/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081124.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, November 24, 2008, Vol. 12, No. 280 Headlines 2712 MISSION: Case Summary & Nine Largest Unsecured Creditors ADIRONDACK 2005-1: Eroding Credit Quality Cues Moody's Rating Cuts AGILYSYS INC: Failure to File 10-Q Further Cues Stocks Delisting AHMAD OTHMAN: Case Summary & 19 Largest Unsecured Creditors ALEXANDER PARK: Moody's Junks Ratings on Three Note Classes ALON USA: S&P Keeps 'B+' Corp. Credit Rating; Stable Outlook AMBAC FINANCIAL: S&P Downgrades Rating on $34 Mil. Notes to 'BB+' AMERICAN LOAN: S&P Cuts Financial Strength Rating to 'BB' From AAA AQUILEX HOLDINGS: S&P Puts 'B' Cop. Credit Rating; Stable Outlook ARCHWAY COOKIES: Lance Offers to Buy Co.'s Assets for $30MM ARTHROCARE CORP: Gets Additional Delisting Notice from Nasdaq AVIS BUDGET: Bank Loan Sells for 61% Off in Secondary Market BEAR STEARNS TRUST: S&P Junks Rating on 2002-TOP8's Class N Cert. BOSCOV'S INC: Court OKs Sale of All Assets to Family Group BPI ENERGY: NYSE Alternext Suspends Trading of Common Stock BRIAN AND MEJA TUTTLE: May Employ Furr and Cohen as Counsel BRIAN AND MEJA TUTTLE: Files Schedules of Assets and Liabilities BROADAX REALTY: Voluntary Chapter 11 Case Summary BUILDING MATERIALS: Housing Downturn Cues S&P's Rating Cut to CCC CALIFORNIA STEEL: Moody's Reviews Low-B Ratings For Possible Cuts CBA COMMERCIAL: Moody's Downgrades Ratings on Eight Cert. Classes CBA COMMERCIAL: Moody's Downgrades Ratings on Four Note Classes CHESAPEAKE CORP: S&P Pares Corporate Rating to 'SD' From 'CCC-' CIT MORTGAGE: Fitch Takes Rating Actions on Various Classes CITIGROUP INC: In Talks With Gov't to Create 'Bad Bank' COAST CFO: Moody's Cuts Ratings on 2006-2 Class D Notes to Ba1 COAST CFO: Moody's Cuts Rating on 2006-1 Class D Notes to Ba1 COMMUNITY BANK: Georgia Bank Fails & FDIC Named as Receiver CONNORS BROTHERS: S&P Withdraws 'B+' Long-Term Corp. Credit Rating CONSTELLATION COPPER: Liquidity Woes May Prompt Bankruptcy Filing CONSTRUCTION RECYCLERS: Closes Biz, Files for Chapter 7 COVERS ETC: Voluntary Chapter 11 Case Summary CPW ACQUISITION: Case Summary & Five Largest Unsecured Creditors DBSI INC: TIC Investors Appoint Bridger Commercial as Advisor DEATH ROW: Hidden Asset Cues Ch. 11 Trustee to Defer Sales DENNY'S CORP: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable DENNY'S HOLDINGS: S&P Cuts Rating on $175MM Unsec. Notes to 'B-' DENNY'S INC: S&P Affirms 'BB' Bank Loan Rating on $350MM Facility DOWNEY SAVINGS: Bank Fails & FDIC Arranges Takeover by U.S. Bank DUNKIN'S DIAMONDS: Will Close Four Stores in Ohio & Florida ERIE COUNTY: Berry Plastics Acquires Firm's Assets for $6.5MM ESTATE FINANCIAL: Panel Taps Ezra Brutzkus as Counsel ESTATE FINANCIAL: Trustees Want to Employ SJLM as Special Counsel ESTATE MORTGAGE: Trustees Want to Employ SJLM as Special Counsel FAIRCHILD SEMICONDUCTOR: Moody's Retains 'Ba3' Corporate Rating FANNIE MAE: Has Until November 26 to Cure NYSE Non-Compliance FIRST AMERICAN: Blames Bankruptcy on Slowdown in Debt Payments FIRSTLIGHT HYDRO: Moody's Maintains 'Ba3' Senior Bonds' Rating FORD MOTOR: Bank Loan Sells for 65% Discount in Secondary Market FORD MOTOR: Mulls Sale of Five Planes to Cut Costs FORD MOTOR: S&P Junks Corporate Ratings on Increasing Cash Use GENERAL GROWTH: Board Amends Bylaws' Notice Protocol GENERAL GROWTH: Extends Rights Deal Expiration to November 2010 GENERAL MOTORS: Bank Loan Sells for 64% Off in Secondary Market GENERAL MOTORS: Board Willing to Consider Chapter 11, Says WSJ GENERAL MOTORS: GMAC Exchange Offer Won't Affect 'CCC+' Rating GENERAL MOTORS: To Give Up 2 Corporate Jets to Diffuse Criticisms GMAC COMMERCIAL: S&P Ratings Tumble to 'D' on Class M and N GMAC LLC: Commences Exchange, Tender Offers for Outstanding Notes GMAC LLC: Moody's Downgrades Senior Unsecured Debt Rating to 'C' GMAC LLC: S&P Cuts Long-Term Counterparty Credit Rating to 'CC' GREENWICH CAPITAL: S&P Upgrades Rating on Class P Cert. to 'B' GENESCO INC: S&P Holds 'B+' Corp. Credit Rating; Outlook Negative GS MORTGAGE: Moody's Assigns Outlooks on Various Classes HARRAH'S ENTERTAINMENT: $2.1BB Note Offer Cues Moody's Junk Rating HAWAII MEDICAL: Blames Bankruptcy on Siemens' $10M Loan Refusal HOSPITAL PARTNERS: Court Converts Case to Chapter 7 Liquidation INTCOMEX INC: Moody's Changes Outlook to Negative; Junks Ratings JC REED: SEC Sues Company for Defrauding Investors JED OIL: Has Until Today to Appeal Securities Delisting at NYSE-A JER CRE: Moody's Downgrades Ratings on Four Classes of CDOs JOHNSON BROADCASTING: May Employ Atropos as Financial Advisor JOHNSON BROADCASTING: Taps Smithwick & Belendiuk as FCC Counsel JP MORGAN: Moody's Reviews Ratings on Nine Classes of Certificates JPMORGAN TRUST: Moody's Reviews Ratings on 16 Classes of Certs. LEAR CORP: Bank Loan Sells at 43% Discount in Secondary Market LITTLEFIELD CITY: S&P Keeps 'BB' Rating on General Obligation Debt LOCUST STREET: Case Summary & Three Largest Unsecured Creditors LUMERA CORP: Less-Than-$10MM Equity Cues Nasdaq Delisting MEDCOMSOFT INC: NOI Prompts Trading Suspension of Common Shares MGM MIRAGE: Terry Lanni Steps Aside as CEO and Chairman MGM MIRAGE: Board Elects James J. Murren as Chairman and CEO MGM MIRAGE: Completes Offering of $750MM Senior Secured Notes MICHAEL'S STORES: Drop in Sales Won't Affect S&P's 'B-' Rating ML-CFC COMMERCIAL: Moody's Junks Ratings on Classes N & P Certs. MOBILE DYNAMICS: Goes Bankrupt, Owes Best Western & Students MORGAN STANLEY: S&P Cuts Rating on $3MM Class A-6 Notes to 'CCC' MRV COMMUNICATIONS: Gets Additional Delisting Notice from Nasdaq MXENERGY HOLDINGS: S&P Says Amendments Won't Affect 'CCC+' Rating NASH FINCH: S&P Changes Outlook to Positive; Keeps 'B+' Rating NELSON EDUCATION: S&P Cuts Second-Lien Debt Rating to 'CCC' NETVERSANT SOLUTIONS: Gets Initial OK to Use $11MM Patriarch Loan NEW AMERICA HIGH: Receives NYSE Listing Non-Compliance Notice NEXCEN BRANDS: Missing 10-Q Cues Another Nasdaq Delisting Note PANOLAM INDUSTRIES: Moody's Junks Corporate Family Rating From B2 PARTS 2 GO: Case Summary & 20 Largest Unsecured Creditors PETROLEUM DEV'T: S&P Cuts Issue Rating on $203MM Sr. Notes to 'B' PETTERS COMPANY: U.S. Trustee Appoints 3-Member Creditors Panel PETTERS COMPANY: Debtors to Each File Statements and Schedules PETTERS COMPANY: Section 341(a) Meeting Set for Nov. 25, 2008 PFF BANK: Bank Fails & FDIC Arranges Takeover by U.S. Bank PINNACLE FOODS: S&P Keeps B- Corp. Credit Rating; Outlook Positive PLY GEM: S&P Puts 'B' Corporate Rating on Negative CreditWatch POTOMAC EDISON: Fitch Says Rate Pact Could Restore Profile REDDY ICE: Receives Listing Non-Compliance Notice from NYSE RENO-SPARKS INDIAN: Fitch Downgrades Issuer Rating to 'BB' RESERVOIR FUNDING: Moody's Junks Ratings on Three Classes of Notes RESI AND RESIX: Moody's Reviews Ratings on 52 Tranches in 13 Deals RESIDENTIAL ASSET: Moody's Downgrades Ratings on 53 Tranches RESIDENTIAL CAPITAL: GMAC Offers Exchange of Notes RESIDENTIAL CAPITAL: Moody's Cuts Senior Debt Ratings to 'C' RESIDENTIAL CAPITAL: S&P Cuts Counterparty Credit Rating to 'CC' ROBERT LANE: Case Summary & 12 Largest Unsecured Creditors SAKS INCORPORATED: Poor Store Sales Cue Fitch's Rating Downgrades SEMGROUP ENERGY: Failure to File Financial Reports Cues Delisting SOUTH COAST: Moody's Junks Ratings on Three Classes of Notes SOUTHWEST WATER: Prior Period Errors Delay 3rdQ Report STORM CAT: Units' Bankruptcy Filing Prompts Delisting of Stock SUNCAL COS: May Commit Up to $75 Million for Bankrupt Projects SUN-TIMES MEDIA: CFO, Chairman & 2 Board Members Resign SYSCAN INT'L: Has Until Today to Pay $207,520 of Bluehill ID Loan TEXAS MUSIC: Files for Chapter 11 Protection THORNBURG MORTGAGE: Interest Nonpayment Cues Fitch's Junk Ratings VALASSIS COMMUNICATIONS: Moody's Maintains 'B1' Corporate Rating US SECURITY: Moody's Lifts Corporate Family Rating to 'B1' VRB POWER: Files Restructuring under Bankruptcy and Insolvency Act VIREXX MEDICAL: Files Protection from Creditors in Canada WACHOVIA BANK: Moody's Downgrades Ratings on Six Classes of Notes WALDEN RESERVE: Panel May Retain Spencer Fane as Counsel WATERBROOK PENINSULA: Plan Filing Period Extended to January 21 WASTEQUIP INC: Market Woes Cue S&P to Junk Corp. Credit Rating WHITEHEAD PRODUCTION: Case Summary & 20 Largest Unsec. Creditors WHITNEY LAKE: Has Interim Use of Cash Collateral until January 31 WHITNEY LAKE: Files Amended List of 20 Largest Unsecured Creditors WHITNEY LAKE: May Employ George Morris as Special Counsel WORLDSPACE INC: May Employ Bank Street as Financial Advisors WORLDSPACE INC: Taps Baker & McKenzie as Special Counsel WP HICKMAN: U.S. Trustee Appoints 7-Member Creditors Panel WP HICKMAN: Panel Taps BMF as Financial Advisors WP HICKMAN: Panel Taps McGuireWoods LLP as Bankruptcy Counsel WP HICKMAN: Taps SJD Business Brokers to Market Assets YELLOWSTONE CLUB: Greg LeMond Demands Payment of $13.5MM Debts * Fitch Assigns Rating Outlooks to $313B of U.S. Credit Card ABS * Fitch Says Downgrades Outnumber Upgrades in 3rd Quarter 2008 * Fitch Says For-Profit Hospitals' Industry Shows Weakness * Macey & Aleman Says Personal Bankruptcy Filings Approaching 1MM * Moody's Report Details Financial Guarantor Rating Drivers * Moody's Says US Commercial Real Estate Conditions Worsen * Morpace Says Consumers Likely to Buy from Big 3 if Bankrupt * Morrison Cohen Adds Four Formerly Senior Counsels as Partners * S&P Junks Ratings on Four Tranches From Eight CDO Deals * S&P Names Liquidity And Support Providers For ABCP Conduits * S&P Reports Banks' Plan To Help Homeowners Avoid Foreclosure * S&P Reports Refinancing Risk For North American Chemical Cos. * S&P Says Bank of Canada Taking Steps To Ease Tight Financing * S&P Says Bank Rating Cuts Affect EMEA ABCP Ratings * BOND PRICING: For the Week of Nov. 17 - Nov. 21, 2008 ********* 2712 MISSION: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------- Debtor: 2712 Mission Partners, L.P. 1874 S. Pacific Coast Hwy., Suite 201 Redondo Beach, CA 90277 Bankruptcy Case No.: 08-32226 Chapter 11 Petition Date: November 20, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Marianne Dickson, Esq. mdickson@ml-sf.com Scott H. McNutt, Esq. SMcNutt@ml-sf.com McNutt Law Group LLP 188 The Embarcadero #800 San Francisco, CA 94105 Tel: (415) 995-8475 Total Assets: $13,638,938 Total Debts: $26,205,163 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MK Real Estate Oppty Fund LLC deed of trust $13,949,118 26 Corporate Plaza Drive value: Suite 250 $13,500,000; Newport Beach, CA 92660 unsecured: $10,297,018 Piero Patri Trust $945,000 c/o Robert H. Mann, CPA 220 Bush St., Ste. 1100 San Francisco, CA 94104 600 Alabama Partners LLC $945,000 1452 Broadway San Francisco, CA 94109 Gorry Meyer & Rudd services $290,862 Office of the Treasurer and value: $201,873 Tax Collector $13,500,000; unsecured: $201,873 Aquamatic Fire Protection services $9,722 Rueben and Junius services $5,932 Brigante Cameron Watters services $5,705 and Strong LLP Bonita S. Moshner, Esq. services $4,050 The petition was signed by President of G.P. Michael Kilroy. ADIRONDACK 2005-1: Eroding Credit Quality Cues Moody's Rating Cuts ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible downgrade the ratings of these four classes of notes issued by Adirondack 2005-1: Class Description: $267,500,000 Class A-1LT-a Floating Rate Notes Due 2040 -- Prior Rating: Aa1, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: Aa2, on review for possible downgrade Class Description: $1,070,100,000 Class A-1LT-b Floating Rate Notes Due 2040 -- Prior Rating: Aa1, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: Aa2, on review for possible downgrade Class Description: $60,800,000 Class A-2 Floating Rate Notes Due 2040 -- Prior Rating: Aa3, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: Baa2, on review for possible downgrade Class Description: $57,700,000 Class B Floating Rate Notes Due 2040 -- Prior Rating: A2, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: Ba1, on review for possible downgrade Additionally, Moody's has downgraded the ratings of these three classes of notes: Class Description: $30,400,000 Class C Deferrable Floating Rate Notes Due 2040 -- Prior Rating: Ba2, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: C Class Description: $24,300,000 Class D Floating Rate Notes Due 2040 -- Prior Rating: B1, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: C Class Description:Up to $5,000,000 Class E Floating Rate Notes Due 2040 -- Prior Rating: Caa2, on review for possible downgrade -- Prior Rating Date: May 23, 2008 -- Current Rating: C Moody's notes that the transaction is currently failing the required overcollateralization tests and the average rating of the collateral debt securities has increased since the prior rating action was taken. The majority of the collateral is subprime RMBS and Alt-A RMBS. In addition, Moody's announced on Sept. 18, 2008 that it is revising its expected loss assumptions which are used for the surveillance of ratings of ABS CDOs holding subprime RMBS, specifically of the second half 2005 -- first half 2007 vintages. Moody's stated that for purposes of monitoring its ratings of ABS CDOs with exposure to second half 2005 -- first half 2007 subprime RMBS, it will rely on certain projections of the lifetime average cumulative losses for vintages of RMBS set forth in a recent Moody's Special Report. Moody's explained that it will utilize the range of loss projections set forth in the report based on deal performance and quarterly vintage to modify its prior assumptions of the expected loss inputs when monitoring ABS CDO ratings. Moody's also announced in a press release that it is revising its expectations of lifetime losses on pools backing US Alt-A residential mortgage-backed securities issued in 2006 and 2007. Moody's explained that it will utilize these revised loss projections when monitoring ABS CDO ratings. AGILYSYS INC: Failure to File 10-Q Further Cues Stocks Delisting ---------------------------------------------------------------- Agilysys, Inc., received a NASDAQ Staff Determination Letter pursuant to Marketplace Rule 4310(c)(14) stating that NASDAQ has not received the company's quarterly report on Form 10-Q for the period ended Sept. 30, 2008, and that this serves as an additional basis for delisting the company's shares from The NASDAQ Stock Market. The company has delayed filing its September Form 10-Q because the company has not yet completed preparation of its Annual Report on Form 10-K for the fiscal year ended March 31, 2008, or its quarterly report on Form 10-Q for the period ended June 30, 2008. The company will present to NASDAQ early next week its written plan to regain compliance with the filing requirement. The delay in filing is related to the pending resolution of the accounting treatment for the company's 20% minority investment in a foreign entity, Magirus AG, a privately held enterprise computer systems distributor headquartered in Germany. Due to these open accounting matters related solely to the company's minority investment in Magirus, Agilysys has been reporting summary financial information, which is unaudited. The company expects to file its September Form 10-Q soon as practicable after it files its 2008 Form 10-K and June Form 10-Q. About Agilysys Inc. Agilysys Inc. (NASDAQ: AGYS) -- http://www.agilysys.com/-- provides IT solutions to corporate and public-sector customers, including retail and hospitality. The company uses technology -- including hardware, software and services -- to help customers resolve their most complicated IT needs. The company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Boca Raton, Fla., Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and China. AHMAD OTHMAN: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ahmad A Othman 11590 Northdale Dr Moorpark, CA 93021 Case No.: 08-13039 Petition Date: November 20, 2008 Court: U.S. Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: James Studer, Esq. 1420 Los Angeles Ave Suite 204c Simi Valley, CA 93065 805-582-9191 Total Assets: $1,915,700 Total Debts: $3,478,065 A list of the Debtor's 19 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb08-13039.pdf ALEXANDER PARK: Moody's Junks Ratings on Three Note Classes ----------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings of these two classes of notes issued by Alexander Park CDO I, Ltd.: Class Description: $203,500,000 Class A-1 Floating Rate Term Notes, Due 2039 -- Prior Rating: Aaa, on review for possible downgrade -- Prior Rating Date: April 23, 2008 -- Current Rating: Baa3, on review for possible downgrade Class Description: $37,500,000 Class A-2 Floating Rate Term Notes, Due 2039 -- Prior Rating: A2, on review for possible downgrade -- Prior Rating Date: April 23, 2008 -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's has downgraded the ratings of these two classes of notes: Class Description: $22,000,000 Class B Floating Rate Term Notes, Due 2039 -- Prior Rating: Ba1, on review for possible downgrade -- Prior Rating Date: April 23, 2008 -- Current Rating: Ca Class Description: $10,000,000 Class C Fixed Rate Term Notes, Due 2039 -- Prior Rating: B2, on review for possible downgrade -- Prior Rating Date: April 23, 2008 -- Current Rating: Ca Moody's notes that both tests of required overcollateralization are currently failing and there has been an increase in the amount of defaulted securities since the prior rating action was taken. Moody's announced on Sept. 18, 2008 that it is revising its expected loss assumptions which are used for the surveillance of ratings of ABS CDOs holding subprime RMBS, specifically of the second half 2005 -- first half 2007 vintages. Moody's stated that for purposes of monitoring its ratings of ABS CDOs with exposure to second half 2005 -- first half 2007 subprime RMBS, it will rely on certain projections of the lifetime average cumulative losses for vintages of RMBS set forth in a recent Moody's Special Report. Moody's explained that it will utilize the range of loss projections set forth in the report based on deal performance and quarterly vintage to modify its prior assumptions of the expected loss inputs when monitoring ABS CDO ratings. Moody's also announced in a press release that it is revising its expectations of lifetime losses on pools backing US Alt-A residential mortgage-backed securities issued in 2006 and 2007. Moody's explained that it will utilize these revised loss projections when monitoring ABS CDO ratings. ALON USA: S&P Keeps 'B+' Corp. Credit Rating; Stable Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Alon USA Energy Inc., including its 'B+' corporate credit rating, and removed the ratings from CreditWatch, where they were placed with negative implications on Feb. 20, 2008, following the explosion and subsequent closure of Alon USA's Big Spring, Texas refinery. The outlook is stable. "The affirmation reflects S&P's belief that the explosion and difficult market conditions will not affect the company's ability to meet future covenant compliance and financial commitments," said Standard & Poor's credit analyst Paul Harvey. "Relatively light covenants should allow Alon USA to remain compliant with financial covenants over the next year despite current weak refining margins." In addition, a strengthened market for asphalt (21% of Alon USA's production) combined with above-average diesel margins (26% of production) should support cash flows as refining margins continue to be generally weak. S&P assumes Alon USA will use the remaining insurance proceeds of up to $100 million to repay outstanding bank debt. The rating on Alon USA reflects the challenges the company faces as a small, independent oil refining and marketing company with modest cash flow diversification among its refineries. The company participates in a competitive industry with erratic profitability, with high fixed-cost requirements for refinery equipment and for compliance with environmental regulations. S&P does not include results from the Krotz Springs refinery, which was acquired from Valero Energy Corp. in July 2008 and financed on a nonrecourse basis to Alon USA, in S&P's analysis of Alon USA. Alon Refining Krotz Springs Inc. (B/Stable/--), the legal entity, is rated on a stand-alone basis. AMBAC FINANCIAL: S&P Downgrades Rating on $34 Mil. Notes to 'BB+' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $34 million callable class A certificates from STRATS Trust For Ambac Financial Group Inc. Securities Series 2007-1 to 'BB+' from 'BBB+'. The rating action follows the Nov. 19, 2008, lowering of the rating on the underlying securities, Ambac Financial Group Inc.'s 6.15% directly issued capital securities due Feb. 7, 2087. STRATS Trust For Ambac Financial Group Inc. Securities Series 2007-1 is a pass-through transaction, and the rating on the certificates is based solely on the rating assigned to the underlying securities, Ambac Financial Group Inc.'s 6.15% directly issued capital securities due Feb. 7, 2087 ('BB+'). AMERICAN LOAN: S&P Cuts Financial Strength Rating to 'BB' From AAA ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its financial strength rating on American Loan Guaranty Association to 'BB' from 'AAA'. The outlook is negative. "Due to the limited market interest associated with the small and declining amount of ALGA-insured debt outstanding, S&P has also withdrawn the rating on ALGA," said S&P's credit analyst Dick Smith. As of Oct. 27, 2008, three transactions with a total of $9.8 million of debt insured by ALGA remain outstanding. The downgrade reflects changed financial strength ratings of the various ALGA members. Those ALGA members that participated on various transactions on a several basis are Ambac Assurance Corp. (A/Negative), Financial Guaranty Insurance Co. (BB/Watch Neg), Financial Security Assurance Inc., (AAA/Watch Neg), and MBIA Insurance Corp. (AA/Negative). The negative outlook on ALGA mirrors the negative outlook or CreditWatch Negative status of each of the participating members, which reflect in part the continuing potential for adverse loss development from the companies' exposures to domestic nonprime mortgages and related collateralized debt obligation of asset- backed securities exposures. AQUILEX HOLDINGS: S&P Puts 'B' Cop. Credit Rating; Stable Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Atlanta, Georgia-based Aquilex Holdings LLC. The outlook is stable. At the same time, S&P assigned its 'BB-' rating and a recovery rating of '1' to Aquilex Acquisition Sub III LLC's proposed $310 million senior secured first-lien bank facilities, reflecting S&P's expectation of very high (90%-100%) recovery in the event of a payment default. The proposed first-lien credit facilities consist of a $50 million revolving credit facility due 2013, $50 term loan A due 2012, and $210 million term loan B due 2013. The ratings on the credit facilities are based on preliminary terms and conditions. Ontario, Canada-based Ontario Teachers' Pension Plan, through its subsidiary, Aquilex Acquisition Sub III LLC, plans to acquire Aquilex Holdings LLC from private-equity firm Harvest Partners LLC. Proceeds from the proposed term loans, in conjunction with a proposed unrated $171 million subordinated mezzanine loan and an approximately $432 million equity contribution, will be used to finance the acquisition. At the close of the transaction, Aquilex is expected to have approximately $446 million of debt outstanding (adjusted to include capitalized operating leases). "The ratings on Aquilex Holdings and Aquilex Acquisition reflect limited liquidity, high debt leverage, narrow scope of operations, and a moderately concentrated customer base," said S&P's credit analyst Ket Gondha. "Partially offsetting these weaknesses are Aquilex's leading market position in its niches, largely variable cost structure, and relatively stable revenues supported by the recurring, non- discretionary nature of the company's services," Mr. Gondha said. Aquilex Holdings is a holding company for Aquilex Corp., which manages a specialty repair and overhaul business, and HydroChem Industrial Services Inc., its industrial cleaning subsidiary. Upon close of the acquisition, the outstanding debt of HydroChem is expected to be repaid in its entirety, and S&P's ratings will be withdrawn at that time. Pro forma for the acquisition, Aquilex's consolidated revenues for 2008 are expected to be approximately $600 million. ARCHWAY COOKIES: Lance Offers to Buy Co.'s Assets for $30MM ----------------------------------------------------------- Dan Mitchell at Bnet.com reports that North Carolina snack company Lance has offered $30 million for Archway Cookies' assets. Lance, according to Bnet.com, said that it would finance the purchase through its existing lines of credit if its bid is accepted. Bnet.com relates that other bidders could still make competing offers under Archway Cookies' bankruptcy agreement, with the deadline set for Tuesday. According to Bnet.com, the asset auction will be on Dec. 1, 2008. About Archway Cookies Battle Creek, Michigan-based Archway Cookies, LLC,-- http://www.archwaycookies.com/-- makes soft-baked cookies. and crackers. In 1998, Specialty Foods Corp. acquired the Debtors' for about $100 million. Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie Company and Archway Cookies from The Specialty Foods Acquisition Corporation for $250 million in 2000. Parmalat later sold its North American Bakery Group, which includes the Archway brands, Mother's brands and the U.S. and Canadian private label cookie businesses, to the private equity firm Catterton Partners and their operating partner Insight Holdings in 2005. Archway Cookies filed for Chapter 11 protection on Oct. 6, 2008 (Bankr. D. Del. Case No. 08-12323). Its affiliate, Mother's Cake & Cookie Co. also filed for bankruptcy (Bankr. D. Del. Case No. 08-12326). Michael R. Lastowski, Esq., at Duane Morris, LLP, represent the Debtors in their restructuring efforts. In their filing, the Debtors listed estimated assets of between $50 million and $100 million and estimated debts of between $500 million and $1 billion. ARTHROCARE CORP: Gets Additional Delisting Notice from Nasdaq ------------------------------------------------------------- ArthroCare Corp. received an additional NASDAQ Staff Determination Letter in connection with the company's inability to timely file its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2008, with the Securities and Exchange Commission. The Additional Staff Determination letter states that the company is therefore not in compliance with NASDAQ Marketplace Rule 4310(c)(14), and that this issue may serve as an additional basis for the NASDAQ Listing Qualifications Panel to delist its common stock from NASDAQ. The company received a similar NASDAQ Staff Determination letter on Aug. 13, 2008, in connection with the company's inability to timely file its Quarterly Report on Form 10-Q for the period ended June 30, 2008, with the SEC. The company appealed that Staff Determination and attended a hearing before the Panel this fall during which the company requested that the Panel grant additional time to regain compliance with NASDAQ's filing requirement. Pending a decision by the Panel, the company's common stock will remain listed on The NASDAQ Global Select Market. There can be no assurance that the Panel will grant the company's request for continued listing. About ArthroCare Corp. Founded in 1993, ArthroCare Corp. -- http//www.arthrocare.com/ -- develops, manufactures and markets minimally invasive surgical products. AVIS BUDGET: Bank Loan Sells for 61% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 38.71 cents-on-the-dollar during the week ended November 21, 2008, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 10.43 percentage points from the previous week, the Journal relates. The syndicated loan matures on April 12, 2012, and Avis pays 125 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's Ba1 rating and Standard & Poor's BB rating. On April 19, 2006, Avis Budget Holdings, LLC and Avis Budget Car Rental, LLC entered into a $2.375 billion Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Deutsche Bank Securities Inc., as Syndication Agent, Bank of America, N.A., Calyon New York Branch and Citicorp USA, Inc., as Documentation Agents, Wachovia Bank, National Association, as Co-Documentation Agent, and a syndicate of lenders, consisting of (i) a $1.5 billion 5-year revolving credit facility and (ii) an $875 million 6-year term loan. The facilities are guaranteed by Avis Budget Holdings, LLC, the direct parent company of Avis Budget Car Rental, LLC, and certain subsidiaries of Avis Budget Car Rental, LLC. The facilities also are secured by a first perfected priority lien in substantially all of Avis Budget Car Rental, LLC's intellectual property and all of the capital stock of certain of its direct and indirect subsidiaries. In the event that the credit ratings assigned to Avis by nationally recognized debt rating agencies are downgraded as set forth in the Credit Agreement, the interest rate and facility fees relating to the borrowings under the revolving credit facility are subject to incremental upward adjustments. The Credit Agreement also provides the committed capacity to issue $1.5 billion in letters of credit. The Credit Agreement requires Avis to maintain a consolidated leverage ratio of less than 5.5 to 1.00, decreasing over time to 4.00 to 1.00, and a consolidated interest coverage ratio of more than 2.25 to 1.00, increasing over time to 3.00 to 1.00. As of September 30, 2008, the floating rate term loan bears interest at three month LIBOR plus 125 basis points. The floating rate term loan and the revolving credit facility are secured by pledges of all of the capital stock of substantially all of the company's direct or indirect domestic subsidiaries and up to 66% of the capital stock of each direct foreign subsidiary, subject to certain exceptions, and liens on substantially all of the company's intellectual property. A full-text copy of the April 2006 Credit Agreement is available at no charge at: http://ResearchArchives.com/t/s?3514 Bank debt of other companies in the auto industry are also being sold at substantial discount, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Ford Motor Co. is a borrower traded in the secondary market at 34.40 cents-on-the- dollar during the week ended November 21, 2008. This represents a drop of 11.40 percentage points from the previous week, the Journal relates. The syndicated loan matures on Dec. 15, 2013, and Ford pays 300 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Meanwhile, participations in a syndicated loan under which General Motors Corp. is a borrower traded in the secondary market at 35.33 cents-on-the-dollar during the week ended November 21, 2008. This represents a drop of 10.52 percentage points from the previous week, the Journal relates. The syndicated loan matures on Nov. 27, 2013, and GM pays 275 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's B1 rating and Standard & Poor's B rating. Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 56.57 cents-on-the- dollar during the same period. This represents a drop of 7.54 percentage points from the previous week, the Journal relates. The syndicated loan matures on March 29, 2012, and Lear pays 250 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Based in Parsippany, New Jersey, Avis Budget Group, Inc. provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. BEAR STEARNS TRUST: S&P Junks Rating on 2002-TOP8's Class N Cert. ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on two classes of commercial mortgage pass-through certificates from Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8. Concurrently, S&P lowered its rating on one class and affirmed its ratings on 13 other classes from this series. The upgrades are due to increased credit enhancement levels resulting from a 13% reduction in the mortgage pool balance since issuance, as well as the defeasance of the collateral securing 24% ($177.9 million) of the pool. The affirmations reflect credit enhancement levels that provide adequate support through various stress scenarios. The downgrade reflects credit concerns with three of the four loans in the pool that have reported debt service coverage (DSC) below 1.0x. As of the Nov. 17, 2008, remittance report, the trust collateral consisted of 118 loans with an aggregate principal balance of $736.9 million, compared with 120 loans totaling $842.2 million at issuance. The master servicer, Wells Fargo Bank N.A., reported financial information for 98% of the loans in the pool, excluding the defeased loans. Eighty-eight percent of the servicer-reported information was year-end 2007 data. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.87x, up from 1.68x at issuance. All of the loans in the trust are current, and no loans are with the special servicer. The trust has incurred one loss totaling $3.2 million to date. The top 10 exposures secured by real estate have an aggregate principal balance of $192.8 million (26%) and a weighted average DSC of 1.92x, up from 1.75x at issuance. Standard & Poor's reviewed the property inspection reports provided by Wells Fargo for the assets underlying the top 10 exposures, which characterized the properties as "good" or "excellent." The credit characteristics for three loans were consistent with those of investment-grade rated obligations at issuance. These loans continue to retain their credit characteristics. Details are: -- The Flushing Plaza loan, the second-largest exposure in the pool ($28.6 million, 4%), is secured by a 243,100-sq.-ft. class B office building in Flushing, New York Wells Fargo reported a 1.79x DSC for the six months ended June 30, 2008, and 89% occupancy as of July 2008. Although the average base rents at the property have risen 31% since issuance, occupancy has declined and operating expenses have increased. This caused net cash flow and S&P's resulting valuation to decline 19% since issuance. Despite the decline, the loan continued to exhibit credit characteristics consistent with those of investment-grade rated obligations. -- The Princeton Shopping Center loan, the fourth-largest exposure in the pool ($18.5 million, 3%), is secured by a 228,700-sq.-ft. open-air community shopping center in Princeton, New Jersey. The master servicer reported a 2.09x DSC for the six months ended June 30, 2008, and 97% occupancy as of September 2008. S&P's adjusted valuation is comparable to its level at issuance. -- The TriQuest Business Center loan, the seventh-largest exposure in the pool ($13.0 million, 2%), is secured by 12 industrial/flex buildings totaling 205,100 sq. ft. in Irvine, California. Wells Fargo reported a 2.16x DSC and 93% occupancy for the six months ended June 30, 2008. Standard & Poor's valuation is comparable to its level at issuance. Four loans in the pool, totaling $6.6 million (1%), have reported DSCs below 1.0x. These loans have an average balance of $1.7 million and have experienced a weighted average decline in DSC of 84% since issuance. The loans are secured by office, retail, multifamily, and other properties. With the exception of a $0.9 million loan secured by a land parcel, Standard & Poor's has credit concerns with three of these loans, which S&P stressed accordingly in S&P's analysis. The properties securing the three loans have experienced a decline in NCF due to low occupancies. All three loans appear on the master servicer's watchlist. Wells Fargo reported a watchlist of eight loans totaling $42.7 million (6%). The largest and second-largest loans on the watchlist are the St. Andrews Apartments -- Phase II ($11.1 million, 1.5%) and the St. Andrews Apartments -- Phase I loans ($10.7 million, 1.5%). Each loan is secured by a 236-unit garden- style apartment complex in Pearland, Texas. Both loans appear on the master servicer's watchlist because the multifamily properties sustained substantial roof damage from Hurricane Ike, and the borrowers are waiting for the insurance adjuster to assess an estimate of the damage costs. Wells Fargo reported a combined DSC of 1.47x and 90% occupancy for the six months ended June 30, 2008. The remaining loans are on the watchlist due to declines in DSC since issuance, low occupancy, and/or upcoming lease rolls. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels adequately support the raised, lowered, and affirmed ratings. Ratings Raised Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ C A+ A 8.28% D A A- 6.99% Rating Lowered Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N CCC+ B- 0.71% Ratings Affirmed Bear Stearns Commercial Mortgage Securities Trust 2002-TOP8 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 15.56% A-2 AAA 15.56% B AA+ 12.13% E BBB+ 5.42% F BBB 4.56% G BBB- 3.99% H BB+ 2.85% J BB 2.42% K BB- 1.85% L B+ 1.42% M B 0.99% X-1 AAA N/A X-2 AAA N/A N/A -- Not applicable. BOSCOV'S INC: Court OKs Sale of All Assets to Family Group ---------------------------------------------------------- Boscov's Department Store LLC disclosed that the United States Bankruptcy Court for the District of Delaware has approved the company's agreement for the sale of substantially all of its assets to a family group led by Albert Boscov and Edwin Lakin. The transaction is expected to close shortly. "This marks an important milestone in Boscov's restructuring and more importantly for the future of our Company," said Ken Lakin, chairman and CEO. "Working with the Boscov/Lakin families and supported by the Official Creditors' Committee and our lenders, we were able to complete an agreement that maximizes the value of our business and allows us to move forward with a solid financial base to establish a stronger and more competitive business." "Boscov's ability to reach this point in our restructuring, in the face of an economic recession and one of the most challenging periods the retail sector has ever encountered, is a testament to the hard work and commitment of our co-workers, the loyalty and encouragement of our customers and the support and belief in our Company among the vendor community," added Mr. Lakin. "We now look forward to building on our nearly 100-year tradition of providing a friendly, local place to shop with brand names, great values and superior service." Headquartered in Reading, Pennsylvania, Boscov's Inc. -- http://www.boscovs.com/-- is America's largest family-owned independent department store, with 49 stores in Pennsylvania, New York, New Jersey, Maryland, Delaware and Virginia. Boscov's Inc. and its debtor-affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637). Judge Kevin Gross presides over the cases. David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day, serve as the Debtors' lead counsel. The Debtors' financial advisor is Capstone Advisory Group and their investment banker is Lehman Brothers, Inc. The Debtors' claims agent is Kurtzman Carson Consultants L.L.C. Boscov's listed assets of $538 million and liabilities of $479 million in its bankruptcy filing. (Boscov's Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BPI ENERGY: NYSE Alternext Suspends Trading of Common Stock ----------------------------------------------------------- BPI Energy Holdings, Inc., received notification from the NYSE Alternext US LLC that the company no longer complies with one or more of the Exchange's continued listing standards and that its securities are, therefore, subject to being delisted from the Exchange. The Exchange halted trading in BPI's common stock on Nov. 6, 2008. The notice specifically indicates that BPI is in violation of the NYSE Alternext US company Guide Section 1003(a)(iv) in that it has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the company will be able to continue operations and/or meet its obligations as they mature. Moreover, based on the press release issued on Oct. 30, 2008, stating that it is currently insolvent and given the current market value of the company's common stock, pursuant to Section 1003(c)(3) of the company Guide the Exchange will normally consider suspending dealings in, or removing from the list securities, of an issuer whenever advice has been received, deemed by the Exchange to be authoritative, that the security is without value. The notice also cited the company's SEC disclosure that it was unable to file its Annual Report on Form 10-K for the year ended July 31, 2008, when due, and the extension period afforded by filing Form 12b-25 ended on Nov. 13, 2008. The timely filing of such reports is a condition for the company's continued listing on the Exchange, as required by Sections 134 and 1101 of the company Guide. BPI is evaluating its option to appeal this determination and request a hearing before a committee of the Exchange to present a plan to regain compliance with NYSE Alternext US listing standards; however, there can be no assurance that the company's request for continued listing will be granted. About BPI Energy Holdings, Inc. BPI Energy Holdings, Inc. (AMEX:BPG) -- http://www.bpi-energy.com/ -- is an independent energy company engaged in the exploration, production and commercial sale of coalbed methane in the Illinois Basin, which covers approximately 60,000 square miles in Illinois, southwestern Indiana and northwestern Kentucky. The company controls a large CBM position in the Illinois Basin at approximately 534,280 acres. BRIAN AND MEJA TUTTLE: May Employ Furr and Cohen as Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida granted Brian R. Tuttle and Merja A. Tuttle permission to employ Robert C. Furr, Esq. and the law firm of Furr and Cohen, P.A. as counsel, nunc pro tunc to Oct. 15, 2008. As the Tuttles' counsel, Robert C. Furr, Esq. and the law firm of Furr and Cohen, P.A. are expected to, among others, give advice with respect to the Debtors' powers and duties as debtors-in- possession and the continued management of their business operations, and represent the Debtors in negotiation with their creditors in the preparation of a plan. Robert C. Furr, Esq., an attorney at Furr and Cohen, P.A., assured the Court that the firm does not represent any interest adverse to the Debtors and their estates, and are "disinterested persons" as required by Sec. 327(a) of the Bankruptcy Code. Robert C. Furr serves as a Panel Trustee in the Southern District of Florida in Chapter 7, Chapter 12 and Chapter 11 cases. Mr. Furr further told the Court that there are no pre-petition fees due to Furr and Cohen and that the firm received $10,000 from Brian R. Tuttle to represent Brian R. Tuttle, Merja A. Tuttle, Tuttle Land Holding Corp. and TLH-BOS Corp. at mediation with Gibraltar Private Bank & Trust Company. In addition, the firm also received a retainer in the amount of $40,000 from Brian R. Tuttle to file this Chapter 11 proceeding and two related Chapter 11 proceedings of related entities, Tuttle Land Holding Corp. and TLH-BOS Corp. Mr. Furr did not provide a schedule of Furr and Cohen's professional fees. Brian R. Tuttle and Merja A. Tuttle of West Palm Beach, Florida, are real estate developers. They filed for chapter 11 bankruptcy on October 15, 2008, before the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 08-25253). Debtor- affiliates that filed separate Chapter 11 petitions are Tuttle Land Holding Corp. (Case No. 08-25255) and TLH-BOS Corp. Hyman (Case No. 08-25256). Judge Paul G. Hyman Jr. presides over the case. Robert C. Furr, Esq., at Furr & Cohen, serves as the Debtors' bankruptcy counsel. In their schedules, the Debtors listed total assets of $69,338,910 and total debts of $23,605,666. On October 15, 2008, the Tuttles filed with the Court a chapter 11 statement of current monthly income, disclosing $18,333 in total current monthly income, including $14,000 net monthly income from business operations. BRIAN AND MEJA TUTTLE: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Brian R. Tuttle and Merja A. Tuttle filed with the U.S. Bankruptcy Court for the Southern District of Florida, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $5,550,000 B. Personal Property $63,788,910 C. Property Claimed as Exempt D. Creditors Holding $4,741,568 Secured Claims E. Creditors Holding $529,480 Unsecured Priority Claims F. Creditors Holding $18,334,617 Unsecured Non-priority Claims ----------- ----------- TOTAL $69,338,910 $23,605,666 Brian R. Tuttle and Merja A. Tuttle of West Palm Beach, Florida, are real estate developers. They filed for chapter 11 bankruptcy on October 15, 2008, before the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 08-25253). Debtor- affiliates that filed separate Chapter 11 petitions are Tuttle Land Holding Corp. (Case No. 08-25255) and TLH-BOS Corp. Hyman (Case No. 08-25256). Judge Paul G. Hyman Jr. presides over the case. Robert C. Furr, Esq., at Furr & Cohen, serves as the Debtors' bankruptcy counsel. On October 15, 2008, the Tuttles filed with the Court a chapter 11 statement of current monthly income, disclosing $18,333 in total current monthly income, including $14,000 net monthly income from business operations. BROADAX REALTY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Broadax Realty, Inc. 318 West 113th Street New York, NY 10026 Case No.: 08-14615 Petition Date: November 20, 2008 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Joseph Fleming, Esq. 116 John St., Suite 2830 New York, NY 10038 212-385-8036 Total Assets: $3,220,370 Total Debts: $2,250,000 The Debtor did not identify any unsecured creditor in its schedules of assets and liabilities. BUILDING MATERIALS: Housing Downturn Cues S&P's Rating Cut to CCC ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on San Francisco-based Building Materials Holding Corp. to 'CCC' from 'CCC+'. At the same time, S&P removed all ratings from CreditWatch, where they were placed with negative implications on July 30, 2008. The outlook is negative. The recovery rating on the company's first-lien bank credit facilities is unchanged at '4', which indicates its expectation for average (30% to 50%) recovery in the event of a payment default. "The lower ratings reflect S&P's concerns that weak economic conditions in the U.S. and the ongoing housing downturn will significantly erode the company's end-market demand, credit measures, and liquidity over the next several quarters," said Standard & Poor's credit analyst Andy Sookram. Financial covenants under BMHC's recently amended credit facility include monthly minimum levels of EBITDA. Given S&P's expectation that 2009 will be challenging for residential construction, S&P believes operating performance will likely weaken further during this period, which could likely necessitate further bank facility waivers and/or amendments. S&P also believes that cash flow will weaken significantly, diminishing the company's liquidity position. The rating on BMHC reflects the company's high debt leverage, participation in the cyclical residential construction and building materials supply markets, susceptibility to wood products prices, and concentration of revenues from national homebuilders. BMHC's operating performance is vulnerable to fluctuations in volume, selling prices for commodity wood products, and unfavorable weather conditions. The company's operating margin, before depreciation and amortization, declined to negative 2.5% for the 12 months ended Sept. 30, 2008, from positive 4.9% for the year-earlier period because of a significant decline in new residential construction and increasingly competitive market conditions. Although BMHC has made some progress in lowering its cost structure, the company is still highly dependent on housing starts, which are likely to remain depressed over the next several quarters because of tight credit markets and weak economic conditions in the U.S. As a result, S&P believes profit margins will be below current levels, which could necessitate further waivers and/or amendments under its bank credit facility. CALIFORNIA STEEL: Moody's Reviews Low-B Ratings For Possible Cuts ----------------------------------------------------------------- Moody's placed California Steel's Ba2 corporate family rating, Ba2 probability of default rating, and Ba3 (LGD 5; 71%) senior unsecured note rating under review for possible downgrade. The review stems from concerns about pressures in the steel industry and the potential impact on CSI's operating and financial profile. In Moody's opinion, CSI's available liquidity may decline in the future due to deteriorating business conditions amidst a high cost slab inventory built up during the third quarter. Over 50% of CSI's sales are tied to the construction industry, which, in Moody's opinion, is likely to remain challenged for the foreseeable future though this is partially offset by strength in the pipe business. While the company has successfully adapted to changing conditions in the past, Moody's is concerned that the financial profile may be pressured over the next 12-18 months beyond levels appropriate for the Ba2 rating. Moreover, Moody's believes that there could be pressure on the company's tangible net worth covenant due to the possibility of inventory impairments given the rapidly declining price of slab. The review will focus on (i) CSI's ability to respond to rapidly changing market conditions, (ii) the impact of any potential inventory write-downs, and (iii) the company's liquidity profile including the potential role of its shareholders. Ratings placed under review for possible downgrade include: -- Ba2 Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba3 senior unsecured note rating (LGD 5; 71%) Moody's previous rating action was to downgrade the senior unsecured note rating of California Steel in September of 2006. With revenues of approximately $1.2 billion in 2007, CSI is a leading producer of flat rolled steel in the western U.S. based on tonnage billed. CSI does not produce raw steel but rather processes steel slab manufactured by third parties. The company is 50% owned by JFE Steel and 50% owned by Rio Doce, a subsidiary of Vale. The company is headquartered in Fontana, California. CBA COMMERCIAL: Moody's Downgrades Ratings on Eight Cert. Classes ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of eight classes of CBA Commercial Assets, LLC, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2007-1: -- Class A, $101,938,255, downgraded to Aa1 from Aaa -- Class X-1, Notional, downgraded to Aa1 from Aaa -- Class M-1, $3,509,000, downgraded to Aa3 from Aa2 -- Class M-2, $3,669,000, downgraded to Baa1 from A2 -- Class M-3, $2,233,000, downgraded to Baa3 from Baa1 -- Class M-4, $1,436,000, downgraded to Ba2 from Baa2 -- Class M-5, $1,755,000, downgraded to B1 from Baa3 -- Class M-6, $1,276,000, downgraded to B3 from Ba1 Moody's downgraded Classes A, X-1, M-1, M-2, M-3, M-4, M-5 and M-6 due to anticipated losses from specially serviced loans. As of the Oct. 27, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 5% to $121.1 million from $127.6 million at securitization. The Certificates are collateralized by 224 mortgage loans with an average loan size of approximately $541,000. The top 10 loans represent 20% of the pool. No loans have been liquidated since securitization. There are 27 loans, representing 12% of the pool, currently in special servicing. Fifteen of these loans, representing 7% of the pool, are in the process of foreclosure or are real estate owned. Moody's is currently estimating an aggregate $3.2 million loss from all the specially serviced loans. Eight loans, representing 2.4% of the pool, are on the servicer's watchlist. Moody's was not provided with updated financial information for the pool and accordingly has not estimated an overall loan to value ratio. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a press release dated April 7, 2008. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating small balance commercial transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 - this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 - this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; * CMBS: Moody's Approach to Small Commercial Real Estate Loans, Sept. 24, 1999 -- this paper discusses certain characteristics of small loans that differentiate them from conduit loans including higher interest rates, higher cap rates, tenant diversity, cash flow characteristics, market locations, re- leasing costs, replacement reserves, and owner-occupied and special use properties along with quality of information differences and how the characteristics and information quality shape Moody's rating approach; and * CMBS: Moody's Approach to Small Loan Transactions, Dec. 15, 2004 - this paper helps differentiate when a loan is CMBS, RMBS or ABS, discusses certain characteristics of small loans, speaks to delinquency rates by loan size and seasoning, and goes into Moody's Rating Approach based on the use of higher hurdle and cap rates, originator differentiation, the value of recourse, special purpose entities, floating rate penalties and the quality of information. CBA COMMERCIAL: Moody's Downgrades Ratings on Four Note Classes --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of four classes and affirmed three classes of CBA Commercial Assets, LLC, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2005-1: -- Class A, $87,843,400, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class M-1, $7,250,000 downgraded to A1 from Aa2 -- Class M-2, $5,640,000, downgraded to Baa3 from A3 -- Class M-3, $2,690,000, downgraded to Ba3 from Baa2 -- Class M-4, $3,760,000, downgraded to B3 from Baa3 Moody's downgraded Classes M-1, M-2, M-3 and M-4 due to realized and anticipated losses from specially serviced loans. As of the Oct. 27, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 45% to $118.2 million from $214.9 million at securitization. The Certificates are collateralized by 327 mortgage loans with an average loan size of $326,000. The top 10 loans represent 15% of the pool. Seventeen loans have been liquidated from the trust resulting in an aggregate realized loss of approximately $4.3 million. Classes M-8 and M-9 have been entirely eliminated due to losses and Class M-7 has experienced an aggregate loss of approximately $1.3 million. There are 62 loans, representing 19% of the pool, currently in special servicing. Moody's is currently estimating an aggregate $8.7 million loss from the specially serviced loans. Moody's has received limited current financial information for the pool and accordingly has not estimated an overall loan to value ratio. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a press release dated May 7, 2008. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating small balance commercial transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 - this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 - this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; * CMBS: Moody's Approach to Small Commercial Real Estate Loans, Sept. 24, 1999 -- this paper discusses certain characteristics of small loans that differentiate them from conduit loans including higher interest rates, higher cap rates, tenant diversity, cash flow characteristics, market locations, re- leasing costs, replacement reserves, and owner-occupied and special use properties along with quality of information differences and how the characteristics and information quality shape Moody's rating approach; and * CMBS: Moody's Approach to Small Loan Transactions, Dec. 15, 2004 - this paper helps differentiate when a loan is CMBS, RMBS or ABS, discusses certain characteristics of small loans, speaks to delinquency rates by loan size and seasoning, and goes into Moody's Rating Approach based on the use of higher hurdle and cap rates, originator differentiation, the value of recourse, special purpose entities, floating rate penalties and the quality of information. CHESAPEAKE CORP: S&P Pares Corporate Rating to 'SD' From 'CCC-' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Richmond, Virginia-based Chesapeake Corp. to 'SD' from 'CCC-', which indicates a selective default. At the same time, S&P lowered its issue-level rating on Chesapeake's 10.375% sterling-denominated subordinated notes due 2011 to 'D' from 'CC'. S&P also affirmed the rating on the euro-denominated subordinated notes at 'CC'. "The ratings actions stem from S&P's assessment that the Nov. 15, 2008, coupon payment date on the sterling-denominated notes was likely blocked from being paid by the secured lenders under Chesapeake's $250 million revolving credit facility because of the company's distressed financial situation, which was caused by weak cash flows and high leverage," said Standard & Poor's credit analyst Andy Sookram. While a payment default has not occurred under the legal provisions of the notes, Standard & Poor's considers a default to have occurred when a payment related to an obligation is not made -- even if a grace period exists -- when the nonpayment is a function of the borrower being under financial stress, unless S&P is confident that the payment will be made in full during the grace period. Chesapeake continues to review financial and strategic alternatives, which potentially include recapitalization, refinancing, restructuring, or reorganization of its obligations. CIT MORTGAGE: Fitch Takes Rating Actions on Various Classes ----------------------------------------------------------- Fitch Ratings publishes its ratings on CIT Mortgage Loan Trust 2007-1. Loss Coverage Ratios for each class are included with the ratings: -- Class 1-A 'BBB'; Outlook Negative (LCR: 1.37); -- Class 2-A1 'AA'; Outlook Stable (LCR: 1.69); -- Class 2-A2 'A'; Outlook Stable (LCR: 1.49); -- Class 2-A3 'BBB'; Outlook Negative (LCR: 1.37); -- Class 1-M1 'BB'; Outlook Stable (LCR: 1.15); -- Class 2-M1 'BB'; Outlook Stable (LCR: 1.16); -- Class 1-M2 'B'; Outlook Stable (LCR: 1.06); -- Class 2-M2 'B'; Outlook Stable (LCR: 1.07); -- Class 1-M3 'CCC/DR1'; (LCR: 0.99); -- Class 2-M3 'CCC/DR1'; (LCR: 1.00); -- Class 1-M4 'CCC/DR1'; (LCR: 0.92); -- Class 2-M4 'CCC/DR1'; (LCR: 0.93); -- Class 1-M5 'CCC/DR1'; (LCR: 0.85); -- Class 2-M5 'CCC/DR1'; (LCR: 0.86); -- Class 1-M6 'CCC/DR1'; (LCR: 0.79); -- Class 2-M6 'CCC/DR1'; (LCR: 0.8); -- Class B1 'CC/DR3'; (LCR: 0.74); -- Class B2 'CC/DR3'; (LCR: 0.68); -- Class B3 'CC/DR3'; (LCR: 0.65). Summary -- 60+ day Delinquency: 27.51%; -- Realized Losses to date (% of Original Balance): 0.78%; -- Expected Remaining Losses (% of Current Balance): 32.58%; -- Cumulative Expected Losses (% of Original Balance): 28.92%. CITIGROUP INC: In Talks With Gov't to Create 'Bad Bank' ------------------------------------------------------- Citigroup Inc. is in talks with the U.S. government for the creation of a "bad bank," a structure that would house some of the company's risky assets, David Enrich and Carrick Mollenkamp at The Wall Street Journal report, citing people familiar with the situation. Citing people familiar with the matter, Bradley Keoun, Alison Vekshin, and Christine Harper at Bloomberg News relate that Citigroup Chief Financial Officer Gary Crittenden and Chief Risk Officer Brian Leach are leading the negotiations with the government. The sources said that the structure would help Citigroup cleanse its balance sheet of billions of dollars in "toxic assets," WSJ relates. The report says that the bad bank might take in assets from Citigroup's off-balance-sheet units, which hold about $1.23 trillion. Investors, according to the report, have worried that those assets -- some are tied to mortgages -- could cause heavy losses if they are on Citigroup's balance sheet. As of Sept. 30, 2008, Citigroup has $2 trillion in loans, securities, and other assets on its balance sheet, the report states. A source said that the bad bank would hold about $50 billion of assets, WSJ reports. Citigroup and the government are discussing a plan that calls for the assets to remain at Citigroup, with the government agreeing to assume losses beyond a specified amount, Bloomberg says, citing sources. The sources said that the holdings that may be guaranteed are a portion of the $400 billion pile of mortgages, bonds, auto loans, and corporate loans that Citigroup CEO Vikram Pandit pledged in May 2008 to get rid of within three years. The amount to be covered under the plan is still under discussion, but the talks are focused on $100 billion to $200 billion of the assets, the report says, citing the sources. Citing sources, David Enrich at WSJ relates that Citigroup has been talking to Treasury Department and Federal Reserve officials in recent days. Citigroup, according to WSJ, hopes that the government would express confidence in the company to help reassure clients. Citigroup thinks that even a small capital infusion from the government would send a positive signal, the report says. CreditSights Inc. analyst David Hendler said in a report that the Federal Deposit Insurance Corporation could provide loan-loss support, or the U.S. Treasury could contribute money from the $700 billion Troubled Asset Relief Program passed by Congress in October 2008, to help Citigroup. According to WSJ, Citigroup already received $25 billion from the government's Troubled Asset Relief Program, boosting capital levels that the company, the government, and many analysts believe are enough to absorb future losses on loans and securities. Sources said that government officials have encouraged Citigroup to consider a range of scenarios, and the firm hasn't made a formal request for government financial assistance. Christine Harper at Bloomberg News reports that the government could intervene if Citigroup's depositors start to withdraw money. Citigroup, according to the report, would be considered an institution whose collapse could threaten the financial system. Goldman Sachs & Morgan Stanley May Want Citigroup Citing CreditSights Inc., Goldman Sachs Group Inc. and Morgan Stanley may want to acquire Citigroup, as Citigroup would "significantly" add to the companies' earnings as long as the U.S. government absorbed losses on the bank's assets. CreditSights analyst David Hendler said in a report that the potential buyer of Citigroup would be acquiring a significant future earnings stream for a relatively low price, and "would probably receive government support if it was needed." According to Bloomberg, Goldman Sachs and Morgan Stanley have said that they would consider acquisitions to help build their deposit bases. Bloomberg reports that CreditSights said that Citigroup's $2 trillion of assets would have to be booked by any acquirer at current market values, translating into $100 billion of writedowns. The Federal Deposit Insurance Corp., says Bloomberg, could provide loan-loss support or the U.S. Treasury could provide funds from TARP. Won't Sell Assets; Stock Drops 20% WSJ reports that Mr. Pandit said in a conference call that he won't sell the Smith Barney brokerage unit or other pieces of the company, even though its stock dropped 20% on Friday to a 16-year low. As reported in the Troubled Company Reporter on Nov. 21, 2008, Citigroup executives started considering the possibility of auctioning off assets of the company or even selling the whole firm outright. WSJ relates that Citigroup's board met on Friday morning to discuss their options if the 60% stock-price drop continues this week. Citing people familiar with the matter, the report says that executives haven't ruled out a possible sale or breakup of Citigroup if there is no alternative. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citi had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. COAST CFO: Moody's Cuts Ratings on 2006-2 Class D Notes to Ba1 -------------------------------------------------------------- Moody's Investors Service downgraded these debt securities issued by Coast CFO 2006-2 Ltd.: $250,000,000 Class A Secured Floating Rate Notes due 2013 -- Current Rating: Aa1, on review for downgrade -- Prior Rating: Aaa, on review for downgrade $40,000,000 Class B Secured Floating Rate Notes due 2013 -- Current Rating: A1, on review for downgrade -- Prior Rating: Aa2, on review for downgrade $15,000,000 Class C Secured Floating Rate Notes due 2013 -- Current Rating: A2, on review for downgrade -- Prior Rating: A2, on review for downgrade $45,000,000 Class D Secured Floating Rate Notes due 2013 -- Current Rating: Ba1, on review for downgrade -- Prior Rating: Baa2, on review for downgrade Originally rated on Dec. 18, 2006, Coast CFO 2006-2 Ltd. is a collateralized fund obligation that is backed by equity interests in a diversified fund of hedge funds. The fund is managed by Coast Asset Management LP. The secured floating rate notes were put on review for possible downgrade by Moody's on Oct. 28, 2008. Rating action reflects severe deterioration in the transaction's overcollateralization level due to severe market conditions. COAST CFO: Moody's Cuts Rating on 2006-1 Class D Notes to Ba1 ------------------------------------------------------------- Moody's Investors Service downgraded these debt securities issued by Coast CFO 2006-1 Ltd.: $300,000,000 Class A Secured Floating Rate Notes due 2013 -- Current Rating: Aa1, on review for downgrade -- Prior Rating: Aaa, on review for downgrade $46,000,000 Class B Secured Floating Rate Notes due 2013 -- Current Rating: Aa3, on review for downgrade -- Prior Rating: Aa2, on review for downgrade $20,000,000 Class C Secured Floating Rate Notes due 2013 -- Current Rating: A2, on review for downgrade -- Prior Rating: A2, on review for downgrade $54,000,000 Class D Secured Floating Rate Notes due 2013 -- Current Rating: Ba1, on review for downgrade -- Prior Rating: Baa2, on review for downgrade Originally rated on March 29, 2006, Coast CFO 2006-1 Ltd. is a collateralized fund obligation that is backed by equity interests in a diversified fund of hedge funds. The fund is managed by Coast Asset Management LP. The secured floating rate notes were put on review for possible downgrade by Moody's on Oct. 28, 2008. Rating action reflects severe deterioration in the transaction's overcollateralization level due to severe market conditions. COMMUNITY BANK: Georgia Bank Fails & FDIC Named as Receiver ----------------------------------------------------------- The Community Bank, Loganville, Georgia, was closed on Friday, November 21, 2008, 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 Bank of Essex, to assume all of the deposits of The Community Bank. The Community Bank's four branches will open on Monday, November 24, 2008 as Bank of Essex. Depositors of the failed bank will automatically become depositors of Bank of Essex. 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 The Community Bank were able to access their 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 October 17, 2008, The Community Bank had total assets of $681.0 million and total deposits of $611.4 million. Bank of Essex purchased approximately $84.4 million of The Community Bank's assets, and paid the FDIC a premium of $3.2 million for the right to assume the failed bank's deposits. 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 between $200 million and $240 million. The Community Bank -- http://www.banktcb.com/-- is the 20th FDIC-insured institution to be closed nationwide, and the third in Georgia, this year. 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. CONNORS BROTHERS: S&P Withdraws 'B+' Long-Term Corp. Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings, including the 'B+' long-term corporate credit rating, on Toronto-based Connors Bros. Income Fund. The rating action follows the acquisition of the company's operating businesses by an affiliate of Centre Partners Management LLC for C$8.50 per unit in cash (totaling about C$438 million), plus the repayment of debt, for a total consideration of almost C$675 million. CONSTELLATION COPPER: Liquidity Woes May Prompt Bankruptcy Filing ----------------------------------------------------------------- Constellation Copper Corporation reports that it has been delayed in filing its interim financial statements for its third quarter ended Sept. 30, 2008, and Management Discussion & Analysis related thereto by the required filing date under applicable Canadian securities laws, namely Nov. 14, 2008. The delay is attributable to the uncertainty of reaching an agreement with Jaguar Financial Corporation and Glencore International AG pursuant to the letter of intent disclosed on Sept. 3, 2008, and the status of the company's ongoing negotiations with secured creditor Investec Bank (UK) Limited. Consequently, the company does not know whether it will be able to continue operating as a going concern, unless the relief requested from Investec to cover critical operating and other expenses is granted or another source of financing becomes available. The company may consider filing for legal protection from its creditors in both Canada and the United States if cash liquidity problems can not be resolved. The company anticipates that it will be in a position to file its Third Quarter Report by Jan. 14, 2009. Until its Third Quarter Report is filed, the company intends to satisfy the requirements of the "alternate information guidelines" described in CSA Staff Notice 57-603, including issuing bi-weekly default status reports. As a result of this delay, Constellation management has asked the securities regulatory authorities in each of the Provinces of Canada to put in place a management cease trade order covering all persons who are directors, officers or insiders of the company or who have been directors, officers or insiders of Constellation during the period that the financial statements are being prepared. If the company's Third Quarter Report is not filed by Jan. 14, 2009, one or all of the authorities may impose an issuer cease trade order against Constellation. The company does not believe that it will be affected by this aspect of the Notice because it anticipates that it will be in a position to file its Third Quarter Report by Jan. 14, 2009. The MCTO will remain in place until two full business days after receipt by the authorities of all filings that the company is required to make pursuant to applicable Canadian securities laws. About Constellation Copper Headquartered in Lakewood, Colorado, Constellation Copper Corporation (CCU: TSX) -- http://www.constellationcopper.com/-- evaluates and develops mineral properties in the United States and Mexico. The company holds its properties primarily through three of its wholly owned subsidiaries, Lisbon Valley Mining Co. LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A. de C.V. LVMC operates the Lisbon Valley copper mine, which comprises three main deposits: Sentinel, Centennial and GTO, plus the Cashin satellite deposit, with reserves and resources totaling +50 million tons and grading an average 0.48% copper. Minera Terrazas holds the company's interest in the Terrazas zinc-copper project located in north- central Mexico. The property has a total resource of 90 million tonnes grading 1.37% zinc and 0.32% copper in two adjacent deposits. San Javier del Cobre S.A. de C.V. holds the company's interest in the San Javier copper property located in northwestern Mexico. CONSTRUCTION RECYCLERS: Closes Biz, Files for Chapter 7 ------------------------------------------------------- David Frey at Aspen Daily News reports that Construction Recyclers has closed and filed for Chapter 7. Aspen Daily relates that Douglas Larson, the attorney for Grand Junction, blamed the company's collapse on construction downturn resulting due to financial crisis. Construction Recyclers had been struggling for years, but it was facing eviction when it closed, the report says, citing Mr. Larson. "The cash flow diminished to such an extent they were unable to pay their rent," the report quoted Mr. Larson as saying. According to Aspen Daily, an auction was planned for the remaining holdings, but bankruptcy trustee Kevin Kubie said that the goods may be turned over to the bank to sell. The merchandise was worth a fraction of what the business claimed, making it difficult to reimburse creditors through an auction, Aspen Daily states, citing Mr. Kubie. Court documents indicate that Construction Recyclers has almost 450 creditors, most of them consignors with merchandise ranging from $2 to $1,400. Aspen Daily states that Construction Recyclers owes about $12,000 in back rent, has a negative balance on its bank account, and owes the Internal Revenue Service about $2,500 in withholding and unemployment taxes. According to court documents, Construction Recyclers had about 335 items on consignment valued at almost $43,000, and 4,117 items out of consignment, valued at $225,000. About Construction Recyclers Located in a metal warehouse on the north side of Carbondale, Construction Recyclers, or Construction Junction, Robert and Susan Kurk, of Glenwood Springs, purchased the consignment shop in 2002, but four years later, Susan Kurk took it over in divorce proceedings. COVERS ETC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Covers, Etc., Inc. 925 West Harris Road Arlington, TX 76001 Case No.: 08-45472 Petition Date: November 20, 2008 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Howard Marc Spector, Esq. Howard Marc Spector, P.C. 12770 Coit Road Banner Place, Suite 1100 Dallas, TX 75251 Tel: (214) 365-5377 Fax: (214) 237-3380 Email: hspector@howardmarcspector.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its Chapter 11 petition. CPW ACQUISITION: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: CPW Acquisition Corp. c/o Cecchi Gori Pictures 11990 San Vicente Blvd., Suite 300 Los Angeles, CA 90049 Bankruptcy Case No.: 08-14623 Chapter 11 Petition Date: November 20, 2008 Court: Southern District of New York (Manhattan) Debtor's Counsel: Kenneth M. Lewis, Esq. klewis@rosenpc.com Sanford P. Rosen & Associates, P.C. 747 Third Avenue New York, NY 10017-2803 Tel: (212) 223-1100 Fax: (212) 223-1102 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 ------ --------------- ------------ Fortress Credit Corp. guaranty $18,000,000 1345 Avenue of the Americas New York, New York 10105 Bd of Mgr. Trump Int'l Hotel common charges $62,355 & Tower Condominium One Central Park West New York, New York 10023 Tel: (212) 299-1000 Loeb & Loeb LLP legal services $9,776 345 Park Avenue New York, New York 10154 Tel: (212) 407-4000 Steven Landy & Associates PLLC legal services $7,608 Zuber & Taillien LLP legal services $9,122 The petition was signed by CPW Acquisition secretary Claire C. Ambrosio. DBSI INC: TIC Investors Appoint Bridger Commercial as Advisor ------------------------------------------------------------- Bridger Commercial Funding has been retained as an expert advisor for certain Tenants-in-Common (TICs) who made investments in commercial real estate properties sponsored by DBSI Inc. Bridger says that DBSI's Chapter 11 bankruptcy filing in Delaware on Nov. 10, 2008, may impact over 8,300 investors. Paul O'Rear, Senior Vice President of Bridger Commercial, stated, "TIC investors that acquired interests in DBSI properties face potentially severe financial and tax consequences as a result of DBSI's bankruptcy. Unfortunately, very significant investments are at risk, and investors' tax deferral under Section 1031 of the Internal Revenue Code may be in jeopardy under certain outcomes. The financial and legal complexities of the DBSI TIC transactions are significant, suggesting the best course is the retention of qualified professionals to sort through it all." With approximately 225 separate property transactions that DBSI sponsored, Mr. O'Rear estimated that it will take months if not years to resolve the issues that stem from DBSI's bankruptcy. "We are very familiar with how tenants-in-common transactions are structured, and are uniquely positioned to advise the DBSI TIC investors on how to preserve their investment. Many members of Bridger's professional staff are bank-trained workout specialists with experience in managing over $1 billion in complex real estate workouts," Mr. O'Rear added. "In our view, there are two distinct advisors each DBSI TIC investor should retain--counsel to represent the investor's legal interests before the bankruptcy court, and a real estate advisor with workout and TIC expertise to ensure that each property is sound and remains operationally and financially viable while DBSI is moved out of the picture," stated O'Rear. Bridger has created a Web site and blog dedicated to DBSI investors and the critical issues they face at http://dbsiinvestorreport.blogspot.com/. About Bridger Commercial Bridger Commercial Funding offers an array of commercial real estate funding options that help banks generate fee income, enhance borrower relationships, and optimize commercial real estate portfolio risk/return profiles. The company also acts as an advisor for loan trading through BankXchange -- the banking industry's leading commercial real estate loan sale advisory service. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com -- operates a real estate company. The company and 145 of its affiliates filed for Chapter 11 protection on Nov. 10, 2008 (Bankr. D. Del. Lead Case No. 08-12687). The Debtors proposed Young Conaway Stargatt & Taylor LLP as its counsel. Kurztman CarsonConsultants LLC represents as the Debtors' notice claims and balloting agent. No Official Committee of Unsecured Creditors has bee appointed in these cases to date. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. DEATH ROW: Hidden Asset Cues Ch. 11 Trustee to Defer Sales ---------------------------------------------------------- The Deal's Jamie Mason reports that that R. Todd Neilson, the Chapter 11 Trustee of Death Row Records Inc., is asking the Hon. Vincent Zurzolo of the United States Bankruptcy Court for the Central District of California to defer the sale of the Debtor's music-related assets. According to the Deal, the Trustee proposed Jan. 5, 2009, as deadline for interested parties to submit their offers for the Debtor's assets and Jan. 12, 2009, as auction and sale hearing. The Court originally set Nov. 24, 2008, as bid deadline, and Dec. 9, 2008, as auction and sale hearing, source says. The Trustee seeks to reschedule the sale after hidden assets of the Debtors in Michigan were uncovered, Mr. Mason relates. The hidden assets includes unreleased tracks from the late Tupac Shakur, Michel'le, Kurrupt, Magoo, Li'l Jon, Danny Boy and Petey Pablo, he notes. On Oct. 2, 2008, the Debtor's assets were handed over to the Livingston County Sheriff's Department in Michigan after a person related to a Debtor's former employee disclosed their location, the report says. Judge Zurzolo approved the Debtor's bidding procedures for its assets on Oct. 28, 2008, Mr. Mason adds. About Death Row Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as chapter 11 Trustee for the Debtors' estate. The U.S. Trustee for Region 17 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Pachulski Stang Ziehl & Jones as its counsel. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. DENNY'S CORP: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed the 'B+' corporate credit rating on Denny's Corp. (the parent of Denny's Holdings Inc. and Denny's Inc.) and the 'BB' bank loan rating on Denny's Inc.'s $350 million bank facility. The '1' recovery rating on Denny's Inc.'s bank facility remains unchanged, indicating the expectation for very high (90%-100%) recovery in the event of a payment default. The outlook on Denny's Corp. is stable. S&P said it lowered its rating on Denny's Holdings Inc.'s. $175 million senior unsecured notes to 'B-' from 'B'. S&P also revised the recovery rating on this debt issue to '6' from '5', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. "The action reflects Standard & Poor's lower enterprise valuation due to weaker prospects for the casual-dining segment of the restaurant industry," said Standard & Poor's credit analyst Mariola Borysiak. As a result, S&P revised the valuation multiple to 4x from 5x. DENNY'S HOLDINGS: S&P Cuts Rating on $175MM Unsec. Notes to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on Denny's Holdings Inc.'s. $175 million senior unsecured notes to 'B-' from 'B'. S&P also revised the recovery rating on this debt issue to '6' from '5', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. At the same time S&P affirmed the 'B+' corporate credit rating on Denny's Corp. (the parent of Denny's Holdings Inc. and Denny's Inc.) and the 'BB' bank loan rating on Denny's Inc.'s $350 million bank facility. The '1' recovery rating on Denny's Inc.'s bank facility remains unchanged, indicating the expectation for very high (90%-100%) recovery in the event of a payment default. The outlook on Denny's Corp. is stable. "The action reflects Standard & Poor's lower enterprise valuation due to weaker prospects for the casual-dining segment of the restaurant industry," said Standard & Poor's credit analyst Mariola Borysiak. As a result, S&P revised the valuation multiple to 4x from 5x. DENNY'S INC: S&P Affirms 'BB' Bank Loan Rating on $350MM Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'B+' corporate credit rating on Denny's Corp. (the parent of Denny's Holdings Inc. and Denny's Inc.) and the 'BB' bank loan rating on Denny's Inc.'s $350 million bank facility. The '1' recovery rating on Denny's Inc.'s bank facility remains unchanged, indicating the expectation for very high (90%-100%) recovery in the event of a payment default. The outlook on Denny's Corp. is stable. S&P said it lowered its rating on Denny's Holdings Inc.'s. $175 million senior unsecured notes to 'B-' from 'B'. S&P also revised the recovery rating on this debt issue to '6' from '5', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. "The action reflects Standard & Poor's lower enterprise valuation due to weaker prospects for the casual-dining segment of the restaurant industry," said Standard & Poor's credit analyst Mariola Borysiak. As a result, S&P revised the valuation multiple to 4x from 5x. DOWNEY SAVINGS: Bank Fails & FDIC Arranges Takeover by U.S. Bank ---------------------------------------------------------------- U.S. Bank, National Association, Minneapolis, Minn., acquired the banking operations, including all the deposits, of Downey Savings and Loan Association, F.A., Newport Beach, Calif., and PFF Bank & Trust, Pomona, Calif., in a transaction facilitated by the Federal Deposit Insurance Corporation. The combined 213 branches of the two organizations will reopen as branches of U.S. Bank under their normal business hours, including those with Saturday hours. Depositors will automatically become depositors of U.S. Bank. 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. Customers of both banks should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the organizations. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards. As of September 30, 2008, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion. PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion. Besides assuming all the deposits from the two California banks, U.S. Bank will purchase virtually all their assets. The FDIC will retain any remaining assets for later disposition. The FDIC and U.S. Bank entered into a loss share transaction. U.S. Bank will assume the first $1.6 billion of losses on the asset pools covered under the loss share agreement, equal to the net asset position at close. The FDIC will then share in any further losses. Under the agreement, U.S. Bank will implement a loan modification program similar to the one the FDIC announced in August stemming from the failure of IndyMac Bank, F.S.B., Pasadena, CA. The loss-sharing arrangement is expected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship. U.S. Bank currently has 353 offices in California. Downey Savings and PFF Bank are not affiliated with each other. Downey Savings has 170 branches in California and five in Arizona, and PFF Bank has 38 branches in California. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Downey Savings will be $1.4 billion and $700 million for PFF Bank. U.S. Bank's acquisition of all the deposits of the two institutions was the "least costly" option for the FDIC's DIF compared to alternatives. These were the 21st and 22nd banks to fail in the nation this year, and the fourth and fifth banks to close in California. The last bank to be closed in the state was Security Pacific Bank, Los Angeles, on November 7, 2008. 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 8,451 banks 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. DUNKIN'S DIAMONDS: Will Close Four Stores in Ohio & Florida ----------------------------------------------------------- Dan Eaton at Business First of Columbus reports that Dunkin's Diamonds Inc. will close four of its 10 stores in Ohio and Florida. Business First relates that Dunkin's Diamonds filed for Chapter 11 protection Nov. 6, 2008, after three creditors filed for the company's liquidation on Oct. 30, 2008. Dunkin's Diamonds has $10 million to $50 million in assets and $10 million to $50 million in liabilities, court documents say. Business First says that Webster Business Credit Corp. is Dunkin's Diamond's largest creditor, with a $7 million claim. Dunkin's Diamonds, says Business First, will close three of its four Florida stores, leaving only its Fort Myers shop. The report states that the company will also close a store in Athens, and will keep stores in these locations open: -- Columbus, -- Heath, -- Lancaster, -- New Philadelphia, and -- Lima. According to Business First, Dunkin's Diamonds' co-owner Carney Chavis said that Florida is the problem, adding, "The situation in Florida is drastic. We opened two stores in the last 18 months. When we were planning them, things were booming at the time. But it's brought us to a situation where we can't carry them any more." The Florida stores were too large, about 5,000 square feet each, and carried large amounts of inventory that couldn't be sold when the real estate crisis and economic slowdown came, the report states, citing Mr. Chavis. Dunkin's Diamonds Inc. -- http://dunkinsdiamonds.com-- is a jewelry company that started in Europe and has since grown into 10 locations in Ohio and Florida. The company is owned by Carney Chavis and Stuart Dunkin. ERIE COUNTY: Berry Plastics Acquires Firm's Assets for $6.5MM ------------------------------------------------------------- Berry Plastics Corporation has completed the acquisition of certain assets of Erie County Plastics Corporation, a custom injection molder of plastics packaging and components. Erie Plastics previously filed for bankruptcy protection on Sept. 29, 2008, and Berry Plastics was the successful bidder for the majority of the assets of Erie Plastics including equipment, inventory and other tangible and intangible assets. Total consideration was approximately $6.5 million which included approximately $1.0 million of cash on hand at Erie Plastics and approximately $1.8 million of accounts receivable that were retained by the senior secured lenders. The remaining $3.7 million was paid by Berry Plastics from available cash on hand. Robert Weilminster, Vice President of Corporate Development for Berry Plastics, stated, "Erie Plastics is a business with a long respected history in plastic packaging. The workforce has done an outstanding job continuing the operations of the business during a difficult time." About Berry Plastics Berry Plastics is a leading manufacturer and marketer of plastic packaging products. Berry Plastics is a major producer of a wide range of products, including open top and closed top packaging, polyethylene-based plastic films, industrial tapes, medical specialties, packaging, heat-shrinkable coatings and specialty laminates. The company's 17,000 plus customers range from large multinational corporations to small local businesses. Based in Evansville, Indiana, the company has 68 manufacturing facilities worldwide and nearly 14,000 employees. About Erie County Headquartered in Corry, Pennsylvania, Erie County Plastics Corp. -- <http://www.erieplastics.com/>http://www.erieplastics.com/-- makes custom injection molders of plastics packaging and components including lids, closures and vials. The company filed for Chapter 11 relief on Sept.29, 2008 (Bankr. W.D. Pa. Case No. 08-11860). Lawrence C. Bolla, Esq., at Quinn Buseck Leemhuis Toohey & Kroto Inc. represents the Debtor as counsel. When the company filed for protection from its creditors, it listed assets and debts of $10 million to $50 million, and debts of $10 million to $50 million. ESTATE FINANCIAL: Panel Taps Ezra Brutzkus as Counsel ----------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Estate Financial Inc.'s bankruptcy case asks the U.S. Bankruptcy Court for the Central District of California for authority to employ Ezra Brutzkus Gubner LLP as counsel, effective as of Oct. 23, 2008. As the Committee's counsel, EBG will: a) advise the Committee on matters relating to the administration of the estate, and on the Committee's rights and remedies with regard to the estate's assets and the claims of secured and unsecured creditors; b) provide legal advice and guidance with respect to the powers, duties, rights and obligations of the Committee; c) assist the Committee in the review and supervision of the Debtor's business affairs; interfacing with representatives of the Debtor, United States Trustee's Office, the Trustee, the Fund Committee, the Fund Trustee and other parties-in- interest concerning all facets of the case, including without limitation, the proposed use of cash collateral, debtor-in- possession financing, the sale or disposition of assets, analysis and perhaps development of proposed plans of reorganization and disclosure statements; d) assist in the protection of assets of the estate; e) represent the Committee's interest in such matters, motions and legal proceedings as may come before this Court and in proceedings related thereto; f) assist in the preparation of such pleadings, applications, schedules, orders, memoranda and other documents as are required for the orderly administration of this estate and all ther legal documents as may be necessary and requested by the Committee; and g) perform other additional legal services as may be appropriate and requested by the Committee in the case. Steven T. Gubner, a member at EBG, assures the Court that the firm does not hold or represent any interest adverse to the Debtor, the Trustee or the Debtor's estate. To the best of the Committee's knowledge, EBG is a disinterested party as that term is defined in the Bankruptcy Code. As compensation for their services, EBG's professionals currently bill: Hourly Rate ----------- Partner $400-$500 Of Counsel $500 Associate $245-$400 Paralegals $195-$230 Law Clerks $100 About Estate Financial Five creditors of Paso Robles, California-based Estate Financial Inc. -- http://www.estatefinancial.com/-- filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Petitioner Steve Gardality asserted a claim of $6,269,768. Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represent the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Brian D. Fittipaldi, Esq., at the U.S. DOJ/Office of the U.S. Trustee, represents the Chapter 11 trustee as counsel. In its schedules, Estate Financial listed total assets of $27,428,550, and total debts of $7,316,755. ESTATE FINANCIAL: Trustees Want to Employ SJLM as Special Counsel ----------------------------------------------------------------- Thomas P. Jeremiassen, the acting Chapter 11 trustee for the bankruptcy estate of Estate Financial, Inc. (EFI), and Bradley D. Sharp, the acting Chapter 11 trustee for the bankruptcy estate of Estate Financial Mortgage Fund, LLC, have jointly requested the U.S. Bankruptcy Court for the Central District of California for authority to employ Sinsheimer Juhnke Lebens & McIvor, LLP, as special counsel, effective Oct. 13, 2008. The Trustees wish to employ SJLM as special counsel relating to the collection and foreclosure of various obligations, the investigation and pursuit of claims on behalf of EFI and the Fund against third parties including former principals and affiliates of EFI and the Fund, and such other legal matters as may be appropriate. The Trustees tell the Court that SJLM is particularly suited to undertake this employment as it has been involved in the past 10 months in matters related to EFI and the Fund on behalf of other clients of the firm, and has expended more than 300 hours investigating EFI and the Fund and their principals, related entities and agents. During the course of its investigation, SJLM also worked closely with various governmental agencies, and has assisted these agencies with their ongoing investigations. Specifically, as special counsel for the EFI Trustee and the Fund Trustee, SJLM will: -- assist the Trustees with collection of the outstanding loans made by EFI and any guaranties, the servicing of the loans, and the foreclosure of any collateral for such loans which are in default; -- investigate prepetition transfers made by the Debtors and insiders of the Debtors to both insiders of the Debtors and others, investigate claims on behalf of EFI and the Fund against third parties including former principals and affiliates of EFI and the Fund, report the findings of such investigation to the Trustees, recommend possible actions based upon those findings; and -- perform other legal matters as may be requested by the Trustees. Roger Frederickson, Esq. an attorney with the law firm of SJLM, assures the Court that SJLM does not hold or represent any interest adverse to the Debtors or the estates concerning the matters for which it is being engaged. SJLM's professionals currently bill: Hourly Rate ----------- David A. Juhnke, Partner $310 Roger B. Frederickson, Associate $285 Joshua W. Martin, Associate $195 Gina D. Axson, Paralegal $130 About Estate Financial Five creditors of Paso Robles, California-based Estate Financial Inc. -- http://www.estatefinancial.com/-- filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Petitioner Steve Gardality asserted a claim of $6,269,768. Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represent the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Brian D. Fittipaldi, Esq., at the U.S. DOJ/Office of the U.S. Trustee, represents the Chapter 11 trustee as counsel. Robyn B. Sokol, Esq., and Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represents the Official Committee of Unsecured Creditors as counsel. In its schedules, Estate Financial listed total assets of $27,428,550, and total debts of $7,316,755. About Estate Financial Mortgage Paso Robles, California-based Estate Financial Mortgage Fund, LLC, filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Ca. Case No. 08-11535). Lewis R. Landau, Esq., at Calabasas, California, represents the Debtor as counsel. Bradley D. Sharp was appointed as Chapter 11 trustee. David M. Poitras, Esq., Joseph A. Eisenberg, Esq., and Thomas M. Geher, Esq., at Jeffer Mangels Butler & Marmaro LLP, represent the Chapter 11 trustee as counsel. In its schedules, Estate Financial Mortgage Fund, LLC listed assets of $19,620,404 and debts of $34,167. ESTATE MORTGAGE: Trustees Want to Employ SJLM as Special Counsel ---------------------------------------------------------------- Thomas P. Jeremiassen, the acting Chapter 11 trustee for the bankruptcy estate of Estate Financial, Inc. (EFI), and Bradley D. Sharp, the acting Chapter 11 trustee for the bankruptcy estate of Estate Financial Mortgage Fund, LLC (the Fund), have jointly requested the U.S. Bankruptcy Court for the Central District of California for authority to employ Sinsheimer Juhnke Lebens & McIvor, LLP, as special counsel, effective Oct. 13, 2008. The Trustees wish to employ SJLM as special counsel relating to the collection and foreclosure of various obligations, the investigation and pursuit of claims on behalf of EFI and the Fund against third parties including former principals and affiliates of EFI and the Fund, and such other legal matters as may be appropriate. The Trustees tell the Court that SJLM is particularly suited to undertake this employment as it has been involved in the past 10 months in matters related to EFI and the Fund on behalf of other clients of the firm, and has expended more than 300 hours investigating EFI and the Fund and their principals, related entities and agents. During the course of its investigation, SJLM also worked closely with various governmental agencies, and has assisted these agencies with their ongoing investigations. Specifically, as special counsel for the EFI Trustee and the Fund Trustee, SJLM will: -- assist the Trustees with collection of the outstanding loans made by EFI and any guaranties, the servicing of the loans, and the foreclosure of any collateral for the loans which are in default; -- investigate prepetition transfers made by the Debtors and insiders of the Debtors to both insiders of the Debtors and others, investigate claims on behalf of EFI and the Fund against third parties including former principals and affiliates of EFI and the Fund, report the findings of such investigation to the Trustees, recommend possible actions based upon those findings; and -- perform other legal matters as may be requested by the Trustees. Roger Frederickson, Esq., an attorney with the law firm of SJLM, assures the Court that SJLM does not hold or represent any interest adverse to the Debtors or the estates concerning the matters for which it is being engaged. SJLM's professionals currently bill: Hourly Rate ----------- David A. Juhnke, Partner $310 Roger B. Frederickson, Associate $285 Joshua W. Martin, Associate $195 Gina D. Axson, Paralegal $130 About Estate Financial Five creditors of Paso Robles, California-based Estate Financial Inc. -- http://www.estatefinancial.com/-- filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Petitioner Steve Gardality asserted a claim of $6,269,768. Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represent the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Brian D. Fittipaldi, Esq., at the U.S. DOJ/Office of the U.S. Trustee, represents the Chapter 11 trustee as counsel. Robyn B. Sokol, Esq., and Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represents the Official Committee of Unsecured Creditors as counsel. In its schedules, Estate Financial listed total assets of $27,428,550, and total debts of $7,316,755. About Estate Financial Mortgage Paso Robles, California-based Estate Financial Mortgage Fund, LLC, filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Ca. Case No. 08-11535). Lewis R. Landau, Esq., at Calabasas, California, represents the Debtor as counsel. Bradley D. Sharp was appointed as Chapter 11 trustee. David M. Poitras, Esq., Joseph A. Eisenberg, Esq., and Thomas M. Geher, Esq., at Jeffer Mangels Butler & Marmaro LLP, represent the Chapter 11 trustee as counsel. In its schedules, Estate Financial Mortgage Fund, LLC listed assets of $19,620,404 and debts of $34,167. FAIRCHILD SEMICONDUCTOR: Moody's Retains 'Ba3' Corporate Rating --------------------------------------------------------------- Moody's Investors Service affirmed Fairchild Semiconductor Corporation's (a wholly owned subsidiary of Fairchild Semiconductor International, Inc.) Ba3 corporate family rating and SGL-1 speculative grade liquidity rating. The ratings outlook was revised to stable from positive. Moody's also affirmed the Ba2 rating on the company's senior secured credit facilities. The stabilization of the ratings outlook reflects the likely contraction in Fairchild's sales and margins because of weak end- market demand. The company recently announced that it expects sales to sequentially decline 16% to 21% for the December 2008 quarter. However, the stable outlook is supported by Moody's expectation that the company should maintain very good liquidity throughout the near term and improved supply chain management, as evidenced through previous cycles. Despite the potential severity of the current global economic downturn and Fairchild's exposure to weakening end-markets (such as consumer, automotive, computing), the affirmation of the Ba3 corporate family rating is supported by Moody's expectation that while maintaining very good liquidity, it can mitigate the impact of declining sales on its margins, within a tolerable bandwidth, through cost containment initiatives and continued emphasis on working capital management. In Moody's opinion, based on various stress scenarios, the company should have the ability to sustain credit metrics that are appropriate for the Ba3 ratings category over the medium-term. However, to the extent the company experiences a decline in demand levels greater than Moody's expectations, this could apply negative pressure to the ratings. Moody's notes that Fairchild's end-market visibility is somewhat limited given that a material portion of its products are sold through distributors, many of whom are coping with reduced orders and are trying to reduce inventories. Additionally, the company's exposure to the mature Standard Products business could constrain gross margins, particularly if ASP's sharply decline. These ratings were affirmed: -- Corporate family rating at Ba3; -- Probability-of-default rating at B1; -- $100 million senior secured revolving credit facility due 2012 at Ba2 (LGD2, 27%); -- $515.8 million senior secured term loan due 2013 at Ba2 (LGD2, 27%). Fairchild's Ba3 corporate family rating continues to reflect the company's moderate leverage, its favorable business profile as the largest global supplier of power semiconductors, and significant historical improvements in operating margins, but also considers the highly competitive nature of the company's markets, ongoing acquisition risk, and its exposure to softening end-markets. As such, Moody's will continue to monitor the company's business strategy, the pricing environment, and its cost control efforts. In Moody's opinion, Fairchild's liquidity position is very good due to its large cash balance, favorable debt maturity profile, expectations for positive cash flow, and capacity under its revolving credit facility. The last rating action for Fairchild occurred on May 2, 2008, when Moody's affirmed the company's Ba3 corporate family rating and SGL-1 speculative grade liquidity rating. Fairchild Semiconductor Corporation, based in South Portland, Maine, is the world's largest global supplier of power semiconductors. The company reported sales of approximately $1.7 billion through the twelve months ended Sept. 28, 2008. FANNIE MAE: Has Until November 26 to Cure NYSE Non-Compliance ------------------------------------------------------------- Fannie Mae has been notified by the New York Stock Exchange about its failure to satisfy one of the NYSE's standards for continued listing of its common stock. Fannie Mae said in a filing with the Securities and Exchange Commission that NYSE advised that Fannie Mae was below the exchange's price criteria for common stock because the average closing price of Fannie Mae's common stock for the 30 consecutive trading days ending Nov. 12, 2008, was less than $1.00 per share. As a result, the company's common stock and each of its listed series of preferred stock are subject to suspension and delisting unless the company notifies the NYSE by Nov. 26, 2008, of its intent to cure this deficiency. If the company provides this notice, it will have six months from Nov. 12, 2008, subject to monitoring by the NYSE, to bring its common stock share price and average share price for 30 consecutive trading days above $1.00. Fannie Mae is working with its conservator, the Federal Housing Finance Agency, to explore options relating to this deficiency and has not yet determined its response or any specific action that it will take as a result of the exchange's notice. Fannie Mae's common stock and each of the company's listed series of preferred stock currently remain listed on the exchange under the symbol or prefix "FNM," and will trade on the main platform. Further, each will be assigned a ".BC" indicator by the NYSE to indicate to investors that the company is not currently in compliance with the exchange's continued listing standards. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. FIRST AMERICAN: Blames Bankruptcy on Slowdown in Debt Payments -------------------------------------------------------------- Fred O. Williams at The Buffalo News reports that First American Recovery Services in Amherst said that slowdown in payments from debtors led it to file for bankruptcy. First American and three affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court in Buffalo this month, reporting debts of up to $50 million, The Buffalo News states. The Buffalo News relates that First American owns $500 million in overdue accounts. The report quoted First American's President Mark F. Bohn as saying, "Consumers are really struggling." Much of First American's revenue comes from monthly payment plans designed to wipe out debts over time, and "now, somebody paying an amount over six or 12 months may take 24 or 36 months," the report states, citing Mr. Bohn. Mr. Bohn, according to The Buffalo News, said that prices for items like food and fuel are dropping, but the period of high costs over the last year has left many households tapped out. First American, as a debt buyer, employs 12 to 15 local firms to collect past-due amounts, supporting about 100 jobs in the region, and the company has six direct workers in its office on Wehrle Drive, the report says, citing Mr. Bohn. The Buffalo News reports that First American said that its bankruptcy filing was triggered when CapitalSource Finance LLC, its biggest lender, shut off funding due to the financial crisis. Court documents say that CapitalSource Finance said that First American funneled money to outside companies while failing to make its loan payments. According to the documents, CapitalSource Finance said that a First American entity "has made unauthorized distributions" to outside companies, including a real estate and a construction company. The Buffalo News relates that CapitalSource Finance tried to seize First American's cash to try to protect $25 million in loans. Citing Mr. Bohn, The Buffalo News reports that First American is showing a profit for this year, and given time, it can make good on its debts, because "our assets are greater than our liabilities." First American Recovery is a full service repossession company specializing in collateral recovery. It offers professional services to financial institutions throughout North America. It provides 24 hour a day service with frequent status reports, multiple secured storage facilities and state of art towing and transportation services. It also offers skip tracing, liquidation, and remarketing services for a nominal fee. First American is owned by Mark F. Bohn and Douglas J. Mackinnon. FIRSTLIGHT HYDRO: Moody's Maintains 'Ba3' Senior Bonds' Rating -------------------------------------------------------------- Moody's affirmed the Ba3 rating of FirstLight Hydro Generating Company's senior secured first mortgage bonds and the B2 Corporate Family Rating, B1 first lien and B3 second lien ratings for its parent company FirstLight Power Resources, Inc. In addition, the short-term Speculative Grade Liquidity rating of FLP was upgraded to SGL-2 from SGL-3. The outlooks for both FLH and FLP remain stable. The affirmations consider the pending acquisition of 100% of the common stock of FLP's ultimate parent FirstLight Power Enterprises, Inc. by GDF Suez Energy North America (GDF NA: unrated), a subsidiary of French energy company GDF Suez SA (GDF Suez: Aa3 senior unsecured, stable). FLPE is currently owned by Energy Capital Partners, a private equity firm. While Moody's views the pending acquisition as potentially positive for FLP and FLH, particularly in light of Moody's understanding of the potential for the development of operational synergies within the GDF NA portfolio, Moody's notes that the debt at FLP and FLH will remain non-recourse to GDF NA and GDF Suez, and that, at least initially, all existing contractual arrangements will remain in place; however, Moody's understands that no additional debt will be incurred at either FLP or FLH as a result of the transaction. The affirmations are also reflective of the company's exposure to merchant energy markets, the asset concentration risk associated with its 1,080 MW Northfield Mountain facility, its planned capital expenditure program, and its high degree of financial leverage. The upgrade to SGL -- 2 reflects improved cash flows and covenant cushion resulting from the implementation of FLP's hedging strategy for Northfield Mountain, a return to more normal hydrology conditions, and lower operating costs. The stable outlooks for FLP and FLH recognize improved 2008 performance and Moody's expectation that cash flows should be relatively stable over the near-to medium term due to the hedging program at Northfield Mountain and the solid operational performance surrounding that key facility. The stable outlooks also consider the hedged nature of the cash flows expected to be generated by Mt. Tom and the conventional and run-or-river hydro facilities. The stable outlooks assume FLP's and FLH's capital expenditure programs will likely remain close to budget and that debt repayment will generally continue as scheduled. Headquartered in Hartford, Connecticut, FLP owns and operates 1,442 MW of merchant electric generating assets located in Connecticut and Massachusetts. FLP's wholly-owned subsidiary FLH, owns 1,296 MW of predominately hydroelectric generating facilities that include two pumped storage hydro units, eleven conventional and run-of-river hydro units, and one internal combustion peaking facility. FLP's portfolio also includes a 146 MW coal-fired generating station held in a separate subsidiary. FLP markets the output of its assets through FirstLight Power Resource Management, the group's marketing subsidiary. FORD MOTOR: Bank Loan Sells for 65% Discount in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Ford Motor Co. is a borrower traded in the secondary market at 34.40 cents-on-the- dollar during the week ended November 21, 2008, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 11.40 percentage points from the previous week, the Journal relates. The syndicated loan matures on Dec. 15, 2013, and Ford pays 300 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Meanwhile, participations in a syndicated loan under which General Motors Corp. is a borrower traded in the secondary market at 35.33 cents-on-the-dollar during the week ended November 21, 2008, as reported in the Journal. This represents a drop of 10.52 percentage points from the previous week, the Journal relates. The syndicated loan matures on Nov. 27, 2013, and GM pays 275 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's B1 rating and Standard & Poor's B rating. Bank debt of other companies in the auto industry are also being sold at substantial discount, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 38.71 cents-on-the-dollar during the week ended November 21, 2008. This represents a drop of 10.43 percentage points from the previous week, the Journal relates. The syndicated loan matures on April 12, 2012, and Avis pays 125 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's Ba1 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 56.57 cents-on-the- dollar during the same period. This represents a drop of 7.54 percentage points from the previous week, the Journal relates. The syndicated loan matures on March 29, 2012, and Lear pays 250 basis points over LIBOR to borrow under the facility. The bank loan is unrated. FORD MOTOR: Mulls Sale of Five Planes to Cut Costs -------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that Ford Motor Co. said that it is considering selling its five aircraft. WSJ quoted Ford Motor spokesperson Mark Truby as saying, "Ford's top priority is to continue making progress on our transformation plan, and we do not want anything to distract us. We are exploring all cost-effective solutions for our air travel.... We have sold four planes since 2005." Citing Mr. Truby, WSJ relates that Ford Motor has three small jets used for executives' travel and two planes used to carry larger groups of workers to help introduce new products. WSJ states that lawmakers and the press criticized executives for using the planes while seeking for a $25 billion bailout from the government. The CEOs didn't tell the Congress that it is often corporate policy that they fly on private planes to ensure their security and save valuable time, WSJ says. General Motors Corp., according to WSJ, was criticized for using private jets to fly to Washington D.C. while seeking for government financial assistance. GM said on Friday that it will sell two of its five corporate planes, the report states About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Moody's Investors Service lowered the debt ratings of Ford Motor Company, Corporate Family and Probability of Default Ratings to Caa1 from B3. The company's Speculative Grade Liquidity rating remains at SGL-3 and the rating outlook is negative. In a related action Moody's also lowered the long-term rating of Ford Motor Credit Company to B3 from B2. The outlook for Ford Credit is negative. As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. FORD MOTOR: S&P Junks Corporate Ratings on Increasing Cash Use -------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its ratings on Ford Motor Co., Ford Motor Credit Co., and related entities, including the corporate credit ratings to 'CCC+' from 'B-', and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. At the same time, S&P lowered the counterparty credit rating on FCE Bank PLC, Ford Credit's European bank, to 'B-' from 'B', maintaining the one- notch rating differential between FCE and its parent. The rating outlook on all entities is negative. The downgrades reflect increasing and ongoing cash use in Ford's automotive operations caused by plummeting U.S. and now European light-vehicle demand and the dramatic consumer shift away from large pickup trucks and SUVs in the U.S. earlier this year. "We expect Ford's cash outflows to further reduce its cash balances during the next few quarters, which will test the company's ability to maintain sufficient liquidity throughout 2009," said Standard & Poor's credit analyst Robert Schulz. S&P still expects the $10.7 billion revolving credit facility to remain undrawn through the end of 2008, although S&P estimates that continued adverse industry conditions could force the company to begin drawing on this facility in the first half of 2009, followed by possibly significant draws by the end of 2009. Ford's current liquidity position remains superior to that of its Michigan-based competitors, General Motors Corp. and Chrysler LLC (both CCC+/Negative/--), and S&P believes Ford Credit has been less constrained recently in its ability to provide financing for Ford customers. As a result, Ford faces a less imminent, but still significant, danger of falling below the necessary levels of cash to run its automotive business. Still, the difference in liquidity relative to that of its competitors provides Ford with a few additional quarters of comfort rather than a year or more. In S&P's view, the company may be forced to consider a financial restructuring or bankruptcy filing in 2009, caused by the very weak outlook for vehicle sales in most of the world. The failure of one or more of Ford's Michigan-based competitors would adversely affect many of Ford's own suppliers, and the resulting turmoil could reduce Ford's liquidity further. S&P believes the most likely trigger for a financial restructuring or bankruptcy filing by Ford would be a reduction in cash and bank facility availability, approaching levels that are insufficient to operate the business, rather than the company making a strategic decision. The company used $7.9 billion in cash, including cash restructuring costs, in its global automotive operations in the third quarter, bringing to $12.8 billion its cash use for the first nine months of the year. Since then, U.S. industry sales plummeted even further in October amid the worsening financial crisis, and S&P believes demand has remained anemic in November. Moreover, weak European demand has led Ford to sharply cut production in that region. Consequently, S&P expects Ford's cash use to continue unabated through the end of this year and early 2009, even as the company continues to aggressively slash costs and conserve cash. Ford and the other Michigan-based automakers may ultimately receive loans or other financial support from the U.S. government, although the form, timing, and magnitude of this assistance are difficult to predict. Although S&P expects some of the $25 billion of previously appropriated government loan funding to begin arriving early in 2009, or perhaps sooner, the amount of funding under this program may be modest at first and spread out over multiple years. Even if the government expedites funding or creates a new program, it is important to stress that S&P would likely view such assistance as buying more time for these companies rather than as a solution to their fundamental business risks, especially deteriorating global demand. S&P expects U.S. light-vehicle sales of about 13.3 million units or less this year, the lowest in 15 years and down sharply from 16.1 million units in 2007. S&P also expects sales to fall further in 2009, to about 12.3 million units, as the economy remains weak and housing prices and consumers' access to credit remain under pressure. The outlook for other major auto markets, including Europe, has suddenly turned much bleaker in the past few months as economic woes have dampened automotive demand beyond the U.S. The weak environment prompted Ford to augment its latest restructuring plan with a series of additional cash-saving actions to be implemented through 2010. These include lower capital spending, reduced inventory and other working capital, and further salaried headcount and compensation reductions. The ratings on Ford reflect the possibility that the multiple problems the company faces in stemming cash use could overwhelm its cash and liquidity during 2009. Items that Ford can address over time, such as its overcapacity, labor costs, and product lineup, will not, in S&P's view, be sufficient to produce any meaningful reduction in its cash use in the immediate future. A stabilization of industry sales, even at low levels, would lead to somewhat lower but still sizable cash use in 2009. Nonetheless, S&P's concern is that the company may not have the liquidity to survive this economic downturn. S&P still views the four-year labor contract reached in late 2007 with the United Auto Workers union as a substantial long-term positive for Ford's turnaround efforts in North America. However, under the current agreement, the large retiree health care and other cost savings from the contract will not begin to accrue until 2010. The negative outlook reflects S&P's view that cash losses could easily cause Ford's liquidity to sink below necessary levels in 2009, even if management's cash-saving actions are partly successful. S&P could lower the ratings further if S&P came to believe that cash balances plus availability under the revolving credit facility would drop significantly below $10 billion by the end of 2009. This could occur even with more vehicle sales than S&P has seen in recent months. S&P could also lower the rating if Ford Credit cannot maintain sufficient funding to continue its already lower levels of auto loan originations. S&P will evaluate the effect of any specific announcements regarding federal funding as they materialize. S&P expects some form of federal assistance to arrive early in 2009, or perhaps sooner, but the form, timing, and magnitude of this and any further assistance are difficult to predict. S&P stresses that S&P would likely view such assistance as buying more time for Ford rather than solving its fundamental business risks. GENERAL GROWTH: Board Amends Bylaws' Notice Protocol ---------------------------------------------------- The Board of Directors of General Growth Properties, Inc., adopted on November 18, 2008, a resolution amending and restating the company's Amended and Restated Bylaws. This further amendment and restatement of the Bylaws amends Sections 2.14 and 2.15 of the Bylaws. The amended Advance Notice Provisions clarify that a company stockholder must submit advance notice of such stockholder's intention to introduce any business at a company stockholder meeting, including, without limitation, the nomination of director candidates or the introduction of a stockholder proposal. The Advance Notice Provisions also have been amended to (i) require expanded disclosure of direct and indirect stock ownership information, including hedging transactions, from the company stockholder providing advance notice, together with any person associated with such stockholder, (ii) require, if true, a representation from such stockholder and any Stockholder Associated Person that such person, or any group of which such person is a part, intends to solicit proxies in support of a stockholder proposal or director nominee, and (iii) require additional information regarding any proposed director nominee and impose additional requirements on such nominees, including the completion of a questionnaire in the form completed by other nominees and a representation that the proposed nominee would not enter into arrangements which would impair the nominee's ability to as a director of the company. A full-text copy of the SECOND AMENDED AND RESTATED BYLAWS OF GENERAL GROWTH PROPERTIES, INC. dated November 18, 2008, is available at no charge at: http://ResearchArchives.com/t/s?3516 Debt Refinancing As reported in the Troubled Company Reporter on Nov. 21, 2008, Bloomberg News reported that General Growth has hired Sidley Austin to assist it in negotiations to refinance roughly $27.3 billion in debt. The Wall Street Journal said General Growth has tapped Sidley Austin as "bankruptcy counsel," but noted that the engagement doesn't mean a Chapter 11 filing is imminent. "Financially distressed companies often hire bankruptcy advisers and never take that step," according to the report. TCR reported on Nov. 14 that General Growth acknowledged in a regulatory filing that it's working with lenders to gain more time to pay off debt, and is also considering asset sales and other ways to raise cash. General Growth has $1.13 billion in debt coming due by the end of the year, with more than $900 million due by Dec. 1, 2008 [Nov. 28]. General Growth said that even if it is successful in addressing these 2008 maturities, an additional $3.07 billion in debt is scheduled to mature in 2009. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing September 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at September 30. * * * As reported in the Troubled Company Reporter on Nov. 18, 2008, Moody's Investors Service has downgraded the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Caa2 from B3 senior secured bank debt; to Caa2 from B3 senior unsecured debt). The ratings remain on review for further possible downgrade. The rating action reflects deepening concerns in the REIT's ability to meet its near term debt obligations and funding needs. GENERAL GROWTH: Extends Rights Deal Expiration to November 2010 --------------------------------------------------------------- General Growth Properties, Inc. extended the expiration date of its Rights Agreement to Nov. 18, 2010. The Rights Agreement was originally adopted with an expiration date of Nov. 18, 2008. In connection with this extension, the purchase price of each right issued under the Rights Agreement was changed from $148 to $105. As a result, the holder of each right is entitled to purchase one-third of one one-thousandth of a share of the company's Series A Junior Participating Preferred Stock for $105, subject to the provisions of the agreement. No other terms of the Rights Agreement were modified. Adam Metz, interim chief executive officer of General Growth, stated, "The extension and amendment of our Rights Agreement is part of the effort by the board to protect and maximize the value of our stockholders' investment in the company and helps to ensure that the company's ongoing strategic evaluation is allowed to proceed in an orderly manner." General Growth is a U.S.-based publicly traded Real Estate Investment Trust. The company currently has ownership interest in, or management responsibility for, a portfolio of more than 200 regional shopping malls in 44 states, well as ownership in master planned community developments and commercial office buildings. The company's portfolio totals approximately 200 million square feet and includes over 24,000 retail stores nationwide. The company is listed on the New York Stock Exchange under the symbol GGP. In relation to the extension of the Rights Agreement, the company's Board of Directors on November 18, 2008, approved a third amendment to the Rights Agreement by and between the Company and BNY Mellon Shareholder Services. A full-text copy of the THIRD AMENDMENT TO RIGHTS AGREEMENT is available at no charge at: http://ResearchArchives.com/t/s?3517 Debt Refinancing As reported in the Troubled Company Reporter on Nov. 21, 2008, Bloomberg News reported that General Growth has hired Sidley Austin to assist it in negotiations to refinance roughly $27.3 billion in debt. The Wall Street Journal said General Growth has tapped Sidley Austin as "bankruptcy counsel," but noted that the engagement doesn't mean a Chapter 11 filing is imminent. "Financially distressed companies often hire bankruptcy advisers and never take that step," according to the report. TCR reported on Nov. 14 that General Growth acknowledged in a regulatory filing that it's working with lenders to gain more time to pay off debt, and is also considering asset sales and other ways to raise cash. General Growth has $1.13 billion in debt coming due by the end of the year, with more than $900 million due by Dec. 1, 2008 [Nov. 28]. General Growth said that even if it is successful in addressing these 2008 maturities, an additional $3.07 billion in debt is scheduled to mature in 2009. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner with 200-plus shopping malls in 44 states. General Growth is a self-administered and self-managed real estate investment trust. General Growth owns, manages, leases and develops retail rental property, primarily shopping centers. Substantially all of its properties are located in the United States, but the company also has retail rental property operations and property management activities -- through unconsolidated joint ventures -- in Brazil and Turkey. Its Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing September 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. General Growth had $29.6 billion in total assets and $27.3 billion in total liabilities as at September 30. * * * As reported in the Troubled Company Reporter on Nov. 18, 2008, Moody's Investors Service has downgraded the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Caa2 from B3 senior secured bank debt; to Caa2 from B3 senior unsecured debt). The ratings remain on review for further possible downgrade. The rating action reflects deepening concerns in the REIT's ability to meet its near term debt obligations and funding needs. GENERAL MOTORS: Bank Loan Sells for 64% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which General Motors Corp. is a borrower traded in the secondary market at 35.33 cents- on-the-dollar during the week ended November 21, 2008, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 10.52 percentage points from the previous week, the Journal relates. The syndicated loan matures on Nov. 27, 2013, and GM pays 275 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's B1 rating and Standard & Poor's B rating. Participations in a syndicated loan under which Ford Motor Co. is a borrower traded in the secondary market at 34.40 cents-on-the- dollar during the week ended November 21, 2008, the Journal says. This represents a drop of 11.40 percentage points from the previous week, the Journal relates. The syndicated loan matures on Dec. 15, 2013, and Ford pays 300 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Bank debt of other companies in the auto industry are also being sold at substantial discount, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 38.71 cents-on-the-dollar during the week ended November 21, 2008. This represents a drop of 10.43 percentage points from the previous week, the Journal relates. The syndicated loan matures on April 12, 2012, and Avis pays 125 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's Ba1 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 56.57 cents-on-the- dollar during the same period. This represents a drop of 7.54 percentage points from the previous week, the Journal relates. The syndicated loan matures on March 29, 2012, and Lear pays 250 basis points over LIBOR to borrow under the facility. The bank loan is unrated. GENERAL MOTORS: Board Willing to Consider Chapter 11, Says WSJ -------------------------------------------------------------- General Motors Corp.'s board of directors are willing to consider options for the company, including filing for Chapter 11 protection, John D. Stoll at The Wall Street Journal reports, citing people familiar with the matter. WSJ relates that GM CEO Rick Wagoner told Congress last week that the GM management has ruled out the option of filing for bankruptcy, and instead is trying to convince lawmakers to provide financial assistance. GM said in a statement that the board had discussed bankruptcy but decided that it wasn't a "viable solution to the company's liquidity problems." Citing people familiar with the matter, WSJ says that the board agrees that seeking government bailout is GM's top priority, but isn't willing to dismiss the possibility of a Chapter 11 filing. The report says that the board will consider all options in light of circumstances as they may develop. Josh Mitchell at WSJ relates that U.S. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said that GM, Ford Motor Corp., and Chrysler LLC must provide to the Congress a documented assessment of their finances, including the amount of money they need to return to "long-term viability," by Dec. 2, 2008. On Friday, GM said it is pushing ahead with new cost-cutting measures. It said three plants in the U.S. and one in Ontario, Canada, would extend their normal two-week holiday shut-downs into January. It also said it would close down an Ontario truck plant sooner than it had planned. GM also confirmed it is ending leases on two of the five remaining corporate jets in its fleet. The move comes after Mr. Wagoner and Detroit's two other auto CEOs were chastised in Congress for flying corporate jets to meetings this week in which they asked for billions of dollars in public assistance. Mr. Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli told lawmakers they have been restructuring their companies and need bridge loans to carry them through until the economy recovers. Mr. Wagoner asked the government for $10 billion to $12 billion in immediate funding. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. GENERAL MOTORS: GMAC Exchange Offer Won't Affect 'CCC+' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on General Motors Corp. (CCC+/Negative/--) are not immediately affected by the GMAC LLC's exchange offer for certain notes of both GMAC and its 100%-owned subsidiary Residential Capital LLC. GM owns 49% of GMAC. S&P views the exchange as a distressed debt exchange and, as a result, S&P lowered the ratings on both GMAC and Residential Capital and placed them on CreditWatch with negative implications. Although the GMAC offer is part of an attempt to improve its capital levels as it seeks to become a bank holding company, S&P believes that if the exchange fails, GMAC and/or Residential Capital might file for bankruptcy protection. The ratings on GM, which were lowered in early November, reflect the concern that the automaker's liquidity could become insufficient to operate its business during the first half of 2009 or earlier. GM and GMAC are discussing changes to the operating agreements between them. Should these discussions or GMAC's own situation lead to a further reduction in financing access for GM retail customers, S&P believes GM's financial position would become even more precarious. In S&P's view, the timeframe during which the financial survival of the domestic automakers will be determined has accelerated in the past 60 days amid the deepening financial market crisis and worsening consumer confidence, and S&P now views the next few quarters as the most critical period. S&P will evaluate the effect of any specific announcements regarding federal funding as they are made. Although S&P expects some of the $25 billion of previously appropriated government loan funding to begin arriving early in 2009, or perhaps sooner, the amount of funding under this program may be modest at first and spread out over multiple years. Even if the government expedites funding or creates a new program, it is important to stress that S&P would likely view such assistance as buying more time for GM rather than as a solution to its fundamental business risks, especially deteriorating global demand. In addition, S&P envisions a scenario in which federal government assistance may be predicated on financial restructuring of some existing debt. GENERAL MOTORS: To Give Up 2 Corporate Jets to Diffuse Criticisms ----------------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that General Motors Corp. said on Friday that it will offload two of its five corporate planes, after being criticized for using private jets to fly to Washington D.C. while seeking for government financial assistance. WSJ states that lawmakers and the press criticized executives for using the planes while seeking for a $25 billion bailout from the government. The CEOs didn't tell the Congress that it is often corporate policy that they fly on private planes to ensure their security and save valuable time, WSJ says. Ford Motor Co. said that it is also considering selling its five aircraft, WSJ reports. WSJ quoted Ford Motor spokesperson Mark Truby as saying, "Ford's top priority is to continue making progress on our transformation plan, and we do not want anything to distract us. We are exploring all cost-effective solutions for our air travel.... We have sold four planes since 2005." Citing Mr. Truby, WSJ relates that Ford Motor has three small jets used for executives' travel and two planes used to carry larger groups of workers to help introduce new products. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. GMAC COMMERCIAL: S&P Ratings Tumble to 'D' on Class M and N ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'D' on the class M and N commercial mortgage pass-through certificates from GMAC Commercial Mortgage Securities Inc.'s series 2005-C1. Concurrently, S&P affirmed its ratings on 19 other classes from this series. The downgrades of classes M and N to 'D' reflect recurring interest shortfalls resulting from two appraisal reduction amounts totaling $18.2 million in effect on two assets with the special servicer, Helios AMC. In addition, class N is susceptible to a principal loss upon the liquidation of the largest asset with the special servicer. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. Details concerning the three assets ($32.2 million) with the special servicer are: -- The largest exposure with the special servicer and the 10th- largest exposure in the pool, the Two Detroit Center Garage loan, has a total exposure of $27.3 million (2%). The loan was transferred to special servicing in March 2007 due to imminent default, and the loan became real estate owned in November 2007. The loan is secured by a 1,095-space, 336,000-sq.-ft. parking garage built in 2002 in Detroit. The garage is one of three parking garages that services Detroit's central business district, including the Comerica Tower, a 1 million-sq.-ft. office building. The subject property suffered a significant loss in business due to increased office vacancies in the immediate area, which reduced its monthly income, and the loss of transient business. An ARA of $16.6 million is in effect based on a June 2007 as-is appraisal of $11 million. A July 2008 appraisal was finalized with an as-is value of $9.3 million. The property is in escrow for $10 million and is scheduled to be closed by the end of this year. Based on the most recent appraisal and purchase price, Standard & Poor's expects a substantial loss upon the liquidation of this asset. -- The remaining two loan exposures with the special servicer, Raleigh Boulevard Plaza and Walgreens Berkeley Heights, have respective total exposures of $4.9 million and $2.6 million. The loans have the same managing member and were transferred to the special servicer in June 2006 after the New Jersey state court removed the managing member and appointed a fiscal agent to liquidate the collateral. The Raleigh Boulevard Plaza loan is secured by a 79,232-sq.-ft. anchored retail property built in 1989 in Raleigh, North Carolina. The Walgreens Berkeley Heights (Walgreens) loan is secured by a 15,254-sq.-ft. retail site newly constructed by Walgreens in Berkeley Heights, New Jersey The payment status of the loans was noted to be in their grace period as of the Nov. 10, 2008, remittance report. An ARA totaling $1.66 million is in effect for the Raleigh loan. The Raleigh and Walgreens loans are included in 13 Dwek properties that are under contract for sale. Based on the sale price allocated to the Raleigh and Walgreens assets, S&P expects minimal losses upon their resolution. Ratings Lowered GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2005-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ M D CCC- 1.52% N D CCC- 1.25% Ratings Affirmed GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2005-C1 Class Rating Credit enhancement A-1A AAA 32.05% A-2 AAA 32.05% A-3 AAA 32.05% A-4 AAA 32.05% A-5 AAA 32.05% A-M AAA 21.20% A-J AAA 12.51% B AA 10.21% C AA- 9.39% D A 7.77% E A- 6.68% F BBB 5.59% G BBB- 4.51% H BB- 3.15% J B 2.75% K B- 2.34% L CCC 1.80% X-1 AAA N/A X-2 AAA N/A N/A - Not applicable. GMAC LLC: Commences Exchange, Tender Offers for Outstanding Notes ----------------------------------------------------------------- GMAC Financial Services is applying before the U.S. Federal Reserve Board of Governors to become a bank holding company under the Bank Holding Company Act of 1956, as amended. GMAC also submitted an application to the U.S. Treasury to participate in the Capital Purchase Program created under the Emergency Economic Stabilization Act of 2008, conditional upon becoming a bank holding company. As a bank holding company, GMAC would obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses. GMAC also expects to have expanded opportunities for funding and for access to capital as a bank holding company. If GMAC's application to become a bank holding company under the BHC Act is accepted, GMAC Bank will become a Utah chartered Federal Reserve member bank. GMAC also commenced separate private exchange offers and cash tender offers to purchase and exchange certain of its and its subsidiaries' and Residential Capital, LLC's outstanding notes held by eligible holders for cash, newly issued notes of GMAC and, in the case of the GMAC offers only, preferred stock of a GMAC subsidiary, upon the terms and subject to the conditions set forth in the applicable confidential offering memoranda, each dated Nov. 20, 2008, and the related letters of transmittal. The purpose of the offers is to increase GMAC's capital levels while reducing the amount of GMAC's and ResCap's outstanding debt in connection with GMAC's capital plan relating to its application to become a bank holding company. In the GMAC offers, GMAC is offering to purchase and exchange any and all of the notes held by eligible holders for, at the election of each eligible holder, either: (a) new securities consisting of a combination of (i)(x) in the case of GMAC old notes maturing prior to 2031, newly issued Senior Guaranteed Notes of GMAC with the same interest rate and maturity date as the applicable series of GMAC old notes exchanged therefor, which new guaranteed notes will be guaranteed by certain subsidiaries of GMAC and will in all cases be denominated in U.S. dollars or (y) in the case of GMAC old notes maturing in 2031, a combination of new guaranteed notes and newly issued 8.00% Subordinated Notes due 2018 of GMAC; and (ii) newly issued 5% Perpetual Senior Preferred Stock with a liquidation preference of $1,000 per share of a subsidiary of GMAC; or (b) cash, in each case in the amounts per 1,000 U.S. dollar equivalent principal amount of GMAC old notes. Cash elections will be subject to proration in the event that the aggregate consideration required to accept all GMAC old notes tendered pursuant to cash elections would exceed $2 billion. The new guaranteed notes will be guaranteed, on a joint and several basis, by GMAC Latin America Holdings LLC, GMAC International Holdings Cooperatief U.A., GMAC Continental LLC, IB Finance Holding Company LLC and GMAC US LLC, which are all subsidiaries of GMAC. The note guarantees will be senior obligations of each note guarantor and will rank equal with all existing and future senior debt of such note guarantor. The note guarantees will rank senior to all subordinated debt of such note guarantor. In the ResCap offers, GMAC is offering to purchase and exchange any and all of the ResCap notes held by eligible holders for, at the election of each eligible holder either, (i)(x) in the case of the 8.50% notes of ResCap maturing on May 15, 2010, newly issued 7.5% Senior Notes due 2013 of GMAC or (y) in the case of all other series of ResCap old notes, a combination of new senior notes and new subordinated notes or (ii) cash, in all cases in the amount per 1,000 U.S. dollar equivalent principal amount of ResCap old notes. Cash elections will be subject to proration in the event that the aggregate consideration required to accept all ResCap old notes tendered pursuant to cash elections would exceed $500 million. GMAC is offering an early delivery payment in the GMAC and ResCap offers, which, with respect to cash consideration will be paid in cash, and in all other cases will be paid in principal amount of new notes. For each offer, the early delivery payment will be paid only to eligible holders who validly tender (and do not withdraw) their old notes prior to 5:00 p.m., New York City time, on Dec. 4, 2008, unless extended by GMAC with respect to the offer. For eligible holders of old notes that tender after the early delivery time, in determining the consideration the holders will receive, the amounts indicated in the tables above for cash prices and exchange ratios into new guaranteed notes, in the case of the GMAC offers, or new senior notes, in the case of the ResCap offers, will be reduced by the early delivery payment of $50 of cash or $50 principal amount of new guaranteed or new senior notes, as applicable, per 1,000 U.S. dollar equivalent principal amount of old notes validly tendered and not withdrawn. Each of the GMAC and ResCap offers will expire at 11:59 p.m., New York City time, on Dec. 18, 2008, unless extended by GMAC with respect to any or all series of old notes. In each of the GMAC and ResCap offers, tendered old notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on Dec. 4, 2008, unless extended by GMAC with respect to the GMAC or ResCap offers, but not thereafter. Holders of old notes accepted in the GMAC and ResCap offers will also receive a cash payment (paid in the currency of the old notes) equal to the accrued and unpaid interest in respect of such old notes from the most recent interest payment date to, but not including, the settlement date for the applicable offer. The GMAC offers are conditioned upon, among other things, the completion of the ResCap offers and a sufficient amount of old notes having been tendered for purchase and exchange pursuant to the GMAC offers such that, in GMAC's judgment, GMAC has obtained a sufficient amount of capital in connection with the GMAC offers, whether or not such amount of capital would be sufficient to satisfy the requirements of the BHC Act or any other applicable regulations. The ResCap offers are conditioned upon, among other things, the completion of the GMAC offers and a sufficient amount of old notes having been tendered for purchase and exchange pursuant to the ResCap offers such that, in GMAC's judgment, the ResCap offers were successful. For the avoidance of doubt, these conditions are for GMAC's benefit and may be asserted by GMAC or may be waived by GMAC at any time and from time to time, in its sole discretion. In addition, GMAC has the right to terminate or withdraw any of the offers at any time and for any reason, including, without limitation, if any of the foregoing conditions or any other conditions to the offers described in the confidential offering memorandum are not satisfied. A full-text copy of the Private Exchange Offers is available for free at http://ResearchArchives.com/t/s?3518 GMAC will enter into registration rights agreements pursuant to which, under certain circumstances, it will agree to use reasonable best efforts to file exchange offer registration statements or shelf registration statements with respect to the new notes and the new preferred stock. Documents relating to the offers will only be distributed to holders of the old notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Noteholders who desire to obtain a copy of the eligibility letter must contact Global Bondholder Services Corporation, the information agent for the offers, at (866) 794-2200 (U.S. Toll-free) or (212) 430-3774 (Collect). GMAC cannot assure that it will obtain Federal Reserve approval to become a bank holding company or that any of the transactions described above will be completed, and if completed, whether they will achieve a sufficient amount of capital to satisfy the applicable capital adequacy requirements or will otherwise be successful. Wachtell, Lipton, Rosen & Katz served as legal advisor to GMAC. Liquidity and Capital Resources GMAC said in a regulatory filing that its funding strategy and liquidity position have been materially adversely affected by the ongoing stress in the credit markets that began in the middle of 2007 and reached unprecedented levels during recent months. The capital markets remain highly volatile, and GMAC's access to liquidity has been and continues to be significantly reduced. These conditions, in addition to the reduction in GMAC's credit ratings, have resulted in increased borrowing costs and GMAC's inability to access the unsecured debt markets in a cost-effective manner. Furthermore, GMAC has regular renewals of outstanding bank loans and credit facilities. Based on existing asset availability and eligibility criteria, GMAC currently has available approximately $500 million of capacity under its secured credit lines. However, GMAC has the ability to significantly increase the amount of available capacity based on future asset origination and potential availability. Although GMAC's material committed facilities due to mature in the third quarter were renewed at revised terms, some facilities have not been renewed. The circumstances have placed additional pressure on GMAC's liquidity position. GMAC's inability to renew the remaining loans and facilities as they mature would have a further negative impact on its liquidity position. GMAC also has significant maturities of unsecured debt each year. Approximately $1.8 billion of GMAC's outstanding unsecured debt matures in the fourth quarter of 2008, $12.8 billion matures in 2009 and $8.8 billion matures in 2010. In addition, as of Sept. 30, 2008, GMAC has approximately $38.7 billion of outstanding unsecured debt (including $14.6 billion of Smart Notes and $3.9 billion of Demand Notes, although such amount of outstanding Demand Notes has significantly declined since Sept. 30, 2008) which is not subject to the private exchange offers and cash tender offers for certain outstanding GMAC and ResCap debt securities announced by GMAC on Nov. 20, 2008. In order to retire these instruments, GMAC either will need to refinance this debt, which will be very difficult if the current volatility in the credit markets continue or worsen, or generate sufficient cash to retire the debt. A full-text copy of the company's Liquidity and Capital Resources is available for free at s http://ResearchArchives.com/t/s?3519 About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. 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. As reported in the Troubled Company Reporter on Nov. 13, 2008, Fitch Ratings has downgraded GMAC LLC's issuer default rating and senior unsecured debt: (i) IDR to 'CCC' from 'B+'; and (ii) senior unsecured debt to 'CC' from 'B+'. GMAC LLC: Moody's Downgrades Senior Unsecured Debt Rating to 'C' ---------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured debt of GMAC LLC to C from Caa1, following GMAC's launch of debt exchange offerings for debt in face amount totaling $38 billion ($29 billion GMAC; $9B Residential Capital LLC). The outlook for the GMAC's ratings is developing. In a related action, Moody's downgraded ResCap's senior unsecured rating to C from Ca and assigned a stable outlook. The downgrade of GMAC's ratings is based on Moody's view that the exchange offering is a distressed exchange, as it results in a diminished financial obligation for GMAC. Distressed exchanges are included in Moody's definition of default. Holders of GMAC bonds eligible for exchange may receive a combination of new senior notes guaranteed by certain GMAC subsidiaries, subordinated debt (senior notes maturing in 2031 only), preferred shares, and cash. Bondholders exchanging GMAC debt and participating in the cash option could receive notional value in the exchange that represents a potentially meaningful discount to the original par value of the exchanged debt. Additionally, while the maturity and interest rate of the new senior notes will closely match those of the old notes, the newly issued preferred shares will have both indefinite maturity and lower priority compared with the old notes. Moody's also commented that investors with eligible debt that don't participate in the exchange and holders of approximately $38 billion of non-eligible debt will be structurally subordinated to the new senior notes, as the old notes will not benefit from the GMAC subsidiary guarantees. GMAC's ratings also incorporate operating pressures relating to general capital market illiquidity, continuing underperformance at ResCap and the consequent possibility for further reliance upon GMAC for support, weakening asset quality trends in the auto finance portfolio, and operating challenges at GM. During the fourth quarter to date, GMAC has forgiven $239 million of ResCap indebtedness and has plans to provide up to $500 million of additional support to ResCap. Moody's believes extensions of support to ResCap have weakened GMAC's capital and liquidity profiles and has resulted in GMAC possessing concentrated risk exposures to the financially weakened company. Moody's said that GMAC is also facing a possibility of breaching one or more of its leverage covenants if its capital position weakens further. The increased potential for default under these agreements, and the associated implications for GMAC's financial condition, were contributing factors in Moody's rating committee outcome. In connection with its debt exchange offerings, GMAC announced that it has applied to the U.S. Federal Reserve for bank holding company status. The benefits of achieving bank holding company status could include access to additional sources of capital and liquidity, potentially including U.S. government programs such as the Troubled Asset Relief Program and the Temporary Liquidity Guarantee Program. These sources could forestall a further weakening of the firm's credit profile. In time, bank holding company status could also serve as a basis for GMAC achieving a more stable operating and funding profile. Moody's believes that for GMAC to meet requirements for bank holding company status it must raise significant additional capital. The exchange offerings, if successful, could be an important source of capital toward that objective. The developing outlook assigned to GMAC's ratings is in recognition that a successful conversion to bank holding company status, incorporating strengthened capitalization and access to new liquidity, could improve the firm's financial and operating flexibility. Moody's will closely monitor developments in this regard, including their effect on GMAC's new and old debt issuance. Moody's notes, however, that GMAC's credit profile could weaken significantly if its application is not approved. The ratings affected by Moody's action: GMAC LLC: -- Senior Unsecured: to C from Caa1 -- Preferred Stock: to C from Ca GMAC Australia LLC: -- Backed Senior Unsecured: to C from Caa1 GMAC Bank GMBH: -- Backed Senior Unsecured: to C from Caa1 GMAC International Finance B.V.: -- Backed Senior Unsecured: to C from Caa1 GMAC, Australia (Finance) Limited: -- Backed Senior Unsecured: to C from Caa1 General Motors Acceptance Corp. (N.Z.) Limited: -- Backed Senior Unsecured: to C from Caa1 General Motors Acceptance Corp. of Canada Ltd.: -- Backed Senior Unsecured: to C from Caa1 GMAC LLC is a global financial services company operating in the automotive finance, dealer and personal line insurance, and residential real estate finance sectors. Total reported assets at Sept. 30, 2008, equaled $211 billion. GMAC LLC: S&P Cuts Long-Term Counterparty Credit Rating to 'CC' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered selected ratings on GMAC LLC and its 100% owned subsidiary, Residential Capital LLC, including lowering the long-term counterparty credit rating on GMAC LLC to 'CC' from 'CCC' and lowering the long-term counterparty credit rating on Residential Capital LLC to 'CC' from 'CCC-'. These actions follow the launch of GMAC LLC exchange offers for certain notes of both entities. S&P views the exchange as a distressed debt exchange. The ratings on both GMAC LLC and Residential Capital LLC are placed on CreditWatch with negative implications. "The downgrade reflects the probability that, with the successful execution of the exchange offers, which will pay less than face value to certain bondholders, Standard & Poor's, in accordance with S&P's criteria, will lower S&P's counterparty credit rating on the company to 'SD'," said S&P's credit analyst John K. Bartko, C.P.A. In addition, S&P would likely lower ratings on the affected old debt issues to 'D'. A successful exchange would increase GMAC LLC's capital levels, and reduce the amount of GMAC LLC's and Residential Capital LLC's outstanding debt. GMAC LLC has indicated that it is seeking to achieve these objectives in conjunction with GMAC LLC's application to become a bank holding company. S&P expects that the potential bank holding company status and the debt exchange would partially provide needed liquidity and funding relief, though the exchanges illustrate the gravity of the company's financial position. S&P believes that if the exchange fails, GMAC LLC and/or Residential Capital LLC might file for bankruptcy protection. Accordingly, S&P's ratings on securities that are not part of the exchange offer are also on CreditWatch with negative implications. In the GMAC offers, GMAC is offering to purchase and/or exchange certain notes for either new securities or cash, at the election of the holder. For old GMAC notes maturing prior to 2031, the securities would consist of a combination of newly issued GMAC senior guaranteed notes with the same interest rate and maturity date as the applicable series of old GMAC notes exchanged. These new guaranteed notes will be guaranteed by certain subsidiaries of GMAC and will in all cases be denominated in U.S. dollars and newly issued 5% perpetual senior preferred stock with a liquidation preference of $1,000 per share of a wholly owned subsidiary of GMAC. For old GMAC notes maturing in 2031, the securities would consist of a combination of new guaranteed notes and newly issued 8.00% GMAC subordinated notes due 2018 (the new subordinated notes) and the new preferred stock. Cash elections will be subject to proration if the aggregate consideration required to accept all GMAC old notes tendered pursuant to cash elections exceeds $2 billion. The new guaranteed notes will be guaranteed on a joint and several basis by GMAC Latin America Holdings LLC, GMAC International Holdings Cooperatief U.A., GMAC Continental LLC, IB Finance Holding Company LLC, and GMAC US LLC, which are all subsidiaries of GMAC LLC. The note guarantees will be senior unsecured obligations of each note guarantor and will rank equal with all existing and future senior unsecured debt of each note guarantor. The note guarantees will rank senior to all subordinated unsecured debt of such note guarantor. In the Residential Capital LLC offers, GMAC is offering to purchase and/or exchange certain Residential Capital LLC notes for either new GMAC securities or cash, at the election of the holder. In the case of the 8.50% Residential Capital LLC notes maturing on May 15, 2010, the securities would consist of newly issued GMAC 7.5% senior notes due 2013. For all other series of old Residential Capital LLC notes, the securities would consist of a combination of new senior notes and new subordinated notes. Cash elections will be subject to proration if the aggregate consideration required to accept all old Residential Capital LLC notes tendered pursuant to cash elections exceeds $500 million. GREENWICH CAPITAL: S&P Upgrades Rating on Class P Cert. to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on eight classes of commercial mortgage pass-through certificates from Greenwich Capital Commercial Funding Corp.'s series 2003-C1. Concurrently, S&P affirmed its ratings on the remaining 11 classes from this series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios, as well as the defeasance of 31% of the pool. As of the Nov. 7, 2008, remittance report, the trust collateral pool consisted of 67 assets with an aggregate balance of $932.3 million, compared with 72 loans with a balance of $1.215 billion at issuance. There are 13 defeased loans totaling $291.7 million, or 31% of the pooled trust balance. The master servicer, Wachovia Bank N.A. (Wachovia), reported financial information for 99% of the loans in the pool; 96% of the servicer-reported information was year-end 2007 data. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.51x for the pool, down from 1.67x at issuance. All of the loans in the pool are current except for the Royal St. Charles loan, which is discussed below. To date, the trust has experienced no losses. The top 10 loans have an aggregate outstanding balance of $322.9 million (35%) and a weighted average DSC of 1.52x, down from 1.56x at issuance. Two of the top 10 exposures are on the master servicer's watchlist and are discussed below. In addition, one of the top 10 exposures is with the special servicer, Capmark Finance Inc., and is also discussed below. Wachovia provided property inspections for all of the top 10 loan exposures. One was characterized as "excellent," and the remaining properties were characterized as "good." Two assets ($32.6 million) are with the special servicer (including one of the top 10 exposures in the pool). Details of these two specially serviced assets are: -- The Heritage Plaza loan ($23.9 million total exposure), the eighth-largest loan in the pool, is secured by a 353,003-sq.- ft. office property located in Metairie, Louisiana. The property was built in 1983 and renovated in 2002. The loan was transferred to the special servicer in September 2008 due to imminent default. The special servicer has indicated that the property is currently 85% occupied, down from 95% at issuance. The borrower was seeking a forbearance agreement while it made repairs to damage sustained during Hurricane Gustav on Sept. 1, 2008. The borrower subsequently withdrew its request for relief and decided to keep the loan current. The damage to the property totaled approximately $1.5 million, and the repair work is 90% complete. The property has windstorm and flood insurance in place, and all of the tenants are back in occupancy at this time. S&P does not expect a loss upon the resolution of the asset at this time. -- The Royal St. Charles loan ($9.1 million total exposure) is secured by a 143-room, limited-service hotel located on the edge of the French Quarter in New Orleans. The property was built in 1970 and renovated in 2000. The loan was transferred to the special servicer in December 2006 due to payment default, and it is currently one month delinquent. After Hurricane Katrina, performance at the property deteriorated, and the property has continued to struggle as the hotel industry in New Orleans has been slow to recover. The original management company has been replaced in an effort to improve property performance, and Capmark is currently reviewing a new forbearance agreement. The most recent occupancy was 70% (as of September 2008), down from 75% at issuance. At this time, Standard & Poor's expects a moderate loss upon the resolution of this asset. Five loans in the pool, totaling $23.9 million (3%), have reported DSCs below 1.0x. These loans have an average balance of $4.8 million and have experienced a weighted average decline in DSC of 43% since issuance. The loans are secured by a variety of retail, office, and multifamily properties. Standard & Poor's has credit concerns with three ($14.2 million, 2%) of these five loans. The three loans have an average balance of $4.7 million and are secured by retail, office, and manufactured housing properties. S&P stressed these loans in S&P's analysis. The two loans that are not credit concerns have improving property occupancy and relatively low leverage. Wells Fargo reported a watchlist of 16 loans ($164.0 million, 17.6%). The largest loan on the watchlist and the fifth-largest loan in the pool is the National City Plaza loan ($29.5 million, 3.2%), which is secured by a 358,642-sq.-ft. office building located in Columbus, Ohio, and built in 1977. This loan appears on the watchlist due to a drop in occupancy to 77% as of June 30, 2008, from 84% at issuance. The loan also experienced a drop in DSC to 1.08x as of June 30, 2008, from 1.59x at issuance. The second-largest loan on the watchlist and the 10th-largest loan in the pool is the Tysons Office Center loan ($19.7 million, 2.1%), which is secured by a 148,467-sq.-ft. office building located in Vienna, Virginia, and built in 1979. This loan appears on the watchlist due to a drop in occupancy and DSC to 81% and 1.25x as of Sept. 30, 2008, respectively, from 91% and 1.72x at issuance. Standard & Poor's stressed the loans on the master servicer's watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2003-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ H A A- 10.91% J A- BBB+ 8.96% K BBB+ BBB- 7.33% L BBB- BB 5.70% M BB+ BB- 4.89% N BB B+ 4.24% O B+ B 3.26% P B B- 2.61% Ratings Affirmed Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2003-C1 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 25.74 A-3 AAA 25.74 A-4 AAA 25.74 B AAA 21.34 C AAA 19.71 D AA+ 17.76 E AA 15.80 F AA- 14.66 G A+ 13.03 XP AAA N/A XC AAA N/A N/A - Not applicable. GENESCO INC: S&P Holds 'B+' Corp. Credit Rating; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Nashville-based Genesco Inc. to negative from stable. At the same time, S&P affirmed all other ratings on the company, including the 'B+' corporate credit rating. "The outlook revision," said Standard & Poor's credit analyst David Kuntz, "reflects S&P's expectations that the company will be increasingly challenged by the current weak economic environment, leading to poor performance at most, if not all, operating segments." Concurrently, S&P anticipates that credit protection metrics will deteriorate over the near term. GS MORTGAGE: Moody's Assigns Outlooks on Various Classes -------------------------------------------------------- Fitch Ratings upgrades and assigns Ratings Outlooks to GS Mortgage Securities Corporation II pass-through certificates, series 2007- EOP: -- $370.3 million class B to 'AAA' from 'AA+'; Outlook Stable. In addition, Fitch affirms and assigns Rating Outlooks to these classes: -- $875 million class A-1 at 'AAA'; Outlook Stable; -- $584.8 million class A-2 at 'AAA'; Outlook Stable; -- $606.5 million class A-3 at 'AAA'; Outlook Stable; -- Interest only class X at 'AAA'; Outlook Stable; -- $432.3 million class C at 'AA'; Outlook Stable; -- $220 million class D at 'AA-'; Outlook Stable; -- $237.9 million class E at 'A+'; Outlook Stable; -- $214.7 million class F at 'A'; Outlook Stable; -- $142.4 million class G at 'A-'; Outlook Stable; -- $142.4 million class H at 'BBB+'; Outlook Stable; -- $395 million class J at 'BBB'; Outlook Stable; -- $213.6 million class K at 'BBB-; Outlook Stable; -- $534 million class L at 'BB+'; Outlook Negative. The upgrade to class B reflects the pay down of approximately 27.6% since issuance. Fitch has completed its review of year-end 2007 and June 30, 2008 servicer reported information. As of the Nov. 15, 2008 distribution date, the total collateral balance has been reduced to approximately $4.97 billion from $6.87 billion at issuance. The pay down included the release of two of the top ten mortgaged assets, 10 & 30 South Wacker in Chicago, Ilinois and Three Stamford Plaza in Stamford, CT. The Negative Outlook for Class L reflects the exposure to the office sector given the economic outlook, in addition to the increased allocated debt attributed to markets in California, Boston and New York. The Rating Outlooks reflect the likely direction of rating changes over the next one to two years. The certificates are collateralized by a single $4.9 billion nonrecourse floating-rate loan secured by approximately 103 office properties, down from approximately 135 properties at issuance. The collateral consists of mortgages, equity pledges in joint ventures and cash flow pledges. In addition, there is approximately $2.3 billion of mezzanine debt held outside the trust. The largest property in the pool (11%) is the Verizon Building located across from Bryant Park in mid-town Manhattan. The property was undergoing major interior and exterior renovations at issuance. With building renovations completed, occupancy continues to improve as tenants complete their build outs. As of the Aug. 31, 2008 rent roll, the Verizon Building was approximately 88.2% leased and 78.3% occupied, with many tenants in free rent periods. Due to lag in actual rent collections, there was not a June 30, 2008 servicer report for this property. The pool remains diverse, with 103 office properties located in nine different states. Excluding the Verizon Building, the top ten properties account for approximately 29% of the collateral balance, with no single property comprising more than 4% of the collateral. In addition, the average occupancy at the properties as of Aug. 31, 2008 was approximately 88% compared to 91% at issuance. HARRAH'S ENTERTAINMENT: $2.1BB Note Offer Cues Moody's Junk Rating ------------------------------------------------------------------ Moody's Investors Service downgraded Harrah's Entertainment, Inc.'s Corporate Family Rating to Caa1 from B3, and the Probability of Default rating to Ca from B3 following its announcement that it is commencing a private debt exchange offer. Moody's also downgraded several classes of debt issued by HET's subsidiary, Harrah's Operating Company, Inc. The rating outlook is negative. The downgrade of the PD rating reflects HET's recent announcement that it is offering up to $2.1 billion aggregate principal amount of new 10% second lien notes in exchange for specific HOC existing senior unsecured, senior subordinated, and senior guaranteed notes issues (the Exchange Transaction). If successful, the Exchange Transaction will result in a swap of junior debt (at a discount) for new second lien notes. Existing note holders that elect to participate in the Exchange Transaction will accept principal reductions of between 0% - 63%, depending upon the date tendered and the class of notes. The Exchange Transaction, depending upon the degree of participation, could result in a net reduction in debt and a lower total interest burden. Although full participation in the Exchange Transaction would result in a modest improvement in leverage and interest coverage, credit metrics would remain weak for the previous B3 rating. Moody's views the exchange as a distressed exchange, and Moody's reflect the very high likelihood of this event occurring through the assignment of the Ca Probability of Default rating. Moody's will classify this distressed exchange as a limited default and change the PDR to Caa1/LD upon closing of the Exchange Transaction. This is due to Moody's current belief that the going-forward PDR will end up at Caa1 shortly following the closure of the transaction and recognition that the limited default has occurred. The downgrade of the CFR to Caa1 and the negative outlook reflects Moody's view that gaming demand will fall for a more prolonged period of time given deteriorating macro-economic conditions. As a result, Moody's believe credit metrics will remain very weak, including consolidated debt to EBITDA (which incorporate Moody's standard analytic adjustments) that may exceed 11.0 times in 2009. Moody's lowered the ratings on HOC's senior secured bank facilities to B1, senior guaranteed notes to Caa2, senior unsecured notes to Caa3, and senior subordinated note to Caa3. The downgrades are based upon HET's estimated post-Exchange Transaction capital structure and are consistent with a PD of Caa1. Moody's will re-evaluate the details of the ultimate capital structure based on the actual results of the Exchange Transaction, and so the loss given default assessments and/or point estimates could change. HET's Speculative Grade Liquidity rating of SGL-3 reflects adequate liquidity, based on the company's expected negative free cash flow position over the next four quarters, offset by cash balances of $1.0 billion and the existence of a $2.0 billion revolving credit facility that is expected to remain available to the company. Ratings downgraded and assessments changed Harrah's Entertainment, Inc. -- Corporate Family rating to Caa1 from B3 -- Probability of Default rating to Ca from B3 Harrah's Operating Company, Inc. -- Senior secured guaranteed revolving credit facility to B1 (LGD 2, 22%) from Ba3 (LGD 2, 19%) -- Senior secured guaranteed term loans to B1 (LGD 2, 22%) from Ba3 (LGD 2, 19%) -- Senior unsecured guaranteed notes to Caa2 (LGD 5, 71%) from Caa1 (LGD 4, 63%) -- Senior unsecured debt to Caa3 (LGD 5, 87%) from Caa2 (LGD 5, 88%) -- Senior subordinated notes to Caa3 (LGD 6, 96%) Caa2 (LGD 6, 96%) Harrah's Entertainment, Inc., through its wholly-owned subsidiary, Harrah's Operating Company, Inc., owns or manages approximately 50 casinos that comprise around 40,000 hotel rooms, three million square feet of gaming space and two million square feet of convention center space. HET generated consolidated revenues of $10.4 billion for the last twelve months ended Sept. 30, 2008. Affiliates of Apollo LLC and Texas Pacific Group (the Sponsors) acquired the company through a $31 billion leverage buy-out in early 2008. HAWAII MEDICAL: Blames Bankruptcy on Siemens' $10M Loan Refusal --------------------------------------------------------------- Hawaii Medical Center LLC filed for Chapter 11 protection on Aug. 29, 2008, saying that Siemens Financial Services Inc. refused to extend a $10.5 million revolving loan, Kelly Riddell and Michael Janofsky at Bloomberg report. Citing Hawaii Medical's chief implementation officer Salim Hasham, Bloomberg relates that the funds were to be used to pay creditors and cover payroll expenses. According to Bloomberg, Siemens Financial's senior director of external relations, Esra Ozer, said in a statement that the company "did not decline to extend the loan" and will work with Hawaii Medical to resolve its problems. About Hawaii Medical Honolulu, Hawaii-based Hawaii Medical Center is only for-profit, physician-owned hospital. It is a partnership of CHA Hawaii, an affiliate of Cardiovascular Hospitals of America. It has two specialty units, including Adult and Pediatric and Intensive Care. Wichita, Kansas-based CHA Hawaii LLC, and its affiliates -- including Hawaii Medical Center LLC -- filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Del. Case No. 08-12027). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of between $1 million and $10 million and liabilities of between $50 million and $100 million when they filed for bankruptcy. HOSPITAL PARTNERS: Court Converts Case to Chapter 7 Liquidation --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has converted Hospital Partners of America Inc. and its debtor- affiliates' Chapter 11 cases to liquidation proceedings under Chapter 7 of the Bankruptcy Code. The Court has ordered that pending the qualification of a permanent trustee, all contested matters in the Debtor' bankruptcy cases are stayed, unless otherwise ordered by the Court. As reported in the Troubled Company Reporter on Nov. 18, 2008, Hospital Partners of America asked the Court to convert its Chapter 11 reorganization case to a Chapter 7 liquidation proceeding. According to Bloomberg, the Debtor's lender refused to extend the debtor-in-possession financing which fell due last Nov. 21, 2008. Headquartered in Charlotte, North Carolina, Hospital Partners of America, Inc. -- http://www.hospitalpartners.com/-- develops and manages hospitals. The company and its affiliates filed for Chapter 11 bankruptcy protection on Sept. 24, 2008 (Bankr. D. Del. Case No. 08-12180). Curtis A. Hehn, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl Young Jones, represent the Debtor in its restructuring efforts. Kurtzman Carson Consultants LLC is the Claims Agent. Moore & Van Allen PLLC is the Debtors' corporate and litigation counsel. The Debtors listed assets of $100 million to $500 million and debts of $100 million to $500 million. INTCOMEX INC: Moody's Changes Outlook to Negative; Junks Ratings ---------------------------------------------------------------- Moody's Investors Service changed Intcomex, Inc.'s ratings outlook to negative from stable, downgraded the company's probability of default rating to Caa1 from B3, and lowered its speculative grade liquidity rating to SGL-4 from SGL-3. Intcomex's corporate family rating was affirmed at B3. The ratings outlook change reflects the company's weaker than expected financial performance resulting in tight cushions for the financial maintenance covenants under the company's bank credit agreement resulting in a weaker liquidity position and reduced financial flexibility due to shortened maturity of the revolving credit facility. Moody's believes that the company may potentially violate the financial covenants under its $30 million first-lien senior secured revolving credit facility (unrated by Moody's). In addition, the company faces a degree of refinancing risk due to the upcoming maturity of its revolving credit facility in January 2010 in an ever more challenging credit market. Moody's notes that the company has obtained a waiver to its credit agreement due to a default of its financial covenants in Q3 2008. Intcomex's B3 CFR is constrained by the company's: (i) high debt leverage at 5.0x; (ii) weak liquidity profile with almost 80% drawn on its $30 million asset-based first-priority senior secured revolver and tight financial covenants with a high probability of covenant violations over the next twelve months; (iii) Moody's expectation of limited free cash flow generation; (iv) meaningful debt maturity profile over the near to medium-term; (v) the company's moderate exposure to credit risk associated with its reseller customers; and (vi) geographic concentration as revenues that are substantially generated from countries in Latin America and the Caribbean, which are potentially subject to economic and foreign currency volatility. The rating also considers Intcomex's good market position and diversified customer / country base within Latin America and the Caribbean markets, good revenue growth over the last several years (organic and through entry into new geographic markets), and moderate barriers to entry in certain of its markets due to the difficulties of conducting business in Latin America, although there is potential for increased competition from large-scale broadline IT distributors and OEMs selling direct to high-volume markets. These ratings were changed: -- Probability of default rating to Caa1 from B3 -- Speculative grade liquidity rating to SGL-4 from SGL-3 -- $120 Million of 11.75% of second lien secured notes to B3, LGD-3, 36% from B3, LGD3, 48% These rating was affirmed: -- Corporate Family Rating at B3 The rating outlook is negative. The previous rating action occurred on Sept. 25, 2006 when Moody's changed the second lien secured notes rating to B3 from Caa1 as per Moody's Loss-Given-Default Methodology. Intcomex, Inc., headquartered in Miami, Florida, is a distributor of computer components, peripherals, software, computer systems, accessories, networking products and digital consumer electronics to more than 40,000 customers in 45 countries in Latin America and the Caribbean. The company distributes more than 5,700 products from over 220 vendors. Revenues and EBITDA for the twelve months ended Sept. 30, 2008 were $1.1 billion and $34 million, respectively. JC REED: SEC Sues Company for Defrauding Investors -------------------------------------------------- E. Thomas Wood at Nashvillepost.com reports that the Securities and Exchange Commission has filed in Nashville's federal court a lawsuit against JC Reed & Co., Inc., its affiliate J.C. Reed Advisory Group Inc., company officer Barron A. Mathis, and the estate of founder John C. Reed, for defrauding investors out of millions. According to Nashvillepost.com, the SEC accuses the defendants of "floating an unregistered offering of securities" and selling more than $11 million of Reed & Co. stock in to more than 100 investors. JC Reed & Co. and J.C. Reed Advisory and their principals misled shareholders about financial results, because Reed & Co. "has raised and spent more than $11 million in investor funds, but has generated only about $386,000 in gross revenues," the report says, citing the SEC. Nashvillepost.com relates that when JC Reed & Co. filed for Chapter 11 petition in October 2008, Bill Norton, Esq., at Boult, Cummings, Conners & Berry -- the attorney for the company -- said that Reed Advisory and mortgage lender J.C. Reed Mortgage Co. -- the other main JC Reed & Co. operating unit -- were in need of funding, while JC Reed & Co. was running out of cash. The defendants misled investors about a key man life insurance policy that JC Reed & Co. had on Mr. Reed -- who died of cancer in June 2008 -- by failing to disclose a shareholder agreement obligating the company to use up to $1 million of the $1.5 million policy to redeem Mr. Reed's shares in the event of his death, Nashvillepost.com states, citing the SEC. According to Nashvillepost.com, SEC included Lana Reed -- widow of Mr. Reed -- as a defendant in the case. Mr. Mathis was also identified as Reed Advisory president in the lawsuit, the report says. Nashvillepost.com reports that the SEC is seeking for the "disgorgement of all ill-gotten gains" by Mr. Mathis and by Mr. Reed's estate. Franklin, Tennessee-based JC Reed & Co., Inc., filed for Chapter 11 protection on Oct. 22, 2008 (Bankr. M. D. Tenn. Case No. 08- 09771). William L. Norton, III, Esq., at Boult Cummings Conners Berry, PLC, represents the company in its restructuring effort. The company listed assets of $1,000,000 to $10,000,000 and debts of $100,000 to $500,000. Nashvillepost.com states that JC Reed & Co. declared that it has assets of $4.7 million and debts of $491,000. JED OIL: Has Until Today to Appeal Securities Delisting at NYSE-A ----------------------------------------------------------------- JED Oil Inc. received notice from the staff of the NYSE Alternext US, LLC indicating that the company no longer complies with the Exchange's continued listing standards under Section 1003(a)(i) of the Exchange's Company Guide. As per this section's requirements, a listed company must have either $2,000,000 in shareholders' equity or not have sustained losses from continuing operations or net losses in two out of three of its most recent fiscal years. In addition, as per Section 1003(a)(iv) of the Company Guide, JED has had sustained losses which are so substantial in relation to its overall operations and its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether JED would be able to continue operations and meet its obligations as they mature. JED can appeal the Exchange's intention to institute delisting proceedings if by Nov. 24, 2008, it has made a written request for an appeal and paid fees of either $5,000 for an oral hearing or $4,000 to make written submissions. At this time it is JED's intention to appeal. If the Exchange has not received JED's written request for an appeal and payment of the fee by Nov. 24, 2008, or if such appeal is subsequently denied, the Exchange will suspend trading of JED's common shares and file an application with the U.S. Securities and Exchange Commission to strike the company's common shares from being listed for trading through the facilities of the Exchange and JED's registration on the Exchange in accordance with Section 12 of the United States Securities Exchange Act of 1934 and the rules promulgated there under. In addition, this news release constitutes JED's first bi-weekly Default Status Report under Canadian National Policy 12-203, pursuant to which the company disclosed that its financial statements for the third quarter ended Sept. 30, 2008, would not be filed by Nov. 14, 2008. JED reports that since announcing the original Notice of Default on Nov. 5, 2008, there have not been any material changes to the information contained therein; nor any failure by JED to fulfill its intentions as stated therein, and there are no additional defaults or anticipated defaults subsequent to such statement. Further, there have been no additional material changes respecting the company and its affairs, other than the receipt of the notice of intention to delist its common shares on the Exchange. The company intends to file its next Default Status Report on Dec. 3, 2008. About JED Oil JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an independent energy company that explores, develops, and produces natural gas, crude oil, and natural gas liquids in Canada and the United States. As of Dec. 31, 2007, it had total proved reserves of 3,035,000 of barrels of oil equivalent. The company was founded in 2003 and is headquartered in Didsbury, Canada As reported in the Troubled company Reporter on June 5, 2008, JED Oil Inc.'s consolidated balance sheet at March 31, 2008, showed $90.5 million in total assets, $76.4 million in total liabilities, and $28.5 million in convertible redeemable preferred shares, resulting in a $14.4 million total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $15.2 million in total current assets available to pay $72.0 million in total current liabilities. As reported in the Troubled Company Reporter on Aug. 27, 2008, JED Oil Inc. and its subsidiaries, JED Production Inc., and JED Oil (USA) Inc. have obtained creditor protection under the Companies' Creditors Arrangement Act (Canada) pursuant to an Order obtained on Aug. 13, 2008, from the Court of Queen's Bench of Alberta, Judicial District of Calgary. Going Concern Doubt At March 31, 2008, the company had a consolidated working capital deficiency of $56.8 million and a stockholder's deficiency of $14.4 million. The company requires additional funds to maintain operations and discharge liabilities as they become due. These conditions raise substantial doubt about the company's ability to continue as a going concern. The company does not currently have a loan facility. JER CRE: Moody's Downgrades Ratings on Four Classes of CDOs ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of four classes and affirmed four classes of JER CRE CDO 2005-1, Limited and JER CRE CDO 2005-1, LLC, Collateralized Debt Obligations, Series 2005-1: -- Class A, $81,725,000, Floating Rate Notes Due 2043, affirmed at Aaa -- Class B-1, $38,130,000, Fixed Rate Notes Due 2043, affirmed at Aa2 -- Class B-2, $37,500,000, Floating Rate Notes Due 2043, affirmed at Aa2 -- Class C, $48,400,000, Fixed Rate Notes Due 2043, affirmed at A2 -- Class D, $46,500,000, Fixed Rate Notes Due 2043, downgraded to Baa3 from Baa2 -- Class E, $23,320,000, Fixed Rate Notes Due 2043, downgraded to Ba2 from Baa3 -- Class F, $15,000,000, Fixed Rate Notes Due 2043, downgraded to B1 from Ba2 -- Class G, $10,000,000, Fixed Rate Notes Due 2043, downgraded to Caa1 from B2 Moody's is downgrading the transaction due to moderately deteriorated pool performance. As of the Oct. 20, 2008 remittance statement, the transaction's collateral pool balance has remained the same at $418.7 million as at securitization. The transaction's aggregate bond balance has also remained the same at $416.0 million as at securitization. The certificates are collateralized by all or a portion of 73 subordinate classes from 13 fixed rate CMBS pools (96.6% of the transaction) and 3 subordinate classes from one Re-Remic transaction (3.4% of the transaction). The transaction hasn't experienced any realized losses since securitization. Among the Moody's rated securities (75.2%), there have been no upgrades or downgrades since securitization. Credit estimates were performed on non-Moody's rated securities (24.8%). Moody's uses a weighted average rating factor as an overall indicator of the credit quality of a CDO transaction. Based on Moody's analysis, the current WARF is 2,175 compared to 2,075 at issuance and 2,084 at the time of Moody's most recent review. Moody's reviewed the ratings or performed credit estimates on all the collateral supporting the Notes. The distribution is:Baa1- Baa3 (5.9% compared to 5.9% at issuance), Ba1-Ba3 (47.7% compared to 48.8% at issuance), B1-B3 (40.6% compared to 42.1% at issuance), and Caa1-NR (5.7% compared to 3.2% at issuance). The CMBS securities are from pools securitized between 1998 and 2005. The vintage exposures are 2005 (71.5%), 2004 (26.4%), and 1998 (2.1%). The five largest CMBS exposures are MLMT 2005-CKI1 (11.6%), JPMCC 2005-LDP4 (10.2%), BACM 2005-1 (9.3%), MSCI 2005- IQ10 (9.0%) and CSFB 2005-C2 (9.0%). Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a press release dated Jan. 17, 2007. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating conduit and fusion transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Rating Static CDOs Backed by Commercial Real Estate Securities, June 17, 2004 -- this paper details the evolution of Moody's analytic approach to rating CRE CDOs touching on the binomial expansion model, extension risk, correlation, severity rates, pari passu notes, diversity, and interest shortfalls with a discussion of simulation engines, cash flow analysis, scenario analysis, and other elements in Moody's analysis with detailed supplementary information on deriving a CDO collateral loss distribution by simulating pool loss for each CMBS transaction and by simulating default probability and severity for each CMBS certificate; and * The Inclusion of Commercial Real Estate Assets in CDOs, Oct. 8, 1999 -- this paper describes the development of commercial real estate backed CDOs, speaks to collateral pool analysis including industry classifications, diversification, credit quality, recovery rate, and cash flow characteristics, and refers to other aspects of CMBS as CDO collateral including prepayment risk, sequential pay structure, ability to defer interest payments temporarily, servicer advancing, losses, extension risk, recovery rates, and servicer risk. JOHNSON BROADCASTING: May Employ Atropos as Financial Advisor ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas granted Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. authority to employ Atropos Inc. as their financial advisor, nunc pro tunc to Oct. 13, 2008. As the Debtors' financial advisor, Atropos Inc. is expected to provide management, financial advisory and consulting services relative to managing the Debtors during their bankruptcy proceedings. Atropos will also assist in preparing schedules and statements of financial affairs, preparing monthly operating reports, financial advisory and cash management services and the formulating of plans of reorganization. As compensation for their services, Atropos's professionals bill: Professional Hourly Rate ------------ ----------- Karen G. Nicolaou $250 Senior Staff $125 The Debtors told the Court that they paid Atropos a prepetition retainer in the amount of $5,000, which, as of the petition date, has a balance of approximately $3,000. The retainer will be continue to be held in a segregated account pending Court approval of postpetition compensation requests. The Debtors told the Court that to the best of their knowledge, Atropos does not hold or represent any interest adverse to the Debtors, their bankruptcy estates, creditors, equity security holders, or affiliates in the matters on which Atropos is to be engaged. Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. own and operate television stations in Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. filed separate petitions for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D. Texas Case No. 08-36583 and 08-36585, respectively). John James Sparacino, Esq., and Timothy Alvin Davidson, II, Esq., at Andrews and Kurth, represents the Debtors as counsel. When Johnson Broadcasting Inc. filed for protection from its creditors, it listed assets and debts of between $10 million to $50 million each. JOHNSON BROADCASTING: Taps Smithwick & Belendiuk as FCC Counsel --------------------------------------------------------------- Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. asks the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ Smithwick & Belendiuk, P.C., under a general retainer, as special Federal Communications Commission counsel. SB's services will include: a) compliance with the Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC, preparing and filing applications and other submissions to the FCC, and drafting or negotiating documents in transactions related to the broadcast stations and licenses regulated by the FCC; and b) general advice and counselling regarding FCC issues and related corporate matters. To the best of the Debtors' knowledge and belief, SB does not represent any interest adverse to the Debtors or their estates in the matters upon which SB is be engaged. The Debtors tell the Court that SB is owed approximately $50,000 for unpaid prepetition services. As compensation for their services, SB's professionals bill: Hourly Rate ----------- Gary Smithwick, Esq. $450 Arthur Belendiuk, Esq. $450 Attorneys $350 to $450 Paralegals $150 Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. own and operate television stations in Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of Dallas Inc. filed separate petitions for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D. Texas Case No. 08-36583 and 08-36585, respectively). John James Sparacino, Esq., and Timothy Alvin Davidson, II, Esq., at Andrews and Kurth, represents the Debtors as counsel. When Johnson Broadcasting Inc. filed for protection from its creditors, it listed assets and debts of between $10 million to $50 million each. JP MORGAN: Moody's Reviews Ratings on Nine Classes of Certificates ------------------------------------------------------------------ Moody's Investors Service placed the ratings of nine classes of J.P. Morgan Chase Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C1 on review for possible downgrade: -- Class H, $14,729,000, currently rated Baa1, on review for possible downgrade -- Class J, $16,202,000, currently rated Baa2, on review for possible downgrade -- Class K, $13,256,000, currently rated Baa3, on review for possible downgrade -- Class L, $7,364,000, currently rated Ba1, on review for possible downgrade -- Class M, $8,837,000, currently rated Ba2, on review for possible downgrade -- Class N, $4,419,000, currently rated Ba3, on review for possible downgrade -- Class P, $5,891,000, currently rated B1, on review for possible downgrade -- Class Q, $4,419,000, currently rated B2, on review for possible downgrade -- Class T, $2,946,000, currently rated B3, on review for possible downgrade Moody's placed Classes H, J, K, L, M, N, P, Q and T on review for possible downgrade due to concerns about the Westin Portfolio Loan which was recently transferred to special servicing. The Westin Portfolio Loan ($105.0 million -- 8.9%) represents a pari passu interest in a $209.0 million first mortgage loan. The loan is secured by two full service hotel properties totaling 899 rooms - the Westin Hilton Head in Hilton Head, South Carolina (412 rooms) and the Westin La Paloma in Tuscan, Arizona (487 rooms). The loan was transferred to special servicing on Oct. 22, 2008 for imminent default. The borrower had requested relief because the properties are performing below expectations. The loan sponsor is Michael J. Hanson and Randy G. Dix. The loan is now 30 days delinquent. At securitization, the underwritten net cash flow provided by J.P. Morgan Chase for the two hotels was $19.9 million. Moody's NCF was $18.4 million, a 7.6% haircut to the underwriter, based on an overall occupancy rate of 70%, average daily rate of $180 and revenue per available room of $125. The most recent financial information provided at securitization was for the trailing 12- month period ending February 2008. The occupancy rate, ADR and RevPAR for the Westin La Paloma for that period was 64%, $167 and $107, respectively. The occupancy rate, ADR and RevPAR for the West Hilton Head was 64%, $182 and $115, respectively. Based on information provided by J.P. Morgan, the occupancy rate, ADR and RevPar for the Westin La Paloma for the trailing 12 months ending October 2008 was 69%, $175 and $118, respectively. The occupancy rate, ADR and RevPAR for the Westin Hilton Head for that period was 65%, $190 and $114, respectively. Moody's will continue to monitor the performance of this specially serviced loan and the progress of the special servicer's resolution strategies. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a Presale Report dated Dec. 6, 2007. Moody's has not reviewed the transaction since securitization. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating conduit and fusion transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 -- this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 -- this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; and * US CMBS: Moody's Approach to Rating Fusion Transactions, April 19, 2005 -- this paper discusses the key ratings factors for fusion deals (large loan credit quality, composition and correlation of the large loan pool, and conduit diversity), value drivers for office and retail properties, valuation and cap rate issues, property type volatility, Moody's large loan tranching methodology, and an assessment of subordination levels. JPMORGAN TRUST: Moody's Reviews Ratings on 16 Classes of Certs. --------------------------------------------------------------- Moody's Investors Service placed the ratings of 16 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2008-C2 on review for possible downgrade: -- Class A-J, $61,209,000, currently rated Aaa, on review for possible downgrade -- Class B, $14,574,000, currently rated Aa1, on review for possible downgrade -- Class C, $14,575,000, currently rated Aa2, on review for possible downgrade -- Class D, $10,201,000, currently rated A3, on review for possible downgrade -- Class E, $10,202,000, currently rated A1, on review for possible downgrade -- Class F, $13,116,000, currently rated A2, on review for possible downgrade -- Class G, $11,659,000, currently rated A3, on review for possible downgrade -- Class H, $16,031,000, currently rated Baa1, on review for possible downgrade -- Class J, $14,574,000, currently rated Baa2, on review for possible downgrade -- Class K, $14,573,000, currently rated Baa3, on review for possible downgrade -- Class L, $8,745,000, currently rated Ba1, on review for possible downgrade -- Class M, $4,372,000, currently rated Ba2, on review for possible downgrade -- Class N, $5,829,000, currently rated Ba3, on review for possible downgrade -- Class P, $4,372,000, currently rated B1, on review for possible downgrade -- Class Q, $2,915,000, currently rated B2, on review for possible downgrade -- Class T, $4,372,000, currently rated B3, on review for possible downgrade Moody's placed Classes A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q and T on review for possible downgrade due to concerns about two loans, representing 19.7% of the pool, that were recently transferred to special servicing. The largest loan in special servicing is The Promenade Shops at Dos Lagos ($125.2 million -- 10.8%), which is secured by a 352,000 square foot lifestyle center built in 2006 and located in Corona, California. The loan was transferred to special servicing on Nov. 4, 2008 for imminent default. The borrower had requested relief because the property is experiencing cash flow difficulties. The loan sponsor is Poag & McEwen Lifestyle Centers, LLC, a recognized developer of lifestyle centers. The loan is now 30 days delinquent. At securitization, a portion of the center was under construction. The property was 96% leased but some tenants had not yet taken occupancy. According to information provided by J.P. Morgan, the property was 94% leased as of September 2008. J.P. Morgan indicates that the property has experienced $1.7 million in bad debt expense in 2008, indicating that some tenants may have become delinquent in paying their rent, never actually occupied their space or vacated their space prior to lease expiration. The second loan in special servicing is the Westin Portfolio Loan ($104.0 million -- 8.9%), which represents a pari passu interest in a $209.0 million first mortgage loan. The loan is secured by two full service hotel properties totaling 899 rooms - the Westin Hilton Head in Hilton Head, South Carolina (412 rooms) and the Westin La Paloma in Tuscan, Arizona (487 rooms). The loan was transferred to special servicing on Oct. 22, 2008 for imminent default. The borrower had requested relief because the properties are performing below expectations. The loan sponsor is Michael J. Hanson and Randy G. Dix. The loan is now 30 days delinquent. At securitization, the underwritten net cash flow provided by J.P. Morgan Chase for the two hotels was $19.9 million. Moody's NCF was $18.4 million, a 7.6% haircut to the underwriter, based on an overall occupancy rate of 70%, average daily rate of $180 and revenue per available room of $125. The most recent financial information provided at securitization was for the trailing 12- month period ending February 2008. The occupancy rate, ADR and RevPAR for the Westin La Paloma for that period was 64%, $167 and $107, respectively. The occupancy rate, ADR and RevPAR for the West Hilton Head was 64%, $182 and $115, respectively. Based on information provided by J.P. Morgan, the occupancy rate, ADR and RevPAR for the Westin La Paloma for the trailing 12 months ending October 2008 was 69%, $175 and $118, respectively. The occupancy rate, ADR and RevPAR for the Westin Hilton Head for that period was 65%, $190 and $114, respectively. Moody's will continue to monitor the performance of the specially serviced loans and the progress of the special servicer's resolution strategies. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a Presale Report dated April 23, 2008. Moody's has not reviewed the transaction since securitization. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating conduit and fusion transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 -- this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 -- this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; and * US CMBS: Moody's Approach to Rating Fusion Transactions, April 19, 2005 -- this paper discusses the key ratings factors for fusion deals (large loan credit quality, composition and correlation of the large loan pool, and conduit diversity), value drivers for office and retail properties, valuation and cap rate issues, property type volatility, Moody's large loan tranching methodology, and an assessment of subordination levels. LEAR CORP: Bank Loan Sells at 43% Discount in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 56.57 cents-on-the- dollar during the same period, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 7.54 percentage points from the previous week, the Journal relates. The syndicated loan matures on March 29, 2012, and Lear pays 250 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Bank debt of other companies in the auto industry are also being sold at substantial discount, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 38.71 cents-on-the-dollar during the week ended November 21, 2008. This represents a drop of 10.43 percentage points from the previous week, the Journal relates. The syndicated loan matures on April 12, 2012, and Avis pays 125 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's Ba1 rating and Standard & Poor's BB rating. Participations in a syndicated loan under which Ford Motor Co. is a borrower traded in the secondary market at 34.40 cents-on-the- dollar during the week ended November 21, 2008. This represents a drop of 11.40 percentage points from the previous week, the Journal relates. The syndicated loan matures on Dec. 15, 2013, and Ford pays 300 basis points over LIBOR to borrow under the facility. The bank loan is unrated. Meanwhile, participations in a syndicated loan under which General Motors Corp. is a borrower traded in the secondary market at 35.33 cents-on-the-dollar during the week ended November 21, 2008, as reported in the Journal. This represents a drop of 10.52 percentage points from the previous week, the Journal relates. The syndicated loan matures on Nov. 27, 2013, and GM pays 275 basis points over LIBOR to borrow under the facility. The bank loan carries Moody's B1 rating and Standard & Poor's B rating. Based in Southfield, Michigan, Lear Corp. is a global automotive supplier, conducting business in two product operating segments: seating and electrical and electronic. The seating segment includes seat systems and the components. The electrical and electronic segment includes electrical distribution systems and electronic products, primarily wire harnesses, junction boxes, terminals and connectors, various electronic control modules, as well as audio sound systems and in-vehicle television and video entertainment systems. The assembly process with respect to the electrical and electronic segment is performed in low-cost labor sites in Mexico, Honduras, the Philippines, Eastern Europe and Northern Africa. Lear has divested substantially all of the assets of its interior segment, which included instrument panels and cockpit systems, headliners and overhead systems, door panels, flooring and acoustic systems and other interior products. LITTLEFIELD CITY: S&P Keeps 'BB' Rating on General Obligation Debt ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Littlefield, Texas' general obligation debt to negative from stable. At the same time, Standard & Poor's affirmed its 'BB' standard long-term rating on the city's GO debt. The outlook revision reflects S&P's concerns regarding the viability of the Bill Clayton Detention Center. The operator, GEO Corp., and the current tenant, Idaho Department of Corrections, have given notice that they will vacate the facility effective Jan. 5, 2009. With the high degree of uncertainty regarding the use of the facility, there is the potential for rating deterioration because the city's general fund and tax base would not likely be able to support the debt service requirement without causing severe financial distress to the city. Given the current condition of the city's general fund and its reliance on enterprise fund revenues, however, the city's ability to raise sufficient revenues to cover debt service on the facility should it become vacant remains in doubt. Littlefield, which owns Bill Clayton Juvenile Detention Facility, was originally under contract with the Texas Youth Commission to provide juvenile detention services for up to 120 youths at a per diem of $106. Texas, however, ceased housing prisoners at the facility, effective Aug. 31, 2003, which left the detention center without a tenant. The city is evaluating its options, including contracting with a different operator or selling the facility. The next debt service payment is due on February 2009. The city has indicated that there are sufficient fund available to meet that requirement. The following debt service payment, due in August, 2009, may be more challenging if there is no action taken with respect to generating revenues from the facility. There is a fully funded debt service reserve fund, which provides an additional year of debt service protection. LOCUST STREET: Case Summary & Three Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Locust Street Managers LLC 79 Alexander Avenue, Suite 33-A Bronx, NY 10454 Bankruptcy Case No.: 08-14621 Chapter 11 Petition Date: November 20, 2008 Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Marc A. Pergament, Esq. marc.pergament@psinet.com Weinberg, Gross & Pergament, LLP 400 Garden City Plaza, Suite 403 Garden City, NY 11530 Tel: (516) 877-2424 Fax: (516) 877-2460 Total Assets: $32,000,000 Total Debts: $10,945,407 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lila S. Judelson -- $2,473,000 7 Pheasant Run Scarsdale, NY 10583 Steven M. Judelson -- $1,386,936 43 East 19th Street New York, NY 10003 Natalie Judelson -- $185,471 43 East 19th Street New York, NY 1003 The petition was signed by Locust Street president Steven Judelson. LUMERA CORP: Less-Than-$10MM Equity Cues Nasdaq Delisting --------------------------------------------------------- Lumera Corporation received a NASDAQ Staff Determination on Nov. 18, 2008, indicating that the company fails to comply with the minimum stockholders' equity requirements for continued listing, set forth in Marketplace Rule 4450(a)(3) and that its common stock is therefore scheduled to be delisted from The NASDAQ Global Market on Nov. 28, 2008. Marketplace Rule 4450(a)(3) provides that the company must maintain a minimum stockholders' equity of $10,000,000 for continued listing on The NASDAQ Global Market. As reported on the company's Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2008, the company's stockholders' equity was $8,718,000. The company does qualify for a continued listing on the NASDAQ Capital Market at this time. The company intends to request a hearing before a NASDAQ Listing Qualifications Panel to review the Staff Determination, and to request that consideration of the matter be postponed until after Lumera's upcoming annual meeting, at which its proposed merger with GigOptix will be considered. After that point, the new GigOptix Inc. may propose to have its stock listed on the NASDAQ Global Market, to move to the NASDAQ Capital Market or to agree that its stock will be delisted, in which case it would be traded on the OTCBB. Although the company is requesting a hearing before a NASDAQ Listing Qualifications Panel, there can be no assurance the Panel will grant the company's request for continued listing. About Lumera Corporation Based in Bothell, Washington, Lumera Corporation (NASDAQ:LMRA) -- http://www.lumera.com/-- is engage in photonic communications. The company designs electro-optic components based on proprietary polymer compounds for the telecommunications and computing industries. MEDCOMSOFT INC: NOI Prompts Trading Suspension of Common Shares --------------------------------------------------------------- The common shares of MedcomSoft Inc. were suspended from tradingeffective immediately subject to clarification of the company's affairs as a result of a filing of a Notice of Intention to make a proposal to creditors under the Bankruptcy and Insolvency Act (Canada). As reported in the Troubled Company Reporter on Nov. 19, 2008, The company's board of directors reviewed the current financial condition of the company and management's report on the status of and feedback from investors that were contacted during the Raymond James financing engagement. In light of the fact that the company had significant liabilities and expense obligations and the absence of an offer of investment or purchase, the board authorized the hiring of a Trustee and the filing of a Notice of Intention to make a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada). Headquartered in Toronto, Ontario, MedcomSoft Inc. (TSE:MSF) -- http://www.medcomsoft.com/-- develops and distributes software solutions to the healthcare industry in Canada and United States. The company develops, markets, licenses and supports healthcare software solutions to the office-based or ambulatory care market designed with improving the quality of patient care. MedcomSoft's products include MedcomSoft record UE and MedcomSoft clinical data repository. Its subsidiaries include MedcomSoft Corporation, MedcomSoft Australia Pty Ltd. and BNK Informatics Canada Inc. MedcomSoft Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $1,125,171, total liabilities of $1,508,839 and shareholders' deficit of $383,668. MGM MIRAGE: Terry Lanni Steps Aside as CEO and Chairman ------------------------------------------------------- MGM Mirage's chairman and CEO Terry Lanni notified the company that he is retiring from his executive positions, effective Nov. 30, but will remain as a member of the board of directors. "I have served as chairman for more than 13 years and have seen this company grow from owning one resort in Las Vegas to 17 resorts internationally, with joint ventures around the world," Mr. Lanni said. "I believe it is now time to step aside from full-time engagement and turn over the reins to the new generation. I am recommending to the board of directors that Jim Murren succeed me as chairman and CEO. [Mr. Murren] is fully equipped to lead the company through these turbulent times in the [worldwide] economy and take it to new levels of growth and success." Mr. Lanni joined MGM Grand, Inc. in June 1995, as president and chief executive officer and a member of the board. In July 1995, he was named to his current position. Mr. Lanni guided MGM MIRAGE through periods of unprecedented growth, including mergers with Mirage Resorts (2000) and Mandalay Resort Group (2005). He also led the business through uncertain economic times, especially in the aftermath of the tragedy of 9-11. "The company will always be indebted to [Mr. Lanni] for his many years of leadership and wisdom," Kirk Kerkorian, majority shareholder of MGM MIRAGE, said. "We are delighted that he will remain as a member of the board and that the company will have available his wealth of experience and institutional knowledge." "I respect [Mr. Lanni's] personal decision and I am honored that he is recommending me to the Board to serve as his successor," MGM MIRAGE president and COO Jim Murren said. "I will continue to devote all of my energies to this great company. As a direct result of [Mr. Lanni's] leadership, we have a remarkable depth of seasoned management and I am confident of our company's ability to manage through the current economy and emerge stronger, more vigorous and well-positioned to capitalize on future opportunities as the economy rebounds from its current slowdown." The MGM Mirage board will take up the issue of formally naming Mr. Lanni's successor at an upcoming meeting. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled company Reporter on Oct. 9, 2008, Tamara Audi at The Wall Street Journal reports that MGM Mirage needs to raise about $1.2 billion to complete the financing of its CityCenter project in Las Vegas. As reported in the Troubled company Reporter on Oct. 7, 2008, MGM Mirage said that CityCenter, its joint development project with Dubai World, completed the first phase of its $3.0 billion financing package by securing a $1.8 billion senior bank credit facility. The facility matures in April 2013 and is expected to be increased to a total amount of $3.0 billion as additional commitments are received. CityCenter has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed. MGM Mirage and Dubai World continue to work with additional lenders and will seek the remaining commitment amounts through a syndication process beginning on Oct. 7, 2008. The gross project budget consists of $9.3 billion of construction costs (including capitalized interest), $1.7 billion of land, $0.2 billion of preopening expenses, and $0.1 billion of intangible assets. CityCenter is scheduled to be completed in December 2009. According to WSJ, MGM Mirage is working to secure 41.2 billion in financing to round out the $3 billion needed to complete the project. Jim Murren, MGM Mirage's chief operating officer and president, said that he hopes to have the remaining funds committed by Oct. 31, WSJ says. As reported in the Troubled Company Reporter on Nov. 3, 2008, Moody's Investors Service downgraded MGM MIRAGE's (MGM) Corporate Family rating and Probability of Default rating to Ba3 from Ba2. Moody's also downgraded MGM's senior unsecured bond rating to Ba3 from Ba2 and its senior subordinated bond rating to B2 from B1. Moody's also assigned a (P)Ba1 provisional rating to the company's proposed benchmark senior secured guaranteed note. All ratings remain on review for further possible downgrade. The company's Speculative Grade Liquidity rating was also downgraded to SGL-4 from SGL-3. As reported in the Troubled Company Reporter on Oct. 31, 2008, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE and its subsidiaries by one notch. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is negative. MGM MIRAGE: Board Elects James J. Murren as Chairman and CEO ------------------------------------------------------------ MGM Mirage's board of directors has elected James J. Murren as the company's chairman and chief executive officer, effective Dec. 1, 2008. As of the date of Mr. Murren's appointment, no material plan, contract or arrangement, or material amendment in connection with the appointment, has been entered into, nor has any grant or award under the material plan, contract or arrangement been made in connection therewith. Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled company Reporter on Oct. 9, 2008, Tamara Audi at The Wall Street Journal reports that MGM Mirage needs to raise about $1.2 billion to complete the financing of its CityCenter project in Las Vegas. As reported in the Troubled company Reporter on Oct. 7, 2008, MGM Mirage said that CityCenter, its joint development project with Dubai World, completed the first phase of its $3.0 billion financing package by securing a $1.8 billion senior bank credit facility. The facility matures in April 2013 and is expected to be increased to a total amount of $3.0 billion as additional commitments are received. CityCenter has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed. MGM Mirage and Dubai World continue to work with additional lenders and will seek the remaining commitment amounts through a syndication process beginning on Oct. 7, 2008. The gross project budget consists of $9.3 billion of construction costs (including capitalized interest), $1.7 billion of land, $0.2 billion of preopening expenses, and $0.1 billion of intangible assets. CityCenter is scheduled to be completed in December 2009. According to WSJ, MGM Mirage is working to secure 41.2 billion in financing to round out the $3 billion needed to complete the project. Jim Murren, MGM Mirage's chief operating officer and president, said that he hopes to have the remaining funds committed by Oct. 31, WSJ says. As reported in the Troubled Company Reporter on Nov. 3, 2008, Moody's Investors Service downgraded MGM MIRAGE's (MGM) Corporate Family rating and Probability of Default rating to Ba3 from Ba2. Moody's also downgraded MGM's senior unsecured bond rating to Ba3 from Ba2 and its senior subordinated bond rating to B2 from B1. Moody's also assigned a (P)Ba1 provisional rating to the company's proposed benchmark senior secured guaranteed note. All ratings remain on review for further possible downgrade. The company's Speculative Grade Liquidity rating was also downgraded to SGL-4 from SGL-3. As reported in the Troubled Company Reporter on Oct. 31, 2008, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE and its subsidiaries by one notch. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is negative. MGM MIRAGE: Completes Offering of $750MM Senior Secured Notes ------------------------------------------------------------- MGM Mirage completed the private offering of $750 million principal amount of 13% Senior Secured Notes due November 2013 at a price of 93.132%. The company intends to use the net proceeds of this offering, or approximately $688 million, to repay a portion of the outstanding borrowings under its revolving credit facility and for general corporate purposes. The Notes are guaranteed on a senior basis by substantially all of the company's U.S. subsidiaries. In addition, the Notes and the corresponding guarantees are secured by: (i) a first priority lien on the New York-New York Hotel and Casino, the real property on which New York-New York Casino is located and all existing and future personal property of New York-New York Casino & Hotel, LLC, a Nevada limited liability; and (ii) upon receipt of the necessary gaming approvals, a first priority pledge of the equity interests in New York-New York LLC. In connection with the closing of the Private Placement: (i) the company and the guarantors entered into an indenture, dated Nov. 14, 2008, with U.S. Bank National Association, as the trustee; (ii) New York-New York LLC entered into a security agreement, dated Nov. 14, 2008, with U.S. Bank, as the collateral agent; and (iii) the company and New PRMA Las Vegas, Inc., a Nevada corporation and a subsidiary of the company, entered into a pledge agreement, dated Nov. 14, 2008, with U.S. Bank, as the collateral agent. Under the Indenture, the company issued the Notes bearing an interest rate of 13.00% and maturing on Nov. 15, 2013, to certain initial purchasers of the Notes. Interest on the Notes will be payable semi-annually on May 15 and Nov. 15 of each year, beginning on May 15, 2009. Pursuant to the Indenture, the Notes are guaranteed on a senior basis by the guarantors. Furthermore, the Indenture contains covenants that will limit the company's and the guarantors' ability to: (i) pay dividends or distributions, repurchase equity, prepay subordinated debt or make certain investments; (ii) incur additional debt or issue certain disqualified stock and preferred stock; (iii) incur liens on assets ; (iv) merge or consolidate with another company or sell all or substantially all assets; (v) enter into transactions with affiliates; (vi) allow to exist certain restrictions on ability of guarantors to transfer assets; and (vii) enter into sale and lease-back transactions. In addition, pursuant to the Indenture, if the company experiences certain change of control or, under certain circumstances, if the company or a Guarantor sells assets or experiences an event of loss with respect to the Asset Collateral, the company will be required to offer to repurchase all or a portion, as applicable, of the outstanding Notes. Moreover, the Notes will be redeemable at the option of the company at any time prior to the maturity date at 100% of their principal amount plus any accrued interest and a make-whole premium set forth in the Indenture. Pursuant to the Security Agreement, New York-New York LLC granted a security interest on the Asset Collateral to the collateral agent to secure the obligations by New York-New York LLC under its guarantee of the Notes. Pursuant to the Pledge Agreement, the company and New PRMA agreed to pledge, upon receipt of the necessary gaming approvals, the Equity Collateral to secure the obligations of the company under the Notes and the obligations of New PRMA under its guarantee of the Notes. The Security Agreement and the Pledge Agreement contain customary representations and warranties. U.S. Bank also serves as the trustee under various other indentures governing the terms and conditions of certain of the company's outstanding debt securities. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled company Reporter on Oct. 9, 2008, Tamara Audi at The Wall Street Journal reports that MGM Mirage needs to raise about $1.2 billion to complete the financing of its CityCenter project in Las Vegas. As reported in the Troubled company Reporter on Oct. 7, 2008, MGM Mirage said that CityCenter, its joint development project with Dubai World, completed the first phase of its $3.0 billion financing package by securing a $1.8 billion senior bank credit facility. The facility matures in April 2013 and is expected to be increased to a total amount of $3.0 billion as additional commitments are received. CityCenter has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed. MGM Mirage and Dubai World continue to work with additional lenders and will seek the remaining commitment amounts through a syndication process beginning on Oct. 7, 2008. The gross project budget consists of $9.3 billion of construction costs (including capitalized interest), $1.7 billion of land, $0.2 billion of preopening expenses, and $0.1 billion of intangible assets. CityCenter is scheduled to be completed in December 2009. According to WSJ, MGM Mirage is working to secure 41.2 billion in financing to round out the $3 billion needed to complete the project. Jim Murren, MGM Mirage's chief operating officer and president, said that he hopes to have the remaining funds committed by Oct. 31, WSJ says. As reported in the Troubled Company Reporter on Nov. 3, 2008, Moody's Investors Service downgraded MGM MIRAGE's (MGM) Corporate Family rating and Probability of Default rating to Ba3 from Ba2. Moody's also downgraded MGM's senior unsecured bond rating to Ba3 from Ba2 and its senior subordinated bond rating to B2 from B1. Moody's also assigned a (P)Ba1 provisional rating to the company's proposed benchmark senior secured guaranteed note. All ratings remain on review for further possible downgrade. The company's Speculative Grade Liquidity rating was also downgraded to SGL-4 from SGL-3. As reported in the Troubled Company Reporter on Oct. 31, 2008, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE and its subsidiaries by one notch. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is negative. MICHAEL'S STORES: Drop in Sales Won't Affect S&P's 'B-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that Irving, Texas-based Michaels Stores Inc.'s (B-/Stable/--) announcement that total sales were down 3.0% and same-stores sales were down 6.5% in its third quarter has no immediate effect on the company's rating or outlook. The company also announced that it had $92 million in cash and an additional $510 million of availability under it asset-based revolving credit facility. The sales declines and likely corresponding margin declines mean that credit metrics are exceedingly weak, and the deterioration will continue in the fourth quarter. However, a future downgrade or negative outlook revision would focus on the company's liquidity, which S&P still feels is adequate in the near term, considering its cash position, revolving credit facility availability, and lack of any material maintenance covenants. ML-CFC COMMERCIAL: Moody's Junks Ratings on Classes N & P Certs. ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of six classes and affirmed 14 classes of ML-CFC Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-6 and placed nine classes on review for possible downgrade: -- Class A-1, $20,447,696 affirmed at Aaa -- Class A-2, $170,430,000, affirmed at Aaa -- Class A-2FL, $150,000,000, affirmed at Aaa -- Class A-3, $60,689,000, affirmed at Aaa -- Class A-4, $728,987,000, affirmed at Aaa -- Class A-1A, $363,993,755, affirmed at Aaa -- Class AM, $214,593,000, affirmed at Aaa -- Class AJ, $107,403,000, affirmed at Aaa -- Class AJ-FL, $75,000,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $42,919,000, affirmed at Aa2 -- Class C, $16,094,000, affirmed at Aa3 -- Class D, $34,872,000, affirmed at A2 -- Class E, $18,776,000, affirmed at A3 -- Class F, $24,142,000, currently rated Baa1, on review for possible downgrade -- Class G, $24,142,000, currently rated Baa2, on review for possible downgrade -- Class H, $26,824,000, currently rated Baa3, on review for possible downgrade -- Class J, $5,365,000, downgraded to Ba2 from Ba1, on review for possible downgrade -- Class K, $5,365,000, downgraded to Ba3 from Ba2, on review for possible downgrade -- Class L, $5,364,000, downgraded to B1 from Ba3, on review for possible downgrade -- Class M, $5,365,000, downgraded to B3 from B1, on review for possible downgrade -- Class N, $5,365,000, downgraded to Caa1 from B2, on review for possible downgrade -- Class P, $5,365,000, downgraded to Caa2 from B3, on review for possible downgrade Moody's downgraded Classes J, K, L, M, N, and P due to the decline in performance of the Peter Cooper Village and Stuyvesant Town Loan, anticipated losses from specially serviced loans and increased dispersion. Moody's placed Classes F, G, H J, K, L, M, N and P on review for possible downgrade due to concerns about possible further decline in the performance of the pool, including the PCV-ST Loan. As of the Oct. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 0.4% to $2.14 billion from $2.15 billion at securitization. The Certificates are collateralized by 146 mortgage loans ranging in size from less than 1.0% to 10.4% of the pool, with the top 10 loans representing 46.0% of the pool. At securitization, the PCV- ST Loan had an investment grade underlying rating, but the property's performance has declined and the loan no longer has an investment grade underlying rating. The pool has not experienced any losses since securitization. One loan, representing less than 1% of the pool, is currently in special servicing. Moody's is currently estimating a $3.8 million loss for the specially serviced loan. Thirteen loans, representing 16% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association's monthly reporting package. As part of Moody's ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Moody's was provided with full or partial year 2007 and partial- year 2008 operating results for 97% and 65% of the pool, respectively. Moody's weighted average loan to value ratio for the conduit component is 114% compared to 107% at securitization. In addition to the overall decline in pool performance, LTV dispersion has increased since securitization. Based on Moody's analysis, approximately 81% of the conduit pool has a LTV in excess of 100% compared to 70% at securitization. Approximately 36% has a LTV in excess of 120% compared to 25% at securitization. The Peter Cooper Village and Stuyvesant Town Loan ($202.3 million -- 9.5%) represents a pari passu interest in a $3.0 billion first mortgage. The loan is secured by two adjacent multifamily apartment complexes totaling 11,227 units located on the east side of Manhattan. The borrower is pursuing a comprehensive renovation of the property and conversion of rent regulated units to market rents. However, progress has been slower than expected. As of June 2008, approximately 35.8% of the apartments were at market rate, compared to 28.5% at securitization. In addition to the delay in converting apartments, operating expenses have been higher than projected, largely due to utility expenses and repairs and maintenance expenses associated with upgrading apartments upon tenant lease expirations. At securitization, a $400.0 million interest reserve and a $190.0 million general reserve were established to cover interest shortfalls. As of September 2008, approximately $200.0 million of these reserves remain. At the present pace of the conversion program, it is expected that the reserves will be depleted by the end of the third quarter of 2009. The loan is on the servicer's watchlist due to low debt service coverage. The loan sponsors are Tishman Speyer and BlackRock Realty Advisors. In addition to the first mortgage loan, there is a $1.4 billion mezzanine loan secured by a pledge of equity interests in the borrower. Moody's current valuation of this loan reflects a slower rate of conversion of units to market rates, higher expenses and a lower market rental growth, resulting in a decrease in value. Moody's underlying rating is Ba3 compared to Baa3 at securitization. The three largest conduit loans represent 21.4% of the pool. The largest loan is the MSKP Retail Portfolio Loan ($223.4 million -- 10.4%), which is secured by eight retail properties located in different submarkets in Florida. The properties range in size from 63,000 to 230,000 square feet and total 1.2 million square feet. Occupancy has declined to 83% as of June 2008 compared to 88% at securitization. Performance has been impacted by increased operating expenses. The loan is on the servicer's watchlist for low debt service coverage. The loan is interest only for its entire 10-year term. Moody's LTV is 147% compared to 134% at securitization. The second largest loan is the Westfield Southpark ($150.0 million -- 7.0%), which is secured by the borrower's interest in a 1.6 million square foot regional mall (887,000 square foot collateral) located in suburban Cleveland, Ohio. The center is anchored by Dillard's, Macy's, Sears and J.C. Penney. The in-line stores were 91% occupied as of June 2008 compared to 82% at securitization. The loan is interest only for its entire 10-year term. Moody's LTV is 80%, the same as at securitization. The third largest loan is the Blackpoint Puerto Rico Retail Portfolio Loan ($84.7 million -- 4.0%), which is secured by six retail properties located in Puerto Rico. The properties range in size from 59,000 to 306,000 square feet and total 855,000 square feet. Occupancy has declined to 81% as of June 2008 compared to 89% at securitization. Performance has been impacted by a decline in rental income since securitization due to the decline in occupancy. The loan is on the servicer's watchlist due to low debt service coverage. The loan is interest only for its entire 5-year term. Moody's LTV is 127% compared to 115% at securitization. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a Presale Report dated March 21, 2007. This is Moody's full first review since securitization. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating conduit and fusion transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 -- this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 -- this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; and * US CMBS: Moody's Approach to Rating Fusion Transactions, April 19, 2005 -- this paper discusses the key ratings factors for fusion deals (large loan credit quality, composition and correlation of the large loan pool, and conduit diversity), value drivers for office and retail properties, valuation and cap rate issues, property type volatility, Moody's large loan tranching methodology, and an assessment of subordination levels. MOBILE DYNAMICS: Goes Bankrupt, Owes Best Western & Students ------------------------------------------------------------ Tony Ricciuto at The Niagara Falls Review reports that Mobile Dynamics Canada has gone bankrupt. The Niagara Falls Review quoted student Neil Costa as saying, "We had students from all over the world. Some of them had to call their parents and get flights booked so that they could go home. This is a government accredited school and once you pass the two- month course you get certified and can start a career in the car audio industry." According to The Niagara Falls Review, Mobile Dynamics had an arrangement worked out with the Best Western Hotel so that students could live at the hotel. Payment for the hotel was included in the students' tuition fees, says the report. Best Western said that it was also owed money by Mobile Dynamics and if the students wanted to continue staying they would need to pay additional money, The Niagara Falls Review relates, citing Mr. Costa. The Niagara Falls Review reports that Mobile Dynamics said in a letter posted on its door that students would be contacted in about a week regarding their refund. Mr. Costa, says the report, paid about $9,000 in tuition fees. Mobile Dynamics Canada is a private career college in Richmond Hill in Canada. The school was founded in 1990. It trains students in the field of mobile electronics installation. It has a sister U.S. campus, in Phoenix, Arizona, which is still open. MORGAN STANLEY: S&P Cuts Rating on $3MM Class A-6 Notes to 'CCC' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $3.0 million class A-6 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'CCC' from 'CCC+'. At the same time, S&P lowered its rating on the $3.5 million class A-14 secured fixed-rate notes from the same series to 'CCC+' from 'B'. This rating remains on CreditWatch, where it was placed with negative implications on Oct. 16, 2008. The downgrade of class A-6 reflects the Nov. 14, 2008, lowering of the senior unsecured debt rating on Millennium Chemical Inc. The downgrade of class A-14 reflects the Nov. 17, 2008, lowering of the senior unsecured debt rating on American Axle & Manufacturing Holdings Inc., which remains on CreditWatch negative. Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note transaction. The rating on each class of notes is based on the lowest of (i) the rating on the respective reference obligations for each class (with respect to class A-6, the senior unsecured notes issued by Millennium America Inc. {'CCC'}, guaranteed by Millennium Chemical Inc. and with respect to class A-14, the senior unsecured notes issued by American Axle & Manufacturing Holdings Inc. {'CCC+/Watch Neg'}); (ii) the rating on the guarantor of the counterparty to the credit default swap, the interest rate swap, and the contingent forward agreement, Morgan Stanley (A+/Negative/A-1); and (iii) the rating on the underlying securities, the class A certificates issued by BA Master Credit Card Trust II's series 2001-B due 2013 ('AAA'). MRV COMMUNICATIONS: Gets Additional Delisting Notice from Nasdaq ---------------------------------------------------------------- MRV Communications, Inc. received an Additional Staff Determination letter from The Nasdaq Stock Market stating that MRV is not in compliance with Nasdaq's Marketplace Rule 4310(c)(14) because it did not file its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2008, timely and that such noncompliance serves as an additional basis for delisting MRV's common stock from Nasdaq. On Aug. 14, 2008, MRV received a Nasdaq Staff Determination letter stating that the company was not in compliance with Nasdaq's listing requirements because it did not file its Quarterly Report on Form10-Q for the quarter ended June 30, 2008, by the required deadline. In response to the Aug. 14, 2008, Nasdaq-staff determination letter, MRV initiated an appeal process by requesting a hearing before the Nasdaq Listing Qualifications Panel, which hearing was held on Oct. 16, 2008. At the hearing, MRV requested that its common stock continue to be listed on Nasdaq pending completion of the review by a special committee of MRV's Board of Directors into MRV's past stock options practices and other unrelated accounting issues and the likely restatement of the company's financial statements. The Panel issued a decision on Nov. 10, 2008, granting MRV an extension of time to Feb. 10, 2009, to file its June 10-Q and indicating that such extension represents, pursuant to Nasdaq Marketplace Rule 4802(b), the full extent of the Panel's authority to grant an exception with respect to the June 10-Q. MRV may seek an additional extension of time in the event the company is not able to meet the Feb. 10, 2009, deadline, but there can be no assurance an additional extension, if requested, will be granted. Pursuant to Nasdaq Marketplace Rule 4804(c), MRV plans to present its views to the Panel with respect to the delay in filing the September 10-Q, which is subject of the Additional Staff Determination letter of Nov. 13, 2008, and seek additional time to make the delinquent filing. There can be no assurance that the Panel will grant MRV's request for continued listing pending the filing of its September 10-Q. Until a decision by the Panel on this extension request, MRV's common stock will continue to be listed on Nasdaq. About MRV Communications Inc. Headquartered in Chatsworth, California, MRV Communications Inc. -- http://www.mrv.com/and http//www.sourcephotonics.com/ -- (Nasdaq:MRVC) provides network equipment and services, and optical components. MRV's network equipment business provides equipment used by commercial customers, governments and telecommunications service providers, and includes switches, routers, physical layer products and out-of-band management products well as specialized networking products for aerospace, defense and other applications including voice and cellular communication. MRV markets and sells its products worldwide through a variety of channels, including a dedicated direct sales force, manufacturers' representatives, value-added-resellers, distributors and systems integrators. MRV also has operations in Europe that provide network system design, integration and distribution services that include products manufactured by third-party vendors, well as internally developed and manufactured products. The company's optical components business, operating under the Source Photonics brand, includes Source Photonics Inc. and Fiberxon Inc., both wholly owned subsidiaries of MRV. Publicly traded since 1992. As reported in the Troubled Company Reporter on Aug. 4, 2008, MRV Communications Inc. disclosed that the internal review of the special committee appointed by its board of directors is ongoing and the adjustments to MRV's historical financial statements have yet to be determined. MXENERGY HOLDINGS: S&P Says Amendments Won't Affect 'CCC+' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services indicated that MXEnergy Holdings Inc.'s (CCC+/Watch Neg/--) disclosure concerning the execution of certain amendments to its credit agreement are already incorporated into the company's 'CCC+' corporate credit rating and would not immediately affect ratings at this time. The disclosed amendments provide for reductions in borrowing capacity at set milestone dates as the winter heating season progresses. Available borrowing capacity will decline to a maximum of $125 million at maturity on July 31, 2009. The amendments allow the company to continue to hedge its commodity exposure through the upcoming winter heating season, and are needed to preserve short-term liquidity given the recent decline in natural gas prices, which has resulted in a reduction to the company's borrowing base. As preconditions for the amendments, MXEnergy has agreed to either repay any outstanding amounts under the revolving credit facility or obtain a $75 million equity infusion by May 31, 2009. These actions are collectively referred to as "Liquidity Events" under the agreement. Failure to take one or more of these actions would be an event of default under the agreement. Furthermore, MXEnergy has agreed to take several interim steps to demonstrate its ability to meet these conditions. Failure to meet these milestone dates (the earliest of which is Dec. 15, 2009) would also constitute a default under the agreement. Standard & Poor's views these amendments as substantially increasing the default risk of MXEnergy over the next six months given the continuing uncertainty in the capital markets. However, these risks are currently reflected in the 'CCC+' rating. S&P could lower the ratings if the company cannot articulate its plan for achieving these milestones before Dec. 31, 2009, as required under the amendment. NASH FINCH: S&P Changes Outlook to Positive; Keeps 'B+' Rating -------------------------------------------------------------- Standard & Poor's Rating Services said it revised its outlook on Minneapolis-based Nash Finch Co. to positive from stable. At the same time, S&P affirmed all other ratings on the company, including the 'B+' corporate credit rating. "The outlook revision to positive reflects the incremental gains the company has made at both its distribution and retail segments," said Standard & Poor's credit analyst David Kuntz, "and expectations for continued stability at the military food distribution division." The company has met with moderate success with its Operation Fresh Start program, resulting in positive margin momentum. "This has translated into an enhanced credit protection profile year over year," added Mr. Kuntz. NELSON EDUCATION: S&P Cuts Second-Lien Debt Rating to 'CCC' ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Toronto-based Nelson Education Ltd. to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered the rating on the company's first- lien debt to 'B' from 'BB-', and revised the recovery rating to '2' from '1'. The '2' recovery rating indicates an expectation of substantial (70%-90%) recovery in the event of a payment default, in contrast to a '1' recovery rating, which indicates the expectation of very high (90%-100%) recovery. S&P revised the recovery rating due to the use of a lower EBITDA amount and EBITDA multiple in the event of default. S&P also revised the rating on the second-lien debt to 'CCC' from 'CCC+'. The recovery rating on the second-lien debt is unchanged at '6', indicating and expectation of negligible (0%-10%) recovery in a default scenario. "The downgrade reflects Nelson's very high debt leverage, resulting from the company's weaker-than-expected operating performance in S&P's view," said S&P's credit analyst Lori Harris. "The lower-than-expected profits resulted from softness in the Canadian school segment (K-12), which affected Nelson because of its strong presence in this category," Ms. Harris added. The ratings on Nelson reflect what S&P sees as its highly leveraged financial risk profile, seasonal sales, and lack of geographic diversity given the high concentration of revenue in Ontario, which is in line with the industry. These factors are slightly offset by the company's strong market position in the Canadian educational publishing industry and solid operating margin. Nelson is the largest academic publisher in Canada, with the No. 1 market position in the school segment and the No. 2 position in higher education. The company benefits from a relationship with Cengage Learning Holdings II L.P. (the former U.S. Thomson Learning business; B/Stable/--) through an operating agreement that doesn't expire until Jan. 1, 2018, and is renewable for one-year extensions thereafter. The stable outlook reflects S&P's expectation that Nelson's operating performance will remain relatively stable in the medium term, driven by its strong market positions in both the school and higher education segments. S&P would consider revising the outlook to negative if the company's liquidity position weakened or if leverage increased further. Although unlikely because of what S&P views as the company's very high debt leverage, S&P could revise the outlook to positive if Nelson demonstrates a financial policy consistent with a higher rating and reduces its debt leverage substantially through sustainable earnings growth and lower debt balances. NETVERSANT SOLUTIONS: Gets Initial OK to Use $11MM Patriarch Loan ----------------------------------------------------------------- The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware authorized NetVersant Solutions Inc. and its debtor-affiliates to obtain, on an interim basis, up to $11 million postpetition financing from group of financial institution led by Patriarch Partners Agency Services LLC, as administrative agent, and Zohar CDO 2003-1 Limited, Zohar II 2006- 1 Limited and Zohar III Limited, as lenders. The proceeds of the facility will be used for (i) working capital and generate corporate purposes; (ii) payment of costs of administration of the Chapter 11 cases; (iii) payment of interest and fees under the debtor-in-possession agreement; and (iv) payment of costs and expenses of the DIP agent in connection with the Chapter 11 cases. The lenders committed to provide as much as $20 million to the Debtors. According to the credit agreement, the facility will incur interests at a per annum rate equal to: i) the LIBOR Rate plus the LIBOR Rate Margin if the relevant obligation is an advance that is a LIBOR Rate Loan; ii) the Base Rate plus the Base Rate Margin if the relevant obligation is an advance that is a Base Rate Loan,; and iii) the Base Rate plus the Base Rate Margin; Provided, however, that in no event will the Base Rate plus the Base Rate Margin be less than the LIBOR Rate plus the LIBOR Rate Margin. The LIBOR Rate Margin is 8% and the Base Rate Margin is 7%. To secure their DIP obligations, the lenders will be granted superpriority administrative claims over all other administrative claims under Section 507(b) of the United States Bankruptcy Court. Moreover, the lender will be paid a 2% of the commitment at closing due and payable on the termination date. The credit agreement contains customary and appropriate events of default. A hearing is set for Dec. 5, 2008, at 2:00 p.m., to consider final approval of the motion. Objections, if any, are due Dec. 4,2008. A full-text copy of the Debtor-in-Possession Credit Agreement is available for free at http://ResearchArchives.com/t/s?350f A full-text copy of the Debtor-in-Possession Budget is available for free at http://ResearchArchives.com/t/s?350f About NetVersant Solutions Headquartered in Houston, Texas, NetVersant Solutions, Inc. -- http://www.netversant.com/-- provides wireless network infrastructure services. The company also provides an array of voice, video and data communication services. The company and 20 of its affiliates filed for Chapter 11 protection on November 19, 2008 (Bankr. D. Del. Lead Case No. 08-12973). Daniel B. Butz, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell, represents the Debtors in their restructuring efforts. The Debtor selected Porter & Hedges LLP as local counsel. When they filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. NEW AMERICA HIGH: Receives NYSE Listing Non-Compliance Notice ------------------------------------------------------------- The New America High Income Fund, Inc., received a letter from NYSE Regulation, Inc. advising it that the Fund is not in compliance with the New York Stock Exchange's continued listing standard related to maintaining a consecutive thirty day average closing stock price of over $1.00 per share. The thirty day average closing stock price as of Nov. 12, 2008, was $.99. Under the Exchange's rules, the Fund has six months from the date of the NYSE notice to cure the average price deficiency, during which time, subject to compliance with the Exchange's other continued listing standards, the Fund's shares of common stock will continue to be listed and traded on the Exchange. If these conditions are not met during the six-month cure period, NYSE indicated that it will commence suspension and delisting procedures. The Fund has notified NYSE that it intends to take steps intended to cure the price deficiency within the six-month cure period. Based in Boston, Massachusetts, The New America High Income Fund, Inc. (NYSE:HYB) -- http://www.newamerica-hyb.com/-- is a diversified closed-end investment company. The Fund's investment objective is to provide high current income, while seeking to preserve capital through investment in a diversified portfolio of high-yield, fixed-income securities. NEXCEN BRANDS: Missing 10-Q Cues Another Nasdaq Delisting Note -------------------------------------------------------------- NexCen Brands, Inc., received additional notification from The Nasdaq Stock Market that the company is not in compliance with the continued listing requirement of Nasdaq Marketplace Rule 4310(c)(14) due to its failure to file its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2008. As noted in the company's Notification of Late Filing on Form 12b- 25 filed with the SEC on Nov. 12, 2008, it expects to file its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2008, soon as practicable after the company files an amendment to its Annual Report on Form 10-K for the year ended Dec. 31, 2007, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008 and June 30, 2008. At this time, the company anticipates that it will complete these filings in the first quarter of 2009. The company has received two Nasdaq Staff Determination letters indicating that its common stock is subject to delisting pursuant to Nasdaq Marketplace Rule 4310(c)(14) due to its failure to file its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008, and June 30, 2008. After the company's receipt of the initial letter for the first quarter of 2008, the company requested and was granted a hearing before the Nasdaq Listing Qualifications Panel. At the hearing, held on July 10, 2008, the company requested continued listing and presented to the Panel its plan to regain compliance with Nasdaq's filing requirements. On Sept. 2, 2008, the Panel issued its decision granting the company's request, subject to the condition that, on or before Nov. 17, 2008, the company file its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008 and June 30, 2008. On Oct. 15, 2008, the Nasdaq Listing and Hearing Review Council informed the company that, pursuant to the Listing Counsel's discretionary authority, it has stayed the Panel's Sept. 2, 2008, decision and granted the company the opportunity to provide, by Nov. 28, 2008, additional information to the Listing Council, including an updated plan of compliance. The company plans to submit such additional information by the submission deadline. The company's common stock will remain listed on Nasdaq pending determination from the Listing Council. On Oct. 22, 2008, representatives of Nasdaq also informed the company that Nasdaq has temporarily suspended enforcement of the minimum bid price requirement. The company had received a Nasdaq Staff Deficiency letter indicating that its common stock is subject to delisting pursuant to Nasdaq Marketplace Rule 4450(a)(5) due to its failure to satisfy the minimum $1 bid price requirement. Pursuant to Nasdaq Marketplace Rule 4450(e)(2), the company was provided an initial period of 180 calendar days, or until Jan. 5, 2009, to regain compliance. The temporary suspension tolls the compliance period for all companies presently in a minimum bid price compliance period until reinstatement of the rule on Jan. 19, 2009. Accordingly, the company will now have until April 13, 2009, to regain compliance with the minimum $1 bid price requirement. The company cannot provide any assurances that the Listing Council will allow continued listing through such time that the company will be able to file its Quarterly Reports on Form 10-Q for the periods ended March 31, 2008, June 30, 2008, and Sept. 30, 2008, or that the company will meet the minimum bid price requirement by the revised April 13, 2009 deadline for compliance. About NexCen Brands NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/ -- acquires and manages global brands, generating revenue through licensing and franchising. The company own and license the Bill Blass and Waverly brands, well as seven franchised brands. Two franchised brands -- The Athlete's Foot and Shoebox New York -- sell retail footwear and accessories. Five are quick-service restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time, Pretzelmaker, and Great American Cookies. The company licenses and franchises its brands to a network of leading retailers, manufacturers and franchisees that generate $1.3 billion in retail sales in more than 50 countries around the world. The franchisees operate approximately 1,900 franchised stores. Franchisee support and training is provided at NexCen University, a state-of-the-art facility located in Atlanta. * * * As reported by the Troubled Company Reporter on May 21, 2008, the company believes that there is substantial doubt about its ability to continue as a going concern, and pending completion of an independent review, that this substantial doubt also may have existed at the time the company filed its 2007 10-K. The audit committee of the company's Board of Directors has retained independent counsel to conduct an independent review of the situation. The company has concluded that its 2007 financial statements should no longer be relied upon and no reliance should be placed upon KPMG's audit report dated March 20, 2008, or its report dated March 20, 2008 on the effectiveness of internal control over financial reporting as of Dec. 31, 2007, as contained in the company's 2007 10-K. NexCen also announced that it is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company's lender. In addition, the company will take immediate steps to reduce operating expenses. PANOLAM INDUSTRIES: Moody's Junks Corporate Family Rating From B2 ----------------------------------------------------------------- Moody's Investors Service downgraded Panolam Industries International, Inc.'s corporate family rating to Caa1 from B2, senior secured credit facilities ratings to B2 from Ba3, and subordinated notes rating to Caa2 from Caa1. Moody's also downgraded the company's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings outlook remains negative. The downgrade of the corporate family rating to Caa1 from B2 reflects (i) continuing weakness in the company's end markets as the company primarily sells to commercial and residential construction markets; (ii) looming covenant issues, as the cushion under the company's interest coverage and debt leverage covenants is exceptionally narrow, and Moody's anticipates that the company will need to amend its covenants in the near future; (iii) historically low return on assets that could lead to asset impairments, thereby weakening the company's equity base; (iv) historically negative tangible net worth that is projected to weaken further, as Moody's projects the company to generate losses in 2009; (v) weak cash flow from operations generation, with a large part of the CFO coming from depreciation and amortization. It should be noted that the company has stepped up its depreciation schedule in connection with acquisitions. The company's ratings are supported by acceptable debt leverage and interest coverage. Moody's adjusted debt to EBITDA and EBITDA to interest expense for the LTM period ended Sept. 30, 2008 were 5.5 times and 2 times, respectively. However, Moody's projects both of those metrics to deteriorate as 2009 unfolds and rolling four quarter EBITDA declines. The SGL rating was downgraded to SGL-4, indicating weak liquidity for the next 12 months. The SGL rating takes into consideration internal and external liquidity, covenant compliance, as well as access to alternative liquidity sources. In terms of internal liquidity, the company generated about $26 million of CFO for the LTM period ended Sept. 30, 2008. Cash on hand on Sept. 30, 2008 was $28 million. The company has access to a $30 million revolving credit facility, and at Sept. 30, 2008 the company had $5 million of borrowings and $4.1 million of letters of credit outstanding under the facility. However, subsequent to Sept. 30, 2008, Panolam borrowed the remaining $20.9 million that was available under the revolving credit facility in order to enhance its liquidity. The company's covenant compliance will become an issue in the coming quarters as the maximum decline in EBITDA under the company's debt leverage covenant and interest coverage covenant on Sept. 30, 2008 was $1.3 million and $4.3 million, respectively. Given that the company increased its debt leverage after Sept. 30, 2008, the covenants will certainly become tighter as the effect of increased debt and declining EBITDA will place pressure on the ratios. In terms of alternate liquidity, all the company's assets are encumbered, leaving very little that could be sold to generate unrestricted cash. The negative outlook reflects the uncertainty surrounding covenant compliance as well as weakening business conditions in both residential and commercial construction that will place pressure on the company's performance. These ratings/assessments for Panolam Industries International were affected: -- Corporate Family Rating, downgraded to Caa1 from B2; -- Probability of default, downgraded to Caa1 from B2; -- $215 million Sr. Sec. 1st Lien Term Loan, due 2012, downgraded to B2 (LGD2, 25%) from Ba3 (LGD2, 29%); -- $30 million Sr. Sec. 1st Lien Revolver, due 2010, downgraded to B2 (LGD2, 25%) from Ba3 (LGD2, 29%); -- $151 million 10.75% Sr. Sub. Notes, due 2013, downgraded to Caa2 (LGD5, 79%) from Caa1 (LGD5, 84%). -- Speculative Grade Liquidity Rating, downgraded to SGL-4 from SGL-2. Headquartered in Shelton, Connecticut, Panolam is an integrated manufacturer of thermally fused melamine panels and high pressure laminates. Revenues for the LTM period ended Sept. 30, 2008 were $392 million. PARTS 2 GO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Parts 2 Go Trading Co. 2110 Enterprise St Escondido, CA 92029 Case No.: 08-11760 Petition Date: November 19, 2008 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Laura S. Taylor Debtor's Counsel: Judith A. Descalso 960 Canterbury Pl., Suite 340 Escondido, CA 92025 Tel: (760) 745-8380 Fax: (760) 860-9800 Email: descalso@pacbell.net Total Assets: $793,740 Total Debts: $1,291,821 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/casb08-11760.pdf PETROLEUM DEV'T: S&P Cuts Issue Rating on $203MM Sr. Notes to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue rating and revised its recovery rating on Petroleum Development Corp.'s $203 million senior unsecured notes due 2018. S&P lowered the issue rating to 'B' (the same as the corporate credit rating) from 'B+' and revised the recovery rating to '3' from '2', indicating the expectation for meaningful (50% to 70%) recovery in the event of a payment default. This follows the company's announcement that it has increased its unrated senior secured revolving credit facility to $375 million from $300 million. Ratings List Petroleum Development Corp. Corporate credit rating B/Positive/-- Ratings Revised To From $203 million senior unsecured notes due 2018 B B+ Recovery rating 3 2 PETTERS COMPANY: U.S. Trustee Appoints 3-Member Creditors Panel --------------------------------------------------------------- Habbo G. Fokkena, the United States Trustee for Region 12, appointed 3 creditors to serve on the Official Committee of Unsecured Creditors in Petters Company Inc. and its debtor- affiliates' jointly administered Chapter 11 cases. The list of debtor-affiliates includes Petters Group Worldwide, LLC; PC Funding, LLC, Thousand Lakes, LLC; SPF Funding, LLC; PL Ltd., Inc.; Edge One, LLC; MGC Finance, Inc.; PAC Funding, LLC; and Palm Beach Finance Holdings, Inc. The Creditors Committee members are: a) Ronald R. Peterson, as Chapter 7 trustee of Colossus Capital Fund, L.P., Colossus Capital Fund, Ltd., Lancelot Investors Fund II, L.P., and related entities Acting Chairperson c/o Jenner & Block, LLP 330 N. Wabash Avenue Chicago, IL 60611 Tel: (312) 222-9350 b) ArrowHead Capital Management, LLC Attn: James N. Fry 601 Carlson Parkway Suite 1250 Minnetonka, MN 55305 Tel: (952) 224-5200 Fax: (952) 224-5296 c) Taunton Ventures, L.P. Attn: Paul Taunton 990 Deerbrook Drive Chanhassen, MN 55317 Tel: (952) 278-7849 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. 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. Petters Group Worldwide, LLC, and nine other debtor-affiliates filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). 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. PETTERS COMPANY: Debtors to Each File Statements and Schedules -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota ordered that notwithstanding any provision in the order of Oct. 22, 2008, that provided for the joint administration of Petters Company, Inc. and nine (9) debtor-affiliates' cases, the Debtors will each file a set of statements and schedules to be entered in the case of the particular debtor alone. The Court also ordered that to have a deadline fixed for the timely filing of proofs of claim for the cases, the Debtors will each make a motion, with notice to parties-in-interest as appropriate under the local rules. 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. Petters Group Worldwide, LLC, and nine other debtor-affiliates filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). 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. PETTERS COMPANY: Section 341(a) Meeting Set for Nov. 25, 2008 ------------------------------------------------------------- The United States Trustee for Region 12 will convene a meeting of Petters Company, Inc. and its debtor-affiliates' creditors at 10:00 a.m.., on Nov. 25, 2008, at 300 South Street, in Minneapolis, Minnesota. The meeting of creditors will not be concluded on November 25, but will be reconvened on Dec. 16, 2008, at 10:00 a.m. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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. Petters Group Worldwide, LLC, and nine other debtor-affiliates filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). 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. PFF BANK: Bank Fails & FDIC Arranges Takeover by U.S. Bank ---------------------------------------------------------- U.S. Bank, National Association, Minneapolis, Minn., acquired the banking operations, including all the deposits, of Downey Savings and Loan Association, F.A., Newport Beach, Calif., and PFF Bank & Trust, Pomona, Calif., in a transaction facilitated by the Federal Deposit Insurance Corporation. The combined 213 branches of the two organizations will reopen as branches of U.S. Bank under their normal business hours, including those with Saturday hours. Depositors will automatically become depositors of U.S. Bank. 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. Customers of both banks should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the organizations. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards. As of September 30, 2008, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion. PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion. Besides assuming all the deposits from the two California banks, U.S. Bank will purchase virtually all their assets. The FDIC will retain any remaining assets for later disposition. The FDIC and U.S. Bank entered into a loss share transaction. U.S. Bank will assume the first $1.6 billion of losses on the asset pools covered under the loss share agreement, equal to the net asset position at close. The FDIC will then share in any further losses. Under the agreement, U.S. Bank will implement a loan modification program similar to the one the FDIC announced in August stemming from the failure of IndyMac Bank, F.S.B., Pasadena, CA. The loss-sharing arrangement is expected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship. U.S. Bank currently has 353 offices in California. Downey Savings and PFF Bank are not affiliated with each other. Downey Savings has 170 branches in California and five in Arizona, and PFF Bank has 38 branches in California. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Downey Savings will be $1.4 billion and $700 million for PFF Bank. U.S. Bank's acquisition of all the deposits of the two institutions was the "least costly" option for the FDIC's DIF compared to alternatives. These were the twenty first and twenty second banks to fail in the nation this year, and the fourth and fifth banks to close in California. The last bank to be closed in the state was Security Pacific Bank, Los Angeles, on November 7, 2008. 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 8,451 banks 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. PINNACLE FOODS: S&P Keeps B- Corp. Credit Rating; Outlook Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlook on Mountain Lakes, New Jersey-based Pinnacle Foods Group LLC to stable from positive. At the same time, S&P affirmed all ratings on the company, including the 'B-' corporate credit rating. As of Sept. 28, 2008, Pinnacle had about $1.8 billion of reported debt. "The outlook revision reflects S&P's expectations that Pinnacle will not improve credit measures to previously anticipated levels over the nearer term, due to its lower free cash flow forecast for the remainder of 2008, largely due to one-time events," said Standard & Poor's credit analyst Christopher Johnson. The ratings reflect Pinnacle's high debt levels, and its participation in the highly competitive, although somewhat recession-resistant, packaged food industry. The outlook is stable, reflecting the company' adequate liquidity position, and S&P's expectation that leverage will remain in the 7.5x area due to lower than previously expected free cash flow available to reduce debt over the near term. S&P could revise the outlook back to positive if the company's operating performance moderately improves and adjusted debt to EBITDA declines below 7.5x. S&P estimates this would occur if 2009 EBITDA margins stay in the mid-15% range, the company generates low-single-digit net sales growth, and applies a portion of estimated free cash flows in 2009 of about $50 million to debt reduction. Alternatively, S&P could revise the outlook to negative if S&P's estimated EBITDA cushion on the company's triggering leverage ratio falls below 10% ahead of its anticipated third-quarter 2009 revolver drawdown. PLY GEM: S&P Puts 'B' Corporate Rating on Negative CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Cary, North Carolina-based Ply Gem Industries Inc., including its 'B' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch listing reflects S&P's assessment that as a result of the continued depressed level of housing starts and lower residential repair and remodeling activity, a trend S&P expects to continue through at least 2009, Ply Gem's operating performance will likely continue to suffer, possibly resulting in a weakening of credit measures that will no longer be consistent with the current rating," said S&P's credit analyst Thomas Nadramia. In addition, cash interest increases by about $15 million during 2009 in conjunction with the company's 2008 senior secured note offering. The additional interest burden, combined with the possibility of weaker EBITDA, could result in the company utilizing its $150 million asset-based revolver for debt service. As of Sept. 27, 2008, Ply Gem's liquidity was $166.1 million, consisting of $20.5 million in cash and $146.1 million of availability on its $150 million credit facility. In resolving S&P's CreditWatch listing, S&P will consider the impact that the challenging operating environment will have on Ply Gem's near-term credit measures and liquidity position. POTOMAC EDISON: Fitch Says Rate Pact Could Restore Profile ---------------------------------------------------------- Fitch Ratings views Potomac Edison Company's proposed rate settlement agreement in Virginia as a favorable step toward restoring the utility's credit profile. The proposed agreement was reached among Potomac Ed, the staff of the Virginia State Corporation Commission, a group of large and mid-sized commercial and industrial customers, and the office of the Virginia Attorney General to permit the recovery of purchased power costs in Virginia for Potomac Ed. The VSCC still needs to approve the proposed settlement agreement before it can take effect, and a ruling may not occur until the end of the year. Fitch would view a supportive ruling by the VSCC as favorable to maintaining Potomac Ed's credit quality, and it likely would result in a Ratings Outlook revision to Stable from Negative. Potomac Ed's issuer default rating is 'BB+' and its senior secured bonds are rated 'BBB'. The proposed agreement would help resolve the ongoing issues related to Potomac Ed's under-recovery of purchased power costs in the Virginia portion of its service territory and the uncertainty over the tariff structure in Virginia after the existing capped rate period expires. Since July 1, 2007, Potomac Ed has been materially under-recovering purchased power costs in Virginia, which has resulted in significantly weaker credit metrics. Under the proposed agreement, Potomac Ed would continue to collect a previously allowed interim rate increase of $73 million per annum through June 30, 2009. After VSCC approval of the settlement, Potomac Ed would conduct an auction to purchase power to meet its load. The utility would then absorb some of the higher purchased power costs from July 1, 2009 until July 1, 2011, at which time going forward it would be allowed full recovery. Until the VSCC approves the settlement setting in motion the auction process and Potomac Ed procures the power, the actual financial impact cannot be determined. Ultimately, credit metrics would improve following the proposed settlement, but remain weak through the first half of 2011, after which time Potomac Ed would be able to fully restore its financial profile. Fitch plans to review the credit rating upon final resolution of the rate order and power auction. REDDY ICE: Receives Listing Non-Compliance Notice from NYSE ----------------------------------------------------------- Reddy Ice Holdings, Inc., was notified by NYSE Regulations, Inc., that it is not in compliance with one of the continued listing standards of the New York Stock Exchange. Reddy Ice is considered below criteria established by the NYSE because the company's total market capitalization has been less than $75 million over a consecutive 30 trading-day period and its last reported shareholders' equity was less than $75 million. In accordance with NYSE procedures, Reddy Ice has 45 days from the receipt of the notice to submit a plan to the NYSE demonstrating how it intends to comply with the NYSE's continued listing standards within 18 months. Upon receipt of the company's plan, the NYSE has 45 calendar days to review and determine whether the company has made a reasonable demonstration of its ability to come into conformity with the relevant standards within the 18 month period. The NYSE will either accept the plan, at which time the company will be subject to ongoing monitoring for compliance with this plan, or the NYSE will not accept the plan and the company will be subject to suspension and delisting proceedings. As required by the NYSE's rules, the company plans to notify the NYSE within 10 business days of receipt of the non-compliance notice of the company's intent to submit a plan to remedy its non- compliance. The company's common stock remains listed on the NYSE under the symbol "FRZ," but will be assigned a ".BC" indicator by the NYSE to signify that the company is not currently in compliance with the NYSE's continued listing standards. The company is required to maintain compliance with other applicable NYSE continued listing requirements, including the minimum global market capitalization standard, which requires the company to maintain an average global market capitalization of at least $25 million over a consecutive 30 trading-day period. Failure to maintain compliance with this requirement would result in the NYSE promptly initiating suspension and delisting procedures. On Nov. 17, 2008, Reddy Ice's common stock had a closing price of $1.17 per share, equating to a market capitalization of approximately $26 million. About Reddy Ice Holdings, Inc. Reddy Ice Holdings, Inc., through its wholly-owned subsidiary, Reddy Ice Corporation, manufactures and distributes packaged ice products. Reddy Ice is a manufacturer of packaged ice products in the United States and serves approximately 82,000 customer locations in 31 states and the District of Columbia. Typical end markets include supermarkets, mass merchants, and convenience stores. * * * As reported in the Troubled Company Reporter on Aug. 20, 2008, Moody's Investors Service downgraded the Corporate Family Rating and Probability of Default Rating of Reddy Ice Holdings, Inc. to B2 from B1 and assigned an SGL-3 speculative grade liquidity rating. Moody's concurrently lowered the ratings on the $300 million senior secured credit facility and senior discount notes by one notch. Moody's said the rating outlook is negative. As reported in the Troubled Company Reporter on Aug. 20, 2008, Standard & Poor's Ratings Services revised its outlook on Dallas, Texas-based Reddy Ice Holdings Inc. and its wholly owned operating subsidiary, Reddy Ice Corp. (Reddy Ice) to negative from stable. At the same time, S&P affirmed all of its ratings on the company, including the 'B+' corporate credit rating. As of June 30, 2008, Reddy Ice had about $438 million in adjusted debt. RENO-SPARKS INDIAN: Fitch Downgrades Issuer Rating to 'BB' ---------------------------------------------------------- In the course of routine surveillance, Fitch Ratings downgrades to 'BB' from 'BBB-' the long-term issuer rating on the Reno-Sparks Indian Colony, Nevada. The RSIC has outstanding debt of $15.8 million, series 2006 fixed rated bonds rated 'AA-' by Fitch based on a direct-pay letter of credit provided by U.S. Bank, National Association. The Rating Outlook is Stable. The downgrade to 'BB' reflects the deterioration in financial flexibility reflected in reduced reserve levels and limited ability to cut expenditures. Long-term fiscal stability is heavily reliant upon the successful completion and operation of key economic development projects and the resultant sales tax revenues. The RSIC's main revenue source is sales and excise taxes with a concentration in tobacco products. At the time of the original rating the RSIC's tobacco sales were bucking national trends but sales over the last few years more closely reflect declining nationwide consumption. The tribe levies sales and excise taxes on businesses operating on tribal trust land. The five RSIC-owned smoke shops, combined, provide the largest source of tax revenue to the tribe. The tribe's authority to collect sales and excise taxes is generated from an agreement with the state signed in 1991. The agreement stipulates that the tribe must charge a rate at least equivalent to the state's sales and excise taxes on tobacco products. The RSIC maintains an important pricing advantage over its non-tribal competitors as the tribe does not pay taxes on the product it purchases for sale. There are no other tribally owned smoke shops in the RSIC service area. Sales and excise taxes from tobacco products totaled a high 49% of general fund revenues in 2007, down from 74% in 2005. The reduction in revenue concentration is largely due to demand for the RSIC's tobacco products mirroring nationwide declining consumption trends and the success of other tax-paying entities. RSIC officials continue to work on generating alternate sources of sales tax and rental income and have shown some success to date with the presence of two high-end car dealerships. At the time of Fitch's initial rating in 2006 the RSIC expected the near term development of a Wal-Mart but the project was delayed. RSIC officials report that the project is moving forward and is set to break ground the first half of 2009. The RSIC's 2007 audit shows a significant decline in financial flexibility reflected in the third straight year of general fund deficits. The RSIC maintains reserves in other funds that are available for general use but overall flexibility is low. In 2007, the tribe reported a general fund deficit of $2.7 million, down from $11.5 million in 2004, the most recent audit available at the time of the initial rating. Fund balance across the general, enterprise and capital improvement funds in 2007 was $7.9 million, or 19.9% of spending, but also down from the 2004 figure of $9.9 million or 34.3% of spending. Year to date 2008 reports show $4.3 million unreserved fund balance across these same funds and an additional $1.6 million of cash available in the grant fund. While a low level of flexibility was factored into the original rating, current levels are lower than expected. Tobacco related revenues are projected to decline but if the current Wal-Mart development schedule is met, the RSIC expects to start building balances in mid-2009 and a return to more stable financial operations by 2010. However, even if the project is built on schedule negative national economic trends, specifically in the retail sector, could pressure revenues. The tribe does maintain some flexibility as capital spending has increased significantly since 2004 but over the long term, the RSIC's financial wherewithal will always be reliant on sales and excise taxes which are sensitive to economic swings. Any diversification away from tobacco products and within the sale and excise revenue base may add some level of financial stability. The RSIC's debt profile includes $8 million in outstanding bank loans in addition to the bonds. The RSIC is currently in negotiations to renew the LOC supporting the bonds, which expires June 28, 2009. If the LOC is terminated without substitution a mandatory tender is triggered. At that point the bonds become bank bonds and the terms of the indenture specify that the RSIC must pay the bonds in full within 36 hours or pay a rate to the bank of 5% above prime until the bonds are paid in full. Ongoing payments required under these terms would add significant additional stress to the RSIC's financial profile. The RSIC is a federally recognized tribe with a reservation consisting of noncontiguous trust land totaling over 2,000 acres in and around downtown Reno, Nevada, within Washoe County. The tribe has 847 enrolled members and employs approximately 317 people, 45% of which are tribal members. The tribe is governed by an eight-member tribal council and a tribal chairman, all elected to four year terms. RESERVOIR FUNDING: Moody's Junks Ratings on Three Classes of Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible downgrade the ratings of these three classes of notes issued by Reservoir Funding, Ltd.: Class Description: $374,900,000 Class A-1-NV First Priority Senior Non-Voting Floating Rate Notes Due 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Prior Rating Date: May 29, 2008 -- Current Rating: A2, on review for possible downgrade Class Description: $100,000 Class A-1-V First Priority Senior Floating Rate Notes Due 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Prior Rating Date: May 29, 2008 -- Current Rating: A2, on review for possible downgrade Class Description: $75,000,000 Class A-2 Second Priority Senior Floating Rate Notes Due 2040 -- Prior Rating: Baa1, on review for possible downgrade -- Prior Rating Date: May 29, 2008 -- Current Rating: B3, on review for possible downgrade Additionally, Moody's has downgraded the ratings of three classes of notes: Class Description: $34,500,000 Class B Third Priority Floating Rate Notes Due 2040 -- Prior Rating: B3, on review for possible downgrade -- Prior Rating Date: May 29, 2008 -- Current Rating: Ca Class Description: $3,000,000 Class C Fourth Priority Mezzanine Floating Rate Deferrable Notes Due 2040 -- Prior Rating: Ca -- Prior Rating Date: May 29, 2008 -- Current Rating: C Class Description: $7,000,000 Class D Fifth Priority Mezzanine Floating Rate Notes Due 2040 -- Prior Rating: Ca -- Prior Rating Date: May 29, 2008 -- Current Rating: C According to Moody's, the rating changes reflect the deterioration in the credit quality of the transaction's underlying collateral, the majority of which consists of subprime RMBS and ABS CDOs. Moody's notes that the transaction is currently failing the mezzanine overcollateralization test and that the weighted average rating has increased significantly since the last rating action was taken. Moody's announced on Sept. 18, 2008 that it is revising its expected loss assumptions which are used for the surveillance of ratings of ABS CDOs holding subprime RMBS, specifically of the second half 2005 -- first half 2007 vintages. Moody's stated that for purposes of monitoring its ratings of ABS CDOs with exposure to second half 2005 -- first half 2007 subprime RMBS, it will rely on certain projections of the lifetime average cumulative losses for vintages of RMBS set forth in a recent Moody's Special Report. Moody's explained that it will utilize the range of loss projections set forth in the report based on deal performance and quarterly vintage to modify its prior assumptions of the expected loss inputs when monitoring ABS CDO ratings. While this transaction is primarily exposed to 2004 vintage collateral, the credit quality of the ABS CDO securities in the pool has deteriorated significantly since the prior rating action. RESI AND RESIX: Moody's Reviews Ratings on 52 Tranches in 13 Deals ------------------------------------------------------------------ Moody's Investors Service has placed on review the ratings of fifty two tranches issued in thirteen transactions from the RESI and RESIX shelves and corrected the ratings of 6 tranches in two RESIX transactions. The RESI certificates are protected through subordination including a non-amortizing unrated tranche. The synthetic transaction provides the owner of a sizable pool of jumbo mortgages credit protection similar to the credit enhancement provided through subordination in conventional residential mortgage backed securities transactions. The reference portfolio includes prime conforming and nonconforming balance of primarily fixed-rate mortgages purchased from various originators. The portfolio is generally static as in most RMBS deals. Through an agreement with the securities issuer, the Protected Party pays a fee for the transfer of a portion of the portfolio risk. Investors in the securities have an interest in the holdings of the issuer, which include highly rated investment instruments, a forward delivery agreement and fee collections on the agreement with the Protected Party. Investors are exposed to losses from the reference portfolio but benefit only indirectly from cash flows from these assets. Depending on the class of securities held, investors have credit protection from subordination. The credit-linked notes in the RESIX shelf replicate the cash flow of synthetic RMBS securities issued: -- RESIX Finance Limited Credit Linked Notes, Series 2003-B replicates the cash flows of Class B9 and Class B10 issued by the Real Estate Synthetic Investment Securities, Series 2003- B transaction. -- RESIX Finance Limited Credit Linked Notes, Series 2004-A replicates the cash flows of Class B7, Class B8, Class B9, and Class B10 issued by the Real Estate Synthetic Investment Securities, Series 2004-A transaction. -- RESIX Finance Limited Credit Linked Notes, Series 2005-A replicates the cash flows of Class B7 and Class B8 issued by the Real Estate Synthetic Investment Securities, Series 2005- A transaction. -- RESIX Finance Limited Credit-Linked Notes, Series 2005-D replicates the cash flows of Class B7, Class B8, Class B9, and Class B10 issued by the Real Estate Synthetic Investment Securities, Series 2005-D transaction. -- RESIX Finance Limited Credit-Linked Notes, Series 2006-A replicates the cash flow of Class B7 issued by the Real Estate Synthetic Investment Securities, Series 2006-A transaction -- RESIX Finance Limited Credit- Linked Notes, Series 2006-C replicates the cash flows of Class B7, Class B8, and Class B9 issued by the RESI Finance Limited Partnership 2006-C transaction. The actions are part of an ongoing, wider review of all Jumbo RMBS transactions, in light of the deteriorating housing market and rising delinquencies and foreclosures. The rating adjustments will vary based on level of credit enhancement, collateral characteristics, pool-specific historical performance, quarter of origination, and other qualitative factors. Complete rating actions are: Issuer: RESI Finance Limited Partnership 2005-A -- Cl. B8, Placed on Review for Possible Downgrade, currently Ba3 Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2005-A -- Class B8, Placed on Review for Possible Downgrade, currently Ba3 Issuer: RESI Finance Limited Partnership 2005-C -- Cl. B2, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B3, Placed on Review for Possible Downgrade, currently A2 -- Cl. B4, Placed on Review for Possible Downgrade, currently A3 -- Cl. B5, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B6, Placed on Review for Possible Downgrade, currently Baa3 Issuer: RESI Finance Limited Partnership 2005-D, Real Estate Synthetic Investment Securities, Series 2005-D -- Cl. A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B1, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B2, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B3, Placed on Review for Possible Downgrade, currently A2 -- Cl. B4, Placed on Review for Possible Downgrade, currently A3 -- Cl. B5, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B6, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B7, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. B8, Placed on Review for Possible Downgrade, currently B1 -- Cl. B10, Placed on Review for Possible Downgrade, currently Caa2 Issuer: RESIX Finance Limited Credit Linked Notes, Series 2005-D -- Cl. B7, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. B8, Placed on Review for Possible Downgrade, currently B1 -- Cl. B10, Placed on Review for Possible Downgrade, currently Caa2 Issuer: RESI Finance Limited Partnership 2006-A -- Cl. B1, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B2, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B3, Placed on Review for Possible Downgrade, currently A2 -- Cl. B4, Placed on Review for Possible Downgrade, currently A3 -- Cl. B5, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B6, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B7, Placed on Review for Possible Downgrade, currently B1 Issuer: RESIX Finance Limited Credit Linked Notes, Series 2006-A -- Cl. B7, Placed on Review for Possible Downgrade, currently B1 Issuer: RESI Finance Limited Partnership 2006-B -- Cl. B1, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B2, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B3, Placed on Review for Possible Downgrade, currently A2 -- Cl. B4, Placed on Review for Possible Downgrade, currently A3 -- Cl. B5, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B6, Placed on Review for Possible Downgrade, currently Baa3 Issuer: RESI Finance Limited Partnership 2006-C -- Cl. A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B1, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B2, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B3, Placed on Review for Possible Downgrade, currently A1 -- Cl. B4, Placed on Review for Possible Downgrade, currently A2 -- Cl. B5, Placed on Review for Possible Downgrade, currently Ba1 -- Cl. B6, Placed on Review for Possible Downgrade, currently Ba3 -- Cl. B7, Placed on Review for Possible Downgrade, currently B2 -- Cl. B9, Placed on Review for Possible Downgrade, currently Caa2 Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2006-C -- Cl. B7, Placed on Review for Possible Downgrade, currently B2 -- Cl. B9, Placed on Review for Possible Downgrade, currently Caa2 Issuer: RESI Finance Limited Partnership 2007-A -- Cl. B3, Placed on Review for Possible Downgrade, currently B1 -- Cl. B7, Placed on Review for Possible Downgrade, currently Caa2 Issuer: RESI Finance Limited Partnership 2007-B -- Cl. B3, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B4, Placed on Review for Possible Downgrade, currently Ba1 -- Cl. B5, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. B6, Placed on Review for Possible Downgrade, currently Ba3 Issuer: RESI Finance Limited Partnership 2007-C -- Cl. B6 Notes, Placed on Review for Possible Downgrade, currently B1 Corrections: Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2003-B -- Cl. B9, Upgraded to Baa2, currently Ba2 -- Cl. B10, Upgraded to Baa3, currently Ba3 Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2004-A -- Cl. B7, Upgraded to Baa2, currently Ba2 -- Cl. B8, Upgraded to Baa3, currently Ba3 -- Cl. B9, Upgraded to Ba2, currently B2 -- Cl. B10, Upgraded to Ba3, currently B3 RESIDENTIAL ASSET: Moody's Downgrades Ratings on 53 Tranches ------------------------------------------------------------ Moody's Investors Service has downgraded the ratings of 53 tranches from 5 transactions issued by Residential Asset Securitization Trust. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: Residential Asset Securitization Trust 2005-A11CB -- Cl. 1-A-3, Downgraded to Baa1 from Aaa -- Cl. 1-A-4, Downgraded to Baa1 from Aaa -- Cl. 1-A-5, Downgraded to Aa1 from Aaa -- Cl. 1-A-6, Downgraded to Baa2 from Aaa -- Cl. 2-A-1, Downgraded to A3 from Aaa -- Cl. 2-A-2, Downgraded to A3 from Aaa -- Cl. 2-A-4, Downgraded to Baa2 from Aaa -- Cl. 2-A-5, Downgraded to Baa2 from Aaa -- Cl. 2-A-X, Downgraded to A3 from Aaa -- Cl. PO, Downgraded to Baa2 from Aaa -- Cl. 2-A-3, Downgraded to Baa3 from Aa1 -- Cl. B-1, Downgraded to Caa2 from A3 -- Cl. B-2, Downgraded to Ca from Baa1 -- Cl. B-3, Downgraded to Ca from Ba3 -- Cl. B-4, Downgraded to Ca from B2 -- Cl. B-5, Downgraded to Ca from B2 -- Cl. B-6, Downgraded to Ca from B3 -- Cl. B-7, Downgraded to Ca from Ba2 Issuer: Residential Asset Securitization Trust 2005-A13 -- Cl. 1-A-1, Downgraded to A3 from Aaa -- Cl. 1-A-2, Downgraded to A3 from Aaa -- Cl. 1-A-3, Downgraded to Aa2 from Aaa -- Cl. 1-A-4, Downgraded to Aa2 from Aaa -- Cl. 1-A-6, Downgraded to A3 from Aaa -- Cl. 1-A-7, Downgraded to Aa2 from Aaa -- Cl. 2-A-1, Downgraded to Aa2 from Aaa -- Cl. A-X, Downgraded to Aa2 from Aaa -- Cl. PO, Downgraded to A3 from Aaa Issuer: Residential Asset Securitization Trust 2005-A5 -- Cl. A-1, Downgraded to A1 from Aaa -- Cl. A-2, Downgraded to Aa3 from Aaa -- Cl. A-3, Downgraded to Aa2 from Aaa -- Cl. A-5, Downgraded to A1 from Aaa -- Cl. A-6, Downgraded to Aa2 from Aaa -- Cl. A-7, Downgraded to A2 from Aaa -- Cl. A-8, Downgraded to Aa2 from Aaa -- Cl. A-10, Downgraded to A2 from Aaa -- Cl. A-11, Downgraded to A1 from Aaa -- Cl. A-12, Downgraded to Aa3 from Aaa -- Cl. A-X, Downgraded to Aa2 from Aaa -- Cl. PO, Downgraded to A2 from Aaa Issuer: Residential Asset Securitization Trust 2005-A6CB -- Cl. A-1, Downgraded to Aa2 from Aaa -- Cl. A-2, Downgraded to Aa2 from Aaa -- Cl. A-3, Downgraded to Aa1 from Aaa -- Cl. A-5, Downgraded to A1 from Aaa -- Cl. A-6, Downgraded to Aa1 from Aaa -- Cl. A-7, Downgraded to Aa1 from Aaa -- Cl. A-X, Downgraded to Aa1 from Aaa -- Cl. PO, Downgraded to A1 from Aaa -- Cl. A-4, Downgraded to A2 from Aa1 -- Cl. A-8, Downgraded to A2 from Aa1 -- Cl. A-9, Downgraded to A2 from Aa1 Issuer: Residential Asset Securitization Trust Series 2004- IndyPort1 -- Cl. A-1, Downgraded to Aa2 from Aaa -- Cl. A-1X, Downgraded to Aa2 from Aaa -- Cl. B-2, Downgraded to Ca from Baa3 RESIDENTIAL CAPITAL: GMAC Offers Exchange of Notes -------------------------------------------------- On November 20, 2008, GMAC LLC commenced separate private exchange offers and cash tender offers to purchase and/or exchange certain of its and its subsidiaries' and Residential Capital, LLC's outstanding notes held by eligible holders for cash, newly issued notes of GMAC and, in the case of the GMAC offers only, preferred stock of a wholly-owned GMAC subsidiary, upon the terms and subject to the conditions set forth in the applicable confidential offering memoranda, each dated November 20, 2008, and the related letters of transmittal. In addition, GMAC Financial Services submitted an application to the U.S. Federal Reserve Board of Governors for approval to become a bank holding company under the Bank Holding Company Act of 1956, as amended. GMAC also submitted an application to the U.S. Treasury to participate in the Capital Purchase Program created under the Emergency Economic Stabilization Act of 2008, conditional upon becoming a bank holding company. As a bank holding company, GMAC would obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses. GMAC also expects to have expanded opportunities for funding and for access to capital as a bank holding company. If GMAC's application to become a bank holding company under the BHC Act is accepted, GMAC Bank will become a Utah chartered Federal Reserve member bank. Exchange Of Outstanding Notes GMAC also commenced separate private exchange offers and cash tender offers to purchase and exchange certain of its and its subsidiaries' and Residential Capital, LLC's outstanding notes held by eligible holders for cash, newly issued notes of GMAC and, in the case of the GMAC offers only, preferred stock of a GMAC subsidiary, upon the terms and subject to the conditions set forth in the applicable confidential offering memoranda, each dated Nov. 20, 2008, and the related letters of transmittal. The purpose of the offers is to increase GMAC's capital levels while reducing the amount of GMAC's and ResCap's outstanding debt in connection with GMAC's capital plan relating to its application to become a bank holding company. In the GMAC offers, GMAC is offering to purchase and exchange any and all of the notes held by eligible holders for, at the election of each eligible holder, either: (a) new securities consisting of a combination of (i)(x) in the case of GMAC old notes maturing prior to 2031, newly issued Senior Guaranteed Notes of GMAC with the same interest rate and maturity date as the applicable series of GMAC old notes exchanged therefor, which new guaranteed notes will be guaranteed by certain subsidiaries of GMAC and will in all cases be denominated in U.S. dollars or (y) in the case of GMAC old notes maturing in 2031, a combination of new guaranteed notes and newly issued 8.00% Subordinated Notes due 2018 of GMAC; and (ii) newly issued 5% Perpetual Senior Preferred Stock with a liquidation preference of $1,000 per share of a subsidiary of GMAC; or (b) cash, in each case in the amounts per 1,000 U.S. dollar equivalent principal amount of GMAC old notes. Cash elections will be subject to proration in the event that the aggregate consideration required to accept all GMAC old notes tendered pursuant to cash elections would exceed $2 billion. The new guaranteed notes will be guaranteed, on a joint and several basis, by GMAC Latin America Holdings LLC, GMAC International Holdings Cooperatief U.A., GMAC Continental LLC, IB Finance Holding Company LLC and GMAC US LLC, which are all subsidiaries of GMAC. The note guarantees will be senior obligations of each note guarantor and will rank equal with all existing and future senior debt of such note guarantor. The note guarantees will rank senior to all subordinated debt of such note guarantor. In the ResCap offers, GMAC is offering to purchase and exchange any and all of the ResCap notes held by eligible holders for, at the election of each eligible holder either, (i)(x) in the case of the 8.50% notes of ResCap maturing on May 15, 2010, newly issued 7.5% Senior Notes due 2013 of GMAC or (y) in the case of all other series of ResCap old notes, a combination of new senior notes and new subordinated notes or (ii) cash, in all cases in the amount per 1,000 U.S. dollar equivalent principal amount of ResCap old notes. Cash elections will be subject to proration in the event that the aggregate consideration required to accept all ResCap old notes tendered pursuant to cash elections would exceed $500 million. GMAC is offering an early delivery payment in the GMAC and ResCap offers, which, with respect to cash consideration will be paid in cash, and in all other cases will be paid in principal amount of new notes. For each offer, the early delivery payment will be paid only to eligible holders who validly tender (and do not withdraw) their old notes prior to 5:00 p.m., New York City time, on Dec. 4, 2008, unless extended by GMAC with respect to the offer. For eligible holders of old notes that tender after the early delivery time, in determining the consideration the holders will receive, the amounts indicated in the tables above for cash prices and exchange ratios into new guaranteed notes, in the case of the GMAC offers, or new senior notes, in the case of the ResCap offers, will be reduced by the early delivery payment of $50 of cash or $50 principal amount of new guaranteed or new senior notes, as applicable, per 1,000 U.S. dollar equivalent principal amount of old notes validly tendered and not withdrawn. Each of the GMAC and ResCap offers will expire at 11:59 p.m., New York City time, on Dec. 18, 2008, unless extended by GMAC with respect to any or all series of old notes. In each of the GMAC and ResCap offers, tendered old notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on Dec. 4, 2008, unless extended by GMAC with respect to the GMAC or ResCap offers, but not thereafter. Holders of old notes accepted in the GMAC and ResCap offers will also receive a cash payment (paid in the currency of the old notes) equal to the accrued and unpaid interest in respect of such old notes from the most recent interest payment date to, but not including, the settlement date for the applicable offer. The GMAC offers are conditioned upon, among other things, the completion of the ResCap offers and a sufficient amount of old notes having been tendered for purchase and exchange pursuant to the GMAC offers such that, in GMAC's judgment, GMAC has obtained a sufficient amount of capital in connection with the GMAC offers, whether or not such amount of capital would be sufficient to satisfy the requirements of the BHC Act or any other applicable regulations. The ResCap offers are conditioned upon, among other things, the completion of the GMAC offers and a sufficient amount of old notes having been tendered for purchase and exchange pursuant to the ResCap offers such that, in GMAC's judgment, the ResCap offers were successful. For the avoidance of doubt, these conditions are for GMAC's benefit and may be asserted by GMAC or may be waived by GMAC at any time and from time to time, in its sole discretion. In addition, GMAC has the right to terminate or withdraw any of the offers at any time and for any reason, including, without limitation, if any of the foregoing conditions or any other conditions to the offers described in the confidential offering memorandum are not satisfied. A full-text copy of the Private Exchange Offers is available for free at http://ResearchArchives.com/t/s?3518 GMAC will enter into registration rights agreements pursuant to which, under certain circumstances, it will agree to use reasonable best efforts to file exchange offer registration statements or shelf registration statements with respect to the new notes and the new preferred stock. Documents relating to the offers will only be distributed to holders of the old notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Noteholders who desire to obtain a copy of the eligibility letter must contact Global Bondholder Services Corporation, the information agent for the offers, at (866) 794-2200 (U.S. Toll-free) or (212) 430-3774 (Collect). GMAC cannot assure that it will obtain Federal Reserve approval to become a bank holding company or that any of the transactions described above will be completed, and if completed, whether they will achieve a sufficient amount of capital to satisfy the applicable capital adequacy requirements or will otherwise be successful. Wachtell, Lipton, Rosen & Katz served as legal advisor to GMAC. Liquidity and Capital Resources GMAC's funding strategy and liquidity position have been materially adversely affected by the ongoing stress in the credit markets that began in the middle of 2007 and reached unprecedented levels during recent months. The capital markets remain highly volatile, and GMAC's access to liquidity has been and continues to be significantly reduced. These conditions, in addition to the reduction in GMAC's credit ratings, have resulted in increased borrowing costs and GMAC's inability to access the unsecured debt markets in a cost-effective manner. Furthermore, GMAC has regular renewals of outstanding bank loans and credit facilities. Based on existing asset availability and eligibility criteria, GMAC currently has available approximately $500 million of capacity under its secured credit lines. However, GMAC has the ability to significantly increase the amount of available capacity based on future asset origination and potential availability. Although GMAC's material committed facilities due to mature in the third quarter were renewed at revised terms, some facilities have not been renewed. See GMAC's quarterly report on Form 10-Q for the period ending Sept. 30, 2008 for additional information regarding such facilities. This has placed additional pressure on GMAC's liquidity position. GMAC's inability to renew the remaining loans and facilities as they mature would have a further negative impact on its liquidity position. GMAC also has significant maturities of unsecured debt each year. Approximately $1.8 billion of GMAC's outstanding unsecured debt matures in the fourth quarter of 2008, $12.8 billion matures in 2009 and $8.8 billion matures in 2010. In addition, as of Sept. 30, 2008, GMAC has approximately $38.7 billion of outstanding unsecured debt (including $14.6 billion of Smart Notes and $3.9 billion of Demand Notes, although such amount of outstanding Demand Notes has significantly declined since Sept. 30, 2008) which is not subject to the private exchange offers and cash tender offers for certain outstanding GMAC and ResCap debt securities announced by GMAC on Nov. 20, 2008. In order to retire these instruments, GMAC either will need to refinance this debt, which will be very difficult if the current volatility in the credit markets continue or worsen, or generate sufficient cash to retire the debt. A full-text copy of the company's Liquidity and Capital Resources is available for free at s http://ResearchArchives.com/t/s?3519 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. As reported in the Troubled Company Reporter on Nov. 13, 2008, Fitch Ratings has downgraded GMAC LLC's issuer default rating and senior unsecured debt: (i) IDR to 'CCC' from 'B+'; and (ii) senior unsecured debt to 'CC' from 'B+'. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. GMAC Financial Services is in turn wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on GMAC LLC to 'CCC' from 'B-'. At the same time, S&P lowered S&P's long-term counterparty credit rating on GMAC's subsidiary, Residential Capital LLC, to 'CCC-' from 'CCC+'. The ratings on GMAC were removed from CreditWatch Negative where they were placed Oct. 9, 2008. The outlooks for GMAC and Residential Capital LLC are negative. RESIDENTIAL CAPITAL: Moody's Cuts Senior Debt Ratings to 'C' ------------------------------------------------------------ Moody's Investors Service downgraded the senior secured, junior secured, and unsecured senior debt ratings of Residential Capital LLC) to C from Ca. The outlook is stable. This action is in conjunction with Moody's downgrade of GMAC LLC to C from Caa1, with a developing outlook. The downgrade follows GMAC's announcement of an exchange offer for ResCap's senior secured, junior secured and substantially all of its unsecured bonds. The total principal value of bonds included in the exchange is approximately $9.3 billion. These bonds will be exchanged for either GMAC senior bonds or a combination of GMAC senior and subordinate bonds. Moody's considers this exchange to be a distressed exchange because the bonds being offered in exchange for ResCap's existing debt are being offered at a discount to par value and will have longer maturities. The discount to par value being offered in the exchange is substantial, in most cases no less then 45%. This is the second distressed exchange related to ResCap bonds in 2008. Distressed exchanges are included in Moody's definition of defaults. This exchange will not reduce the amount of ResCap debt outstanding because the current debt, at its current principal amount, will be held by GMAC after the exchange. The significant discount being offered in the exchange, in addition to the low recovery bondholders would be likely to receive if ResCap would be liquidated, is consistent with a C rating. This transaction illustrates that ResCap cannot produce the required cash flow to service and ultimately repay its obligations. "It is Moody's opinion that ResCap would not be a going concern without support from GMAC," said Moody's Vice President and Senior Credit Officer Craig Emrick. "Each month requires additional support from GMAC to prevent ResCap from violating its debt covenants and defaulting on its debt service." GMAC is undertaking its own bond exchange and is applying to become a bank holding company. The difference between the GMAC and ResCap ratings outlooks reflects that future support from GMAC to ResCap remains uncertain. GMAC may choose not to support ResCap further, or if GMAC is successful in converting to a bank holding company, it may be precluded by bank regulators from doing so. Additionally, GMAC disclosed in its recent regulatory filing that it does not intend to support ResCap further if the GMAC exchange offers are not completed. ResCap requires significant external support to continue as a going concern. ResCap required debt forgiveness from GMAC in October 2008 to avoid violating its minimum net worth covenant and additional support to service its mid-November interest payments on certain debt. Downgrades: Issuer: Residential Capital, LLC -- Multiple Seniority Shelf, Downgraded to (P)C from (P)Ca -- Senior Secured Regular Bond/Debenture, Downgraded to C from Ca -- Junior Secured Regular Bond/Debenture, Downgraded to C from Ca -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from Ca Outlook Actions: Issuer: Residential Capital, LLC -- Outlook, Changed to Stable from Negative ResCap is a subsidiary of GMAC LLC and is headquartered in Minneapolis, Minnesota. Rescap reported equity of $2.3 billion at Sept. 30, 2008. RESIDENTIAL CAPITAL: S&P Cuts Counterparty Credit Rating to 'CC' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered selected ratings on GMAC LLC and its 100% owned subsidiary, Residential Capital LLC, including lowering the long-term counterparty credit rating on GMAC LLC to 'CC' from 'CCC' and lowering the long-term counterparty credit rating on Residential Capital LLC to 'CC' from 'CCC-'. These actions follow the launch of GMAC LLC exchange offers for certain notes of both entities. S&P views the exchange as a distressed debt exchange. The ratings on both GMAC LLC and Residential Capital LLC are placed on CreditWatch with negative implications. "The downgrade reflects the probability that, with the successful execution of the exchange offers, which will pay less than face value to certain bondholders, Standard & Poor's, in accordance with S&P's criteria, will lower S&P's counterparty credit rating on the company to 'SD'," said S&P's credit analyst John K. Bartko, C.P.A. In addition, S&P would likely lower ratings on the affected old debt issues to 'D'. A successful exchange would increase GMAC LLC's capital levels, and reduce the amount of GMAC LLC's and Residential Capital LLC's outstanding debt. GMAC LLC has indicated that it is seeking to achieve these objectives in conjunction with GMAC LLC's application to become a bank holding company. S&P expects that the potential bank holding company status and the debt exchange would partially provide needed liquidity and funding relief, though the exchanges illustrate the gravity of the company's financial position. S&P believes that if the exchange fails, GMAC LLC and/or Residential Capital LLC might file for bankruptcy protection. Accordingly, S&P's ratings on securities that are not part of the exchange offer are also on CreditWatch with negative implications. In the GMAC offers, GMAC is offering to purchase and/or exchange certain notes for either new securities or cash, at the election of the holder. For old GMAC notes maturing prior to 2031, the securities would consist of a combination of newly issued GMAC senior guaranteed notes with the same interest rate and maturity date as the applicable series of old GMAC notes exchanged. These new guaranteed notes will be guaranteed by certain subsidiaries of GMAC and will in all cases be denominated in U.S. dollars and newly issued 5% perpetual senior preferred stock with a liquidation preference of $1,000 per share of a wholly owned subsidiary of GMAC. For old GMAC notes maturing in 2031, the securities would consist of a combination of new guaranteed notes and newly issued 8.00% GMAC subordinated notes due 2018 (the new subordinated notes) and the new preferred stock. Cash elections will be subject to proration if the aggregate consideration required to accept all GMAC old notes tendered pursuant to cash elections exceeds $2 billion. The new guaranteed notes will be guaranteed on a joint and several basis by GMAC Latin America Holdings LLC, GMAC International Holdings Cooperatief U.A., GMAC Continental LLC, IB Finance Holding Company LLC, and GMAC US LLC, which are all subsidiaries of GMAC LLC. The note guarantees will be senior unsecured obligations of each note guarantor and will rank equal with all existing and future senior unsecured debt of each note guarantor. The note guarantees will rank senior to all subordinated unsecured debt of such note guarantor. In the Residential Capital LLC offers, GMAC is offering to purchase and/or exchange certain Residential Capital LLC notes for either new GMAC securities or cash, at the election of the holder. In the case of the 8.50% Residential Capital LLC notes maturing on May 15, 2010, the securities would consist of newly issued GMAC 7.5% senior notes due 2013. For all other series of old Residential Capital LLC notes, the securities would consist of a combination of new senior notes and new subordinated notes. Cash elections will be subject to proration if the aggregate consideration required to accept all old Residential Capital LLC notes tendered pursuant to cash elections exceeds $500 million. ROBERT LANE: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Robert Lane Estates, Inc. c/o Cecchi Gori Pictures 11990 San Vicente Blvd., Suite 300 Los Angeles, CA 90049 Bankruptcy Case No.: 08-14625 Chapter 11 Petition Date: November 20, 2008 Court: Southern District of New York (Manhattan) Debtor's Counsel: Kenneth M. Lewis, Esq. klewis@rosenpc.com Sanford P. Rosen & Associates, P.C. 747 Third Avenue New York, NY 10017-2803 Tel: (212) 223-1100 Fax: (212) 223-1102 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fortress Credit Corp. guaranty; $32,849,052 1345 Avenue of the Americas security: New York, NY 10105 $8,000,000 Los Angeles County Tax taxes; $72,221 Collect security: PO Box 54018 $8,000,000; Los Angeles, CA 90054-0018 senior lien: $32,894,052 City of Beverly Hills, Water utilities $1,500 455 N. Rexford Drive, Rm 240 Beverly Hills, CA 90210-4817 Southern Cal. Edison utilities $1,060 Francisco Resendiz Tree & services $800 Gard AT&T services $560 The Gas Co. utilities $200 Post Alarm System services $150 Trousdale Private Patrol services $140 Time Warner Cable services $120 Dish Network services $100 Ace Pool Service services $90 The petition was signed by Robert Lane secretary Claire C. Ambrosio. SAKS INCORPORATED: Poor Store Sales Cue Fitch's Rating Downgrades ----------------------------------------------------------------- Fitch Ratings has downgraded its ratings on Saks Incorporated: -- Long-term Issuer Default Rating (IDR) to 'B' from 'B+'; -- Senior secured bank credit facility to 'BB/RR1' from 'BB+/RR1'; -- Senior unsecured notes to 'B+/RR3' from 'BB-/RR3'. The Rating Outlook is Negative. Saks had $649 million in debt outstanding, including a $230 million 2% convertible note due 2024, as of Nov. 1, 2008. The downgrade reflects the considerable deterioration in luxury department store sales and the resulting pressure on operating margins that already trail its peers, free cash flow and credit metrics. Fitch expects free cash flow to be negative in 2008, with a decline in cash from $101 million in 2007 and increased borrowings under its $500 million credit facility. Further, operating EBITDA could turn negative in 2009 if sales trends remain at recently reported levels which would require further borrowings on its facility to fund operations. Fitch expects liquidity to remain adequate in 2009 but will monitor Saks' ability to manage inventory levels, store expenses and capital expenditures in a timely fashion in the face of the rapid top line deceleration. While Saks' comparable store sales had been tracking well above its industry peers (with the highest comparable store sales growth among the luxury department store retailers for eight quarters through the first half of 2008), revenue trends for the luxury department stores deteriorated rapidly in the last two months, with the softness no longer just contained to weakness in aspirational consumer spending. Saks comparable store sales in the third quarter was -11.5% as sales trends deteriorated from - 5.9% in August to -16.6% in October, with sales at its New York City flagship store, which accounted for over 20% of sales in 2007, also pulling back significantly. Operating EBITDA for the first three quarters declined by 48% to $78 million from $150 million in the comparable year ago period, reflecting the significant pressure on gross margin in the third quarter which declined by 640 basis points year over year. Saks will continue to face substantial gross margin pressure during the holiday season as inventory is misaligned against recent comparable store sales trends (with comparable inventory up 4.4% year over year at the end of the third quarter) and given heightened promotional activity in the sector. With comparable inventory still expected to be up at the end of the fourth quarter, gross margin pressure will likely continue into 2009. Saks had $20 million in cash and approximately $85 million in borrowings under its credit facility as of Nov. 1, 2008. Subsequently, the company retired $84.1 million in debt using borrowings on its facility. Total borrowings on the facility reflect the buildup in seasonal working capital and should decrease by year end. Leverage measured by adjusted debt/EBITDAR deteriorated to 5.5 times for the latest 12 months ending Nov. 1, 2008, from the 4.2x reported in each of the last three quarters, while EBITDAR coverage of interest and rents has declined to 1.8x from 2.3x, respectively. Saks is taking steps to cut inventory receipts by 15% for the spring season and has reduced its capital expenditures to $75 million in 2009 from $125 million anticipated in 2008. However, Fitch expects that same store sales trends could remain considerably weak through 2009 and credit metrics could weaken significantly from current levels as cost cutting measures and reduction in capital expenditures may not be adequate to preserve cash. The ratings on the company's $500 million secured bank facility and the senior unsecured notes are derived from the IDR and the relevant recovery rating. Fitch's recovery analysis assumes a liquidation value in a distressed scenario of approximately $1 billion. Saks' senior credit facility, which is secured by inventories and certain receivables, is rated 'BB/RR1', indicating outstanding (90%-100%) recovery prospects. The facility terminates in September 2011 and is not subject to any covenants unless the availability falls below $60 million. At that time, it is subject to a fixed charge coverage ratio of at least 1:1. The senior unsecured notes are rated 'B+/RR3', indicating good recovery prospects (51%-70%). Debt maturities are $0 in 2009, $46 million in December 2010 and $142 million in October 2011. The company's significant real estate holdings, which include its Fifth Avenue New York City store, provide a source of liquidity for the company. SEMGROUP ENERGY: Failure to File Financial Reports Cues Delisting ----------------------------------------------------------------- SemGroup Energy Partners, L.P., received an Additional Staff Determination Letter from The NASDAQ Stock Market, stating that SGLP is not in compliance with NASDAQ's Marketplace Rule 4310(c)(14) because it did not timely file its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2008, with the Securities and Exchange Commission, and that this issue may serve as an additional basis to delist SGLP's common units from NASDAQ. SGLP received a similar NASDAQ Staff Determination Letter on Aug. 19, 2008, in connection with SGLP's inability to timely file its Quarterly Report on Form 10-Q for the period ended June 30, 2008, with the SEC. SGLP appealed that Staff Determination and attended a hearing before the NASDAQ Listing Qualifications Panel on Oct. 16, 2008, during which SGLP requested that the Panel grant additional time to regain compliance with NASDAQ's filing requirement. There can be no assurance that the Panel will grant SGLP's request for continued listing. Pending a decision by the Panel, SGLP's common units will remain listed on NASDAQ. SGLP was unable to timely file the Second Quarter Form 10-Q and the Third Quarter Form 10-Q due to uncertainties surrounding the filing of voluntary petitions by SemGroup, L.P. and certain of its subsidiaries for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on July 22, 2008. SGLP's management and the board of directors of its general partner are evaluating the impact of the Bankruptcy Filings and certain related matters on SGLP's financial statements. SGLP expects to file the Second Quarter Form 10-Q and the Third Quarter Form 10-Q as soon as is reasonably practicable after the evaluation has been completed. 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, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOUTH COAST: Moody's Junks Ratings on Three Classes of Notes ------------------------------------------------------------ Moody's Investors Service announced that it has downgraded the ratings of seven classes of notes and left on review for possible further downgrade the ratings of six of these classes of notes issued by SOUTH COAST FUNDING V LTD: Class Description: $115,500,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aa2 -- Prior Rating Date: July 20, 2004 -- Current Rating: A2, on review for possible downgrade Class Description: $47,050,000 Class C-1 Mezzanine Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa2 -- Prior Rating Date: July 20, 2004 -- Current Rating: Caa2, on review for possible downgrade Class Description: $5,200,000 Class C-2 Mezzanine Secured Fixed Rate Notes Due 2039 -- Prior Rating: Baa2 -- Prior Rating Date: July 20, 2004 -- Current Rating: Caa2, on review for possible downgrade Class Description: 46,700 Preference Shares -- Prior Rating: Ba3 -- Prior Rating Date: July 20, 2004 -- Current Rating: C Class Description: $10,000,000 Class A-1 Combination Securities due 2039 -- Prior Rating: Baa3 -- Prior Rating Date: July 20, 2004 -- Current Rating: B3, on review for possible downgrade Class Description: $4,000,000 Class A-2 Combination Securities due 2039 -- Prior Rating: Baa2 -- Prior Rating Date: July 20, 2004 -- Current Rating: B2, on review for possible downgrade Class Description: $10,000,000 Class A-3 Combination Securities due 2039 -- Prior Rating: Aa3 -- Prior Rating Date: July 20, 2004 -- Current Rating: Ba1, on review for possible downgrade According to Moody's, these rating actions are as a result of deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of structured finance securities. Moody's notes that the transaction is currently failing a mezzanine test of overcollateralization and that the amount of par erosion has increased due to the presence in the collateral pool of defaulted securities. Moreover, the collateral includes significant exposure to subprime RMBS and Alt- A RMBS. Moody's announced on Sept. 18, 2008 that it is revising its expected loss assumptions which are used for the surveillance of ratings of ABS CDOs holding subprime RMBS, specifically of the second half 2005 -- first half 2007 vintages. Moody's stated that for purposes of monitoring its ratings of ABS CDOs with exposure to second half 2005 -- first half 2007 subprime RMBS, it will rely on certain projections of the lifetime average cumulative losses for vintages of RMBS set forth in a recent Moody's Special Report. Moody's explained that it will utilize the range of loss projections set forth in the report based on deal performance and quarterly vintage to modify its prior assumptions of the expected loss inputs when monitoring ABS CDO ratings. Moody's also announced in a press release that it is revising its expectations of lifetime losses on pools backing US Alt-A residential mortgage-backed securities issued in 2006 and 2007. Moody's explained that it will utilize these revised loss projections when monitoring ABS CDO ratings. SOUTHWEST WATER: Prior Period Errors Delay 3rdQ Report ------------------------------------------------------ SouthWest Water Company received an extension from the syndicate of lenders for its credit facility with regard to reporting financial results for the 2008 third quarter, and as a result, continues to have full access to the $150 million credit facility for general corporate purposes. On Nov. 10, 2008, the company stated that it would delay the filing of its Form 10-Q for the quarter ended Sept. 30, 2008, to review prior period financial statements after management discovered errors. SouthWest Water also disclosed that on Nov. 13, 2008, it received a Nasdaq Staff Deficiency Letter informing the company that it is subject to delisting based upon the company's failure to comply with Nasdaq Marketplace Rule 4310(c)(14), which requires the timely filing of all reports and other documents filed or required to be filed with the SEC. Nasdaq rules permit the company 60 calendar days to submit a plan to regain compliance. After a review of this plan, Nasdaq Staff can grant the company an exception, up to 180 calendar days from the due date of the Periodic Report, or until May 11, 2009, to regain compliance. The company intends to submit a plan to regain compliance in a timely fashion. Headquartered in Los Angeles, California, SouthWest Water Company (NASDAQ:SWWC) -- http://www.southwestwater.com/-- provides operations, maintenance and management services, including water production, treatment and distribution; wastewater collection and treatment; customer service; and utility infrastructure construction management. The company owns regulated public utilities and also serves cities, utility districts and private companies under contract. SouthWest Water serves more than two million people in 10 states. STORM CAT: Units' Bankruptcy Filing Prompts Delisting of Stock -------------------------------------------------------------- Storm Cat Energy Corporation received a delisting notice from the NYSE Alternext US LLC pursuant to Section 1009 of the NYSE Alternext US company Guide. Key reasons for the delisting of the company's stock cited by the NYSE Alternext US include, among others, the subsidiaries of Storm Cat having filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on Nov. 10, 2008, its recent financial performance, and the low per share trading price of Storm Cat's common stock for a substantial period of time, as addressed by the NYSE Alternext US company Guide in Sections 1003(a)(i)-(iv), 1003(c)(3) and 1003(f)(v). Separately, the company received a notice from the Toronto Stock Exchange stating that the TSX had decided to suspend trading of the company's common shares immediately and to delist the company's common shares as of the close of business on Dec. 18, 2008. The delisting was imposed due to similar reasons cited by the NYSE Alternext US. Storm Cat has a limited right to appeal the NYSE Alternext US's decision until Nov. 24, 2008, and is required to appeal the TSX's decision before Dec. 18, 2008. At present, Storm Cat has elected not to take any specific actions or responses to the NYSE Alternext US or TSX delisting notices. About Storm Cat Energy Corporation Based in Alberta, Canada, Storm Cat Energy Corporation -- http://www.stormcatenergy.com/-- is engaged in the exploitation, development and production of crude oil and natural gas with focus on unconventional natural gas resources from coal seams, fractured shales and tight sand formations. The company's estimated proved reserves as of Dec. 31, 2007, were 44.5 billion cubic feet of natural gas of natural gas. All of the drilling activities are conducted on a contract basis with independent drilling contractors. The company's principal product is natural gas. The principal markets are natural gas marketing companies, utilities and industrial or commercial end-users. SUNCAL COS: May Commit Up to $75 Million for Bankrupt Projects -------------------------------------------------------------- Bob Howard at Globest.com reports that SunCal Cos. is willing to commit up to $75 million for critical expenses at the bankrupt projects. Globest.com relates that the funding would require approval from the U.S. Bankruptcy Court. According to Globest.com, SunCal has filed for Chapter 11 protection on 17 of its projects that were depending on funding from Lehman Bros. SunCal spokesperson Joe Aguirre said that the Chapter 11 filings apply only to the entities that filed the bankruptcy actions, most of them LLCs, and not to SunCal, GlobeSt.com says. SunCal said in a statement last week that the LLCs "have been forced to file for Chapter 11 involuntary bankruptcy, with the goal of obtaining new funding for the projects and sustaining them through completion." Globest.com states that the projects that are affected include 10000 Santa Monica Boulevard in Century City and the 248-acre Marblehead Coastal project in San Clemente. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Some of SunCal's communities include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs. SunCal Companies recently added an active-adult, commercial, homebuilding, multifamily and urban divisions; and expanded to Florida, Texas and Washington, D.C. Irvine, California-based Palmdale Hills Property, LLC, develops real estate property. It filed for Chapter 11 protection on Nov. 6, 2008 (Bankr. C. D. Calif. Case No. 08-17206). Affiliates who also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. Paul J. Couchot, Esq., at Winthrop Couchot PC represents Plamdale Hills in its restructuring effort. The company listed assets of $100 million to $500 million and debts of $100 million to $500 million. SUN-TIMES MEDIA: CFO, Chairman & 2 Board Members Resign ------------------------------------------------------- Sun-Times Media Group, Inc. disclosed several changes at the company. Chairman of the board, Raymond G. H. Seitz, intended to resign from the board of directors effective Dec. 31, 2008, the company said. Mr. Seitz has been a director of the company since July 2003 and was elected as non-executive chairman on June 13, 2006. He has also been a member of the special committee since the commencement of his service on the board. The company disclosed that, acting on the recommendation of the special committee, the company's board voted and approved the dissolution of the special committee effective immediately. The Special Committee was formed on June 17, 2003, to investigate related-party transactions and other payments made to certain executives of the company and its controlling stockholder at the time, Hollinger Inc., and to affiliates of Hollinger Inc. In light of the developments, the special committee and the board determined that it is appropriate to dissolve the committee and turn over related legal matters to the full board and the company's management. These developments include the consummation of a settlement agreement with Hollinger Inc. disclosed on June 18, 2008, the virtual completion of the criminal case against the former management and directors of the company, and the recent simplification of the civil litigation initiated by the special committee accomplished by the Oct. 8, 2008, filing of a third amended complaint in the United States District Court for the Northern District of Illinois against former members of company management and other parties. Special committee members Gordon A. Paris and Graham W. Savage stated their intention to resign from the board effective upon the appointment of their respective replacements, but in any event no later than Dec. 31, 2008, the company said. Also, the developments in the action by the United States Securities and Exchange Commission would, if approved, result in the termination of the appointment of Richard C. Breeden as the special monitor of the company. In light of the intended resignations of Messrs. Paris, Savage and Seitz and the request by a shareholder that certain individuals be appointed to the board, the board's nominating and governance committee is in the process of evaluating a general restructuring of the board to be accomplished on or about Jan. 1, 2009. To that end, the nominating and governance committee is evaluating candidates for appointment to the board, including the persons who have been suggested by such shareholder. The company also disclosed the resignation of William G. Barker III, senior vice president and chief financial officer, who is departing the company for another opportunity. The company reported that effective Nov. 25, 2008, David C. Martin has been elected senior vice president and chief financial officer. Mr. Martin was vice president, Financial Planning for the company and joined the company in April 2006. In addition, the company's board has authorized the company to terminate voluntarily the registration of the company's Class A common stock under the Securities Exchange Act of 1934 by making the appropriate filings with the SEC. The company had determined that its Class A common stock is held of record by fewer than 300 holders and is therefore eligible for deregistration. In reaching its decision, the board determined that the benefits accruing to the company and its shareholders from having the Class A common stock continue to be registered, particularly given that the stock was delisted from the New York Stock Exchange in May 2008, are substantially outweighed by the burdens and costs of continued compliance with certain provisions of the Sarbanes-Oxley Act of 2002 and with the periodic reporting requirements under the federal securities laws. The company expects to file a Form 15 with the SEC effecting the deregistration in January 2009. The company's obligation to file periodic reports with the SEC for 2009 will be suspended upon the filing of the Form 15. However, the company will be required to file its Annual Report on Form 10-K for the year ended Dec. 31, 2008. The registration of the company's Class A Common Stock under the Securities Exchange Act of 1934 is expected to terminate 90 days after the filing of the Form 15 if the SEC does not deny the company's application to deregister. After the company's reporting obligations have terminated, the company expects to continue to make available current public information, including financial statements, as set forth in Rule 144(c) under the Securities Act of 1933. As a result of the deregistration of the Class A Common Stock, such stock will no longer be eligible for quotation on the OTC Bulletin Board. The company does, however, expect the Class A Common Stock to be quoted on the Pink Sheets. Finally, the company has reached an agreement in principle with the Staff of the SEC to resolve the pending litigation styled Securities and Exchange Commission v. Hollinger International, Inc., Case No. 04C 0336, which is pending in the United States District Court for the Northern District of Illinois. This action was commenced against the company in 2004 by the SEC as a result of the actions of its former management. The company has executed a consent to a revised judgment that would (a) supersede the Jan. 16, 2004, Partial Final Judgment and Order of Permanent Injunction and Other Equitable Relief; (b) discharge Richard C. Breeden as Special Monitor for the company; (c) permanently restrain and enjoin the company from violating, directly or indirectly, certain provisions of the securities laws of the United States; and (d) dismiss with prejudice the SEC's claims for disgorgement, prejudgment interest and civil penalties against the company. The agreement in principle must be approved by the SEC and the Court in this case. About Sun-Times Media Headquartered in Chicago, Sun-Times Media Group Inc. (NYSE: SVN) - - http://www.thesuntimesgroup.com/-- is a newspaper publisher. Its media properties include the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities throughout the Chicago area. The Troubled Company Reporter reported on Aug. 14, 2008, that at June 30, 2008, Sun-Times Media Group Inc.'s consolidated balance sheet showed $721.2 million in total assets and $870.8 million in total liabilities, resulting in a roughly $149.5 million stockholders' deficit. The company reported a net loss in the second quarter of 2008 of $37.8 million, versus net income of $528.0 million in the same period in 2007. On Aug. 1, 2007, Hollinger Inc. -- http://www.hollingerinc.com/-- which owns approximately 70.0% voting and 19.7% equity interest in Sun-Times Media Group Inc., along with two affiliates, 4322525 Canada Inc. and Sugra Limited, filed separate Chapter 15 petitions (Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger also initiated Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) on the same day. SYSCAN INT'L: Has Until Today to Pay $207,520 of Bluehill ID Loan ----------------------------------------------------------------- Syscan International Inc. received a Letter of Demand from lawyers of Bluehill ID, AG, a company with headquarters in Switzerland and a secured lender of the company pursuant to a Bridge Loan obtained to use as working capital. The Loan was entered on Aug. 29, 2008, in the amount of C$150,000.00 and subsequently increased by C$50,000.00 on Oct. 3, 2008. The company signed 2 promissory notes pursuant to which the company unconditionally promised to pay by Dec. 28, 2008, the cumulative sum of $200,000.00 to BlueHill, said amount bearing interest, at a nominal rate of 18% per annum. Moreover, on Aug. 29, 2008, the lender and the company entered into a movable hypothec Agreement which guarantees the payment by the company under the Promissory Notes to the extent of $150,000.00 on the universality of all the property of the company. Under the terms of the Promissory Notes, the outstanding principal and accrued interest would become immediately due and payable on demand by the Lender upon the occurrence of any of the Events of Default enumerated therein, including these: -- a judgment for the payment of money in a cumulative amount in excess of $25,000.00 in the aggregate is rendered against the company and the company has not provided from the discharge thereof in accordance with its terms within 30 days from the date of entry thereof. -- a judgment in the principal amount of $98,370.00 was rendered against the company on Oct. 20, 2008, in Quebec Superior Court file 500-17-027321-051. As a consequence, and in accordance with the terms of the Promissory Notes, the lender has declared the outstanding principal amounts advanced under the Promissory Notes, and all accrued and unpaid interest upon, namely the sum of $207,520.55, immediately due and payable by the company to the lender no later than Nov. 24, 2008 at 12:00 PM. The Letter of Demand further states that if the company fail to provide a certified check in the amount of $207,520.55 payable to the lender's counsel in trust, they have been instructed to institute all necessary legal proceedings against the company. The company is reviewing the Letter of Demand with legal counsel and investigating its options and alternatives. About Syscan International Inc. Syscan International Inc. (TSX VENTURE: SYA) is a supply chain solution provider that delivers integrated real-time tracking and tracing systems that improve business efficiency through Radio Frequency Identification. Its standardized supply chain solutions include traceability, temperature monitoring and quality control applications for the food and pharmaceutical and military sectors. TEXAS MUSIC: Files for Chapter 11 Protection -------------------------------------------- Michael Corcoran at Statesman.com reports that Texas Music Group Inc., along with Antone's Records and Texas Clef Entertainment, has filed for Chapter 11 protection. Texas Music, Antone's Records, and Texas Clef were being sued for fraud, breach of fiduciary duty, and breach of contract, Statesman.com relates. The lawsuit -- filed in March 2005 while country-western crooner Don Walser and his wife, Pat, were still alive -- seeks that master recordings and money owed from the Walser's heirs, says Statesman.com. Randy Clendenen, Heinz Geissler and James Heldt were also named as co-defendants in the case, according to the report. A trial in state court was set for Dec. 1, but the bankruptcy filing puts a hold on the proceedings, the report says. According to Statesman.com, the past Walser recordings were originally released on Mr. Geissler's Watermelon Records, which declared bankruptcy in December 1998. Texas Music, says Statesman.com, has reissued many of those tracks on "best of" compilations. Craig Barker, the attorney for the Walser family, said in a statement, "The Walser heirs are saddened by this turn of events where the individuals behind the corporate shells continue to exploit their father's work for financial gain." The Texas Music Group is an Austin-based independent record company releasing the best music from the Lone Star State and points beyond. It builds on the success of Austin's two most- prominent indie labels of the 1990s, Antone's and Watermelon Records, to create a new, dynamic, and multi-faceted record company ready to meet the challenges of the rapidly changing music marketplace in the new millennium. Heinz Geissler is the Label Group Manager of the Texas Music Group, and the founder and former President of Watermelon Records. THORNBURG MORTGAGE: Interest Nonpayment Cues Fitch's Junk Ratings ----------------------------------------------------------------- Based on Thornburg Mortgage Inc.'s missed interest payment on its 8% senior notes, Fitch Ratings has downgraded Thornburg's Issuer Default Rating: -- IDR to 'RD' from 'CCC'. Fitch has maintained these ratings: -- Senior notes remain at 'C/RR6'; -- Senior secured subordinated notes remain at 'C/RR6'; -- Subordinated notes remain at 'C/RR6'; -- Preferred stock remains at 'C/RR6'. The IDR downgrade is based on Thornburg failing to make an interest payment on its 8% senior notes. The RR6 recovery ratings for the rated securities are due to Fitch's continued belief that recoveries in the event of default would be poor. Based in Santa Fe, New Mexico, Thornburg Mortgage, Inc. is a lender to the single-family residential mortgage housing market and is focused principally on the jumbo segment. Thornburg originates, acquires and retains investments in adjustable-rate mortgage assets. Thornburg's ARM assets are comprised of Purchased ARM Assets and ARM Loans. All of Thornburg's ARM assets are either Traditional ARMs, which includes Pay Option ARMs or Hybrid ARMs. For tax purposes, Thornburg is organized as a real estate investment trust and is managed externally by Thornburg Mortgage Advisory Corporation. VALASSIS COMMUNICATIONS: Moody's Maintains 'B1' Corporate Rating ---------------------------------------------------------------- Moody's Investors Service affirmed Valassis Communications, Inc.'s B1 Corporate Family rating, B1 Probability of Default rating and associated debt ratings and changed the company's rating outlook to stable from positive. The stable rating outlook reflects Moody's expectation that weakening U.S. economic conditions will create greater pressure on Valassis' advertising revenue into 2009 than Moody's had previously anticipated and will prevent the company from generating the improvement in credit metrics necessary to move to a higher rating. Outlook Actions: Issuer: Valassis Communications, Inc. -- Outlook, Changed to Stable from Positive Valassis' B1 CFR reflects its ability to generate cash flow from good market positions in a broad array of largely print-based marketing services. Valassis has considerable scale and reach in media services and good customer diversity. The company nevertheless will face challenges reversing operating margin pressure while managing through a difficult economic and advertising environment in 2009. Valassis' high leverage of 5.8x (LTM Sept. 30, 2008incorporating Moody's standard adjustments) adds to these operating risks and positions the company weakly within the B1 rating category. The company has publicly stated it is targeting a more moderate leverage profile of net debt-to- EBITDA (GAAP basis) of 3x and that the leverage target will guide the use of free cash flow. Maintaining ample liquidity is critical to sustaining the existing capital structure through the economic downturn. Valassis has sufficient cash on hand and projected free cash flow to meet its debt maturities and an approximate 20% EBITDA cushion under the senior secured debt-to-EBITDA covenant, which is the tightest covenant as of 9/30/08. Moody's anticipates moderate covenant headroom will continue to exist within the rating agency's operating projections for Valassis over the next 12-18 months after incorporating anticipated debt reduction and step downs in the covenants at the end of 2008 and 2009. The stable rating outlook reflects Moody's expectation that Valassis will continue to maintain free cash flow-to-debt within the 3-7% range anticipated for the B1 rating, although debt-to- EBITDA will likely be at or moderately above the high end of the range anticipated for the B1 rating in 2009 due to the economic slowdown. In Moody's view, Valassis' focus on value-oriented marketing will somewhat cushion its advertising revenue performance in the downturn and anticipate the company will generate $60-70 million of free cash flow in 2009 aided by lower capital spending and interest expense. Moody's last rating action on Valassis was a change in the rating outlook to positive from stable on June 9th, 2008. Valassis Communications, Inc., headquartered in Livonia, Michigan, offers a wide range of promotional and advertising products including shared (direct) mail approximately 59% of LTM Sept. 30, 2008 revenue), free-standing inserts (15%), neighborhood targeting (19%), sampling, coupon clearing and consulting and analytic services. Annual revenue approximates $2.4 billion. US SECURITY: Moody's Lifts Corporate Family Rating to 'B1' ---------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of U.S. Security Associates Holdings, Inc. to B1 from B2 while concurrently raising the ratings on the senior secured first lien credit facility to Ba3 from B1. Solid organic revenue growth, combined with recent cost reduction initiatives, has driven a steady improvement in the company's profitability and credit metrics over the past two years. Notwithstanding current macroeconomic headwinds, the stable outlook reflects a mostly stable demand environment for the security services industry as well as Moody's expectations that U.S. Security will maintain key credit metrics, including leverage, at levels appropriate for the B1 rating category over the intermediate term. The ratings are constrained by the highly competitive nature of the security services industry and resulting low operating margins, the potential for pricing pressures associated with a slowing US economy, and U.S. Security's acquisition strategy and financial policies. The ratings benefit from the company's track record of mostly meeting or exceeding Moody's expectations, a good liquidity profile, a highly diversified customer base across several end markets, and U.S. Security's market position within the industry. Moody's upgraded these ratings: -- Corporate Family Rating, to B1 from B2 -- Probability of Default Rating, to B1 from B2 -- $40 million senior secured revolver due 2012, to Ba3 / LGD3 (34%) from B1 / LGD3 (35%) -- $135 million senior secured term loan B due 2013, to Ba3 / LGD3 (34%) from B1 / LGD3 (35%) -- $30 million senior secured acquisition loan due 2013, to Ba3 / LGD3 (34%) from B1 / LGD3 (35%) The previous rating action occurred on April 24, 2006 when Moody's assigned a first-time Corporate Family Rating of B2. U.S. Security Associates Holdings, Inc. is the fourth largest uniformed security guard provider in the United States. The company serves approximately 3,400 clients and, in the last twelve months ended Sept. 25, 2008, generated revenues of about $650 million. VRB POWER: Files Restructuring under Bankruptcy and Insolvency Act ------------------------------------------------------------------ VRB Power Systems Inc. applied to the British Columbia Supreme Court for an order appointing Abakhan & Associates Inc. as interim receiver over the assets and property of the company. The company has also filed a Notice of Intention to make a proposal for its reorganization under the Bankruptcy and Insolvency Act (Canada). In light of the foregoing, the directors of the company have indicated their intention to resign. Appointment of the Interim Receiver was expected to occur on Nov. 21, 2008. To date, the company has not given any update on this matter. Headquartered in Richmond, Canada, VRB Power Systems Inc. (TSX-V: VRB) is an energy storage technology developer which is marketing, selling and manufacturing products utilizing the patented VRB Energy Storage System. The VRB-ESS can store and supply large amounts of electricity on demand and is focused on stationary applications. VIREXX MEDICAL: Files Protection from Creditors in Canada --------------------------------------------------------- ViRexx Medical Corp. filed a Notice of Intention to make a proposal to its creditors pursuant to the Bankruptcy and Insolvency Act (Canada) as a result of having insufficient financial resources to meet all of its existing creditor obligations. The company also disclosed that it has appointed two directors to its board. After the resignations of Douglas Gilpin, Yves Cohen, Michael Marcus and Jacques LaPointe as directors of the company, these people were appointed as directors of the company as at Sept. 14, 2008: (i) Roger Flowerdew, CA and (ii) William Milligan. The board of directors of the company now has three members, including the chairman and interim CEO, Darrell Elliott. The company filed a NOI to make a proposal under the BIA to facilitate an orderly evaluation of strategic alternatives including those designed to strengthen the company's business model and capital structure. The NOI filing allows ViRexx to maintain scaled-back operations and maintain the integrity of its assets while evaluating its strategic alternatives and developing a restructuring proposal for creditors. Until the company files its proposal, Meyers Norris Penny Limited will monitor the activities of the company as trustee. On Nov. 7, 2008, ViRexx accepted a Letter of Intent from Paladin Labs Inc., to provide an immediate cash injection as a debtor in possession financing of up to an aggregate amount of C$200,000 to ViRexx with interest at the prime rate posted by the Toronto Dominion Bank plus 4%. Interest will be payable from the day any amount is disbursed. Key terms of the LOI are: -- "Basket" proposal: full and final payment to all unsecured creditors of ViRexx in proportion to each such creditor's pro rata share of all proven claims from the funds provided by the Purchaser equal to C$1,250,000 less any amounts that ViRexx is required under applicable law to pay to creditors in priority to the unsecured creditors except for DIP financing repayment. The amounts will be payable up to C$1,250,000 within 10 business days of the transaction closing; -- Redemption of all issued and outstanding shares for C$1.00 in the aggregate; -- Former Shareholders as a class to be established on transaction closing will be entitled, on a pro rata basis, to a contractual right entitling them to a contingent payment of C$2,000,000 in the aggregate, provided that on or before Dec. 31, 2009, the company receives net cash proceeds from the realization of assets of the company equal to not less than C$4,000,000. Deductions from net cash proceeds will include amounts invested or loaned to the company in excess of C$1,250,000 with a venture capital return of 20% thereon. Shareholders will also receive pro-rata 25% of any cash milestone payments received from the sale or licensing of the assets completed prior to Dec. 31, 2009, after deduction for excess investment to a maximum of C$500,000 in the aggregate, and which payments are received by the company within two years from the date of any sale or licensing. There can be no assurance that the company will complete the proposed transaction with Paladin and, if it does, there can be no assurance that shareholders will receive any proceeds from a realization on the assets of the company. Although Paladin is committed to seek to realize proceeds from the sale of the assets of ViRexx, Paladin may, depending on costs, feasibility and market conditions, re-evaluate their position with respect to the continued development of ViRexx's assets and may, as a result, cease or limit such development which, in turn, may cause it to be unable to realize any future proceeds from a sale of such assets. Mr. Elliott commented: "The collapse of ViRexx's rights offering due to the failure of LM Funds Corp. to honor its standby commitment coincided with the current turmoil in [worldwide] financial markets and greatly exacerbated the difficulties ViRexx has faced in securing alternative financing, as many investors and lenders have currently withdrawn from such activity. Nevertheless, the quality of ViRexx's underlying science programmes, in the opinion of management, continue to be recognized and have generated interest by parties in several countries with whom ViRexx will continue discussions. I would like to take the opportunity to welcome the new directors to the board and also to thank those members of the board who resigned on Sept. 14, 2008, for their many years of service to the company." About ViRexx Medical Corp. ViRexx Medical Corp. (TSX: VIR) (AMEX: REX) is a Canadian-based development-stage biotech company focused on developing innovative-targeted therapeutic products that offer better quality of life and a renewed hope for living. The company's platform technologies include product candidates for the treatment of Hepatitis B, Hepatitis C, avian influenza viral infections, biodefence and nanoparticle applications, select solid tumors and late-stage ovarian cancer. WACHOVIA BANK: Moody's Downgrades Ratings on Six Classes of Notes ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of six classes and affirmed 17 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007- 30 and placed eleven classes on review for possible downgrade: -- Class A-1, $28,173,489, affirmed at Aaa -- Class A-1A, $2,288,973,608, affirmed at Aaa -- Class A-2, $100,000,000, affirmed at Aaa -- Class A-3, $908,744,000, affirmed at Aaa -- Class A-4, $195,542,000, affirmed at Aaa -- Class A-5, $1,876,383,000, affirmed at Aaa -- Class A-PB, $126,906,000, affirmed at Aaa -- Class A-M, $540,349,000, affirmed at Aaa -- Class A-MFL, $250,000,000, affirmed at Aaa -- Class A-J, $671,798,000, affirmed at Aaa -- Class X-P, Notional, affirmed at Aaa -- Class X-C, Notional, affirmed at Aaa -- Class X-W, Notional, affirmed at Aaa -- Class B, $49,397,000, affirmed at Aa1 -- Class C, $79,035,000, affirmed at Aa2 -- Class D, $69,155,000, affirmed at Aa3 -- Class E, $59,277,000, affirmed at A1 -- Class F, $69,155,000, currently rated A2, on review for possible downgrade -- Class G, $98,794,000, currently rated A3, on review for possible downgrade -- Class H, $79,035,000, currently rated Baa1, on review for possible downgrade -- Class J, $88,914,000, currently rated Baa2, on review for possible downgrade -- Class K, $79,035,000, currently rated Baa3, on review for possible downgrade -- Class L, $39,518,000, downgraded to Ba2 from Ba1, on review for possible downgrade -- Class M, $19,759,000, downgraded to Ba3 from Ba2, on review for possible downgrade -- Class N, $29,638,000, downgraded to B1 from Ba3, on review for possible downgrade -- Class O, $19,758,000, downgraded to B2 from B1, on review for possible downgrade -- Class P, $9,880,000, downgraded to Caa1 from B2, on review for possible downgrade -- Class Q, $19,759,000, downgraded to Caa2 from B3, on review for possible downgrade Moody's downgraded Classes L, M, N, O, P and Q due to the decline in performance of the Peter Cooper Village and Stuyvesant Town Loan and anticipated losses from specially serviced loans. Moody's placed Classes F, G, H, J, K, L, M, N, O, P and Q on review for possible downgrade due to concerns about possible further decline in the performance of the pool, including the PCV- ST Loan. As of the Oct. 20, 2008 distribution date, the transaction's aggregate certificate balance has decreased by less than 1.0% to $7.896 billion from $7.903 billion at securitization. The Certificates are collateralized by 265 mortgage loans ranging in size from less than 1% to 19% of the pool, with the top 10 loans representing 52% of the pool. The pool includes four loans, representing 2% of the pool, with investment grade underlying ratings. The performance of the PCV-ST Loan has declined since securitization and the loan no longer has an investment grade underlying rating. The pool has not experienced any losses since securitization. Three loans, representing less than 1% of the pool, are currently in special servicing. Moody's is currently estimating an aggregate $6.1 million loss for the specially serviced loans. Forty loans, representing 43% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association's monthly reporting package. As part of Moody's ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Moody's was provided with partial and full-year year 2007 and partial-year 2008 operating results for 98% and 53% of the pool, respectively. Moody's weighted average loan to value ratio for the conduit component is 118%, the same as at securitization. The loans with investment grade underlying ratings represent 2.1% of the pool. The largest loan with an underlying rating is the 9 West 57th Street Loan ($100.0 million -- 1.3%), which is secured by the fee interest in a 1.4 acre land parcel located in Midtown Manhattan. The land is leased to Solow Building Company LLC pursuant to a 130-year ground lease that expires in May 2098. The collateral is improved with a 1.4 million square foot Class A office building. Ground lease payments are $12 million per year and remain flat for the remainder of the lease term. Moody's current underlying rating is Aaa, the same as at securitization. The remaining loans with underlying ratings comprise less than 1% of the pool. The Concord Square Shopping Center Loan ($35.0 million -- 0.4%) is secured by a 237,000 square foot retail center located in Wilmington, Delaware. Moody's current underlying rating is A3, the same as at securitization. The Manor Shopping Center Loan ($15.0 million -- 0.2%) is secured by a 243,000 square foot shopping center located in Lancaster, Pennsylvania. Moody's current underlying rating is Baa3, the same as at securitization. The Everett Mall Office Park I & II Loan ($14.0 million -- 0.2%) is secured by an 188,000 square foot office complex located in Everett, Washington. Moody's current underlying rating is Baa3, the same as at securitization. The Peter Cooper Village and Stuyvesant Town Loan ($1.5 billion -- 19.0%) represents a pari passu interest in a $3.0 billion first mortgage. The loan is secured by two adjacent multifamily apartment complexes totaling 11,227 units located on the east side of Manhattan. The borrower is pursuing a comprehensive renovation of the property and conversion of rent regulated units to market rents. However, progress has been slower than expected. As of June 2008, approximately 35.8% of the apartments were at market rate, compared to 28.5% at securitization. In addition to the delay in converting apartments, operating expenses have been higher than projected, largely due to utility expenses and repairs and maintenance expenses associated with upgrading apartments upon tenant lease expirations. At securitization, a $400.0 million interest reserve and a $190.0 million general reserve were established to cover interest shortfalls. As of Sept. 2008, approximately $200.0 million of these reserves remain. At the present pace of the conversion program, it is expected that the reserves will be depleted by the end of the third quarter of 2009. The loan is on the servicer's watchlist due to low debt service coverage. The loan sponsors are Tishman Speyer and BlackRock Realty Advisors. In addition to the first mortgage loan, there is a $1.4 billion mezzanine loan secured by a pledge of equity interests in the borrower. Moody's current valuation of this loan reflects a slower rate of conversion of units to market rates, higher expenses and a lower market rental growth, resulting in a decrease in value. Moody's underlying rating is Ba3 compared to Baa3 at securitization. The three largest conduit loans represent 17.1% of the pool. The largest loan is the Five Times Square Loan ($536.0 million -- 6.8%), which is secured by a 550,000 square foot office building located in Midtown Manhattan, New York. The property has maintained 100% occupancy since securitization. The office component, which represents 97% of the total building NRA, is leased to Ernst and Young through 2022 and serves as their U.S. World Headquarters. Performance has been impacted by higher operating expenses. The loan is interest only for the full 10-year term. Moody's LTV is 135% compared to 130% at securitization. The second largest loan is the 350 Park Avenue Loan ($430.0 million -- 5.4%), which is secured by a 538,000 square foot office building located in Midtown Manhattan, New York. The property was 97% leased as of June 2008, compared to 100% at securitization. The largest tenant is Ziff Brothers Investments, which occupies 36% of the property through April 2011. Performance has been impacted by increased operating expenses. The loan is interest only for its entire five-year term. Moody's LTV is 145% compared to 143% at securitization. The third largest loan is the State Street Financial Center Loan ($387.5 million -- 4.9%), which represents a 50% pari passu interest in a $775.0 million first mortgage loan. The loan is secured by a 1.0 million square foot office building located in downtown Boston, Massachusetts. The property is 100% leased to State Street Bank Corporation (Moody's senior unsecured rating Aa3, negative outlook) through September 2023 and serves as its headquarters. The loan is interest only for its entire 10-year term. Moody's LTV is 138%, the same as at securitization. Moody's periodically completes full reviews in addition to monitoring transactions on a monthly basis. Moody's prior full review is summarized in a Presale Report dated March 8, 2007. This is Moody's full first review since securitization. Moody's has published rating methodologies outlining Moody's analytical approach to surveillance and Moody's approach to rating conduit and fusion transactions. In addition, Moody's has published numerous articles outlining Moody's ratings approach to the various property types customarily deposited within these transactions along with other articles on credit issues unique to CMBS. The major rating methodologies employed in analyzing this transaction include: * CMBS: Moody's Approach to Surveillance, Sept. 30, 2002 -- this paper provides an overview of Moody's surveillance philosophy, an indication of what prompts a conduit review, how conduit and large loan monitoring is performed, and what Moody's objectives are with respect to post-closing requests and servicer reviews; * CMBS: Moody's Approach to Rating U.S. Conduit Transactions, Sept. 15, 2000 -- this paper provides an overview of rating methodology and process with details on property level analysis, loan level analysis, legal and structural characteristics, and portfolio characteristics with supplementary information on legal issues, a research summary, helpful information for commercial real estate transactions, capitalization rates, and guidelines for capital reserves; and * US CMBS: Moody's Approach to Rating Fusion Transactions, April 19, 2005 -- this paper discusses the key ratings factors for fusion deals (large loan credit quality, composition and correlation of the large loan pool, and conduit diversity), value drivers for office and retail properties, valuation and cap rate issues, property type volatility, Moody's large loan tranching methodology, and an assessment of subordination levels. WALDEN RESERVE: Panel May Retain Spencer Fane as Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas granted the Official Committee of Unsecured Creditors appointed in Walder Reserve, LLC's bankruptcy case authority to retain Spencer Fane Britt & Browne LLP as its counsel. As the Creditors Committee's bankruptcy counsel, SFBB will is expected to, among other things, advise the Committee with respect to its rights, duties and powers, represent the Committee, and to perform all other legal services that the Committee may require in connection with the Debtor's bankruptcy case. As compensation for their services, SFBB's professionals bill: Partners $225-$450 per hour Associates $200-$255 per hour Paralegal $95-$155 per hour Scott J. Goldstein, Esq., and Lisa A. Epps, Esq. have agreed to bill at $300 per hour. Scott J. Goldstein, Esq., a partner at SFBB, assured the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate, and is a "disinterested person" as that term in defined in Sec. 101(14) of the Bankruptcy Code. About Walden Reserve Based in Overland Park, Kan., Walden Reserve, LLC, formerly doing business as Renegade Mountain Partners LLC, owns and manages residential real estate. The Debtor filed for chapter 11 protection on May 28, 2008 (D. Kan. Case No. 08-21230). Colin N. Gotham, Esq., at Evans & Mullinix, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $14,637,288 and total debts of $7,085,320. An 8-Member Official Committee of Unsecured Creditors has been appointed in this case. WATERBROOK PENINSULA: Plan Filing Period Extended to January 21 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has extended Waterbrook Peninsula, LLC's exclusive periods to: a) file a plan of reorganization until Jan. 21, 2008; and b) solicit acceptances of said plan until Feb. 20, 2008. The Debtor told the Court that its case is both large and complex, and that it requires additional time to analyze possible plans and the most prudent method to maximize the value of its assets. Based in Deerfield Beach, Florida, Waterbrook Peninsula LLC is the developer of a residential development, "Peninsula on the Intracoastal," located at 2649 North Federal Highway, Boynton Beach, Florida. The company filed for Chapter 11 protection on June 25, 2008 (Bankr. S.D. Fla. Case No. 08-18603). Scott A. Underwood, Esq., and Thomas M. Messana, Esq., at Messana, Weinstein & Stern, P.A., represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $10 million to $50 million. WASTEQUIP INC: Market Woes Cue S&P to Junk Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Wastequip Inc., including the long-term corporate credit rating to 'CCC+' from 'B'. The outlook is negative. S&P lowered the issue- level rating on Wastequip's $381 million senior secured credit facility to 'B-' from 'BB-'. The recovery rating on this debt has been revised to '2' from '1', indicating expectations of substantial recovery (70%-90%) of principal in the event of a payment default. "The rating action reflects the company's weakened performance resulting from challenging conditions in the housing and nonresidential construction markets," said Standard & Poor's credit analyst Helena Song. "It also reflects S&P's belief that the company is at a heightened risk of a covenant violation in the near term given the weak end markets and step-ups in covenant levels." The ratings on privately held Wastequip reflect the company's highly leveraged balance sheet and aggressive financial policy, along with limited cash flow and meaningful customer concentration. Partially mitigating these risks are the company's leading niche position; its ability to pass on raw material cost increases, especially for steel, to its customers; and its low capital intensiveness. With annual sales totaling about $500 million and manufacturing facilities across North America, Cleveland, Ohio-based Wastequip is a leading producer of nonmobile waste handling equipment, including dumpsters, hoists, compactors, and balers. The company also manufactures intermodal refuse containers used for waste transportation. Capital outlays from a few key end customers, including the top three U.S. waste management companies, partly drive sales. These three customers are expected to account for about 15%-20% of the company's revenues. Wastequip's business risk profile reflects limited diversity and its participation in a relatively small (roughly $2 billion) niche market. Because of the challenging conditions in the U.S. housing and nonresidential construction market, demand from national and regional waste haulers has declined, resulting in lower revenues and weak earnings for suppliers such as Wastequip. A pickup in replacement sales at some point could possibly help stabilize operating performance following the initial reduction in industry capital expenditures. Wastequip is highly leveraged. As of June 30, 2008, lease- adjusted debt to EBITDA was more than 10x, and funds from operations to total debt was minimal. The calculations for both ratios include $40 million of 14.25% senior unsecured payment-in- kind notes at the holding company. Cash flow should be sufficient to allow Wastequip to fund modest capital expenditures. Wastequip's strategy has been to incorporate acquisitions to supplement organic growth. The company has completed more than 20 acquisitions since its founding in 1989. S&P could lower the ratings if the company violates its covenants and the likelihood of its obtaining a satisfactory cure worsens or if the company fails to meet its financial obligations. A positive rating action could occur if the company avoids a covenant violation or, if the company does violate a covenant, the company is able to receive adequate relief. WHITEHEAD PRODUCTION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Whitehead Production Company, Inc. 905 University Drive Fort Worth, TX 76107 Case No.: 08-45475 Petition Date: November 20, 2008 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: John Y. Bonds, III, Esq. Shannon, Gracey, Ratliff & Miller 777 Main St., Suite 3800 Ft. Worth, TX 76102-5304 Tel: (817)336-9333 Fax: (817)336-3735 Email: jbonds@shannongracey.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb08-45475.pdf WHITNEY LAKE: Has Interim Use of Cash Collateral until January 31 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Carolina has granted Whitney Lake, LLC interim authority to use cash collateral, consisting of proceeds from the anticipated sale of four residential units within the Whitney Lake subdivision. The interim authority of the Court will terminate on Jan. 31, 2009. Regions Bank, First Horizon Home Loans, a division of First Tennessee Bank, National Association, and Stock Building Supply hold mortgage liens on one or more of the Units anticipated to be sold. Various other creditors have filed mechanics' liens on the Units but only VNS Corporation filed an objection to Debtor's motion. At the hearing on the motion, the Lenders, VNS and the Debtor agreed to these terms for the interim use of Cash Collateral: a) The holder of the mortgage on any Units sold shall be paid an applicable release price for such unit, less an agreed upon Debtor allowance for each Unit for the use of the Debtor of: -- $35,000 for the first Unit under lien to First Horizon; -- $18,000 for the first Under lien to Stock Building; and -- $150,000 for the first two (2) Units under lien to Regions Bank. b) The Debtor may also use the portion of the sales proceeds consisting of the excess of (i) the Net Sales Proceeds from the sale of each unit less (ii) the Release Price applicable to such Unit. The Debtor Allowances will be segregated into separate, restricted cash collateral accounts, with one account for each holder of a mortgage on a Unit sold. Subject to the sale of the Units, these Accounts shall be funded, as follows: i. Regions Bank - $300,000 ii. Stock Building - $18,000 iii. First Horizon - $35,000 The Excess Proceeds from the sale of each Unit shall be deposited into a separate General Administrative and Operating Expenses Account, to be funded in the total amount of $70,500: Regions Contribution $45,000 Stock Building Contribution $19,500 First Horizon $6,000 The Debtor is authorized to use Cash Collateral from the General Account to pay the ordinary and necessary costs of operating its business, pursuant to a budget for the period from Oct. 14, 2008, to Jan. 31, 2009. Restricted Cash Collateral Accounts of Regions Bank, Stock Building, and First Horizon may be used only for permitted expenditures as set forth in the Order. As adequate protection, Stock Building and First Horizon are granted a replacement lien on the property consisting of 53.311 acres owned by Frazier Real Property, LP located in the City of Charleston, South Carolina. This replacement lien shall be junior in priority to the lien of Regions Bank. In addition, Lenders are granted a replacement lien on any collateral in which they have a pre-petition lien, and the lien of the Lenders shall attach to the Cash Collateral deposited in their respective Restricted Cash Collateral Accounts. The lien of the Lenders shall also extend to the Cash Collateral deposited in the General Account, on a pro rata basis, but such lien shall be subordinate to any administrative claims allowed pursuant to Sec. 507(a)(2) of the Bankruptcy Code. To the extent that they have an interest in Cash Collateral, Baycorp, Inc., a judgment lien creditor, and each of the Mechanic Claimants are also granted a pro rata replacement on the Property to the extent of Cash Collateral placed into the General Account, equal in priority to the replacement lien being granted to Stock Building and First Horizon. A full-text copy of the first interim order is available for free at http://researcharchives.com/t/s?3512 Based in Johns Island, South Carolina, Whitney Lake, LLC -- http://www.whitneylake.com/-- is a townhouse subdivision developer. The company filed for Chapter 11 relief on Sept. 18, 2008 (Bankr. D. S.C. Case No. 08-05729). Kevin Campbell, Esq., at The Campbell Law Firm, P.A. A represents the Debtor as counsel. When the company filed for protection from its creditors, it listed total assets of $22,807,654, and total debts of $21,197,259. WHITNEY LAKE: Files Amended List of 20 Largest Unsecured Creditors ------------------------------------------------------------------ Whitney Lake, LLC, filed with the U.S. Bankruptcy Court for the District of South Carolina an amended list of its 20 largest unsecured creditors. A complete list of Whitney Lake's 20 largest unsecured creditors is available for free at: http://researcharchives.com/t/s?3511 Based in Johns Island, South Carolina, Whitney Lake, LLC -- http://www.whitneylake.com/-- is a townhouse subdivision developer. The company filed for Chapter 11 relief on Sept. 18, 2008 (Bankr. D. S.C. Case No. 08-05729). Kevin Campbell, Esq., at The Campbell Law Firm, P.A. A represents the Debtor as counsel. When the company filed for protection from its creditors, it listed total assets of $22,807,654, and total debts of $21,197,259. WHITNEY LAKE: May Employ George Morris as Special Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina granted Whitney Lake, LLC authority to employ George J. Morris, Esq., as special counsel. As special counsel, Mr. Morris is expected to represent the Debtor in real estate related issues and transactions, including all activities related thereto, including but not limited to lien and judgment searches; defending, including investigation, negotiation or litigation, as applicable, the Debtor in actions/claims filed by mechanic lien and other similar creditors. As compensation for his services, Mr. Morris will bill the Debtor at $250 per hour. To the best of the Debtor's knowledge, Mr. Morris does not hold or represent any interests adverse to the Debtor or its estate, and is a "disinterested person" as that term is defined under Sec. 101(14) of the Bankruptcy Code. Based in Johns Island, South Carolina, Whitney Lake, LLC -- http://www.whitneylake.com/-- is a townhouse subdivision developer. The company filed for Chapter 11 relief on Sept. 18, 2008 (Bankr. D. S.C. Case No. 08-05729). Kevin Campbell, Esq., at The Campbell Law Firm, P.A. A represents the Debtor as counsel. When the company filed for protection from its creditors, it listed total assets of $22,807,654, and total debts of $21,197,259. WORLDSPACE INC: May Employ Bank Street as Financial Advisors ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware granted WorldSpace Inc. and its debtor-affiliates permission to employ The Bank Street Group LLC as their financial advisors, effective as of the Petition Date. As the Debtors financial advisors, Bank Street will provide advisory and consulting services in connection with potential restructuring, sale or financing transactions. In consideration for Bank Street's services as financial advisors, the Debtors have agreed to pay Bank Street: a) a monthly advisory fee, paid in advance, in the amount of $100,000. b) a cash financing fee equal to (i) 1.5% of the aggregate principal amount of any senior debt financing; plus (ii) 2.5% of the aggregate principal of any senior subordinated, subordinated or mezzanine financing; plus (iii) 5.0% of any preferred equity financing; plus (iv) 6.0% of any common equity financing and on such terms as provided for in the Engagement Letter. c) A fee upon the completion of a Restructuring equal to 1.0% of the total face/accreted value of any Obligations which are restructured, less the total amount of the gross proceeds of any Financing or Sale in which Bank Street is entitled to receive a Financing or Sale Fee. d) A transaction fee if, during the term of the Engagement Letter, within the earlier to occur of (i) twelve full months following the termination of the Engagement Letter or (ii) the effective date of a plan of reorganization, an agreement in principle or definitive agreement to effect any Sale is entered into, in an amount equal to 2.5% of the Aggregate Consideration paid, which will be payable at the closing of such Sale. Richard S. Lukaj, a senior managing director at Bank Street, assured the Court that to the best of his knowledge, Bank Street neither holds nor represents any interest adverse to the Debtors or their estates, and that Bank Street is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. A full-text copy of the Court's order authorizing the employment of Bank Street as the Debtors' financial advisors is available for free at: http://researcharchives.com/t/s?3513 About WorldSpace WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its debtor- and non-debtor affiliates provide satellite-based radio and data broadcasting services to paying subscribers in ten countries throughout Europe, India, the Middle East, and Africa. The Debtors and their affiliates operate two geostationary satellites, AfriStar and Asia Star, which are in orbit over Africa and Asia. 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). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Shearman & Sterling, LLP, represent the Debtors as counsel. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot Greenleaf represent the Committee as counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. WORLDSPACE INC: Taps Baker & McKenzie as Special Counsel -------------------------------------------------------- WorldSpace Inc. asks the U.S. Bankruptcy Court for the District of Delaware for authority to employ Baker & McKenzie LLP, as their special counsel, nunc pro tunc to the Petition Date. The Debtors seek to retain Baker & McKenzie to act as general corporate and securities counsel, including the securitization sale or other dispositon of assets, and to give bankruptcy advice relating to corporate matters. Jeffrey E. Cohen, Esq. a partner at Baker & McKenzie, tells the Court that the the firm has a prepetition claim totaling $1,265,670. Mr. Cohen, however, assures the Court that regardless of its prepetition claim, the firm does not represent or hold any interest adverse to the Debtors or their estates. As compensation for their services, Baker & McKenzie's professionals bill: Hourly Rate ----------- Partners $625-$900 Associates $310-$545 Paraprofessionals $175-$200 About WorldSpace WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its debtor- and non-debtor affiliates provide satellite-based radio and data broadcasting services to paying subscribers in ten countries throughout Europe, India, the Middle East, and Africa. The Debtors and their affiliates operate two geostationary satellites, AfriStar and Asia Star, which are in orbit over Africa and Asia. 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). Mames E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors as counsel. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot Greenleaf represent the Committee as counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. WP HICKMAN: U.S. Trustee Appoints 7-Member Creditors Panel ---------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee for Region 3, appointed 7 creditors to serve on the Official Committee of Unsecured Creditors in W.P. Hickman Systems, Inc., Hickman Manufacturing, Inc., and A.M. Technologies, Inc.'s jointly administered Chapter 11 cases. The Creditors Committee members are: a) Metal-Era, Inc. Attn: Gene Mallinger 1600 Airport Road Waukesha, WI 53188 Tel: (262) 650-6404 Fax: (262) 436-4404 b) FBC Chemical Corp. Attn: Mark M. Hudac P.O. Box 599, 634 Route 228 Mars, PA 16046 Tel: (724) 625-3116 Fax: (724) 625-1640 c) RDF Trucking Corp. Attn: Nunzio Boscarello 7425 Industrial Park Lorain, OH 44053 Tel: (440) 282-9060 Fax: (440) 282-9068 d) Tucker Arensberg, P.C. Attn: Michael A. Shiner, Esq. 1500 One PPG Place Pittsburgh, PA 15222 Tel: (412) 594-5586 Fax: (412) 594-5619 e) ABH Enterprises, Inc. Attn: James L. Hinton, Jr. 1637 51st Avenue Tuscaloosa, AL 35401 Tel: (205) 345-6634 Fax: (205) 349-2767 f) Southeast Building Maintenance Technicians, Inc. Attn: Roger Dean Ozbolt, Sr. 150 C.S. Floyd Rd., (P.O. Box 1687) Loganville, GA 30052 Tel: (770) 466-7665 Fax: (770) 466-7809 g) Cunningham & Associates, CPA, Inc. Attn: Glenn Cunningham, CPA Broadview Heights, OH 44147 Tel: (440) 717-1350 Fax: (440) 717-1345 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Solon, Ohio-based W.P. Hickman Systems, Inc. -- http://www.wphickman.com/-- offers commercial roofing products. The Debtors engage in providing services to the federal government through its GSA certification and are involved in major buying groups including Sodexho-USA, Horizon Resource Group and U.S Community Services. The company and its affiliates filed for Chapter 11 protection on Oct. 2, 2008 (Bankr. W. D. Pa. Case No. 08-26591). Paul J. Cordaro, Esq., and Aurelius P. Robleto, Esq., at Campbell & Levine LLC represent the Debtors in their restructuring efforts. James E. Van Horn, Esq., at McGuireWoods LLP represent the Official Committee of Unsecured Creditors as counsel. W.P. Hickman listed assets of $10 million to $50 million and debts of $10 million to $50 million. WP HICKMAN: Panel Taps BMF as Financial Advisors ------------------------------------------------ The Official Committee of Unsecured Creditors appointed in W.P. Hickman Systems Inc. and its debtor-affiliates' jointly administered bankruptcy cases asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to employ BMF Advisors LLC as its financial advisors, nunc pro tunc to Oct. 27, 2008. As the Committee's financial advisors, BMF will provide these services: a) Assistance and advice to the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; b) Analysis of Debtors' plan to reorganize; c) Valuation and determination of creditor recoveries; d) Assistance to the Committee with information and analyses required pursuant to the Post-Petition Credit ("Credit") including, but not limited to, preparation for hearings regarding the use of cash collateral and any secured financing; e) Assistance with a review of the Debtors' short-term cash management procedures;' f) Assistance with a review of the Debtors' employee retention, should they be proposed, and other critical employee benefit programs; g) Assistance with a review of the Debtors' performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; h) Assistance regarding the valuation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; i) Assistance in the review of financial information including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; j) Attendance at meetings and assistance in discussions with the Debtors, potential investors, lenders, the Committee and any other official committees organized in these chapter 11 proceedings, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; k) Assistance in the review and/or preparation of information and analysis necessary for the confirmation of a plan in these chapter 11 proceedings; l) Assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; m) Litigation advisory services including expert witness testimony on case related issues as required by the Committee; n) Assistance in evaluating transactions between the Debtor and its parents and associated non-debtor entities; o) Assistance to the Committee in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; and, p) Render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. As compensation for their services, BMF's professionals bill: Hourly Rate ----------- Partners $315-$355 Managers/Senior Managers $200-$300 Senior Associates/Supervisors $160-$220 Associates $115-$160 Administration/Paraprofessionals $100 David M. Wehrle, a professional at BMF, assures the Court that BMF does not represent any other entity having an adverse interest in connection with these cases, and believes it is eligible to represent the Committee under Sec. 1103(b) of the Bankruptcy Code. Solon, Ohio-based W.P. Hickman Systems, Inc. -- http://www.wphickman.com/-- offers commercial roofing products. The Debtors engage in providing services to the federal government through its GSA certification and are involved in major buying groups including Sodexho-USA, Horizon Resource Group and U.S Community Services. The company and its affiliates filed for Chapter 11 protection on Oct. 2, 2008 (Bankr. W. D. Pa. Case No. 08-26591). Paul J. Cordaro, Esq., and Aurelius P. Robleto, Esq., at Campbell & Levine LLC represent the Debtors in their restructuring efforts. James E. Van Horn, Esq., at McGuireWoods LLP represent the Official Committee of Unsecured Creditors as counsel. W.P. Hickman listed assets of $10 million to $50 million and debts of $10 million to $50 million. WP HICKMAN: Panel Taps McGuireWoods LLP as Bankruptcy Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in W.P. Hickman Systems, Inc. and its debtor-affiliates' jointly administered bankruptcy cases asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to retain McGuireWoods LLP as its counsel, nunc pro tunc to Oct. 27, 2008. As the Committee's counsel, McGuireWoods will: a) advise the Committee with respect to its powers and duties under Sec. 1103 of the Bankruptcy Code; b) take all necessary action to preserve, protect and maximize the value of the Debtors' estates for the benefit of the Debtors' unsecured creditors, including but not limited to, investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses and the desirability of the continuance of such business, and any other matter relevant to these cases or to the formulation of a plan; c) prepare on behalf of the Committee motions, applications, answers, orders, reports and papers that may be necessary to the Committee's interests in these Chapter 11 cases; d) participate in the formulation of a plan as may be in the best interests of the Committee and the unsecured creditors of the Debtors' estates; e) represent the Committee's interests with respect to the Debtors' efforts to obtain postpetition secured financing (if ultimately necessary); f) advise the Committee in connection with any potential sale of assets; g) appear before this Court, any appellate courts, and protect the interests of the Committee and the value of the Debtors' estates before such courts; h) consult with the Debtors' counsel on behalf of the Committee regarding tax, intellectual property, labor and employment, real estate, corporate, litigation matters, and general business operational issues; and i) perform all other necessary legal services and provide all other necessary legal advice to the Committee in connection with these chapter 11 cases. McGuireWoods will seek payment for its services at these hourly rates: Attorneys $250-$550 Paralegals $175 To the best of the Committee's knowledge, McGuireWoods does not hold or represent any interest adverse to the Debtors' estates or to the Committee's interests and is a "disinterested person" as that phrase is defined in Sec. 101(14) of the Bankruptcy Code. Solon, Ohio-based W.P. Hickman Systems, Inc. -- http://www.wphickman.com/-- offers commercial roofing products. The Debtors engage in providing services to the federal government through its GSA certification and are involved in major buying groups including Sodexho-USA, Horizon Resource Group and U.S Community Services. The company and its affiliates filed for Chapter 11 protection on Oct. 2, 2008 (Bankr. W. D. Pa. Case No. 08-26591). Paul J. Cordaro, Esq., and Aurelius P. Robleto, Esq., at Campbell & Levine LLC represent the Debtors in their restructuring efforts. W.P. Hickman listed assets of $10 million to $50 million and debts of $10 million to $50 million. WP HICKMAN: Taps SJD Business Brokers to Market Assets ------------------------------------------------------ W.P. Hickman Systems Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to employ SJD Business Brokers and Sam Alberico as their broker to market their assets to potential purchasers. As the Debtors' broker, SJD shall be entitled to a commission based on the proceeds of the sale pursuant to a discounted Lehman formula: -- 4% of the first million dollars of sale proceeds; -- 3% of the second million dollars of sale proceeds; -- 2% of the third million dollars of sale proceeds; -- 1% of all sale proceeds above three million dollars. Sam Alberico, the managing partner at SJD, assured the Court that SJD does not hold or represent any interest adverse to the Debtors or their estates and that the firm is a "disinterested person" as that term is defined under Sec. 101(14) of the Bankruptcy Code. Solon, Ohio-based W.P. Hickman Systems, Inc. -- http://www.wphickman.com/-- offers commercial roofing products. The Debtors engage in providing services to the federal government through its GSA certification and are involved in major buying groups including Sodexho-USA, Horizon Resource Group and U.S Community Services. The company and its affiliates filed for Chapter 11 protection on Oct. 2, 2008 (Bankr. W. D. Pa. Case No. 08-26591). Paul J. Cordaro, Esq., and Aurelius P. Robleto, Esq., at Campbell & Levine LLC represent the Debtors in their restructuring efforts. James E. Van Horn, Esq., at McGuireWoods LLP represent the Official Committee of Unsecured Creditors as counsel. W.P. Hickman listed assets of $10 million to $50 million and debts of $10 million to $50 million. YELLOWSTONE CLUB: Greg LeMond Demands Payment of $13.5MM Debts -------------------------------------------------------------- Anthony Effinger at Bloomberg News reports that cyclist Greg LeMond went to the U.S. Bankruptcy Court for the District of Montana to ask that Yellowstone Club pay the $13.5 million he's owed. According to Bloomberg, Yellowstone Club owner Edra Blixseth paid Mr. LeMond and three others $8 million in August 2008 about to resolve claims that the club jilted them out of a dividend for investors. The report says that Ms. Blixseth missed a Nov. 15 deadline to pay the balance of the $21.5 million settlement. Bloomberg relates that the Hon. Loren Tucker granted Mr. LeMond's request on Nov. 17, 2008, to turn the settlement with Ms. Blixseth into "a judgment against her." Mr. LeMond, states the report, filed a lawsuit against Ms. Blixseth and her husband in 2006, claiming that they took $209 million as a dividend for themselves and didn't share it with other investors. Ms. Blixseth won Yellowstone Club this year in her divorce, and promptly settled with Mr. LeMond, Bloomberg says. Court documents say that Ms. Blixseth signed an agreement with Mr. LeMond and his group that would allow them to seek a judgment against her if she didn't make the second payment. According to the documents, the settlement was backed by a lien on Ms. Blixseth's 160-acre private residence on the grounds of the Yellowstone Club. Mr. LeMond is second in line for that property, Bloomberg states, citing Chris Madel, his attorney. CrossHarbor Capital Partners LLC founder Sam Byrne, according to the report, is first in line. Mr. Byrne is a Yellowstone Club member and has developed townhouses there called Sunrise Ridge, Bloomberg says. According to the report, Mr. Byrne has a lien on Ms. Blixseth's mansion near Palm Springs. The report states that he got the lien when he lent Ms. Blixseth about $35 million in August 2008, and court documents indicate that the repayment was due Sept. 30, 2008. About Yellowstone Club Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. It is located near Big Sky, Montana. It was founded in 1999. As reported in the Troubled Company Reporter on Nov. 13, 2008, Yellowstone Club filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana. * Fitch Assigns Rating Outlooks to $313B of U.S. Credit Card ABS ---------------------------------------------------------------- Fitch announces the assignment of Rating Outlooks to $313 billion of outstanding credit card asset backed securities issued from 22 master and issuance trusts. In conjunction with the assignment of the Rating Outlooks, all corresponding credit card ABS ratings are affirmed. Stable Rating Outlooks are assigned to all tranches within 51 classes of credit card ABS, and Negative Outlooks are assigned all tranches within four classes. The Negative Outlooks apply to class B and C ratings from the Bank of America master trusts and to class A and B ratings from HSBC's Union Privilege trust. Stable Outlooks apply to all public ratings from the remaining Fitch rated trusts. As detailed in 'Introducing Rating Outlooks for U.S. Structured Finance Bonds', (Fitch Research dated Sept. 11, 2008), Rating Outlooks are intended to be forward looking and indicate the likely direction of any rating change over a one- to two-year period. Rating Outlooks may be Positive, Negative, Stable, or, occasionally, Evolving. Rating Outlooks will be reviewed concurrently with the rating review for the transaction and published in conjunction with the long-term rating; Fitch's rating action commentary will include rationale for the Rating Outlook along with rationale for the long-term rating. When assigning its initial credit card ABS Rating Outlooks, Fitch applied a sector-wide, one-year forecast to the current performance variables for each trust. The forecast takes into account continued deterioration in overall economic conditions, including rising unemployment, increasing personal bankruptcy filings, the prevailing interest rate environment, as well as additional real estate and consumer level stresses. The estimated impact on current trust performance variables resulted in charge- offs rising by 25% and yield and monthly payment rates declining by 10% each over the 12-month period. Applying base case stresses, Fitch then analyzed breakeven multiples for each class to determine the appropriate Outlook. Stable Outlooks were assigned where multiples remained within Fitch's tolerance range for the current rating. Negative Outlooks were assigned where breakeven multiples approached the point where Fitch would consider downgrades if the forecasted scenario is realized over the next 12 months. The Bank of America Credit Card Trust (class B and C) and HSBC Credit Card Master Note Trust (class A and B) have already exhibited deteriorating performance in recent months. The recent results when combined with Fitch's forecast trust performance resulted in significantly compressed breakeven multiples for the tranches assigned Negative Outlooks. Fitch will continue to monitor macro-level economic conditions and the impact on industry and trust level performance variables and update the Rating Outlooks accordingly. Consistent with Fitch's policy, credit card ABS outstanding from the two Washington Mutual Trusts, Washington Mutual Master Trust and the Washington Mutual Master Note Trust have not been assigned Outlook as the notes are presently on Rating Watch Evolving following the acquisition of Washington Mutual by JP Morgan Chase. These classes have been affirmed, and assigned Outlooks: American Express Issuance Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook Bank of America BA Master Credit Card Trust II and Credit Card Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Negative Outlook -- Class C affirmed; Negative Outlook -- Class CIA affirmed; Negative Outlook Cabela's Credit Card Master Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook -- Class D affirmed; Stable Outlook Capital One Master Trust and Multi-Asset Execution Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook -- Class D affirmed; Stable Outlook Chase Credit Card Master Trust and Issuance Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook Citibank Credit Card Master Trust and Issuance Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook Citibank Omni and Omni-S Master Trusts -- Class A affirmed; Stable Outlook Discover Card Master Trust I and Execution Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook First National Master Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook -- Class D affirmed; Stable Outlook GE Capital Credit Card Master Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook HSBC Credit Card Master Note Trust (Union Privilege) -- Class A affirmed; Negative Outlook -- Class B affirmed; Negative Outlook HSBC Private Label Credit Card Master Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook National City Credit Card Master Note Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook World Financial Network Credit Card Master Trust -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook 1st Financial Credit Card Master Note Trusts I, and III -- Class A affirmed; Stable Outlook -- Class B affirmed; Stable Outlook -- Class C affirmed; Stable Outlook -- Class D affirmed; Stable Outlook * Fitch Says Downgrades Outnumber Upgrades in 3rd Quarter 2008 -------------------------------------------------------------- Fitch Ratings' global corporate rating actions in the third quarter of 2008 continued to reflect worsening credit and economic conditions with downgrades outnumbering upgrades 3.6 to 1, up from 1.8 to 1 in the second quarter and resulting in a year-to-date downgrade to upgrade ratio of 2.5 to 1. Financial institutions shouldered the brunt of negative rating activity in the third quarter and year-to-date period with downgrades exceeding upgrades 5.3 to 1 in the third quarter and 3.2 to 1 on a year-to-date basis. Among industrials, downgrades led upgrades 1.8 to 1 in the third quarter and 1.7 to 1 year-to- date. Emerging market corporate credits fared better than their developed market counterparts for the year-to-date period through September, registering a positive downgrade to upgrade ratio of 0.4 to 1, while developed markets recorded net negative rating movements for the same period of 4 to 1. However, emerging market Rating Outlook and Watch assignments have turned increasingly negative, indicating that credit quality is beginning to come under pressure in these previously robust markets. At the end of September, 13% of all emerging market issuers were assigned either a Negative Rating Outlook or Watch, compared with 7% at year-end 2007. "Across Europe and North America, 21% of corporate issuers were assigned either a Negative Rating Outlook or Watch at the end of September compared with 13% at the beginning of the year,' said Charlotte Needham, Senior Director of Fitch Credit Market Research. 'The share of these issuers on Positive Rating Outlook or Watch declined to 7% from 9% at year end 2007." In addition to the more pronounced negative rating drift and increase in the share of global corporate entities on Negative Rating Outlook or Watch, the third quarter also recorded a meaningful increase in multi-notch downgrades. "This year's rating activity clearly reflects the depth of the credit crisis and deteriorating prospects for global economic growth," said Mariarosa Verde, Managing Director of Fitch Credit Market Research. The new report includes a detailed view of Fitch rating activity by industry sector and region and also provides insight into the distribution and direction of Fitch's global corporate rating outlooks. * Fitch Says For-Profit Hospitals' Industry Shows Weakness ---------------------------------------------------------- The U.S. for-profit hospital industry showed some signs of weakness during the third quarter, as detailed in the special report. Volumes weakened during the quarter, with a 0.35% decline in same facility admissions compared with positive growth during the first half of the year. Several providers cited a slow-down in admissions related to the economy, especially a decline in elective procedures. In addition, continued strong competition, particularly in Texas, negatively affected results at several providers. Although volumes weakened during the quarter, bad debt expense remained relatively stable. Fitch believes that providers have benefitted from recent efforts to increase point-of-service collections, manage elective procedures for uninsured patients, and focus efforts on qualifying patients for Medicaid and other governmental programs. Nonetheless, some sign of pressure was evident as bad debt expense did increase slightly during the quarter after declining during the first half of the year. In addition, a few providers noted a slow-down in collections among self-pay patients. Fitch believes this trend will likely worsen, as the sharp economic slow-down that began at the end of the third quarter will pressure bad debt expense and collections in the fourth quarter and 2009. However, Fitch believes there are several factors that will support the sector's performance in the near term, including efforts to address bad debt expense and continued pricing strength. In addition, providers face a more favorable political climate which could enhance health care coverage and utilization. Overall, Fitch believes the election of Barack Obama is a modest positive for the industry as the Democrats are more likely to address state Medicaid shortages and enhance health care coverage. In addition, the report presents a detailed discussion of the sector's performance during the third quarter including comparative operating and credit statistics for Fitch-rated companies. * Macey & Aleman Says Personal Bankruptcy Filings Approaching 1MM ----------------------------------------------------------------- Macey & Aleman dba Legal Helpers, the nation's personal bankruptcy law firm, states that personal bankruptcy filings are approaching 1,000,000 as the credit crunch and deteriorating economic condition send shockwaves through household finances across the United States. Legal Helpers states year to date figures of personal bankruptcy filings nationwide has risen to 931,873. This frenzy of filings is now occurring some three years after Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act. The Bankruptcy Abuse Prevention and Consumer Protection Act, was designed to reduce the number of personal bankruptcy filings, came into force in 2005 amidst a rising prevalence of Chapter 7 voluntary petitions. This act introduced a compulsory means tested element to the Chapter 7 filing process. However, after an initial decline in the frequency of personal bankruptcy, the figures for Chapter 7 and the less popular Chapter 13 procedures in 2008 have risen 28% on the year, as the impact of the mortgage meltdown and turmoil in the housing market take their toll. Richard K. Gustafson of the Law Offices of Macey & Aleman believes the input of experienced legal personnel in handling Chapter 7 and Chapter 13 filings has become more imperative than ever, given the complexities of filing introduced by the Act and the growing financial pressures on average homeowners. "Chapter 7 and Chapter 13 filings are an unavoidable fact of life, particularly given the current economic climate. Individual households nationwide are struggling to make ends meet as food and fuel prices skyrocket, and their heavy, expensive mortgages come home to roost." According to Mr. Gustafson, "The 2005 Act has done very little in practicality to protect those financially vulnerable consumers choosing bankruptcy as a last resort, and if anything has introduced more complexity and red tape to the filing process. Now, more than ever, the services of reliable, experienced personal insolvency practitioners are imperative to the filing process and to maintaining the dignity of those falling victim of the current economic conditions." An unstable economy built on the foundations of a troubled housing market has resulted in ordinary families feeling the pinch. Coupled with rising food and energy prices, swathing financial uncertainty and global economic panic, the financial burden for many ordinary homeowners has become increasingly intense. Professor Jack Williams of the American Banking Institute believes the problem will get worse before it gets better in spite of the provisions of the 2005 Act, anticipating an even greater rise in personal bankruptcy filings before the year is out. Professor Jack Williams said: "The people who thought they could reduce the number of filings have failed...I expect bankruptcies in 2008 to exceed 1.2 million filings." About Macey & Aleman The Law Offices of Macey & Aleman is a consumer bankruptcy firm, specializing in Chapter 7 and Chapter 13 filings. Founded in 1994, Macey & Aleman, operating as Legal Helpers in some states, employs over 60 bankruptcy attorneys nationwide. * Moody's Report Details Financial Guarantor Rating Drivers ----------------------------------------------------------- A report released by Moody's Investors Service examines the changing business of the financial guarantors and details the manner in which the evolution in the companies' business strategies and franchise values, portfolio characteristics, capital adequacy, profitability and financial flexibility have affected and will affect their ratings. Moody's has downgraded six of the eight Moody's-rated primary guarantors that existed a year ago, including three which have been lowered below investment grade. Moody's is also reviewing the Aaa ratings of FSA and Assured Guaranty for possible downgrade, highlighting key elements of their business model as important concerns. * Moody's Says US Commercial Real Estate Conditions Worsen ---------------------------------------------------------- The Wall Street Journal reports that U.S. homebuilders are lobbying Congress for a $250 billion stimulus package called "Fix Housing First." According to the report, the homebuilders argue that financial markets won't recover until home prices stop falling. The Journal says the homebuilders propose to offer home buyers a tax credit equal to 10% of the home's value, capping it at $22,000, nearly three times the $7,500 credit Congress offered to new buyers earlier this year. Builders say the earlier credit didn't work because it wasn't big enough and had to be repaid, the report says. Homebuilders, the Journal continues, also want subsidies for interest rates on 30-year fixed-rate mortgages for government- backed "conforming" loans, which currently are around 6.2%, to bring rates down to 3% for loans made in the first half of 2009 and 4% for those in the second half of the year. According to the report, realtors are pushing a 4.5% interest-rate buy-down for new loans. According to the report, Lawrence Yun, the chief economist for the National Association of Realtors, estimates that each 1% decline in interest rates could generate between 500,000 and 800,000 home sales. The Journal notes that a rate reduction of about 1% on a 30-year mortgage typically costs the lender -- in this case the government -- around 4% of the principal. So a 2% buy-down on a $200,000 mortgage would cost $16,000. The NAHB estimates the subsidy portion of its proposal would cost the Treasury $143 billion, the report adds. The Journal notes that Congress resisted a similar effort to pass a larger tax credit earlier this year, instead creating the $7,500 credit for new-home purchases that had to be paid back over 15 years, effectively extending an interest-free loan. The Journal says homebuilders are promoting the campaign with full-page newspaper advertisements, but face an uphill battle. According to the report, critics suggest the proposal is too expensive and that it too heavily promotes home purchases rather than addressing loan modifications for delinquent homeowners. Last week, U.S. automakers General Motors, Ford and Chrysler appeared before a government panel in their bid for $25 billion in Federal aid. According to Moody's Investors Service, the balance in supply and demand that is currently helping to support US commercial real estate prices is expected to give way to decreasing demand over the next several months, leading to lower rents and higher vacancies. Moody's said in a new report that the weakened conditions are likely to put downward rating pressure on the ratings of some commercial real estate mortgage-backed securities, says the rating agency. "We do expect that the 2006 through 2008 vintages will experience more downward pressure on ratings than earlier vintages," said Moody's Managing Director, Nick Levidy. "In particular Moody's are concerned about fixed rate deals with concentrations of pro forma loans - loans that were underwritten assuming continued strong macroeconomic tailwinds." The performance of CMBS, however, will vary considerably from deal to deal, even within the same vintage and property type, said Moody's. Two mitigating observations noted in the report are 1) commercial real estate is entering this downturn with little excess supply, and 2) only a small percentage of the loans backing CMBS face refinancing in 2009. Moody's expects commercial property values to decline 20%-30% from their peak in late 2007, with the market reaching a bottom in 2010-2011. Aggregate defaults in commercial real estate loans are also expected to increase several fold over the next few quarters from the current historically low rate of under 1%. Moody's said conditions across all markets and property types are under pressure. "The headwinds faced by the retail sector in particular appear to be strengthening, the hotel sector has been re-pricing for months, demand for office space appears to be on the decline in many markets, and multifamily properties are buffeted by cross currents relating to unemployment, shadow rentals of unsold homes and condominiums and home affordability," says Levidy. "Meanwhile industrial properties have been impacted by slower trade and retail sales." Moody's/REAL Commercial Property Price Indices increased in September, rising 2.5% over the previous month, while it's most recent Red-Yellow-Green quarterly report on market supply-and- demand showed mixed performance. Moody's Delinquency Tracker, which measures outstanding delinquencies on loans in CMBS, has risen 37 basis points to 0.60% in the past year. American Bankruptcy Institute has reported that fears about rising default rates and declining property values are spreading to the commercial real estate market, hammering the value of bonds backed by loans made to office buildings, shopping centers and apartment complexes. ABI also relates that Fannie Mae and Freddie Mac have said they will suspend foreclosure sales and evictions on certain properties until after the holiday season, as they prepare to implement a loan-modification program. * Morpace Says Consumers Likely to Buy from Big 3 if Bankrupt ------------------------------------------------------------- Morpace Inc. stated that General Motors CEO Rick Wagoner's refusal to consider bankruptcy as an option is substantiated by the results of a recent Morpace Omnibus Study. David Myhrer, Vice President of the Morpace Automotive Brand Strategy Practice, said the study shows that consumers who are currently likely to purchase a new vehicle from one of the Big Three are only half as likely to do so if the company goes bankrupt. Such an additional drop in demand would create further financial stress for the already cash-strapped companies. "Declaring bankruptcy could significantly reduce sales and make their cash flow problem even worse," Mr. Myhrer said. The Morpace study compared consumers' likelihood of purchasing a new vehicle from one of the Big Three with their likelihood to do the same if the companies were to go into bankruptcy. 20% say they are currently "very likely" to buy a vehicle from Chrysler, Ford, or General Motors. If the company of interest were to go bankrupt, only 10% say they would be "very likely" to purchase. The Morpace Omnibus study completed 1,016 interviews using an Internet panel of adults aged 18 and older. The sample reflects the demographic profile of the U.S. population. About Morpace Inc. Headquartered in Farmington Hills, Michigan, Morpace Inc. -- http://www.morpace.com/-- is a full-service survey research and consulting organization specializing in automotive, financial services, health care, retail and technology. Morpace has expertise in providing innovative proprietary solutions to clients in four core areas: market definition and segmentation; product development and pricing; brand and image positioning; and customer satisfaction and loyalty. Established in 1941, Morpace Inc. is a privately held marketing research firms in the United States. The company has offices in Irvine, California; New York City; and London, England. * Morrison Cohen Adds Four Formerly Senior Counsels as Partners --------------------------------------------------------------- Morrison Cohen LLP added four new partners to the firm, Michael R. Dal Lago, David S. Goldstein, Paul L. Porretta and Steven N. Rockoff, effective Jan. 1, 2009. All four attorneys were formerly senior counsel at the firm. Mr. Dal Lago is in the firm's Bankruptcy department. He concentrates his practice in bankruptcy matters and creditors' rights. Mr. Goldstein is in the firm's Commercial Litigation department. He has represented clients in all phases of litigation from inception through trial and appeals in both New York and New Jersey federal and state courts. Mr. Porretta is in the firm's Compensation and Benefits department. His experience includes ERISA Title I and IV plans, including ESOPs, cafeteria plans and multiemployer plans. Mr. Rockoff is in the firm's Corporate department. He represents financial institutions, as lenders and agents, and companies, as borrowers in connection with various secured and unsecured lending transactions. Morrison Cohen also promoted two associates to senior counsel, David P. LaGalia and Eitan Tabak. Mr. LaGalia is in the firm's Corporate department. His practice focuses on public and private company mergers and acquisitions, private equity and general corporate matters. Mr. Tabak is in the firm's Corporate department. His practice focuses on corporate finance and securities transactions. David Scherl, chairman of Morrison Cohen, noted, "It is always a pleasure to be able to promote and recognize highly skilled professionals. It is an even greater pleasure to be in the position to do so during these very challenging markets and times. We are very fortunate to be part of a very special and uniquely modeled Law Firm which continues to successfully distinguish itself as a better alternative for middle market businesses during good times and these considerably more challenging times. We congratulate each of our recently promoted colleagues." About Morrison Cohen LLP Morrison Cohen LLP is a New York-based full service mid-size commercial law firm. Given its moderate size and client-favorable partner-to-associate ratio, Morrison Cohen clients work with senior, seasoned attorneys at cost effective and sensitive pricing. Morrison Cohen principally services these three markets: Middle Market Businesses and Transactions; Financial Institutions and Sponsors; and High Net Worth Individuals. * S&P Junks Ratings on Four Tranches From Eight CDO Deals --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 16 tranches from eight U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed four of the lowered ratings from CreditWatch with negative implications. At the same time, S&P placed one rating from CBO Holdings III Ltd. on CreditWatch with negative implications. In addition, S&P affirmed two ratings from two transactions and removed them from CreditWatch with negative implications. The ratings on nine of the downgraded tranches are on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The CreditWatch placements primarily affect transactions for which a significant portion of the collateral assets currently have ratings on CreditWatch with negative implications or have significant exposure to assets rated in the 'CCC' category. The 16 downgraded U.S. cash flow and hybrid tranches have a total issuance amount of $2.767 billion. Five of the eight affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. The other three affected transactions are high-grade SF CDOs of ABS that were collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other SF securities. CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS. In addition, S&P reviewed the ratings assigned to Birch Real Estate CDO I and Lakeside CDO I Ltd. and has left the ratings at their current levels based on the current credit support available to support the tranches. To date, S&P has lowered its ratings on 4,031 tranches from 903 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,037 ratings from 447 transactions are currently on CreditWatch with negative implications for the same reasons. In all, S&P has downgraded $479.556 billion of CDO issuance. Additionally, S&P's ratings on $13.099 billion of securities have not been lowered but are currently on CreditWatch with negative implications, indicating a high likelihood of future downgrades. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Altius II Funding, Ltd. A-1 A+/Watch Neg AA/Watch Neg Altius II Funding, Ltd. A-2 BBB-/Watch Neg BBB+/Watch Neg Altius II Funding, Ltd. B CCC- B-/Watch Neg Altius II Funding, Ltd. C CC CCC-/Watch Neg Blue Bell Funding Ltd A-2 CCC B-/Watch Neg Capital Guardian ABS CDO I B CC B- C-Bass CBO XI, Ltd. D BBB+ BBB+/Watch Neg CBO Holdings III Ltd. C-2 A-/Watch Neg A- Inman Square Funding I IV-FL B/Watch Neg BB+/Watch Neg Inman Square Funding I IV-FX B/Watch Neg BB+/Watch Neg Ischus CDO I Ltd A-2 AAA AAA/Watch Neg Ischus CDO I Ltd B A/Watch Neg A+/Watch Neg Ischus CDO I Ltd C-1 BB/Watch Neg BB+/Watch Neg Ischus CDO I Ltd C-2 BB/Watch Neg BB+/Watch Neg Ischus CDO I Ltd Combo Secs BB-/Watch Neg BB/Watch Neg Kent Funding III, Ltd. A-1 B-/Watch Neg A+/Watch Neg Kleros Real Estate CDO IV A-2 CCC- CCC/Watch Neg Saturn Ventures I, Ltd A-3 A+ AA+ Saturn Ventures I, Ltd B CCC+ BB+ Other Ratings Reviewed Transaction Class Rating ----------- ----- ------ Altius II Funding, Ltd. D CC Birch Real Estate CDO I A-1 AAA Birch Real Estate CDO I A-1L AAA Birch Real Estate CDO I A-2 AAA Birch Real Estate CDO I A-2L AAA Birch Real Estate CDO I A-3L A+ Birch Real Estate CDO I B-1 BB+/Watch Neg Blue Bell Funding Ltd ABCP Notes AA/A-1+/Watch Neg Blue Bell Funding Ltd A-1 BBB/Watch Neg Blue Bell Funding Ltd B CC Capital Guardian ABS CDO I A-1A AAA Capital Guardian ABS CDO I A-1B AAA Capital Guardian ABS CDO I A-1C AAA Capital Guardian ABS CDO I C CC Capital Guardian ABS CDO I Pfd Shares CC C-Bass CBO XI, Ltd. A AAA C-Bass CBO XI, Ltd. B AA+ C-Bass CBO XI, Ltd. C A+ Inman Square Funding I I AAA Inman Square Funding I II-FL AA Inman Square Funding I II-FX AA Inman Square Funding I III A-/Watch Neg Ischus CDO I Ltd A-1 AAA Kent Funding III, Ltd. A-2 CC Kent Funding III, Ltd. A-3 CC Kent Funding III, Ltd. B CC Kent Funding III, Ltd. C CC Kent Funding III, Ltd. D CC Kleros Real Estate CDO IV A-1 AA-/Watch Neg Kleros Real Estate CDO IV A-3 CC Kleros Real Estate CDO IV A-4 CC Kleros Real Estate CDO IV B CC Kleros Real Estate CDO IV C CC Kleros Real Estate CDO IV D CC Kleros Real Estate CDO IV E CC Lakeside CDO I Ltd A-1 AAA Saturn Ventures I, Ltd A-1 AAA Saturn Ventures I, Ltd A-2 AAA * S&P Names Liquidity And Support Providers For ABCP Conduits ------------------------------------------------------------- Standard & Poor's Ratings Services announced that it intends to publish the names of the providers of rating-dependent liquidity and credit support to asset-backed commercial paper conduits. S&P expects to begin including this information in S&P's regular surveillance publishing on RatingsDirect for all reporting periods subsequent to March 31, 2009. This announcement is part of a broad series of measures intended to enhance transparency into S&P's ratings process. S&P believes that this is an important step toward enabling ABCP investors to evaluate their own risk positions more effectively. On May 6, 2008, S&P published a commentary discussing S&P's views on transparency in the ABCP market. S&P described the types of information investors have told us they are seeking, which include the identity of rating-dependent liquidity and credit support providers. S&P intends to publish this information for all rated ABCP conduits. Conduit sponsors who don't want this published may request that S&P withdraw S&P's ABCP rating. * S&P Reports Banks' Plan To Help Homeowners Avoid Foreclosure -------------------------------------------------------------- Loan modification programs for struggling American homeowners could be the next boost for U.S. banks and mortgage service companies, according to a new Standard & Poor's Ratings Services report published titled. Several plans are taking shape in an effort to stem the rising rate of foreclosures by convincing borrowers with delinquent or past-due mortgage payments to keep paying or restart at more affordable rates. S&P believes the programs that keep homeowners in their homes will be generally favorable for banks and could help restore investor confidence in the mortgage credit markets. However, modification of large numbers of loans could have a material adverse effect on residential mortgage-backed securities that such loans secure. "We believe initiatives that move mortgage financing forward, rehabilitate weak borrowers, improve the oversupply of housing in the market, and get mortgage players to the table and banks to lend money will likely be good for the creditworthiness of issuers and will shorten the duration of this weak housing and mortgage cycle, if done prudently," said Standard & Poor's credit analyst Victoria Wagner. "The task is to balance the benefit of loan modification to lenders and borrowers against the adverse effect on RMBS investors. Banks' balance sheets are capital constrained, so to they benefit if they can modify or move delinquent loans off them." In recent months, a rising tide of legislators, regulators, and banks have been proposing new loan-modification programs, which together amount to several hundred billion dollars of financial support. This month, the government-sponsored enterprises Fannie Mae and Freddie Mac announced a loan modification plan in conjunction with federal housing agencies and the Hope Now coalition that is targeting hundreds of thousands of troubled borrowers -- a plan that is similarly structured to the Federal Deposit Insurance Corp.'s program for IndyMac. Citigroup, JPMorgan Chase & Co., and Bank of America have all announced their own programs in recent weeks. Most use a debt-to-income ratio of 40% or a few percentage points less to determine the affordable rate for eligible homeowners. To arrive at the "affordable" rate, many banks and servicers either lower interest rates, extend loan maturities, or if necessary, reduce the amount of debt. * S&P Reports Refinancing Risk For North American Chemical Cos. --------------------------------------------------------------- The weakening economy makes refinancing a challenge in the current difficult and risk-averse credit market. Refinancing risks vary widely in the North American chemical sector, and are a cause for concern at some companies according to a recent report by Standard & Poor's Ratings Services. "Refinancing risks for debt maturing in 2009 and 2010 at an aggregate level for the chemical sector are manageable mainly because the companies with the greatest refinancing requirements are among those with stronger credit profiles," said S&P's credit analyst Paul Kurias. "But there are concerns at some companies." Refinancing risks at an aggregate level are manageable because investment-grade rated companies have a considerably higher amount of total debt maturing in 2009 and 2010 compared with speculative- grade rated companies. S&P expects these investment-grade rated companies to be better positioned to meet their larger debt maturities than speculative-grade rated companies. Additionally, at the start of the third quarter of 2008, a moderate level of about 14% of estimated outstanding debt at investment-grade rated companies and about 13% for speculative- grade rated companies was set to mature in 2009 and 2010. In the report, Standard & Poor's discusses the various factors evaluated in their ongoing surveillance of the North American chemicals industry and what effect current weak market conditions will have on the sector. * S&P Says Bank of Canada Taking Steps To Ease Tight Financing -------------------------------------------------------------- Recent events in the financial markets are casting a long shadow over the outlook for the global economy. This comes at a time when Canadian GDP growth was already close to zero, so now even if things turn out well, the outlook for Canada's economy does not in S&P's opinion look positive, according to a report published by Standard & Poor's Ratings Services. The report notes that in looking ahead, S&P is considering at least two possible macroeconomic scenarios for Canada: whether Canadians will experience a deep recession, or something less disruptive such as a period of stagnant growth and a milder upset to employment, income, and spending. Canada's policy makers' response to the upheaval in financial markets and how their actions will affect the country's economic prospects are in S&P's view key to building consumer confidence. "We find it encouraging that Canadian policy makers are acting swiftly in implementing various measures aimed at easing restrictive financing conditions," said Standard & Poor's fixed income analyst Robert Palombi. Some of the actions discussed are the Bank of Canada's interest rate reduction and use of Term PRAs. Other measures are the federal government's purchase of up to C$75 billion in insured residential mortgage pools from financial institutions and the provision of insurance on term borrowing by federally regulated deposit-taking financial institutions. * S&P Says Bank Rating Cuts Affect EMEA ABCP Ratings ---------------------------------------------------- Downgrades of asset-backed commercial paper programs in 2008 have outnumbered upgrades but mainly due to rating actions on bank counterparties, according to the first quarterly EMEA ABCP Report Card published by Standard & Poor's Ratings Services. "Overall, ABCP ratings transactions in EMEA are stable and performance of assets within ABCP programs is also stable," said surveillance credit analyst Benjamin Benbouzid. "So far in 2008, out of 48 conduits S&P has downgraded five, upgraded two, and placed five on CreditWatch negative." The main driver of ABCP rating actions this year has been rating actions on the major bank liquidity providers and not bond insurers or underlying asset deterioration. Mr. Benbouzid added, "The EMEA ABCP market has been under high tension over the past few months as money market investors, themselves often facing liquidity issues, have been averse to buying ABCP, especially with longer dated tenors." Accordingly, the volume of outstanding ABCP has decreased, spreads on longer-term ABCP have been volatile (from speaking with banks, there is a huge dislocation in the pricing at the moment), and an increasingly high percentage of outstanding paper is now refinanced in the overnight market. "Conduit sponsors have had to adapt to these difficult market conditions by adjusting their conduit structures and funding strategy (e.g., accessing the repo market), and by exploring central bank's liquidity initiatives or programs. S&P expects year-end liquidity to be challenging for sponsors," Mr. Benbouzid said. * BOND PRICING: For the Week of Nov. 17 - Nov. 21, 2008 ------------------------------------------------------- Issuer Coupon Maturity Bid Price ------ ------ -------- --------- ABITIBI-CONS FIN 7.875% 8/1/2009 75 AHERN RENTALS 9.250% 8/15/2013 31 AIRTRAN HOLDINGS 7.000% 7/1/2023 56 ALERIS INTL INC 10.000% 12/15/2016 24.88 AMBASSADORS INTL 3.750% 4/15/2027 26.25 AMD 5.750% 8/15/2012 40 AMER AXLE & MFG 5.250% 2/11/2014 23 AMER AXLE & MFG 7.875% 3/1/2017 23 AMER GENL FIN 2.600% 12/15/2008 82 AMER GENL FIN 3.100% 6/15/2009 16 AMER GENL FIN 3.100% 7/15/2009 50 AMER GENL FIN 3.300% 6/15/2010 50.78 AMER GENL FIN 3.350% 5/15/2009 70.35 AMER GENL FIN 3.750% 12/15/2008 92.25 AMER GENL FIN 3.750% 12/15/2008 95.06 AMER GENL FIN 3.800% 4/15/2009 72 AMER GENL FIN 3.850% 9/15/2009 50 AMER GENL FIN 3.875% 12/15/2008 92 AMER GENL FIN 3.875% 10/1/2009 67.28 AMER GENL FIN 3.875% 11/15/2009 38.96 AMER GENL FIN 4.000% 6/15/2009 53.13 AMER GENL FIN 4.000% 8/15/2009 63 AMER GENL FIN 4.000% 11/15/2009 50 AMER GENL FIN 4.000% 11/15/2009 64.93 AMER GENL FIN 4.000% 11/15/2009 60.07 AMER GENL FIN 4.000% 12/15/2009 56.49 AMER GENL FIN 4.000% 3/15/2011 47 AMER GENL FIN 4.050% 5/15/2010 39.85 AMER GENL FIN 4.100% 5/15/2010 21.13 AMER GENL FIN 4.100% 7/15/2012 30.26 AMER GENL FIN 4.150% 11/15/2010 10.51 AMER GENL FIN 4.200% 8/15/2009 70.12 AMER GENL FIN 4.200% 10/15/2009 60.25 AMER GENL FIN 4.200% 11/15/2009 34.5 AMER GENL FIN 4.250% 10/15/2010 50.91 AMER GENL FIN 4.250% 3/15/2013 29.66 AMER GENL FIN 4.300% 3/15/2009 77.5 AMER GENL FIN 4.300% 9/15/2009 50.03 AMER GENL FIN 4.300% 6/15/2010 55 AMER GENL FIN 4.300% 7/15/2010 45 AMER GENL FIN 4.350% 6/15/2009 70.09 AMER GENL FIN 4.400% 5/15/2009 25.26 AMER GENL FIN 4.400% 7/15/2009 41 AMER GENL FIN 4.400% 12/15/2010 45.25 AMER GENL FIN 4.500% 7/15/2009 80 AMER GENL FIN 4.500% 9/15/2009 59.5 AMER GENL FIN 4.500% 8/15/2010 38.25 AMER GENL FIN 4.500% 11/15/2010 40.91 AMER GENL FIN 4.500% 11/15/2011 25 AMER GENL FIN 4.550% 10/15/2009 47.5 AMER GENL FIN 4.600% 11/15/2009 44 AMER GENL FIN 4.600% 9/15/2010 44.06 AMER GENL FIN 4.600% 10/15/2010 34.02 AMER GENL FIN 4.625% 5/15/2009 82.25 AMER GENL FIN 4.625% 9/1/2010 44.8 AMER GENL FIN 4.625% 3/15/2012 7.1 AMER GENL FIN 4.700% 10/15/2010 39.85 AMER GENL FIN 4.750% 3/15/2009 50 AMER GENL FIN 4.750% 4/15/2010 47.5 AMER GENL FIN 4.750% 6/15/2010 52.7 AMER GENL FIN 4.750% 8/15/2010 30 AMER GENL FIN 4.875% 5/15/2010 55.52 AMER GENL FIN 4.875% 6/15/2010 37.63 AMER GENL FIN 4.875% 7/15/2012 39.6 AMER GENL FIN 4.900% 3/15/2012 29 AMER GENL FIN 5.000% 9/15/2009 64.05 AMER GENL FIN 5.000% 1/15/2010 33.34 AMER GENL FIN 5.000% 6/15/2010 34.01 AMER GENL FIN 5.000% 9/15/2010 33 AMER GENL FIN 5.000% 11/15/2010 35.31 AMER GENL FIN 5.000% 11/15/2010 40.25 AMER GENL FIN 5.000% 12/15/2010 21 AMER GENL FIN 5.000% 12/15/2010 29.5 AMER GENL FIN 5.000% 12/15/2010 30.25 AMER GENL FIN 5.000% 1/15/2011 40 AMER GENL FIN 5.000% 3/15/2011 43.5 AMER GENL FIN 5.000% 6/15/2011 31 AMER GENL FIN 5.000% 12/15/2011 29 AMER GENL FIN 5.000% 8/15/2012 30 AMER GENL FIN 5.100% 3/15/2011 40 AMER GENL FIN 5.100% 1/15/2012 30.5 AMER GENL FIN 5.150% 9/15/2009 61.5 AMER GENL FIN 5.200% 6/15/2010 51.5 AMER GENL FIN 5.200% 9/15/2010 44 AMER GENL FIN 5.200% 5/15/2011 44.88 AMER GENL FIN 5.200% 5/15/2012 33 AMER GENL FIN 5.250% 4/15/2011 25.01 AMER GENL FIN 5.250% 9/15/2012 15.25 AMER GENL FIN 5.250% 12/15/2012 20 AMER GENL FIN 5.250% 12/15/2012 23.5 AMER GENL FIN 5.350% 7/15/2010 36.5 AMER GENL FIN 5.350% 9/15/2011 15 AMER GENL FIN 5.375% 10/1/2012 37.5 AMER GENL FIN 5.400% 5/15/2013 26 AMER GENL FIN 5.400% 9/15/2013 30.26 AMER GENL FIN 5.450% 9/15/2009 66 AMER GENL FIN 5.500% 12/15/2010 47.5 AMER GENL FIN 5.500% 4/15/2011 35.31 AMER GENL FIN 5.500% 5/15/2014 11 AMER GENL FIN 5.600% 6/15/2011 40 AMER GENL FIN 5.625% 8/17/2011 40.02 AMER GENL FIN 5.700% 7/15/2014 20.5 AMER GENL FIN 5.750% 5/15/2013 23.89 AMER GENL FIN 5.850% 9/15/2012 25.05 AMER GENL FIN 6.000% 7/15/2011 39 AMER GENL FIN 6.000% 10/15/2014 18 AMER GENL FIN 6.250% 7/15/2010 50.15 AMER GENL FIN 6.250% 7/15/2011 43 AMER GENL FIN 6.250% 7/15/2011 12.05 AMER GENL FIN 6.750% 7/15/2011 35 AMER GENL FIN 6.750% 7/15/2013 21.5 AMER GENL FIN 8.000% 8/15/2010 51.75 AMER GENL FIN 8.100% 9/15/2011 20 AMER GENL FIN 8.125% 8/15/2009 77.5 AMER GENL FIN 8.150% 8/15/2011 20.1 AMER GENL FIN 8.450% 10/15/2009 78 AMER MEDIA OPER 8.875% 1/15/2011 52.5 AMER MEDIA OPER 10.250% 5/1/2009 60 AMES TRUE TEMPER 10.000% 7/15/2012 41 ANTIGENICS 5.250% 2/1/2025 24 ARVIN INDUSTRIES 7.125% 3/15/2009 88.78 ASSURED GUARANTY 6.400% 12/15/2066 15 ATHEROGENICS INC 1.500% 2/1/2012 8.25 ATHEROGENICS INC 4.500% 9/1/2008 7.88 ATHEROGENICS INC 4.500% 3/1/2011 7.88 AVENTINE RENEW 10.000% 4/1/2017 18 AVIS BUDGET CAR 7.625% 5/15/2014 28 AVIS BUDGET CAR 7.750% 5/15/2016 25 BALLY TOTAL FITN 13.000% 7/15/2011 0.13 BANK NEW ENGLAND 8.750% 4/1/1999 6.94 BANK NEW ENGLAND 9.875% 9/15/1999 5 BANKUNITED CAP 3.125% 3/1/2034 10 BEARINGPOINT INC 3.100% 12/15/2024 26.18 BEAZER HOMES USA 4.625% 6/15/2024 47 BON-TON DEPT STR 10.250% 3/15/2014 14 BORDEN INC 7.875% 2/15/2023 12 BORDEN INC 8.375% 4/15/2016 7.75 BORDEN INC 9.200% 3/15/2021 15 BOWATER INC 6.500% 6/15/2013 22 BOWATER INC 9.000% 8/1/2009 45 BRODER BROS CO 11.250% 10/15/2010 39.25 BURLINGTON COAT 11.125% 4/15/2014 23.5 CARAUSTAR INDS 7.375% 6/1/2009 65 CCH I LLC 9.920% 4/1/2014 12 CCH I LLC 10.000% 5/15/2014 10 CCH I/CCH I CP 11.000% 10/1/2015 24.5 CCH I/CCH I CP 11.000% 10/1/2015 21 CCH II/CCH II CP 10.250% 9/15/2010 48 CCH II/CCH II CP 10.250% 9/15/2010 47.94 CELL GENESYS INC 3.125% 11/1/2011 39.75 CELL THERAPEUTIC 5.750% 12/15/2011 1 CHAMPION ENTERPR 2.750% 11/1/2037 12 CHARTER COMM HLD 10.000% 4/1/2009 88.84 CHARTER COMM HLD 10.000% 5/15/2011 54 CHARTER COMM HLD 11.125% 1/15/2011 51 CHARTER COMM INC 6.500% 10/1/2027 11.58 CHENIERE ENERGY 2.250% 8/1/2012 22 CIRCUS CIRCUS 7.625% 7/15/2013 34.6 CIT GROUP INC 3.375% 4/1/2009 88.55 CIT GROUP INC 5.000% 12/15/2008 96.86 CIT GROUP INC 5.000% 9/15/2009 78.25 CIT GROUP INC 5.200% 9/15/2011 42.02 CIT GROUP INC 5.250% 11/15/2011 39.01 CIT GROUP INC 6.750% 3/15/2011 43.5 CIT GROUP INC 7.250% 3/15/2012 39 CLAIRE'S STORES 9.250% 6/1/2015 19 CLAIRE'S STORES 10.500% 6/1/2017 14 CLEAR CHANNEL 4.400% 5/15/2011 43.5 CLEAR CHANNEL 4.500% 1/15/2010 71 CLEAR CHANNEL 4.900% 5/15/2015 17 CLEAR CHANNEL 5.000% 3/15/2012 18 CLEAR CHANNEL 5.500% 9/15/2014 15 CLEAR CHANNEL 5.750% 1/15/2013 18 CLEAR CHANNEL 6.250% 3/15/2011 34 CLEAR CHANNEL 6.875% 6/15/2018 9.7 CLEAR CHANNEL 7.250% 10/15/2027 17 CMP SUSQUEHANNA 9.875% 5/15/2014 20.75 COEUR D'ALENE 1.250% 1/15/2024 20.15 COLLEGIATE PAC 5.750% 12/1/2009 70.5 COMPUCREDIT 3.625% 5/30/2025 22 CONEXANT SYSTEMS 4.000% 3/1/2026 49.75 CONSTAR INTL 11.000% 12/1/2012 11.06 COOPER-STANDARD 8.375% 12/15/2014 39 CREDENCE SYSTEM 3.500% 5/15/2010 20.1 DAYTON SUPERIOR 13.000% 6/15/2009 60 DECODE GENETICS 3.500% 4/15/2011 13.52 DELPHI CORP 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59.66 FORD MOTOR CRED 5.100% 8/20/2009 49.46 FORD MOTOR CRED 5.100% 11/20/2009 64.25 FORD MOTOR CRED 5.100% 2/22/2011 51.87 FORD MOTOR CRED 5.150% 11/20/2009 42.32 FORD MOTOR CRED 5.150% 11/20/2009 52 FORD MOTOR CRED 5.150% 11/20/2009 42.57 FORD MOTOR CRED 5.150% 1/20/2011 31 FORD MOTOR CRED 5.200% 7/20/2009 44.5 FORD MOTOR CRED 5.200% 3/21/2011 24.99 FORD MOTOR CRED 5.200% 3/21/2011 47 FORD MOTOR CRED 5.250% 6/22/2009 72 FORD MOTOR CRED 5.250% 12/21/2009 56.08 FORD MOTOR CRED 5.250% 12/21/2009 68.09 FORD MOTOR CRED 5.250% 1/20/2010 60.2 FORD MOTOR CRED 5.250% 2/22/2011 35.6 FORD MOTOR CRED 5.250% 3/21/2011 32.75 FORD MOTOR CRED 5.300% 3/21/2011 35.7 FORD MOTOR CRED 5.300% 4/20/2011 23.76 FORD MOTOR CRED 5.350% 5/20/2009 56.64 FORD MOTOR CRED 5.350% 6/22/2009 55.08 FORD MOTOR CRED 5.350% 12/21/2009 60.25 FORD MOTOR CRED 5.350% 2/22/2011 39.5 FORD MOTOR CRED 5.400% 6/22/2009 52.14 FORD MOTOR CRED 5.400% 12/21/2009 51.5 FORD MOTOR CRED 5.400% 9/20/2011 22.67 FORD MOTOR CRED 5.400% 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10/15/2018 16 GMAC LLC 6.700% 6/15/2009 36.52 GMAC LLC 6.700% 7/15/2009 46.5 GMAC LLC 6.700% 5/15/2014 19.9 GMAC LLC 6.700% 5/15/2014 18 GMAC LLC 6.700% 6/15/2014 17.1 GMAC LLC 6.700% 8/15/2016 18.5 GMAC LLC 6.700% 6/15/2018 12 GMAC LLC 6.700% 6/15/2018 11.5 GMAC LLC 6.700% 11/15/2018 16 GMAC LLC 6.700% 6/15/2019 17 GMAC LLC 6.700% 12/15/2019 15.85 GMAC LLC 6.750% 11/15/2009 34.88 GMAC LLC 6.750% 9/15/2011 15.94 GMAC LLC 6.750% 10/15/2011 17.51 GMAC LLC 6.750% 10/15/2011 17 GMAC LLC 6.750% 7/15/2012 17 GMAC LLC 6.750% 9/15/2012 15.81 GMAC LLC 6.750% 9/15/2012 16.5 GMAC LLC 6.750% 10/15/2012 19 GMAC LLC 6.750% 4/15/2013 22.1 GMAC LLC 6.750% 4/15/2013 25.87 GMAC LLC 6.750% 6/15/2014 16.63 GMAC LLC 6.750% 7/15/2016 17 GMAC LLC 6.750% 8/15/2016 19.68 GMAC LLC 6.750% 9/15/2016 17.1 GMAC LLC 6.750% 3/15/2018 14.88 GMAC LLC 6.750% 7/15/2018 15.5 GMAC LLC 6.750% 9/15/2018 17.15 GMAC LLC 6.750% 10/15/2018 13 GMAC LLC 6.750% 11/15/2018 19.5 GMAC LLC 6.750% 5/15/2019 16.5 GMAC LLC 6.750% 5/15/2019 15 GMAC LLC 6.750% 6/15/2019 19 GMAC LLC 6.750% 6/15/2019 16 GMAC LLC 6.800% 7/15/2009 39 GMAC LLC 6.800% 11/15/2009 65.91 GMAC LLC 6.800% 2/15/2013 13 GMAC LLC 6.800% 4/15/2013 13.5 GMAC LLC 6.800% 9/15/2018 13.91 GMAC LLC 6.800% 10/15/2018 16.78 GMAC LLC 6.850% 7/15/2009 65.94 GMAC LLC 6.850% 10/15/2009 38.25 GMAC LLC 6.875% 8/28/2012 37 GMAC LLC 6.875% 10/15/2012 15 GMAC LLC 6.875% 4/15/2013 18 GMAC LLC 6.875% 8/15/2016 15 GMAC LLC 6.875% 7/15/2018 17 GMAC LLC 6.900% 6/15/2009 33.31 GMAC LLC 6.900% 6/15/2017 13 GMAC LLC 6.900% 7/15/2018 13.8 GMAC LLC 6.900% 8/15/2018 11 GMAC LLC 6.950% 8/15/2009 35 GMAC LLC 6.950% 6/15/2017 18.5 GMAC LLC 7.000% 3/15/2009 89.82 GMAC LLC 7.000% 3/15/2009 91.44 GMAC LLC 7.000% 7/15/2009 37 GMAC LLC 7.000% 8/15/2009 29.41 GMAC LLC 7.000% 9/15/2009 33.61 GMAC LLC 7.000% 9/15/2009 41 GMAC LLC 7.000% 10/15/2009 41.1 GMAC LLC 7.000% 10/15/2009 51 GMAC LLC 7.000% 11/15/2009 34 GMAC LLC 7.000% 11/15/2009 58.34 GMAC LLC 7.000% 12/15/2009 34.39 GMAC LLC 7.000% 1/15/2010 28.5 GMAC LLC 7.000% 3/15/2010 24.5 GMAC LLC 7.000% 10/15/2011 20.85 GMAC LLC 7.000% 9/15/2012 28 GMAC LLC 7.000% 10/15/2012 19 GMAC LLC 7.000% 11/15/2012 13.75 GMAC LLC 7.000% 12/15/2012 14.99 GMAC LLC 7.000% 1/15/2013 15.5 GMAC LLC 7.000% 6/15/2017 17 GMAC LLC 7.000% 7/15/2017 17.35 GMAC LLC 7.000% 2/15/2018 14.5 GMAC LLC 7.000% 2/15/2018 12.09 GMAC LLC 7.000% 2/15/2018 17 GMAC LLC 7.000% 3/15/2018 16 GMAC LLC 7.000% 5/15/2018 16.38 GMAC LLC 7.000% 8/15/2018 16.5 GMAC LLC 7.000% 9/15/2018 15.4 GMAC LLC 7.000% 6/15/2022 15 GMAC LLC 7.000% 11/15/2024 17.15 GMAC LLC 7.050% 10/15/2009 40.5 GMAC LLC 7.050% 3/15/2018 16.5 GMAC LLC 7.050% 3/15/2018 21 GMAC LLC 7.050% 4/15/2018 16 GMAC LLC 7.100% 9/15/2012 17 GMAC LLC 7.100% 1/15/2013 16 GMAC LLC 7.100% 1/15/2013 18 GMAC LLC 7.125% 8/15/2009 31.74 GMAC LLC 7.125% 8/15/2012 13.25 GMAC LLC 7.125% 10/15/2017 13 GMAC LLC 7.150% 8/15/2009 41 GMAC LLC 7.150% 8/15/2010 53.72 GMAC LLC 7.150% 11/15/2012 36 GMAC LLC 7.150% 9/15/2018 16.5 GMAC LLC 7.150% 1/15/2025 17.5 GMAC LLC 7.200% 8/15/2009 41 GMAC LLC 7.200% 10/15/2017 9.59 GMAC LLC 7.200% 10/15/2017 16.5 GMAC LLC 7.250% 11/15/2009 33.43 GMAC LLC 7.250% 1/15/2010 47 GMAC LLC 7.250% 8/15/2012 17 GMAC LLC 7.250% 12/15/2012 9 GMAC LLC 7.250% 12/15/2012 17 GMAC LLC 7.250% 9/15/2017 16.5 GMAC LLC 7.250% 9/15/2017 15.5 GMAC LLC 7.250% 9/15/2017 17 GMAC LLC 7.250% 1/15/2018 12.75 GMAC LLC 7.250% 4/15/2018 15.87 GMAC LLC 7.250% 4/15/2018 15 GMAC LLC 7.250% 8/15/2018 11.75 GMAC LLC 7.250% 8/15/2018 17.73 GMAC LLC 7.250% 9/15/2018 16.5 GMAC LLC 7.300% 12/15/2017 15.88 GMAC LLC 7.300% 1/15/2018 16 GMAC LLC 7.300% 1/15/2018 16 GMAC LLC 7.350% 4/15/2018 12.21 GMAC LLC 7.375% 11/15/2016 17.15 GMAC LLC 7.375% 4/15/2018 16 GMAC LLC 7.400% 12/15/2017 15.5 GMAC LLC 7.500% 10/15/2012 18 GMAC LLC 7.500% 11/15/2016 16 GMAC LLC 7.500% 8/15/2017 17 GMAC LLC 7.500% 11/15/2017 13 GMAC LLC 7.500% 11/15/2017 11 GMAC LLC 7.500% 12/15/2017 17.1 GMAC LLC 7.500% 12/15/2017 16.5 GMAC LLC 7.625% 11/15/2012 25 GMAC LLC 7.700% 8/15/2010 57.7 GMAC LLC 7.750% 10/15/2012 14.65 GMAC LLC 7.750% 10/15/2017 17.5 GMAC LLC 7.850% 8/15/2010 56.24 GMAC LLC 7.875% 11/15/2012 13.5 GMAC LLC 8.000% 6/15/2010 39.84 GMAC LLC 8.000% 6/15/2010 25.1 GMAC LLC 8.000% 6/15/2010 18.84 GMAC LLC 8.000% 7/15/2010 35 GMAC LLC 8.000% 7/15/2010 21.38 GMAC LLC 8.000% 9/15/2010 57.5 GMAC LLC 8.000% 8/15/2015 16 GMAC LLC 8.000% 10/15/2017 15.1 GMAC LLC 8.000% 11/15/2017 16 GMAC LLC 8.000% 3/15/2025 17 GMAC LLC 8.050% 4/15/2010 23.06 GMAC LLC 8.125% 9/15/2009 79.64 GMAC LLC 8.125% 11/15/2017 17.21 GMAC LLC 8.200% 7/15/2010 56 GMAC LLC 8.400% 4/15/2010 23.35 GMAC LLC 8.400% 8/15/2015 25.1 GMAC LLC 8.500% 5/15/2010 24.66 GMAC LLC 8.500% 10/15/2010 35 GMAC LLC 8.500% 10/15/2010 40.5 GMAC LLC 8.650% 8/15/2015 19.1 GMAC LLC 8.875% 6/1/2010 35 GMAC LLC 9.000% 7/15/2015 16 GMAC LLC 9.000% 7/15/2020 18.97 HARRAHS OPER CO 5.375% 12/15/2013 22 HARRAHS OPER CO 5.500% 7/1/2010 49.5 HARRAHS OPER CO 5.625% 6/1/2015 13 HARRAHS OPER CO 5.750% 10/1/2017 13 HARRAHS OPER CO 6.500% 6/1/2016 13 HARRAHS OPER CO 8.000% 2/1/2011 54.5 HARRAHS OPER CO 10.750% 2/1/2016 22.27 HAWAIIAN TELCOM 9.750% 5/1/2013 10 HAWAIIAN TELCOM 12.500% 5/1/2015 1.5 HERBST GAMING 8.125% 6/1/2012 0.88 HINES NURSERIES 10.250% 10/1/2011 21 HUTCHINSON TECH 3.250% 1/15/2026 27.13 IDEARC INC 8.000% 11/15/2016 7.65 INN OF THE MOUNT 12.000% 11/15/2010 39.63 INPUT/OUTPUT 5.500% 12/15/2008 345.03 INTCOMEX INC 11.750% 1/15/2011 49 INTL LEASE FIN 3.500% 4/1/2009 87.17 INTL LEASE FIN 4.750% 7/1/2009 83.25 INTL LEASE FIN 4.950% 11/15/2009 70.75 INTL LEASE FIN 5.000% 6/15/2012 20 INTL LEASE FIN 5.050% 3/15/2010 40.02 INTL LEASE FIN 5.100% 11/15/2009 73.9 INTL LEASE FIN 5.150% 3/15/2010 60.26 INTL LEASE FIN 5.250% 8/15/2009 46.03 INTL LEASE FIN 5.350% 4/15/2011 15 INTL LEASE FIN 5.500% 4/15/2012 22.5 INTL LEASE FIN 5.600% 5/15/2009 70 INTL LEASE FIN 5.650% 6/15/2011 35 INTL LEASE FIN 5.700% 4/15/2013 10.03 INTL LEASE FIN 5.950% 4/15/2013 22.25 INTL LEASE FIN 6.375% 3/15/2009 95.75 ISTAR FINANCIAL 5.125% 4/1/2011 41.75 ISTAR FINANCIAL 5.375% 4/15/2010 51 ISTAR FINANCIAL 5.650% 9/15/2011 37.4 ISTAR FINANCIAL 5.800% 3/15/2011 42.75 ISTAR FINANCIAL 6.000% 12/15/2010 41.5 JAZZ TECHNOLOGIE 8.000% 12/31/2011 40 JEFFERSON SMURFI 7.500% 6/1/2013 33 JEFFERSON SMURFI 8.250% 10/1/2012 33 K HOVNANIAN ENTR 6.500% 1/15/2014 30.16 K HOVNANIAN ENTR 8.000% 4/1/2012 35 K HOVNANIAN ENTR 8.875% 4/1/2012 32 KAISER ALUMINUM 12.750% 2/1/2003 4 KELLWOOD CO 7.875% 7/15/2009 55 KEMET CORP 2.250% 11/15/2026 27.75 KEMET CORP 2.250% 11/15/2026 27.43 KIMBALL HILL INC 10.500% 12/15/2012 2.77 KNIGHT RIDDER 7.125% 6/1/2011 35 KULICKE & SOFFA 0.500% 11/30/2008 100 LANDRY'S RESTAUR 9.500% 12/15/2014 84 LAZYDAYS RV 11.750% 5/15/2012 20 LEAR CORP 8.500% 12/1/2013 25.94 LEAR CORP 8.750% 12/1/2016 24 LEHMAN BROS HLDG 0.250% 6/29/2012 8.63 LEHMAN BROS HLDG 2.000% 8/1/2013 8.63 LEHMAN BROS HLDG 3.950% 11/10/2009 8.5 LEHMAN BROS HLDG 4.000% 8/3/2009 7 LEHMAN BROS HLDG 4.000% 4/16/2019 8.17 LEHMAN BROS HLDG 4.250% 1/27/2010 8.5 LEHMAN BROS HLDG 4.375% 11/30/2010 8.5 LEHMAN BROS HLDG 4.500% 7/26/2010 8.5 LEHMAN BROS HLDG 4.500% 8/3/2011 9.35 LEHMAN BROS HLDG 4.700% 3/6/2013 9.61 LEHMAN BROS HLDG 4.800% 2/27/2013 7.5 LEHMAN BROS HLDG 4.800% 3/13/2014 7 LEHMAN BROS HLDG 4.800% 6/24/2023 7.07 LEHMAN BROS HLDG 5.000% 1/14/2011 10 LEHMAN BROS HLDG 5.000% 1/22/2013 9.53 LEHMAN BROS HLDG 5.000% 2/11/2013 10 LEHMAN BROS HLDG 5.000% 3/27/2013 3 LEHMAN BROS HLDG 5.000% 8/3/2014 8.25 LEHMAN BROS HLDG 5.000% 8/5/2015 7.5 LEHMAN BROS HLDG 5.000% 12/18/2015 8.5 LEHMAN BROS HLDG 5.000% 5/28/2023 8.5 LEHMAN BROS HLDG 5.000% 5/30/2023 7.07 LEHMAN BROS HLDG 5.000% 6/10/2023 6 LEHMAN BROS HLDG 5.000% 6/17/2023 7.07 LEHMAN BROS HLDG 5.100% 1/28/2013 7.8 LEHMAN BROS HLDG 5.100% 2/15/2020 5 LEHMAN BROS HLDG 5.150% 2/4/2015 7.06 LEHMAN BROS HLDG 5.200% 5/13/2020 6.55 LEHMAN BROS HLDG 5.250% 2/6/2012 9 LEHMAN BROS HLDG 5.250% 1/30/2014 20 LEHMAN BROS HLDG 5.250% 2/11/2015 7.06 LEHMAN BROS HLDG 5.250% 3/8/2020 7.07 LEHMAN BROS HLDG 5.250% 5/20/2023 7.07 LEHMAN BROS HLDG 5.350% 2/25/2018 8.9 LEHMAN BROS HLDG 5.350% 3/13/2020 13.06 LEHMAN BROS HLDG 5.350% 6/14/2030 7.06 LEHMAN BROS HLDG 5.375% 5/6/2023 7.07 LEHMAN BROS HLDG 5.400% 3/6/2020 7.6 LEHMAN BROS HLDG 5.400% 3/20/2020 9.5 LEHMAN BROS HLDG 5.400% 3/30/2029 7.2 LEHMAN BROS HLDG 5.400% 6/21/2030 7.2 LEHMAN BROS HLDG 5.450% 3/15/2025 5.38 LEHMAN BROS HLDG 5.450% 4/6/2029 7.06 LEHMAN BROS HLDG 5.450% 2/22/2030 2.09 LEHMAN BROS HLDG 5.450% 7/19/2030 9.95 LEHMAN BROS HLDG 5.450% 9/20/2030 7.06 LEHMAN BROS HLDG 5.500% 4/4/2016 8.5 LEHMAN BROS HLDG 5.500% 2/4/2018 9.27 LEHMAN BROS HLDG 5.500% 2/19/2018 2.06 LEHMAN BROS HLDG 5.500% 11/4/2018 8.06 LEHMAN BROS HLDG 5.500% 2/27/2020 7.07 LEHMAN BROS HLDG 5.500% 8/19/2020 8.13 LEHMAN BROS HLDG 5.500% 3/14/2023 8.5 LEHMAN BROS HLDG 5.500% 4/8/2023 7.2 LEHMAN BROS HLDG 5.500% 4/15/2023 6.6 LEHMAN BROS HLDG 5.500% 4/23/2023 7.07 LEHMAN BROS HLDG 5.500% 8/5/2023 4.41 LEHMAN BROS HLDG 5.500% 10/7/2023 8 LEHMAN BROS HLDG 5.500% 1/27/2029 5.5 LEHMAN BROS HLDG 5.500% 2/3/2029 7.06 LEHMAN BROS HLDG 5.500% 8/2/2030 8.4 LEHMAN BROS HLDG 5.550% 2/11/2018 7.2 LEHMAN BROS HLDG 5.550% 3/9/2029 8.4 LEHMAN BROS HLDG 5.550% 1/25/2030 7.8 LEHMAN BROS HLDG 5.550% 9/27/2030 7.2 LEHMAN BROS HLDG 5.550% 12/31/2034 7.8 LEHMAN BROS HLDG 5.600% 1/22/2018 8 LEHMAN BROS HLDG 5.600% 9/23/2023 10 LEHMAN BROS HLDG 5.600% 2/17/2029 7.06 LEHMAN BROS HLDG 5.600% 2/24/2029 8.4 LEHMAN BROS HLDG 5.600% 3/2/2029 6.2 LEHMAN BROS HLDG 5.600% 2/25/2030 6.5 LEHMAN BROS HLDG 5.600% 5/3/2030 7 LEHMAN BROS HLDG 5.625% 1/24/2013 8.75 LEHMAN BROS HLDG 5.625% 3/15/2030 2 LEHMAN BROS HLDG 5.650% 11/23/2029 6.6 LEHMAN BROS HLDG 5.650% 8/16/2030 1.35 LEHMAN BROS HLDG 5.650% 12/31/2034 7.06 LEHMAN BROS HLDG 5.700% 1/28/2018 7.09 LEHMAN BROS HLDG 5.700% 2/10/2029 6.64 LEHMAN BROS HLDG 5.700% 4/13/2029 4 LEHMAN BROS HLDG 5.700% 9/7/2029 9.5 LEHMAN BROS HLDG 5.700% 12/14/2029 7.06 LEHMAN BROS HLDG 5.750% 4/25/2011 8.1 LEHMAN BROS HLDG 5.750% 7/18/2011 8.75 LEHMAN BROS HLDG 5.750% 5/17/2013 10 LEHMAN BROS HLDG 5.750% 1/3/2017 0.1 LEHMAN BROS HLDG 5.750% 3/27/2023 7.7 LEHMAN BROS HLDG 5.750% 9/16/2023 8.56 LEHMAN BROS HLDG 5.750% 10/15/2023 4 LEHMAN BROS HLDG 5.750% 10/21/2023 7.8 LEHMAN BROS HLDG 5.750% 11/12/2023 9.17 LEHMAN BROS HLDG 5.750% 11/25/2023 6.75 LEHMAN BROS HLDG 5.750% 12/16/2028 9 LEHMAN BROS HLDG 5.750% 12/23/2028 6 LEHMAN BROS HLDG 5.750% 8/24/2029 7.06 LEHMAN BROS HLDG 5.750% 9/14/2029 2 LEHMAN BROS HLDG 5.750% 10/12/2029 6 LEHMAN BROS HLDG 5.750% 3/29/2030 7.06 LEHMAN BROS HLDG 5.800% 9/3/2020 6.25 LEHMAN BROS HLDG 5.800% 10/25/2030 7.06 LEHMAN BROS HLDG 5.850% 11/8/2030 6.5 LEHMAN BROS HLDG 5.875% 11/15/2017 8.5 LEHMAN BROS HLDG 5.900% 5/4/2029 8.06 LEHMAN BROS HLDG 5.900% 2/7/2031 7.06 LEHMAN BROS HLDG 5.950% 12/20/2030 7.06 LEHMAN BROS HLDG 6.000% 4/1/2011 12 LEHMAN BROS HLDG 6.000% 7/19/2012 8.5 LEHMAN BROS HLDG 6.000% 1/22/2020 8 LEHMAN BROS HLDG 6.000% 2/12/2020 7.2 LEHMAN BROS HLDG 6.000% 1/29/2021 8 LEHMAN BROS HLDG 6.000% 10/23/2028 3.1 LEHMAN BROS HLDG 6.000% 11/18/2028 4 LEHMAN BROS HLDG 6.000% 5/11/2029 7.06 LEHMAN BROS HLDG 6.000% 7/20/2029 3.66 LEHMAN BROS HLDG 6.000% 3/21/2031 7.7 LEHMAN BROS HLDG 6.000% 4/30/2034 3.11 LEHMAN BROS HLDG 6.000% 7/30/2034 6.6 LEHMAN BROS HLDG 6.000% 2/21/2036 7.06 LEHMAN BROS HLDG 6.000% 2/24/2036 6.2 LEHMAN BROS HLDG 6.000% 2/12/2037 8.95 LEHMAN BROS HLDG 6.050% 6/29/2029 8.95 LEHMAN BROS HLDG 6.100% 8/12/2023 7.06 LEHMAN BROS HLDG 6.150% 4/11/2031 7.75 LEHMAN BROS HLDG 6.200% 9/26/2014 9 LEHMAN BROS HLDG 6.200% 6/15/2027 7.06 LEHMAN BROS HLDG 6.200% 5/25/2029 7.06 LEHMAN BROS HLDG 6.250% 2/5/2021 7.07 LEHMAN BROS HLDG 6.250% 2/22/2023 7.07 LEHMAN BROS HLDG 6.300% 3/27/2037 10.1 LEHMAN BROS HLDG 6.400% 10/11/2022 3.73 LEHMAN BROS HLDG 6.400% 12/19/2036 7 LEHMAN BROS HLDG 6.500% 7/19/2017 0.01 LEHMAN BROS HLDG 6.500% 2/28/2023 9.5 LEHMAN BROS HLDG 6.500% 3/6/2023 7.2 LEHMAN BROS HLDG 6.500% 9/20/2027 7.06 LEHMAN BROS HLDG 6.500% 10/18/2027 7.06 LEHMAN BROS HLDG 6.500% 10/25/2027 7.06 LEHMAN BROS HLDG 6.500% 11/15/2032 7.06 LEHMAN BROS HLDG 6.500% 1/17/2033 5 LEHMAN BROS HLDG 6.500% 12/22/2036 8.5 LEHMAN BROS HLDG 6.500% 2/13/2037 8.9 LEHMAN BROS HLDG 6.500% 6/21/2037 7.5 LEHMAN BROS HLDG 6.500% 7/13/2037 7.75 LEHMAN BROS HLDG 6.600% 10/3/2022 6.41 LEHMAN BROS HLDG 6.600% 6/18/2027 8.1 LEHMAN BROS HLDG 6.625% 1/18/2012 8.65 LEHMAN BROS HLDG 6.625% 7/27/2027 10 LEHMAN BROS HLDG 6.750% 7/1/2022 7.07 LEHMAN BROS HLDG 6.750% 3/11/2033 9.5 LEHMAN BROS HLDG 6.750% 10/26/2037 7 LEHMAN BROS HLDG 6.800% 9/7/2032 8.9 LEHMAN BROS HLDG 6.850% 8/16/2032 7.6 LEHMAN BROS HLDG 6.850% 8/23/2032 8 LEHMAN BROS HLDG 6.875% 5/2/2018 10 LEHMAN BROS HLDG 6.900% 9/1/2032 6.5 LEHMAN BROS HLDG 6.900% 6/20/2036 7.5 LEHMAN BROS HLDG 7.000% 5/12/2023 8.25 LEHMAN BROS HLDG 7.000% 9/27/2027 10.75 LEHMAN BROS HLDG 7.000% 10/4/2032 5 LEHMAN BROS HLDG 7.000% 7/27/2037 8.9 LEHMAN BROS HLDG 7.000% 9/28/2037 5 LEHMAN BROS HLDG 7.000% 11/16/2037 9.5 LEHMAN BROS HLDG 7.000% 12/28/2037 5.96 LEHMAN BROS HLDG 7.000% 1/31/2038 5 LEHMAN BROS HLDG 7.000% 2/7/2038 8.5 LEHMAN BROS HLDG 7.000% 2/8/2038 7 LEHMAN BROS HLDG 7.000% 4/22/2038 5.04 LEHMAN BROS HLDG 7.050% 2/27/2038 4.95 LEHMAN BROS HLDG 7.100% 3/25/2038 9 LEHMAN BROS HLDG 7.200% 8/15/2009 8.5 LEHMAN BROS HLDG 7.250% 2/27/2038 7.25 LEHMAN BROS HLDG 7.250% 4/29/2038 7.06 LEHMAN BROS HLDG 7.350% 5/6/2038 10 LEHMAN BROS HLDG 7.730% 10/15/2023 9.5 LEHMAN BROS HLDG 7.875% 11/1/2009 8.5 LEHMAN BROS HLDG 7.875% 8/15/2010 10 LEHMAN BROS HLDG 8.000% 3/17/2023 8.63 LEHMAN BROS HLDG 8.050% 1/15/2019 7.1 LEHMAN BROS HLDG 8.500% 8/1/2015 10 LEHMAN BROS HLDG 8.500% 6/15/2022 6.38 LEHMAN BROS HLDG 8.800% 3/1/2015 6.9 LEHMAN BROS HLDG 8.920% 2/16/2017 9.5 LEHMAN BROS HLDG 9.000% 12/28/2022 8.63 LEHMAN BROS HLDG 9.500% 12/28/2022 8.95 LEHMAN BROS HLDG 9.500% 1/30/2023 8.75 LEHMAN BROS HLDG 9.500% 2/27/2023 7 LEHMAN BROS HLDG 10.000% 3/13/2023 8.4 LEHMAN BROS HLDG 10.375% 5/24/2024 10.5 LEHMAN BROS HLDG 11.000% 10/25/2017 8 LEHMAN BROS HLDG 11.000% 3/17/2028 9.7 LEHMAN BROS HLDG 12.120% 9/11/2009 8.63 LEHMAN BROS INC 7.500% 8/1/2026 13 LEINER HEALTH 11.000% 6/1/2012 21 LEVEL 3 COMM INC 2.875% 7/15/2010 56.75 LEVEL 3 COMM INC 6.000% 3/15/2010 65 LEVEL 3 COMM INC 11.500% 3/1/2010 57.2 LIFECARE HOLDING 9.250% 8/15/2013 30 MAGNA ENTERTAINM 7.250% 12/15/2009 51 MAGNA ENTERTAINM 8.550% 6/15/2010 46.2 MAJESTIC STAR 9.500% 10/15/2010 32.38 MAJESTIC STAR 9.750% 1/15/2011 3.5 MANDALAY RESORTS 9.375% 2/15/2010 54.5 MASONITE CORP 11.000% 4/6/2015 14.75 MERISANT CO 9.500% 7/15/2013 23 MERITOR AUTO 6.800% 2/15/2009 90 MERIX CORP 4.000% 5/15/2013 25 MERRILL LYNCH 8.060% 3/9/2011 90.5 MERRILL LYNCH 11.000% 4/28/2009 14.5 MERRILL LYNCH 12.000% 3/26/2010 16 METALDYNE CORP 10.000% 11/1/2013 20.75 METALDYNE CORP 11.000% 6/15/2012 5 MGM MIRAGE 8.375% 2/1/2011 51.05 MGM MIRAGE 8.500% 9/15/2010 61.89 MICHAELS STORES 10.000% 11/1/2014 30.5 MICHAELS STORES 11.375% 11/1/2016 21.5 MILLENNIUM AMER 7.625% 11/15/2026 18 MOMENTIVE PERFOR 11.500% 12/1/2016 27 MORGAN ST DEAN W 1.250% 12/30/2008 74.25 MORRIS PUBLISH 7.000% 8/1/2013 11 MUZAK LLC/FIN 10.000% 2/15/2009 79.5 NCI BLDG SYSTEMS 2.125% 11/15/2024 68 NEFF CORP 10.000% 6/1/2015 22 NEW PLAN EXCEL 7.400% 9/15/2009 25 NEW PLAN EXCEL 7.500% 7/30/2029 8 NEW PLAN REALTY 6.900% 2/15/2028 9 NEW PLAN REALTY 7.650% 11/2/2026 11 NEW PLAN REALTY 7.680% 11/2/2026 12.5 NEW PLAN REALTY 7.970% 8/14/2026 20 NEWARK GROUP INC 9.750% 3/15/2014 10.5 NORTEK INC 8.500% 9/1/2014 31 NORTH ATL TRADNG 9.250% 3/1/2012 41 NTK HOLDINGS INC 0.000% 3/1/2014 21.38 NUTRITIONAL SRC 10.125% 8/1/2009 21.5 NUVEEN INVEST 5.000% 9/15/2010 39.5 NUVEEN INVEST 5.500% 9/15/2015 20.17 OSCIENT PHARM 3.500% 4/15/2011 9.25 OSI RESTAURANT 10.000% 6/15/2015 18.88 PALM HARBOR 3.250% 5/15/2024 35 PARK PLACE ENT 7.500% 9/1/2009 35.1 PARK PLACE ENT 7.875% 3/15/2010 53 PARK PLACE ENT 8.125% 5/15/2011 38 PHH CORP 6.450% 4/15/2010 55.5 PHH CORP 6.700% 4/15/2010 63.38 PIEDMONT AVIAT 10.350% 3/28/2011 1 PIERRE FOODS INC 9.875% 7/15/2012 5 PILGRIM'S PRIDE 7.625% 5/1/2015 10 PILGRIM'S PRIDE 8.375% 5/1/2017 10.2 PINNACLE AIRLINE 3.250% 2/15/2025 66.5 PLIANT CORP 11.125% 9/1/2009 10 PLY GEM INDS 9.000% 2/15/2012 31 PORTOLA PACKAGIN 8.250% 2/1/2012 11.05 POWERWAVE TECH 1.875% 11/15/2024 14 PREGIS CORP 12.375% 10/15/2013 40.5 PRIMUS TELECOM 3.750% 9/15/2010 51.75 PRIMUS TELECOM 8.000% 1/15/2014 5 PRIMUS TELECOM 12.750% 10/15/2009 69.89 PROVIDENCE SERV 6.500% 5/15/2014 18.35 QUALITY DISTRIBU 9.000% 11/15/2010 31.5 RADIAN GROUP 7.750% 6/1/2011 47 RADIO ONE INC 6.375% 2/15/2013 30 RADIO ONE INC 8.875% 7/1/2011 51.5 RAFAELLA APPAREL 11.250% 6/15/2011 38.75 RAIT FINANCIAL 6.875% 4/15/2027 40.63 READER'S DIGEST 9.000% 2/15/2017 24.25 REALOGY CORP 10.500% 4/15/2014 19 REALOGY CORP 12.375% 4/15/2015 19 RESIDENTIAL CAP 8.000% 2/22/2011 20 RESIDENTIAL CAP 8.375% 6/30/2010 10 RESIDENTIAL CAP 8.500% 6/1/2012 10.92 RESIDENTIAL CAP 8.500% 4/17/2013 3.89 RESIDENTIAL CAP 8.875% 6/30/2015 6 RH DONNELLEY 6.875% 1/15/2013 17 RH DONNELLEY 8.875% 1/15/2016 13.5 RH DONNELLEY 8.875% 10/15/2017 14.25 RITE AID CORP 6.875% 8/15/2013 29 RITE AID CORP 7.700% 2/15/2027 14.5 RITE AID CORP 8.500% 5/15/2015 28.5 RITE AID CORP 8.625% 3/1/2015 27.56 RITE AID CORP 9.375% 12/15/2015 26.5 RITE AID CORP 9.500% 6/15/2017 27.5 RJ TOWER CORP 12.000% 6/1/2013 2 ROTECH HEALTHCA 9.500% 4/1/2012 29.88 ROUSE CO LP/TRC 6.750% 5/1/2013 25.89 ROUSE COMPANY 7.200% 9/15/2012 25.5 SABRE HOLDINGS 8.350% 3/15/2016 26 SABRE HOLDINGS 7.350% 8/1/2011 49.5 SCOTIA PAC CO 7.110% 1/20/2014 28.5 SEARS ROEBUCK AC 5.875% 3/5/2009 92.02 SEARS ROEBUCK AC 6.000% 11/24/2008 98.6 SEARS ROEBUCK AC 7.500% 1/15/2013 31.02 SECURUS TECH 11.000% 9/1/2011 54.96 SIRIUS SATELLITE 2.500% 2/15/2009 82 SIRIUS SATELLITE 9.625% 8/1/2013 16.03 SIX FLAGS INC 4.500% 5/15/2015 9 SIX FLAGS INC 9.750% 4/15/2013 13 SLM CORP 4.400% 9/15/2011 22 SPECTRUM BRANDS 7.375% 2/1/2015 26 STANLEY-MARTIN 9.750% 8/15/2015 25 STATION CASINOS 6.500% 2/1/2014 7 STATION CASINOS 6.625% 3/15/2018 8.5 STATION CASINOS 6.875% 3/1/2016 7.5 STATION CASINOS 7.750% 8/15/2016 20.25 STONE CONTAINER 8.375% 7/1/2012 31.75 TEKNI-PLEX INC 12.750% 6/15/2010 65 TENNECO AUTOMOT 8.625% 11/15/2014 34.65 TIMES MIRROR CO 7.250% 3/1/2013 7 TIMES MIRROR CO 7.500% 7/1/2023 10 TOUSA INC 7.500% 3/15/2011 1.25 TOUSA INC 9.000% 7/1/2010 17.5 TOUSA INC 9.000% 7/1/2010 11 TRAVELPORT LLC 11.875% 9/1/2016 24 TRIBUNE CO 4.875% 8/15/2010 11.5 TRIBUNE CO 5.250% 8/15/2015 9.25 TRONOX WORLDWIDE 9.500% 12/1/2012 16.5 TRUE TEMPER 8.375% 9/15/2011 34 TRUMP ENTERTNMNT 8.500% 6/1/2015 15 UAL CORP 4.500% 6/30/2021 37.75 UAL CORP 5.000% 2/1/2021 42 UNISYS CORP 6.875% 3/15/2010 50.53 UNISYS CORP 8.000% 10/15/2012 45.78 UNITED AUTO GRP 3.500% 4/1/2026 48 US LEASING INTL 6.000% 9/6/2011 27.13 USEC INC 6.750% 1/20/2009 95 USFREIGHTWAYS 8.500% 4/15/2010 57 VERASUN ENERGY 9.375% 6/1/2017 13.25 VERENIUM CORP 5.500% 4/1/2027 19.09 VICORP RESTAURNT 10.500% 4/15/2011 10 VION PHARM INC 7.750% 2/15/2012 22 VISTEON CORP 7.000% 3/10/2014 8 VISTEON CORP 8.250% 8/1/2010 40.06 WASH MUT BANK NV 5.550% 6/16/2010 23.63 WASH MUT BANK NV 5.950% 5/20/2013 0.8 WASH MUTUAL INC 4.000% 1/15/2009 59 WASH MUTUAL INC 4.200% 1/15/2010 60 WASH MUTUAL INC 4.625% 4/1/2014 20 WASH MUTUAL INC 8.250% 4/1/2010 18 WCI COMMUNITIES 6.625% 3/15/2015 13 WCI COMMUNITIES 7.875% 10/1/2013 6 WCI COMMUNITIES 9.125% 5/1/2012 8 WILLIAM LYON 7.500% 2/15/2014 19 WILLIAM LYON 7.625% 12/15/2012 29 WILLIAM LYON 10.750% 4/1/2013 25 WIMAR OP LLC/FIN 9.625% 12/15/2014 4.5 WOLVERINE TUBE 10.500% 4/1/2009 85 XM SATELLITE 9.750% 5/1/2014 29.38 XM SATELLITE 10.000% 12/1/2009 38.25 YOUNG BROADCSTNG 8.750% 1/15/2014 2.08 YOUNG BROADCSTNG 10.000% 3/1/2011 2.02 ********* 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, Luke Caballos, Sheryl Joy P. Olano, Carlo 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 ***