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/raid1/www/Hosts/bankrupt/TCR_Public/081210.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 10, 2008, Vol. 12, No. 294 Headlines A&E INTERSTATE: Case Summary & Largest Unsecured Creditor ACCENTIA BIOPHARMACEUTICALS: Names Samuel S. Duffey as President ACTIGA CORP: Obtains Waiver of Default Condition from Investors ACTIGA CORP: September 30 Balance Sheet Upside Down by $2.5MM ADELPHIA COMMS: To Pay Duke Energy $4.8MM to Settle Contract Row ADVANCE FOOD: Moody's Affirms 'B1' Ratings; Outlook Negative ADVANCED MICRO: Amends New Semicon Company Pact w/ Mubadala ADVANTAGE RENT: Files for Chapter 11 Protection in Minnesota ADVANTAGE RENT-A-CAR: Voluntary Chapter 11 Case Summary AMERICAN ACHIEVEMENT: S&P Changes Outlook on B Rating to Negative AMERICAN INT'L: Names Peter Eastwood as Lexington Pres. & CEO AXS-ONE INC: Sells $1.1MM Convertible Promissory Notes, Warrants B MOSS CLOTHING: Organizational Meeting to Form Panel Today BA HOLDINGS: Case Summary & Two Largest Unsecured Creditors BANC OF AMERICA: S&P Junks Ratings on 3 Classes of Certificates BOSTON HARBOR: Moody's Lowers Rating on $15 Mil. Notes to 'Ba2' BRB CERAMIC TILE: Case Summary & 20 Largest Unsecured Creditors CAMDEN COUNTY: Fitch Affirms 'C' Rating on $35 Mil. Bonds CANYON CAPITAL: Moody's Lowers Rating on $11.2 Mil. Notes to 'Ba3' CG JCF: Moody's Holds 'B2' Corp. Family Rating; Outlook Negative CHARYS HOLDING: Bondholder Settlement Underpins Amended Plan CHESAPEAKE ENERGY: Will Cut Spending & Won't Sell New Shares CHRYSLER LLC: Congressman Opposes Bailout Due to Cerberus Ties CHRYSLER LLC: Stops Cooperation Talks with Chery Automotive COOPER-STANDARD: Ongoing Financial Stress Cues Moody's Junk Rating COPIA: Main Creditor Asks Court to Dump Chapter 11 Petition COPPER RIVER: Will Liquidate & Return Funds to Investors CORDOVA FUNDING: S&P's Outlook on $225MM Bonds BB Rating Is Stable CORPORATE BACKED: S&P Cuts Ratings on Classes A-1 & A-2 to 'CC' DBSI INC: Gets Go Signal to Continue Using Lenders' Collateral ECLIPSE AVIATION: U.S. Trustee Appoints 7-Member Creditors Panel EMPIRE LAND: Court Converts Bankruptcy Cases to Chapter 7 ENRON CORP: Inks $44MM Settlement In Commercial Paper Litigation EPIX PHARMACEUTICALS: To Appeal Stock Delisting Action of Nasdaq EPIX PHARMACEUTICALS: Sept. 30 Balance Sheet Upside-Down by $84MM EQUITY MEDIA: Files for Chapter 11 Bankruptcy on Debt Default EQUITY MEDIA HOLDINGS: Voluntary Chapter 11 Case Summary EXTENDED STAY: Lenders Might Take Over May Firm EZ LUBE: Files for Chapter 11 to Facilitate Assets Sale EZ LUBE: Case Summary & 35 Largest Unsecured Creditors FAMILY BANK: Weiss Ratings Assigns "Very Weak" E- Rating FORD MOTOR: Former Chrysler Chief Opposes CEO Ousters FRIEDMAN'S INC: Plan Filing Period Extended to December 31 GENERAL GROWTH: Fitch Says May Default; IDR Lowered to 'C' GENERAL MOTORS: Lobbies Workers' Support for CEO Rick Wagoner GOE LIMA: Nedra Wants Case Converted to Chapter 7 or Dismissed GOE LIMA: Get Final Approval to Use $1.6MM SunTrust DIP Facility GREEKTOWN CASINO: Shares Exclusivity; Plan Deadline on Feb. 1 GREEKTOWN CASINO: Seeks to Pay Workers' Compensation Claims GUNDLE/SLT ENVIRONMENTAL: S&P Affirms 'B-' Corporate Credit Rating HARRY PAPPAS: Balks at Pappas Telecasting Plan to Sell All Assets HART ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors HAWAIIAN TELCOM: Organizational Meeting to Form Panel on Friday HERBST GAMING: $5.1MM Interest Nonpayment Cues Moody's 'D' Rating HERBST GAMING: Nonpayment of Interest Cues S&P's 'D' Rating HELLEN-MAY HOLDINGS: Voluntary Chapter 11 Case Summary HOME INTERIORS: Jan. 15 Auction for U.S. and Mexico Assets Set HOME INTERIORS: May Use Cash Collateral Until February 28 HOME INTERIORS: Court Approves Appointment of Chapter 11 Trustee HOME INTERIORS: Obtains Go Signal to Sell Surplus Inventory INTERMEC INC: Deregistration Cues Moody's to Withdraw Ratings JAGS AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors JDA SOFTWARE: S&P Raises Corporate Credit Rating to 'BB-' JIM PALMER: ActionView Not Fully Satisfied with Restructuring Plan JK KEAS INC: Case Summary & Two Largest Unsecured Creditors JOLLY PROPERTIES: Case Summary & 4 Largest Unsecured Creditors JPMORGAN ASSET: Moody's Holds & Withdraws 'Ba' Rating on USD Fund JPMORGAN COMMERCIAL: S&P Keeps 'CCC-' Rating on Class G Certs. JUHL WIND: Posts $383,311 Net Loss in Quarter Ended Sept. 30 KIMBALL HILL: Files Chapter 11 Plan to Wind Down Business KIMBALL HILL: Seeks Court OK to Solicit Votes on Liquidation Plan KIMBALL HILL: Seeks Court OK for Wind-Down Incentive Plans LAND O' LAKES: Case Summary & 20 Largest Unsecured Creditors LANDSBANKI ISLANDS: Seeks Chapter 15 Protection in Manhattan Court LANDSBANKI ISLANDS: Voluntary Chapter 15 Case Summary LB-UBS COMMERCIAL: S&P Keeps B- Rating on Class S Certificates LEEK FINANCE: Fitch Downgrades Rating on Class D Notes to 'B+' LEHMAN BROTHERS: Moody's Downgrades Senior Rating to 'C' From 'B3' LEHMAN BROTHERS: Superior Pipelines Wants to Prosecute LCPI Suits LEHMAN BROTHERS: Sola Sues to Recover $3 Million Transfer LEHMAN BROTHERS: Aliant, et al., Sue LBSF to Recover Securities LENOX GROUP: U.S. Trustee Forms Three-Member Creditors Committee LENOX GROUP: Gets Court Okay to Access $40-Mil. of DIP Financing LEVITT AND SONS: Files 2nd Amended Chapter 11 Plan LEVITT AND SONS: Wachovia Balks at 2nd Amended Plan LIGHTPATH TECH: Posts $1,024,000 Net Loss in Qtr. Ended Sept. 30 LINENS 'N THINGS: Amends Plan to Provide for Liquidation LINENS 'N THINGS: To Receive 95.1% of Cost Value from GOB Sales LINENS 'N THINGS: Agrees Not to Reject Canada Management Pact LINENS 'N THINGS: RSM Richter Appointed Receiver for Canada Unit LUMINENT MORTGAGE: May Employ O'Shea Partners as Special Counsel MILLENNIUM TRANSIT: May Obtain $367,832 Loan from James A. Ludvik MORGAN STANLEY: S&P Cuts Rating on $3MM Class A-5 Notes to 'CCC-' MOTOR COACH: Court Sets Jan. 7, 2009 as Claims Bar Date MOTOR COACH: Panel May Employ Womble Carlyle as Delaware Counsel MOTOR COACH: Panel May Employ Brown Rudnick as Co-Counsel NEONODE INC: Swedish Unit Files for Bankruptcy NEPTUNE MOTORS: Voluntary Chapter 11 Case Summary NEW YORK TIMES: Seeks $225 Million of Financing NOVASTAR FINANCIAL: Appoints CFO as Principal Accounting Officer NOVASTAR FINANCIAL: Delays 10-Q Filing Due to Accounting Review PAPPAS TELECASTING: CEO Balks at Plan to Sell All Assets PHH CORPORATION: Moody's Cuts Senior Unsecured Rating to 'Ba1' PIERRE FOODS: Plan Confirmation Today in Wilmington, Delaware PILGRIM'S PRIDE: U.S. Trustee Appoints 9-Member Creditors Panel PINNACLE CLUB: Organizational Meeting to Form Panel on Dec. 11 RADIAN INSURANCE: S&P Puts BB+ Ratings on 2 Classes on Watch Neg. RESLOC 2007-1: Fitch Affirms Ratings on 11 Outstanding Tranches RICKY'S CANDY: Files for Chapter 11; Creditors' Meeting on Feb. 2 SASI FINANCE: Moody's Places Ratings on 2006-1 Deals Under Review SEARS HOLDINGS: Moody's Reviews 'Ba1' Ratings for Possible Cuts STEINWAY MUSICAL: Moody's Affirms 'Ba3' Corporate Family Rating TELKONET INC: Posts $12.2 Million Net Loss in Nine-Month Period TELKONET INC: Streamlines Operations; 5% of Workforce Cut TRIBUNE CO: Chapter 11 Filing Prompts Moody's 'D' Ratings TRIBUNE CO: Got $850MM-$950MM Offers for Cubs; Team Not in Ch. 11 TRIBUNE CO: Says It's Not Going Out of Business TRIBUNE CO: Wants Schedules & Statements Deadline Moved to Jan. 22 TWEETER OPCO: Court Converts Bankruptcy Case to Chapter 7 UNITED TILE: Case Summary & 20 Largest Unsecured Creditors UNIVERSAL CORP: S&P Assigns 'BB' Preferred Stock Rating USP SPC: S&P Cuts Rating on Jackson 2006-IIA Notes to 'D' VERASUN ENERGY: Court OKs $230MM DIP Financing on Final Basis WACHOVIA BANK: S&P Upgrades Rating on Class O Certificates to 'B' WACHOVIA CORP: Court Rejects Shareholder Suit to Stop Merger WCI COMMUNITIES: Seeks Court Nod on Gulf Harbour Turnover Pact WCI COMMUNITIES: Gets Plan Exclusivity Until April 1 WCI COMMUNITIES: Court Fixes Feb. 2, 2009 as Claims Bar Date WCI COMMUNITIES: Reaches Deal w/ Safeco Insurance on Lawsuit WCI COMMUNITIES: Carl Icahn Dumps All 6,000,000 Shares WESTMORELAND COAL: Unit Gets 30-Day Extension of Revolving Loans WESTMORELAND COAL: Sept. 30 Balance Sheet Upside-Down by $192MM WOLF HOLLOW: S&P Junks Rating on $110 Mil. Second-Lien Term Loan X-CHANGE CORP: Posts $871,205 Net Loss in Quarter Ended Sept. 30 * Fitch Says Weak Demand Could Spur Wireless Substitution * Moody's Reports Spike in Rating Cuts of Non-Profit Hospitals * Moody's Assesses Government Capital Purchase Impact on Insurers * Moody's Says Corp. Default Rate to Reach 10.4% by End of 2008 * S&P Downgrades Ratings on 49 Classes From 15 Subprime RMBS Deals * IATA Projects US$2.5 Billion Loss in Airline Industry for 2009 * SEC Approves Measures to Boost Oversight of Rating Agencies * Dreier LLP'S Head Sued by SEC for $113-Mil. Sale of Bogus Notes * Upcoming Meetings, Conferences and Seminars ********* A&E INTERSTATE: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: A&E Interstate Carwash Inc 11906 Wilshire Blvd Ste 26 W Los Angeles, CA 90025 Case No.: 08-31233 Debtor-affiliate filing separate Chapter 11 petition: Case No. Affiliate -------- --------- 08-31243 A & E Interstate Properties LLC Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Rafael Shpelfogel, Esq. 301 N Canon Dr Ste 304 Beverly Hills, CA 90210 310-850-8081 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor identified Car Aroma at 412 W. Aneheim Street, in Wilmington, California as its largest unsecured creditor. The Debtor did not specify the claim amount. ACCENTIA BIOPHARMACEUTICALS: Names Samuel S. Duffey as President ---------------------------------------------------------------- On Dec. 2, 2008, Steven R. Arikian, M.D., resigned from all positions with Accentia Biopharmaceuticals, Inc., including as president and chief operating officer of Biopharmaceutical Products and Services and as a director, the company said in a filing with the Securities and Exchange Commission. On the same day, Samuel S. Duffey, Esq. was appointed to serve in the position of president of the company. Mr. Duffey will continue to serve as the company's general counsel and has agreed to accept the new position as president of the company without any change to his current salary. In lieu of additional salary, the company has granted Mr. Duffey options to purchase two million shares of the company's common stock with an exercise price equal to the market price at the close of business on Dec. 2, 2008, with an exercise term of ten years. The options will vest upon the successful emergence of the company from the pending Chapter 11 Bankruptcy proceeding, defined as the entry of an Order of the Bankruptcy Court confirming the formal Plan of Reorganization. Mr. Duffey has served as the company's general counsel since April 2003. Prior to joining the company, Mr. Duffey engaged in the private practice of business and securities law. Mr. Duffey received his B.A. and J.D. degrees from Drake University. Liquidity Woes and Bankruptcy Filing As reported by the Troubled Company Reporter, Accentia Biopharmaceuticals and its subsidiaries, on Nov. 10, 2008, filed voluntary petitions for reorganization. The company stated that the action was intended to provide an opportunity for the company to restore shareholder value and to pay secured and unsecured creditors Affiliates of the company, including Hopkins Capital Group, LLC, a major shareholder, have indicated a willingness to provide additional financing to the company as part of its reorganization plan. In deciding to seek reorganization, the company considered, among other things, its limited access to additional financing which has been negatively impacted by the crises in the worldwide debt and equity markets. Accentia believed the decline in its stock price was a result of the worldwide equity market crisis, including selling pressure created by forced redemptions by hedge funds. Limited access to the capital markets appeared to be a systemic condition within the biotech markets, as according to the Biotechnology Industry Organization, 38% of 370 U.S. small biotech companies are operating with less than a year's worth of cash, and nearly 100 publicly-traded biotech companies have less than six months' cash. After evaluating alternatives, Accentia found that reorganization under Chapter 11 is its best option, as it enables the company to remain focused on the commercialization of its drug portfolio, which consists of novel products and technologies that target multiple billion-dollar market opportunities, including therapies for the treatment of many kinds of blood cancers and autoimmune diseases such as multiple sclerosis. The company also stressed its intent to ultimately pay all of its secured and unsecured creditors in full. Delisting On Nov. 3, 2008, Accentia elected not to appeal the NASDAQ Stock Market's Staff determination to delist Accentia's shares of common stock from the NASDAQ Capital Market. Accentia received notice from the NASDAQ Stock Market dated Oct. 24, 2008, notifying the company that it is not in compliance with Rule 4310(c)(3)(B), requiring a minimum $35 million market value. As a result, at the opening of business on Nov 4, 2008, shares of Accentia will open for trading listed on the Pink Sheets, an electronic quotation service for securities traded over-the-counter. Accentia's stock ticker symbol will remain the same. Accentia believes its shares will only temporarily trade on the Pink Sheets, as the company expects one of its market makers to file a "Form 211" with the OTC Bulletin Board to transfer the quotation of its common stock to the OTCBB. The company believed its shares are eligible to be quoted on the OTCBB, as it is current with its filings with the SEC and all other applicable regulatory authorities. About Accentia BioPharmaceuticals Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M. D. Florida, Lead Case No. 08-17795). The Debtors have tapped Charles A. Postler, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida, as their bankruptcy counsel. In their bankruptcy petition, the Debtors listed assets of $134,919,728 and debts of $77,627,355 as of June 30, 2008. ACTIGA CORP: Obtains Waiver of Default Condition from Investors --------------------------------------------------------------- Actiga Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that it has received a waiver of the default condition from the investor on Nov. 11, 2008. The company was in default on a 12% Note with an Option to convert due on May 15, 2009, between the company and a lender in the amount of $50,000 that was subscribed for as part of its bridge offering. Upon an event of default, the lender at its election may call for the repayment in cash of the full principal amount of the Note together with interest and other amounts owing under the Note. The company also disclosed that: a) Due to a delay in obtaining a necessary components for one of its game controller products and a deficiency in its working capital, the company has received notice that some purchase orders received by its subsidiary QMotions, Inc., have been cancelled. There were $270,000 purchase orders for the QMotions product still pending. A total of $675,000 in purchase orders were reported in September 2008. b) As a result of turmoil in the financial markets and tightening of credit throughout the United Stated and the worldwide capital markets, the company has been unable to raise additional capital and currently cannot pay its debts. Additionally, the company has not met its payroll obligations to its employees since Oct. 17, 2008. The company is seeking and reviewing financing and other strategic options to correct this situation. In a separate filing, the company disclosed that effective Dec. 1, 2008, Randolph Geissler resigned from his position as a member of the board of directors of Actiga. About Actiga Corp. Based in Riverside, California, Actiga Corp. (OTCBB: AGAC) -- http://www.qmotions.com/-- terminated its dog day care services after it merged with QMotions Inc. on Jan. 14, 2008. The company currently develops, manufactures, distributes, markets and sells motion-based controllers for video games and Online video games. Actiga Corporation's balance sheet at Sept. 30, 2008, showed total assets of $1,762,469 and total liabilities of $4,336,552, resulting in a stockholders' deficit $2,574,083. For three months ended Sept. 30, 2008, the company reported a net loss of $1,238,043 compared to a net loss of $429,799 for the same period in the previous year. ACTIGA CORP: September 30 Balance Sheet Upside Down by $2.5MM ------------------------------------------------------------- Actiga Corporation's balance sheet at Sept. 30, 2008, showed total assets of $1,762,469 and total liabilities of $4,336,552, resulting in a stockholders' deficit $2,574,083. For three months ended Sept. 30, 2008, the company reported a net loss of $1,238,043 compared to a net loss of $429,799 for the same period in the previous year. In the nine-month period, the company incurred a net loss of $3,848,527 compared with a net loss of $1,209,866 for the same period in the previous year. The company filed its 10-Q five days after the company informed the Securities and Exchange Commission that it needed additional time to work with its outside professionals to prepare and finalize its third quarter results. Liquidity and Capital Resources The company has historically incurred losses, and from inception through Sept. 30, 2008, has incurred losses of $10,701,833. The issuance of additional equity securities by the company could result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase its liabilities and future cash commitments. Presently, its revenues are not sufficient to meet its operating and capital expenses. Management projects that it will require substantial additional funding to expand its current operations as the company is currently nearly out of cash. To revise its operating and financial requirements, management has devoted considerable efforts during the period ended Sept. 30, 2008, and subsequently towards (i) obtaining additional equity financing (ii) controlling of salaries and general and administrative expenses (iii) management of accounts payable (iv) settlement of debt by issuance of common shares and (v) strategically forming subsidiaries that bring synergies to the company's products and services. The company relies on a combination of debt and equity financings to fund its ongoing cash requirements. The company has scaled down its workforce to a few key employees, who have also agreed to accept stock compensation in lieu of payroll. The company has minimized its operations in order to conserve its working capital. In light of the need to raise additional funds in the immediate short term, the company has been focused on capital raising activities in addition to continuing to control operating costs, aggressively managing working capital and attempting to settle certain debt by the issuance of common shares. As of Jan. 1, 2008, to the date of this filing, the company has received $4.1 million of equity financing and loans in order to fund cash requirements. Although the company has been able to raise capital, there can be no assurance that the capital will continue to be available at all or, if available, that the terms of such financing will not be highly dilutive to existing stockholders or otherwise on terms unfavorable to it. The company may review capital raising transactions on terms that are unfavorable to the company and that the company would not otherwise review but for tightening of credit through the global capital market. If the company is unable to secure additional capital as circumstances require, it may not be able to continue its operations. Since Oct. 17, 2008, the company has not met its payroll obligations to its employees. The company has scaled back on its workforce to a few key employees. The company is seeking and reviewing financing and other strategic options to correct this situation. As of Nov. 11, 2008 the company was negotiating an asset purchase agreement with the former employees of QMotions to dispose of certain QMotions assets and liabilities. Total net assets to be transferred are approximately $214,690 comprised of inventory of $6,687 and accounts receivable of $208,003. The disposition will include $435,512 of related liabilities. The liabilities exceed the assets. For the nine months ended Sept. 30, 2008, the QMotions subsidiary incurred net losses of $2,200,113 and $439,513 for the three months ended Sept. 30, 2008. For the comparable periods of 2007 the amounts consisted entirely of QMotions. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?35ec About Actiga Corp. Based in Riverside, California, Actiga Corporation (OTCBB: AGAC) - - http://www.qmotions.com/-- terminated its dog day care services after it merged with QMotions Inc. on Jan. 14, 2008. The company currently develops, manufactures, distributes, markets and sells motion-based controllers for video games and Online video games. ADELPHIA COMMS: To Pay Duke Energy $4.8MM to Settle Contract Row ---------------------------------------------------------------- Bankruptcy Law360 reports that Adelphia Communications Corp. has agreed to pay $4.8 million to utility company Duke Energy Ohio Inc. to settle various disputes over contracts that arose during and after Adelphia's bankruptcy. Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the settlement Thursday, the report says. Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCE FOOD: Moody's Affirms 'B1' Ratings; Outlook Negative ------------------------------------------------------------ Moody's Investors Service changed the rating outlook for Advance Food Company, Inc. to negative from stable. The outlook change reflects Moody's concern that sluggish demand for food away from home and pressure from still high commodity costs may challenge the company's ability to improve leverage in the near term. The company's ratings, including its B1 corporate family rating and B1 probability of default rating, were affirmed based on the potential for operating cash flow to remain stable given recent pricing actions and cost cuts. Ratings affirmed and certain LGD percentages adjusted: -- Corporate family rating at B1 -- Probability of default rating at B1 -- $40 million 1st lien revolving credit facility expiring in March 2012 at B1 (LGD3); LGD percentage to 44% from 45% -- $187.7 million 1st lien term loan due March 2014 at B1 (LGD3); LGD percentage to 44% from 45% $50 million 2nd lien term loan due September 2014 at B3 (LGD6,92%) Profit margins have been hurt by the general rise in commodity prices in 2008 and lower than expected sales volumes as consumers eat less away from home. Debt to EBITDA for the twelve months ended September 27, 2008 was high at approximately 6 times. While pricing actions and cost cuts taken by the company will likely result in improved credit metrics, leverage may not be restored in the near term to the level of approximately 5 times previously articulated by Moody's as appropriate for Advance Food's B1 corporate family rating. Headquartered in Enid, Oklahoma, Advance Food Company, Inc. is a leading full service manufacturer and marketer of a wide variety of value-added, portion-controlled meat products sold primarily into the foodservice distribution channel. Revenues for the twelve months ended September 27, 2008 were approximately $518 million. Moody's most recent rating action on April 13, 2007 lowered the ratings on the company's first lien debt and affirmed the corporate family rating, probability of default rating and the rating on the second lien term loan. ADVANCED MICRO: Amends New Semicon Company Pact w/ Mubadala ----------------------------------------------------------- Advanced Micro Devices Inc., the Advanced Technology Investment Company (ATIC), and Mubadala Development Company disclosed amendments to the Oct. 6, 2008 transaction agreements for the creation of a leading-edge semiconductor manufacturing joint venture, currently known as "The Foundry Company." The transactions covered by the amended agreements are expected to close at the beginning of 2009. The amendments to the terms between AMD and Mubadala provide for: -- Mubadala will purchase 58 million shares of AMD's common stock at a revised purchase price per share equal to the lower of (i) the average closing price per share of AMD's common stock on the NYSE during the 20 trading days immediately prior to and including Dec. 12, 2008, or (ii) the average closing price per share of AMD's common stock on the NYSE during the 20 trading days immediately prior to the closing date of the transaction. -- AMD will issue to Mubadala an additional five million warrants to purchase AMD stock, for a total of 35 million warrants. The amendments to the terms between AMD and ATIC provide for: -- The enterprise value of the manufacturing assets to be contributed by AMD to The Foundry Company will be reduced from a multiplier of 1.13x to 0.85x of the net book value of the assets. As a result, AMD will own approximately 34.2 percent and ATIC will own approximately 65.8 percent of The Foundry Company's fully-converted common stock. AMD and ATIC will each have equal voting rights at the close of the transaction. -- The net asset valuation multiple on future capital calls of The Foundry Company will be reduced from 1.1x to 0.9x. All other material economic terms of the transaction agreements remain unchanged. ATIC will still invest $2.1 billion to purchase its stake in "The Foundry Company," of which it will invest $1.4 billion directly in the new entity and will pay $700 million to AMD. AMD Updates Fourth Quarter Outlook AMD said that it expects revenue from continuing operations for the fourth quarter ended Dec. 27, 2008, to be approximately 25 percent lower than third quarter 2008 revenue of $1.585 billion, not including process technology license revenue. The decrease is due to weaker than expected demand across all geographies and businesses, particularly in the consumer market. AMD will report fourth quarter 2008 results after market close on Jan. 22, 2009. About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. At June 28, 2008, the company's consolidated balance sheet showed $9.8 billion in total assets, $8.1 billion in total liabilities, $189 million in minority interest in consolidated subsidiaries, and $1.5 billion in total stockholders' equity. * * * As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch has affirmed these ratings on Advanced Micro Devices Inc.: Issuer Default Rating at 'B-'; Senior unsecured debt at 'CCC/RR6' and Rating Outlook at Negative. ADVANTAGE RENT: Files for Chapter 11 Protection in Minnesota ------------------------------------------------------------ Advantage Rent A Car has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Minnesota. Advantage Rent is exploring strategic alternatives, including reorganization of its businesses, a sale, or merger. The company plans to continue to operations while it explores these alternatives. "The current economic environment has dramatically affected the travel industry," said Advantage Rent spokesperson Jon Austin. "We have been hit with a simultaneous drop in leisure travel, with greatly increased costs and frozen credit markets. These factors are affecting many industries and companies and we are not immune from these forces. These painful steps are a recognition of that reality." In addition to its bankruptcy petition, Advantage Rent also filed with the Court on Dec. 8, 2008, a number of motions to assure the continuity and stability of its business, including the payment of wages and benefits without interruption to current employees. Advantage Rent also said that it will consolidate its network of rental locations effective immediately. The move allows the company to focus its marketing and operational efforts on its most profitable, highest volume locations. These Advantage Rent A Car units remain open only for the return of vehicles currently out on rental and will not be renting additional vehicles: -- Albuquerque, NM airport location; -- Aspen, CO airport location; -- Austin, TX downtown location; -- Boulder, CO University of Colorado; -- Burbank, CA airport location; -- Chicago, IL O'Hare airport location; -- Dallas/Fort Worth, TX airport location; -- Grand Junction, CO airport location; -- Hayden, CO airport location; -- Honolulu, HI airport location; -- Kansas City, MO airport location; -- Las Vegas, NV Hard Rock Cafe; -- Los Angeles, CA airport location; -- Maui, HI airport location; -- Palm Springs, CA airport location; -- Reno, NV airport location; -- Rifle, CO airport location; -- San Antonio, TX airport location; -- San Diego, CA airport location and Hard Rock Cafe; -- Seattle, WA airport location; and -- Tucson, AZ airport location. These Advantage Rent A Car locations remain open for normal business activities: -- Austin, TX airport location; -- Chicago, IL Midway airport location; -- Colorado Springs, CO airport location; -- Denver, CO airport location; -- El Paso, TX Las Cruces location; -- El Paso, TX airport location -- Houston, TX IAH airport location -- Orlando, FL airport location, International Drive, Lake Buena Vista, Kissimmee; -- Phoenix, AZ airport location; and -- Salt Lake City, UT airport location. Advantage Rent has made arrangements with Hertz Car Rental to honor almost all of the pending reservations at affected locations where Advantage Rent cannot fill customer needs. Customers holding reservations to pick up a vehicle at an affected location can contact Advantage via the dedicated hotline or e-mail address above or at either its customer service or reservations numbers for more information. Customers currently renting vehicles scheduled to be returned at affected locations should return their vehicles as scheduled. Approximately 440 Advantage Rent employees have received layoff notifications as a result of this consolidation. Advantage Rent currently employs approximately 460 people at its remaining locations and at its corporate offices in San Antonio. About Advantage Rent Advantage Rent A Car -- http://www.advantage.com/-- is a car rental company with 50 locations in the U.S. and 130 International affiliate locations. ADVANTAGE RENT-A-CAR: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Advantage Rent-A-Car, Inc. 6660 First Park Ten Blvd, Ste 116 San Antonio, TX 78213 Case No.: 08-46369 Debtor-affiliates filing separate Chapter 11 petitions: Case No. Affiliate -------- --------- 08-46367 ARC Venture Holding, Inc. 08-46368 Southwest-Tex Leasing Co., Inc. 08-46370 Coast Leasing Corp. 08-46371 Floral Leasing Corp. 08-46372 Iliad Leasing Corp. 08-46373 Miso Leasing Corp. 08-46374 Nugget Leasing Corp. 08-46375 Okra Leasing Corp. 08-46376 Rainier Leasing Corp. 08-46377 San Antonio Rental & Leasing Co., Inc. 08-46379 Steamboat Springs Rental & Leasing Co., Inc. 08-46380 Sun Leasing Corporation 08-46383 Tradewinds U-Drive, Inc. 08-46384 Ute Leasing Corporation Chapter 11 Petition Date: December 8, 2008 Court: US Bankruptcy Court District of Minnesota (Minneapolis) Judge: Dennis D O'Brien Debtors' Counsel: Clinton E. Cutler, Esq. Fredrikson & Byron, P.A. 200 South Sixth Street, Ste 4000 Minneapolis, MN 55402 Tel: 612-492-7070 Fax: 612-347-7077 Email: ccutler@fredlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors do not have creditors who are not insiders. AMERICAN ACHIEVEMENT: S&P Changes Outlook on B Rating to Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch implications on its ratings for American Achievement Corp. to negative from developing. The corporate credit rating on the company is 'B'. This action follows the announcement by American Achievement Group Holding Corp., the parent company of AAC, that its acquisition agreement with Herff Jones has been terminated because the companies have not received the requisite regulatory approvals necessary to complete the transaction. "The negative CreditWatch listing reflects AAC's high debt leverage and diminished financial flexibility, given that the previously assumed debt repayment from the proposed transaction is no longer a possibility," said S&P's credit analyst Michael Listner. "These factors weigh heavily on the company's financial profile and will likely pressure the current credit rating." Adjusting for operating leases and debt-like unfunded pension and other postretirement obligations, AAC had consolidated total debt outstanding of about $570 million, or 9.9x EBITDA, at Aug. 30, 2008. Given the company's accreting debt burden from its $150 million senior pay-in-kind notes and 10.25% senior discount notes, which begin to pay cash interest in April 2009, S&P expects it will be challenging for the company to generate adequate discretionary cash flow. Thus, any meaningful reduction in leverage (a factor necessary for maintaining the existing rating) will likely be minimal. In resolving the CreditWatch listing, S&P will reassess the prospects of AAC's operating performance, absent the acquisition, and evaluate the company's options for reducing leverage and managing its burdensome capital structure. S&P will also evaluate the company's credit measures and the level of EBITDA growth necessary to service its debt obligations and maintain covenant compliance with its senior secured credit facility. AMERICAN INT'L: Names Peter Eastwood as Lexington Pres. & CEO ------------------------------------------------------------- The Associated Press reports that American International Group Inc. said on Tuesday that it has appointed Peter Eastwood as president and chief executive of unit Lexington Insurance Co., replacing Kevin Kelley. Mark A. Hofmann at Business Insurance News relates that Mr. Kelley has left AIG to join Bermuda-based Ironshore Inc. as CEO. According to The AP, Mr. Eastwood has worked at AIG since 1991, and has recently served as Lexington Insurance's executive vice president. Offers Retention Payouts to 38 Executives Hugh Son at Bloomberg News states that AIG offered cash awards of as much as $4 million to 38 executives in a retention program. According to the report, AIG CEO Edward Liddy said in a letter dated Dec. 5 to Elijah Cummings -- a Maryland Democrat on the House Committee on Oversight and Government Reform -- that the incentives range from $92,500 to $4 million for workers with salaries between $160,000 and $1 million. The report says that AIG had previously said that about 130 managers would get retention payouts while an executive would get about $3 million. Bloomberg quoted Mr. Cummings as saying, "I remain concerned, as do many American taxpayers, that these retention payments are simply bonuses by another name." According to Bloomberg, Mr. Cummings asked AIG to disclose how much each of the 168 recipients made in salary, bonuses, and other kinds of pay, and an estimate of what AIG would have spent on worker compensation this year if the company hadn't sought government financial aid, compared with what it expected to spend. AIG Owes $10 Billion to Financial Firms Citing people familiar with the matter, The Wall Street Journal relates that AIG owes around $10 billion to other financial services firms for speculative trades that have gone sour. According to WSJ, the sources said that the trades haven't been explicitly disclosed before. The trades aren't covered by terms of the $150 billion government rescue package, the report states, citing WSJ. An AIG spokesperson characterizes the trades as "credit protection instruments," saying that exposure has been fully disclosed and totals to less than $10 billion of AIG's $71.6 billion exposure to derivative contracts on collateralized debt obligations as of Sept. 30, 2008. About American International Group Based in New York, American International Group, Inc. (AIG) is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76 on Sept. 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw- Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On Sept. 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At Sept. 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since Sept. 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to Sept. 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. AXS-ONE INC: Sells $1.1MM Convertible Promissory Notes, Warrants ---------------------------------------------------------------- AXS-One Inc. entered into a Convertible Note and Warrant Purchase Agreement pursuant to which it sold and issued an aggregate of $1,100,000 of Series E 6% Secured Convertible Promissory Notes due May 29, 2009, together with warrants to purchase an aggregate of 3,300,000 shares of common stock of the company at an exercise price of $.01 per share. Net proceeds to the company after transaction expenses were approximately $1,050,000. The Series E notes and warrants were sold in a private placement under Rule 506 promulgated under the Securities Act of 1933, as amended, to eight accredited investors, including two members of the company's board of directors. The Series E Notes will mature on May 29, 2009, and principal and interest thereunder are convertible into the company's common stock at a fixed conversion rate of $1.00 per share, bear interest of 6% per annum and are secured by substantially all the assets of the company. The Series E Notes may be converted at the option of the Series E Note holder at any time prior to maturity. The Series E Notes rank pari passu in priority of payment and in all other respects with all of the Series D 6% Secured Convertible Promissory Notes sold and issued by the company for the aggregate amount of $2,100,000 on July 24, 2008, the Series C 6% Secured Convertible Promissory Notes sold and issued by the company for the aggregate amount of $3,750,000 on Nov. 16, 2007, and the Series A 6% Secured Convertible Promissory Notes and Series B 6% Secured Convertible Promissory Notes sold and issued by the company for the aggregate amount of $5,000,000 on May 29, 2007. The security interest of the Series E Note holders has been subordinated to the security interest of Sand Hill Finance, the company's current senior lender, pursuant to a Second Amended and Restated Subordination Agreement dated as of Oct. 30, 2008. Pursuant to the terms of a Third Security Agreement Amendment dated Oct. 30, 2008, among the company and the other secured parties set forth therein, the security interest of the Series E Notes ranks pari passu with the security interest granted in connection with the Prior Notes. In addition, pursuant to a Waiver and Termination of Participation Rights and Joinder to New Participation Rights Agreement the holders of the Prior Notes (i) have agreed to waive their Participation Rights held pursuant to Section 4.7 of the Convertible Note and Warrant Purchase Agreement, dated as of July 24, 2008; (ii) have agreed that upon execution of the Purchase Agreement, all of their Participation Rights held pursuant to the July 2008 Agreement terminated and are of no further force and effect; and (iii) have agreed, pursuant to Section 4.7 of the Purchase Agreement to join, become party to and be bound by Section 4.7 of the Purchase Agreement regarding rights of participation and the miscellaneous provisions of Article VI of the Purchase Agreement, effective upon execution of the Purchase Agreement. Each Series E Note holder also received a warrant to purchase three shares of AXS-One common stock for each $1 of the principal amount of Series E Notes purchased. Each Warrant has an exercise price of $0.01 per share and is exercisable at any time during the seven-year period following the closing. In addition, in connection with the financing under the Purchase Agreement, the company entered into an Investor Rights Agreement on Oct. 30, 2008, which sets forth the company's obligations relating to the registration of the shares of common stock underlying the Series E Notes and Warrants, including a requirement that the Company file a registration statement with respect to such common stock no later than May 29, 2009. In addition, in connection with the financing under the Purchase Agreement, each of the Prior Notes was amended pursuant to note amendments to provide that any event of default under the Series E Notes will constitute an event of default under the Prior Notes. The proceeds from this financing will be used to fund the company's operations. About AXS-One Inc. Headquartered in Rutherford, New Jersey, AXS-One (OTC BB: AXSO) -- http://www.axsone.com/-- provides "records compliance management" software solutions. The AXS-One Compliance Platform enables organizations to implement secure, scalable and enforceable policies that address records management for corporate governance, legal discovery and industry regulations such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and Gramm-Leach Bliley. AXS-One has offices worldwide including in the United States, Australia, Singapore, United Kingdom and South Africa. As reported in the Troubled Company Reporter on Nov. 5, 2008, AXS-One Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $4.8 million, total liabilities of $18.2 million and shareholders' deficit of $13.4 million. Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2008, Amper, Politziner, & Mattia, P.C., in Edison, N.J., expressed substantial doubt about AXS-One Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's losses from operations and working capital deficiency. The company generated losses from operations of $1,752,000 for the three months ended March 31, 2008. Additionally, the company was not in compliance with its quarterly license revenue covenant as of March 31, 2008. The bank waived such violation and changed the covenants for future periods from a minimum license revenue covenant and minimum three month rolling net loss covenant to (a) a minimum three month rolling EBITDA covenant, (b) minimum cash and accounts receivable availability covenant and (c) a minimum equity infusion covenant of $500,000. B MOSS CLOTHING: Organizational Meeting to Form Panel Today ----------------------------------------------------------- Roberta A. DeAngelis, acting United States Trustee for Region 3, will hold an organizational meeting on December 10, 2008, at 11:00 a.m. in the bankruptcy case of B. Moss Clothing Company Ltd. The meeting will be held at the United States Trustee's Office, One Newark Center, 14th Floor, Room 1401, in Newark, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Secaucus, New Jersey, B. Moss Clothing Company Ltd. -- http://www.bmossclothing.com/-- sells clothing apparels. The Debtor filed for chapter 11 bankruptcy protection December 2, 2008 (Bankr. D. N.J. Case No. 08-33980). The Hon. Novalyn L. Winfield presides over the case. Michael D. Sirota, Esq., and Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard PA, in Hackensack, New Jersey, serve as the Debtor's bankruptcy counsel. When it filed for bankruptcy, the Debtor estimated both assets and debts to be between $10 million and $50 million. BA HOLDINGS: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: BA Holdings LLC 616 Joe Willis Street Las Vegas, NV 89144 Bankruptcy Case No.: 08-24662 Chapter 11 Petition Date: December 8, 2008 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: David J. Winterton, Esq. david@davidwinterton.com David J. Winterton & Assoc., Ltd. 211 N. Buffalo Drive #A Las Vegas, NV 89145 Tel: (702) 363-0317 The Debtor's financial condition as of Dec. 8, 2008: Total Assets: $32,950,000 Total Debts: $12,889,038 The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Clark County Treasurer $31,031 500 S. Grand Central Pkwy. Las Vegas, NV 89155 The Catalyst Group $2,095 2654 West Horizon Bridge Pkwy. B5-223 Henderson, NV 89052 The petition was signed by member Bijan Anjomi. BANC OF AMERICA: S&P Junks Ratings on 3 Classes of Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on nine classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Trust 2006-3. The ratings on these classes remain on CreditWatch with negative implications, where they were placed on Oct. 13, 2008. Concurrently, S&P placed its ratings on four additional classes from this series on CreditWatch with negative implications. The downgrades and CreditWatch placements follow S&P's discussions with the special servicer, CWCapital Asset Management LLC, regarding recently received valuations for seven properties formerly tenanted by Boscov's. The valuations are not finalized, and are subject to change. They suggest, however, that the values of these properties have declined significantly since issuance. The properties serve as collateral for seven loans, which are delinquent between 60 and 90 days. The loans have an aggregate unpaid principal balance of $116.9 million (6.0% of the pool), and a total exposure, including advances and interest thereon, of $117.0 million. The loans, which are neither cross-collateralized nor cross-defaulted, were transferred to the special servicer on Aug. 7, 2008, after Boscov's Aug. 4, 2008, Chapter 11 bankruptcy filing. Significant appraisal adjustment amounts may be instituted for several or all the referenced loans after the appraisal valuations are finalized. The resulting interest shortfalls could interrupt liquidity for the subordinate and lower mezzanine classes, which would prompt more downgrades and/or CreditWatch placements. Standard & Poor's has asked CWCapital for copies of the appraisals when they are finalized. S&P will resolve its negative CreditWatch placements after S&P reviews the appraisals. The loans secured by Boscov's that are with the special servicer are: -- A $19.2 million loan (0.99%) is secured by the fee interest in a 263,700-sq.-ft. Boscov's in Monroeville, Pennsylvania. The property is attached to the Monroeville Mall and was built in 1969 and renovated in 2006. The third-party appraisal value for the Boscov's space at issuance was $28.8 million. -- A $18.9 million loan (0.97%) is secured by the fee interest in a 264,855-sq.-ft. Boscov's in Upper St. Clair, Pennsylvania. The property is attached to the South Hills Village Mall and was built in 1965. The third-party appraisal value for the Boscov's space at issuance was $29 million. -- A $17.0 million loan (0.88%) is secured by a leasehold interest in a 274,050-sq.-ft. Boscov's in Glen Burnie, Maryland. The property is attached to the Marley Station Mall and was built in 1987. The third-party appraisal value for the Boscov's space at issuance was $26.8 million. -- A $16.9 million loan (0.87%) is secured by the fee interest in a 219,996-sq.-ft. Boscov's in Nottingham, Maryland. The property is attached to the White Marsh Mall and was built in 1981. The third-party appraisal value for the Boscov's space at issuance was $25.6 million. -- A $16.8 million loan (0.86%) is secured by the fee interest in a 293,060-sq.-ft. Boscov's in Owings Mills, Maryland. The property is attached to the Owings Mills Mall and was built in 1986. The third-party appraisal value for the Boscov's space at issuance was $26.8 million. -- A $14.1 million loan (0.72%) is secured by a leasehold interest in a 181,212-sq.-ft. Boscov's in Langhorne, Pennsylvania. The property is attached to the Oxford Valley Mall and was built in 1973. The third-party appraisal value for the Boscov's space at issuance was $23.1 million. -- A $14.0 million loan (0.72%) is secured by a leasehold interest in a 182,541-sq.-ft. Boscov's in North Wales, Pennsylvania. The property is attached to the Montgomery Mall and was built in 1981. The third-party appraisal value for the Boscov's space at issuance was $22.6 million. Ratings Lowered and Remain on CreditWatch Banc of America Commercial Mortgage Trust 2006-3 Commercial mortgage pass-through certificates series 2006-3 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ F BBB/Watch Neg BBB+/Watch Neg 5.55% G BB+/Watch Neg BBB/Watch Neg 4.67% H BB-/Watch Neg BBB-/Watch Neg 3.53% J B+/Watch Neg BB+/Watch Neg 2.90% K B/Watch Neg BB/Watch Neg 2.52% L B-/Watch Neg BB-/Watch Neg 2.15% M CCC-/Watch Neg B+/Watch Neg 2.02% N CCC-/Watch Neg B/Watch Neg 1.64% O CCC-/Watch Neg B-/Watch Neg 1.39% Ratings Placed on CreditWatch Negative Banc of America Commercial Mortgage Trust 2006-3 Commercial mortgage pass-through certificates series 2006-3 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AA/Watch Neg AA 10.22% C AA-/Watch Neg AA- 9.21% D A/Watch Neg A 7.57% E A-/Watch Neg A- 6.69% BOSTON HARBOR: Moody's Lowers Rating on $15 Mil. Notes to 'Ba2' --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on these notes issued by Boston Harbor CLO 2004-1, Ltd.: Class Description: US$21,000,000 Class C Floating Rate Notes due 2016 -- Prior Rating: A2 -- Prior Rating Date: May 24, 2004 -- Current Rating: Baa2 Class Description: US$15,000,000 Class D Floating Rate Deferrable Notes due 2016 -- Prior Rating: Baa2, on review for possible downgrade -- Prior Rating Date: September 18, 2008 -- Current Rating: Ba2 On September 18, 2008, Moody's placed the rating of the Class D Notes on review for possible downgrade due to the loss of credit support from the Class D Coupon Swap provided by Lehman Brothers Special Financing Inc. Upon further review of the transaction, Moody's concluded that the loss of the Class D Coupon Swap support does not substantially impact the rating of the Class D Notes. Moody's noted that today's rating action on the Class C and Class D Notes is primarily a result of the ongoing failure of the Weighted Average Spread Test. BRB CERAMIC TILE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: BRB Ceramic Tile, Marble & Stone, Inc. 1603 Dorsett Dock Road Point Pleasant, NJ 08742 Case No.: 08-34368 Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Thomas Michael Walsh, Esq. Trenk, DiPasquale, et al. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: 973-243-8600 Fax: 973-243-8677 Email: twalsh@trenklawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb08-34368.pdf CAMDEN COUNTY: Fitch Affirms 'C' Rating on $35 Mil. Bonds --------------------------------------------------------- During the course of routine surveillance, Fitch Ratings affirms its 'C' rating on approximately $35.310 million in outstanding Camden County Pollution Control Financing Authority, New Jersey solid waste system revenue bonds, series 1991 A, B & D. The Rating Outlook is Stable. The 'C' rating primarily reflects the authority's stable management and dependence upon continued state subsidies for debt service payments. The authority has experienced a reduction in tonnage due to the overall economic downturn and additional competition from a private entity. Consistent state payments over the last nine fiscal years provided a reasonable level of assurance in the state's commitment to maintaining the authority's operations although state subsidy payments in 2007 and 2008 were reduced from prior years. Fitch will monitor future subsidy payments to the authority. The authority must request the funds from the state prior to each semi-annual debt service payment and while there is no legal requirement to provide payment or notice of non-payment of the state subsidy, the state has provided a subsidy since 2003. State support for all local solid waste systems in fiscal 2009 is budgeted at $30 million, representing a decline from fiscal 2008's budgeted amount of $35 million and a de minimis 0.1% of total state appropriations. Fitch issued an exposure draft on July 31, 2008 proposing a recalibration of tax-supported and water/sewer revenue bond ratings which, if adopted, may result in an upward revision of this rating (see Fitch research 'Exposure Draft: Reassessment of the Municipal Ratings Framework'.) At this time, Fitch is deferring its final determination on municipal recalibration. Fitch will continue to monitor market and credit conditions, and plans to revisit the recalibration in the first quarter of 2009. CANYON CAPITAL: Moody's Lowers Rating on $11.2 Mil. Notes to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service has downgraded the ratings on these notes issued by Canyon Capital CDO 2002-1 Ltd.: Class Description: US$11,100,000 Class B Senior Secured Notes due 2014 -- Prior Rating: Baa2 -- Prior Rating Date: 12/19/2002 -- Current Rating: Baa3 Class Description: US$11,200,000 Class C Senior Secured Notes due 2014 -- Prior Rating: Ba2 -- Prior Rating Date: 12/19/2002 -- Current Rating: Ba3 According to Moody's, these rating actions are a result of the decline in the average credit rating of the transaction's underlying collateral pool as well as the increase of securities rated Caa1 and below. In addition, Moody's also announced that it has confirmed its rating on these notes: Class Description: US$222,100,000 Class A Senior Secured Notes due 2014 -- Prior Rating: Aa3, on review with direction uncertain -- Prior Rating Date: 11/17/2008 -- Current Rating: Aa3 This rating action is based on the actual underlying rating of the Class A Notes. This underlying rating reflects the intrinsic credit quality of the Class A Notes in the absence of the guarantee from Ambac Assurance Corporation, whose insurance financial strength rating was downgraded from Aa3 to Baa1 on November 5, 2008. Pursuant to the press release distributed on November 10, 2008, for a structured finance security wrapped by a financial guarantor, the Moody's rating will be the higher of (i) the guarantor's financial strength rating and (ii) the current underlying rating. CG JCF: Moody's Holds 'B2' Corp. Family Rating; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service has affirmed the B2 corporate family rating of C.G. JCF Corp., the holding company for Crump Group, as well as the B2 ratings on the company's senior secured credit facilities. The rating outlook was changed to negative from stable based on significant shortfalls in the company's revenues and EBITDA versus the levels anticipated when Crump Group acquired the life and commercial insurance services and the retirement services operations of The BISYS Group, Inc. in August 2007. Moody's noted that Crump Group's underperformance has been driven mainly by the weak US economy, financial market turmoil and the soft pricing environment for property & casualty insurance. All three of Crump Group's business segments -- Life Insurance Services, Retirement Services and Commercial Insurance Services -- have been negatively impacted. Reduced EBITDA has led to weaker financial leverage and coverage metrics. According to Moody's calculations (which often differ from company or covenant calculations), Crump Group's adjusted debt-to-EBITDA ratio has increased from a range of 4x-5x at the time of the BISYS acquisition to a range of 6x-7x for the trailing 12 months through September 2008. In response to these challenges, Crump Group has taken steps to reduce expenses across all segments, including efforts to restructure and integrate the commercial insurance operations of Crump and BISYS. Further restructuring efforts are underway to streamline business processes in the year ahead. Also, during the first nine months of 2008, the company has received equity contributions totaling approximately $27 million from its private equity sponsor, J.C. Flowers & Co. LLC. The contributions have helped Crump Group to remain in compliance with bank covenants and to repay a portion of its term loan facility ahead of schedule. Moody's expects that JCF will continue to support the company as needed to service debt and comply with covenants. The rating agency noted that Crump Group continues to benefit from its solid presence in target markets and its healthy diversification across the three segments. Crump Group ranks among the largest US wholesale insurance brokers in terms of life and property & casualty premiums placed. The company is also among the largest independent providers of record keeping and administration services for institutional retirement plans, with particular expertise in serving small and mid-sized employers. Moody's cited these factors that could lead to a stable rating outlook for Crump Group: (i) adjusted (EBITDA -- capex) coverage of interest exceeding 2.0 times, (ii) adjusted free-cash-flow-to- debt ratio above 5.0 percent, and (iii) adjusted debt-to-EBITDA ratio below 5.5 times. Moody's cited these factors that could lead to a downgrade of the company's ratings: (i) adjusted (EBITDA -- capex) coverage of interest below 1.5 times, (ii) adjusted debt-to-EBITDA ratio remaining above 6.5 times, or (iii) a sustained period with no organic growth. Based in Roseland, New Jersey, Crump Group is a diversified insurance brokerage and retirement services firm. For the trailing 12 months through September 2008, the company generated total revenues of $439 million. Stockholder's equity was $355 million as of September 30, 2008. The firm is ultimately owned by JCF and Crump Group managers. The last rating action on Crump Group was the assignment of the B2 corporate family rating on July 19, 2007. CHARYS HOLDING: Bondholder Settlement Underpins Amended Plan ------------------------------------------------------------ Charys Holding Co. Inc. and debtor-affiliate Crochet & Borel Services, Inc. filed their first amended reorganization plan and accompanying disclosure statement with the U.S. Bankruptcy Court for the District of Delaware on December 8, 2008. The Plan, Bankruptcy Law360 says, includes settlements with bondholders and other individual creditors that will leave the company with enough assets to pay back the bulk of the company's other creditors. The proposed disclosure statement estimates that holders of Charys' 8.75% Senior Convertible Notes will recover roughly 32.5% of their claims and holders of general unsecured claims will recover between 0% and 15% of their claims. Charys filed for bankruptcy in February 2008 to implement certain pre-negotiated agreements in principle with its largest creditors that will reduce debt, rationalize its capital structure and provide a platform for future profitability. Prior to the bankruptcy filing, Charys was engaged in substantive discussions with its largest creditors and has reached an agreement in principle with certain holders -- or managers of accounts that hold -- roughly 62% of the approximately $201 million in principal amount of its 8.75% Convertible Notes. In a news statement on its bankruptcy filing, Charys said the agreement in principle formed the basis of a Chapter 11 plan under which, among other things, (a) in excess of $160 million of the Convertible Notes would be converted into a substantial majority of the common equity of the reorganized company, and (b) existing subordinated debt and existing equity interests in Charys each would be canceled, and the holders thereof would receive no distribution or consideration. Charys also reached agreements in principle to eliminate over $72 million in debt obligations arising out of the acquisition of its largest operating subsidiaries and to provide for the continued critical leadership and other services by key management within the organization. The Debtors filed their Joint Plan of Reorganization and Disclosure Statement on Aug. 3, 2008. Headquartered in Atlanta, Georgia, Charys Holding Co., Inc. -- http://www.charys.com/-- provides remediation & reconstruction and wireless communications & data infrastructure. The company and its Crochet & Borel Services, Inc. subsidiary filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. Del. Case No.08- 10289). Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Lydia T. Protopapas, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors as counsel. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as co-counsel. No Official Committee of Unsecured Creditors has been appointed in these cases to date. Chary's Holdings Co. Inc. reported total assets of $242.7 million and total liabilities of $378.6 million in its operating report for August 2008. CHESAPEAKE ENERGY: Will Cut Spending & Won't Sell New Shares ------------------------------------------------------------ Ben Casselman at The Wall Street Journal reports that Chesapeake Energy Corp. said it will cut spending in 2009 and won't sell new shares to raise cash. According to WSJ, Chesapeake Energy is trying to win back skeptical investors. Chesapeake Energy, says the report, stated that it wouldn't depend on asset sales to cover its drilling expenses. Chesapeake Energy has disclosed its financial and operational plans through 2010 in response to turbulent financial markets and increased uncertainty about the U.S. economy and natural gas and oil markets. Chesapeake Energy has further reduced its capital expenditure plans for 2009 and 2010 to achieve a cash neutral budget that does not depend on future asset sales. The company also plans to build up to $4 billion in additional cash resources in 2009 and 2010 through further asset monetizations. From the budget presented in its Nov. 3, 2008 outlook, the company has decreased its drilling capital expenditure budget for 2009 and 2010 by a combined $2.9 billion, or 31%, and has also reduced its leasehold and producing property acquisition budget for 2009 and 2010 by a combined $2.2 billion, or 78%. In total, since July 31, 2008, Chesapeake Energy has reduced its planned 2009 and 2010 drilling, leasehold and producing property acquisition budget by approximately $9.8 billion, or 58%, to approximately $7.2 billion. Since August 2008, the company has steadily reduced its drilling and leasing activities in anticipation of a worsening U.S. economy, lower natural gas and oil prices and limited capital markets. The company is now utilizing approximately 130 operated rigs, down from a peak of 158 operated rigs in August 2008, and plans to further reduce its operated rig count to 110 to 115 rigs early in the 2009 first quarter. Chesapeake Energy's costs in approximately 50% of these rigs will be fully or partially paid for by its third-party joint venture partners. Chesapeake Energy anticipates its drilling carries will save the company approximately $1.2 billion of capital expenditures in 2009 and approximately $1.1 billion in 2010. The company will continue to monitor oil and natural gas markets and economic conditions and will further adjust its drilling and leasing activity levels if needed. Chesapeake Energy is now anticipating production growth of approximately 5-10% in 2009 and 10-15% in 2010. The company anticipates the combination of its joint venture drilling carries, 10-20% lower oilfield service costs and continued operational excellence will lead to very attractive drillbit finding costs and financial returns in 2009 and 2010. In its 2009 drilling program, for example, Chesapeake Energy is targeting the addition of approximately 2.5 trillion cubic feet of natural gas equivalent (tcfe) of proved reserve additions from approximately $3.0 billion of net drilling capital expenditures, which would imply a production replacement rate of over 250% and a drillbit finding and development cost of approximately $1.20 per million cubic feet of natural gas equivalent (mcfe). Approximately 1.1 tcfe of the forecasted proved reserve additions are attributable to the company's interests in its three shale joint ventures and are based on approximately $500 million in drilling capital expenditures, net to Chesapeake Energy, at a drillbit finding and development cost of approximately $0.45 per mcfe. Chesapeake Energy is targeting to have proved reserves of 13.5 to 14.0 tcfe by year-end 2009, net of anticipated sales of proved reserves through volumetric production payments (VPPs). To create additional value from its proved and unproved properties and to further enhance its financial liquidity, Chesapeake plans to continue selectively monetizing mature assets and undeveloped leasehold. Chesapeake is in discussions to sell certain Chesapeake-operated producing assets in the Anadarko and Arkoma Basins in its fourth VPP transaction. In this transaction, Chesapeake plans to sell producing assets with proved reserves of approximately 100 bcfe and current net production of approximately 55 mmcfe per day for proceeds of approximately $450 million, or $4.50 per mcfe. Chesapeake will retain future drilling rights on the properties. For accounting purposes, the transaction will be treated as a sale and the company's proved reserves and production will be reduced accordingly. The company anticipates completing this transaction by year-end 2008. While Chesapeake Energy received multiple bids for the purchase of its assets in South Texas, it believes the monetization of all or a portion of the producing assets though a VPP will be a more attractive transaction alternative. As a result, Chesapeake Energy intends to market its fifth VPP transaction for a portion of its South Texas assets instead of selling the entire asset package. The company now anticipates selling producing assets in South Texas with proved reserves of approximately 80 bcfe and current net production of approximately 70 mmcfe per day for proceeds of approximately $450 million, or $5.60 per mcfe, and completing the transaction on these assets in the 2009 first quarter. Additionally, the company continues to have discussions with multiple parties for either a minority investment in its midstream operations or the purchase of portion of its existing midstream assets. Chesapeake Energy anticipates completing a midstream transaction, subject to reaching an agreement on acceptable terms, in the 2009 first quarter. Over the past month, Chesapeake Energy has also restructured its hedging position to provide further downside price protection. Chesapeake Energy currently has approximately 76% of its anticipated 2009 natural gas production hedged through swaps and collars at an average swap and floor price of $8.20 per thousand cubic feet (mcf), including only 12% of its anticipated production hedged through swaps with knockout provisions, much of which is concentrated in the 2009 fourth quarter. Given the company's ample current and projected financial liquidity and in response to an unexpectedly negative market reaction to the company's Nov. 26, 2008 filings with the Securities and Exchange Commission, Chesapeake Energy plans to terminate the Distribution Agency Agreements it has with three securities firms and will not issue any shares under the equity distribution program described in its prospectus supplement dated Nov. 26, 2008. Additionally, the company plans to amend its acquisition shelf registration statement filed on Form S-4 to reduce the number of common shares to be registered from 50 million to 25 million. Aubrey K. McClendon, Chesapeake's chief executive officer, commented, "We are pleased to announce our cash neutral budget for 2009 and 2010 that does not depend on future asset sales. In addition, we plan to build up to $4 billion in additional cash resources over the next two years by continuing to monetize mature assets and undeveloped leasehold. The company has ample financial liquidity and we will monitor market conditions and proactively manage our capital spending levels in order to remain within our cash resources." "Over the past year, we have captured significant value for our shareholders by monetizing a portion of our producing assets and undeveloped leasehold through VPPs and joint ventures. So far this year, we have received approximately $11.7 billion in cash and carried working interests through the sale of two VPPs, the creation of three joint ventures and the sale of our Arkoma Woodford Shale assets. Our cost basis in those assets was approximately $3.0 billion, creating a gain of approximately $8.7 billion. In addition, we still retain 80% of our Haynesville assets, 75% of our Fayetteville assets and 67.5% of our Marcellus assets with indicated combined values of more than $25 billion." Ms. McClendon states. Ms. McClendon said, "We believe our approach of selectively monetizing mature assets and undeveloped leasehold is an attractive supplement to the traditional E&P industry business model of simply drilling wells and collecting proceeds from production over future years and decades. While that traditional activity will remain the foundation of our business, we believe Chesapeake's asset monetization activities increase our financial flexibility and create immediate value for shareholders with less risk. In time, we believe investors will more fully appreciate this aspect of our business as we successfully complete additional monetization transactions." "The market response to our SEC fillings on Nov. 26, 2008 was obviously very negative. We underestimated how the market would assess the purpose, implication, timing and magnitude of our filings. Our intent was to create broad financial flexibility for an uncertain economic and commodity market environment over the next few quarters. In retrospect, we made a mistake and we are terminating the Distribution Agency Agreements that permitted us to sell shares under a prospectus supplement and we are amending our acquisition shelf registration statement filed on Form S-4 to reduce the number of common shares registered from 50 million to 25 million. While the economy, stock market and natural gas and oil prices have made the second half of 2008 a brutal year for industry investors, Chesapeake has generated strong financial and operating results this year. We can not predict how the U.S. economy will perform in 2009 and 2010, but Chesapeake will continue executing its innovative, value-creating strategies and will continue building shareholder value in the years ahead, just as we have for the past 15 years as a public company," Ms. McClendon said. About Chesapeake Energy Corporation Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation (NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas in the U.S. The company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Fort Worth Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. * * * As reported in the Troubled Company Reporter on Oct. 15, 2008, Standard & Poor's Ratings Services said that its ratings, including its 'BB' corporate credit rating, on Chesapeake Energy Corp. remain on CreditWatch with positive implications, where they were placed on July 9, 2008. In May 2002, S&P assigned its 'BB' rating to Chesapeake Energy Corp.'s proposed $800 million senior notes due 2018 and $500 million in contingent senior notes due 2038. The recovery rating is '4', indicating our expectation of average (30%-50%) recovery in the event of a payment default. As disclosed in the Troubled Company Reporter on May 22, 2008, Moody's Investors Service assigned Ba3 (LGD 4; 62%) ratings to Chesapeake Energy's pending $800 million offering of ten year senior unsecured notes and $1 billion or more offering of thirty- year contingent convertible senior notes. Moody's also moved the rating outlook up to stable from negative. Moody's also affirmed CHK's Ba2 corporate family, Baa3 hedge facility, Ba2 probability of default, SGL-3 liquidity ratings, and existing Ba3 note ratings but changed the LGD statistics from LGD 4; 61% to LGD 4; 62%. As reported in the Troubled Company Reporter on Oct. 27, 2008, Fitch Ratings affirmed Chesapeake Energy Corporation's issuer default rating at 'BB' following the company's recently announced updated financial position and plans to cut capital expenditures. The rating outlook remains negative. CHRYSLER LLC: Congressman Opposes Bailout Due to Cerberus Ties -------------------------------------------------------------- Greg Hitt at The Wall Street Journal reports that Congressman Steve Kagen has opposed a bailout for Chrysler LLC, arguing that a take over by parent company Cerberus Capital Management LP of NewPage Corp. led to closures of two factories in Northeast Wisconsin, eliminating 750 jobs, Alex P. Kellogg at WSJ states. WSJ relates that Chrysler CEO Robert Nardelli was also questioned during congressional hearings last week on why he doesn't seek help from Cerberus Capital. Mr. Nardelli, according to the report, said that he already did but was turned down. Mr. Kagen urged Cerberus Capital to put some of its "billions of dollars in assets" on the table before Congress offers Chrysler any kind of bailout, the report says. According to WSJ, Mr. Kagen suggested that Cerberus Capital could sell the mills it closed in Wisconsin and use that money to boost Chrysler. "If Cerberus truly believes Chrysler is a good investment, then Cerberus should put up some of their own money. The question is... why are you coming to taxpayers if it's not such a good deal?" Mr. Kagen supports a bailout for General Motors Corp. and Ford Motor Co., WSJ reports. GM Seeks Workers' Support for CEO John D. Stoll and Sharon Terlep posted in the WSJ blog that GM officials sent salaried engineers an e-mail on Tuesday asking them to sign on to a letter asking that CEO Rick Wagoner and other managers stay at the company. Mr. Stoll and Ms. Terlep say that the letter would be sent to Sen. Christopher J. Dodd and the Senate Banking Finance Committee. According to the blog, Sen. Dodd's committee wqould vote this week on a $15 billion bailout package for GM, Ford Motor Co. and Chrysler LLC. The blog says that Sen. Dodd suggested on Sunday that Mr. Wagoner step aside. Mr. Stoll and Ms. Terlep quoted GM spokesperson Tom Wilkinson as saying, "There is generally a lot of support for Rick among employees at GM." The lobbying effort wasn't initiated by Mr. Wagoner or other ranking executives, the blog states, citing Mr. Wilkinson. Former Chrysler CEO Disapproves of CEO Ousters Mike Spector posted on the WSJ blog that former Chrysler chairperson and chief executive Lee Iacocca doesn't agree with calls from the Congress that CEOs of the automakers seeking government bailout be laid off. According to the blog, Mr. Iacocca had persuaded the Congress to extend Chrysler about $1.5 billion in loans in 1979, and those loans had been paid back, with interest. According to Mr. Spector, Mr. Iacocca was also president of Ford Motor. Mr. Iacocca said in a statement, "Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit auto makers. "You don't change coaches in the middle of the game, especially when things are so volatile . . . . The industry has been brutalized by a totally unpredictable series of events over which it had little control and that is beating it unmercifully into the ground. The companies may not be perfect but the guys who are running them now are the only ones with the experience and the in-depth knowledge and understanding of how the car business really works. They're by far the best shot we have for success. I say give them their marching orders and then let them march. They're the right people to get the job done." Corey Boles posted on the WSJ blog that a senior congressional aide said on Monday that the CEOs of Ford Motor, Chrysler, and GM wouldn't lose their jobs as part of a government bailout. A proposal, says Mr. Boles, is being considered that would require the firms to hire separate chairpersons to oversee management. Bailout Has Lukewarm Support From Public Easha Anand at WSJ reports that the lukewarm support that GM, Ford Motor, and Chrysler's government loan request gets from the public reflects the situation in the Congress. According to WSJ, the requested government bailout has backers in the Congress, but few "champions." A new Wall Street Journal/NBC News poll, conducted from Dec. 5 to Dec. 8 and which had a margin of error of plus or minus three percentage points, indicates that about 46% of U.S. citizens approve of giving aid to the three auto companies, while about 42% disapprove. "It would be nice to bail them out, but you have to take into consideration what auto workers and executives have been paid for years. The country seems to be spending money they do not have, we're going further and further into debt," WSJ quoted Philip Hall, a 56-year-old mason who drives a GMC truck, as saying. Josh Mitchell at WSJ relates that while the White House and top Democrats have reached an agreement on the principles of a $15 billion short-term aid package to the automakers, Republicans are torn between the need to bail out those companies and opposition based on fiscal principles. According to the report, rank-and- file Democrats said they are in favor of a bailout, while some conservative Republicans are against any package that didn't include the firms' bankruptcy filing. WSJ reports that Senate Majority Leader Harry Reid said he hoped for a vote by Wednesday on the legislative proposals for the bailout. Among the conditions in the bailout is that the government would acquire a stake in the companies. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. CHRYSLER LLC: Stops Cooperation Talks with Chery Automotive ----------------------------------------------------------- Chrysler LLC said in a statement on Monday that it has ended cooperation talks with China's Chery Automotive Co. due to the global economic slowdown. Alex P. Kellogg and Norihiko Shirouzu at The Wall Street Journal report that Chrysler started the discussions with Chery Automotive in July 2007, seeking to have Chery Automotive make small cars that it could sell in China and in the U.S. WSJ quoted Chrysler as saying, "Many of the original premises the two companies had when entering into the agreement no longer apply." The termination of talks with Chery won't affect any of the more than two dozen other alliances and partnerships that Chrysler is engaged in, WSJ states, citing Chrysler spokesperson David Elshoff. "Our partnerships are not interdependent," he added. According to WSJ, Chrysler is collaborating with Nissan Motor Co. on some projects and is supposed to introduce a Nissan-made small car in South America next year, as well as a different Nissan- produced small car in the U.S. WSJ relates that Chrysler will make pick up trucks that Nissan will sell in the U.S. in 2011. The report says that Chrysler is producing minivans that Volkswagen AG is selling under its own brand in the U.S. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. COOPER-STANDARD: Ongoing Financial Stress Cues Moody's Junk Rating ------------------------------------------------------------------ Moody's Investors Service lowered the Corporate Family Rating and Probability of Default of Cooper-Standard Automotive Inc., to Caa1 from B2, the ratings of the existing senior secured bank credit facilities to B1 from Ba2, the rating of the guaranteed senior unsecured notes to Caa1 from B3, and the rating of the guaranteed senior subordinated notes to Caa3 from Caa1. In a related action the Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. The rating outlook remains negative. The lowering of Cooper Standard's Corporate Family Rating to Caa1 incorporates the ongoing financial stress among automotive manufacturers and the likelihood that dramatic production declines by the Detroit-3 for the first quarter of 2009 will further weaken the company's operating performance. Significant production declines experienced by European automobile manufactures in the second half of 2008 are expected to continue into 2009 and could place further pressure on Cooper-Standard's results. The company has utilized various restructuring initiatives over the past few years to adapt its operations to the more challenging automotive environment, and this has helped to support cash flow generation. Lower production levels and reduced commodity prices for raw materials could also help to moderate the seasonal cash flow requirements typical of the first calendar quarter of most automotive suppliers. However, the severe global automotive production declines over the near term are expected to leave Cooper-Standard's credit metrics at levels that are no longer consistent with the B rating category. The negative outlook reflects the potential for Cooper-Standard's financial performance to be further weakened during 2009, if U.S. and European auto makers need to take additional production rate cuts, as well as the risk that the significant financial restructuring or bankruptcy of one or more of the Detroit-3 automakers could cause more immediate operating and cash flow disruptions. Future events that could cause Cooper-Standard's ratings to be downgraded include further erosion of operating performance that leads to operating losses or negative cash flow generation, evidence of further erosion of the company's liquidity profile, or evidence of any potential for covenant violations under the bank credit facility. The ratings could be adversely affected if the financial restructuring or bankruptcy of one or more automakers were to create potential for further disruptions in the company's business. Future events that could stabilize Cooper-Standard's outlook would first require the stabilization or improvement in underlying industry conditions. This would need to be accompanied by operational improvements at Cooper-Standard that result in margins being sustained above 5%, EBIT/interest coverage above 1x, and free cash flow generation that facilitates debt reduction. A stable outlook would also require improvement in the company's liquidity profile, including increased unused availability under the company's revolving credit facility. For the LTM period ending September 30, 2008, Cooper-Standard's EBIT/interest expense was approximately 1.2x (calculated using Moody's standard adjustments), total Debt/EBITDA was approximately 4.5x, and free cash flow was $59 million. As of September 30, 2008 the company had $34 million of cash on its balance sheet and an additional $84 million of borrowing capacity under its revolving credit facility, net of letters of credit. In October 2008 the Company borrowed $64 million under its revolving credit facility to protect against possible short-term disruptions in the financial markets. The SGL-4 Speculative Grade Liquidity rating reflects Moody's expectation that the company will maintain weak liquidity over the next 12 months. While Cooper-Standard has historically been a free cash flow generator, depressed production levels in North America and Europe will pressure this ability over the intermediate term. As a result, Moody's anticipates that Cooper- Standard will become increasingly reliant on external financing sources to preserve its liquidity. The $125 million revolving credit facility has about $89 million outstanding after the company drew down $64 million in October 2008 as a precaution against disruptions in the financial markets, and after considering LC requirements there is limited additional availability. Financial covenant cushions are adequate; a senior secured debt to consolidated EBITDA test is the only financial covenant under the bank credit facilities and at September 30, 2008, the test level was 1.9 to 1.0 compared to a required maximum of 3.25 to 1.0. This test steps down to 3.0 to 1.0 at December 31, 2008. Cushion under the financial covenant is expected to diminish over the near term as lower global OEM production pressures the company's earnings, but the company should be able to operate within the required covenant levels. There are limited avenues of alternate liquidity as essentially all the company's assets are pledged under the credit facilities. Ratings Lowered: -- Corporate Family Rating, to Caa1 from B2 -- Probability of Default Rating, to Caa1 from B2 -- Senior secured credit agreement for borrowers Cooper-Standard and Cooper-Standard Canada, to B1 (LGD2, 20%) from Ba2 (LGD2, 20%), consisting of: * guaranteed senior secured revolving credit (US$ denominated) at Cooper-Standard, due December 2010; * guaranteed senior secured revolving credit (US$ or C$ denominated) at Cooper-Standard Canada, due December 2010; * guaranteed senior secured term loan A (C$ denominated) at Cooper-Standard Canada, due December 2010; * guaranteed senior secured term loan B (US$ denominated) at Cooper-Standard Canada, maturing December 2011; * guaranteed senior secured term loan C (US$ denominated) at Cooper-Standard, maturing December 2011; * guaranteed senior secured term loan D (US$ and Euro denominated) at Cooper-Standard, maturing December 2011; * guaranteed senior secured add-on US$90MM equivalent add-on term loan E -- Guaranteed senior unsecured notes maturing December 2012, to Caa1 (LGD4, 52%) from B3 (LGD4 58%); -- Guaranteed senior subordinated unsecured notes maturing December 2014, to Caa3 (LGD6 91%) from Caa1 (LGD5 85%) -- Speculative Grade Liquidity Rating to SGL-4 from SGL-3 The last rating action on Cooper-Standard was to change the company's Outlook to negative on October 28, 2008. Cooper-Standard Automotive, Inc., headquartered in Novi, Michigan, is a portfolio company of The Cypress Group and Goldman Sachs Capital Partners. It is a leading global manufacturer of fluid handling systems (approximately 53% of revenues); and body sealing, and noise, vibration, and harshness control systems (approximately 47%) for automotive vehicles. The company sells about 80% of its products directly to automotive original equipment manufacturers. Annual revenues in 2007 were approximately $2.5 billion. COPIA: Main Creditor Asks Court to Dump Chapter 11 Petition ----------------------------------------------------------- The Associated Press reports that ACA Financial Guaranty Corporation has asked the U.S. Bankruptcy Court for the Northern District of California to deny Copia's petition for Chapter 11 bankruptcy protection. ACA Financial, Copia's main creditor and which insures Copia's $78 million bond debt, claimed that Copia's bankruptcy is an attempt to relieve its debt at the creditors' expense so it can become a for-profit enterprise, The AP states. According to The AP, Copia is a nonprofit food and wine museum also known as The American Center for Wine, Food and the Arts. It filed for Chapter 11 protection saying that it needs to restructure to be profitable, The AP relates. Copia, according to the report, blamed the credit crisis for its decision to close in November. The AP says that Copia hopes to sell its real estate and lease the facilities for its programs. ACA Financial is trying to avoid paying out $40 million or more it may be liable for, the report states, citing Copia's Interim CEO Garry McGuire. Copia is a culinary museum and cultural center in Napa, California. It includes a grand building on the Napa River, organic gardens, outdoor kitchens, wine tasting rooms, exhibition galleries and a restaurant called Julia's Kitchen. As reported in the Troubled Company Reporter on Dec. 3, 2008, Copia filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California on Dec. 1, 2008. COPPER RIVER: Will Liquidate & Return Funds to Investors -------------------------------------------------------- Copper River Management will liquidate and return funds to its investors, Carol S. Remond at The Wall Street Journal reports, citing people familiar with the matter. WSJ relates that Copper River initially considered closing down some offices and continuing on as a smaller entity. According to the report, Copper River lost about 50% of its value in September and was down another 5% in October. The report says that Copper River was affected by market downturn and restrictions that the government imposed on short selling in September. Copper River, says WSJ, wasn't able to cash out derivative contracts, in which Lehman Brothers was the counterparty before the company filed for Chapter 11 protection. WSJ states that Copper River's money became tied up in Lehman Brothers' bankruptcy proceedings. According to WSJ, prime brokers started raising margin requirements, which then forced funds including Copper River to put up more collateral or liquidate trading positions. Copper River Management, LP -- http://www.copperrivermanagement.com/-- is a $1 billion fund that primarily bets on the dropping value of stock it deemed overpriced. The fund was founded by David Rocker and was run by Marc Cohodes. CORDOVA FUNDING: S&P's Outlook on $225MM Bonds BB Rating Is Stable ------------------------------------------------------------------ Standard and Poor's Ratings Services said that it assigned its '1' recovery rating to Cordova Funding Corp.'s $225 million ($187.8 million outstanding as of June 30, 2008) senior secured bonds due 2019; the rating on the bonds is 'BB'. The outlook is stable. "The '1' recovery rating for the project indicates S&P's expectation of very high recovery (90% to 100%) of principal in the event of a default," said S&P's credit analyst Terrence Marshall. "Our simulated default scenario assumes a downturn in the operational performance of the project coupled with increased capital and operations and maintenance expenditures." CFC, which is wholly owned by MidAmerican Energy Holdings Co. (MEHC; A-/Watch Neg), is the funding vehicle that issued the rated debt and subsequently loaned the proceeds to its affiliate, Cordova Energy Company LLC. Cordova used the proceeds in June 2001 to complete construction of its 537 megawatt natural gas- fired, combined-cycle power plant in Rock Island County, Illinois. The project sells its entire capacity and energy to Constellation Energy Commodities Group through a tolling agreement that expires in 2019. Without the tolling agreement, Cordova would be forced to operate in the merchant market and, given current market conditions, would likely not be able to service its debt in a timely manner. Cordova has a tolling power purchase agreement with Constellation Energy Commodities Group. Constellation's obligations are guaranteed by Constellation Energy Group Inc (BBB/Watch Developing/A-2). The PPA agreement expires Dec. 31, 2019, just beyond the debt maturity. Under the PPA agreement, Constellation purchases and schedules Cordova's energy output, and Cordova receives guaranteed capacity payments along with energy payments when the plant is dispatched. While the agreement with the offtaker allows for margin sharing, the market economics have not supported sufficient margins for Cordova to receive any revenues under the plan. Under zero dispatch, the guaranteed payments cover 90% to 100% of the project's debt service and fixed costs, as long as the project qualifies for 100% of the tolling payments. The project uses commercially proven technology and has operated well enough to receive 100% of the payments during the past four years. CORPORATE BACKED: S&P Cuts Ratings on Classes A-1 & A-2 to 'CC' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-1 and A-2 certificates from Corporate Backed Trust Certificates Series 2001-8 Trust to 'CC' from 'CCC+'. The rating actions follow the Dec. 4, 2008, lowering of the long- term corporate credit and other ratings on General Motors Corp. (GM; CC/Negative/NR). Corporate Backed Trust Certificates Series 2001-8 Trust is a pass- through transaction, and the ratings on the certificates are based solely on the rating assigned to the underlying securities ('CC'), the 8.10% debentures due June 15, 2024, issued by GM. The corporate rating actions on GM have no immediate rating impact on the GM-related asset-backed securities supported by collateral pools of consumer auto loans, auto leases, or auto wholesale loans. DBSI INC: Gets Go Signal to Continue Using Lenders' Collateral -------------------------------------------------------------- Bankruptcy Law360 reports that the Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware issued a second supplemental order on December 8, 2008, authorizing the Debtor to continue its limited use of collateral securing its obligations to its lenders. Bankruptcy Law360 says lenders have objected to the Debtor's request, arguing that the Debtor's use of cash collateral would diminish the value of their loans. According to Bankruptcy Law360, the Court found the continued use of cash collateral "necessary and essential" for the Debtor. As previously reported by Troubled Company Reporter on November 20, 2008, the Court authorized DBSI Inc. and its debtor-affiliates to use, on an interim basis, cash collateral securing repayment of secured loan to lenders in accordance with a budget. The Debtors have said they have an urgent need to use cash collateral to permit the preservation and orderly disposition of the tenant-in- common (TIC) properties that compromise the Property Management Business wherein their lenders have a first priority perfected security interest. Absent access to those funds will disable the Debtors to pay expenses associated with the management of the properties including payroll and general maintenance costs, according to the Debtors. As adequate protection, the Debtors have proposed to grant the lenders a replacement lien on all postpetition collateral including all cash and cash equivalents generated by the Debtors relating to the properties. A full-text copy of the Debtors' cash collateral budget is available for free at http://ResearchArchives.com/t/s?34ef The Court will convene a hearing later today, December 10, to consider the request by a group of investors who purchased interests in certain projects of DBSI for the appointment of an examiner in DBSI's Chapter 11 cases. Bloomberg's Bill Rochelle said the investors pointed to a class-action suit filed before bankruptcy making allegations that the company committed bank and tax fraud while intentionally concealing the value of properties, failing to maintain required cash reserves, and inducing people to invest without performing due diligence. Bloomberg said three different groups of investors filed identical motions on Nov. 20 seeking to conduct Bankruptcy Rule 2004 examinations of the company and its CEO and President Douglas Swenson. The investors want information related to motions DBSI is making to reject contracts regarding the projects where they have investments. 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. Roberta A. DeAngelis, the United States Trustee for Region 3, has appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the case. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. ECLIPSE AVIATION: U.S. Trustee Appoints 7-Member Creditors Panel ---------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the bankruptcy case of Eclipse Aviation Corporation: 1. Hampson Aerospace, Inc. 2. Gopal Gadodia 3. Joerg Koepping 4. Passport 500 LLC 5. Pratt & Whitney Canada Corp. 6. Precision Aerostructures 7. Strategic Aeronautics Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' 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. Albuquerque, New Mexico-based Eclipse Aviation Corporation -- http://www.eclipseaviation.com/-- makes six-passenger planes powered by two Pratt & Whitney turbofan engines. The company filed for Chapter 11 protection on Nov. 25, 2008 (Bankr. D. Del. Case No. 08-13031). The company listed assets of $100 million to $500 million and debts of more than $1 billion. EMPIRE LAND: Court Converts Bankruptcy Cases to Chapter 7 --------------------------------------------------------- The United States Bankruptcy Court for the Central District of California has converted the chapter 11 cases of Empire Land LLC and seven debtor-affiliates into proceedings under chapter 7 of the Bankruptcy Code at the behest of the official committee of unsecured creditors. Bankruptcy Law360 says Judge Meredith A. Jury appointed Richard K. Diamond as chapter 7 trustee. Bankruptcy Law360 notes that the committee questioned a $17.5 million transfer made to a nondebtor affiliate and expressed doubts about Empire's ability to maintain operations. As reported by the Troubled Company Reporter on November 12, 2008, the Committee wants the cases converted to Chapter 7 instead of having a Chapter 11 trustee take over the Debtors' estates on grounds that: -- a trustee likely will need to consider substantive consolidation of the other 92 non-debtor entities, which cannot effectively addressed in a liquidating Chapter 11 plan; -- Chapter 11 plan process would increase expenses; -- value of the Debtors' estate could not be adequately disclosed in a disclosure statement; and -- trustee expenses are superior in priority. The Committee told the Court administrative fees and operating losses are mounting, and exclusive periods have expired and no plan as been filed to date. Although there is a draft of the plan, the Debtors have not negotiated any of the terms with the Committee. The plan provides, among other things, the Debtors' unit, Empire Partners Inc., will receive a full release of all claims in turn for $25,000 and any liquidating trustee be forbidden from using any of the Debtors' assets to pursue claims against the Debtors' principals. About Empire Land Headquartered in Ontario, California, Empire Land, LLC, dba Empire Land Development, LLC -- http://www.epinc.com/-- develops communities and other land construction projects located in California and Arizona. As of March 31, 2008, the company owned at least 11,800 lost in 14 separate land projects. The company and seven of its affiliates filed for Chapter 11 protection on April 25, 2008 (Bankr. C.D. Calif. Lead Case No.08-14592). James Stang, Esq., at Pachulski Stang Ziehl & Jones, LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 16 has appointed three creditors to serve on an Official Committee of Unsecured Creditors in these cases. The Committee selected Landau & Berger LLP as its general bankruptcy counsel. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. ENRON CORP: Inks $44MM Settlement In Commercial Paper Litigation ---------------------------------------------------------------- Bankrutpcy Law360 reports that Enron Creditors Recovery Corp. has asked the U.S. Bankruptcy Court for the Southern District of New York to approve settlements totaling more than $44 million with around 70 entities linked to commercial paper transactions that Enron Corp. engaged in before its 2001 collapse. As part of its mission to liquidate remaining operations and distribute assets to its creditors, Enron Creditors Recovery Corp. commenced a lawsuit against approximately 180 defendants, including Goldman, Sachs & Co., Lehman Commercial Paper, Inc., JPMorgan Securities and MassMutual in November 2003. The suit seeks to recover commercial paper debt prepayments, which were made in the months just before Enron filed for bankruptcy. Enron Creditors Recovery Corp. asserts that the payments were preferential or fraudulent, and is seeking recovery of the funds to ensure these institutions do not retain money that should be distributed to Enron's innocent creditors instead. Enron Creditors Recovery Corp. said on its Web site that cash settlements have been reached totaling more than $172 million, including a settlement of nearly $150 million with Lehman and its customers. Not included in this total is a settlement made with JPMorgan Chase as part of its MegaClaims settlement. Enron Creditors Recovery Corp. also noted on its Web site that roughly $418 million in face value transfers are outstanding against defendants, including MassMutual, Goldman, Sachs & Co. and certain of its customers, and certain JPMorgan Chase customers. Enron Creditors Recovery Corp. continues to pursue these claims. In July 2007, CFO.com said Enron Creditors Recovery Corp. settled claims related to the commercial paper litigation for $149 million. The settlement is with 72 of Enron's lenders under the commercial-paper program. CFO.com said the lenders that signed the settlement included Lehman Commercial Paper Inc., Northern Trust Corp., Allstate Life Insurance and Prudential Insurance Co. According to the Troubled Company Reporter on October 6, 2008, Enron Creditors Recovery Corp., fka Enron Corp., disclosed its 24th distribution to creditors of Enron and its affiliated Debtor companies. The distribution to holders of allowed general unsecured claims and allowed guaranty claims totals approximately $828,900,000, consisting of cash of approximately $740,500,000 and Portland General Electric Company Common Stock equivalents of approximately $54,400,000, plus interest, dividends and gains of $34,000,000. Since November 2004, Enron Creditors Recovery Corp. has returned approximately $21,427,900,000 to creditors in twice-yearly distributions, in April and October, as well as in "catch-up" distributions paid on an interim basis every two months, and certain special distributions. Once all pending litigation is settled and various administrative tasks are completed to wind down the estate, Enron will make an additional final distribution to creditors, likely in 2009, of any remaining assets. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D. N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP, represented the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represented the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. EPIX PHARMACEUTICALS: To Appeal Stock Delisting Action of Nasdaq ---------------------------------------------------------------- EPIX Pharmaceuticals Inc. received a notice from the Listing Qualifications Staff of The Nasdaq Stock Market LLC stating that the company has not regained compliance with Nasdaq Marketplace Rule 4450(b)(1)(A), which requires a listed company to maintain a minimum $50 million market capitalization for continued listing on The Nasdaq Global Market. This notice follows prior correspondence from the Staff regarding the company's market capitalization. The Staff has indicated that the company's common stock is subject to delisting unless the company requests a hearing before a Nasdaq Listing Qualifications Panel. The company plans to request a hearing before a Panel. As a result, the company's securities will remain listed on The Nasdaq Stock Market at least until the Panel renders a decision after the hearing. There can be no assurance that the Panel will grant the company's request for continued listing. Headquartered in Lexington, Massachusetts, EPIX Pharmaceuticals Inc. (NasdaqGM: EPIX) -- http://www.epixmed.com/-- is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen, Cystic Fibrosis Foundation Therapeutics, and Bayer Schering Pharma AG, Germany. EPIX Pharmaceuticals Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $52.8 million and total liabilities of $137.6 million, resulting in a stockholders' deficit of $84.8 million. EPIX PHARMACEUTICALS: Sept. 30 Balance Sheet Upside-Down by $84MM ----------------------------------------------------------------- EPIX Pharmaceuticals Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $52.8 million and total liabilities of $137.6 million, resulting in a stockholders' deficit of $84.8 million. EPIX's net loss for the third quarter ended Sept. 30, 2008, was $10.2 million compared with $12.9 million for the quarter ended Sept. 30, 2007. Total revenues for the third quarter ended Sept. 30, 2008, were $5.1 million, compared with $5.3 million for the third quarter of 2007. Revenues during the 2008 and 2007 third quarter periods relate to reimbursed costs and milestones earned associated with the company's GSK and CFFT collaborations. For nine months ended Sept. 30, 2008, the company incurred a net loss of $26.2 million compared with a net loss of $50.4 million. As of Sept. 30, 2008, EPIX had cash, cash equivalents and short- term investments of $34.5 million compared with $61.1 million on Dec. 31, 2007. EPIX has $100.0 million of convertible debt outstanding. Approximately 41.7 million shares of common stock were outstanding at Sept. 30, 2008. On Oct. 23, 2008, EPIX disclosed that it had reduced its cost structure by decreasing its workforce by approximately 23% and narrowing the current focus of its research and development efforts. The company is devoting its resources to its lead clinical programs, PRX-03140 being developed for the treatment of Alzheimer's disease and PRX-08066 being developed for the treatment of patients with chronic obstructive pulmonary disease and moderate-to-severe pulmonary hypertension, well as its partnered preclinical programs with GSK and CFFT. EPIX estimates that this reduction in force will result in a decrease to its annual salary and benefits costs of approximately $3.0 million. In addition, the company expects to realize savings in future research and development spending associated with the narrowing of its research and development focus. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?35e8 About EPIX Pharmaceuticals Headquartered in Lexington, Massachusetts, EPIX Pharmaceuticals Inc. (NasdaqGM: EPIX) -- http://www.epixmed.com/-- is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen, Cystic Fibrosis Foundation Therapeutics, and Bayer Schering Pharma AG, Germany. EQUITY MEDIA: Files for Chapter 11 Bankruptcy on Debt Default ------------------------------------------------------------- Equity Media Holdings Corp. made a voluntary filing under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Arkansas after it defaulted on a $41.5 million loan, Erik Larson of Bloomberg News reports. Patrick G. Doran, chief financial officer of the company, said in a regulatory filing with the Securities and Exchange Commission on Nov. 24, 2008, that the company defaulted in its debt obligations under a restated credit agreement dated as of Feb. 13, 2008, as amended, among the company and lenders -- Silver Point Finance LLC and Wells Fargo Foothill Inc. as collateral agent -- and its lenders terminated the loan documents. All other obligations under the loan documents are due and payable, Mr. Doran related. Silver Point filed on Dec. 2, 2008, an action against the company seeking an appointment of a receiver to take possession of the company for purposes of preserving the value of its assets, Mr. Doran said. The company is now evaluating its potential responses to this action, he continued. According to Bloomberg, affiliate Univision Communications Inc., in New York, who owns 8% of the company's equity, listed more than $100 million in assets and more than $50 million in debts. The company's condensed consolidated balance sheets at Sept. 30, 2008, showed $103.1 million in total assets and $167.5 in total debts. Equity Media lost about $52.9 million for the three quarters ended Sept. 30, 2008, and about $31.1 million during the same period in 2007. A full-text copy of the company's Form 10-Q for the quarterly period ending Sept. 30, 2008, is available for free at: http://ResearchArchives.com/t/s?35e9 Liquidation Possible Silver Point's Dec. 2 action against Equity Media and certain of its subsidiaries seeks, among other relief, an appointment of a receiver to take possession of Equity Media for purposes of preserving the value of the company's assets. According to ArkansasBusiness.com, Silver Point sought repayment on its $41.5 million credit facility. Equity Media said, "If the company is unable to obtain additional funds immediately or if the funds cannot be obtained on favorable terms, management may be required to liquidate substantially all available assets, restructure the company, cease all or a part of operations, seek protection under U.S. bankruptcy laws and regulations, or undertake other actions." Silver Point said in court documents that Equity Media repeatedly defaulted on its credit agreement and that Silver Point attempted to restructure the agreement many times. According to the documents, Silver Point claimed that Equity Media's management frequently acted in their own best interest. "Throughout the lending relationship between the Borrowers and Lenders, the Borrowers have repeatedly acted to impair the value of the Collateral and destroy the security of the Lenders and have elevated certain members of the [board of director's] personal interests over the obligations the Borrowers owe to the Lenders," Silver Point said in its complaint. Citing Silver Point, ArkansasBusiness.com relates that Equity Media's Chairperson Richard Rochon allegedly informed Silver Point that he wouldn't work with the lender to facilitate an orderly bankruptcy of Equity Media to sell assets. Mr. Rochon said that the board members would resign and let the stations stop operating or walk away from the company, according to court documents. About Equity Media Equity Media Holdings Corp. fka Equity Broadcasting Corporation -- http://www.emdaholdings.com/-- operates 121 television stations including 23 full power, 38 Class A and 60 low power stations. The company was founded in 1998. EQUITY MEDIA HOLDINGS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Equity Media Holdings Corporation dba Coconut Palm Acquisition Corp. dba Equity Broadcasting Corp. One Shackleford Drive, Suite 400 Little Rock, AR 72211 Bankruptcy Case No.: 08-17646 Chapter 11 Petition Date: December 8, 2008 Court: Eastern District of Arkansas (Little Rock) Judge: James G. Mixon Debtor's Counsel: James F. Dowden, Esq. jfdowden@swbell.net James F. Dowden, P.A. 212 Center Street, 10th Floor Little Rock, AR 72201 Tel: (501) 324-4700 Fax: (501) 374-5463 Estimated Assets: $100,000,000 to $500,000,000 Estimated Debts: $50,000,000 to $100,000,000 The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Glenn Charlesworth, vice president and chief accounting officer of the company. EXTENDED STAY: Lenders Might Take Over May Firm ----------------------------------------------- Jeffrey McCracken and Alex Frangos at The Wall Street Journal report that Extended Stay Hotels Inc. is in talks with lenders who might end up acquiring the company. WSJ relates that Lightstone Group LLC purchased Extended Stay from Blackstone Group LP for about $8 billion in April 2007 in a highly leveraged deal. According to WSJ, Extended Stay has no major debt expirations due soon and the company is till meeting its debt service, but its cash flow is crashing. Citing people familiar with the matter, WSJ states that Extended Stay could default within the next 60 days if the economic downturn continues. According to the report, a source said that revenue per available room for Extended Stay will drop more than 10% this year, and the report says that much of that decline has come in the last two months. WSJ states that as conditions deteriorate, Extended Stay was started talks with its lenders. A transfer of ownership could come within a month or two, the report says, citing people familiar with the talks. WSJ states that Extended Stay hired Lazard Ltd. as financial adviser and Weil Gotshal & Manges as bankruptcy counsel. Extended Stay, according to WSJ, is unlikely to file for Chapter 11 bankruptcy protection due to provisions common in commercial mortgage-backed securities deals that would expose more properties of its founder, David Lichtenstein. WSJ relates that Mr. Lichtenstein would likely turn Extended Stay directly over to lenders or swap enough equity for debt to give bondholders control of the hotel chain. About Extended Stay Headquartered in Spartanburg, South Carolina, Extended Stay Hotels -- http://www.extendedstayhotels.com/is operated by HVM L.L.C. It offers extended stay lodging hotels with over 680 locations reaching all major metropolitan areas across the United States. Its brands include Extended Stay DeluxeSM, Extended Stay America Efficiency Studios, Homestead Studio Suites, StudioPLUS Deluxe Studios, and Crossland Economy Studios. Extended Stay has operations in 44 states and Canada. EZ LUBE: Files for Chapter 11 to Facilitate Assets Sale ------------------------------------------------------- The EZ Lube LLC along with its affiliate, Xpress Lube-Tech Inc., filed a voluntary petition under Chapter 11 in the United States Bankruptcy Court for the District of Delaware in Wilmington to facilitate a sale transaction. The company said that it has entered into an asset purchase agreement with EZ Lube Acquisition Company LLC, an affiliate of its existing lenders, funds managed by GSO Capital Partners LP, on the sale of substantially all of its assets. The proposed transaction, which is subject to approval by the Court, contemplates, among other things, the assumption of certain liabilities by the buyer as described in the agreement between the parties subject to closing of the proposed transaction. Qualifying bidders will have an opportunity to submit higher and better offers through a court-supervised competitive bidding process. According to Bankruptcy Data, citing documents filed with the Court, the Debtors said their performance has been declining and negatively impacted by numerous factors, including "the national economic downturn, high gas prices during much of 2008, and changes in operations implemented in response to negative publicity." The company said its sales for the 10-month period ending Oct. 31, 2008, were $66.8 million compared to $73.3 million for the same period a year ago. The company further said that the company's year to date sale were down nearly 9%, total number of cars services also were down 11.2%. Averaged amount charged to customers on services visits declined 3.6%, the company noted. Chief Restructuring Officer Stephen V. Coffey said that the company said it is highly leveraged, with more than $96 million owed under its credit facilities and subordinated notes. With current annual debt services charges of about $12 million, the company have had recent difficulty in making certain of their debt service payments, Mr. COffey said. Beginning in April 200, the company failed to make interest payments owed under the subordinated notes and second lien credit documents, he continued. Mr. Coffey further said that the company failed to make another interest payment under the first lien credit documents and also allegedly failed to meet certain other covenants thereunder. The lenders allowed the company to make debts service interest payment for a limited period, Mr. Coffey related. Before it filed for bankruptcy, the company was able to pay the October accrued interest to the first lien lenders but not any accrued interest to the second lien lender, he noted. "Today's actions represent positive news for our customers, employees and other constituents," said President and Chief Executive Officer Marc Graham. "Completing the sale through the Chapter 11 process will allow us to significantly reduce our debt and undertake an orderly transition of ownership. Throughout the sale process, servicing our customers and providing valuable preventative maintenance services is our priority." The company said it secured debtor-in-possession financing from its current senior lender Goldman Sachs Specialty Lending Group, L.P., in order to provide uninterrupted operations at its 82 locations and ensure that its vendor relationships remain intact, subject to the Court's approval. The funds will be used to fund operations and other costs during the sale process and Chapter 11 cases, the company said. Mr. Graham emphasized that neither employees nor customers of its 82 oil change stores are expected to notice any difference in operations as a result of the filing "Daily operations will continue as usual, store hours will remain the same and all aspects of the business will proceed as usual," he said. The company further said it has requested the Court's permission to continue to honor gift certificates and coupons as well as warranties and VIP program. "Looking ahead, we believe the action begun today will result in a more competitive future for EZ Lube," stated Mr. Graham. Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com/provides oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. EZ LUBE: Case Summary & 35 Largest Unsecured Creditors ------------------------------------------------------ Debtor: EZ Lube LLC 3506 W. Lake Center Dr., Suite b Santa An, CA 92704 Bankruptcy Case No.: 08-13256 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Xpress Lube-Tech, Inc. 08-13257 Type of Business: The Debtors provide oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. See: http://www.ezlube.com/ Chapter 11 Petition Date: December 9, 2008 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: Curtis A. Hehn, Esq. chehn@pszjlaw.com Laura Davis Jones, Esq. ljones@pszjlaw.com Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19801 Tel: (302) 652-4100 Fax: (302) 652-4400 Financial Advisor: Broadway Advisors LLC Chief Restructuring Advisor: Coffey Management Company Notice, Claims and Solicitation Agent: Kurztman Carson Consultants LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ExxonMobile Oil Corporation trade $3,387,782 Americas Strategic Global Attn: Jim A. Feeney 3225 Gallows Road Fairfax, VA 22037-0001 Tel: (773) 220-7719 Fax: (425) 969-4036 Filpac trade $1,228,993 Attn: Matt Callahan 948 E. 7145 S, Suite C-202 Midvale, UT 84047 Tel: (801) 290-5841 Fax: (888) 693-9077 ADX Inc. trade $262,988 Attn: July Munoz 9701 Irvine Center Drive Irvine, CA 92618-4324 Tel: (949) 581-5377 Fax: (949) 581-5365 Tomax trade $222,532 Camden Holdings LLC trade $215,893 Mailmark Direct trade $143,666 Aramrk Uniform trade $113,712 Valassis Direct Mail Inc. trade $102,050 Schiefer Public Relations trade $100,424 Etter Racing Inc. trade $100,000 Poma Distributing trade $79,990 Winthrop Resources Corp. trade $77,671 Blue Cross of California trade $69,326 Jankovich Company trade $66,360 Factory Motor Parts trade $42,418 Latham & Watkins LLP trade $52,861 Pennysaver trade $50,560 Jave CXIV Inc. landlord $49,529 Grant Thornton LLP trade $46,730 Media Nation LLC trade $46,585 Call Jensen & Ferrel trade $44,567 Oliver & Company Inc. trade $38,263 Joe Kovalik and Family landlord $36,362 CBS Radio KCBS FM trade $35,667 KCLAC 570 AM trade $33,300 Jancyn Evaluation Shops trade $26,903 Superstition Gateway LLC landlord $25,300 Napa Auto Parts trade $24,833 Chapete Property Corp. landlord $24,833 Motor Information trade $24,001 Victoria Land Partners landlord $23,805 Hugh Smith and Winfried landlord $23,300 Smith Freeway Industrial Park landlord $22,041 Sunset Hoover LLC landlord $21,993 Kenneth Fisher Trust landlord $21,927 The petition was signed by chief restructuring officer Stephen Coffey. FAMILY BANK: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------- Weiss Ratings has assigned its E- rating to Palos Hills-Ill.-based Family Bank and Trust Co. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Family Bank is not a member of the Federal Reserve. Deposits have been insured by the Federal Deposit Insurance Corporation since it was established on Oct. 21, 1977. FDIC data shows that Family Bank disclosed $75.1 million in assets and $70.5 million in liabilities at Sept. 30, 2008, in its regulatory filings. FORD MOTOR: Former Chrysler Chief Opposes CEO Ousters ----------------------------------------------------- Mike Spector posted on The Wall Street Journal blog that former Chrysler LLC chairperson and chief executive Lee Iacocca doesn't agree with calls from the Congress that CEOs of Chrysler, Ford Motor Co., and General Motors Corp. be laid off as a condition of a government financial bailout. According to the blog, Mr. Iacocca had persuaded the Congress to extend Chrysler about $1.5 billion in loans in 1979, and those loans had been paid back, with interest. According to Mr. Spector, Mr. Iacocca was also president of Ford Motor. Mr. Iacocca said in a statement, "Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit auto makers. "You don't change coaches in the middle of the game, especially when things are so volatile . . . . The industry has been brutalized by a totally unpredictable series of events over which it had little control and that is beating it unmercifully into the ground. The companies may not be perfect but the guys who are running them now are the only ones with the experience and the in-depth knowledge and understanding of how the car business really works. They're by far the best shot we have for success. I say give them their marching orders and then let them march. They're the right people to get the job done." Corey Boles posted on the WSJ blog that a senior congressional aide said on Monday that the CEOs of Ford Motor, Chrysler, and GM wouldn't lose their jobs as part of a government bailout. A proposal, says Mr. Boles, is being considered that would require the firms to hire separate chairpersons to oversee management. GM Seeks Workers' Support for CEO John D. Stoll and Sharon Terlep posted in the WSJ blog that GM officials sent salaried engineers an e-mail on Tuesday asking them to sign on to a letter asking that CEO Rick Wagoner and other managers stay at the company. Mr. Stoll and Ms. Terlep say that the letter would be sent to Sen. Christopher J. Dodd and the Senate Banking Finance Committee. According to the blog, Sen. Dodd's committee wqould vote this week on a $15 billion bailout package for GM, Ford Motor Co. and Chrysler LLC. The blog says that Sen. Dodd suggested on Sunday that Mr. Wagoner step aside. Mr. Stoll and Ms. Terlep quoted GM spokesperson Tom Wilkinson as saying, "There is generally a lot of support for Rick among employees at GM." The lobbying effort wasn't initiated by Mr. Wagoner or other ranking executives, the blog states, citing Mr. Wilkinson. Bailout Has Lukewarm Support From Public Easha Anand at WSJ reports that the lukewarm support that GM, Ford Motor, and Chrysler's government loan request gets from the public reflects the situation in the Congress. According to WSJ, the requested government bailout has backers in the Congress, but few "champions." A new Wall Street Journal/NBC News poll, conducted from Dec. 5 to Dec. 8 and which had a margin of error of plus or minus three percentage points, indicates that about 46% of U.S. citizens approve of giving aid to the three auto companies, while about 42% disapprove. "It would be nice to bail them out, but you have to take into consideration what auto workers and executives have been paid for years. The country seems to be spending money they do not have, we're going further and further into debt," WSJ quoted Philip Hall, a 56-year-old mason who drives a GMC truck, as saying. Josh Mitchell at WSJ relates that while the White House and top Democrats have reached an agreement on the principles of a $15 billion short-term aid package to the automakers, Republicans are torn between the need to bail out those companies and opposition based on fiscal principles. According to the report, rank-and- file Democrats said they are in favor of a bailout, while some conservative Republicans are against any package that didn't include the firms' bankruptcy filing. WSJ reports that Senate Majority Leader Harry Reid said he hoped for a vote by Wednesday on the legislative proposals for the bailout. Among the conditions in the bailout is that the government would acquire a stake in the companies. Congressman Opposes Bailout for Chrysler Greg Hitt at WSJ reports that Congressman Steve Kagen has opposed a bailout for Chrysler LLC, arguing that a take over by parent company Cerberus Capital Management LP of NewPage Corp. led to closures of two factories in Northeast Wisconsin, eliminating 750 jobs, Alex P. Kellogg at WSJ states. WSJ relates that Chrysler CEO Robert Nardelli was also questioned during congressional hearings last week on why he doesn't seek help from Cerberus Capital. Mr. Nardelli, according to the report, said that he already did but was turned down. Mr. Kagen urged Cerberus Capital to put some of its "billions of dollars in assets" on the table before Congress offers Chrysler any kind of bailout, the report says. According to WSJ, Mr. Kagen suggested that Cerberus Capital could sell the mills it closed in Wisconsin and use that money to boost Chrysler. "If Cerberus truly believes Chrysler is a good investment, then Cerberus should put up some of their own money. The question is... why are you coming to taxpayers if it's not such a good deal?" Mr. Kagen supports a bailout for General Motors Corp. and Ford Motor Co., WSJ reports. 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-'. FRIEDMAN'S INC: Plan Filing Period Extended to December 31 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended Friedman's Inc. and Crescent Jewelers exclusive period to file a plan through and including Dec. 31, 2008. In its motion the Debtors told the Court that the further extension of the exclusive periods is justified by the significant progress in liquidating and maximizing the value of their estates. The Court previously extended the Debtors' exclusive periods on May 2, 2008, and Sept. 5, 2008. The current exclusive filing period expires on Dec. 15, 2008, and the current exclusive solicitation period expires on Feb. 16, 2009. The Debtors originally asked for an extension of the plan filing period to Feb. 23, 2009, and the solicitation filing period to April 23, 2009. After filing the third motion, the Debtors agreed with the U.S. Trustee to limit the extension to Deb. 15, 2008, and Feb. 16, 2009, without prejudice to their rights to seek further extensions. The Debtors told the Court that because discussions about various plan alternatives involving third parties failed to bear fruit, the Debtors and the Committee have determined that it was best to move forward with a liquidating plan. The Debtors are currently negotiating the terms of a liquidating plan with the Committee and expect to file a plan in the near future. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- prior to the filing of their bankruptcy cases, comprised a leading specialty jewelry retail company. On Jan. 14, 2005, Friedman's and eight of its affiliates filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of Georgia, Case No. 05-40129. On Nov. 23, 2005, the Court confirmed the Debtors' Amended Plan and that Plan became effective on Dec. 9, 2005. Crescent Jewelers, the largest jewelry retailer on the West Coast, filed for Chapter 11 protection on Aug. 12, 2004 (Bankr. N.D. Calif. Case No. 04-44416). On July 13, 2006, the California Bankruptcy Court confirmed Crescent Jewelers' Second Amended Plan of Reorganization. On July 28, 2006, Friedman's acquired Crescent's equity in Crescent's own chapter 11 bankruptcy case in California. Crescent became a wholly owned subsidiary of Friedman's. On Jan. 22, 2008, five parties declaring claims aggregating $9,081,199, filed an involuntary Chapter 7 petition against Friedman's. The petitioners were Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay Gems, Inc., dba Jewelmark; Simply Diamonds Inc.; and Paul Winston-Eurostar LLC. As of commencement of these cases, Friedman's operated 388 stores in 20 states with over 2,890 employees while Crescent Jewelers operated 85 stores in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case Nos. 08-10161 and 08-10179). The Debtors are represented by Athanasios E. Agelakopoulos, Esq., and Paul M. Rosenblatt, Esq., at Kilpatrick Stockton LLP; Chun I. Jang, Esq., Jason M. Madron, Esq., Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger, P.A.; Jocelyn Keynes, Esq.. and Nicholas F. Kajon, Esq., at Stevens & Lee, P.C., in New York; John D. Demmy, Esq., Joseph H. Huston, Jr., Esq., and Maria Aprile Sawczuk, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. Charlene D. Davis, Esq., Justin K. Edelson, Esq., at Bayard, P.A., and Mary E. Augustine, Esq., at Ciardi Ciardi & Astin, P.C., represent the Creditors Committee as counsel. On April 10, 2008, the Court approved the sale to Whitehall Jewelers, Inc., and a joint venture led by Great American Group LLC to sell to Whitehall the inventory and related property at 78 of the Debtors' stores, and to assume and assign to Whitehall the leases with respect to those 78 stores. On June 30, 2008, the liquidation of the balance of the Debtors' assets through store closing sales were concluded. As of Dec. 28, 2007, the Debtors listed total assets of $245,787,000 and total liabilities of $171,877,000. GENERAL GROWTH: Fitch Says May Default; IDR Lowered to 'C' ---------------------------------------------------------- With General Growth Properties recently receiving short-term extensions of the maturity dates on both corporate and non- recourse debt obligations, default of some kind appears imminent, according to Fitch Ratings, which has downgraded the Issuer Default Ratings (IDRs) and outstanding debt ratings of General Growth Properties (NYSE: GGP) and its subsidiaries as follows: General Growth Properties, Inc. -- IDR to 'C' from 'B'. GGP Limited Partnership -- IDR to 'C' from 'B'; -- Revolving credit facility to 'CC/RR5' from ' B-/RR5'; -- Term loan to 'CC/RR5' from ' B-/RR5'; -- Exchangeable senior notes to 'CC/RR5' from ' B-/RR5'; -- Perpetual preferred stock (indicative) to 'C/RR6' from 'CCC/RR6'. The Rouse Company LP --IDR to 'C' from 'B'; --Senior unsecured notes to 'CC/RR5' from ' B-/RR5'. The ratings remain on Rating Watch Negative by Fitch. Fitch's rating action contemplates that either a distressed debt exchange, whereby GGP would be forced to restructure its debt obligations in an effort to avert bankruptcy, or failure to repay debt currently due is likely in the near term. Fitch considers a distressed debt exchange, which includes a material reduction in terms, to be a default. Fitch believes that even if the company is able to agree to longer-term extensions for its recourse and non-recourse obligations, such extensions may constitute a distressed debt exchange and therefore a default under Fitch's rating criteria, given that a default of these obligations would trigger a cross- default provision in GGP's credit agreement. Fitch's rating actions also acknowledge that conditions within both the secured and unsecured commercial real estate debt capital markets remain poor for borrowers, and are placing significant pressure on GGP's ability to sell assets, enter into joint ventures or otherwise raise adequate capital to repay 2009 maturing unsecured debt totaling approximately $600 million. Consistent with Fitch's Oct. 14 press release, resolution of the Negative Rating Watch will be driven by GGP's ability to refinance the terms of its near-term indebtedness to provide the company with additional liquidity and longer-term financial flexibility. Fitch would consider upgrading GGP if the company repaid or refinanced its near-term unsecured and secured debt maturities while maintaining solid fundamentals for its operating properties. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- 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, as well as the development and sale of its one residential condominium project located in Natick (Boston), Massachusetts. General Growth said in a regulatory filing Sept. 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. GENERAL MOTORS: Lobbies Workers' Support for CEO Rick Wagoner ------------------------------------------------------------- John D. Stoll and Sharon Terlep posted in The Wall Street Journal blog that GM officials sent salaried engineers an e-mail on Tuesday asking them to sign on to a letter asking that CEO Rick Wagoner and other managers stay at the company. Mr. Stoll and Ms. Terlep say that the letter would be sent to Sen. Christopher J. Dodd and the Senate Banking Finance Committee. According to the blog, Sen. Dodd's committee wqould vote this week on a $15 billion bailout package for GM, Ford Motor Co. and Chrysler LLC. The blog says that Sen. Dodd suggested on Sunday that Mr. Wagoner step aside. Mr. Stoll and Ms. Terlep quoted GM spokesperson Tom Wilkinson as saying, "There is generally a lot of support for Rick among employees at GM." The lobbying effort wasn't initiated by Mr. Wagoner or other ranking executives, the blog states, citing Mr. Wilkinson. Former Chrysler CEO Disapproves of CEO Ousters Mike Spector posted on the WSJ blog that former Chrysler chairperson and chief executive Lee Iacocca doesn't agree with calls from the Congress that CEOs of the automakers seeking government bailout be laid off. According to the blog, Mr. Iacocca had persuaded the Congress to extend Chrysler about $1.5 billion in loans in 1979, and those loans had been paid back, with interest. According to Mr. Spector, Mr. Iacocca was also president of Ford Motor. Mr. Iacocca said in a statement, "Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit auto makers. "You don't change coaches in the middle of the game, especially when things are so volatile . . . . The industry has been brutalized by a totally unpredictable series of events over which it had little control and that is beating it unmercifully into the ground. The companies may not be perfect but the guys who are running them now are the only ones with the experience and the in-depth knowledge and understanding of how the car business really works. They're by far the best shot we have for success. I say give them their marching orders and then let them march. They're the right people to get the job done." Corey Boles posted on the WSJ blog that a senior congressional aide said on Monday that the CEOs of Ford Motor, Chrysler, and GM wouldn't lose their jobs as part of a government bailout. A proposal, says Mr. Boles, is being considered that would require the firms to hire separate chairpersons to oversee management. Bailout Has Lukewarm Support From Public Easha Anand at WSJ reports that the lukewarm support that General Motors Corp., Ford Motor Co., and Chrysler LLC's government loan request gets from the public reflects the situation in the Congress. According to WSJ, the requested government bailout has backers in the Congress, but few "champions." A new Wall Street Journal/NBC News poll, conducted from Dec. 5 to Dec. 8 and which had a margin of error of plus or minus three percentage points, indicates that about 46% of U.S. citizens approve of giving aid to the three auto companies, while about 42% disapprove. "It would be nice to bail them out, but you have to take into consideration what auto workers and executives have been paid for years. The country seems to be spending money they do not have, we're going further and further into debt," WSJ quoted Philip Hall, a 56-year-old mason who drives a GMC truck, as saying. Josh Mitchell at WSJ relates that while the White House and top Democrats have reached an agreement on the principles of a $15 billion short-term aid package to the automakers, Republicans are torn between the need to bail out those companies and opposition based on fiscal principles. According to the report, rank-and- file Democrats said they are in favor of a bailout, while some conservative Republicans are against any package that didn't include the firms' bankruptcy filing. Greg Hitt at WSJ reports that Senate Majority Leader Harry Reid said he hoped for a vote by Wednesday on the legislative proposals for the bailout. Among the conditions in the bailout is that the government would acquire a stake in the companies. Congressman Steve Kagen has opposed a bailout for Chrysler, arguing that a take over by parent company Cerberus Capital Management LP of NewPage Corp. led to closures of two factories in Northeast Wisconsin, eliminating 750 jobs, Alex P. Kellogg at WSJ states. WSJ relates that Chrysler CEO Robert Nardelli was also questioned during congressional hearings last week on why he doesn't seek help from Cerberus Capital. Mr. Nardelli, according to the report, said that he already did but was turned down. Mr. Kagen urged Cerberus Capital to put some of its "billions of dollars in assets" on the table before Congress offers Chrysler any kind of bailout, the report says. According to WSJ, Mr. Kagen suggested that Cerberus Capital could sell the mills it closed in Wisconsin and use that money to boost Chrysler. "If Cerberus truly believes Chrysler is a good investment, then Cerberus should put up some of their own money. The question is... why are you coming to taxpayers if it's not such a good deal?" Mr. Kagen supports a bailout for GM and Ford Motor, WSJ reports. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. 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. GOE LIMA: Nedra Wants Case Converted to Chapter 7 or Dismissed -------------------------------------------------------------- Nedra Corporation asks the Hon. Mary Ann Whipple of the United States Bankruptcy Court for the Northern District of Ohio to convert the Chapter 11 case of GOE Lima LLC to Chapter 7 liquidation proceeding or, in the alternative, dismiss its case. Nedra argues that the Debtor has ceased operations. The Debtor has filed appropriate motions to provide for the liquidation and sale of all of its assets, Nedra points out. Nedra asserts there is no reasonable likelihood of rehabilitation and the maintenance of the Debtor's proceed -- and the attendant costs -- is diminishing any possible estate. A hearing is set for Jan. 21, 2009, at 1:30 p.m., at United States Courthouse at 1716 Spielbusch Avenue in Courtroom #2, Room 103. About GOE Lima Headquartered in Lima, Ohio, GOE Lima LLC -- http://www.go-ethanol.com/-- operates an ethanol production facility. The company filed for protection on Oct. 14, 2008 (Bankr. N.D. Ohio Case No. 08-35508). Taft Stettinius & Hollister LLP is the Debtor's proposed bankruptcy counsel. The U.S. Trustee for Region 9 appointed creditors to serve on an Official Committee of Unsecured Creditors. Frost Brown Todd LLC represents the Committee in this case. When the Debtor filed for protection from its creditors, its listed assets and debts between $100 million to $500 million each. GOE LIMA: Get Final Approval to Use $1.6MM SunTrust DIP Facility ---------------------------------------------------------------- Jamie Mason at The Deal reports that the Hon. Mary Ann Whipple of the United States Bankruptcy Court for the Northern District of Ohio authorized GOE Lima LLC to obtain, on a final basis, the remaining $1.6 million of debtor-in-possession financing made available by SunTrust Bank NA. Judge Whipple, Mr. Mason, also authorized the Debtors to access cash collateral on a final basis. The Debtor's counsel Timothy Hurley, Esq., at Taft Stettinius & Hollister LLP, said all of the objections to the financing were overruled by the Court, relates Mr. Mason. According to the Deal, the proceeds of the loan will be used for close down expenses and winterization costs. The $2.9-million DIP facility provided by SunTrust incurs interest at 10%, which rises by 200 basis points if the Debtor default on its obligations, the report says. The DIP facility is subject to a $317,470 carve-out for payment of professional expenses, Mr. Mason notes. About GOE Lima Headquartered in Lima, Ohio, GOE Lima LLC -- http://www.go-ethanol.com/-- operates an ethanol production facility. The company filed for protection on Oct. 14, 2008 (Bankr. N.D. Ohio Case No. 08-35508). Taft Stettinius & Hollister LLP is the Debtor's proposed bankruptcy counsel. The U.S. Trustee for Region 9 appointed creditors to serve on an Official Committee of Unsecured Creditors. Frost Brown Todd LLC represents the Committee in this case. When the Debtor filed for protection from its creditors, its listed assets and debts between $100 million to $500 million each. GREEKTOWN CASINO: Shares Exclusivity; Plan Deadline on Feb. 1 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has granted Greektown Casino Holdings LLC, and its debtor affiliates an extension of their deadline to file a plan of reorganization until February 1, 2009. The Debtors, however, will share exclusive rights to file a plan of reorganization with certain parties who objected to the extension. Pursuant to a Court-approved stipulation, the Debtors, their DIP lenders, and certain other parties agree that they, collectively and not individually, have the co-exclusive right with the Debtors to file a plan of reorganization through February 1, 2009, unless they agree to extend that date. The other parties are: 1. The City of Detroit; 2. Deutsche Bank Trust Company Americas, the indenture trustee for $185 million of senior notes due 2013 issued by Greektown Holdings LLC and Greektown Holdings II, Inc.; 3. Jenkins/Skanska Venture LLC; 4. The Official Committee of Unsecured Creditors; 5. AIG Global Investment Corp., BlackRock Advisors, Inc., MFC Global Investment Management U.S. LLC, Oppenheimer Funds and Regiment Capital Advisors LP (the Noteholders); and 6. The State of Michigan Gaming Control Board. The Objecting Parties generally want the Debtors to speed up the process in coming up with a plan of reorganization or allow other parties to come up with a separate plan. With the Court's consent, the Stipulating Parties also agree that: (a) If the Debtors or the Stipulating Parties file a plan on or before the Exclusive Termination Date, the exclusive right to file a plan of reorganization terminates as to all parties-in-interest. (b) Until the Exclusive Termination Date, the Debtors and the Stipulating Parties will negotiate in good faith towards the formulation of a fully consensual plan or plans of reorganization. Any party that files any plan or plans of reorganization will give all other parties at least five business days' notice and opportunity to review and comment on any plan before filing. (c) The Debtors will respond promptly to all reasonable diligence requests by the Stipulating Parties, and any materials required to be provided by the Debtors to the MGCB concerning the Debtors' financial condition or to Merrill Lynch will also be provided to the other Stipulating Parties. The materials, however, will only be furnished pursuant to a signed confidentiality agreement with the Debtors and with respect to certain Noteholders. (d) On or before December 15, 2008, the Debtors will engage and submit to the MGCB (i) an independent chief executive officer acceptable to the Debtors and the Stipulating Parties fully responsible for gaming and hotel operations, or (ii) a gaming consultant whose duties and responsibilities for gaming and casino operations and whose independence from the Debtors are acceptable to the Parties. The Chief Executive Officer or Gaming Consultant is subject to the MGCB's ongoing regulatory authority. (d) The Debtors will permit the Stipulating Parties and their professionals to consult with Moelis & Company LLC, Conway McKenzie, Inc., and the Chief Executive Officer or Gaming Consultant. The Debtors will instruct the Reporting Parties to communicate fully with the Stipulating Parties. This obligation will include, but is not limited to, weekly meetings to receive and discuss a status report from Moelis concerning the progress of its work. (e) The Debtors will support a request for the appointment of an official bondholders' committee, if a request is made by certain Noteholders to the Office of the U.S. Trustee. Before the Parties entered into the Exclusivity Motion Stipulation, Daniel M. McDermott, the U.S. Trustee for Region 9, related that he was informed of ongoing discussions among the parties with respect to the Debtors' second exclusivity request. The U.S. Trustee also told the Court that while some creditors may be receiving financial information, he has not received that information. He expects the Debtors' monthly operating report to provide the most up-to-date information on the Debtors' current operations and financial condition. The U.S. Trustee said he was advised by the Debtors' representatives that the Debtors would not be in a position to file the October information until December 1, 2008. The Objecting Parties generally want the Debtors to speed up the process in coming up with a plan of reorganization or allow other parties in coming up with a separate plan. On behalf of the City of Detroit, Cezar M. Froelich, Esq., at Shefsky & Froelich Ltd., Chicago, Illinois, notes that the Debtors intend "to seek their initially requested and rejected excessive eight month extension of the Exclusive Period by requesting a series of shorter extensions." Mr. Froelich points out that the City previously agreed to a short extension of the period because it understands that the Debtors need additional time in coming up with a Plan. However, he cites, the Debtors have not undertaken the necessary steps to present a Plan and have exhibited an "appalling" lack of urgency in moving their bankruptcy cases to a conclusion. The Creditors Committee argues that the Debtors clearly still have no means of financing a plan of reorganization and have no plan negotiations with the Committee. The Debtors, on the other hand, said that an extension is warranted as they have been working diligently to adhere to the benchmarks established by a prior settlement with the Objecting Parties. The Debtors also disclose that, aside from incoming management changes, they are nearing completion of the permanent Greektown Casino entertainment complex, which includes the permanent casino, a 400-room luxury hotel, exhibit and banquet rooms and a theatre venue. The complex is expected to strengthen the Debtors' position in the Detroit marketplace as well as increase revenues. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operates world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREEKTOWN CASINO: Seeks to Pay Workers' Compensation Claims ----------------------------------------------------------- Greektown Holdings, LLC, and its affiliated debtors seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to incur and pay fees and expenses associated with workers' compensation claims in order to comply with Michigan statute. Before the Petition Date, the Debtors were granted authority by the Michigan Department of Labor & Economic Growth, Workers' Compensation Agency to operate as a self-insured employer under the Michigan Workers' Disability Compensation Act of 1969 or WDCA. The Debtors' Detroit Casino continues to operate under its self-insured status and administers its obligations as a self- insured in part through a "workers' compensation and employers liability excess insurance policy for self-insured" with the Accident Fund. According to Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, part of the Debtors' obligations pursuant to the WDCA is to continue to resolve pending workers' compensation claims. To fulfill that obligation, the Debtors have retained ordinary course professionals previously approved for employment by the Court. Mr. Weiner relates that the Casino is in a position to favorably settle one of the Claims, having reached a tentative settlement with Arturo Cendana, a former employee, for an amount totaling $20,322. Mr. Cendana's claim arises from alleged injuries sustained while employed by the Casino in 2003 and 2005. His original demand was for $60,000. The Debtors seek the Court's permission to settle with Mr. Cendana. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operates world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GUNDLE/SLT ENVIRONMENTAL: S&P Affirms 'B-' Corporate Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Houston- based Gundle/SLT Environmental Inc. to negative from stable. At the same time, S&P affirmed all the ratings, including the 'B-' corporate credit rating, on GSE. "The outlook revision reflects GSE's highly leveraged financial profile and somewhat diminished liquidity profile amid concerns about softening demand in an increasingly uncertain economic environment," said S&P's credit analyst Ket Gondha. "We are concerned that business conditions could weaken beyond earlier expectations, which would erode the company's financial profile and potentially could cause a breach of the financial covenants on the revolving credit facility." The rating on GSE reflects the limited scope of the company's operations, the commodity nature of its products, its vulnerability to fluctuating raw material costs, limited liquidity and cushion under covenants, and its highly leveraged financial risk profile. The company's market position as the largest manufacturer of geomembrane liners, its global manufacturing and distribution capabilities, and relatively stable end markets partially offset these factors. With annual sales of about $480 million, GSE is one of the largest participants in the estimated $1 billion U.S. geosynthetics market. The company competes primarily in the geomembrane subsegment, with applications in solid waste containment (about 45% of total sales), liquid containment, and mining. HARRY PAPPAS: Balks at Pappas Telecasting Plan to Sell All Assets ----------------------------------------------------------------- Bankruptcy Law360 reports that CEO Harry J. Pappas and Stella A. Pappas, creditors and equity-interest holders of Pappas Telecasting Inc., have objected to the Debtors' plan to sell substantially all of their assets in an auction. According to Bankruptcy Law360, the Pappases, in a preliminary objection filed Friday in the U.S. Bankruptcy Court for the District of Delaware, asserted that the assets of the debtors and nondebtor television stations must be sorted prior to auction. As reported by the Troubled Company Reporter on November 21, 2008, Pappas Telecasting will auction off 10 stations on Dec. 11, 2008. Michael Malone at Broadcasting & Cable reported that as Pappas continues to pay down a heavy debt load, stations in these locations will go on the block include those in: -- El Paso, -- Omaha, and -- Sioux City. Broadcasting & Cable said 13 of Pappas Telecasting's stations have been operating under Chapter 11 protection since May 2008. When those stations moved into Chapter 11, three of Pappas Telecasting's lenders pushed for involuntary Chapter 7 petitions for the company's chairperson Harry Pappas and his wife, the report noted. Pappas Telecasting and its lenders agreed in August 2008 to the appointment of a Chapter 11 trustee to oversee the company's operations, financial affairs, and sale process, after talks broke down between Pappas Telecasting and its lenders, according to the report. Pappas Telecasting owns about 27 stations. Broadcasting & Cable relates that the company sold six stations a few months ago, mostly low power ones, in Nevada and California to Entravision for $4 million. About Pappas Telecasting Fresno, California-based Pappas Telecasting Inc., aka KMPH, aka KMPH-TV, and aka KMPH Fox 26, -- http://www.pappastv.com/-- and its affiliates are broadcasting companies. Founded in 1971, their stations reach over 15% of all U.S. households and over 32% of Hispanic households. Pappas and 21 affiliates filed chapter 11 petition on May 10, 2008 (Bankr. D. Del. Case No. 08-10915 through 08-10936). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP represents the Debtors in their restructuring efforts. Administar Services Group LLC is the Debtors' notice and claims agent. The Debtors listed $100 million to $500 million in assets and debts when they filed for bankruptcy. Harry J. Pappas, the CEO and chairman of Pappas Telecasting and its debtor-affiliates, was the subject of a petition for Chapter 7 liquidation filed by creditors before the U.S. Bankruptcy Court for the District of Delaware. Mr. Pappas' wife Stella was also subject of the involuntary petition. The petitioning creditors are Fortress Credit Opportunites I LP, Fortress Credit Opportunites II LP, Ableco Finance LLC and Silver Oak Capital. John H. Knight, Esq., at Richards Layton & Finger, represents the Fortress Creditors. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, represents Ableco and Silver Oak. According to Bloomberg, the Debtors listed assets with a book value of $460 million and debt of $537 million, including inter- corporate debt. HART ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Hart Associates of Springville, Inc. dba Fiddlers Green Manor Nursing Home 168 West Main Street Springville, NY 14141 Case No.: 08-15340 Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court Western District of New York (Buffalo) Debtor's Counsel: Daniel F. Brown, Esq. Damon & Morey 1000 Cathedral Place 298 Main Street Buffalo, NY 14202 Tel: (716) 856-5500 Email: dbrown@damonmorey.com As of December 31, 2007: Total Assets: $1,747,332 Total Debts: $2,137,046 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nywb08-15340.pdf HAWAIIAN TELCOM: Organizational Meeting to Form Panel on Friday --------------------------------------------------------------- Roberta A. DeAngelis, acting United States Trustee for Region 3, will hold an organizational meeting Dec. 12, 2008, at 11:00 a.m. in the bankruptcy case of Hawaiian Telcom Communications, Inc., and its debtor-affiliates. The meeting will be held at The DoubleTree Hotel, 700 King Street, Salon C, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Hawaiian Telecom Headquartered Honolulu, Hawaii Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The company and five of its affiliates filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. (Hawaiian Telcom Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). HERBST GAMING: $5.1MM Interest Nonpayment Cues Moody's 'D' Rating ----------------------------------------------------------------- Moody's Investors Service lowered Herbst Gaming, Inc.'s Probability of Default Rating to D from Ca/LD following the company's December 3, 2008, 8-K disclosure that it has not paid the $5.1 million scheduled interest payment due under its credit agreement. Herbst also disclosed that on December 3, 2008, the forbearance period dated as of November 10, 2008 expired, and the company and its lenders have not entered into a restructuring agreement by that date. As a result of the expiration of the forbearance period, the lenders may require payment in full of all amounts outstanding under the credit agreement -- approximately $847 million plus accrued and unpaid interest -- and exercise all rights and remedies under the credit agreement and the other loan documents. This rating was downgraded: -- Probability of Default Rating to D from Ca/LD These ratings have been affirmed: -- Corporate Family Rating at Ca -- $100 million senior secured revolving credit facility at Caa3 (LGD 3, 34%) -- $325 million senior secured delayed draw term loan at Caa3 (LGD 3, 34%) -- $375 million senior secured term loan B at Caa3 (LGD 3, 34%) -- $60 million senior secured term loan rated Caa3 (LGD 3, 34%) -- $160 million 8.125% senior subordinated notes due 2012 rated C (LGD 5, 71%) from C (LGD 5, 89%) -- $170 million 7.0% senior subordinated notes due 2014 rated C (LGD 5, 71%) from C (LGD 5, 89%) Moody's plans to withdraw all the ratings of Herbst Gaming, Inc. in the near future. Moody's previous rating action related to Herbst occurred on June 20, 2008 when Moody's revised the company's probability of default rating to Ca/LD following its failure to make the May 15, 2008 interest payment on its 7% senior subordinated notes and the expiration of the 30-day grace period. Herbst Gaming, Inc. is an established slot route operator in Nevada with over 7,400 slot machines and currently owns and operates casinos in Nevada, Missouri and Iowa. HERBST GAMING: Nonpayment of Interest Cues S&P's 'D' Rating ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating on the senior secured credit facilities of Herbst Gaming to 'D' from 'CCC-'. The rating action stems from the company's announcement on Dec. 4, 2008, that it had not paid the $5.1 million interest payment due under its credit agreement on Dec. 1, 2008. S&P lowered its corporate credit rating on the company to 'D' on May 19, 2008. Ratings List Herbst Gaming Inc. Corporate Credit Rating D/--/-- Downgraded Herbst Gaming Inc. To From -- ---- Secured D CCC-/Watch Neg Recovery Rating 3 3 HELLEN-MAY HOLDINGS: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Helen-May Holdings, LLC aka Helen-May aka HMH 27 Maple Avenue Jeffersonville, NY 12748 Tel: (845) 482-3371 Bankruptcy Case No.: 08-37749 Chapter 11 Petition Date: December 8, 2008 Court: Southern District of New York (Poughkeepsie) Debtor's Counsel: Daniel J. Scher, Esq. danjscher@aol.com Scher & Scher, P.C. 55 Water Mill Lane, Suite 400 Great Neck, NY 11021 Tel: (516) 482-1777 Fax: (516) 829-3198 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by managing member Irene Claire Griffin. HOME INTERIORS: Jan. 15 Auction for U.S. and Mexico Assets Set -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has approved the bid procedures for the sale of: a) certain of Home Interiors & Gifts, Inc. and its wholly owned debtor and debtor-in-possession subsidiaries' domestic assets; c) the capital stock of Domistyle, Inc. and certain other assets; and b) the capital stock of Home Interiors de Mexico, S de RL de CV, and Home Interiors Services de MEXICO, S.A. de C.V. and certain other assets; a) certain of the assets of Laredo Candle Company, LLC; Interested parties are invited to submit their bids not later than 5:00 p.m. (CDT) on Jan. 8, 2009. If the Debtors receive Qualifying Bids, the Court has set a public auction sale on Jan. 15, 2009. Pursuant to the approved bid procedures, the Stalking Horse Bidder, if one is designated, shall be entitled to a Break-Up Fee of 3% of the Stalking Horse Bid amount, should the Purchaser be an entity other than the designated Stalking Bidder, and that entity consummates the sale of the Assets at Closing. The Break-Up Fee is to be paid by the eventual Purchaser. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew Jillson, Esq., Cameron Kinvig, Esq., Robert McCormick, Esq., and Mike Massad, Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr, PC represents the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. HOME INTERIORS: May Use Cash Collateral Until February 28 --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Home Interiors & Gifts, Inc. and its debtor-affiliates to use Cash Collateral securing their obligations to their lenders on a final basis for the period of Nov. 1, 2008, through Feb. 28, 2009, in accordance with a budget. As reported in the Troubled Company Reporter on Oct. 21, 2008, on July 3, 2008, the Court issued its First Final Cash Collateral Order authorizing Debtors' use of Cash Collateral through and including Oct. 31, 2008. The Debtors told the Court that they require the use of Cash Collateral on a final basis to continue their business operations, and to sell their assets pursuant to the processes approved by the Court. As adequate protection for the amount of any diminution in value in the prepetition collateral resulting from the Debtors' use of Cash Collateral, the prepetition lenders are granted a superpriority adequate protection claim over any and all expenses, and valid, binding, enforceable and perfected liens in all assets of the Debtors and the Debtors' actions for preferences, fraudulent conveyances, and other avoidance power claims and recoveries, subject only to a Carve-Out for the payment of accrued professional fees and expenses by the estate professionals, any allowed professional fees and expenses that are accrued and unpaid as of the Termination Date, fees required to be paid pursuant to Title 28 (Judiciary and Judicial Procedure) Sec. 1930(a)(6) of the U.S. Code, fees for noticing and claims agents or amounts due to the ClerK of the Bankruptcy Court, and in the event the cases are converted to Chapter 7, a separate carve-out of $20,000 for fees and expenses of a Chapter 7 trustee. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew Jillson, Esq., Cameron Kinvig, Esq., Robert McCormick, Esq., and Mike Massad, Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr, PC represents the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. HOME INTERIORS: Court Approves Appointment of Chapter 11 Trustee ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has approved the appointment of a chapter 11 trustee in Home Interiors and its affiliated debtors' bankruptcy cases. The chapter 11 trustee is granted all powers, obligations and authority permitted under all applicable provisions of the Bankruptcy Code except as to alleged claims to be pursued by the Official Committee of Unsecured Creditors, and claims asserted by certain "minority lenders." The order is without prejudice to granting the chapter 11 trustee with all powers, obligations and authority over the Alleged Claims at a later date. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew Jillson, Esq., Cameron Kinvig, Esq., Robert McCormick, Esq., and Mike Massad, Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr, PC represents the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. HOME INTERIORS: Obtains Go Signal to Sell Surplus Inventory ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the sale of Home Interiors & Gifts, Inc. and its affiliated debtors and debtors-in-possession subsidiaries' surplus inventory through Hilco Merchant Resources, LLC, the Debtors' asset disposition agent. The Debtors will pay any ad valorem property taxes due from the sale proceeds as those funds become available. As reported in the Troubled Company Reporter on Nov. 19, 2008, the Court the Debtors to employ Hilco Merchant Resources, LLC as their asset disposition agent, nunc pro tunc to Oct. 21, 2008. As the Debtors' asset disposition agent, Hilco will assist in the preparation, marketing, and disposition of inventory pursuant to its Asset Disposition Agreement with the Debtors. Hilco will also negotiate the terms of sales of the designated inventory in whole or in part, and implement any such agreements with purchasers. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew Jillson, Esq., Cameron Kinvig, Esq., Robert McCormick, Esq., and Mike Massad, Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr, PC represents the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million each. INTERMEC INC: Deregistration Cues Moody's to Withdraw Ratings ------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings on Intermec Inc. The ratings withdrawal is prompted by the company's deregistration of its previously existing shelf registration. These ratings were withdrawn: -- Corporate family rating - previously rated Ba2 -- Probability of default rating - previously rated Ba2 -- $400m senior unsecured shelf - previously rated (P)Ba3, LGD 5, 85% -- $400m subordinate shelf - previously rated (P)B1, LGD 6 , 97%, and -- $400m preferred shelf - previously rated (P)B1, LGD 6 , 97%. The last rating action was on August 9, 2006 when the corporate family rating of Intermec was upgraded to Ba2. Intermec Inc., headquartered in Everett, Washington, develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Revenues for the twelve months ending September 30, 2008 were $923 million. JAGS AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: JAGS Automotive of Louisville LLC 11514 Shelbyville Rd Louisville, KY 40243 Case No.: 08-93397 Petition Date: December 3, 2008 Court: U.S. Bankruptcy Court Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Debtor's Counsel: David M. Cantor, Esq. Seiller Waterman LLC 462 4th Street Ste 2200 Louisville, KY 40202 502-584-7400 Email: cantor@derbycitylaw.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/insb08-93397.pdf JDA SOFTWARE: S&P Raises Corporate Credit Rating to 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Scottsdale, Arizona-based JDA Software Group Inc. to 'BB-' from 'B+' and removed it from CreditWatch, where S&P placed it on Aug. 11, 2008. At the same time, S&P raised the rating on JDA's senior secured $50 million revolving credit facility to 'BB+' from 'BB-'. S&P also revised the recovery rating to '1', indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default, from '2'. S&P also withdrew the ratings on the company's term loan 'B' bank loan following its full repayment on Oct. 1, 2008. The outlook is stable. The rating actions follow JDA's termination of its merger agreement with Dallas, Texas-based I2 Technologies Inc. The upgrade reflects sustained operating performance improvement, and the progress made reducing debt from previous acquisitions. The ratings on JDA reflect its second-tier presence in a highly competitive and consolidating industry, niche product offerings, and risk associated with switching its product development initiatives to a new technology platform. A good position in the company's fragmented, mid-market niche and a solid base of recurring revenues partially offset these fundamental business characteristics. The stable outlook reflects JDA's debt capacity in the rating for further acquisitions, and sustained operating performance improvement. "We are unlikely to revise the outlook to positive over the near to intermediate term, until S&P can assess its next significant strategic move following the termination of its I2 offer," noted S&P's credit analyst Phillip Schrank. "We could, however, revise the outlook to negative if the company shifts to a more aggressive acquisitive growth strategy or implements shareholder-friendly initiatives that lead to leverage materially above 4x," he continued. JIM PALMER: ActionView Not Fully Satisfied with Restructuring Plan ------------------------------------------------------------------ ActionView International Inc. has updated shareholders on the status of the Chapter 11 bankruptcy case of Jim Palmer Trucking Inc. including the contents of its plan of Reorganization. ActionView International provided on May 5, 2008, a $250,000 loan to Jim Palmer Trucking and is currently seeking repayment of the loan. The plan calls to pay unsecured creditors 34% of the allowed claim through 48 monthly payments commencing 180 days after the order of confirmation. ActionView International is acting as chairman of the unsecured creditors committee. "While we are not fully satisfied with the details of the plan filed by Jim Palmer Trucking, it is an important step in the process, and we are pleased that the debt to ActionView International, as part of a class of unsecured creditors, has been addressed," stated ActionView International CEO Steven R. Peacock. "We will continue to work with our legal counsel to ensure that the rights of ActionView International in this matter are protected and that all potential remedies are pursued," Mr. Peacock continued. After the filings of the Jim Palmer bankruptcy case, ActionView International expressed several issues of concern, including its close proximity in time to Jim Palmer Trucking's acceptance of the loan from ActionView International. About ActionView International Inc. Based in Vancouver, British Columbia, ActionView International Inc. (OTCBB: AVWI) -- http://www.actionviewinternational.com/-- through ActionView, its wholly owned subsidiary, is engaged in the business of designing, marketing and manufacturing proprietary illuminated, programmable, motion billboard signs for use in airports, mass transit stations, shopping malls, and other high traffic locations to reach people on-the-go with targeted messaging. About Jim Palmer Trucking Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. -- http://www.jimpalmertrucking.com/-- offers truckload transportation of temperature-controlled cargo. The company operates throughout the US from terminals in Missoula, Montana; Salina, Kansas; and Tampa. The Debtor and two of its affiliates filed for separate Chapter 11 protection on July 15, 2008, (Bankr. D. Mont. Lead Case No.: 08- 60922). James A. Patten, Esq., represents the Debtors in their restructuring efforts. The Debtors have $11,897,554 in total assets and $12,089,808 in total debts. JK KEAS INC: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: J.K. Keas, Inc. 1325 Schwab St Red Bluff, CA 96080 Case No.: 08-38031 Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court] Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: W. Steven Shumway, Esq. 2140 Professional Dr #250 Roseville, CA 95661 Tel: (916) 789-8821 Total Assets: $4,047,000 Total Debts: $2,432,636 The Debtor identified Anthony & Claudia Alosi and Equity Trust Company as its two largest unsecured creditors: Anthony & Claudia Alosi $15,000 c/o Law Offices of William Apger 686 Rio Lindo Avenue Chico, CA 95926 Equity Trust Company $10,000 c/o Robert E. Proaps P.O. Box 2124 Carmichael, CA 95609 JOLLY PROPERTIES: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Jolly Properties, Inc. 12810 Willow Centre Dr., Suite D Houston, TX 77069 Case No.: 08-37692 Petition Date: December 1, 2008 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Jeff Bohm Debtors' Counsel: Yvette Marie Mastin, Esq. 2323 S. Voss Road, #400 Houston, TX 77057 Tel: 832-251-3662 Fax: 832-971-7206 Email: mastinlaw@yahoo.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Debtor's 4 largest unsecured creditors: 1. Roger Arora c/o John P. Venzke P.O. Box 667485 Houston, TX 77266 2. Bombay Group, L.L.C. c/o John P. Venzke P.O. Box 667485 Houston, TX 77266 3. Maxim Bay III, L.P. c/o John P. Venzke P.O. Box 667485 Houston, TX 77266 4. Mandeep Singh 5406 Havenwoods Houston, TX 77069 The Debtor did not indicate the claim amounts. JPMORGAN ASSET: Moody's Holds & Withdraws 'Ba' Rating on USD Fund ----------------------------------------------------------------- Moody's Investors Service affirms and withdraws the fund credit and market risk ratings assigned to three enhanced yield funds managed by JPMorgan Asset Management: * US Dollar Enhanced Yield fund: Ba/MR5 affirmed and withdrawn; * Euro Enhanced Yield fund: Aa/MR5 affirmed and withdrawn; * Sterling Enhanced Yield fund: Aa/MR5 affirmed and withdrawn. The funds are managed by JPMorgan Asset Management, which is a wholly owned subsidiary of JPMorgan Chase & Co., an experienced, global asset management firm with over $1 trillion in assets under management. The funds' objective is to provide high current income consistent with the preservation of capital and a high degree of liquidity. Although the funds aim to minimize exposure to risk or loss of capital, these funds are not managed with the aim of maintaining a stable net asset value and thus not considered to be constant net asset value money market funds. The last rating action on the US Dollar Enhanced Yield fund, the Euro Enhanced Yield fund, and the Sterling Enhanced Yield fund was on 9 October, 2008 when Moody's downgraded both the credit risk and market risk ratings of the US Dollar Enhanced Yield Fund to Ba/MR5 from Aa/MR3 and the market risk ratings of the Euro Enhanced Yield Fund and Sterling Enhanced Yield Fund respectively to MR5 from MR2 and to MR5 from MR1. Moody's has withdrawn the ratings assigned to these three enhanced yield funds because JPMorgan Asset Management has made the decision to liquidate these funds on 8 December 2008. JPMORGAN COMMERCIAL: S&P Keeps 'CCC-' Rating on Class G Certs. -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from JPMorgan Commercial Mortgage Finance Corp.'s series 1997-C5. Concurrently, S&P affirmed its rating on one other class from this series. The raised ratings reflect increased credit enhancement levels due to the paydown of the mortgage pool balance and the amortization of the remaining loans. The affirmed rating reflects credit enhancement that provides adequate support through various stress scenarios. The limited number of loans remaining in the pool (33) tempers these rating actions. As of the Nov. 17, 2008, remittance report, the trust collateral consisted of 33 mortgage assets with an aggregate principal balance of $112.6 million, down from 269 loans totaling $1.0 billion at issuance. The master servicer, Midland Loan Services Inc., reported full-year 2007 financial information for 83% of the loans in the trust. Based on this information, S&P calculated a weighted average debt service coverage of 1.62x. There are no loans with the special servicer. One asset is classified as 30-plus-days delinquent. To date, the trust has experienced 18 losses totaling $25.4 million. Four loans ($5.3 million, 5%) in the pool have reported a low DSC, three of which are credit concerns. The loans that are credit concerns have an average balance of $1.1 million and have experienced an average decline in DSC of 93% since issuance. Two of the loans are secured by lodging properties, while the remaining loan is backed by an industrial property. All three of the assets are experiencing low occupancy levels. The top 10 real estate exposures have an aggregate outstanding balance of $81.8 million (73%). Year-end 2007 financial information was not available for two of the top 10 exposures. Based on available information, Standard & Poor's calculated a weighted average DSC of 1.67x. Two of the top 10 exposures are on the master servicer's watchlist and are discussed below. Standard & Poor's reviewed property inspection reports provided by the master servicer for all of the assets collateralizing the top 10 loans. All of the properties were characterized as "good." Midland reported a watchlist of 10 loans totaling $27.9 million (25%), including two of the top 10 real estate exposures, which constitute 58% ($16.3 million) of the loans on the watchlist. Details are: -- The largest loan on the watchlist and the third-largest exposure in the pool is the Crosstown Plaza Shopping Center loan ($10.1 million, 9%), which is secured by a 143,134-sq.- ft. retail property in West Palm Beach, Florida. The asset appears on the watchlist because it has insufficient windstorm insurance coverage. Midland reported a 1.12x DSC for the six months ended June 30, 2008, and 78% occupancy as of July 2008. -- The second-largest loan on the watchlist and the sixth- largest exposure in the pool is the Rego Park Nursing Home loan ($6.2 million, 6%), which is secured by a 200-bed health care property in Flushing, New York. The asset appears on the watchlist due to a low DSC. Midland reported a DSC of 0.61x for the 12 months ended Dec. 31, 2006, and 100% occupancy as of December 2006. During the course of S&P's review, Midland provided updated financial data that shows improved property performance (year-end 2007 DSC was 1.22x, and June 2008 DSC was 1.69x). It is S&P's understanding that the asset will be removed from the servicer's watchlist. The remaining loans are on the watchlist due to low occupancies and/or low DSCs. S&P stressed various assets in the mortgage pool as part of its analysis, including the assets on the watchlist, and other assets with credit issues. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised JPMorgan Commercial Mortgage Finance Corp. Commercial mortgage pass-through certificates series 1997-C5 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D AAA AA+ 92.10% E AA+ AA 78.33% F BBB- BB+ 32.45% Rating Affirmed JPMorgan Commercial Mortgage Finance Corp. Commercial mortgage pass-through certificates series 1997-C5 Class Rating Credit enhancement ----- ------ ------------------ G CCC- 0.33% JUHL WIND: Posts $383,311 Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------ Daniel J. Juhl, chief executive officer, and John P. Mitola, president and chief financial officer, disclosed in a regulatory filing with the Securities and Exchange Commission that on June 24, 2008, Juhl Wind, Inc., terminated McElravy, Kinchen & Associates, P.C., as its independent registered public accounting firm. "McElravy Kinchen audited our financial statements for the fiscal year ended December 31, 2007. The reason for the replacement of McElravy Kinchen was that the independent registered public accountants for Juhl Energy Development, Inc. and DanMar and Associates, Inc. is the firm of Boulay, Heutmaker, Zibell & Co. P.L.L.P. We believed that it was in our best interest to have Boulay Heutmaker continue to work with our business, and we therefore retained Boulay Heutmaker as our new independent registered public accounting firm effective as of June 24, 2008. Boulay Heutmaker is located at 7500 Flying Cloud Drive, Suite 800, Minneapolis, Minnesota 55344." "McElravy Kinchen's report on our financial statements for the year ended December 31, 2007, did not contain any adverse opinion or disclaimer of opinion and was not qualified as audit scope or accounting principles, however such year-end report did contain a modification paragraph that expressed substantial doubt about our ability to continue as a going concern," Messrs. Juhl and Mitola relate. As of September 30, 2008, the company's balance sheet showed total assets of $5,031,325 and total stockholders' equity of $1,399,811. For the three months ended September 30, 2008, the company posted a net loss of $383,311 as compared to net income of $110,883 during the same quarter in 2007. "Our net loss was $568,869 for the nine months ended September 30, 2008, as compared to net income of $238,500 during the same nine-month period in 2007. This loss was primarily due to the increase in general and administrative expenses, payroll and one-time costs," Messrs. Juhl and Mitola disclose. A full-text copy of Juhl Wind's Quarterly Report is available for free at: http://researcharchives.com/t/s?35ee About Juhl Wind Juhl Wind, Inc., is engaged in the development of a type of wind power in various small communities in the Midwestern United States and Canada that has been labeled "community wind power." Since 2003, the company has developed 11 wind farms, accounting for more than 117 megawatts of wind power, that currently operate in the Midwest region of the United States. It is presently engaged in various aspects of the development of 16 wind farms totaling an additional 400 megawatts of community wind power systems. Juhl Energy Development, Inc. and DanMar & Associates, Inc. are wholly owned subsidiaries of Juhl Wind. DanMar & Associates, Inc., is engaged in providing consulting services to owners and operators of wind energy projects. Juhl Energy Development, Inc., is engaged in the development of wind farms. Juhl Energy Development, Inc. also has a subsidiary, Community Wind Development Group LLC. KIMBALL HILL: Files Chapter 11 Plan to Wind Down Business --------------------------------------------------------- Kimball Hill Homes said that as a result of the severe economic downturn and escalating turmoil in the credit markets, the Company has made the difficult decision to begin the wind-down of its operations with efforts to facilitate a sale of its business or a bulk sale of its assets to continue during this period. The Company also filed its Chapter 11 plan, which is supported by the official committee of unsecured creditors and the Company's senior lenders. The Company emphasized that homes currently under construction will be completed and delivered over the next six months. "We deeply regret the necessity of [] decision, but given the current housing and financial market conditions we are simply unable to conduct normal operations while the Company continues its sale efforts," said Ken Love, Chief Executive Officer, on Dec. 2. "We believe it is appropriate to begin the wind-down process now to ensure the smoothest transition possible for our employees, our homebuyers, the communities we serve, as well as our creditors." The Company said that it continues to have access to more than $35 million from its debtor-in-possession (DIP) financing facility, which along with home sale proceeds will provide more than ample liquidity to fund payments to contractors and trade partners and meet employee obligations throughout the sale and wind-down process. "We have maintained very strong relationships with our trade partners and suppliers during the bankruptcy and have appreciated their ongoing support, which we anticipate will continue as we complete homes currently under construction," Mr. Love said. "The quick resolution of our trade partners' pre-petition claims following the bankruptcy filing was a significant achievement and we will continue to pay our suppliers as work is completed throughout the process." "Over the last seven months, our employees have worked tirelessly to sustain our business in an unprecedented economic downturn. I want to thank them for their dedication, loyalty and commitment to Kimball Hill Homes," concluded Mr. Love. "I am pleased that the Company will provide both severance and outplacement assistance to impacted employees, in accordance with the Company's standard practices, throughout the sale and wind down period." The Company has asked for a hearing on January 12, 2009, to approve the Disclosure Statement accompanying the Plan. The Company has established a toll-free information line for customers, homeowners, trade partners, and other interested parties. The number is 877-631-3923. Overview & Summary of Plan Kimball Hill, Inc., and its debtor-affiliates filed, together with the Official Committee of Unsecured Creditors, a Chapter 11 Joint Plan and a Disclosure Statement explaining that Plan. The Plan groups claims against and interests in the Debtors into five classes: Class Description Claim Treatment ----- ----------- --------------- N/A DIP Facility Claims * Payment in full in cash Est. Allowed Claim: * Estimated Recovery: 100% $16,000,000 N/A Administrative * Payment in full in cash Claims * Estimated Recovery: 100% Est. Allowed Claim: $1,000,000 N/A Priority Tax Claims * Entitled to: Est. Allowed Claim: $1,000,000 (a) Payment in full in cash; (b) Payment in cash in an amount agreed to by the Holder and the Debtors, with the consent of the Prepetition Agent and the Official Committee of Unsecured Creditors or the Plan Administrator, with the consent of the Liquidation Trust Administrator; or (c) At the option of the Plan Administrator, payment in cash in an aggregate amount of the Allowed Priority Tax Claim payable in installment payments over a period of not more than five years after the Petition Date. N/A Intercompany * Cancelled and no distribution Interest under the Plan * Estimated Recovery: 0% N/A Intercompany * Cancelled and no distribution Claims under the Plan * Estimated Recovery: 0% A-1 Senior Credit * Impaired Agreement Claims * Estimated Recovery: 48% - 37% Est. Allowed Claim: * Entitled to vote on the Plan $315,100,000 * Entitled to receive pro rata share of: (a) the beneficial interests of Post-Consummation Trust; (b) 64% of the proceeds of the Pre-Effective Date Sale Transactions allocable to the Debtors' unencumbered assets; and (c) 100% of the Liquidation Trust Series A Interest. * Each holder of an Allowed Senior Credit Agreement will be deemed to consent to the distribution of $2.1 million in cash from the Committee Settlement Payment to Holder of Allowed Unsecured Senior Subordinated Note Claims on the Effective Date as part of the Settlement. A-2 Other Secured * Unimpaired Claims * Estimated Recovery: 100% Est. Allowed Claim * Not entitled to vote on the Plan $4,000,000 * Entitled to receive: (a) payment in full in cash of the Allowed Other Secured Claim from the net proceeds of the collateral securing the Claim; (b) delivery of the collateral securing any Allowed Other Secured Claim and any interest required to be paid under Section 506(b) of the Bankruptcy Code; or (c) the Allowed Other Secured Claim will otherwise be rendered unimpaired. A-3 Secured Bank Claims * Unimpaired Est. Allowed Claim: * Estimated Recovery: 100% $6,520,000 * Note entitled to vote on the Plan * Entitled to receive: (a) payment in full in cash of the Allowed Secured Bank Claim from the net proceeds of the collateral securing the Claim; (b) delivery of the collateral securing any Allowed Secured Bank Claim and any interest required to be paid under Section 506(b) of the Bankruptcy Code; or (c) the Allowed Secured Bank Claim will otherwise be rendered unimpaired. B Priority Non-Tax * Unimpaired Claims * Estimated Recovery: 100% Est. Allowed Claim: * Not entitled to vote on the Plan $1,000,000 * Each holder of an Allowed Priority Non-Tax Claim will be paid in full in cash from the collateral securing the Senior Credit Agreement Claims. C-1 Senior Unsecured * Impaired Claim * Estimated Recovery: 36% - 29% Est. Allowed Claim * Entitled to vote on the Plan $43,571,000 * Each holder of an allowed Senior Unsecured Claim will receive pro rata share of: (a) 36% of the proceeds of the Pre-Effective Date Sale Transactions allocable to the Debtors' unencumbered assets; (b) 100% of the Liquidation Trust Series B Interests; and (c) $3.9 million from the Committee Settlement Payment. C-2 General Unsecured * Impaired Claims * Estimated Recovery: 20% - 17% Est. Allowed Claim: * Entitled to vote on the Plan $130,900,000 * Each holder of an Allowed General Unsecured Claim will receive pro rate share of: (a) 36% of the proceeds of the Pre-Effective Date Sale Transactions allocable to the Debtors' unencumbered assets; (b) 100% of the Liquidation Trust Series B Interests; and (c) $3.9 million from the Committee Settlement Payment. C-3 Unsecured Senior * Impaired Subordinated Note * Estimated Recovery: 1% Claim * Entitled to vote on the Plan Est. Allowed Claim: * Each holder of an Allowed $210,600,000 Unsecured Senior Subordinated Note Claim will receive and retain its pro rate share of $2.1 million in cash from the Committee Settlement Payment. If (a) if Class C-3 votes to reject the Plan, or (b) if any holder of an Allowed Unsecured Senior Subordinated Note Claim or the Indenture Trustee objects to the Confirmation of the Plan or files a notice of appeal of the Confirmation Order, then the Cash payment will not be made and holder of Allowed Unsecured Senior Subordinated Note Claims will not receive and retain a distribution under the Plan. In that event, the $2.1 million in cash will revert to holders of Liquidation Trust Series B Interest for distribution pursuant to the provisions of the Plan and the Liquidation Trust Agreement. D Subordinated Debt * Impaired Securities Claims * Estimated Recovery: 0% Est. Allowed Claim: * Not entitled to vote on the Plan $0 * Holders of Claims in Class D will not receive a distribution from the Estates under the Plan. E Interests * Impaired * Estimated Recovery: 0% * Not entitled to vote on the Plan * Holders of Interests in Class E will not receive a distribution from the Estates under the Plan. Based on their valuation, the Debtors believe that the secured portion of the Senior Credit Agreement Claims is allowable (a) in the amount of $72,000,000 in the aggregate in the event the Debtors do not consummate, on or before the Effective Date, a sale of all or substantially all of their assets that are collateral securing the Senior Credit Agreement Claims, or (b) in the event the sale is consummated on or before the Effective Date, in the amount of consideration allocable to the assets securing the Senior Credit Agreement Claims. A full-text copy of the 65-page Joint Chapter 11 Plan is available for free at: http://bankrupt.com/misc/Kimball_Ch11Plan.pdf A full-text copy of the 187-page Disclosure Statement is available for free at: http://bankrupt.com/misc/Kimball_DisclosureStatement.pdf The Debtors ask the Court to approve the Disclosure Statement as containing adequate information pursuant to Section 1125 of the Bankruptcy Code. Section 1125 defines "adequate information" to mean information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors will continue to review the Disclosure Statement and, based on their ongoing review and further developments in their Chapter 11 cases, may make changes and disclosures before the Disclosure Statement hearing. Any additional disclosures will increase the amount of information to to holders of claims and interests and will consequently enhance the adequacy of information in the Disclosure Statement, he says. The Court will convene a hearing on January 13, 2009, at 2:00 p.m., C.T., to consider approval of the Disclosure Statement. Parties-in-interest are enjoined to file their objections with the Court no later than January 6, 2009. About Kimbal Hill Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007, reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Jan. 16, 2009, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Seeks Court OK to Solicit Votes on Liquidation Plan ----------------------------------------------------------------- Kimball Hill Inc., and its affiliated Debtors seek permission from the U.S. Bankruptcy Court for the Northern District of Illinois to begin soliciting votes on their Joint Chapter 11 Plan in accordance with a proposed schedule and protocol. The Debtors ask the Court to establish the first day of the Disclosure Statement hearing as the record date for determining (a) the holders of claims entitled to receive a Solicitation Package pursuant to the Solicitation Procedures; (b) the holders of claims entitled to vote to accept or reject the Plan; and (c) whether claims have been properly transferred to an assignee pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure so that the assignee can vote as the holder of the claim. The Debtors ask the Court to set the deadline to turn in votes to accept or reject the Plan at 5:00 p.m. prevailing Pacific Time on the date that is 10 calendar days before the confirmation hearing. Confirmation objections are due on that same day. The Debtors plan to file responses to these objections no later than five days before the confirmation hearing. The Debtors will ask the Court to set the date of the confirmation hearing at the January 13 Disclosure Statement Hearing. Solicitation Procedures To efficiently solicit votes in connection with the Plan in a manner that is consistent with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and due process, the Debtors seek approval of their proposed Solicitation Procedures. The Debtors have retained Kurtzman Carson Consultants, LLC, as their voting and solicitation agent. To the extent not already authorized, the Debtors ask the Court to authorize Kurtzman to assist them in, among others: -- distributing the Solicitation Packages and soliciting votes on the Plan; -- receiving, tabulating, and reporting on Ballots and Master Ballots cast to accept or reject the Plan by Holders of Claims; and -- responding to inquiries relating to the Disclosure Statement, the Plan, and the Solicitation Procedures. The Debtors also seek to utilize the services of Financial Balloting Group LLC to solicit votes of Holders of Claims based on publicly traded securities. The Debtors propose to distribute solicitation packages that contain, among others, paper copies of the Solicitation Procedures Order, a letter from the Debtors' significant constituents urging holder in each voting class to accept the Plan, the appropriate ballot, and the confirmation hearing notice. The Debtors intend to distribute the Solicitation Packages to Holders of Claims entitled to vote no later than 28 calendar days before the Voting Deadline. The forms of the ballots and the master ballots are based on Official Form No. 14 and have been modified to (a) address the particular circumstances of the Debtors' chapter 11 cases and (b) include additional information the Debtors believe to be relevant for each Class of Claims entitled to vote on the Plan. Proposed Voting and Tabulation Procedures The Debtors propose that only these Holders of Claims will be entitled to vote: (a) Holders of Claims for which Proofs of Claims have been timely filed, as reflected in the claims register as of the Record Date; provided that Holders of Claims subject to a pending objection will not be entitled to vote unless they become eligible to vote through a Resolution Event. (b) Holders of Claims that are listed in the Debtors' schedules of assets and liabilities except those Claims that are scheduled as contingent, disputed, or unliquidated; provided that Holders of contingent, disputed, or unliquidated claims for which the applicable Bar Date has not passed may vote; (c) Holders whose Claims arise pursuant to an agreement or settlement with the Debtors regardless of whether a Proof of Claim has been filed; and (d) the applicable Nominee, as reflected in the relevant records as of the Record Date. The Debtors also propose to use these general tabulating procedures and standard assumptions, among others, in tabulating Ballots and Master Ballots: (a) unless the Ballot or Master Ballot is submitted on or prior to the Voting Deadline, the Debtors will reject that Ballot or Master Ballot as invalid; (b) an original executed Ballot or Master Ballot submitted for tabulation must be original and must be executed. Delivery of a Ballot or Master Ballot by facsimile, email, or any other electronic means will not be valid; (d) the Debtors will tabulate all Ballots and Master Ballots and file a voting report no later than five calendar days prior to the Confirmation Hearing; (e) the Debtors will provide notice of the Voting Report to the U.S. Trustee, the Master Service List, the 2002 List, and all parties who have timely filed an objection to the Plan by the Plan Objection Deadline, and will also serve a copy of the Voting Report to the Court. The Plan contemplates for certain Beneficial Holders of Claims to vote on the Plan. The Debtors propose a separate set of voting procedures for Beneficial Holders of Claims. About Kimbal Hill Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007, reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Jan. 16, 2009, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Seeks Court OK for Wind-Down Incentive Plans ---------------------------------------------------------- Kimball Hill Inc., and its affiliated Debtors seek permission from the U.S. Bankruptcy Court for the Northern District of Illinois to implement employee incentive plans in light of the proposed liquidation of their businesses. After significant consultation with their Prepetition Lenders and the Official Committee of Unsecured Creditors, the Debtors have determined to continue the sale process while they commence an orderly wind-down of operations. The Debtors contemplate an immediate and substantial reduction in force and have identified those critical employees whose contributions are essential for the first phase of the Sale and Wind-Down Process and thereafter. To motivate these employees to complete their essential tasks to enable the Debtors to pursue a sale transaction that will expedite realization of asset proceeds and distributions to creditors, as well as to maximize the value of the Debtors' estates, the Debtors ask the Court to approve an Associate Incentive Plan and a Management Incentive Plan. The Associate Incentive Plan The Debtors relate that approximately 225 full-time employees are involved in the Wind-Down, which number will gradually be reduced as the Wind-Down progresses. The Associate Incentive Plan provides that: (a) Payments are based upon the level of the employees and their length of service until completion of the Wind-Down, subject to a maximum of 25% of base pay. Payment will be made if the Key Employees meet designated targets which will be established for each 13-week period of the Wind- Down. (b) The Wind-Down targets of the Key Employees include (i) projected proceeds from consolidated home closings (ii) projected number of homes remaining in inventory for which a certain stage of construction has been achieved or exceeded, and (iii) a satisfactory performance rating. The Wind-Down Targets will be determined in connection with the Wind-Down budget approved jointly by the Debtors, the Creditors' Committee, and the Prepetition Agent. (c) If the Key Employees achieve 90% or more of the Wind-Down Targets, they would receive these payments: Incentive Amount Level (Amt. of Base Salary) ------ --------------------- Non-exempt (hourly) 1 week/month of wind-down service Exempt (salary) 2 weeks/month of wind-down service Management 2 weeks/month of wind-down service Executive 2 weeks/month of wind-down service (d) If the Key Employees do not fully achieve the Wind-Down Targets, their Associate Incentive payment will be calculated based on the percentage of Wind-Down Targets achieved: Percentage to ========================================= Associate Wind-down Targets Incentive Payment ----------------- ----------------- 20% - 60% 50% 61% - 90% 75% (e) Key Employees terminated at the end of the first Wind-Down Interval will receive their Associate Incentive Payments upon termination. Key Employees terminated after Phase I will receive 25% of the Associate Incentive Payment earned during the previous Wind-Down Interval within 15 days after the end of each Wind-Down Interval during which they remain employed by the Debtors. The balance of the Associate Incentive Payment will be paid upon termination. Key Employees that are terminated during the first 45 days of a Wind-Down Interval will not be subject to the Wind- Down Targets for that Wind-Down Interval but will have to meet qualitative objectives and meet the Rating Target in order to be eligible for an Associate Incentive Payment for the period after the end of the prior Wind-Down Interval. Key Employees terminated on or after day 46 of a Wind-Down Interval will be subject to the Wind-Down Targets for that Wind-Down Interval. The Associate Incentive Plan also provides for the creation of a discretionary bonus pool to be paid to certain Key Employees at the discretion of the Debtors' chief executive officer. This plan provides for $250,000 pool with awards to any one Key Employee capped at $50,000. This Discretionary Bonus Plan replaces the same plan approved as part of the Original Incentive Program. The incremental cost of this plan is $50,000. The Associate Incentive Plan payments comprise a gross incentive amount ranging from about $1,000 to $65,000 per employee, depending on the respective Employee's years of service, base salary, and rank. The Associate Incentive Plan payments will not exceed 25% of the Key Employees' gross annual base salary, with average payments per Key Employee of 16% of gross annual base salary. The maximum total amount of payments to be made to Key Employees under the Associate Incentive Plan is estimated at approximately $2,400,000, including taxes, based upon currently estimated termination dates. Douglas J. Friske, a managing principal at Towers, Perrin, Forster and Crosby, Inc., who is familiar with the Debtors' employee incentive plans, relates that the Associate Incentive Plan provides a competitive level of compensation in a format that recognizes the Debtors' limitations in bankruptcy. The Management Incentive Plan In order to maintain, recognize, and reward commitment by the Senior Management to the success of the Wind-Down, the Debtors have developed a Management Incentive Plan which provides Senior Management with incentives to (1) dedicate themselves during Phase I to implementing and managing through a successful Wind-Down, referred to as the "Completion Bonus", and (2) complete a bulk sale of the Debtors' businesses, or the "Transaction Bonus". (1) Completion Bonus (a) The Completion Bonus will be paid from a fixed pool established at the end of Phase I. The size of the Completion Bonus Pool will be determined by these percentage of Wind-Down Targets achieved: * 20% ? 80% of Wind-Down Targets will result in a $750,000 Completion Bonus Pool; * 80% ? 99% of Wind-Down Targets will result in a $1.0 million Completion Bonus Pool; and * 100% or greater of Wind-Down Targets will result in a $1.52 million Completion Bonus Pool. (b) Allocation of the Completion Bonus Pool among the members of the Senior Management are: Officers Percentage of Bonus -------- ------------------- Chief Executive Officer 39.5% Regional Vice President 19.1% Regional Vice President 13.2% Chief Finance Officer 10.5% Head of Human Resources 8.7% General Counsel 5% Corporate Controller 4% (c) Payment of the Completion Bonus will be made within 15 days after the end of Phase I. Members of the Senior Management who voluntarily terminate their employment or are terminated for cause prior to their scheduled Termination Date will forfeit all Completion Bonus benefits. The Completion Bonus Pool will be reduced pro rata on the basis of the amounts allocated to any members of the Senior Management who voluntarily terminate their employment or are terminated for cause before the end of Phase I. (2) Transaction Bonus (a) If the Debtors complete a Transaction, an incremental bonus pool will be created and calculated based on when a contract is executed and deposit paid: * 0 ? 30 days after commencement of the Wind-Down will result in a Transaction Bonus Pool of 1% of the total cash proceeds from the sale plus assumed postpetition liabilities; * 31 ? 60 days after commencement of the Wind-Down will result in a Transaction Bonus Pool of 0.75% of the Transaction Value; * 61 ? 90 days after commencement of the Wind-Down will result in a Transaction Bonus Pool of 0.50% of the Transaction Value. (b) Allocation of the Transaction Bonus Pool among the members of the Senior Management is pursuant to the Management Allocations. (c) Payment of the Transaction Bonus will be made within 15 days after closing of any Transaction. Members of Senior Management who voluntarily terminate their employment or are terminated for cause prior to their scheduled termination date will forfeit all Transaction Bonus benefits. The Transaction Bonus Pool will be reduced pro rata on the basis of the amounts allocated to any eligible employees who voluntarily terminate their employment or are terminated for cause before the end of the end of Phase I. Mr. Friske says the Management Incentive Plan will result in incentive payments that amount to less than the target bonus for the fiscal year for the executives included in the Plan. The Debtors relate that the cost of engaging outside contractors to conduct the winddown is substantially more than that under the proposed Incentive Programs. Accordingly, they assert that the costs associated with the Incentive Plans are more than justified by the benefits expected to be realized. The Court will consider the Debtors' request at a hearing on December 17, 2008. Objections must be filed no later than December 12, 2008. About Kimbal Hill Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007, reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Jan. 16, 2009, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LAND O' LAKES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Land O' Lakes Marine, Inc. 3208 Land O' Lakes Blvd. Land O Lakes, FL 34639-4406 Case No.: 08-19539 Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: 813-877-4669 Fax: 813-877-5543 Buddy@tampaesq.com Total Assets: $2,297,500 Total Debts: $1,987,699 A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb08-19539.pdf LANDSBANKI ISLANDS: Seeks Chapter 15 Protection in Manhattan Court ------------------------------------------------------------------ Iceland's Landsbanki Islands hf sought protection under Chapter 15 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in the Southern District of New York on December 9, 2008. Based in Reykjavik, Landsbanki disclosed more than $1 billion of both assets and liabilities, according to various reports. Kaupthing Bank hf on November 30 and Glitnir Banki hf on Nov. 26 have also sought Chapter 15 protection before the Manhattan court. According to Reuters, all three banks had been seized by Iceland's Financial Supervisory Authority as the global credit crisis deepened. Reuters relates that Kristinn Bjarnason, a court-appointed assistants managing Landsbanki Islands' reorganization, told the U.S. court that since 2006, the bank has issued $2.6 billion of notes in the United States. Landsbanki's known asssets in the United States are bank accounts, some loan receivables and bonds and stocks held for hedging purposes, Ms. Bjarnason said in a court filing, according to Reuters. Landsbanki has asked the U.S Court to recognize its bankruptcy proceedings in Iceland as a foreign main proceeding under Chapter 15. "The ultimate goal of Landsbanki is to satisfy the claims of creditors and to try to preserve the value of the bank's assets to the extent possible," Ms. Bjarnason said, according to Reuters. Reuters notes that Iceland's banks had taken on billions of dollars of debt in recent years to fund aggressive overseas expansion. After the country took a majority stake in Glitnir in late September, Reuters relates, investors rushed to shed Icelandic assets, causing the krona to sink and a bank run on the nation's largest lenders. Reuters says the International Monetary Fund approved on November 19 a $2.1 billion loan for Iceland as part of an assistance package totaling about $10 billion. On October 7, 2008, following the continued deterioration in the financial markets, the Financial Supervisory Authority of Iceland used powers granted by the Icelandic Parliament to take control of Landsbanki. Subsequently, New Landsbanki Bank hf was created and Old Landsbanki's domestic Icelandic deposits, as well as significant Old Landsbanki assets relating to its Icelandic operations, were transferred to it. New Landsbanki is wholly owned by the Icelandic Government. New Landsbanki has taken over all of Old Landsbanki's domestic Icelandic deposits, together with significant Old Landsbanki assets that were related to its Icelandic operations, such as loans and other claims. Old Landsbanki retains all liabilities and assets not transferred to New Landsbanki. New Landsbanki will issue a bond to Old Landsbanki, the face value of which will be the net difference between the assets and liabilities transferred into New Landsbanki from Old Landsbanki, to reflect a fair value asset adjustment verified by an independent third party. A Resolution Committee has been appointed by the FME to supersede the board of directors of Old Landsbanki. The role of the Resolution Committee is to oversee the realisation of assets, maximize the value as much as possible, and retain within Old Landsbanki until a formal process of payment distribution commences. On October 30, the Resolution Committee appointed the U.K. limited liability partnership of Deloitte & Touche LLP to assist with the communication and consultation with all remaining creditors of Old Landsbanki including its international branches. The Resolution Committee tapped Deloitte to assist it in setting up an informal committee of creditors representing a broad cross section of financial institutions, bond holders, international deposit holders, and other creditors. On November 14, the first informal creditors' committee meeting was in Reykjavik. The ICC is made up of creditors and creditor's representatives of Old Landsbanki representing the interests of different classes and types of creditors. According to Mr. Larus Finnbogason, Chairman of the Resolution Committee, the meeting discussed the background to Landsbanki's operations and the circumstances leading up to action taken by the Icelandic financial regulator. Attendees were informed of actions being taken by the Resolution Committee to both maximize long-term value and protect assets for stakeholders and there was a discussion of the way forward for Old Landsbanki to achieve the best long-term result for stakeholders. The Resolution Committee said it looks forward to working closely with the ICC towards a solution that maximizes recovery for all stakeholders. LANDSBANKI ISLANDS: Voluntary Chapter 15 Case Summary ----------------------------------------------------- Chapter 15 Debtor: Landsbanki Islands hf. Austurstraeti 11, IS 155 Reykjavik, Iceland Bankruptcy Case No.: 08-14921 Type of Business: The Debtor is a financial institution. See: http://www.landsbanki.is/ Chapter 15 Petition Date: December 9, 2008 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Gary S. Lee, Esq. glee@mofo.com Morrison & Foerster LLP 1290 Avenue of the Americas, 40th Floor New York, NY 10022 Tel: (212) 468-8042 Fax: (212) 468-7900 Estimated Assets: More than $ 1 billion Estimated Debts: More than $ 1 billion LB-UBS COMMERCIAL: S&P Keeps B- Rating on Class S Certificates -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust 2003-C8. Concurrently, S&P affirmed its ratings on 17 other classes from the same series. The upgrades reflect increased credit enhancement levels resulting from a 29% reduction in the mortgage pool balance since issuance, as well as the defeasance of the collateral securing 11% ($107.6 million) of the pool. The affirmations reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Nov. 18, 2008, remittance report, the collateral pool consisted of 88 loans with an aggregate principal balance of $990.0 million, down from 94 loans with a $1.4 billion balance at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 99.7% of the pool, excluding the defeased loans. Almost all (98.8%) of the servicer-reported information was year-end 2007 or interim 2008 data. Based on this information, S&P calculated a weighted average debt service coverage of 1.80x, up from 1.71x at issuance. All of the loans in the pool are current. There is one loan ($5.1 million, 0.5%) with the special servicer, LNR Partners Inc. The trust has not incurred any losses to date. The top 10 loans secured by real estate have an aggregate outstanding balance of $551.6 million (56%) and a weighted average DSC of 2.05x, up from 1.94x at issuance. Two of the top 10 loans appear on the servicer's watchlist and are discussed below. S&P reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. One property was characterized as "excellent," while the remaining collateral was characterized as "good." Credit characteristics for four of the loans in the pool continue to be consistent with those of investment-grade rated obligations. Details of these loans are: -- The largest exposure in the pool, the Grove loan, has a trust balance of $163.7 million (17%). The loan is secured by the leasehold interest in a 583,688-sq.-ft. lifestyle center retail property in Los Angeles, Califrnia. For the year- ended Dec. 31, 2007, the DSC was 2.39x and occupancy was 99.2%. S&P's adjusted net cash flow is comparable to its level at issuance. -- The second-largest exposure, the 114 West 47th Street Building loan, has a trust balance of $106.7 million (11%) and is secured by a leasehold interest in a 596,815-sq.-ft. office property in Manhattan. The property serves as the U.S. headquarters for U.S. Trust Co. of New York. Wachovia reported a DSC of 1.93x for the year-ended 2007 and 97% occupancy as of July 31, 2008. Standard & Poor's adjusted net cash flow is comparable to its levels at issuance. -- The third-largest exposure, Westfield Shoppingtown South County Mall, has a trust balance of $79.2 million (8%). The loan is secured by 451,651 sq. ft. of a 1.02-million-sq.-ft. regional mall in St. Louis, Missouri. The sponsor of the loan and manager of the property is Westfield America Trust (A-/Stable/--). Wachovia reported a DSC of1.89x as of year- end 2007 and 95.9% occupancy as of June 30, 2008. -- The eighth-largest exposure, Liberty Tree Mall, has a trust balance of $35.0 million (4%). The interest-only loan is secured by 449,718 sq. ft. of an 859,237-sq.-ft. regional mall in Danvers, Massachussetts. The sponsor of the loan and manager of the property is Simon Property Group Inc. (A-/Stable/--). Standard & Poor's analysis of the property's cash flow indicated a loan-to-value of 41%. The credit characteristics of 23rd-largest exposure, Sangertown Square, ($14.1 million, 1%) are no longer consistent with those of an investment-grade rated obligation. The exposure is a B note that is subordinate to a $56.6 million A note. The $56.6 million A note was securitized in the LB-UBS Commercial Mortgage Trust 2000-C3 transaction. Both loans are secured by an 855,360-sq.-ft. regional mall in New Hartford, New York. Standard & Poor's analysis of the property's cash flow result in a LTV of 81%. There are seven loans ($66.2 million) in the pool that have reported low DSC, three of which are credit concerns. The three loans that are credit concerns are secured by office, retail, and lodging properties, have an average balance of $7.7 million, and have experienced a weighted average decline in DSC of 72% since issuance. The collateral properties have experienced a combination of declining occupancy and higher operating expenses since issuance, and S&P does not expect DSC to improve significantly in the near future. The Rock Road Center loan ($5.1 million, 0.5%), the one loan with the special servicer, was transferred to LNR on Oct. 24, 2008 for imminent default. The loan is secured by an 86,500-sq.-ft. retail center in Wichita, Kansas. The collateral property is occupied by three tenants: Linens 'N Things, (43% of net rentable area), Office Max (27% of net rentable area), and Appollon Computers (29%). Due to the closure of Linens 'N Things, the property's cash flow will be insufficient to support the debt service payments. LNR is evaluating the situation to determine the asset strategy. The reported DSC was 1.39x as of June 30, 2008. Wachovia reported a watchlist of 15 loans ($125.5 million, 13%). The Milestone Hotel portfolio loan ($29.3 million, 3%), the largest loan on the watchlist and the sixth-largest exposure in the pool, is secured by four lodging properties in New York, Florida, and Pennsylvania. The loan is on the watchlist because the four properties reported a weighted average DSC of 0.93x for the six months ended June 30, 2008. All four properties have experienced declines in revenue due to the softening market and competition. The properties have also experienced increases in operating expenses. -- The Oceanview Village Shopping Center loan ($18.8 million, 2%), the eighth-largest loan, is secured by a 98,515 -sq.-ft. grocery anchored retail property in San Francisco, California. The loan is on the watchlist because Hollywood Video vacated the property and rejected its lease after the company filed for bankruptcy. The grocery anchor, Albertsons, subleased its space to a local grocery chain but remains financially obligated through the end of its lease. Wachovia reported a DSC of 1.04x for the six months ended June, 30 2008, and an occupancy of 94% as of March 2008. S&P stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised LB-UBS Commercial Mortgage Trust 2003-C8 Commercial mortgage pass-through certificates series 2003-C8 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D AAA AA+ 16.08% E AA+ AA 13.79% F AA AA- 12.37% Ratings Affirmed LB-UBS Commercial Mortgage Trust 2003-C8 Commercial mortgage pass-through certificates series 2003-C8 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 20.85% A-3 AAA 20.85% A-4 AAA 20.85% B AAA 19.35% C AAA 17.85% G A+ 10.25% H A- 8.48% J BBB+ 7.07% K BBB 4.95% L BB+ 4.24% M BB 3.53% N BB- 3.00% P B+ 2.30% Q B 1.94% S B- 1.59% X-CL AAA N/A X-CP AAA N/A N/A - Not applicable. LEEK FINANCE: Fitch Downgrades Rating on Class D Notes to 'B+' -------------------------------------------------------------- Fitch Ratings has affirmed 11 tranches of Leek Finance Number 19 plc, a non-conforming RMBS transaction issued by Platform Funding Limited, a wholly owned subsidiary of Britannia Building Society (Britannia - 'A-' ((A minus))/ 'F2'/Outlook Negative). At the same time, the agency has downgraded the class D notes to 'B+' from 'BB' and revised the Outlooks on the class C notes to Negative from Stable. The rating actions are listed below. The downgrades and revised Outlooks affecting the lower-rated notes of Leek 19 reflect high and increasing mortgage loan arrears, repossessions, losses, very high weighted-average loss severity and a high loan-to-value ratio. Loans that are three months or greater in arrears accounted for 6.21% of the outstanding balance as of September 2008, higher than previous transactions from the Leek series at the same level of seasoning. The total number of properties in repossession increased to 2.82% of the current collateral balance in September from 2.39% in June, with cumulative net losses totalling 0.58%. This transaction has historically had a high WALS, which has increased significantly in the last quarter: period WALS totalled 43.81% and cumulative WALS totalled 32.45%. Fitch has been informed that this increase is due to specific loans with acute losses of over GBP100,000, primarily on flats/maisonettes in the North West, Yorkshire and East Midlands which have been sold at auction. Although this may therefore be a one-off increase, the agency expects an increasing trend in WALS throughout the UK Non- Conforming market due to continuing house price declines in the UK. The Leek series of transactions include a provisioning mechanism that traps excess revenue at the bottom of the revenue waterfall to build a loss provision reserve. Fitch has given credit for this reserve to the lower-rated classes. -- Class A1a (ISIN XS0294474464) affirmed at 'AAA'; Outlook Stable -- Class A1b (ISIN XS0294475867) affirmed at 'AAA'; Outlook Stable -- Class A2a (ISIN XS0294479778) affirmed at 'AAA'; Outlook Stable -- Class A2b (ISIN XS0294480602) affirmed at 'AAA'; Outlook Stable -- Class A2c (ISIN XS0294482483) affirmed at 'AAA'; Outlook Stable -- Class Ma (ISIN XS0294483614) affirmed at 'AA'; Outlook Stable -- Class Mc (ISIN XS0294484349) affirmed at 'AA'; Outlook Stable -- Class Ba (ISIN XS0294484778) affirmed at 'A'; Outlook Stable -- Class Bc (ISIN XS0294485072) affirmed at 'A'; Outlook Stable -- Class Ca (ISIN XS0294485403) affirmed at 'BBB'; Outlook revised to Negative from Stable -- Class Cc (ISIN XS0294486476) affirmed at 'BBB'; Outlook revised to Negative from Stable -- Class Da (ISIN XS0294486559) downgraded to 'B+' from 'BB'; Outlook Negative -- Class Dc (ISIN XS0294486716) downgraded to 'B+' from 'BB'; Outlook Negative LEHMAN BROTHERS: Moody's Downgrades Senior Rating to 'C' From 'B3' ------------------------------------------------------------------ Moody's Investors Service downgraded the senior ratings of Lehman Brothers Holdings Inc., and those of certain guaranteed subsidiaries, to C from B3. The firm's subordinated debt was downgraded to C from Caa2, and its preferred stock to C from Ca. The senior long-term rating of Lehman Brothers Inc. was lowered to Ca from B1 and subordinated debt to C from B3. The short-term ratings for all rated Lehman entities are Not-Prime. This rating action concludes the review of Lehman's long-term ratings. Moody's will subsequently withdraw the ratings within the next few days. On September 15, Moody's downgraded Lehman's ratings and placed them on review for possible further downgrade following the firm's announcement that it was filing for Chapter 11 bankruptcy protection. The B3 rating assigned at that time to LBHI senior obligations reflected Moody's expectations that the financial regulators would look to achieve an orderly wind-down of the firm, which would help support existing asset value coverage and recovery for senior creditors. Moody's said that the rating action reflects its expectations that recoveries for senior creditors will likely be significantly reduced as a result of continued market value declines and the likelihood that Lehman's liquidation will continue to be a somewhat disorderly and protracted process that could extend for several years. The extended time expected to affect such a wind- down poses uncertainty as to ultimate asset value realizations. Potential recoveries implied by the C rating are between 0 to 50%, with senior creditors at the upper end of the range and subordinated and preferred claims at zero. The Ca rating on Lehman Brothers Inc. reflects the potential for a higher recovery rate (50-70%) for Lehman's regulated primary broker-dealer given its higher quality balance sheet and minimal outstanding debt relative to Lehman's unregulated entities. Though LBI was not part of the initial bankruptcy filing, the entity was placed into liquidation by the Securities Investors Protection Corporation on September 19, 2008 to facilitate the sale of substantially all of Lehman's North American capital markets, research and investment banking operations to Barclays Capital, as well as to move acquired customer accounts and balances to Barclays. The B3 long-term bank deposit and issuer ratings of Lehman Brothers Commercial Bank and Lehman Brothers Bank, FSB were confirmed with a stable outlook. The higher ratings for the two U.S. banks reflect the potential for significantly higher recovery for uninsured depositors and creditors given the subsidiaries' capital buffer. LBHI had guaranteed the obligations of both FSB and LBCB. Both banks continue to operate and depositors and creditors continue to receive timely payments. However, Moody's expects that as deposits mature the banks may face liquidity pressures and could be liquidated or sold. The ratings of these Lehman subsidiaries are based solely upon the quality of the guarantee from LBHI and do not reflect the intrinsic quality of the balance sheets of these rated entities. * Lehman Brothers International (Europe), * Lehman Brothers OTC Derivatives Inc., * Lehman Brothers Special Financing Inc., * Lehman Brothers Bankhaus AG, * Lehman Brothers Treasury Co, B.V. Lehman Brothers Holdings Inc. is a financial services holding company headquartered in New York. The company filed for protection under Chapter 11 of the US bankruptcy code on September 15, 2008. The last rating action was on September 15, 2008 when the ratings of Lehman Brothers Holdings Inc. were placed under review for possible downgrade. Issuer: Lehman Brothers Bank, FSB Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Confirmations: -- Issuer Rating, Confirmed at B3 -- Senior Unsecured Deposit Rating, Confirmed at B3 Issuer: Lehman Brothers Bankhaus AG Downgrades: -- Multiple Seniority Medium-Term Note Program, Downgraded to C from a range of Caa2 to B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Commercial Bank Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Confirmations: -- Issuer Rating, Confirmed at B3 -- Senior Unsecured Deposit Note/Takedown, Confirmed at B3 Issuer: Lehman Brothers Holdings Capital Trust I Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust II Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust III Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust IV Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust IX Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust V Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust VI Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust VII Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust VIII Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust X Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust XI Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Capital Trust XII Downgrades: -- Preferred Stock Shelf, Downgraded to (P)C from (P)Caa2 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings E-Capital Trust I Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Inc. Downgrades: -- Issuer Rating, Downgraded to C from B3 -- Multiple Seniority Medium-Term Note Program, Downgraded to C from a range of Caa2 to B3 -- Multiple Seniority Shelf, Downgraded to (P)C from a range of (P)Caa2 to (P)B3 -- Preferred Stock Preferred Stock, Downgraded to C from Ca -- Subordinate Regular Bond/Debenture, Downgraded to C from Caa2 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to C from B3 -- Senior Unsecured Medium-Term Note Program, Downgraded to C from B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from B3 -- Senior Unsecured Shelf, Downgraded to (P)C from (P)B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Inc. (London) Downgrades: -- Multiple Seniority Medium-Term Note Program, Downgraded to C from a range of Caa2 to B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Holdings Plc Downgrades: -- Multiple Seniority Medium-Term Note Program, Downgraded to C from a range of Caa2 to B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers International (Europe) Downgrades: -- Issuer Rating, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers OTC Derivatives Inc. Downgrades: -- Issuer Rating, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Special Financing Inc. Downgrades: -- Issuer Rating, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers Treasury Co. B.V. Downgrades: -- Multiple Seniority Medium-Term Note Program, Downgraded to C from B3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to C from B3 -- Senior Unsecured Medium-Term Note Program, Downgraded to C from B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from a range of Caa2 to B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers UK Cap. Fund. II Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers UK Capital Funding III LP Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Issuer: Lehman Brothers UK Capital Funding IV LP Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers UK Capital Funding LP Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers UK Capital Funding V LP Downgrades: -- Preferred Stock Preferred Stock, Downgraded to C from Ca Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review Issuer: Lehman Brothers, Inc. Downgrades: -- Issuer Rating, Downgraded to Ca from B1 -- Multiple Seniority Shelf, Downgraded to a range of (P)C to (P)Ca from a range of (P)B3 to (P)B1 -- Senior Subordinated Medium-Term Note Program, Downgraded to C from B3 -- Senior Subordinated Regular Bond/Debenture, Downgraded to C from B3 Outlook Actions: -- Outlook, Changed To Stable From Rating Under Review LEHMAN BROTHERS: Superior Pipelines Wants to Prosecute LCPI Suits ----------------------------------------------------------------- Superior Pipelines, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to prosecute a pending lawsuit against Lehman Commercial Paper, Inc., and others. The lawsuit is currently pending before the U.S. Bankruptcy Court for the Eastern District of California. Superior is a building contractor operating in the state of California. In March 2006, Superior, under a written letter of intent with debtor LBREP/L-SunCal McAllister Ranch LLC, commenced work on a residential development located east of Highway 43 and west of the future Allen Road extension on Panama Lane in Kern County, called McAllister Ranch. Walter E. Alexander, president of Superior, relates that McAllister Ranch was designed to be a 2,070-acre master planned community development and was to be constructed on the Debtor's real property. Turman Construction Company, Inc., was hired by the Debtor to do Earth work in July 2005. Between April 2006 and September 2007, Superior installed utilities -- storm drains, water system, sewer, electric, cable, telephone and gas -- on the Property. T. Scott Belden, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, in Bakersfield, California, relates that Superior has provided labor, services, equipment and material to the Property in excess of $16,000,000. The Debtor paid Superior $9,927,801 and owes Superior $6,385,162, exclusive of interest. Mr. Alexander relates that in March 2008, he was told by Sam Bowman, project manager of McAllister Ranch, that the Debtor was going to walk away from the Property and shut it down. Superior filed mechanics' liens against the Property and then filed a complaint in the Superior Court of Kern County against the Debtor and Lehman Commercial Paper, Inc., among others, for breach of contract and to foreclose its Mechanics' Liens. Superior attached $1.2 million of SunCal's funds that are in the hands of a third party, McAllister Ranch Irrigation District. MRID disputes that the funds Superior attached are SunCal's property. Mr. Belden says MRID continues to use those funds to operate, so the funds are eroding. Superior also attached $835,000 of SunCal's funds that were on deposit with Pacific Gas and Electric Company. On September 11, 2008, three creditors filed an involuntary Chapter 11 petition against SunCal and several of its affiliates in the Central District of California, Santa Ana Division. Judge Erithe A. Smith appointed a Chapter 11 trustee on October 28, 2008. Superior filed a notice to remove the Superior Court case to the California Bankruptcy Court for the Eastern District. Superior wants to file its First Amended Complaint in the removed proceeding to add claims for relief for: (1) equitable subordination under Section 510(c) of the Bankruptcy Code, (2) determination of nature, extent, and validity of liens under Section 506 of the Bankruptcy Code, and (3) declaratory relief under Sections 362 and 541 of the Bankruptcy Code. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Sola Sues to Recover $3 Million Transfer --------------------------------------------------------- Sola Ltd. filed an adversary proceeding before the U.S. Bankruptcy Court for the Southern District of New York against Lehman Brothers Special Financing, Inc., and JP Morgan Chase Bank, N.A., seeking to recover $3,000,000 that were inadvertently transferred by wire to the account of LBSF held at JP Morgan on September 12, 2008, in response to a September 10, 2008, e-mail from LBSF. A few days, Sola filed an amended complaint to include additional information relating to Sola's correspondence with LBSF and JP Morgan regarding the request for the return of the Sola Funds. According to Sola, shortly after the transfer was made, it became apparent that the transfer of funds was an administrative error and that the September 10 e-mail from LBSF did not request funds from Sola, but was intended instead to confirm the transfer of funds to Sola from LBSF in the ordinary course of business between Sola and LBSF. Sola's counsel, Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch, LLP, in New York, relates that since the error was discovered, the Sola Funds have not been released to Sola despite repeated requests to both JP Morgan and LBSF. He adds that JP Morgan exercised setoff rights against the LBSF account in which the Sola Funds were held. Sola asserts that it is entitled to declaratory relief that the Sola Funds were not the property of LBSF, and thus not subject to setoff by JP Morgan. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Aliant, et al., Sue LBSF to Recover Securities --------------------------------------------------------------- Aliant Bank, Southern Community Financial Corporation and Southern Community Bank and Trust, and Carolina First Bank, commenced separate adversary proceedings against Lehman Brothers Special Financing, Inc., seeking to recover securities that served as collateral for their potential obligations to LBSF pursuant to the terms of several prepetition ISDA Master Agreements. The Plaintiffs seek to recover: Plaintiff Collateral --------- ---------- Southern Federal Home Loan Bank securities bearing CUSIP No. 31339XD68 and CUSIP No. 3128X1EP8 Carolina First Fannie Mae mortgage-backed security bearing CUSIP No. 31402RNF2 Aliant FNMA mortgage-backed security bearing CUSIP No. 31371LB81 The Plaintiffs also seek to recover any proceeds from the securities and interests accrued by the securities. According to the Plaintiffs, they properly terminated the Swap Agreements before the Petition, thus, as a result, LBSF had an obligation to immediately return all of the posted collateral to their respective owners. The Plaintiffs tell the Court that, despite repeated demands, LBSF has not returned the Posted Collateral. Southern and Carolina First are represented by Jay G. Safer, Esq., at Locke Lord Bissell & Liddell, LLP, in New York. Aliant is represented by John S. Mairo, Esq., at Porzio, Bromberg & Newman, P.C., in Morristown, New Jersey. In support of its complaint, Aliant filed a brief. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LENOX GROUP: U.S. Trustee Forms Three-Member Creditors Committee ---------------------------------------------------------------- Diana G. Adams, the United States Trustee for Region 2, appointed three creditors to serve on an Official Committee of Unsecured Creditors for the Chapter 11 cases of Lenox Group Inc. and its debtor-affiliates. The creditors committee members are: 1) Pension Benefit Guaranty Corp. ATTN: Adi Berger, Financial Analyst 1200 K. Street NW Washington, DC 20005-4026 Tel: (202) 326-4070 Fax:(202) 842-2643 2) The Taubman Company LLC ATTN: Andrew S. Conway, Vice President, Senior Counsel 200 E Long Lake Road, Suite 300 Bloomfield Hills, MI 48304 Tel: (248) 258-7427 Fax: (248) 258-7481 3) North American Color, Inc. ATTN: Larry Leto, President 5960 S. Sprinkle Road Portage, MI 49002 Tel: (269)323-0552 Fax: (269) 323-7786 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' 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 Lenox Group Headquartered in Bristol, Pennsylvania, Lenox Group Inc. -- http://www.department56.com/,http://www.lenox.com/,and http://www.dansk.com/-- including its two main operating subsidiaries, D 56, Inc. and Lenox, Incorporated, is a leading designer, marketer, distributor, wholesaler, manufacturer and retailer of quality tableware, collectibles, and other giftware products under the Lenox, Dansk, Gorham, and Department 56 brand names. These products are sold through department stores, large specialty retailers, general merchandise chains, national chains and clubs, small independent specialty retailers, and other wholesale accounts. The company and six of its affiliates filed for Chapter 11 protetcion on November 23, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14679). Harvey R. Miller, Esq., and Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors their restructuring efforts. The Debtors proposed Berenson & Company as financial advisor, Carl Marks Advisory Group LLC as consultants, and The Garden City Group as claims and noticing agent. Debtors have $264,000,000 in total assets and $238,000,000 in total debts as of October 25, 2008. LENOX GROUP: Gets Court Okay to Access $40-Mil. of DIP Financing ---------------------------------------------------------------- The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York authorized Lenox Group Inc and its debtor-affiliates to obtain, on an interim basis, up to $40 million of debtor-in-possession financing provided by its current revolving lender group. A hearing is set for Dec. 15, 2008, at 11:30 a.m. at Courtroom 617, to consider final approval of the motion. Objections, if any, are due Dec. 11, 2008, by 12:00 p.m. According to the Troubled Company Reporter on Nov. 25, 2008, the new facility will provide a continuing source of funds to the company to enable it to satisfy customary obligations associated with ongoing operations of its business, including the timely payment of employee obligations, material purchases, normal operating expenses and other obligations. Prepetition, the Debtors' primary source of funding was a revolving senior credit facility, dated as of April 20, 2007, among D 56, Lenox Retail, and Lenox, Inc. as borrowers; Lenox Group, Lenox Sales, FL 56 and Lenox Worldwide as guarantors; UBS AG, Stamford Branch as administrative agent; JP Morgan Chase Bank, N.A. as collateral agent; and certain lenders party thereto. The Revolving Loan Agreement provides for a revolving credit facility in the maximum aggregate amount of $175 million with a sublimit of $20 million for swingline loans and $30 million for letters of credit. The Revolving Loan Agreement was set to mature April 20, 2012. As of Sept. 27, 2008, the balance owed under the Revolving Loan Agreement was approximately $72 million. The Debtors granted to UBS, Revolving Loan Agent, a lien on and security interest in substantially all of their assets. In addition, the Debtors are parties to that certain Amended and Restated Term Loan Credit Agreement, dated as of April 20, 2007, among D 56, Lenox Retail, and Lenox, Inc. as borrowers; Lenox Group, Lenox Sales, FL 56 and Lenox Worldwide as Guarantors; UBS as administrative agent and collateral agent; and certain lenders party thereto. The Term Loan Agreement provides for a term loan facility in the maximum aggregate amount of $100 million. The Term Loan Agreement matures on April 20, 2013. As of Sept. 27, 2008, the balance owed under the Term Loan Agreement was approximately $98.75 million. To secure the obligations under the Term Loan Agreement, the Debtors granted to UBS, as Term Loan Agent, lien on and security interest in substantially all of their assets. Pursuant to an Intercreditor Agreement, dated as of April 20, 2007, liens on any collateral securing obligations under the Revolving Loan Agreement are senior in all respects and prior to any lien on the collateral securing obligations under the Term Loan Agreement. The salient terms of the DIP Credit Facility are: Borrowers. 56, Lenox Retail and Lenox, Inc.; Guarantors. Lenox Group, Lenox Sales, FL 56 and Lenox Worldwide; Administrative Agent. UBS AG, Stamford Branch; Credit Facility. First priority senior secured revolving credit facility, including swingline loans and letters of credit, and including a "roll-up" of all of the existing outstanding obligations under the Revolving Loan Agreement; Amount. $85,000,000 Letters of Credit Sublimit. $15,000,000 Swingline Facility Sublimit. $15,000,000 Security. The DIP Facility Lenders will receive (A) priming security interests in, and liens upon, all prepetition and postpetition assets of the Debtors, including, the Revolver Priority Collateral, but excluding the Term Loan Priority Collateral (in each case as defined in the Intercreditor Agreement) whether now existing or hereafter acquired, and (B) junior priority security interests in, and liens upon, all assets otherwise encumbered by Revolver Permitted Prior Liens, other than Avoidance Actions (in each case as defined in the Intercreditor Agreement or the interim order approving the DIP Credit Facility, specifically including the Term Loan Priority Collateral; Maturity. Earlier of (i) the date on which all the Loans have been indefeasibly repaid in full in cash, (ii) [November __, 2009], (iii) the closing date of a sale pursuant to Section 363 of the Bankruptcy Code of all or substantially all of the Debtors' assets, (iv) the effective date of a confirmed plan of reorganization for Borrowers in any case commenced pursuant to chapter 11 of the Bankruptcy Code, (v) the date of a conversion pursuant to chapter 7 of the Bankruptcy Code, and (vi) the date of the termination of all of the Commitments; Use of Proceeds. Proceeds will be used to: (a) repay all obligations under the Revolving Loan Agreement, (b) fund general corporate and working capital needs, (c) pay administrative expenses of the chapter 11 cases, including reasonable fees and expenses of professionals; and Adequate Protection. The Debtors will (i) (A) grant the Revolving Loan Agent (for itself and for the benefit of the Revolving Loan Lenders) (w) valid, binding, enforceable, non-avoidable, automatically-perfected first priority replacement security interests in and a liens on the Collateral, (x) a second priority perfected lien on the Revolver Permitted Prior Liens, (y) an allowed administrative claim against each of the Debtors pursuant to Section 507(b) of the Bankruptcy Code, subject only to the superpriority status of the obligations under the DIP Credit Facility and to the Carve-out, and (z) make payments to the Revolving Loan Agent and Revolving Loan Lenders for reasonable prepetition and postpetition fees and expenses, and (ii) (A) grant the Term Loan Agent (for itself and on behalf of the Term Loan Lenders) valid, binding, enforceable, non-avoidable, automatically perfected replacement security interests in and liens on the Collateral, subject only to the DIP Facility Liens and the Term Loan Permitted Prior Liens, (B) an allowed administrative claim against each of the Debtors pursuant to Section 507(b) of the Bankruptcy Code, subject only to the superpriority status of the obligations under the DIP Facility and to the Carve-Out, and (C) make payments to the Term Loan Agent and Term Loan Lenders for reasonable prepetition and postpetition professional fees and expenses; Carve-Out. "Carve-Out" means the DIP Facility Liens, DIP Facility Superpriority Claim, the Adequate Protection Liens and Claims held by the Prepetition Lenders and is subject to these amounts: (i) unpaid fees payable to the United States Trustee and clerk of the Bankruptcy Court, (ii) allowed professional fees and expenses incurred by the Debtors and any statutory committee appointed in the Chapter 11 cases, incurred to the extent consistent with the DIP Budget, but, unpaid, prior to the delivery of a Carve-Out Notice, (iii) Professional Fees incurred subsequent to the delivery of the Carve-Out Notice to the extent consistent with the DIP Budget in an aggregate amount not in excess of $2,000,000, and (iv) the approved professional fees and expenses incurred by any court appointed chapter 7 Trustee up to an aggregate amount of $50,000. Lenox Group, Inc., and six subsidiaries sought bankruptcy protection from creditors before the U.S. Bankruptcy Court for the Southern District of New York on Nov. 23, 2008. Lenox seeks to pursue the sale of substantially all its assets while under Chapter 11 protection. About Lenox Group Headquartered in Bristol, Pennsylvania, Lenox Group Inc. -- http://www.department56.com/,http://www.lenox.com/,and http://www.dansk.com/-- including its two main operating subsidiaries, D 56, Inc. and Lenox, Incorporated, is a leading designer, marketer, distributor, wholesaler, manufacturer and retailer of quality tableware, collectibles, and other giftware products under the Lenox, Dansk, Gorham, and Department 56 brand names. These products are sold through department stores, large specialty retailers, general merchandise chains, national chains and clubs, small independent specialty retailers, and other wholesale accounts. The company and six of its affiliates filed for Chapter 11 protetcion on November 23, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14679). Harvey R. Miller, Esq., and Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors their restructuring efforts. The Debtors proposed Berenson & Company as financial advisor, Carl Marks Advisory Group LLC as consultants, and The Garden City Group as claims and noticing agent. Debtors have $264,000,000 in total assets and $238,000,000 in total debts as of Oct. 25, 2008. LEVITT AND SONS: Files 2nd Amended Chapter 11 Plan -------------------------------------------------- Levitt and Sons LLC and its debtor affiliates, together with their official committee of unsecured creditors, as co-proponent, filed with the Court a Second Amended Disclosure Statement and Second Amended Joint Liquidating Chapter 11 Plan dated December 5, 2008. The Plan Proponents also filed the form of ballots to be used in connection with the Plan voting and certain procedures to govern the solicitation and tabulation of ballots. The Second Amended Disclosure Statement contains, among other things, a summary of the Plan and, in particular, the effect of its terms on holders of claims and equity interests that would result if the Plan is confirmed and consummated, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Fort Lauderdale, Florida, reiterates. In performing certain analyses, the Plan Proponents sought and received input from their advisors and their major constituents and their advisors. The Plan Proponents have incorporated significant additional information into the Second Amended Disclosure Statement based on objections raised in respect of the original Disclosure Statement, according to Mr. Singerman. The Second Amended Disclosure Statement provides, among other things: (a) James S. Feltman has been chosen as the Plan Administrator. He is a senior managing partner at Mesirow Financial Consulting, LLC, which is the Creditors Committee's financial advisor. (b) The Debtors' estates have Causes of Action against Bank of American, N.A., and KeyBank, N.A., for surcharge under Section 506(a) of the Bankruptcy Code, which claims will be pursued. (c) The Debtors' Estates and Plan Administrator assert that certain claims exist to recover assets or the value of assets of the Debtors' Estates that are in possession or control of the Wachovia Debtors, or which are asserted to be part of the Wachovia Collateral. These claims, believed to be valued at $1,000,000, are intended to be pursued. (d) The Wachovia Collateral Administrator will not have the right or power to pursue any Causes of Action, and will only be entitled to pursue the Wachovia Debtor Causes of Action. (e) Claims against the LAS Consolidated Debtors range from $70,434,098 to $335,803,167. The Plan Proponents estimate that total Allowed General Unsecured Claims against Class LAS-9A will range from $68,914,944 to $334,112,522. Holders of Allowed Unsecured Claims in Class LAS-9A against the LAS Consolidated Debtors will receive distributions of roughly between 2.91% and 20.96% on account of their Allowed Claims. Holders of Allowed Deposit Holder Claims in Class LAS-9B against the LAS Consolidated Debtors will receive distributions of roughly between 2.91% and 30.40% on account of their Allowed Deposit Holder Claims. (f) If 68% or more of Holders of Allowed Deposit Holder Claims in Class LAS-9B comply with conditions precedent for the receipt of their Pro Rata Share of the Deposit Holders' Fund, then the Distribution that Class LAS-9B Claimholders would have been entitled to receive, but who fail to comply with conditions precedent, will be distributed to those Allowed Class LAS-9B Deposit Holder Claims that satisfy the conditions precedent, and not transferred to the Plan Administrator to be included in the LAS Available Cash. The same applies to Class Tenn-6B Holders of Allowed Deposit Holder Claims. The Distribution of those Holders who fail to comply with conditions precedent will not be transferred to the Plan Administrator to be included in the Available Cash. (g) If Wachovia Bank rejects the Plan in respect of its Class LAS-6 Allowed Secured Claim, Class LAS-7 Allowed Postpetition DIP Financing Secured Claim, and Class LAS-9A Allowed General Unsecured Claim, if any, then any Liability arising out of the postpetition contract with the Chief Administrator will be limited to the Wachovia Collateral or Wachovia Bank. A black-lined copy of the Second Amended Plan is available for free at http://bankrupt.com/misc/LAS_Blacklined2ndAmendedPlan.pdf A full-copy of the Second Amended Disclosure Statement and plan exhibits is available for free at: http://bankrupt.com/misc/LAS_2ndAmendedDSandExhibits.pdf A hearing on the adequacy of the First Amended Disclosure Statement was held on December 1, 2008. The Court has continued the hearing until December 10, 2008, and directed the Plan Proponents to file an amended Disclosure Statement and Chapter 11 Plan by December 5. The hearing on the adequacy of the Second Amended Disclosure Statement is December 10. The Debtors and the Creditors Committee also seek the Court's authority to retain Kurtzman Carson Consultants LLC, to act as voting and claims agent in the Debtors' cases. The Court previously approved the Debtors' employment of KCC as the Debtors' claims and balloting Agent. To the extent not already authorized, the Plan Proponents seek that KCC, as Voting and Claims Agent, be authorized to assist them in: * distributing the Solicitation Package; * receiving, tabulating, and reporting on Ballots cast to accept or reject the Plan by holders of claims; * responding to inquiries from claims and equity interests holders and other parties-in-interest relating to the Second Amended Disclosure Statement, the Plan, the Ballots, the Solicitation Package, and all related documents and matters; * soliciting votes on the Plan; and * if necessary, contacting creditors and holders of claims and equity interests regarding the Plan. Solicitation & Voting Procedures The Debtors and Creditors Committee propose that December 10, 2008, be established as the record date by which creditors are entitled to vote to accept or reject the Plan. The Voting Record Date is for voting purposes only and will have no impact on who is entitled to receive distributions under the Plan. The Plan Proponents also propose that the Court establish 5:00 p.m., Pacific Time, on the date that is 10 days before the proposed confirmation hearing as the last date on which all properly executed and completed ballots voting to reject or accept the Plan, must be actually received by the Voting and Claims Agent -- Voting Deadline. The Debtors have prepared (i) one ballot form for all Holders of Claims in Classes LAS-2, LAS-3, LAS-4, LAS-5, LAS-6, LAS-7, LAS- 8, Tenn-2, Tenn-3, Tenn-4, and Tenn-5 -- General Ballots, (ii) a second ballot form for Holders of General Unsecured Claims in Classes LAS-9A and Tenn-6A under the Plan -- GUC Ballots, and (iii) a third ballot form for Deposit Holders on account of their Allowed Claims in Class LAS-9B under the Plan -- Deposit Holder Ballots. The Plan Proponents anticipate the confirmation hearing to occur on or around mid- to late-January 2009. The Plan Proponents propose these solicitation and voting procedures to facilitate a smooth and efficient distribution of the Second Amended Disclosure Statement and the solicitation and tabulation of votes to accept or reject the Plan: (a) The Solicitation Package will contain copies of a cover letter, solicitation letters from the Deposit Holders Committee and Creditors Committee urging applicable holders to vote on accepting the Plan, the appropriate Ballot, the Second Amended Disclosure Statement, the Plan, the Disclosure Statement Order, and the confirmation hearing notice. The Plan Proponents seek authority to serve, in their discretion, copies of the Second Amended Disclosure Statement, the Plan, the Disclosure Statement Order and other documents in the Solicitation Package in CD-ROM format. Any party may request for a paper copy of the documents (1) at http://www.kccllc.net/levittandsons,(2) by writing to Levitt and Sons, LLC Balloting Center, c/o Kurtzman Carson Consultants LLC, located at 2335 Alaska Avenue, in El Segundo, California, (3) by calling 866-381-9100, or (4) by e-mailing KCC_LEVITT@kccllc.com A full-text copy of the proposed Disclosure Statement Order is available at no charge at: http://bankrupt.com/misc/LAS_Proposed2ndAmendedDSorder.pdf (b) The Plan Proponents propose to deliver the Solicitation Packages no later than 25 days before the Voting Deadline. For each address for which a notice has been returned as undeliverable, the Plan Proponents propose not to be required to mail a Solicitation Package unless a party associated with that address provides a written confirmation correcting the address no less than 10 business days before the Solicitation Date to Levitt and Sons, LLC Balloting Center, c/o Kurtzman Carson Consultants LLC, located at 2335 Alaska Avenue, in El Segundo, California. Classes LAS-2, LAS-3, LAS-4, LAS-5, LAS-6, LAS-7, LAS-8, LAS-9A, LAS-9B, Tenn-2, Tenn-3, Tenn-4, Tenn-5, Tenn-6A, and Tenn-6B are impaired and are entitled to vote on the Plan. (c) If a claim holder receives a Solicitation Package and either or both of the Plan Proponents object to the claim after the Voting Record Date, but at least five days before the confirmation hearing, the notice of objection will inform the applicable holder of the rules applicable to claims subject to a pending objection and the procedures for temporary allowance for voting purposes. If either or both of the Plan Proponents object to a claim less than five days before the confirmation hearing, the applicable holder's claim will be deemed temporarily allowed for voting purposes only, without further action by the claim holder and the Court. To ensure that votes are counted, the applicable holder must (1) complete the applicable Ballot, (2) indicate its decision either to vote or reject the Second Amended Plan, and (3) sign and return the Ballot in the enclosed pre-addressed envelope. Only Ballots received within the Voting Deadline will be counted, unless the Debtors and the Creditors Committee determine otherwise. A vote that partially accepts and partially rejects the Second Amended Plan will not be counted. If a holder has multiple claims within the same class, the Debtors and the Creditors Committee, in their sole discretion, may aggregate the claims of the applicable holder within a class for the purpose of counting votes. If multiple Ballots are received, the last Ballot timely received will supersede and revoke any earlier- received Ballots. A full-text copy of the proposed confirmation hearing notice, which contains certain releases and injunction, is available for free at: http://bankrupt.com/misc/LAS_ProposedConfirmationHearingNotice.pdf Filing Objections to Plan Confirmation The Plan Proponents ask the Court to establish a date, which is at least 10 business days before the confirmation hearing, as the last day on which all properly completed objections to the Plan must be filed with the Court and actually received by each of the Plan Proponents and certain other parties-in-interest. Any objection to the Plan must be (1) in writing, (2) conform to the Bankruptcy Rules and Local Bankruptcy Rules, (3) state the name and address of the objecting party and details of its claim, (4) state with particularity the basis and nature of the objection and, if practicable, a proposed modification to the Plan that would resolve the objection, and (5) be filed with the Court and be received by certain notice parties on or before the Plan Objection Deadline. About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LEVITT AND SONS: Wachovia Balks at 2nd Amended Plan --------------------------------------------------- Wachovia Bank, National Association, says that the voting process proposed by the Levitt and Sons LLC does not provide adequate notice to creditors that their claims may not be allowed for voting purposes. Levitt and Sons LLC and its debtor affiliates, together with their official committee of unsecured creditors, as co-proponent, filed with the Court a Second Amended Disclosure Statement and Second Amended Joint Liquidating Chapter 11 Plan dated December 5, 2008. Also, the timing of the Voting Deadline may result in creditors trying to get an order allowing its claim out of the Court over the holidays or face having its claim disallowed for voting purposes, Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, adds. The Court should require that all objections to claims -- for voting purposes -- be filed at least 20 days before the Plan confirmation hearing. The deadline for a Resolution Event should be eliminated in its entirety, Mr. Gilbert says. About Levitt and Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). LIGHTPATH TECH: Posts $1,024,000 Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Lightpath Technologies, Inc.'s balance sheet as of September 30, 2008, showed total assets of $6,603,473 and total stockholders' equity of $2,802,008. J. James Gaynor, president and chief executive officer, and Dorothy M. Cipolla, chief financial officer, relate that net loss was approximately $1,024,000 during the first quarter of fiscal 2009, compared with the first quarter of fiscal 2008, in which the company reported a net loss of $1.5 million. "This represents an $479,000 decrease in net loss. Weighted-average shares outstanding increased in the first quarter of fiscal 2009 compared to the first quarter in fiscal 2008 primarily due to the issuance of shares related to the convertible debentures issued in the first quarter of fiscal 2009." "Because of recurring operating losses during 2008 and 2007 of $5.5 million and $2.6 million, respectively, and cash used in operations during 2008 and 2007 of $3.6 million and $1.9 million, respectively, there is substantial doubt about our ability to continue as a going concern. Our continuation as a going concern is dependent on attaining profitable operations through achieving revenue growth targets," Mr. Gaynor and Ms. Cipolla note. "We have instituted a cost reduction program and have reduced headcount in Orlando and costs for medical insurance for our employees. In addition, we have redesigned certain product lines, increased sales prices on certain items, obtained more favorable material costs, and have instituted more efficient management techniques. We believe these factors will contribute towards achieving profitability assuming we meet out sales targets." Mr. Gaynor and Ms. Cipolla disclose that on October 3, 2008, the company received a notification from The NASDAQ Listing Qualifications of The NASDAQ Stock Market, LLC that the company does not comply with Marketplace Rule 4310(c)(3), which requires the company to have a minimum of $2,500,000 in stockholders' equity or $35,000,000 market value of listed securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. In the notification letter from NASDAQ, Staff noted: (i) based on the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2008, the company's stockholders' equity was $2,159,761; (ii) as of October 2, 2008, NASDAQ Staff determined that the market value of the company's listed securities was $7,357,696; and (iii) the company has reported net losses from continuing operations of $5,467,769, $2,614,629 and $3,368,881, in its annual filings for the fiscal years ended June 30, 2008, 2007 and 2006, respectively. "Based on these circumstances, Staff is reviewing the company's eligibility for continued listing on The Nasdaq Capital Market. On October 24, 2008, the company submitted a specific plan to achieve stockholders' equity in excess of $2,500,000 and, thereby, regaining compliance with Marketplace Rule 4310(c)(3)." A full-text copy of the company's Quarterly Report is available for free at: http://researcharchives.com/t/s?35f0 About LightPath LightPath Technologies, Inc., was incorporated in Delaware in 1992 to pursue a strategy of supplying hardware to the telecommunications industry. In April 2000, the company acquired Horizon Photonics, Inc., and in September 2000 the company acquired Geltech, Inc. During fiscal 2003, in response to sales declines in the telecommunications industry, the operations of Horizon in California and LightPath in New Mexico were consolidated into the former Geltech facility in Orlando, Florida. In November 2005, the company announced the formation of LightPath Optical Instrumentation (Shanghai) Co., Ltd, a wholly owned manufacturing subsidiary located in Jiading, People's Republic of China. The manufacturing operations are housed in a 17,000-square foot facility located in the Jiading Industrial Zone near Shanghai. This plant has increased overall production capacity and enabled LightPath to compete for larger production volumes of optical components and assemblies, and strengthened partnerships within the Asia/Pacific region. It also provides a launching point to drive the company's sales expansion in Asia/Pacific. Over 90% of the first quarter's precision molded lenses were manufactured in LPOI's Shanghai facility. The company is engaged in the production of precision molded aspherical lenses, GRADIUM(R) glass lenses, collimators and isolator optics used in various markets, including industrial, medical, defense, test & measurement and telecommunications. LINENS 'N THINGS: Amends Plan to Provide for Liquidation -------------------------------------------------------- Bankruptcy Law360 reports that Linens 'n Things, Inc., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a disclosure statement explaining their first amended joint plan of reorganization. The liquidation plan was filed November 21, 2008. The Amended Plan reflects changes in the Debtors' bankruptcy strategy: The Plan provides for the dissolution of the Debtors, and distribution of funds, after the Debtors failed to auction off their operations. A new set of conditions precedent to the Effective Date that must be satisfied or waived are also provided in the Amended Plan. LNT Liquidating Trust The Amended Plan proposes the creation of an LNT liquidating trust pursuant to a liquidating trust agreement, which will take title to all of LNT's trust claims and assets, including avoidance actions and their proceeds, but excluding all remaining senior noteholder collateral and defensive causes of action. Terms relating to the LNT Liquidating Trust are defined under the Amended Plan. The establishment of the LNT Liquidating Trust and the sharing of distributions from that trust between holders of allowed senior notes claims and the general unsecured claims is defined in the Amended Plan as the "global compromise". Entry of the Confirmation Order will constitute the Court's approval of the Global Compromise. The LNT Liquidating Trust will be established on the Effective Date for (i) investigating and, if appropriate, pursuing Trust Claims, (ii) administering and pursuing the Liquidating Trust Assets, (iii) resolving all disputed general unsecured claims, and (iv) making all distributions to beneficiaries from the LNT Liquidating Trust. The LNT Liquidating Trust will be funded with the recoveries of the Debtors' avoidance actions against vendors, suppliers and factors. The Liquidating Trustee will make distributions, after consultation with the Liquidating Trust Committee, when the aggregate proceeds and income available are sufficient to economically distribute funds. All of the Debtors' property as of the Effective Date, other than the Liquidating Trust Assets, their proceeds and the collateral securing the Allowed Other Secured Claims, will be considered "Remaining Senior Noteholders' Collateral." Around $6,000,000 of the Noteholders' Collateral proceeds will be used by the Debtors or the Reorganized Debtors to satisfy, in part, allowed administrative claims, allowed priority tax claims, and allowed other priority claims. The Senior Noteholders' share of the Liquidating Trust will be 50% of all proceeds of the Trust Assets, net of shared expenses, in excess of the initial litigation recovery amount. Since the Debtors are liquidating, terms and languages relating to the post-Effective Date "New Linens," and the Plan Trust were taken out of the Amended Plan. Instead, "Plan Administrator" is defined as an individual selected by the Senior Noteholders' Committee vested with the powers of the sole officer and director of the Reorganized Debtors. Wind-Down Budget and New Class 5 According to the Amended Plan, a wind-down budget will be filed with the Court as part of the Plan Supplement. The Wind-Down Budget will be in a form satisfactory to the Senior Noteholders Committee, and will provide for the timely satisfaction of all costs, fees and expenses incurred by the Debtors through March 31, 2009. A new class of claims, Class 5, is added under the Amended Plan, which class consists of Intercompany Claims. Notwithstanding the Intercompany Claims' treatment in Class 5, their holders by virtue of their status as Debtors or affiliates are deemed to accept the Plan. Pursuant to the Global Compromise, the Intercompany Claims will be canceled, and their holders will receive no distribution on account of the claims. Certain terms were deleted from the Amended Plan, including the terms Commitment Letter, Commitment Parties, Deferred Compensation Plan, DTC, and Exit Credit Facility. Some were also added, like Defensive Causes of Action, Disputed Reserves, distributions, and Global Compromise. The Amended Plan defines administrative bar date as the date that is 60 days from the Effective Date, and is the deadline for holders of administrative claims to ask for payment. Administrative Claims are claims for costs and expenses of administration under Sections 503(b), 507(b) or 1114(e)(2) of the Bankruptcy Code. GSI Commerce Solutions, Inc., and Hilco Consumer Capital L.P., are designated as agent, while holders of Allowed Senior Notes Claims and Allowed General Unsecured Claims are designated as beneficiaries. Post-Effective Date Debtors On the Effective Date, all of the Debtors' property, including all Remaining Senior Noteholders' Collateral, but excluding the Liquidation Trust Assets, will vest in the Reorganized Debtors, free and clear of all claims or encumbrances, except that the Remaining Senior Noteholders' Collateral will remain subject in all respects to the claims of the Senior Notes Indenture Trustee and the Senior Noteholders. The Reorganized Debtors will continue to liquidate the Remaining Senior Noteholders' Collateral, and distribute the net proceeds to the holders of Allowed Senior Notes Claims in accordance with the terms of the Plan. All costs and expenses relating directly to the liquidation will be paid from the gross sale proceeds of the collateral. The Reorganized Debtors will resolve disputed other secured claims, disputed administrative claims, disputed priority tax claims and disputed other priority claims in any manner approved by the Court on those disputed claims. In the Plan Supplement, the Debtors will (i) disclose the identity of the Plan Administrator, who will be selected by the Senior Noteholders Committee, and (ii) file any agreement regarding the Plan Administrator's rights and responsibilities. The authority, power and incumbency of the Debtors' directors and officers will be terminated on the Effective Date. In addition, all the then Equity Interests in the Debtors will be canceled and extinguished without further action under any applicable agreement, law, regulation or rule. The Reorganized Debtors will issue one share of stock in the Reorganized Debtors to the Plan Administrator, who will hold the share of stock in trust for the benefit of the holders of Allowed Senior Notes Claims, and that share will remain outstanding until the Reorganized Debtors are dissolved in accordance with the Plan. Dissolution of the Debtors After the liquidation of the Remaining Senior Noteholders' Collateral and distribution of the proceeds, each of the Debtors will: (a) file its certificate of dissolution, together with all necessary corporate documents, under the applicable laws of its state of incorporation; and (b) complete and file its final federal, state and local tax returns, including an expedited determination of any unpaid tax liability. Upon the Reorganized Debtors' dissolution, the LNT Liquidating Trust will assume any of the Debtors' outstanding responsibility, including administering any remaining reserves for disputed claims. During the period from the Confirmation Date through and until the Effective Date, the Debtors will continue to operate as Debtors-in-Possession. The Creditors Committee will also be dissolved on the Effective Date, and its members will be released and discharged from all further authority, duties, responsibilities and obligations. Professionals retained by the Creditors Committee will also be terminated. Distribution of Funds On the Effective Date, or as soon as practicable, the Reorganized Debtors will make initial, or will make adequate reserves for, distributions required to be made under the Amended Plan to holders of allowed administrative, priority tax and other priority tax claims. On the Initial Distribution Date, the Liquidating Trustee will make or reserve for the distributions as required by the LNT Liquidating Trust under the Amended Plan. The Reorganized Debtors will also establish a disputed reserve for disputed administrative, other secured, priority tax and other priority claims. Subsequent distributions will be made for claims that were not previously allowed. No interest will accrue or be paid on the unpaid amount of any distribution paid on a subsequent distribution date. Except as expressly set forth in the Amended Plan, neither the Reorganized Debtors, the LNT Liquidating Trust nor the Liquidating Trustee will have any duty to fund the Disputed Reserves. In addition, the LNT Liquidating Trust or the Reorganized Debtors may -- but are not required to -- set off against, or recoup from, any claim. Disputed and Unliquidated Claims Notwithstanding any other provision of the Amended Plan, the Reorganized Debtors and the LNT Liquidating Trust will not distribute any cash or other property on account of any disputed claim unless and until the claim becomes allowed. The LNT Liquidating Trust, however, will have the right, to the exclusion of all others, to make, prosecute, settle or resolve objections to general unsecured claims subject to the limitations of the Amended Plan. The LNT Liquidating Trust and the Reorganized Debtors will have joint right to resolve objections to administrative, other secured, priority tax and other priority claims. Rejection of Contracts and Leases The Amended Plan will constitute a request to reject all executory contracts and unexpired leases, and the Debtors will have no further liability under those Leases and Contracts. The entry of the Confirmation Order will constitute approval of any rejections. Claims arising from rejection or expiration of the Leases and Contracts must be filed no later than 30 days after the Effective Date. Since the Debtors' employee contracts will be terminated, all provisions regarding those contracts were taken out from the Amended Plan. Conditions Precedent to the Effective Date The Amended Plan contemplates on three conditions precedent to the Effective Date that must be satisfied or waived: (1) The Confirmation Order has become a final order; (2) The Confirmation Order will be in full force and effect; and (3) On or before August 30, 2009, or other later date requested by the Debtors with the consent of the Senior Noteholders Committee and the Creditors Committee, the Debtors will have sufficient cash on hand to pay in full all allowed administrative, priority tax and other priority claims. If the Debtors fail to timely satisfy the third condition, the Confirmation Order will be no force or effect, and the Amended Plan will be deemed withdrawn. A copy of the Amended Plan is available for free at: http://bankrupt.com/misc/LNT_1st_Amended_Plan.pdf About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS 'N THINGS: To Receive 95.1% of Cost Value from GOB Sales --------------------------------------------------------------- Linens 'n Things, Inc., and its affiliates entered into an Agency Agreement with a joint venture comprised of Gordon Brothers Retail Partners, LLC, Hilco Merchant Resources, LLC, SB Capital Group, LLC, Tiger Capital Group, LLC, Hudson Capital Partners, LLC, and Great American Group, LLC, pursuant to which the Agent is conducting store closing sales for the Debtors' merchandise at all of their remaining stores and their distribution centers. In a regulatory filing with the Securities and Exchange Commission, the Debtors disclosed that as a guaranty of their performance under the Agency Agreement, the Agent has guaranteed that the Debtors will receive 95.1% of the aggregate cost value of the merchandise, and on October 17, 2008, the Agent paid the Debtors $200,000,000. After payment of the Guaranteed Amount and expenses of the sale, the Agent is entitled to receive a fee equal to 3.75% of the aggregate cost value of the merchandise. To the extent that the proceeds of the Store Closing Sales exceed the sum of the Guaranteed Amount, Expenses of the Sale, and the Agent's Fee, then all remaining proceeds will be shared as: (1) the next proceeds up to 2% of the aggregate cost value of the merchandise to the Debtors; (2) the next proceeds up to 2% of the aggregate cost value of the merchandise to the Agent; and (3) remaining proceeds of 50% to the Debtors and 50% to the Agent. Subject to the prior termination of the lease for any Closing Store, the Agent is required to complete the Store Closing Sales at each Closing Store no later than January 31, 2009, unless the time period is extended by mutual written agreement of the Agent and the Debtors. In addition, the Agent may terminate a Closing Store Sale at any Closing Store upon not less than 10 days' prior written notice to the Debtors. The Agency Agreement contains customary representations, warranties, and covenants by the Debtors and the Agent. An "Event of Default" occurs under the Agency Agreement if (i) either the Debtors or the Agent fail to perform any material obligation that remains uncured for 10 days after receipt of written notice, or (ii) any representation or warranty made by the Debtors or Agent proves untrue in any material respect as of the date made and, to the extent curable, continues uncured for 10 days after written notice to the defaulting party. Any damages or entitlement to equitable relief because of the occurrence of an Event of Default will be determined by Court. About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS 'N THINGS: Agrees Not to Reject Canada Management Pact ------------------------------------------------------------- Linens 'n Things Inc., and its affiliated debtors obtained the U.S. Bankruptcy Court for the District of Delaware's approval of their agency agreement dated October 23, 2008, under which the Debtors agreed not to reject their management agreement with Linen 'n Things Canada Corp. during the sale period, provided that LnT Canada continues to timely honor its obligations to the Debtors, including payment of management services fees. The Debtors' agency agreement for their final round of store closing sales contained, among other things, a "Canadian Put Option," which provided the Debtors and LnT Canada with the ability to include the Canadian store locations in the store closing sales to be conducted by the Court-approved agent consisting of Gordon Brothers Retail Partners, LLC, at al. The agent under the Canadian Agency Agreement is a joint venture comprised of GBRP Inc., HMR Canada II, Inc., Schottenstein Bernstein Corporation, Tiger Capital Group, LLC, Hudson Capital Partners, LLC, and Great American Group CS, LLC. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that on October 16, 2008, the Debtors and LnT Canada exercised the Canadian Put Option with respect to the Canadian Stores in accordance with the terms of the U.S. Agency Agreement. A copy of the Canadian Agency Agreement that is contemplated by the U.S. Agency Agreement is available for free at: http://bankrupt.com/misc/Canadian_AgencyAgreement.pdf The Canadian Agency Agreement provides that, among other things, the Debtors will not seek to reject the Management Agreement until the store closing sales have concluded at the Canadian stores. Hence, the Debtors are required to continue providing the central office services necessary for the store closing sales. The Debtors believe that they have the ability to continue operating under the Management Agreement. They also believe that the relief requested is consistent with what was contemplated under the U.S. Agency Agreement, and a necessary step to moving forward with the liquidation of the Canadian Debtors, which represent a valuable asset of the bankruptcy estates. Judge Sontchi has noted in his order that to the extent that the Debtors wish to suspend or terminate the services provided under the Management Agreement due to the Canadian Debtors' failure to timely honor their obligations, the Debtors will seek further relief from the Court before any of the services are suspended or terminated. About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS 'N THINGS: RSM Richter Appointed Receiver for Canada Unit ---------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Linens 'n Things Inc., and its affiliates disclosed that the Ontario Superior Court of Justice has issued an order appointing RSM Richter Inc. as interim receiver and receiver over Linens Canada and certain affiliated Canadian entities. Linens 'n Things Canada Corp., and the indirect Canadian operating subsidiary of Linens Holding Co. has filed for protection under the Canadian Bankruptcy and Insolvency Act. The Canadian Court also approved an agreement for the liquidation of Linens Canada's inventory at Linens Canada's 40 locations. The Agreement was contemplated in the previously disclosed Agency Agreement, dated as of October 15, 2008, entered into by and between Linens Holding, Linens Canada, and Linens Holding's other indirect wholly owned Canadian subsidiaries, and a joint venture comprised of Gordon Brothers Retail Partners, LLC, Hilco Merchant Resources, LLC, SB Capital Group, LLC, Tiger Capital Group, LLC, Hudson Capital Partners, LLC, and Great American Group, LLC. About Linens 'n Things, Inc. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LUMINENT MORTGAGE: May Employ O'Shea Partners as Special Counsel ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Maryland granted Luminent Mortgage and its affiliated debtors permission to employ O'Shea Partners LLP as their special litigation counsel in a litigation involving HSBC and Merrill Lynch. On Oct. 18, 2007, Luminent Mortgage Capital, Inc., Mercury Mortgage Finance Statutory Trust and Minerva Mortgage Finance Corporation filed a complaint in the U.S. District Court for the Southern District of New York against HSBC Securities (USA) Inc. alleging wrongful disposition of collateral that certain of the Debtors had posted with HSBC pursuant to a so-called "repurchase agreement." On Dec. 24, 2007, Luminent and Mercury filed a complaint against Merill Lynch & Co., Inc. and certain of its affiliates asserting claims for violations of certain federal and state securities laws, fraud/deceit, innocent misrepresentation, negligent misrepresentation, breach of contract and rescission. O'Shea Partners' fee will consist of the first $75,000 recovered and thereafter 50% of any recovery in the Trading Litigation, plus reimbursement of expenses and disbursements incurred in connection with the Trading Litigation. Sean F. O'Shea, a partner at O'Shea Partners LLP, assured the Court that the firm does not represent or hold any interest adverse to the Debtors or their estate and that the firm does not have any connection to the Debtors, their non-debtor affiliates, creditors other parties in interest in the Debtors' Chapter 11 case. About Luminent Mortgage Luminent Mortgage Capital, Inc., (OTCBB: LUMCE) is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, as its counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc. reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. Full-text copies of the Debtors' operating report for September 2008 are available for free at: http://researcharchives.com/t/s?345b At March 31, 2008, Luminent Mortgage Capital, Inc.'s consolidated balance sheet showed $3,757,205,000 in total assets, $3,980,417,000 in total liabilities, and $223,212,000 in stockholders' deficit. Luminent and its debtor-subsidiaries continue to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. MILLENNIUM TRANSIT: May Obtain $367,832 Loan from James A. Ludvik ----------------------------------------------------------------- The United States Bankruptcy Court for the District of New Mexico granted Millennium Transit Services, LLC, authority to obtain a $367,832 loan from James A. Ludvik, in accordance with a budget. The loan would be on the same terms as the previous $354,832 loan from Mr. Ludvik that was earlier approved by the Court on Oct. 16, 2008. As security for the payment of the indebtedness, Mr. Ludvik is granted a lien in all of the existing tangible and intangible property and other assets and properties of the Debtor, along with the perfected first priority lien described in that certain Leasehold Deed of Trust dated March 30, 2007, executed by the Debtor for the benefit of Mr. Ludvik and that certain Security Agreement dated March 30, 2007, executed by the Debtor for the benefit of Mr. Ludvik; provided, however, that the property shall not include any avoidance actions owned by the Debtor's bankruptcy estate arising under Sec. 554-551 of the Bankruptcy Code. The lien against the DIP Collateral granted to Mr. Ludvik shall be junior to the prepetition liens of Pioneer Bank but senior to Mr. Ludvik's prepetition liens, and of equal priority with the First DIP Loan made by Mr. Ludvik. The Debtor told the Court that it was unable to obtain unsecured credit allowed under Sec. 503(b)(1) of the Bankruptcy Code as an administrative expense, or to obtain credit secured by a junior lien on property of the estates or secured by property of the estates that is not otherwise subject to a lien, on terms more favorable than those offered by Mr. Ludvik. Pursuant to the Second DIP Revolving Credit Facility, interest on the principal shall accrue at 10% p.a. compounded monthly prior to acceleration or maturity. Any amount of the Revolving Facility which is not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from the date when due until said amount is paid in full, payable on demand, at a rate per annum equal at all times to 12% p.a. compounded monthly. The loan shall mature at the earlier to occur of confirmation of a plan of reorganization; conversion of dismissal of the bankruptcy case; or entry of an order approving the sale of a substantial portion of the Debtor's assets. Roswel, New Mexico-based Millennium Transit Services LLC is a bus manufacturer. The company filed for Chapter 11 relief on Aug. 29, 2008 (Bankr. D. N.M. Case No. 08-12848). Judge Mark B. McFeeley presides over the case. David T. Thuma, Esq., at Jacobvitz, Thuma & Walker, represents the Debtor as counsel. George M. Moore, Esq., at Moore, Berkson & Gandarilla, P.C., represents the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million and the same range in debts. MORGAN STANLEY: S&P Cuts Rating on $3MM Class A-5 Notes to 'CCC-' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $3.0 million class A-5 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'CCC-' from 'CCC+'. The rating action reflects the Dec. 3, 2008, lowering of the rating on Bowater Inc.'s senior unsecured debt. 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-5, the senior unsecured notes issued by Bowater Inc.{'CCC-'}); (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'). MOTOR COACH: Court Sets Jan. 7, 2009 as Claims Bar Date ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set Jan. 7, 2009, as the general bar date by which time creditors must file proofs of claim in Motor Coach Industries International, Inc. and its affiliated debtors' bankruptcy cases. The Court set a March 16, 2009 bar date for governmental units. Proofs of Claim must be sent to: Motor Coach Claims Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 In the case of 503(b)(9) Claim Requests, creditors must file the request on or before the applicable bar date with the: U.S. Bankruptcy Court for the District of Delaware 824 North Market Street, Third Floor Wilmington, Delaware 19801 About Motor Coach Wilmington, Delaware-based Motor Coach Industries International, Inc. -- http://www.mcicoach.com/-- and its subsidiaries manufacture intercity coaches for the tour, charter, line-haul, scheduled service, and commuter transit sectors in the U.S. and Canada. They also operate seven sales centers and nine service centers in the U.S. and Canada and is the industry's supplier of aftermarket parts for most makes and models. The company and six (6) of its debtor-affiliates filed separate petitions for Chapter 11 relief on Sept. 15, 2008 (Bankr. D. Del. Lead Case No. 08-12136), to implement a pre-negotiated restructuring plan to be funded by Franklin Mutual Advisors, LLC and certain of its affiliates. The company's Canadian operations are not included in the filing. Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New York; and Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as claims and notice agent. Rothschild Inc. and AlixPartners LLP also provide restructuring advice. At the time of filing, the Debtors listed assets of between $500,000,000 and $1,000,000,000 and liabilities of between $100,000,000 and $500,000,000. MOTOR COACH: Panel May Employ Womble Carlyle as Delaware Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted the Official Committee of Unsecured Creditors appointed in Motor Coach International, Inc., and its affiliated debtors' cases permission to retain Womble Carlyle Sandridge & Rice, PLLC, as Delaware co- counsel, nunc pro tunc to Sept. 24, 2008. As Delaware co-counsel, Womble Carlyle will: a) assist and advise the Creditors Committee in its discussions with the Debtors and other parties in interest regarding the overall administration of these cases; b) represent the Creditors Committee at hearings to be held before this Court and communicate with the Creditors Committee regarding the matters heard and the issues raised as well as the decisions and considerations of this Court; c) assist and advise the Creditors Committee in its examination and analysis of the conduct of the Debtors' affairs; d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with this Court by interested parties in these cases; advise the Creditors Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consent or object to pleadings or orders on behalf of the Creditors Committee, as appropriate; e) assist the Creditors Committee in preparing such applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Creditors Committee, including all trial preparation as may be necessary; f) confer with the professionals retained by the Debtors and other parties in interest, as well as with such other professionals as may be selected and employed by the Creditors Committee; g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as such information as may be received from professionals engaged by the Creditors Committee or other parties in interest in these cases; h) participate in such examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors' assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates; i) negotiate and formulate a plan of reorganization for the Debtors; and j) assist the Creditors Committee generally in performing such other services as may be desirable or required for the discharge of the Creditors Committee's duties pursuant to Sec. 1103 of the Bankruptcy Code. As compensation for their services, Womble Carlyle's professionals bill: Hourly Rate ----------- Steven K. Kortanek, Esq. $485 Matthew P. Ward ,Esq. $325 John H. Strock, Esq. $250 Paraprofessionals $50-$190 Steven K. Kortanek, Esq., a member at Womble Carlyle, assured the Court that the firm does no hold or represent any interest adverse to the Debtors or their estates, the Committee, their creditors or any other party in interest in the Debtors' cases, and that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Motor Coach Wilmington, Delaware-based Motor Coach Industries International, Inc. -- http://www.mcicoach.com/-- and its subsidiaries manufacture intercity coaches for the tour, charter, line-haul, scheduled service, and commuter transit sectors in the U.S. and Canada. They also operate seven sales centers and nine service centers in the U.S. and Canada and is the industry's supplier of aftermarket parts for most makes and models. The company and six (6) of its debtor-affiliates filed separate petitions for Chapter 11 relief on Sept. 15, 2008 (Bankr. D. Del. Lead Case No. 08-12136), to implement a pre-negotiated restructuring plan to be funded by Franklin Mutual Advisors, LLC and certain of its affiliates. The company's Canadian operations are not included in the filing. Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New York; Mark D. Collins, Esq., Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as claims and notice agent. Rothschild Inc. and AlixPartners LLP also provide restructuring advice. At the time of filing, the Debtors listed assets of between $500,000,000 and $1,000,000,000 and liabilities of between $100,000,000 and $500,000,000. MOTOR COACH: Panel May Employ Brown Rudnick as Co-Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted the Official Committee of Unsecured Creditors appointed in Motor Coach Industries International, Inc. and its affiliated debtors' cases permission to retain Brown Rudnick as co-counsel, nunc pro tunc to Sept. 24, 2008. As the Debtors' co-counsel, Brown Rudnick will: a) assist and advise the Official Committee in its discussions with the Debtors and other parties-in-interest regarding the overall administration of these cases; b) represent the Official Committee at hearings to be held before this Court and communicate with the Official Committee regarding the matters heard and the issues raised as well as the decisions and considerations of this Court; c) assist and advise the Official Committee in its examination and analysis of the conduct of the Debtors' affairs; d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with this Court by interested parties in these cases; advise the Official Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consent or object to pleadings or orders on behalf of the Official Committee, as appropriate; e) assist the Official Committee in preparing such applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Official Committee, including all trial preparation as may be necessary; f) confer with the professionals retained by the Debtors and other parties-in-interest, as well as with such other professionals as may be selected and employed by the Official Committee; g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as such information as may be received from professionals engaged by the Official Committee or other parties-in-interest in these cases; h) participate in such examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors' assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates; i) negotiate and formulate a plan of reorganization for the Debtors; and j) assist the Official Committee generally in performing such other services as may be desirable or required for the discharge of the Official Committee's duties pursuant to Sec. 1103 of the Bankruptcy Code. The Official Committee has obtained permission to retain Womble Carlyle Sandridge & Rice, LLC to serve as the Committee's Delaware counsel as Brown Rudnick does not have an office in Delaware. Robert J. Struck, Esq., a member at Brown Rudnick, told the Court that the firm represents Goldman Sachs Credit Partners L.P., agent under the Debtors' second lien postpetition financing facility, in connection with its purchases and sales of distressed bank debt. In order to avoid any conflict or the appearance of conflict, Womble Carlyle, Delaware counsel to the Official Committee, will handle all matters on behalf of the Official Committee in which the Committee is directly adverse to Goldman Sachs. Notwithstanding that disclosure, Mr. Stark assured the Court that the firm does not hold or represent any interest adverse to the Debtors' estates. The Official Committee told the Court that it believes that Brown Rudnick is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. As compensation for their services, Brown Rudnick's professionals bill: Hourly Rate ----------- Robert J. Stark, Esq. $800 Jeremy B. Coffey, Esq. $640 Daniel J. Saval, Esq. $610 Paraprofessionals $220-$295 About Motor Coach Wilmington, Delaware-based Motor Coach Industries International, Inc. -- http://www.mcicoach.com/-- and its subsidiaries manufacture intercity coaches for the tour, charter, line-haul, scheduled service, and commuter transit sectors in the U.S. and Canada. They also operate seven sales centers and nine service centers in the U.S. and Canada and is the industry's supplier of aftermarket parts for most makes and models. The company and six (6) of its debtor-affiliates filed separate petitions for Chapter 11 relief on Sept. 15, 2008 (Bankr. D. Del. Lead Case No. 08-12136), to implement a pre-negotiated restructuring plan to be funded by Franklin Mutual Advisors, LLC and certain of its affiliates. The company's Canadian operations are not included in the filing. Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New York; Mark D. Collins, Esq., Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as claims and notice agent. Rothschild Inc. and AlixPartners LLP also provide restructuring advice. At the time of filing, the Debtors listed assets of between $500,000,000 and $1,000,000,000 and liabilities of between $100,000,000 and $500,000,000. NEONODE INC: Swedish Unit Files for Bankruptcy ---------------------------------------------- Neonode Inc. says its Swedish subsidiary, Neonode AB, filed a petition for bankruptcy in compliance with Swedish bankruptcy rules. Hans Oden of the Stockholm-based Ackordscentralen AB, a consultancy firm specialized in insolvency, was appointed by the district court of Stockholm to administrate the process. "For the past six months we have focused on turning the business around and solving the financial situation of Neonode AB," Per Bystedt, CEO and Chairman of Neonode, Inc. said. "We continue to have great belief in our technology and believe we have a competitive product in the Neonode N2 but without sufficient funds we cannot continue operations." Neonode AB has, together with its American parent company, Neonode Inc., taken a number of measures to attempt to restructure and refinance Neonode AB's operations. On Oct. 22, 2008 Neonode AB filed for reconstruction in accordance with the Swedish reorganization act (1996:764). "We have had a good dialogue with many of our creditors and tried a number of different solutions, but unfortunately we have been unable to reach a satisfactory solution for all parties," Mr. Bystedt continued. Neonode Inc intends to continue to operate as a technology licensing company, focusing on developing and marketing the Company's patented touch screen technology, zForceT to third parties. Neonode Inc. is currently working with its major stakeholders on a plan for a complete restructuring of the Company. About Neonode Inc. Neonode Inc. NASDAQ: NEON) -- http://www.neonode.com-- operates a mobile communication company that develops touch screen technologies and designs mobile handsets. Neonode AB is a wholly- owned subsidiary of Neonode Inc. and has carried out business with focus on the development and sales of touch screen mobile phones such as the Neonode N2 since 2004. NEPTUNE MOTORS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Neptune Motors, LLC 82 Main Street Ocean Grove, NJ 07756 Case No.: 08-34321 Chapter 11 Petition Date: December 8, 2008 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Jules L. Rossi, Esq. 208 Main Street Asbury Park, NJ 07712 Tel: (732) 774-5520 Fax: (732) 744-5870 Email: jlrbk423@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors when it filed its petition. NEW YORK TIMES: Seeks $225 Million of Financing ----------------------------------------------- David B. Wilkerson at The Wall Street Journal reports that The New York Times Co. will borrow as much as $225 million against its Manhattan headquarters, through a mortgage or a sale-leaseback agreement. Sarah Rabil at Bloomberg News reports that The NY Times has a $400 million credit line due in May 2009. Bloomberg says that The NY Times also has about $366.3 million remaining under a second credit agreement that becomes payable in June 2011. According to Bloomberg, The NY Times spokesperson Catherine Mathis said that the newspaper publisher hired commercial real-estate company Cushman & Wakefield Inc. to help secure financing. Bloomberg relates that The NY Times shareholders, Firebrand Partners and Harbinger Capital Partners, have pressured the company to: -- invest more in the Internet, -- sell or mortgage the company's skyscraper, and -- sell stakes in professional sports teams and regional newspapers. WSJ relates that The NY Times said in October that ad revenue at its newspapers dropped 17.2% on continued weakness in print advertising. WSJ states that classified sales fell almost 35%. The NY Times' total advertising revenue declined by 14% in the third quarter, according to the report. Its classified-ad sales plunged 29%, says the report. As reported by yesterday's Troubled Company Reporter, Tribune Co., which owns the Chicago Tribune and L.A. Times, other newspapers and television stations, filed for Chapter 11 protection from creditors due to declining revenues, and substantial debt requirements. When it filed for chapter 11 yesterday, Tribune and its units disclosed $7,605,195,000 in assets and $12,972,541,148 of debts. According to Bankruptcy Law360, experts say factors including declining advertising revenues and competition from online news sources will lead to a surge in newspaper bankruptcies and dramatically alter the landscape of the newspaper industry in the coming years. About New York Times The New York Times Co. operates as a diversified media company in the United States. It operates in two segments, News Media and About Group. The company was founded in 1896. As reported in the Troubled Company Reporter on Dec. 4, 2008, The NY Times cut its quarterly dividend by 74%, as part of an effort to conserve cash. The NY Times said that it took steps to lower debt and increase liquidity, including reevaluating its assets. The NY Times has laid off employees, merged sections of the NY Times and Globe to reduce printing costs, and consolidated New York area printing plants this year. NY Times has $46 million in cash and about $1.1 billion of debt. NOVASTAR FINANCIAL: Appoints CFO as Principal Accounting Officer ---------------------------------------------------------------- Novastar Financial, Inc., appointed Rodney Schwatken as principal accounting officer. He will also remain as chief financial officer of the company, a position he has held since January 2008. From March 2006 through January 2008, Mr. Schwatken had been the company's vice president of strategic initiatives where he was responsible for special projects, generally related to corporate development and management of the company's strategic transactions. From March 1997 until March 2007, Mr. Schwatken held various titles including vice president, secretary, treasurer and controller (chief accounting officer) of the company and was responsible for corporate accounting, including implementation of accounting policies and procedures and developing and implementing proper internal control over all financial recordkeeping. From June 1993 to March 1997, when he joined the company, Mr. Schwatken was accounting manager with U.S. Central Credit Union, a $30 billion dollar investment, liquidity and technology resource for the credit union industry. From January 1987 to June 1993, Mr. Schwatken was employed by Deloitte & Touche LLP in Kansas City, Missouri, as an audit manager. Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- prior to significant changes in its business during 2007 and the first quarter of 2008, the company originated, purchased, securitized, sold, invested in and serviced residential nonconforming mortgage loans and mortgage backed securities. Novastar Financial Inc.'s consolidated balance sheet at June 30, 2008, showed $1.5 billion in total assets, $1.1 billion in total liabilities, and $384.4 million in total stockholders' deficit. Going Concern Doubt Deloitte & Touche LLP, in Kansas City, Missouri, expressed substantial doubt about Novastar Financial Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's deficit in shareholders' equity, the disruption in the credit markets and related liquidity issues, the sale of its loan servicing operations and the decision to cease all of its mortgage lending operations. NOVASTAR FINANCIAL: Delays 10-Q Filing Due to Accounting Review --------------------------------------------------------------- Novastar Financial, Inc., disclosed in a Form 12b-25 filed with the Securities and Exchange Commission that it could not timely file its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2008, and that it would not file the Third Quarter 10-Q within the 5 calendar day period contemplated by Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as amended. The company and its independent auditors are analyzing certain technical accounting matters related to three separate loan securitization transactions that were originally accounted for as financings. This analysis is being made due to events that have occurred since these securitizations originally closed. Due to the ongoing analysis, the company has not finalized its financial statements for the third quarter of 2008. However, the company expects that its results of operations for the nine and three month periods ending Sept. 30, 2008, will change significantly from its results of operations for the nine and three month periods ending Sept. 30, 2007, as result of, among other things, the termination of the company's mortgage origination business, the sale of the mortgage servicing operation during 2007, the impact of market factors and the mortgage securities markets on the company's financial statements and the valuation of the company's financial assets and amendments to certain securitization agreements. Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- prior to significant changes in its business during 2007 and the first quarter of 2008, the company originated, purchased, securitized, sold, invested in and serviced residential nonconforming mortgage loans and mortgage backed securities. Novastar Financial Inc.'s consolidated balance sheet at June 30, 2008, showed $1.5 billion in total assets, $1.1 billion in total liabilities, and $384.4 million in total stockholders' deficit. Going Concern Doubt Deloitte & Touche LLP, in Kansas City, Missouri, expressed substantial doubt about Novastar Financial Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's deficit in shareholders' equity, the disruption in the credit markets and related liquidity issues, the sale of its loan servicing operations and the decision to cease all of its mortgage lending operations. PAPPAS TELECASTING: CEO Balks at Plan to Sell All Assets -------------------------------------------------------- Bankruptcy Law360 reports that CEO Harry J. Pappas and Stella A. Pappas, creditors and equity-interest holders of Pappas Telecasting Inc., have objected to the Debtors' plan to sell substantially all of their assets in an auction. According to Bankruptcy Law360, the Pappases, in a preliminary objection filed Friday in the U.S. Bankruptcy Court for the District of Delaware, asserted that the assets of the debtors and nondebtor television stations must be sorted prior to auction. As reported by the Troubled Company Reporter on November 21, 2008, Pappas Telecasting will auction off 10 stations on Dec. 11, 2008. Michael Malone at Broadcasting & Cable reported that as Pappas continues to pay down a heavy debt load, stations in these locations will go on the block include those in: -- El Paso, -- Omaha, and -- Sioux City. Broadcasting & Cable said 13 of Pappas Telecasting's stations have been operating under Chapter 11 protection since May 2008. When those stations moved into Chapter 11, three of Pappas Telecasting's lenders pushed for involuntary Chapter 7 petitions for the company's chairperson Harry Pappas and his wife, the report noted. Pappas Telecasting and its lenders agreed in August 2008 to the appointment of a Chapter 11 trustee to oversee the company's operations, financial affairs, and sale process, after talks broke down between Pappas Telecasting and its lenders, according to the report. Pappas Telecasting owns about 27 stations. Broadcasting & Cable relates that the company sold six stations a few months ago, mostly low power ones, in Nevada and California to Entravision for $4 million. About Pappas Telecasting Fresno, California-based Pappas Telecasting Inc., aka KMPH, aka KMPH-TV, and aka KMPH Fox 26, -- http://www.pappastv.com/-- and its affiliates are broadcasting companies. Founded in 1971, their stations reach over 15% of all U.S. households and over 32% of Hispanic households. Pappas and 21 affiliates filed chapter 11 petition on May 10, 2008 (Bankr. D. Del. Case No. 08-10915 through 08-10936). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP represents the Debtors in their restructuring efforts. Administar Services Group LLC is the Debtors' notice and claims agent. The Debtors listed $100 million to $500 million in assets and debts when they filed for bankruptcy. Harry J. Pappas, the CEO and chairman of Pappas Telecasting and its debtor-affiliates, was the subject of a petition for Chapter 7 liquidation filed by creditors before the U.S. Bankruptcy Court for the District of Delaware. Mr. Pappas' wife Stella was also subject of the involuntary petition. The petitioning creditors are Fortress Credit Opportunites I LP, Fortress Credit Opportunites II LP, Ableco Finance LLC and Silver Oak Capital. John H. Knight, Esq., at Richards Layton & Finger, represents the Fortress Creditors. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, represents Ableco and Silver Oak. According to Bloomberg, the Debtors listed assets with a book value of $460 million and debt of $537 million, including inter- corporate debt. PHH CORPORATION: Moody's Cuts Senior Unsecured Rating to 'Ba1' -------------------------------------------------------------- Moody's Investors Service downgraded PHH Corporation's senior unsecured rating to Ba1 from Baa3 and its short term rating to Not-Prime from Prime-3. All long term ratings are under review for further downgrade. This rating action follows a decline in the profitability of PHH's fleet management segment due to higher fleet leasing funding costs and uncertainty regarding the availability of funding for these leasing activities. If PHH is unable to obtain cost effective, stable sources of fleet lease funding that ensure its ability to originate new car leases it could face franchise impairment. The review will focus on the company's ability to stabilize the profitability of its fleet management activities and obtain cost effective, stable funding for its fleet leasing activities. PHH's stable and profitable fleet management segment has helped to mitigate the significant earnings variability in the company's currently unprofitable mortgage operations. However, due to wider ABS spreads resulting in higher fleet leasing funding costs, the earnings of this segment have declined significantly over the past two quarters. Although PHH has revised pricing for new fleet leases and for some existing leases, Moody's is concerned that PHH will be considerably challenged in its efforts to return its fleet management profitability to previous levels, certainly over the short-term, through passing these higher funding costs onto customers or by other means. "Moody's considered the continuation of stable profitability in PHH's fleet management activities to be key for maintaining an investment grade rating," said Moody's Vice President and Senior Credit Officer Craig Emrick. In addition, one of two notes related to the asset backed commercial paper funded single-seller conduit PHH uses to fund its fleet leasing activities matured at the end of November 2008 and has been renewed only temporarily. There is the potential that this note will not be renewed and will begin amortization. The second note associated with this conduit matures at the end of February 2009. Normally PHH has been able to extend these notes for a full year. PHH is exploring various alternatives for funding its fleet leasing activities including, at least partially, with deposits by becoming a thrift holding company. If PHH is unable to obtain cost effective, stable sources of fleet lease funding that ensure its ability to originate new car leases it could face franchise impairment. Moody's believes that the fleet leasing product assists the company in its sales of more profitable fleet management services such as fuel cards, maintenance cards, vehicle accident services and vehicle purchase and disposition services. Moody's does not believe there are any rating triggers in the company's funding agreements. The last rating action was on January 2, 2008, when the ratings were confirmed with a negative outlook. Downgrades: Issuer: PHH Corporation -- Commercial Paper, Downgraded to NP from P-3 -- Issuer Rating, Downgraded to Ba1 from Baa3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ba1 from Baa3 -- Senior Unsecured Medium-Term Note Program, Downgraded to Ba1 from Baa3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from Baa3 -- Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3 Outlook Actions: Issuer: PHH Corporation -- Outlook, Changed To Rating Under Review From Negative PHH Corporation, headquartered in Mount Laurel, New Jersey, reported assets of $8.9 billion at September 30, 2008. PIERRE FOODS: Plan Confirmation Today in Wilmington, Delaware ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware will convene a hearing today, at 9:30 am Eastern Time, to consider confirmation of Pierre Foods, Inc.'s bankruptcy plan. Bankruptcy Law360 says Roberta A. DeAngelis, Acting United States Trustee for Region 3, has objected to Pierre Foods, Inc.'s bankruptcy plan. According to Bankruptcy Law360, the U.S. Trustee contends that the plan improperly seeks to release some parties in the case from liability. As reported by the Troubled Company Reporter on October 30, 2008, the Bankruptcy Court approved the Disclosure Statement filed in connection with Pierre Foods's Plan and authorized the Debtor to begin soliciting votes on the Plan. The TCR said the Plan is supported by funds managed by Oaktree Capital Management L.P., the company's single largest creditor, and Pierre's Official Committee of Unsecured Creditors. Oaktree supplied the company's debtor-in-possession credit facility, and upon confirmation of the Plan, funds managed by Oaktree will become the majority owner of Pierre. The company stated, "We are pleased that the Court has authorized the solicitation of votes on the consensual Plan of Reorganization. Everyone at Pierre can be proud of what has been accomplished in a very short amount of time. Pierre is poised to emerge from Chapter 11 as a stronger company, with a solid balance sheet, that is well prepared to operate throughout the current economic cycle and beyond. The company is excited about its new sponsorship with Oaktree and appreciates the unwavering dedication and loyalty shown by its employees, customers and vendors throughout the restructuring process." The company expects to emerge from Chapter 11 shortly after the December 10 confirmation hearing. The Debtor said that, at emergence, its consolidated debt will be approximately $141 million, as compared to approximately $367 million of debt at the time of its Chapter 11 filing. About Pierre Foods Based in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Jonathan S. Henes, Esq., and Lisa G. Laukitis, Esq., at Kirkland & Ellis; and Daniel J. DeFranceschi, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger P.A., represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. The United States Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and James R. Savin, Esq., at Akin Gump's Washington, D.C. office, as counsel. Oaktree Capital Management, the Debtors' DIP lender and which is serving as plan sponser, is represented by Van C. Durrer, II, Esq., at Skadden Arps, Slate Meagher & Flom LLP, in Los Angeles, California. Wachovia Bank, N.A., the administrative agent under the Debtors' June 2004 credit agreement, is represented by Gregory Bray, Wsq., and Haig Mark Maghakian, Esq., at Milbank Tweed Hadley McCloy LLP. PILGRIM'S PRIDE: U.S. Trustee Appoints 9-Member Creditors Panel --------------------------------------------------------------- William T. Neary, the United States Trustee for Region 7, appoints nine members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Pilgrim's Pride Corp. and its debtor affiliates. The Creditors' Committee members are: (1) Ala Trade Foods, LLC Attn: Davis Lee 725 Blount Avenue Guntersville, AL 35976 Tel No.: (256) 571-9696 Fax No.: (256) 571-9977 E-mail: pyacey@alatrade.com (2) The Bank of New York Mellon Trust Attn: J. Chris Matthews 601 Travis 16th Floor Houston, TX 77002 Tel No.: (713) 483-6267 Fax No.: (713) 483-6979 E-mail: j.chris.matthews@bnymellon.com (3) Calamos Advisors LLC Attn: John Krasucki 2020 Calamos Court Naperville, IL 60563 Tel No.: (630) 245-7215 Fax No.: (630) 245-7522 E-mail: jkrasucki@calamos.com (4) HSBC Bank USA, National Association Attn: Sandra E. Horwitz 10 East 40th Street, 14th Floor New York, NY 10016-0200 Tel No.: (212) 525-1358 Fax No.: (212) 525-1366 E-mail: Sandra.e.horwitz@us.hsbc.com (5) International Paper Company Attn: Ronald Borcky 4049 Willow Lake Blvd. Memphis, TN 38118 Tel No.: (901) 419-1295 Fax No.: (901) 419-1235 (6) Kornitzer Capital Management/Great Plains Trust Company/Buffalo Funds Attn: John C. Kornitzer P.O. Box 918 Shawnee Mission, KS 66201 Tel No.: (913) 384-4339 Fax No.: (913) 754-1530 E-mail: john@buffalofunds.com (7) Newly Weds Foods, Inc. Attn: Brian Toth 4140 West Fullerton Avenue Chicago, IL 60639 Tel No.: (773) 292-7647 Fax No.: (773) 292-2423 E-mail: mlopez@newlywedsfoods.com (8) Oaktree Capital Management, L.P. Attn: Frances Nelson 333 S. Grand Avenue 28th Floor Los Angeles, CA 90071 Tel No.: (213) 830-6467 Fax No.: (213) 830-8567 E-mail: fnelson@oaktreecapital.com (9) Pension Benefit Guaranty Corp. Attn: Marc Pfeuffer 1200 K Street NW Washington, DC 20009 Tel No.: (202) 326-4020 x 4903 Fax No.: (202) 326-4112 E-mail: Pfeuffer.marc@pbgc.gov Pursuant to Section 1103 of the Bankruptcy Code, the Creditors Committee may: -- consult with the Debtors concerning the administration of the bankruptcy cases; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization for the Debtors; -- participate in the formulation of a plan, advise its constituents regarding the Committee's determinations as to any plan formulated, and collect and file with the Court acceptances or rejections of the plan; -- request the appointment of a trustee or examiner; and -- perform other services as are in the interest of its constituents. The Creditors Committee may retain counsel, accountants, or other agents, to represent or perform services for the group. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants n Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corporation and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case No. 08-45664). Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. Pilgrim's Pride had total assets of $3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008. William T. Neary, United States Trustee for Region 7, will convene a meeting of creditors of Pilgrim's Pride Corporation and its affiliates on January 30, 2009, at 4:00 p.m., at Room 976, at 1100 Commerce Street, in Dallas, Texas. (Pilgrim's Pride Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PINNACLE CLUB: Organizational Meeting to Form Panel on Dec. 11 -------------------------------------------------------------- Roberta A. DeAngelis, acting United States Trustee for Region 3, will hold an organizational meeting in the bankruptcy case of Pinnacle Club at Absecon, LLC, on December 11, 2008, at 10:00 a.m. The meeting will be held at the United States Trustee's Hearing Room, Bridge View, 800-840 Cooper Street, Suite 102, in Camden, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Based in Clarksboro, New Jersey, Pinnacle Club at Absecon, LLC, filed for chapter 11 bankruptcy protection November 25, 2008 (Bankr. D. N.J. Case No. 08-33388). Barry W. Frost, Esq., at Teich Groh, in Trenton, serves as the Debtor's bankruptcy counsel. When it filed for bankruptcy, the Debtor disclosed $5,525,000 in total assets, and $9,898,683 in total liabilities. RADIAN INSURANCE: S&P Puts BB+ Ratings on 2 Classes on Watch Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on three classes from two U.S. asset-backed securities transactions on CreditWatch with negative implications following the recent CreditWatch actions affecting the financial strength ratings on monoline insurers Radian Asset Assurance Inc. (BBB+/Watch Neg/--) and Radian Insurance Inc. (BB+/Watch Neg/--). The CreditWatch placements of the long-term ratings on classes IM- 2 and IIM-2 from Manufactured Housing Contract Trust Pass-Thru Cert Series 2001-1 reflect the actions on Radian Insurance Inc. The CreditWatch placement of the long-term rating on class A from BCC Funding Corp. VI, an equipment loan and lease transaction, reflects the actions on Radian Asset Assurance Inc. Ratings Placed on Creditwatch Negative Manufactured Housing Contract Trust Pass-Thru Cert Series 2001-1 $271 million pass-through certificates series 2001-1 Class To From ----- -- ---- IM-2 BB+/Watch Neg BB+ IIM-2 BB+/Watch Neg BB+ BCC Funding Corp. VI $100 million asset-backed notes series 2007-1 Rating ------ Class To From ----- -- ---- A BBB+/Watch Neg BBB+ RESLOC 2007-1: Fitch Affirms Ratings on 11 Outstanding Tranches --------------------------------------------------------------- Fitch Ratings has affirmed 11 outstanding tranches of ResLoC 2007- 1 plc and downgraded seven tranches, following a performance review of the UK non-conforming RMBS transaction. The agency has simultaneously revised the Outlooks on six notes to Negative from Stable. The transaction is comprised of collateral originated by Advantage Home Loans, Amber, GMAC-RFC and Victoria Mortgage Funding. The rating actions are the result of the combined effect of the deterioration in the UK housing and mortgage market alongside worse-than-expected transaction performance. The ResLoc transaction has seen numerous reserve fund draws over the last 18 months due to the high level of losses coming through each quarter, leaving just 0.87% against a target amount of 1.35% of the original note balance, and Fitch anticipates further draws. The total number of properties currently in repossession is 1.7% of the current collateral balance. A total of 51 properties were sold during the quarter and just under 50% of the following sold properties were purpose-built flats that were constructed in the last four years. Current period losses amount to 0.39% with a weighted-average loss severity for the period of 37.5%. Cumulative WALS is 32.69%, significantly higher than was originally modelled by Fitch. The majority of fixed-rate loans are scheduled to roll off to their floating rate in January 2009 (22.6%). The recent reduction in interest rates could therefore benefit these borrowers, and will certainly have limited any potential payment shock. However the agency would expect that the proportion of loans in arrears will increase as performing loans seek to re-finance with different lenders. Current mortgage arrears levels are, however, relatively low. Loans that are three months or greater in arrears accounted for 3.56% of the outstanding balance as of September 2008, and arrears, inclusive of repossessions, accounted for 5.27%. Principal payment rates have been increasing since closing: PPR as of September was 20.09%. This level may drop after the next interest payment date as the majority of borrowers will have switched to their reversionary rates, and those that are able to refinance will do so, leaving borrowers without refinancing options in the pool. ResLoC 2007-1 plc: -- Class A2a (ISIN XS 0300466173): affirmed at 'AAA'; Outlook Stable -- Class A2b (ISIN XS0300467148): affirmed at 'AAA'; Outlook Stable -- Class A2c (ISIN XS0300467734): affirmed at 'AAA'; Outlook Stable -- Class A3a (ISIN XS0300468385): affirmed at 'AAA'; Outlook Stable -- Class A3b (ISIN XS0300470365): affirmed at 'AAA'; Outlook Stable -- Class A3c (ISIN XS0300472817): affirmed at 'AAA'; Outlook Stable -- Class M1a (ISIN XS0300473203): affirmed at 'AAA'; Outlook Stable -- Class M1b (ISIN XS0300473542): affirmed at 'AAA'; Outlook Stable -- Class B1a (ISIN XS0300474193): affirmed at 'AA'; Outlook revised to Negative from Stable -- Class B1b (ISIN XS0300474607): affirmed at 'AA'; Outlook revised to Negative from Stable -- Class C1a (ISIN XS0300474789): downgraded to 'A-'(A minus) from 'A'; Outlook revised to Negative from Stable -- Class C1b (ISIN XS0300475083): downgraded to 'A-'(A minus) from 'A'; Outlook revised to Negative from Stable -- Class D1a (ISIN XS0300475323): downgraded to 'B' from 'BBB'; Outlook revised to Negative from Stable -- Class D1b (ISIN XS0300476057): downgraded to 'B' from 'BBB'; Outlook revised to Negative from Stable -- Class E1b (ISIN XS0300477022): downgraded to 'CCC' DR1 from 'BB' -- Class E2b (ISIN XS0300477535): downgraded to 'CC' DR5 from 'BB-'(BB minus) -- Class F1b (ISIN XS0300477964): downgraded to 'C' DR6 from 'B' MERCs affirmed at 'AAA'; Outlook Stable RICKY'S CANDY: Files for Chapter 11; Creditors' Meeting on Feb. 2 ----------------------------------------------------------------- Martin C. Daks at Njbiz.com reports that Ricky's Candy, Cones, and Chaos, Inc., has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. According to Njbiz.com, Ricky's Candy listed assets of $100,000 to $500,000 and debts of $100,000 to $500,000. The liabilities, court documents say, include a $100,000 claim by New Jersey for unpaid sales taxes and $30,000 of unpaid rent. The company, according to the documents, disputes the unpaid taxes. Njbiz.com relates that the Hon. Raymond T. Lyons Jr. has scheduled a Feb. 2 meeting in the Court between Ricky's Candy and its creditors. Ten individuals and three firms from New Jersey, Virginia, and Massachusetts sued Ricky's Candy in July, claiming that they lost more than $3 million as Ricky's Candy franchisees, Njbiz.com states. According to the report, the complainants alleged that Ricky's Candy failed to fully disclose the financial risks involved in the business. Njbiz.com quoted Justin M. Klein at Red Bank's Marks & Klein LLP, which represents the franchisees, as saying, "We just learned of the bankruptcy filing. We will review the documents to determine what steps may be required." Ricky's Candy, Cones, and Chaos, Inc. -- http://www.rickysofpa.com/-- of the Delaware Valley opened it first store in Wayne on Dec. 12, 2006. It is owned by Rick Barber. Ricky's Candy shops sell ice cream and candy, and host children's parties. The company filed for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. N.J. Case No. 08-33881). SASI FINANCE: Moody's Places Ratings on 2006-1 Deals Under Review ----------------------------------------------------------------- Moody's Investors Service has placed on review the ratings of the SASI Finance Limited Partnership 2006-A and the RESIX Finance Limited Credit Linked Notes, Series 2006-1 transactions. The certificates and notes 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 fixed-rate and adjustable-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 risk from the reference portfolio but benefit only indirectly from cash flows from these assets. The credit-linked notes in the RESIX shelf replicate the cash flow of synthetic RMBS securities issued: -- RESIX Finance Limited Credit-Linked Notes, Series 2006-1 replicates the cash flows of Class B7, Class B8, Class B9 and Class B10 issued by the SASI Finance Limited Partnership 2006-A, Sovereign Asset Synthetic Investment Securities, Series 2006-A transaction The actions are triggered by higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to currently available credit enhancement levels. The actions listed below reflect Moody's revised expected losses on the Jumbo sector announced in a press release on September 18th, and are part of Moody's on-going review process. The ratings on the notes were monitored by evaluating factors determined to be applicable to the credit profile of the notes, such as i) the nature, sufficiency, and quality of historical performance information regarding the asset class ii) an analysis of the collateral being securitized, iii) an analysis of the transaction's allocation of collateral cashflow and capital structure, and (iv) a comparison of these attributes against those of other similar transactions. Moody's calculates estimated losses for Jumbo RMBS in a two-stage process. First, serious delinquencies are projected through late 2009, primarily based upon recent historical performance. These projected delinquencies are converted into projected losses using lifetime roll rates (the probability of transition to default) averaging 40% for 60-day delinquencies, 75% for delinquencies greater than 90 days, and 90-100% for foreclosure or REO, and severity assumptions averaging 35%. The second step is to determine losses for the remaining life of the deal, following the projection period. Depending on a deal's performance, including delinquency, default, and prepayment rates, as well as collateral characteristics, such as loan type (fixed or adjustable), or loan-to-value ratios and geographic concentrations of remaining current loans, Moody's assumes varying degrees of slowing in the loss rate (which is measured by loss-to- liquidation) for the remaining life of the deal. Typical degrees of slowing in loss rate after late 2009 range from no slowing at all to 40% slowing. To take an example, a deal with very poor early performance due to relatively high loan-to-value ratios and dropping regional home values would be expected to see markedly high delinquency and loss rates for the next year. But the high rate of losses may be expected to slow afterwards, as economic factors and real estate values begin to stabilize, and a slowing of 20-40% may be used in the projection. On the other hand, a deal with stronger early performance that is demonstrating relative resiliency in the current market environment may not be expected to have high losses in the near-term, but may be expected to sustain a similar level of losses for the life of the deal, as the pool continues to be subject to factors that have more historically driven prime performance such as borrower life events, unemployment, and so on. Loss estimates are subject to variability and, as a result, realized losses could ultimately turn out higher or lower than Moody's current expectations. Moody's will continue to evaluate performance data as it becomes available and will assess the pattern of potential future defaults and adjust loss expectations accordingly if necessary. Complete rating actions are: Issuer: SASI Finance Limited Partnership 2006-A, Sovereign Asset Synthetic Investment Securities, Series 2006-A -- Cl. A Notes, Currently Aaa Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Aaa -- Cl. B1 Notes, Currently Aa1 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Aa1 -- Cl. B2 Notes, Currently Aa1 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Aa1 -- Cl. B3 Notes, Currently Aa3 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Aa3 -- Cl. B4 Notes, Currently Aa3 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Aa3 -- Cl. B5 Notes, Currently A2 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned A2 -- Cl. B6 Notes, Currently A3 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned A3 -- Cl. B7 Notes, Currently Baa3 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Baa3 -- Cl. B8 Notes, Currently Ba2 Placed on Review for Possible Downgrade; previously on 6/29/2006 Assigned Ba2 -- Cl. B9 Certificates, Currently B3 Placed on Review for Possible Downgrade; previously on 9/22/2008 Downgraded to B3 from Ba3 -- Cl. B10 Certificates, Currently Caa2 Placed on Review for Possible Downgrade; previously on 9/22/2008 Downgraded to Caa2 from B2 Issuer: RESIX Finance Limited Credit Linked Notes, Series 2006-1 -- Cl. B7 Notes, Currently Baa3 Placed on Review for Possible Downgrade; previously on 6/30/2006 Assigned Baa3 -- Cl. B8 Notes, Currently Ba2 Placed on Review for Possible Downgrade; previously on 6/30/2006 Assigned Ba2 -- Cl. B9 Notes, Currently B3 Placed on Review for Possible Downgrade; previously on 9/22/2008 Downgraded to B3 from Ba3 -- Cl. B10 Notes, Currently Caa2 Placed on Review for Possible Downgrade; previously on 9/22/2008 Downgraded to Caa2 from B2 SEARS HOLDINGS: Moody's Reviews 'Ba1' Ratings for Possible Cuts --------------------------------------------------------------- Moody's Investors Service placed the Ba1 corporate family and probability of default ratings of Sears Holdings Corporation on review for possible downgrade. The SGL-1 speculative grade liquidity rating was affirmed. This review action results from Moody's concern that Sears Holdings' credit metrics will continue to deteriorate for the balance of 2008, and into 2009. "While the macroeconomy continues to punish Sears' operating results, the company still has not come up with a coherent softlines strategy to take some of the pressure off of the solid hardlines business," stated Moody's Senior Analyst Charlie O'Shea. "Moody's review will focus primarily on fourth quarter performance. If credit metrics for the fiscal year continue to deteriorate, ratings could be downgraded". Ratings placed on review for possible downgrade include: Sears Holdings Corporation -- Corporate family rating at Ba1; -- Probability of default rating at Ba1; -- $4 billion senior secured revolving credit facility at Baa3, and Sears, Roebuck and Co. -- Issuer rating at Ba1. Sears Roebuck Acceptance Corp. -- 5.2% to 7.5% medium term notes due 2008 to 2013 at Ba2; -- 6.25% to 7.5% notes due 2008 to 2043 at Ba2, and Debentures and bonds at Ba2. Sears DC Corp. -- 9.07% to 9.2% medium term notes due 2012 at Ba2. Rating affirmed: Sears Holdings Corporation -- Speculative grade liquidity rating at SGL-1. The last rating action for Sears Holdings was the June 6, 2008 affirmation of the Ba1 corporate family and probability of default ratings, and the change in outlook to negative. Sears Holdings, Inc., headquartered in Hoffman Estates, Ilinois, is a leading home improvement and apparel retailer, with LTM September 2008 revenues of $48.6 billion. STEINWAY MUSICAL: Moody's Affirms 'Ba3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Steinway, but revised the rating outlook to negative from stable due to Moody's expectations that, despite a relatively good third quarter, the accelerating uncertainty in both the capital market and job market will likely result in further deterioration in consumer spending, especially for high ticket items such as Steinway's flagship product, the grand piano. "While still expected to remain relatively well positioned versus other entertainment related issuers and other similarly rated consumer durable companies, the negative outlook reflects Moody's belief that the company's profitability may be significantly lower than in previous years" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Despite the company's recent return of a modest amount of excess cash flow to shareholders via a special one-time $25 million dividend in Q1 2007 and the implementation of a $25 million share repurchase program earlier this year (only $2 million shares repurchased to date), Moody's believe that Steinway possesses a good liquidity profile with over $30 million of operating (retained) cash flow, no debt maturities until 2014, around $25 million of cash, access to a committed secured $110 million revolver and no expected financial covenant issues. These ratings are affirmed: -- Corporate family rating at Ba3; -- Probability-of-default rating at Ba3; -- $175 million senior unsecured note, due 2014, at B1 (LGD 4 66%); no change in LGD assessment The last rating action was on September 26, 2006, where Moody's lowered the note rating to B1 upon implementation of Moody's Loss Given Default Methodology. Steinway Musical Instruments, Inc., headquartered in Waltham, Massachusetts, is one of the world's leading manufacturers of musical instruments. The company's products include Selmer Paris saxophones, Bach Stradivarius trumpets, C.G. Conn French horns, King trombones, Ludwig snare drums, and Steinway & Sons, Boston and Essex pianos. Through its online music retailer, ArkivMusic, the company also distributes classical music recordings. Revenues for the twelve months ended September 30 2007, approximated $415 million. TELKONET INC: Posts $12.2 Million Net Loss in Nine-Month Period --------------------------------------------------------------- Telkonet, Inc. disclosed third quarter results for the period ended Sept. 30, 2008. The results of operations include the acquisitions of EthoStream, LLC, Smart Systems International and Newport Telecommunications Co, which was acquired by MSTI Holdings, Inc. on March 15, March 9, 2007, and July 18, 2007, and also includes the operations of the company's majority-owned subsidiary MSTI Holdings, Inc. Telkonet, Inc. reported a third quarter 2008 net loss of $2.9 million compared with a net loss of $5.0 million in the 2007 third quarter. During the period ended Sept. 30, 2008, the company recorded a non-cash expense of $1.6 million in connection with the sale of certain debentures. For the 2008 third quarter, Telkonet, Inc. had revenue of $5.7 million, an increase of 24% compared to $4.6 million in the 2007 third quarter. The increase was a result of organic growth in the company's energy and hospitality management businesses. Excluding revenue from its MST subsidiary, Telkonet had revenue of $4.7 million, an increase of 24% compared to $3.8 million in the year-earlier period and $4.6 million in the 2008 second quarter. Telkonet, Inc. reported a net loss of $12.2 million for the nine months ended Sept. 30, 2008, compared to a net loss of $14.9 million for the nine months ended Sept. 30, 2007. For the nine months ended Sept. 30, 2008, Telkonet had revenue of $16.3 million, an increase of 72% compared to $9.5 million in the nine months ended Sept. 30, 2007. Excluding revenue from its MST subsidiary, Telkonet had revenue of $13.4 million, an increase of 74% compared to $7.7 million in the year-earlier period. Liquidity and Capital Resources The company's working capital decreased by $1.7 million during the nine months ended Sept. 30, 2008, from a working capital deficit of $2.9 million at Dec. 31, 2007, to a working capital deficit of $4.7 million at Sept. 30, 2008. The decrease in working capital for the nine months ended Sept. 30, 2008, was due to a combination of factors, of which the significant factors include cash had a net decrease from working capital by $1.4 million for the nine months ended Sept. 30, 2008. The most significant uses and proceeds of cash were: -- Approximately $4.8 million of cash consumed directly in operating activities; -- A private placement from the sale of 2,500,000 shares of common stock at $0.60 per share provided proceeds of $1.5 million ; -- A repayment of a Senior Note in the amount of $1.5 million issued to GRQ Consultants, Inc.; -- A sale of convertible debentures for proceeds of $1.0 million and $2.5 million in May and July 2008. Of the total current assets of $4.3 million as of Sept. 30, 2008, cash represented $149,993. Of the total current assets of $7.0 million as of Dec. 31, 2007, cash represented $1.6 million. While the company has raised capital to meet its working capital and financing needs, additional financing is required in order to meet its current and projected cash flow requirements from operations and development. Additional investments are being sought, but it cannot guarantee that it will be able to obtain these investments on favorable terms or at all. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of its common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if the company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to collect significant amounts owed to it, or experience unexpected cash requirements that would force the company to seek alternative financing which it may not be able to obtain. Further, if it issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of its common stock. If additional financing is not available or is not available on acceptable terms, the company will have to curtail its operations. At Sept. 30, 2008, the company's balance sheet showed total assets of $32.8 million, total liabilities of $21.2 million and stockholders' equity of $11.6 million. A full-text copy of the 10-Q filing is available for free at http://ResearchArchives.com/t/s?35ea About Telkonet Based in Germantown, Maryland, Telkonet Inc. (AMEX: TKO) -- http://www.telkonet.com/-- provides centrally managed solutions for integrated energy management, networking, building automation, and proactive support services in the United States and Canada. Going Concern Doubt RBSM LLP, in McLean, Virginia, expressed substantial doubt about Telkonet Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's significant operating losses in the current year and also in the past. The company believes that anticipated revenues from operations will be insufficient to satisfy its ongoing capital requirements for at least the next 12 months. TELKONET INC: Streamlines Operations; 5% of Workforce Cut --------------------------------------------------------- Telkonet, Inc., reduced its corporate headcount at all levels, by approximately 5% as part of its strategic long-range plan to streamline operations and rationalize its cost structure. Telkonet's acquisition integration activities over the last nine months have resulted in significant cost savings and operational efficiencies. The company expected this action to result in estimated annualized cost savings of approximately $1.2 million per year, which contributed to the company's goal of operating cash flow break-even by the end of 2008. Jason Tienor, Telkonet chief executive officer said, "A key finding of our strategic review completed in the first quarter of 2008 was the need to realign and streamline internal company functions to enable the successful execution of our long-range plan. We therefore have examined all areas of our business to maximize efficiency and drive overall improved productivity and revenue growth. We are making solid progress in achieving all of the objectives laid out in our strategic long-range plan and are firmly on track to reach our stated goal of operating cash flow break-even from ongoing core operations and deliver enhanced shareholder value by the end of 2008." This comprehensive audit of Telkonet's performance and technologies initiated the final phase of Telkonet's evolution to becoming a clean technology company. The restructuring has facilitated the reduction of numerous positions through combining staff responsibilities and migrating roles to resources acquired during the most recent acquisitions. With Telkonet's key growth taking place within GREEN technology and the smart grid industry, these changes leverage resources across the organization with a broad array of expertise and knowledge in this area. With these new changes, the company expects to achieve greater efficiency and more focused product integration targeting energy conservation and the utility market. About Telkonet Based in Germantown, Maryland, Telkonet Inc. (AMEX: TKO) -- http://www.telkonet.com/-- provides centrally managed solutions for integrated energy management, networking, building automation, and proactive support services in the United States and Canada. Going Concern Doubt RBSM LLP, in McLean, Virginia, expressed substantial doubt about Telkonet Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's significant operating losses in the current year and also in the past. The company believes that anticipated revenues from operations will be insufficient to satisfy its ongoing capital requirements for at least the next 12 months. TRIBUNE CO: Chapter 11 Filing Prompts Moody's 'D' Ratings --------------------------------------------------------- Moody's Investors Service downgraded Tribune Company's Probability of Default rating to D from Caa2, the Corporate Family rating to Ca from Caa2, and associated debt ratings as detailed below. The downgrades follow Tribune's announcement on December 8, 2008 that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Moody's will withdraw all of Tribune's ratings shortly. Downgrades: Issuer: Tribune Company -- Probability of Default Rating, Downgraded to D from Caa2 -- Corporate Family Rating, Downgraded to Ca from Caa2 -- Guaranteed Senior Secured Bank Credit Facility, Downgraded to Caa3, LGD3-36% from Caa1, LGD3-36% -- Guaranteed Senior Unsecured $1.6 Billion Bridge Credit Facility, Downgraded to C, LGD5 - 82% from Caa3, LGD5 - 82% -- Senior Secured Bonds/Debentures, Downgraded to C, LGD5 - 89% from Ca, LGD5 - 89% -- Subordinate Bonds, Downgraded to C, LGD6 - 95% from Ca, LGD6 - 95% -- Medium-Term Note Program, Downgraded to C from Ca -- Multiple Seniority Shelf, Downgraded to (P)C from (P)Ca Outlook Actions: Issuer: Tribune Company -- Outlook, Changed to Stable from Negative Moody's last rating action on Tribune was on July 23, 2008 when it lowered the company's CFR and PDR both to Caa2 from B3 and assigned an SGL-4 speculative-grade liquidity rating, signaling heightened liquidity stress and near-term default risk. The downgrade of the PDR to D reflects the Company's now formal bankruptcy filing, which Moody's classifies as a "default" event, consistent with the "D" Probability of Default rating. The CFR and ratings for individual debt instruments are based on application of Moody's Loss Given Default framework utilizing an expected 50% family recovery rate. Tribune Company, headquartered in Chicago, Illinois, operates the second largest newspaper group in the U.S. as well as television and radio broadcasting and interactive services. The company owns 23 television stations including a VHF station in each of the top three metro markets, and TV-newspaper duopolies in Los Angeles, Chicago, Miami, and Hartford. Annual revenue approximates $4.6 billion. TRIBUNE CO: Got $850MM-$950MM Offers for Cubs; Team Not in Ch. 11 ----------------------------------------------------------------- Tribune Co. received bids ranging from $850 million to $950 million for the Chicago Cubs baseball team, Sarah Rabil and Curtis Eichelberger at Bloomberg News report, citing a person familiar with the matter. The source, according to Bloomberg, said that bidders for Chicago Cubs included: -- Tom Ricketts, the chairperson of Incapital LLC whose father founded TD Ameritrade Holding Corp.; -- Hersch Klaff, a real estate executive; and -- Marc Utay, managing partner of Clarion Capital Partners LLC. The bids for Chicago Cubs should decline after Tribune filed for Chapter 11 bankruptcy protection, Bloomberg says, citing the source. According to the report, estimates for the sale of the team, its Wrigley Field ballpark, and a 25% stake in Comcast Corp.'s Comcast SportsNet Chicago ranged from $800 million in April to $1.3 billion in July. A person familiar with the matter said that Chicago Cubs over-estimated ticket price increases, on- site real estate development, and baseball's willingness to approve an owner who borrowed huge sums to buy the franchise, the report states. Tribune had a $12.9 billion debt after being taken private by billionaire Sam Zell in 2007. Citing CreditSights Inc. debt analyst Jake Newman, Bloomberg states that Tribune needed to sell Chicago Cubs for at least $1 billion and repay its Tranche X loan to avoid breaching year-end debt covenants. Chicago Cubs wasn't included in Tribune's bankruptcy filing. The sales process for the team, ballpark, and related assets will proceed, according to Bloomberg. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TRIBUNE CO: Says It's Not Going Out of Business ----------------------------------------------- In light of its Chapter 11 filing yesterday, Tribune Co. disputed concerns that it or any of its business units are going out of business. "Chapter 11 should not be confused with Chapter 7, which is used by companies that are shutting down operations and liquidating assets. We continue to operate our media businesses. We are continuing to publish our newspapers and to run our television stations and websites. We have great brands, and we are pursuing this restructuring in order to protect and strengthen them long- term," Tribune said. Tribune explained that it filed for Chapter 11 because simply has "too much debt in light of the dramatic and unexpected decline in revenues, which has been amplified by the current recession." Tribune added that restructuring under Chapter 11 is the best option for the company. "This restructuring is the best option we have to take pressure off of our operations so we can pursue our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and that plays a vital role in the communities we serve." In response to questions about the Chicago Cubs being excluded from the Chapter 11 filing, Tribune said that the baseball team was kept out so that the restructuring process would have as little impact as possible on the monetization process. The team will continue to pay pre-petition invoices, according to the company. Tribune also disputed concerns that there will be layoffs as a result of the filing. "The filing is about our debt, not our operations," it points out. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TRIBUNE CO: Wants Schedules & Statements Deadline Moved to Jan. 22 ------------------------------------------------------------------ Tribune Co. and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their deadline to filed schedules of assets and liabilities and statements of financial affairs to Jan. 22, 2009. Given the size and scope of the Debtors' Chapter 11 cases, it is a practical impossibility for them to complete their Schedules of Assets and Liabilities and Statements of Financial Affairs within the 30-day extension period provided by the Bankruptcy Code and the Local Rules, says Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, proposed attorney for the Debtors. The Debtors deadline to file their Schedules and Statements is automatically extended for 30 days pursuant to Rule 1007(a) of the Federal Rules of Bankruptcy Procedure. Together with their Petition, the Debtors have submitted a consolidated list of creditors, consolidated list of creditors holding the 30 largest unsecured claims, and lists of equity security holders, demonstrating that the total number of creditors exceeds 200. In addition to the automatic extension, the Debtors also ask for 15 more days to compile the information necessary to complete the Schedules and Statements. Due to a huge number of creditors of more than 60,000, 25,000 current and former employees, numerous leases and contracts that must be assembled and reviewed, the Debtors anticipate that they won't be able to finish everything before the deadline. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- fka Times Mirror Corporation, is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun-Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. The company filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Delaware Case No. 08-13141). Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, and Sidley Austion LLP represent the company in its restructuring effort. The company's financial advisors are Lazard Ltd. and Alvarez & Marsal North Americal LLC. Its claims agent is Epiq Bankruptcy Solutions LLC. As of Dec. 8, 2008, the company listed assets of $7,604,195,000 and debts of $12,972,541,148. (Tribune Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). TWEETER OPCO: Court Converts Bankruptcy Case to Chapter 7 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved a request by Tweeter Opco LLC to convert its Chapter 11 bankruptcy and liquidate its business under Chapter 7, Bankruptcy Law360 reports. Separately, Bankruptcy Law360 says, the Court entered an order, over the objections of several utility companies, barring the utilities from discontinuing service to the Debtors. According to Bankruptcy Law360, the Court also permitted the Debtors to create a utility deposit account to pay for utility services. As reported by the Troubled Company Reporter on December 8, 2008, Tweeter Opco and its debtor-affiliates asked the Court to immediately convert their cases to Chapter 7 pursuant to Section 1112(a) of the Bankruptcy Code and direct the Office of the United States Trustee to appoint a Chapter 7 Trustee. Judge Walrath held a hearing on the Debtors' request on Dec. 3, 2008. A minute entry released by the Court noted that the order on the Motion to Convert is due under certification of counsel, the TCR said. Twice.com, however, relayed in a report dated December 3, 2008, that Tweeter Opco's Chapter 7 conversion request has been granted the federal court. Twice.com said it is very possible for Tweeter Opco to re-open its stores to continue the liquidation process under Chapter 7. Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, related that before the Petition Date, the Opco Debtors were party to two Credit Agreements dated as of: (a) September 19, 2007, with Wells Fargo Retail Finance, LLC as administrative agent; and (b) August 28, 2007, with Schultze Agency Services, LLC, as agent. Obligations under those credit agreements were secured by a lien on substantially all of the Opco Debtors' assets. All of the DIP obligations have been paid in full and the Letters of Credit issued under the DIP Credit Agreement have been reduced to zero or fully collateralized pursuant to the terms of the DIP Credit Agreement. According to Mr. Heath, the Opco Debtors' consensual use of Well Fargo's cash collateral terminated on December 1, 2008. "Without the use of the cash collateral, the Debtors are unable to continue to liquidate their estates under Chapter 11 of the Bankruptcy Code," Mr. Heath said. "Chapter 7 will permit the Debtors' remaining assets to be liquidated and potential causes of action to be pursued to monetized for the benefit of creditors." Moreover, the Opco Debtors have engaged in extensive negotiations with Schultze in an effort to obtain its consent to use cash collateral to continue to finance their liquidation efforts but Schultze refused. Accordingly, the Opco Debtors closed their remaining stores and terminated all their employees on December 1, 2008. The Debtors have asked the Court to direct Wells Fargo to create a reserve fund of $900,000 for payment of the accrued, but unpaid prepetition wages, commissions and payroll related taxes of the Opco Debtors' employees. The Opco Debtors also want Wells Fargo to create an additional reserve for contingent indemnification claims. Furthermore, the Opco Debtors have asked the Court to order that the $1,150,000 Carve Out under their DIP Agreement be held in a Richards, Layton & Finger, P.A. escrow account pending approval of their professionals' fees and expenses. Consultants and Utility Providers Object SB Capital Group, LLC, Tiger Capital Group, LLC and Hudson Capital Partners, LLC, the Opco Debtors' liquidating consultants, have demanded that any order regarding the Conversion Motion should oblige the Opco Debtors to pay all fees and expenses owed to them through the date of termination of the sale. The Consultants argued that Schultze's refusal to consent to the payment of their fees and expenses from the proceeds of the sale is tantamount to fraud. "Schultze cannot just pick and choose the provisions of the Consulting Agreement, or the Court's prior orders that inure to its benefit while disregarding the rights of other parties-in-interest," the Consultants said. The Consultants seek payment with respect to the fees and expenses, aggregating $1,766,163. Meanwhile, Utility Providers Florida Power & Light Company, Baltimore Gas Electric, Delmarva Power & Light Co., and Central Maine Power opposed the Conversion Motion to the extent the Opco Debtors propose to pay certain administrative creditors in preference to other administrative creditors. About Tweeter Opco Tweeter Opco, LLC, was formed in July 2007 to acquire the business operations and assets of Tweeter Home Entertainment Group, Inc. The company filed for Chapter 11 protection on Nov. 5, 2008 (Bankr. D. Delaware Case No. 08-12646). Chun I. Jang, Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger, P.A., assists the company in its restructuring effort. The company listed assets of $50 million to $100 million and debts of $50 million to $100 million. (Tweeter Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). UNITED TILE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: United Tile & Stone, Inc. dba Tile Wordl of Italy 5502 Anderson Rd. Tampa, Fl 33614 Bankruptcy Case No.: 08-19499 Type of Business: The Debtor makes and sells ceramic floor & wall tiles. See: http://www.twiflorida.com/ Chapter 11 Petition Date: December 8, 2008 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: M. Lynn Pope, Esq. mlplaw@yahoo.com David W. Steen, PA 602 South Boulevard Tampa, FL 33606 Tel: (813) 251-3000 Fax: (813) 251-3100 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sovereign Bank Pro Edge III; $191,000 3 Huntington Quadrangle Bridge Cutting Suite 101N Machine Tools; 2 Melville, NY 11747 Cutting Machine Paolo G. Plazza $132,249 17308 Carriage Way Odessa, FL 33556 Unicom $123,380 Flumendosa 7 41040 Spezzano Di Fiorano Modense Modena Italy NOAT SRL $98,014 Crevisa $112,321 Caterina Plazaa $95,458 Marcello Regoci $91,800 Grein Italia $82,337 Florida Dept. of Revenue sales & use tax $87,838 Stone Interiors dbs PRP PRP export and $86,771 USA vintage granite Francisco Segura & Galvan $82,024 PRP Exports supplier $75,046 Doug Beldon Tax Collector intangible taxes $69,070 2007 Sterling Bank SL50 CNC Machine; $69,000 Pro Edge Shaper Antolini Luigi $65,004 Stefano Plazaa $64,455 M&T Credit edge polisher $60,000 Graniti Export $40,460 FCCI Insurance Company vendor $34,436 Trenam, Kemker legal fees $33,620 The petition was signed by president Liborio Mario Plazza UNIVERSAL CORP: S&P Assigns 'BB' Preferred Stock Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB-' senior unsecured debt rating and 'BB' preferred stock rating to Universal Corp.'s Rule 415 shelf registration for debt securities and preferred stock. The new shelf has an indeterminate aggregate initial offering amount for debt securities and preferred stock. The ratings on Richmond, Virginia-based Universal reflect its position as one of the largest independent processors and distributors of leaf tobacco and its intermediate financial risk profile. This is tempered by the business challenges in which the company operates: global competition, a weak U.S. dollar, customer concentration risk, and declining cigarette consumption in most mature worldwide markets. In addition, Universal's ability to manage through the inherent supply and demand volatility in worldwide leaf tobacco is a key factor in S&P's analysis. S&P expects that Universal will maintain a moderate financial policy and fairly stable credit protection measures. Debt leverage is expected to remain, on average through the tobacco cycle, in the mid-2x area, even if margins contract by 200 basis points, which could occur due to the volatility in commodity cost and foreign currency. Ratings List Universal Corp. BBB-/Stable/-- Rating Assigned Rule 415 shelf Senior unsecured/preferred stock BBB-/BB (prelim) USP SPC: S&P Cuts Rating on Jackson 2006-IIA Notes to 'D' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the notes issued by USP SPC, acting for the account of Jackson 2006-IIA, to 'D' from 'CCC-'. The downgrade reflects the reduction of the outstanding principal amount of the notes from USP SPC, acting for the account of Jackson 2006-IIA, to zero due to cash settlement payments related to various credit events. Rating Lowered USP SPC Jackson 2006-IIA Rating Balance (million) ------ ----------------- To From To From -- ---- -- ---- Notes D CCC- 0.000 $47.578 JPMorgan Commercial Mortgage Finance Corp. Commercial mortgage pass-through certificates series 1997-C5 Class Rating Credit enhancement ----- ------ ------------------ G CCC- 0.33% VERASUN ENERGY: Court OKs $230MM DIP Financing on Final Basis ------------------------------------------------------------- Bankruptcy Law360 reports that VeraSun Energy Corp. has obtained approval, on a final basis, from the United States Bankruptcy Court for the District of Delaware to use a financing package of more than $230 million to help fund operations while the company reorganizes under Chapter 11 protection. As reported by the Troubled Company Reporter on November 13, 2008, a $190,000,000 component of the DIP Loans for the VSE Debtors provided by certain holders of the 9-7/8% Senior Secured Notes due 2012 will mature on the earliest of (i) November 30, 2009, (ii) November 5, 2009 if the final order approving the VSE Loans has not been entered on or before this date, (iii) confirmation by the Court of a plan of reorganization, or (iv) the acceleration of the VSE Loans or the termination of the VSE Lenders' commitments in accordance with the final loan documentation. The TCR said the commitment of the VSE Lenders to provide VSE Loans is subject to a number of conditions, including completion of final loan documentation satisfactory in form and substance to the VSE Lenders and the administrative agent for the VSE Lenders, and final approval by the Court, on or before November 17, 2008. Failure to meet the condition will constitute an event of default and will result in the VSE Loans becoming immediately due and payable. Subject to a $1,000,000 professional fee carve-out, the VSE Loans will be secured by a first priority, priming security interest on the property, plant and equipment of the VSE Obligors and a junior security interest on the accounts receivable and inventory of the VSE Obligors -- junior to the security interests of the lenders under VeraSun's $125,000,000 revolving credit facility with UBS Securities LLC, UBS AG, Stamford Branch, and UBS Loan Finance LLC. The $25,000,000 DIP Loans for certain VSE Debtors to be provided by AgStar Financial Services, PCA, will mature on November 3, 2009. The Interim Facility will mature on the earlier of the entry of a final order of the Court approving the final loan documentation or Dec. 10, 2008. About VeraSun Energy Corporation Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- is a producer and marketer of ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No.: 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. Verasun Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WACHOVIA BANK: S&P Upgrades Rating on Class O Certificates to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on seven classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2003-C3. Concurrently, S&P affirmed its ratings on 10 other classes from the same series. The upgrades reflect increased credit enhancement levels resulting from a 16% paydown in the mortgage pool balance since issuance, as well as the defeasance of the collateral securing 19% ($146.2 million) of the pool. The affirmations reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Nov. 17, 2008, remittance report, the collateral pool consisted of 120 loans with an aggregate trust balance of $789.5 million, compared with 130 loans totaling $937.3 million at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 93.8% of the pool, excluding the defeased loans; 87.6% of the servicer-reported information was year-end 2007 or interim-2008 data. Based on this information, S&P calculated a weighted average debt service coverage of 1.59x, compared with 1.51x at issuance. There is one loan ($7.2 million, 1%) with the special servicer, LNR Partners Inc., which is discussed below. In addition, four other loans ($23 million, 3%) in the pool are 30-plus-days delinquent and are in the process of being transferred to LNR, which will be reflected in the next remittance report. Apart from these loans, there are no other delinquent loans in the pool. To date, the trust has not incurred any losses. The top 10 loans have an aggregate outstanding balance of $229.3 million (29%) and a weighted average DSC of 1.49x, compared with 1.48x at issuance. The aforementioned debt service calculation excludes the ninth- and 10th-largest loans, which are not subject to annual reporting requirements. The fourth-largest loan appears on the watchlist. S&P reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. One property was characterized as "excellent," while the remaining collateral was characterized as "good." There are four loans ($16.6 million) in the pool that have reported low DSCs, and three of them are credit concerns. The three loans that are credit concerns are secured by office, industrial, and multifamily properties with an average balance of $3.4 million. They have experienced a weighted average decline in DSC of 51% since issuance. The properties have experienced a combination of declining occupancy and higher operating expenses since issuance, and S&P does not expect their DSCs to improve in the near future. There is one loan with the special servicer. The Hesperian Retail Center loan ($7.2 million, 1%) is secured by a 38,990-sq.-ft. retail property in Hayward, California. The loan was transferred to LNR in July 2008 because the sponsor transferred its ownership interests without the lender's consent. The loan is current. LNR is working with the borrower to cure the default, and S&P expect that the loan will be returned to the master servicer in the near future. The property is 51% occupied by Office Depot and 37% occupied by Walgreens. As of Dec. 31, 2007, the DSC was 1.50x and occupancy was 100%. There are four loans in the process of being transferred to the special servicer: the Highland Point loan ($7.9 million, 1%), the Highland Manor loan ($6.6 million, 0.8%), the Highland Club loan ($5.7 million, 0.7%), and the Highland Arms loan ($3.2 million, 0.4%) are 30-plus-days delinquent. The loans are secured by multifamily properties in Georgia and share the same sponsor. The borrowers indicated that they will not be able to make future debt service payments, and as a result the loans are in the process of being transferred to LNR. As of June 30, 2008, the DSC and occupancy for the properties, respectively, were 1.46x and 90% for Highland Point; 1.19x and 88% for Highland Manor; 1.06x and 89% for Highland Club; and 1.15x and 92% for Highland Arms. Wachovia reported a watchlist of 21 loans ($107.9 million, 14%). The Avalon Heights Apartments loan is the fourth-largest exposure ($22.1 million, 3%) and is secured by a 208-unit multifamily property in Tampa, Florida. The loan appears on the watchlist because the property reported a year-end 2007 DSC of 1.09x. The property's performance has improved since then; as of June 30, 2008, the DSC was 1.31x and occupancy was 96%. S&P stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2003-C3 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ G A+ A- 11.28% H A BBB+ 9.65% J BBB BBB- 6.83% L BB BB- 4.75% M BB- B+ 4.45% N B+ B 3.56% O B B- 2.97% Ratings Affirmed Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2003-C3 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 25.38% A-2 AAA 25.38% B AAA 20.78% C AAA 19.14% D AA+ 15.88% E AA 14.25% F AA- 12.91% K BB+ 5.64% IO-I AAA N/A IO-II AAA N/A N/A - Not applicable. WACHOVIA CORP: Court Rejects Shareholder Suit to Stop Merger ------------------------------------------------------------ Bankruptcy Law360 reports that Judge Albert Diaz of the North Carolina Business Court denied a shareholder's request for preliminary injunction against the $11.7 billion merger deal between Wells Fargo and Wachovia Corp. The ruling, according to Bankruptcy Law360, paves the way for the merger to move forward. As reported by the Troubled Company Reporter, Scott Lanman at Bloomberg News said the Federal Reserve's Board of Governors unanimously approved on Oct. 12, Wells Fargo's takeover of Wachovia. TCR said the takeover is valued at $12.2 billion. Based in Charlotte, North Carolina, Wachovia Corporation (NYSE:WB) -- http://www.wachovia.com/-- is one of the nation's diversified financial services companies, with assets of $812.4 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Clients are served in selected corporate and institutional sectors and through more than 40 international offices. Its retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 18,600 registered representatives in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com. Wachovia was exposed to large mortgage losses as a result of its 2006 purchase of mortgage lender Golden West Financial Corp., according to The Wall Street Journal. The company, WSJ stated, has believed total losses for Golden West's payment option loan portfolio could eventually reach 12%, up from previous forecasts. Wachovia Corp. reported a $23.89 billion net loss in the third quarter of 2008. As reported in the Troubled Company Reporter on Oct. 8, 2008, Fitch has upgraded Wachovia's IDR to 'A+' from 'BB-' and placed it on Rating Watch Positive, along with the 'A+' senior debt of Wachovia and subsidiaries, following Wells Fargo & Company's definitive agreement to acquire Wachovia Corporation and subsidiaries. As reported in the Troubled Company Reporter on Oct. 1, 2008, Standard & Poor's Ratings Services placed all its ratings on Wachovia Corp. and Wachovia Bank on CreditWatch with negative implications. S&P also lowered its DRD Series J and K and convertible preferred stock Series L ratings on Wachovia Corporation to 'BB' from 'A-', as these securities will not be acquired and will continue to reside with the new Wachovia. WCI COMMUNITIES: Seeks Court Nod on Gulf Harbour Turnover Pact -------------------------------------------------------------- WCI Communities, Inc. and its debtor affiliate ask the U.S. Bankruptcy Court for the District of Delaware to approve a turnover agreement relating to The Gulf Harbour Golf & Country Club. The Debtors also seek permission to consummate the contemplated transaction, including the sale of WCI memberships, inventory and supplies; and reject certain WCI contracts. The Gulf Harbour Golf & Country Club, Inc., is an equity club located in Fort Myers, Florida, which offers to its members a golf course, several tennis courts, a clubhouse, a restaurant, dining rooms and a fitness center. The Debtors manage and operate the Club pursuant to a 1999 Management Agreement. The Debtors also have access to the Club's facilities pursuant to a 1999 Marketing, Access and Use agreement. In addition, the Debtors and the Club entered into a club acquisition agreement, pursuant to which the Debtors transferred certain club facilities to the Club and agreed to renovate certain facilities for the benefit of the Club. Pursuant to a Membership Plan, the Club issued 400 golf memberships and 1,000 sports memberships. The Debtors currently own seven golf memberships and 304 sports memberships. The Membership Plan contemplates that control of the Club and all of its facilities will not be transferred to equity members until December 31, 2009. However, in light of the Debtors' bankruptcy filing and uncertain financial status, an early turnover committee was established by equity members on behalf of the Club to facilitate and expedite the transfer of control of the Club from the Debtors to the equity members. Accordingly, Jeffrey M. Schlerf, Esq., at Bayard P.A., in Wilmington, Delaware, discloses, the Turnover Committee engaged in discussions with the Debtors and ultimately agreed on the terms of a Turnover Agreement. The salient terms of the Turnover Agreement are: -- Control of the Club and its facilities will be transferred to equity members on December 31, 2008. All members of the Club's board assigned by the Debtors will resign and equity members will be elected to take over. -- The Debtors will reject, as of the Turnover Date, all leases, service contracts and other agreements between the applicable lessor/vendor and the Debtors that relate to the operation of the Club. A list of the Contracts to be rejected is available for free at: http://bankrupt.com/misc/WCIGulfHarbourContracts.pdf -- The Turnover Agreement will become effective when it is ratified by affirmative votes of a majority of the equity members, exclusive of any equity members held by or for the benefit of the Debtors, and after the Court enters a final order approving it. -- On the Turnover Date, the Debtors will provide a bill of sale for the equipment and other personal property owned by the Debtors, located at the Gulf Harbour Club and used primarily in the operation of the facilities. -- On the Turnover Date, the Debtors will assign all assignable licenses and permits, provided that any cure amounts required to be paid pursuant to Section 365 of the Bankruptcy Code will be paid by the Club. -- On the Turnover Date, the Club will pay the Debtors an amount equal to: (a) the cost of food, beverage and merchandise or pro shop inventory then on hand not exceeding $100,000; (b) the cost of supplies used in maintenance and operation estimated to be $16,000; and (c) amounts prepaid for contracts which will benefit the Club after the Turnover Date. -- On the Turnover Date, among others, utility bills, real estate taxes, rents, payroll, and other accrued or prepaid expenses will be prorated. -- On the Turnover Date, the Debtors will assign all of their rights and titles in the WCI Memberships, free and clear of all liens and claims. The Debtors will not sell any of their seven Golf Memberships as of the date of the Turnover Agreement. They have the right to sell the Sports Memberships until the Turnover Date, at a price not less than $7,000 a piece. In consideration of the WCI Memberships turnover, the Club will pay the Debtors $960,000, reduced by $50,000 for major repair items. "The expedited sale of the WCI Memberships will generate significant and immediate revenue for the Debtors," Mr. Schlerf maintains. The Court will convene a hearing on the Debtors' request on December 17, 2008. All objections, if any, must be filed no later than December 16. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. (WCI Communities Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WCI COMMUNITIES: Gets Plan Exclusivity Until April 1 ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended WCI Communities, Inc. and its debtor affiliates' exclusive period for filing a Chapter 11 plan through and including April 1, 2009. The Court also extended the period within which the Debtors may solicit acceptances of that plan, through including June 1, 2009. The Court's Order is without prejudice to the Debtors' right to request further extensions of the Exclusive Periods pursuant to Section 1121(d) of the Bankruptcy Code. In requesting for an extension, the Debtor's counsel, Jeffrey M. Schlerf, Esq., at Bayard P.A., in Wilmington, Delaware, explained that the Debtors are in the process of modifying and adapting their business strategies to preserve and optimize value. "Until such business plan can be developed and vetted with the Debtors' key stakeholders, efforts to propose and file a Chapter 11 plan in this current tumultuous and unstable market would be premature," Mr. Schlerf contends. The Court approved the extension amid reservations by the Debtors' lenders, including Bank of America. The Debtors successfully negotiated and closed a $150,000,000 DIP credit facility and obtained authority from the Court to, among other things, continue selling homes in the ordinary course of business and honor warranty and other obligations. Bank of America N.A., as administrative agent on behalf of the Debtors' Revolver Lenders, said it does not object to the requested 120-day exclusivity period extension. However, it seeks that any extension of exclusivity be conditioned on the Debtors meeting certain milestones designed to show significant progress toward the confirmation of a plan of reorganization, including: (1) The delivery of a business plan to the Agent for the DIP Lenders, the Agent for the Prepetition Revolver Lenders, the Agent for the Prepetition Term Lenders, and the Official Committee of Unsecured Creditors no later than December 31, 2008; and (2) The delivery of a term sheet outlining the principal terms of a plan of reorganization or plans of reorganization to the Notice Parties no later than February 15, 2009. If the Debtors are unable to meet these Milestones, BofA contends that the Court should terminate the Debtors' exclusivity. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. (WCI Communities Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WCI COMMUNITIES: Court Fixes Feb. 2, 2009 as Claims Bar Date ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has fixed February 2, 2009, as the last date and time by which parties-in- interest can file proofs of claim against WCI Communities, Inc. and its debtor affiliates' or be forever barred. The Debtors will serve a notice of the Bar Date by December 12, 2008 to all known creditors, shareholders, and other parties-in- interest. The purpose of the Bar Date is to provide a deadline to identify any possible unknown claims against the Debtors' estates and to give parties additional certainty regarding the magnitude of claims against the Debtors' estates, Jeffrey M. Schlerf, Esq., at Bayard P.A., in Wilmington, Delaware, relates. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. (WCI Communities Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WCI COMMUNITIES: Reaches Deal w/ Safeco Insurance on Lawsuit ------------------------------------------------------------ At a hearing before the U.S. Bankruptcy Court for the District of Delaware, WCI Communities, Inc., and Safeco Insurance Company reached a settlement agreement to dismiss lawsuits between the two parties without prejudice, with each party to bear its own attorney's fees and costs. In adversary proceedings filed separately with the Court, the Debtors had filed charges against Safeco with respect to four performance bonds, aggregating $4,143,415. The charges include: -- breach of contract, -- breach of implied covenant of good faith and fair dealing, -- violation of Florida Unfair & Deceptive Trade Practices Act, -- tortious interference with contractual rights, -- tortious interference with business relationships, -- fraud, -- libel or defamation, and -- conversion. On October 10, 2008, Debtor MHI-Rugby Road LLC initiated another complaint against Safeco with regard to a performance bond Safeco issued for $2,611,644 to guarantee satisfactory completion of a project. Safeco responded and sought dismissal of the complaints against it. On behalf of Safeco, Alberta L. Adams, Esq., at Mills Paskert Divers, in Tampa, Florida, contended that the Debtors' claims are barred under a general agreement of indemnity between the Debtors and Safeco. She adds that pursuant to the Indemnity Agreement, the Debtors expressly agreed that they would procure the discharge of Safeco from any bond. Under the Indemnity Agreement, Ms. Adams notes that the principal has the obligation of exonerating and indemnifying the surety, and the principal has no rights under the bond. "The relief sought by [the Debtors] would turn the surety relationship on its head," Ms. Adams said. Ms. Adams further notes that Safeco had the right to cancel the subject bond and in fact, the Debtors requested that Safeco cancel another bond, recognizing the surety's right to do so. Thus, the Debtors cannot maintain a claim as a matter of law based on Safeco's cancellation of the subject bond, she maintains. In addition, Ms. Adams argued that the Debtors failed to state a cause of action against Safeco as the subject bonds run in favor of the named oblige, and not the Debtors. Ms. Adams contends that bankruptcy courts hold that bonds are not property of a debtor's principal estate. Since the Debtors have no right under the bonds, the Debtors cannot challenge the cancellation of the bonds. Ms. Adams also contended that the subject bonds are financial accommodations, which cannot be assumed. Thus, she avers, the Debtors have no rights in the bonds. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. (WCI Communities Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WCI COMMUNITIES: Carl Icahn Dumps All 6,000,000 Shares ------------------------------------------------------ Icahn Associates Corp. and its affiliated companies, in a regulatory filing with the Securities and Exchange Commission, disclose that as of December 4, 2008, they, other than Carl Icahn, no longer beneficially own any WCI Communities, Inc. shares. The affiliates of Icahn Associates are: - High River Limited Partnership - Hopper Investments LLC - Barberry Corp. - Icahn Partners LP - Icahn Onshore LP - Icahn Partners Master Fund LP - Icahn Offshore LP - Icahn Capital LP - IPH GP LLC - Icahn Enterprises Holdings L.P. - Icahn Enterprises G.P. Inc. On December 4, 2008, the Icahn Entities sold in a privately negotiated transaction, shares aggregating 6,096,175 for $0.02 to an undisclosed buyer who said that it was acquiring the shares for investment purposes: -- About 1,279,725 of the WCI Shares were sold by High River Limited Partnership. -- About 2,901,892 WCI Shares were sold by Icahn Partners LP. -- About 1,914,558 WCI Shares were sold by Icahn Partners Master Fund LP. As a result of the Transaction, the Icahn Entities ceased to be beneficial owners of more than 5% of WCI total outstanding shares issued. Mr. Icahn beneficially owns 3,848 shares of WCI common stock. Mr. Icahn's shares constitute 0.007% of WCI's 53,213,252 outstanding shares issued as of June 30, 2008. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. (WCI Communities Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). WESTMORELAND COAL: Unit Gets 30-Day Extension of Revolving Loans ---------------------------------------------------------------- Westmoreland Resources, Inc., a subsidiary of Westmoreland Coal Company, entered into a second amendment to the Business Loan Agreement dated Oct. 29, 2007, as amended, and a Change in Terms Agreement, with First Interstate Bank, Billings, Montana. Westmoreland Coal Company is guarantor of WRI's obligations under the Loan Agreement and has pledged 100% of WRI's common stock to FIB as collateral to secure such guaranty. The Loan Agreement provided WRI, as borrower, a $8,500,000 term loan and a $20,000,000 revolving line of credit. The revolving line of credit was originally set to mature on Oct. 28, 2008. The company disclosed in a regulatory filing with the Securities and Exchange Commission that on Oct. 28, 2008, WRI entered into a 30-day extension of its revolving line of credit. Borrowings during the extension period were limited to $10,000,000, a reduction from the $20,000,000 of borrowings available prior to the extension. The reduction in borrowing capacity was due to the withdrawal of a participant bank from the credit facility. Pursuant to the amendment and the changes in terms agreement, the revolving line of credit has been extended to Nov. 19, 2009, and the amount of borrowings available under the revolving line of credit is restored to the original amount of $20,000,000. The interest rate will be the prime rate, subject to a floor of 6% per annum and a ceiling of 8% per annum. A full-text copy of the amendment no. 2 to business loan agreement is available for free at http://ResearchArchives.com/t/s?35c4 A full-text copy of the change in terms agreement is available for free at http://ResearchArchives.com/t/s?35c5 About Westmoreland Coal Company Headquartered in Colorado Springs, Colorado, Westmoreland Coal Company (AMEX: WLB) -- http://www.westmoreland.com/-- is an independent coal company in the United States. The company mines coal, which is used to produce electric power, and the company owns power-generating plants. The company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its current power operations include ownership and operation of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal Company's balance sheet at Sept. 30, 2008, showed total assets of $811,472,000 and total liabilities of $1,003,610,000 resulting in a shareholders' deficit of $192,138,000. WESTMORELAND COAL: Sept. 30 Balance Sheet Upside-Down by $192MM --------------------------------------------------------------- Westmoreland Coal Company's balance sheet at Sept. 30, 2008, showed total assets of $811,472,000 and total liabilities of $1,003,610,000 resulting in a shareholders' deficit of $192,138,000. Westmoreland Coal reported net loss of $3,153,000 in three months ended Sept. 30, 2008, compared with net loss of $7,028,000 for the same period in the previous year. The company stated that the results were negatively impacted during third quarter 2008 by a $2,600,000 charge taken for the anticipated settlement of two coal royalty claims and $800,000 charge for an other-than-temporary impairment of marketable securities. Third quarter 2008 also benefited from a $900,000 gain on the sale of our interest in the Ft. Lupton power project. The third quarter of 2007 was negatively impacted by a $1,700,000 restructuring charge and a $1.1 million write-off of inventory associated with the new contract at our Jewett Mine. For nine months ended Sept. 30, the company incurred net loss of $32,218,000 compared with net loss of $10,262,000 for the same period in the previous year. Liquidity In the first nine months of 2008, the company took three significant steps to improve liquidity: First, on March 4, 2008, the company completed the sale of $15,000,000 in senior secured convertible notes to an existing stockholder. Second, on March 17, 2008, its Westmoreland Partners subsidiary completed a refinancing of the ROVA Power Project debt. The refinancing paid off all outstanding bank borrowings, bond borrowings, and the ROVA acquisition loan, and eliminated the need for the irrevocable letters of credit, which supported the bond borrowings. Lastly, on June 26, 2008, its Westmoreland Mining subsidiary completed a refinancing of its term and revolving debt. The refinancing extended the repayment schedule through 2018, with principal payments starting in 2011. As a result of these steps, working capital improved by $73,900,000 from Dec. 31, 2007 to Sept. 30, 2008. In addition, after the end of the third quarter on Oct. 16, 2008, its Westmoreland Resources, Inc. subsidiary entered into a series of transactions in order to enable WRI to more fully monetize the Indian Coal Production Tax Credits available to it. If a favorable Private Letter Ruling is received from the Internal Revenue Service on the transactions, the company could realize net cash flows of up to $37,100,000 before taxes, through 2012. Full-text copies of the company's consolidated financial statements for the quarter ended , are available for free at http://ResearchArchives.com/t/s?35c6 On November 10, the company received a notice of late filing from the Securities and Exchange Commission. The company's delayed filing was due to the discussions it had with the lender to one of its subsidiaries, Westmoreland Resources, Inc., regarding the renewal of a line of credi. The company needed additional time to proceed with these discussions and complete its preparation of the Quarterly Report on Form 10-Q. About Westmoreland Coal Company Headquartered in Colorado Springs, Colorado, Westmoreland Coal Company (AMEX: WLB) -- http://www.westmoreland.com/-- is an independent coal company in the United States. The company mines coal, which is used to produce electric power, and the company owns power-generating plants. The company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its current power operations include ownership and operation of the two-unit ROVA coal-fired power plant in North Carolina. WOLF HOLLOW: S&P Junks Rating on $110 Mil. Second-Lien Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on electricity generator Wolf Hollow I L.P.'s $260 million senior secured bank facility and $30 million working capital facility to 'B' from 'B+'. The $260 million senior secured bank debt consists of a $156 million senior secured term loan ($121 million outstanding as of Sept. 30, 2008), a $104 million synthetic letter of credit, and a $30 million working capital revolver. At the same time, S&P lowered the rating on the $110 million second-lien senior secured term loan maturing in December 2012 to 'CCC+' from 'B-'. The recovery ratings of '1' (indicating expectation of very high (90%-100%) in the event of a payment default) on the first-lien facilities and '4' (average; 30%-50% recovery) on the second-lien facilities remain unchanged. The outlook on both issues remains negative. "The ratings action and continued negative outlook follow sustained operational and financial difficulties for Wolf Hollow resulting from multiple maintenance outages in each of the first three quarters of 2008," said S&P's credit analyst Justin Martin. The outages have adversely affected financial performance through increased repair costs and lower revenues under the power purchase agreement with Exelon Corp. (BBB/Watch Neg/A-2) and the J. Aron & Co. heat-rate call option. In addition, a restatement of repair and restore expenses for the second quarter (expenses that are excluded from operating and maintenance cost figures used to calculated cash available for debt service) resulted in revised debt service coverage ratios of 1.21x (versus 1.23x previously reported), only 0.01x above the financial covenant requirement of 1.20x. Third-quarter coverage was exactly 1.20x, highlighting the increased exposure to a technical default in the event of a covenant violation. The negative outlook on Wolf Hollow reflects S&P's belief that the plant will experience a debt service coverage ratio for the fourth quarter that is close to the 1.20x ratio required by the credit agreement. Although the plant's total leverage is low for the 'B' rating, the proximity to a technical default raises the concern that lenders may accelerate the loans. If coverage ratios (as calculated by the credit agreement) reach 1.25x-1.3x within the next four quarters, S&P would consider raising the rating. Conversely, if they decline below 1.20x or liquidity further deteriorates, a downgrade may result. From a market perspective, a sustained decrease in regional heat rates below 9 mmBtu/MWh would also lower the earnings potential while increasing refinancing default. By the same token, improved availability and operating efficiency (three to four quarters at 7.1 mmBtu/MWh and no urgent maintenance outages) could resolve the outlook and S&P could raise the rating. X-CHANGE CORP: Posts $871,205 Net Loss in Quarter Ended Sept. 30 ---------------------------------------------------------------- Kathleen Hanafan, chief executive officer, and Wm Chris Mathers, chief financial officer, disclosed in a regulatory filing with the Securities and Exchange Commission that as of September 30, 2008, the X-Change Corporation's balance sheet showed total assets of $1,570,452, and total liabilities of $1,507,402, resulting in total stockholders' equity of $63,050. For the quarter ended September 30, 2008, the company posted a net loss of $871,205. "Our operations generated losses in 2007 and continued to generate losses in the first nine months of 2008. Our net loss for the nine months ended September 30, 2008 was $2,404,464. For the nine months ended September 30, 2008, we recorded stock based compensation expense in the amount of $130,299, paid in kind accrued interest of $139,036, amortization of financing fees of $123,897 and amortization of debt discount in the amount of $694,311. Accounts payable decreased $398,927 for the nine months ended September 30, 2008, over the same period ended 2007," Ms. Hanafan and Mr. Mathers relate. "There were no uses of cash flows by investing activities during the first nine months of 2008. Our cash decreased by $241,973 during the nine months ended September 30, 2008." "Our working capital requirements depend on many factors including contract extensions and new contracts. However, our primary source of working capital at this time comes from securing investment financing. If losses continue as we expect, we will have to obtain additional funds to meet our ongoing business requirements. We had a working capital deficit on September 30, 2008, in the amount of $313,195." According to Ms. Hanafan and Mr. Mathers, several conditions and events cast doubt about the company's ability to continue as a going concern. "We have incurred substantial losses in the periods being reported. We require additional financing in order to fund our business activities on an ongoing basis. During 2007, the company raised approximately $3 million in three separate transactions including a private placement and two financings structured as convertible debt. The company closed an additional convertible debt financing of $1.8 million on July 10, 2008. This financing does not provide sufficient capital to alleviate concerns regarding our ability to continue as a going concern." "Our future capital requirements will depend on numerous factors including, but not limited to, our ability to perform on current and future development contracts and the commercialization thereof." "We do not have sufficient working capital to sustain our operations. We have been unable to generate sufficient revenues to sustain our operations. We will have to continue to obtain funds to meet our cash requirements through business alliances or financial transactions with third parties, the sale of securities or other financing arrangements, or we may be required to curtail our operations, seek a merger partner, or seek protection under federal bankruptcy laws. Any of the foregoing may be on terms that are unfavorable to us or disadvantageous to existing stockholders. In addition, no assurance may be given that we will be successful in raising additional funds or entering into business alliances." "The company has incurred substantial costs in maintaining its status as a reporting public company including dealing with recent SEC reviews. The company has also incurred substantial costs associated with raising capital for its continued operations. Management is continually reviewing these costs on an on-going basis." "We are considering alternatives with respect to our intellectual property in areas outside the oil and gas industry including our GenuDot system. In evaluating these technologies, we may consider readdressing the marketplace, joint ventures or outright sales of these technologies." "Our auditors have included an explanatory paragraph in their audit opinion with respect to our consolidated financial statements at December 31, 2007. The paragraph states that our recurring losses from operations and resulting continued dependence on access to external financing raise substantial doubt about our ability to continue as a going concern. Furthermore, the factors leading to and the existence of our going concern status may adversely affect our relationship with customers and suppliers and have an adverse effect on our ability to obtain financing." A full-text copy of X-Change's Quarterly Report is available for free at: http://researcharchives.com/t/s?35ef About X-Change Corporation The X-Change Corporation was incorporated under the laws of the State of Delaware on February 5, 1969, and changed its domicile to the State of Nevada on October 4, 2000. AirGATE Technologies, Inc., is the sole operating subsidiary of the company. AirGATE is developing end-to-end solutions in wireless technologies including radio frequency identification for the business-to-business customer. The company focuses on products and services in vertical markets, especially the oil and gas industry. * Fitch Says Weak Demand Could Spur Wireless Substitution --------------------------------------------------------- Fitch Ratings has reviewed the third quarter operating results of the largest telecommunication service providers, and believes that the current economic environment can lead to an acceleration of the pace of wireless substitution making consumer wire-line services, which historically have been very defensive in periods of weak economic demand, more sensitive to the economic cycle. However, the scale and revenue growth generated from facilities based video services offered by the largest telephone companies is beginning to offset legacy voice revenue declines associated with access line losses and stabilizing consumer retail segment revenues, according to a Fitch special report published Dec. 8, 2008. Access-line losses at the three regional Bell operating companies continue to accelerate. During the third quarter of 2008, the RBOCs collectively lost approximately 2.8 million access lines, reflecting 53% deterioration relative to the same period last year and a 10% sequential decline. Continued strong operating momentum within the wireless businesses at Verizon Wireless and AT&T demonstrate that their respective leading competitive positions remain strong. Cable MSO subscriber trends in the third quarter were generally soft; however, financial results were relatively steady given the economic and competitive environment. In total, the three largest cable multiple system operators added approximately 1.3 million revenue generating units reflecting a 16.5% year-over-year decline relative to the third quarter of 2007. Trends identifying the scope and depth of the competitive overlap of leading telecommunications operators can be found in Fitch's U.S. Communications Industry Leaders Competitive Scorecard special report for the third quarter of 2008. The report compares the competitive positions of the leading local exchange carriers, cable MSOs, wireless service providers and direct broadcast satellite operators. The report summarizes key operating metrics financial statistics, particularly related to key forecast items such as revenue growth, margin changes, capital re - investment and debt. Additionally, the report includes summary comments concerning key developments in the quarter. * Moody's Reports Spike in Rating Cuts of Non-Profit Hospitals -------------------------------------------------------------- An escalation in rating downgrades of not-for-profit hospitals in the fourth quarter points to the negative effects on the sector of a rapidly weakening economy, restricted access to capital, investment losses, and the growing risks associated with variable rate debt, says Moody's Investors Service in a new report. "We expect there to be a heightened number of downgrades over the next year as virtually all rated healthcare credits are facing some degree of credit stress due to these factors," said Moody's Vice President Lisa Goldstein. "Our report discusses the credit implications for the sector and outlines some steps management teams are taking to mitigate challenges." Moody's downgraded 18 hospital bond ratings in October and November while upgrading only one -- a sharp increase in downgrades for the first nine weeks of a quarter and a notable departure from the nearly equal ratios of upgrades to downgrades in recent quarters. The primary factors for the downgrades cited by the Moody's report include the softening of revenue caused by patients deferring elective procedures, intensifying competition for insured patients with other hospitals and physician groups, and weaker financial performance as rising unemployment is causing increased charity care and bad debt expense. "Material declines in liquidity positions as many hospitals have suffered material losses in their investment portfolios is another problem along with large increases in leverage as some hospitals pursue aggressive capital investment strategies," said Goldstein. "Variable rate debt structures, combined with lower liquidity, have also resulted in increased likelihood of violating liquidity covenants in letter of credit agreements, which could help accelerate downgrades." She said many hospital management teams have responded quickly to the economic challenges that are impairing financial performance, and include such steps as making greater use of board members' financial and investment expertise, delays of non-essential capital spending, and re-evaluation of the financial benefits of new large-scale capital projects. "Other steps include better upfront payments collection, staff reductions, review of all vendor contracts, and outsourcing of some services," said Goldstein. "However, some hospitals with union contracts set to expire in the next 12 months are finding staff reductions to be a more delicate matter." Still other options include service line reviews, changing investment policies to reduce the exposure to equities and abate declines in liquidity, and greater engagement of physician leaders regarding financial and capital decisions to foster their support and input. "The overall credit stress on the sector is likely to continue for some time," said Goldstein. "But proactive management and engaged board members may be able to mollify some of these risks through thoughtful and methodical planning." * Moody's Assesses Government Capital Purchase Impact on Insurers ----------------------------------------------------------------- In a new report, Moody's Investors Service explores the potential rating implications of the U.S. Government's Capital Purchase Program, a component of the Troubled Assets Relief Program, on insurers. Under the CPP, the Government has made available to a broad array of banks, thrifts and other financial institutions $250 billion of capital in the form of preferred stock. Jeff Berg, Senior Vice President, and one of the authors of the report, explains: "Although insurers are not explicitly listed as being eligible under the CPP, certain insurers meet the criteria to participate in the CPP by virtue of the fact that they are either owned by one of the institutions directly eligible for TARP funding, or because they own an eligible entity downstream." "Moody's views the TARP capital injection as positive for insurers that qualify and obtain funds because it can be supportive to an insurer's regulatory capitalization and is being injected at a time when companies have limited cost-effective access to the capital markets" says Mr. Berg. With that said, any insurer participating in the CPP will be evaluated individually, focusing on the reason for accessing TARP capital as well as the expected use of proceeds. Added Mr. Berg, "Since Moody's do not consider the TARP preferred stock to be permanent, the stock will receive only 25% equity credit under Moody's hybrid toolkit, with 75% of the proceeds being classified as debt. This means that insurance companies that fully deploy TARP capital into their businesses will experience an increase in financial leverage." Due to the temporary nature of the capital as well as the higher financial leverage, Moody's does not expect near-term upgrades of insurers who receive TARP funding. "However", adds Mr. Berg, "the addition of capital could mitigate some downward pressure on ratings depending on how it is deployed and whether capitalization was seen as a primary weakness for a particular insurer." * Moody's Says Corp. Default Rate to Reach 10.4% by End of 2008 --------------------------------------------------------------- Moody's Investors Service's default rate forecasting model now predicts that the global speculative-grade issuer-weighted corporate default rate will climb to 4.2% by the end of this year and rise sharply to 10.4% a year from now. "Corporate default rates will likely climb sharply throughout 2009 as the ongoing credit crisis leaves few options for companies needing to refinance maturing debt or amend loan agreements that move out of compliance with covenants," says Moody's Director of Corporate Default Research Kenneth Emery. "Moody's expects distressed debt exchanges to comprise a growing share of total defaults as they remain one of the few available options for companies to reduce debt service burdens." Moody's global speculative-grade default rate edged higher to 3.1% in November, from October's revised level of 2.9% and 0.9% a year ago. Measured on a dollar volume basis, the default rate rose to 2.5% in November from 2.4% in October. A year ago, the global dollar-weighted bond default rate stood at 0.6%. For both U.S. and European speculative-grade issuers, Moody's forecasting model foresees default rates increasing to 4.6% and 2.6%, respectively, by the end of this year, and 10.7% and 12.5% a year from now. The U.S. speculative-grade default rate increased from 3.3% in October to 3.4% in November. At this time last year, the U.S. default rate was 1.0%. Measured on a dollar-weighted basis, the default rate remained unchanged at 2.7% from October to November, compared with 0.6% at this time last year. Across industries over the coming year, Moody's default rate forecasting model indicates that the Consumer Transportation sector will be the most troubled in the U.S. and the Durable Consumer Goods sector will have the highest default rate in Europe. Moody's speculative-grade corporate distress index -- which measures the percentage of rated issuers that have debt trading at distressed levels -- closed at 51.8% in November, up from 48.5% in October. The index is now at its highest level since it began in 1996. A year ago, the index was much lower at 8.0%. There were a total of eight rated corporate debt defaulters in November. All but one are based in North America (five from the U.S. and two from Canada). The only exception is Cap Cana, S.A. which is based in the Dominican Republic. In the year to date, a total of 80 Moody's-rated corporate issuers have defaulted this year, compared with 17 defaults for the same period last year. Of the 80 defaulters, 66 are from the U.S. and Canada and nine are from Europe In the leveraged loan market, a total of three Moody's-rated issuers defaulted on loans in November. The trailing 12-month U.S. leveraged loan default rate closed at 2.9% in November, unchanged from the previous month. A year ago, the leveraged loan default rate was much lower at 0.1%. * S&P Downgrades Ratings on 49 Classes From 15 Subprime RMBS Deals ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 49 classes of pass-through certificates from 15 U.S. subprime residential mortgage-backed securities transactions issued between 1998 and 2004 from various issuers. At the same time, S&P removed three of the lowered ratings from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on 77 other classes of certificates from these and three additional deals. The lowered ratings reflect the deterioration of available credit support for the affected transactions, as well as S&P's loss expectations based on the dollar amount of loans currently in the delinquency pipelines of the downgraded transactions. Because the remaining pool balances for transactions with lowered ratings are becoming smaller, the potential losses from delinquent loans could have a more significant impact on the credit support available for the remaining classes. Based on the current collateral performance of these transactions, S&P project that future credit enhancement percentages will be insufficient to maintain the ratings at their previous levels. As of the Oct. 25, 2008, distribution date, cumulative losses for the downgraded transactions ranged from 0.62% to 9.08% of the original pool balances. Total delinquencies ranged from 8.50% to 53.35% of the current pool balances, while severe delinquencies (90-plus days, foreclosures, and real estate owned) ranged from 6.88% to 23.49% of the current pool balances. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. As of the October 2008 remittance report, credit support for these classes ranged from 1.48% to 73.55% of the current pool balances. In comparison, the ratio of current credit enhancement to original enhancement ranged from 0.23x to 6.26x. A combination of subordination, excess interest, and overcollateralization provide credit enhancement for these transactions. The collateral supporting these series originally consisted of pools of U.S. subprime fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Rating Actions Citigroup Mortgage Loan Trust, Series 2004-RES1 Series 2004-RES1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-5 17307GKQ0 A A+ M-6 17307GKR8 BBB A M-7 17307GKS6 BBB- A- M-8 17307GKT4 BB BBB+ M-9 17307GKU1 CCC BBB M-10 17307GKV9 CCC BBB M-11 17307GKW7 CCC BBB M-12 17307GKX5 CC BBB- Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2000-B Series SPMD 2000B Rating ------ Class CUSIP To From ----- ----- -- ---- MF-1 456606AT9 CCC AA Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2003-A Series SPMD2003-A Rating ------ Class CUSIP To From ----- ----- -- ---- MV-1 456606EC2 A AA MV-2 456606ED0 BB- A+ MV-3 456606EE8 B+ A MV-4 456606EF5 B A- MV-5 456606EG3 B- BBB+/Watch Neg BV 456606EH1 CCC BBB/Watch Neg Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2004-A Series SPMD2004-A Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 456606ET5 BBB- BBB+ M-5 456606EU2 CCC BBB M-6 456606EV0 CCC BBB M-7 456606EW8 CC BBB-/Watch Neg Merrill Lynch Mortgage Investors Inc. Series 1999-CB1 Rating ------ Class CUSIP To From ----- ----- -- ---- 1M-1 12489WAD6 A AA 1M-2 12489WAE4 BBB- A 1M-3 12489WAF1 B- BBB 1M-4 12489WAG9 B- BBB Merrill Lynch Mortgage Investors Trust Series 2004-WMC1 Series 2004-WMC1 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 5899297N2 BBB BBB+ B-3 5899297P7 CCC BBB- B-4 5899297Q5 CC BB Merrill Lynch Mortgage Investors Trust Series 2004-WMC4 Series 2004-WMC4 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 59020UDJ1 BBB A B-2 59020UDK8 B BBB+ B-3 59020UDL6 CCC BBB B-4 59020UDM4 CC B Merrill Lynch Mortgage Investors Trust, Series 2003-WMC2 Series 2003-WMC2 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 589929M54 CCC BB B-2 589929M62 CC B Merrill Lynch Mortgage Investors Trust, Series 2003-WMC3 Series 2003-WMC3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 5899292E7 BBB- A- B-1 5899292F4 B BBB+ B-2 5899292G2 CCC BBB B-3 5899292H0 CC BB Merrill Lynch Mortgage Investors Trust, Series 2004-WMC3 Series 2004-WMC3 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 59020UCR4 BB A B-2 59020UCS2 CCC BBB+ B-3 59020UCT0 CC B B-4 59020UCU7 CC CCC Salomon Brothers Mortgage Securities VII Inc. Series 1998-NC3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 79548KA81 B A Structured Asset Securities Corp. Series 1998-6 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 863572UE1 CCC A Structured Asset Securities Corp. Series 1999-SP1 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 863572B69 A AA+ M2 863572B77 BB A B 863572B85 CC BBB Structured Asset Securities Corp. Series 2002-HF2 Rating ------ Class CUSIP To From ----- ----- -- ---- M3 86359ACR2 B BBB B1 86359ACS0 CC BB Structured Asset Securities Corp. Series 2003-BC3 Rating ------ Class CUSIP To From ----- ----- -- ---- M5 86359A2U6 CCC B B 86359A3S0 CC CCC Ratings affirmed Citigroup Mortgage Loan Trust Inc. Series 2003-HE2 Class CUSIP Rating ----- ----- ------ M-1 17307GAB4 AAA M-2 17307GAC2 AA+ M-3 17307GAD0 AA M-4 17307GAE8 A+ M-5 17307GAF5 A M-6 17307GAG3 BBB+ M-7 17307GAH1 BB+ Citigroup Mortgage Loan Trust, Series 2004-RES1 Series 2004-RES1 Class CUSIP Rating ----- ----- ------ M-1 17307GKL1 AAA M-2 17307GKM9 AA+ M-3 17307GKN7 AA M-4 17307GKP2 AA- Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2000-B Series SPMD 2000B Class CUSIP Rating ----- ----- ------ AF-1 456606AS1 AAA MV-1 456606AY8 AA+ MV-2 456606AZ5 A BV 456606BA9 CCC Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2003-A Series SPMD2003-A Class CUSIP Rating ----- ----- ------ AV-2 456606EB4 AAA Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2004-A Series SPMD2004-A Class CUSIP Rating ----- ----- ------ M-1 456606EQ1 AA M-2 456606ER9 A M-3 456606ES7 A- Merrill Lynch Mortgage Investors Inc. Series 1999-H1 Class CUSIP Rating ----- ----- ------ A-5 589929TP3 AAA M-1 589929TR9 AA+ M-2 589929TS7 A Merrill Lynch Mortgage Investors Inc. Series 1999-CB1 Class CUSIP Rating ----- ----- ------ 1A 12489WAA2 AAA 1A-PO 12489WAC8 AAA Merrill Lynch Mortgage Investors Inc. Series 2002-NC1 Class CUSIP Rating ----- ----- ------ M-1 589929ZE1 AAA M-2 589929ZF8 A B-1 589929ZC5 CCC B-2 589929ZD3 CCC Merrill Lynch Mortgage Investors Trust Series 2003-OPT1 Series 2003-OPT1 Class CUSIP Rating ----- ----- ------ A-1 5899295F1 AAA A-2 5899295G9 AAA A-3 5899295H7 AAA S 5899295J3 AAA M-1 5899295K0 AA+ M-2 5899295L8 AA M-3 5899295M6 BBB B-1 5899295N4 BB B-2 5899295P9 B B-3 5899295Q7 CCC Merrill Lynch Mortgage Investors Trust Series 2004-WMC1 Series 2004-WMC1 Class CUSIP Rating ----- ----- ------ M-1 5899297J1 AAA M-2 5899297K8 AA M-3 5899297L6 A+ B-1 5899297M4 A Merrill Lynch Mortgage Investors Trust Series 2004-WMC4 Series 2004-WMC4 Class CUSIP Rating ----- ----- ------ M-2 59020UDG7 AA M-3 59020UDH5 A+ Merrill Lynch Mortgage Investors Trust, Series 2003-WMC2 Series 2003-WMC2 Class CUSIP Rating ----- ----- ------ M-2 589929M47 AAA Merrill Lynch Mortgage Investors Trust, Series 2003-WMC3 Series 2003-WMC3 Class CUSIP Rating ----- ----- ------ M-3 5899292D9 A+ Merrill Lynch Mortgage Investors Trust, Series 2004-WMC3 Series 2004-WMC3 Class CUSIP Rating ----- ----- ------ M-2 59020UCP8 AA M-3 59020UCQ6 A+ RAFC Asset-Backed Trust 2001-1 Series 2001-1 Class CUSIP Rating ----- ----- ------ M-2 749213AE4 AA+ B-1 749213AF1 BBB Salomon Brothers Mortgage Securities VII Inc. Series 1997-NC5 Class CUSIP Rating ----- ----- ------ M-1 79548KYG7 AAA Salomon Brothers Mortgage Securities VII Inc. Series 1998-NC3 Class CUSIP Rating ----- ----- ------ A-5 79548KA57 AAA A-6 79548KA65 AAA M-1 79548KA73 AA Southern Pacific Secured Assets Corp. Series 1997-2 Class CUSIP Rating ----- ----- ------ A-4 843590BL3 AAA A-5 843590BM1 AAA M-1F 843590BQ2 AA M-2F 843590BS8 A- Structured Asset Securities Corp. Series 1998-2 Class CUSIP Rating ----- ----- ------ A 863572SE4 AAA M-1 863572SF1 AA Structured Asset Securities Corp. Series 1998-6 Class CUSIP Rating ----- ----- ------ B-1 863572UD3 AA Structured Asset Securities Corp. Series 1998-8 Class CUSIP Rating ----- ----- ------ A-3 863572UX9 AAA M-1 863572UU5 AA M-2 863572UV3 A Structured Asset Securities Corp. Series 1999-SP1 Class CUSIP Rating ----- ----- ------ A1 863572A94 AAA A2 863572B28 AAA Structured Asset Securities Corp. Series 2002-HF2 Class CUSIP Rating ----- ----- ------ M2 86359ACQ4 A Structured Asset Securities Corp. Series 2003-AM1 Class CUSIP Rating ----- ----- ------ M1 86359ATL7 AA M2 86359ATM5 A M3 86359ATN3 A- B2 86359ATS2 BB+ Structured Asset Securities Corp. Series 2003-BC3 Class CUSIP Rating ----- ----- ------ M1 86359A2Q5 AA M2 86359A2R3 A M3 86359A2S1 A- M4 86359A2T9 BB Structured Asset Securities Corp. Series 2003-39EX Class CUSIP Rating ----- ----- ------ M3 86359BEA5 BBB B 86359BEB3 BBB- * IATA Projects US$2.5 Billion Loss in Airline Industry for 2009 ---------------------------------------------------------------- The International Air Transport Association's forecast for 2009 shows an industry loss of US$2.5 billion. All regions, except the US, are expected to report larger losses in 2009 than in 2008. Forecast highlights are: * Industry revenues are expected to decline to US$501 billion. This a fall of US$35 billion from the US$536 billion in revenues forecasted for 2008. This drop in revenues is the first since the two consecutive years of decline in 2001 and 2002. * Yields will decline by 3.0% (5.3% when adjusted for exchange rates and inflation). * Passenger traffic is expected to decline by 3% following growth of 2% in 2008. This is the first decline in passenger traffic since the 2.7% drop in 2001. * Cargo traffic is expected to decline by 5%, following a drop of 1.5% in 2008. Prior to 2008 the last time that cargo declined was in 2001 when a 6% drop was recorded. * The 2009 oil price is expected to average US$60 per barrel (Brent) for a total bill of US$142 billion. This is US$32 billion lower than in 2008 when oil averaged US$100 per barrel (Brent). "The outlook is bleak. The chronic industry crisis will continue into 2009 with US$2.5 billion in losses. We face the worst revenue environment in 50 years," said Giovanni Bisignani, IATA's Director General and CEO. IATA also updated its forecast for 2008 to a loss of US$5.0 billion. This is slightly improved from the US$5.2 billion loss projected in the Association's September forecast primarily as a result of the rapid decline in fuel prices. The reduction in industry losses from 2008 to 2009 is primarily due to a shift in the results of North American carriers. Carriers in this region were hardest hit by high fuel prices with very limited hedging and are expected to post the largest industry losses for 2008 at US$3.9 billion. An early 10% domestic capacity reduction in response to the fuel crisis has given the region's carriers a head-start in combating the recession-led fall in demand. The lack of hedging is now allowing the region's carriers to take full advantage of rapidly declining spot fuel prices. As a result, North American carriers are expected to post a small profit of US$300 million in 2009. "North America will be the only region in the black, but the expected US$300 million profit is less than 1% of their revenue. 2009 will be another tough year for everyone," said Mr. Bisignani. All other regions will show losses: * Asia-Pacific carriers will see losses more than double from the US$500 million in 2008 to US$1.1 billion in 2009. With 45% of the global cargo market, the region's carriers will be disproportionately impacted by the expected 5% drop in global cargo markets next year. The region's largest market -- Japan -- is already in recession. And its two main growth markets -- China and India -- are expected to deliver a major shift in performance. Chinese growth will slow as a result of the drop-off in exports. India's carriers, which are already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following on from the tragic terror incidents in November. * Losses for European carriers will increase ten-fold to US$1 billion. Europe's main economies are already in recession. Hedging has locked in high fuel prices for many of the region's carriers in US dollar terms, and the weakened Euro is exaggerating the impact. * Middle Eastern airlines will see losses double to US$200 million. The challenge for the region will be to match capacity to demand as fleets expand and traffic slows -- particularly for long-haul connections. * Latin American carriers will see losses double to US$200 million. Strong commodity demand that has driven the region's growth has been severely curtailed in the current economic crisis. The downturn in the US economy is hitting the region hard. * African airlines will see losses of US$300 million continue. The region's carriers face strong competition. Defending market-share will be the main challenge. Mr. Bisignani made special note of the continuing contraction of air cargo traffic that started in June 2008. "Air cargo comprises 35% of value of goods traded internationally. The 7.9% decline in October is a clear indication that the worst is yet to come - for airlines and the slowing global economy," said Mr. Bisignani. "Airlines have done a remarkable job of restructuring themselves since 2001. Non-fuel unit costs are down 13%. Fuel efficiency has improved by 19%. And sales and marketing unit costs have come down by 13%. IATA made a significant contribution to this restructuring. In 2008 our fuel campaign helped airlines to save US$5 billion, equal to 14.8 million tonnes of CO2. And our work with monopoly suppliers yielded saving of US$2.8 billion. But the ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity with the expected 3% drop in passenger demand for 2009. The industry remains sick. And it will take changes beyond the control of airlines to navigate back into profitable territory," said Mr. Bisignani. Mr. Bisignani outlined an industry action plan for 2009 that reflected the Association's Istanbul Declaration in June of this year. "Labour must understand that jobs will disappear when costs don't come down. Industry partners must contribute to efficiency gains. And governments must stop crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers," said Mr. Bisignani. A full-text copy of Giovanni Bisignani's speech is available at no charge at http://ResearchArchives.com/t/s?35f5 A full-text copy of IATA's financial forecast is available at no charge at http://ResearchArchives.com/t/s?35f4 * SEC Approves Measures to Boost Oversight of Rating Agencies ------------------------------------------------------------- The Securities and Exchange Commission approved on Dec. 3 a series of measures to increase transparency and accountability at credit rating agencies, and ensure that firms provide more meaningful ratings and greater disclosure to investors. The new measures impose additional requirements on credit rating agencies, whose ratings of residential mortgage-backed securities backed by subprime mortgage loans and of collateralized debt obligations linked to subprime loans contributed to the recent turmoil in the credit markets. The SEC also proposed additional measures related to transparency and competition concerning credit rating agencies. The SEC's actions were informed by the agency's extensive 10-month examination of three major credit rating agencies that found significant weaknesses in ratings practices. "These comprehensive rules touch every aspect of the credit rating process - from conflicts of interest, to publication of ratings methodologies, to disclosure of ratings track records," said SEC Chairman Christopher Cox. "The SEC's examinations of credit rating agencies uncovered serious deficiencies that these rules will address, so that investors and markets will have better information to guide investment decisions." This is the second set of credit rating agency reforms since the SEC received its new regulatory authority from Congress to register and oversee credit rating agencies. The initial rules were implemented by the Commission under the Credit Rating Agency Reform Act in June 2007. The regulatory program established through the Credit Rating Agency Reform Act allows the SEC to promulgate rules regarding public disclosure, recordkeeping and financial reporting, and substantive requirements to ensure that credit rating agencies conduct their activities with integrity and impartiality. Public comments on the new proposed amendments must be received by the Commission within 45 days after their publication in the Federal Register. * Dreier LLP'S Head Sued by SEC for $113-Mil. Sale of Bogus Notes ----------------------------------------------------------------- The Securities and Exchange Commission has charged New York attorney Marc S. Dreier with fraud in connection with an elaborate scheme that raised at least $113 million from the sale of bogus promissory notes. Mr. Dreier is the founder and managing partner of Dreier LLP, a 250-attorney law firm headquartered in New York with offices in Los Angeles, Pittsburgh, and Stamford, Conn., among other places. The SEC also is seeking an emergency court order to freeze Mr. Dreier's assets and appoint a temporary receiver for the assets. The SEC's complaint, filed with the U.S. District Court for the Southern District of New York in Manhattan, alleges that since at least October 2008, Mr. Dreier has been marketing fake promissory notes, including bogus notes of a New York-based real estate development company, to hedge funds and other private investment funds, and has closed at least three sales. According to the complaint, Mr. Dreier created an elaborate charade designed to convince purchasers that the notes were genuine. He allegedly distributed phony financial statements and audit opinion letters of a reputable accounting firm, and recruited confederates to play the parts of representatives of legitimate companies involved in the transactions, even creating dummy e-mail addresses and telephone numbers. "Our complaint alleges a stunning, brazen fraud that targeted some very sophisticated institutional investors. Investors big and small alike should take heed, especially in these difficult economic times, that con artists are out there and may go to elaborate lengths to commit fraud," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. James Clarkson, Acting Regional Director of the SEC's New York Regional Office, added, "The conduct alleged here is particularly troubling because it was allegedly committed by an attorney and is contrary to the high standards of character and integrity we expect, and have a right to expect, from members of the bar." According to the SEC's complaint, Mr. Dreier directed that two purchasers of the bogus notes wire payment to what appeared to be his law firm's escrow account. At least one note purchaser discovered the fraud, and demanded and received the return of its investment. Approximately $100 million in known proceeds from the sale of the bogus notes remains unaccounted for. The SEC's complaint alleges that, among other fake securities, Mr. Dreier has been offering fictitious promissory notes of a New York-based real estate development company, a former client of both Mr. Dreier and his law firm. Since at least October of this year, Mr. Dreier has approached at least three different investment funds with an offer to sell them, at a deep discount, various short-term, unsecured promissory notes supposedly issued by that developer. Two of the investment funds agreed to purchase the notes -- one fund purchased notes in two separate transactions -- and forwarded approximately $113 million to an account in the name of "Dreier LLP Attorney Trust Account" in payment. A third fund was offered the notes, but declined to participate. As alleged in the SEC's complaint, all of the offers were accompanied by documents that Mr. Dreier subsequently admitted he knew were fabricated. Mr. Dreier offered the notes for sale even though he knew that the developer had never issued the notes, had not authorized Mr. Dreier to market them, and indeed knew nothing of their existence or Mr. Dreier's offers or sales. The SEC's complaint further alleges that in marketing the notes, Mr. Dreier provided the hedge funds with fabricated documents including a "form" note and related agreements, "audited financial statements," and purported audit letters, which bore the forged signature of the developer's auditor, but which were printed on purported stationery of the developer's auditing firm. Mr. Dreier did not tell representatives from the hedge funds that the notes were bogus, that the "audited financial statements" and audit opinion letters were fabricated, or that the developer had never issued the notes or authorized Mr. Dreier to market them, despite Mr. Dreier's knowledge of these matters. As alleged in the complaint, Mr. Dreier has confessed that: * The notes were fictitious. * The notes had never been issued by the developer. * The developer had never authorized him to market the notes. * He had fabricated documents evidencing that the notes had been issued by the developer to the original holder even though the original holder may never have purchased any notes issued by the developer. In that connection, he or his confederates forged the signature of the developer's CEO. * The developer's financial statements and the audit reports were fabrications. * He knew that the phony financial statements and audit reports had been distributed to the hedge funds without disclosure that they were false. In addition to emergency and interim relief, the SEC seeks a final judgment permanently enjoining Mr. Dreier from future violations of the antifraud provisions of the federal securities laws and ordering him to pay civil penalties and disgorgement of ill-gotten gains with prejudgment interest. According to the complaint, Mr. Dreier, 58, resides in Manhattan, and is a former partner at two prestigious law firms and a graduate of Harvard Law School and Yale College. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ http://www.beardaudioconferences.com/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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 ***