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/raid1/www/Hosts/bankrupt/TCR_Public/070327.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 27, 2007, Vol. 11, No. 73 Headlines 3DFX INTERACTIVE: Judge Efremsky Reverses Decision; Allows Media 3DFX INTERACTIVE: Judge Efremsky Okays Deal with Harbinger ADESA INC: Launches Offering for $125 Million of 7-5/8% Notes ABITIBI-CONSOLIDATED: Moody's Cuts Corporate Family Rating to B2 ADVA-LITE INC: Selling Assets at April 10 Auction AES CORPORATION: Gets Waivers from Majority of Lenders AGILENT TECH: Board Okays Acceleration of $2 Bil. Share Repurchase AIRNET COMMUNICATIONS: Selling Patents and Patent Applications ALPHARMA INC: Inks Amended Loan & Security Agreement with BofA ALPHARMA INC: S&P Rates $300 Million 2.125% Senior Notes at B+ ANGIOTECH PHARMA: Safety Issues Cue S&P's Negative Outlook ARCAP 2004-RR3: S&P Holds Low-B Ratings on 6 Certificate Classes ASSOCIATED MATERIALS: Earns $33.2 Million in Yr. Ended December 31 AVIATION CAPITAL: Moody's Junks Rating on $24 Mil. Class D-1 Notes BABSON CLO: Moody's Rates $25 Million Class D Notes at Ba2 BEAR STEARNS: DBRS Puts Low-B Ratings on Four Class Certificates BEAR STEARNS: S&P Assigns Low-B Ratings to 4 Certificate Classes BEAR STEARNS: S&P Raises Class E Certificates' Rating to CCC BIRDS EYE: S&P Withdraws Ratings at the Company's Request BLUEMOUNTAIN CLO: Moody's Rates $21.15 Million Junior Notes at Ba2 BONNIE SNAVELY: Case Summary & 12 Largest Unsecured Creditors BOWATER INC: Moody's Cuts Senior Notes' Rating to B3 from B2 CANADA MORTGAGE: DBRS Upgrades Rating on Class F Certs. to BB CATHOLIC CHURCH: San Diego Can Borrow $2.7MM to Pay Construction CATHOLIC CHURCH: San Diego Can File Part of Schedule F Under Seal CATHOLIC CHURCH: McCartin Wants Portland's Allied Terms Reported CENT CDO: Moody's Rates $12.5 Million Class E Junior Notes at Ba2 CHAMPION ENTERPRISES: S&P Holds Corporate Credit Rating at B+ CHASE MANAGEMENT: Case Summary & 7 Largest Unsecured Creditors CIFC FUNDING: Moody's Rates $17 Million Class B-2L Notes at Ba2 CITIZENS COMMS: Launches Cash Offering for Two Convertible Notes COLLINS & AIKMAN: Former CEO Charged with Securities Fraud COLLINS & AIKMAN: Inks Non-Prosecution Agreement with DOJ CONGOLEUM CORP: Earns $679,000 in Year Ended December 31 CREDIT SUISSE: Moody's Cuts Rating on Class B Certificates to B1 CREDIT SUISSE: S&P Holds Low-B Ratings on 5 Certificate Classes CREDIT SUISSE: S&P Cuts Rating on Class N Certs. to B- from BBB- DAIMLERCHRYSLER: Magna Offering Up to $4.7BB for 25% of Chrysler DELTA AIR: Court Approves Extension of Lease-Decision Period DELTA AIR: Exclusive Solicitation Period Extended to June 1 DOLE FOOD: Posts $89 Million Net Loss in Year Ended December 30 DURA AUTOMOTIVE: Can Assume Bayer MaterialScience Sales Contract DURA AUTOMOTIVE: Exclusive Plan-Filing Period Extended to May 23 EASTLAND CLO: Moody's Puts Ba2 Rating on $48 Million Class D Notes EMPORIA PREFERRED: Moody's Rates $18.5 Mil. Class E Notes at Ba2 ENCOMPASS HOLDINGS: Posts $1.58MM Net Loss in Qtr. Ended Dec. 31 ENCOMPASS TELESERVICES: Case Summary & 20 Largest Unsec. Creditors ENDOCARE INC: Ernst & Young LLP Raises Going Concern Doubt ENRON CORP: Judge Harmon Okays $72.5 Million Andersen Settlement FASTENTECH INC: Commences Cash Offer for 11-1/2% Senior Notes FIRST FRANKLIN: Fitch Downgrades Ratings on 9 Certificate Classes FLYI INC: Wants Court Approval on Cisco Agreement FOSTER WHEELER: Good Performance Cues S&P's to Lift Ratings to BB FRANCISCO RIVERA: Case Summary & 20 Largest Unsecured Creditors FREEPORT-MCMORAN: S&P Rates Proposed $2.5 Bil. Stock Offering at B GALE FORCE: Moody's Rates $29.1 Million Notes at Ba2 GALLATIN CLO: Moody's $15.5 Million Class B-2L Notes at Ba2 GENERAL MOTORS: Annual Stockholders' Meeting Scheduled on June 5 GENERAL MOTORS: Awards Stock Grants to Executives GETTY IMAGES: Moody's Holds Ba2 Rating on $265 Million Debentures G-FORCE: S&P Junks Rating on Class N Certificates GOLDENTREE LOAN: Moody's Rates $17.8 Million Notes at Ba2 GOODYEAR TIRE: Sells Unit to Carlyle Group for $1.475 Billion GREAT COMMISSION: Court Approves Province Valuation as Appraiser GREENVILLE HOUSING: Moody's Withdraws Ca Rating on $14 Mil. Bonds HANCOCK FABRICS: Can Borrow Up to $10 Million from Wachovia HANCOCK FABRICS: Wants to Use Prepetition Lenders' Cash Collateral HANCOCK FABRICS: NYSE Suspends Trading of Common Stock HANCOCK FABRICS: Organizational Meeting Scheduled for April 4 HEALTHSOUTH CORP: Sells Surgery Division to TPG for $945 Million HEALTHTRONICS INC: Revenue Drop Cues S&P's Negative Outlook HKW TRADING: Court Sets May 30 as Claim Filing Deadline INSURANCE AUTO: Launches Offering $150 Mil. of 11% Senior Notes IRON AGE: Taps Great American to Liquidate Assets J. CREW: Good Performance Prompts S&P's Positive Outlook JP MORGAN: Moody's Junks Rating on Three Class Certificates KENDLE INT'L: Posts $4.7 Million Net Loss in Quarter Ended Dec. 31 KOALA CORP: Case Summary & 60 Largest Unsecured Creditors LEGACY LLC: Case Summary & 18 Largest Unsecured Creditors LEINER HEALTH: FDA Action Prompts S&P's Negative CreditWatch LIGAND PHARMACEUTICALS: Earns $141.4 Million in Qtr. Ended Dec. 31 LIGAND PHARMA: Reports $253 Million Cash Dividend to Shareholders MAIN STREET: Committee Hires Shutts & Bowen as Counsel MAIN STREET: Trustee Hires Freeman Dawson as Special Accountants MARIA VISTA: Case Summary & 20 Largest Unsecured Creditors MASSACHUSETTS HEALTH: Fitch Holds BB+ Rating on $9 Million Bonds MASTR ALTERNATIVE: Moody's Junks Rating on 2 Certificate Classes MGM MIRAGE: Appoints Daniel J. Taylor to Board of Directors MIRACOR DIAGNOSTICS: Provides Financing Restructuring Update MORGAN STANLEY: S&P Puts Notes' B- Rating on Positive CreditWatch NATIONAL LAMPOON: Posts $1.7 Million Net Loss in Qtr Ended Jan. 31 NEENAH PAPER: Earns $2.7 Million in Quarter Ended December 31 NEW CENTURY: Analysts See Looming Bankruptcy Filing, WSJ Says NEW CENTURY: Morgan Stanley to Sell 13,200 Mortgage Loans NORTH CAROLINA MEDICAL: Fitch Holds BB- Rating on $49.8 Mil. Bonds NORTHWEST AIRLINES: Court Approves Disclosure Statement NORTHWEST AIRLINES: Plan Confirmation Hearing Scheduled on May 16 NORTHWEST AIRLINES: Withdraws $129MM Claim for Salaried Employees NVE INC: Court Extends Exclusive Plan-Filing Period to April 5 NVIDIA CORP: Judge Efremsky Reverses Decision; Allows Media OHA PARK: Moody's Assigns Ba2 Rating to $28 Million Class D Notes ORCHID STRUCTURED: S&P Cuts Ratings on Two Certificates to B- PREFERREDPLUS TRUST: S&P Lifts Rating on Class A & B Certs. to BB- PROTECTION ONE: Dec. 31 Balance Sheet Upside-Down by $79.9 Million REALOGY CORP: Moody's Junks Rating on Proposed $2.25 Billion Notes REDDING TANK: Case Summary & 20 Largest Unsecured Creditors REDONDO WASTE: Case Summary & Seven Largest Unsecured Creditors RGIS INVENTORY: Blackstone Offer Cues S&P's Negative CreditWatch RIVAS ALVARADO: Voluntary Chapter 11 Case Summary ROACH AUTOMOTIVE: Voluntary Chapter 11 Case Summary RURAL/METRO CORP: Dec. 31 Balance Sheet Upside Down by $92.9 Mil. SBBR 1 LLC: Case Summary & 20 Largest Unsecured Creditors SEQUOIA ALTERNATIVE: S&P Holds B Rating on Class B-6 Certificates SP NEWSPRINT: Moody's Affirms B1 Ratings & Says Outlook is Stable SPARTA COMMERCIAL: Jan. 31 Balance Sheet Upside-down by $644,623 STANDARD MOTORS: Gets $275 Mil. Credit Facility with GE Capital STANDARD PACIFIC: S&P Affirms Low-B Ratings & Says Outlook is Neg. STANFIELD DAYTONA: Moody's Rates $21 Mil. Class B-2L Notes at Ba2 STEINWAY MUSICAL: Poor Performance Cues S&P to Downgrade Ratings STONE TOWER: Moody's Rates $31 Mil. Class D Notes Due 2021 at Ba2 TEC ELECTRIC: Case Summary & 34 Largest Unsecured Creditors TRALEE CDO: Moody's Assigns Ba2 Rating to $13.4 Mil. Class D Notes TRAVELPORT: Moody's Junks Rating on New $1 Billion PIK Loan UNIVEST MULTI-STRATEGY: Court Enters Permanent Injunction Order VERTRUE INC: Inks $800 Mil. Acquisition Deal with Investor Group WARD PRODUCTS: Plan Confirmation Hearing Scheduled on April 4 WII COMPONENTS: Amends Terms for 10% Senior Notes Offering * Large Companies with Insolvent Balance Sheets ********* 3DFX INTERACTIVE: Judge Efremsky Reverses Decision; Allows Media ---------------------------------------------------------------- The Hon. Roger Efremsky of the U.S. Bankruptcy Court for the Northern District of California reversed his decision and agreed to open the court proceedings involving Nvidia Corp. and 3DFX Interactive Inc., to the public and the press, the Mercury News reports. As reported in the Troubled Company Reporter on March 23, 2007, Judge Efremsky had barred the media in the trial and asked parties who wanted to observe the proceedings to sign confidentiality agreements. The reversal came after Mercury News' counsel objected to the non- disclosure order. The Mercury News further relates that although Judge Efremsky allowed reporters to attend the trial without signing non- disclosure agreements, he will ask reporters to leave the courtroom if he deems that the documents involved in a testimony is confidential in nature. About NVIDIA Corp. Headquartered in Santa Clara, Calif., NVIDIA Corporation -- http://www.nvidia.com/-- is a manufacturer of programmable graphics processor technologies. The company creates innovative, industry-changing products for computing, consumer electronics and mobile devices. NVIDIA has annual revenues of over $2.5 billion. About 3DFX Interactive Headquartered in Palo Alto, Calif., 3DFX Interactive Inc. developed graphics chips, graphics boards, software and related technology. On March 27, 2001, 3DFX's shareholders approved proposals to liquidate, wind up and dissolve the company pursuant to a plan of dissolution and to sell certain of its assets to Nvidia US Investment Company, a wholly owned subsidiary of Nvidia Corporation. The Company filed for chapter 11 protection on Oct. 15, 2002 (Bankr. N.D. Calif. Case No. 02-55795). William A. Brandt, Jr. serves as trustee and is represented by Aron M. Oliner, Esq., at the Law Offices of Duane Morris and Craig C. Chiang, Esq, at Buchalter, Nemer, Fields and Younger. Robert S. Gebhard, Esq., at Sedgwick, Detert, Moran and Arnold represents the Official Committee of Unsecured Creditors. At July 31, 2002, the Company had $35,236,000 net liabilities in liquidation from total assets of $106,000 and total liabilities of $35,342,000. 3DFX INTERACTIVE: Judge Efremsky Okays Deal with Harbinger ---------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California approved an agreement between a committee representing 3DFX Interactive Inc.'s shareholders and Harbinger Capital Partners, the Associated Press reports. Under the agreement, Harbinger will pay $51.5 million for the company's preferred stock. The proceeds of the sale, according to Reuters, will be used to pay the company's creditors. The deal however is dependent on the result of the shareholders' case against Nvidia Corp. Lawsuit Creditors of 3DFX sued Nvidia alleging that they are still owed 1 million shares of Nvidia's stock pursuant to a 2001 merger agreement. Nvidia had bought 3DFX for $70 million in cash but now claims that those assets were just worth $14 million. About 3DFX Interactive Headquartered in Palo Alto, Calif., 3DFX Interactive Inc. developed graphics chips, graphics boards, software and related technology. On March 27, 2001, 3DFX's shareholders approved proposals to liquidate, wind up and dissolve the company pursuant to a plan of dissolution and to sell certain of its assets to Nvidia US Investment Company, a wholly owned subsidiary of Nvidia Corporation. The Company filed for chapter 11 protection on Oct. 15, 2002 (Bankr. N.D. Calif. Case No. 02-55795). William A. Brandt, Jr. serves as trustee and is represented by Aron M. Oliner, Esq., at the Law Offices of Duane Morris and Craig C. Chiang, Esq, at Buchalter, Nemer, Fields and Younger. Robert S. Gebhard, Esq., at Sedgwick, Detert, Moran and Arnold represents the Official Committee of Unsecured Creditors. At July 31, 2002, the Company had $35,236,000 net liabilities in liquidation from total assets of $106,000 and total liabilities of $35,342,000. ADESA INC: Launches Offering for $125 Million of 7-5/8% Notes ------------------------------------------------------------- ADESA, Inc. is offering to purchase for cash any and all of its outstanding $125 million aggregate principal amount of 7-5/8% Senior Subordinated Notes due 2012, on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 22, 2007, and the accompanying Consent and Letter of Transmittal. The company is also soliciting consents from holders of the Notes for certain amendments that would, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture under which the Notes were issued. Adoption of the proposed amendments requires the consent of holders of at least a majority of the aggregate principal amount of the Notes outstanding. As previously disclosed on Dec. 22, 2006, the company entered into a definitive merger agreement under which affiliates of Kelso & Co., GS Capital Partners, ValueAct Capital and Parthenon Capital will acquire all of the company's outstanding common stock for $27.85 per share in cash. The completion of the Offer and Consent Solicitation is not a condition to the consummation of the Merger. The Consent Solicitation will expire at 5:00 p.m., New York time, on April 5, 2007, unless earlier extended or terminated. The Offer will expire at 8:00 a.m., New York time, on April 23, 2007, unless extended or earlier terminated. The total consideration to be paid for each $1,000 in principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the Offer Documents, will be paid in cash and will be calculated based on a fixed spread pricing formula. The total consideration will be determined on the third business day prior to the Expiration Time based, in part, upon a fixed spread of 50 basis points over the yield on the 4.875 percent U.S. Treasury Note due May 31, 2008. The total consideration includes a consent payment equal to $30 per $1,000 in principal amount of Notes. The detailed methodology for calculating the total consideration for the Notes is outlined in the Offer Documents. Holders who validly tender their Notes on or prior to the Consent Time will be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Time, but on or prior to the Expiration Time, will be eligible to receive the total consideration less the Consent Payment. In either case, all Holders who validly tender their Notes will receive accrued and unpaid interest up to, but not including, the date of settlement. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Time. The company's Offer and Consent Solicitation are conditioned on, among other things, the following: * the closing of the Merger shall have occurred; * all of the loans, reimbursement obligations and other obligations and liabilities of the company under its Amended and Restated Credit Agreement, dated as of July 25, 2005, shall have been paid in full and all commitments of the lenders thereunder to make loans or issue letters of credit shall have been terminated; * the company shall have received valid consents from holders of a majority of the aggregate principal amount of the Notes; and * a supplemental indenture which implements the proposed amendments in respect of the Notes upon receipt of the consents required for those amendments shall have been executed and delivered. The company has retained Bear, Stearns & Co., Inc. to act as sole Dealer Manager for the Offer and as the Solicitation Agent for the Consent Solicitation. Bear, Stearns & Co., Inc. can be contacted at (212) 272-5112 (collect) or (877) 696-BEAR (toll free). D.F. King & Co., Inc. is the Information Agent and can be contacted at (212) 269-5550 (collect) or (888) 628-9011 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent. About ADESA, Inc. Headquartered in Carmel, Indiana, ADESA, Inc. (NYSE: KAR) -- http://www.adesainc.com-- is a wholesaler of vehicle auctions and used vehicle dealer floor plan financing. The company's operations span North America with 54 ADESA used vehicle auction sites, 42 impact salvage vehicle auction sites and 85 AFC loan production offices. * * * As reported in the Troubled Company Reporter on Dec. 28, 2006, Standard & Poor's Ratings Services placed its 'BB' corporate credit and debt ratings on ADESA, Inc. on CreditWatch with negative implications. At the same time, S&P placed the 'B' corporate credit and debt ratings on Insurance Auto Auctions, Inc. on CreditWatch with positive implications. The ratings actions follow the announcement that ADESA and IAAI have entered into a definitive merger agreement to be acquired by a group of private equity funds consisting of Kelso & Co., GS Capital Partners, ValueAct Capital, and Parthenon Capital in a transaction valued at $3.7 billion. ABITIBI-CONSOLIDATED: Moody's Cuts Corporate Family Rating to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded Abitibi-Consolidated Inc.'s corporate family rating and senior unsecured debt ratings by one notch to B2 and B3 respectively. At the same time, the company's speculative grade liquidity rating was affirmed at SGL-2, indicating good liquidity. Abitibi has announced a plan to merge with Bowater Incorporated in the third quarter of this year. In light of continued uncertainty, primarily with respect to the structural status of individual bond issues at each company vis-a-vis the other and a yet-to-be arranged operating credit facility, and the associated potential that ratings for unsecured instruments may need to be revised as a consequence of the pending merger, the ratings outlook remains unchanged as developing. Moody's does not expect the merger to cause a revision to the B2 CFR. The downgrade reflects prospects for weakening financial metrics as a result of pricing declines, higher input costs and the resulting pressure on margins. With the CFR downgraded to B2, credit metrics are now more closely aligned with expected financial performance. With newsprint pricing having come off recent peak levels observed in 2006 (US$675/tonne) and with none of the key industry participants taking steps to idle and or shutter machines (current pricing is US$625/tonne), Moody's is concerned that pricing will continue to drift lower during the year. Abitibi also has a significant lumber operation. 2007 results are expected to be adversely affected by the impact of a very soft housing market. Aside from low lumber prices, the housing market has prompted significant supply curtailments. A by-product of this is elevated wood chip prices. With wood chips being a key raw material input to paper making. While Abitibi has substantial backwards integrated into wood chip supply, this will add to the margin pressure that falling newsprint prices may cause. While there is some indication that some input costs such as energy, for example, have moderated, and the CDN$ has depreciated slightly relative to the US$, Moody's is concerned that the company will not be able to generate significantly more cash flow than it did in 2006, and, accordingly, will not be able to de-lever. Given the ongoing displacement of print communication and the associated decline of the North American newsprint and uncoated mechanical paper manufacturers as advertising revenues continue to migrate to digital media, it has proven to be very difficult for the paper makers to recoup lost ground. Accordingly, Moody's is concerned that the market peak may have passed and that near-to-mid term prospects are weak-to-tepid at best. With Moody's having previously noted that it considered Abitibi to be weakly positioned at the prior B1 rating level, with very poor credit protection measures only being partially off-set by favorable rating signals derived from business profile type measures such as aggregate size and scale, and cost competitiveness, the rating revision is warranted in light of updated profit expectations. At the B2 rating level, the company is seen as being reasonably well positioned in the context of current expectations. With the corporate family rating adjusted downwards by one notch, and with no changes to the company's capital structure, the ratings of the senior unsecured notes were also adjusted downwards by one notch as per Moody's loss given default methodology. While market conditions will continue to pose a challenge to Abitibi's ability to reduce its debt load, the company's good liquidity arrangements warrant affirmation of the SGL-2 speculative grade liquidity rating. As noted, owing to a number of uncertainties related to the pending merger, the ratings outlook is developing. Downgrades: * Abitibi-Consolidated Inc. -- Corporate Family Rating, Downgraded to B2 from B1 -- Multiple Seniority Shelf, Downgraded to B3 from B2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 * Abitibi-Consolidated Company of Canada -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 -- Senior Unsecured Shelf, Downgraded to B3 from B2 * Abitibi-Consolidated Finance L.P. -- Multiple Seniority Shelf, Downgraded to B3 from B2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 * Donohue Forest Products Inc. -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 Abitibi-Consolidated Inc., headquartered in Montreal, Quebec, is North America's leader in newsprint and uncoated mechanical paper and also has a significant lumber business. ADVA-LITE INC: Selling Assets at April 10 Auction ------------------------------------------------- Adva-Lite Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to sell substantially all of their assets at an auction on April 10, 2007, at 10:00 a.m., Eastern Time. The auction will be held at the offices of Young Conaway Stargatt & Taylor, LLP, at 1000 West Street, Brandywine Building, in Wilmington, Del. To participate in the auction, competing bids must be filed on or before 12:00 noon, Eastern Time, on April 9, 2007. The Court will convene a hearing on April 11, 2007, 11:00 a.m., Eastern Time, to consider confirmation of the results of the sale. The hearing will be held at: Courtroom No. 5 U.S. Bankruptcy Court 5th Floor No. 824 Market St. Wilmington, DE 19801 Objections to the sale are due on April 4, 2007. Prepetition Debts As of their bankruptcy filing, the Debtors disclose that they owe their prepetition lenders these amounts: Description Amount ----------- ------ Revolving Loans $5.9 million Term Loan A $11.0 million Term Loan B $10.9 million Term Loan D-1 $5.0 million Term Loan D-3 $10.0 million ---------------------------------- Total $43.8 million To maximize value of their operations and preserve other benefits of stakeholders, the Debtors decided to sell their business as a going concern. In this regard, the Debtors have obtained a commitment from the Revolving Loan Lenders, the Term Loan A Lenders, and the Term Loan B Lenders to provide secured postpetition financing to the Debtors. The stalking-horse bidder, Corvest SPV LLC, pursuant to an asset purchase agreement dated Feb. 28, 2007, proposed to buy the Debtors' assets in exchange for the: a) assumption of the debtor-in-possession obligations to the debtor-in-possession financing lenders and certain specified contracts, leases, trade creditor obligations; b) payment of $500,000 in cash to the Debtors for the benefit of their estates, plus $100,000 to fund administrative expenses of the estates; and c) satisfaction of the claims of the Term D Prepetition Lenders through the issuance of 15% of the equity of Corvest up to a maximum value of $5,000,000. The Debtors retained the services of Houlihan, Lokey Howard & Zukin Capital Inc. as their investment banker. About Adva-Lite Inc. Headquartered in Largo, Fla., Adva-Lite Inc., together with Corvest Promotional Products Inc., and four other affiliates, sought chapter 11 protection on February 28, 2007 (Bankr. D. Del. Case Nos. 07-10264 through 07-10271). The four affiliates filing separate chapter 11 petitions are Toppers LLC, CGI Inc., It's All Greek To Me Inc., and Corvest Group Inc. Adva-Lite, It's All Greek, and Toppers are subsidiaries of Corvest Promotional. Adva-Lite manufactures and markets personal lighting gizmos, writing instruments, beverageware, and tools. It's All Greek provides custom plush products. Toppers offers sports bags, totes, luggage, caps, and other business accessories. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case to date. When Adva-Lite sought protection from its creditors, it listed assets and debts between $1 million to $100 million. AES CORPORATION: Gets Waivers from Majority of Lenders ------------------------------------------------------ AES Corporation disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on March 22, 2007, it obtained the necessary votes from a majority of its lenders under both the senior bank facility and the senior unsecured credit facility, to waive the respective events of default described above. Waivers have been executed with respect to each credit facility. Because the company has obtained these waivers, the company now has access to the credit available under its senior bank facility and senior unsecured credit facility. Restatements and Default As previously reported in the Troubled Company Reporter, the company said that it was restating its previously reported financial statements due to errors discovered by its management. As a result, it has delayed the filing of its Form 10-K for the year ending Dec. 31, 2006. The company further disclosed that as a result of the restatement, it was in default under its senior bank credit facility. A full-text copy of Amendment No. 10 and Waiver No. 6 dated as of March 22, 2007 to Third Amended and Restated Credit and Reimbursement Agreement is available for free at: http://ResearchArchives.com/t/s?1c2d A full-text copy of Waiver No. 2 dated as of March 22, 2007 to the Credit Agreement among The AES Corporation as Borrower, the Banks listed therein, and Merrill Lynch Capital Corporation as Administrative Agent, is available for free at: http://ResearchArchives.com/t/s?1c2e About AES Corporation AES Corporation -- http://www.aes.com/-- is a global power company. The company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. AGILENT TECH: Board Okays Acceleration of $2 Bil. Share Repurchase ------------------------------------------------------------------ Agilent Technologies Inc.'s Board of Directors has authorized the acceleration of its existing $2 billion share-repurchase program. To date, the company has repurchased $500 million of the total $2 billion and expects completion by the end of Agilent's fiscal year. At that time, Agilent will have cumulatively repurchased $6.4 billion of the shares outstanding since the program's inception in 2005. "The Board's decision reflects the company's confidence in Agilent's operating model," Bill Sullivan, Agilent president and chief executive officer, said. "It also underscores the company's continuing commitment to return excess cash to the owners." Agilent anticipates the share-repurchase program will be implemented using a variety of methods, which may include open- market purchases, block trades, accelerated share-repurchase transactions or otherwise, or by any combination of such methods. The number of shares to be repurchased and the timing of any repurchases will depend on factors such as the stock price, economic and market conditions, and corporate and regulatory requirements. The stock-repurchase program may be suspended or discontinued at any time. About Agilent Technologies Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/-- is a measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. * * * Moody's Investors Service has assigned a 'Baa3' rating to Alliant Techsystems Inc.'s proposed senior secured credit facilities, due 2012, and has affirmed all of the company's existing ratings, including the 'Ba3' Corporate Family Rating. The rating outlook remains positive. In March 2007, ATK reported its plans to re-finance its senior secured bank credit facilities, replacing its $223 million term loan facility and $300 million revolving credit facility, both due 2009, with a $275 million term loan and $500 million revolver due 2012. The new term loan also has a $225 million accordion feature. Key benefits to this transaction are extended debt maturities and lower pricing. Otherwise, the re-financing had no material impact on ATK's credit fundamentals. AIRNET COMMUNICATIONS: Selling Patents and Patent Applications -------------------------------------------------------------- AirNet Communications Corp. is selling its patents and patent applications in order to satisfy its creditors under a Reorganization Plan approved by the U.S. Bankruptcy Court for the Middle District of Florida. The portfolio of 59 issued U.S. patents, 31 issued foreign patents, 7 pending U.S. and 18 pending foreign applications includes seminal SDR Base Station patents dating back to the mid- 1990's, and covers a broad-range of hot technologies including solutions for broadband SDR Base Stations, fundamental OFDM and FFT-signal processing techniques, value-added wireless network design, E911 Phase 2-related location services, frequency optimization, and innovative wireless backhaul and power management techniques. The portfolio also features seminal patents covering emerging Wireless Video delivery solutions like MediaFlo, DVB-H, and WiMAX, as well as Wireless Data Networking utilizing a building's own power lines (ala the HomePlug and related initiatives). Originally spun out of Harris Corporation in 1994 to commercialize its vision of flexible and programmable wireless infrastructure, AirNet pioneered SDR Base Stations and many underlying technologies and value-added solutions. During its history AirNet received almost $280 million in investment funding, won several technology innovation awards, and installed its SDR Base Stations in metropolitan and rural areas around the world. AirNet's vision of a more nimble and efficient wireless infrastructure truly lead the marketplace. SDR is now seen as key to the future of being able to drive down the replacement costs involved with upgrading existing networks to support new standards, technologies, applications or solutions. SDR Base Stations are software reconfigurable to support multiple different wireless communications standards and the continuous evolution and improvement in Base Station components. They also allow network providers to quickly add new solutions while maintaining support and compatibility for their large installed bases. These solutions are sold into the $29B+ US Wireless Equipment market. In connection with its Chapter 11 proceeding, Pluritas, an advisory firm that specializes in transacting patent assets, was hired to package and market AirNet's patents and patent applications to potential acquirers of these assets. Bids on the patents and applications must be submitted in writing by June 1, 2007 and must provide for an all-cash purchase. Bids will be accepted on all the assets of the portfolio as well as on individual cluster lots. Interested parties should contact either Robert Aronoff (415) 503- 4075 or Andy Scott (415) 503-4074 at Pluritas, or visit http://www.pluritas.com/AirNet.htm About Pluritas Pluritas , LLC -- http://www.pluritas.com/-- is a leading transaction advisory firm that specializes in transactions driven in large part by the value of the underlying patent assets. The Firm has been engaged in patent assignment transactions since 2002, with headquarters in San Francisco, California. About AirNet Communications Headquartered in Melbourne, Florida, AirNet Communications Corporation -- http://www.aircom.com/-- designs, manufactures, and markets wireless infrastructure products and offers infrastructure solutions for commercial GSM customers, and government, defense, homeland security based agencies. The Debtor filed for chapter 11 protection on May 22, 2006 (Bankr. M.D. Fla. Case No. 06-01171). R. Scott Shuker, Esq., at Gronek & Latham, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $15,701,881 and total debts of $21,615,346. On Aug. 17, 2006, the Debtor filed its amended reorganization plan, which was subsequently approved by the Court. AirNet emerged from Chapter 11 on Oct. 13, 2006. AirNet's reorganization plan calls for the sale of the AirNet patent portfolio to satisfy the obligations to creditors. Except for AirNet Communications retaining a right to practice, the patents, through the Bankruptcy process, are being offered to potential acquirers free of all encumbrances. ALPHARMA INC: Inks Amended Loan & Security Agreement with BofA -------------------------------------------------------------- Effective March 14, 2007, Alpharma Inc. entered into an amendment to its Amended and Restated Loan and Security Agreement, dated March 10, 2006, with Bank of America N.A., as lender, issuing bank and collateral, and administrative agent. The Amendment provides that the Bank and the Required Lenders consent to (i) the proposed issuance of certain new unsecured senior notes, and (ii) providing a credit facility and certain bank product services to the company's Chinese subsidiary. On March 20, 2007, Alpharma Inc. closed the sale of $300 million of its 2.125% Convertible Senior Notes due 2027. A full-text copy of Alpharma and BofA's Amended Loan and Security Agreement is available for free at: http://ResearchArchives.com/t/s?1c1c Alpharma Inc. (NYSE: ALO) -- http://www.alpharma.com/-- is a global generic pharmaceutical company with leadership positions in products for humans and animals. Alpharma is presently active in more than 60 countries. Alpharma is a leading manufacturer of generic pharmaceutical products in the U.S., offering solid, liquid and topical pharmaceuticals. It is also one of the largest suppliers of generic solid dose pharmaceuticals in Europe, with a presence in Southeast Asia. Alpharma is among the world's leading producers of several important pharmaceutical-grade bulk antibiotics and is internationally recognized as a leading provider of pharmaceutical products for poultry, swine and cattle. ALPHARMA INC: S&P Rates $300 Million 2.125% Senior Notes at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Alpharma Inc. Standard & Poor's also assigned its 'B+' senior unsecured debt rating to its $300 million 2.125% senior convertible notes due 2027. The outlook is stable. "The ratings reflect the potential for increased competition against Alpharma's main products and the likely need for the company to conduct acquisitions and other business development transactions in order to expand its pharmaceutical franchise," explained Standard & Poor's credit analyst Arthur Wong. "This is mitigated by the diversity of its three businesses: pharmaceuticals, active pharmaceutical ingredients, and animal health." Proceeds from the company's recent offering of $300 million in convertibles will likely be used to fund the expansion of the company's drug portfolio. Pro forma for the debt, Alpharma still has a relatively solid financial profile, with debt to EBITDA of only 2.2x. ANGIOTECH PHARMA: Safety Issues Cue S&P's Negative Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Angiotech Pharmaceuticals Inc. to negative from stable. At the same time, the 'B+' long-term corporate credit and senior unsecured debt ratings and the 'B-' senior subordinated debt rating on Angiotech were affirmed. "The outlook revision reflects our ongoing concern with market conditions for coated drug-eluting stents, which have been under increasing scrutiny due to safety concerns," said Standard & Poor's credit analyst Don Povilaitis. Also of concern are Angiotech's credit metrics, which have deteriorated since the American Medical Instruments Inc. acquisition in Feb. 2006, and are expected to weaken further in 2007 given the expectation of lower earnings. Vancouver, British Columbia-based Angiotech is a Canadian specialty pharmaceutical company whose core strength is adding pharmaceutical compounds to medical devices and targeting interventions with high failure rates that can result in costly corrective surgeries. The company receives royalty payments under a licensing agreement with marketing partner Boston Scientific Corp. for paclitaxel, the drug used to coat the Taxus Express and Taxus Libert, paclitaxel-eluting stent systems. These royalty payments are Angiotech's most important source of revenue and represent a significant product concentration. The very competitive drug-eluting stent market and the position of potential new entrants will ultimately play important roles in the company's ability to generate consistent free cash flow. Currently, the highly cash-generative nature of the Taxus stent allows for the conversion of about half of the company's EBITDA into free cash flow. But although Angiotech generated $52.4 million in free cash flow in fiscal 2006, this could prove difficult to sustain in 2007 given the risks associated with the stent market and the lower royalty rate the company now receives from BSX. Somewhat offsetting the risks of substantial declines in free cash flow are the company's limited working capital needs; modest annual capital expenditures of about US$15 million, given modern-owned facilities; and no major planned investments other than an addition to laboratory space. Nevertheless, other than an increase in cash balances in 2007, which will result in a reduction in net debt, Standard & Poor's does not expect any excess cash to be applied toward gross debt reduction before 2008 at the earliest. The negative outlook reflects Standard & Poor's expectation that Angiotech's credit metrics will weaken throughout fiscal 2007 and will not likely strengthen until 2008. Should Taxus-related royalty revenues become more acutely affected by competitive, legal, or safety factors, thereby further depressing Angiotech's cash flow, the ratings could be lowered. Conversely, if BSX is able to successfully deal with the onset of stent competition in the U.S. (expected by 2008) and,concurrently, Angiotech is able to strengthen its capital structure, whether through a recovery in stent royalty or medical device revenues, then the outlook could be revised to stable. ARCAP 2004-RR3: S&P Holds Low-B Ratings on 6 Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 15 classes of commercial mortgage-backed securities pass-through certificates from ARCap 2004-RR3 Resecuritization Inc. The affirmations reflect credit support levels that adequately support the existing ratings. As of the March 21, 2007, remittance report, the collateral pool consisted of 57 classes of subordinated fixed-rate CMBS pass-through certificates with an aggregate principal balance of $539.6 million, compared with 57 classes of certificates totaling $545.4 million at issuance. The collateral pool represents 19 distinct CMBS transactions issued between 1999 and 2004. In addition, 58% of the collateral balance is concentrated in five underlying transactions: -- Chase Manhattan Bank - First Union National Bank Commercial Mortgage Trust's series 1999-1 (20%); -- Mortgage Capital Funding's series 1998-MC1 (14%); -- First Union Bank - Bank of America N.A.'s series 2001-C1 (9%); -- Prudential Securities Secured Financing Corp.'s series 1999-C2(8%); and -- JP Morgan Commercial Mortgage Finance Corp.'s series 2000- C10 (7%). The 19 CMBS transactions are collateralized by 2,925 loans with a current outstanding principal balance of $15.8 billion, down from 3,311 loans with an aggregate principal balance of $20.6 billion at issuance. The certificates in the collateral pool exhibit credit characteristics consistent with a 'BB-' rated obligation, up from 'B+' at issuance. Although none of the certificates had investment-grade ratings or were issued credit estimates commensurate with investment-grade obligations at issuance, 19.5% currently have low investment-grade ratings. Since the collateral for the mortgage certificates consists of CMBS pass-through certificates rather than mortgage loans, there is no direct relationship between real estate losses in the loan pools and losses realized by the series 2004-RR3 transaction. Losses associated with the mortgage loans are first realized by the CMBS trusts that issued the pass-through certificates secured by the mortgage loans. The losses on the pass-through certificate balances are then allocated to the balances of the mortgage certificates from series 2004-RR3. The resultant credit enhancement levels adequately support the affirmed ratings. Ratings Affirmed ARCap 2004-RR3 Resecuritization Inc. Commercial Mortgage-Backed Securities Pass-Through Certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 40.24 A-2 AAA 40.24 B AA 32.66 C A 26.85 D A- 25.58 E BBB+ 22.55 F BBB 20.02 G BBB- 17.62 H BB+ 14.21 J BB 12.57 K BB- 11.05 L B+ 9.41 M B 7.01 N B- 6.00 X AAA N/A N/A -- Not applicable. ASSOCIATED MATERIALS: Earns $33.2 Million in Yr. Ended December 31 ------------------------------------------------------------------ Associated Materials, Inc. for the year ended Dec. 30, 2006, reported a net income of $33.29 million on net sales of $1.25 billion, versus a net income of $22.46 million on net sales of $1.17 billion for the year ended Dec. 31, 2005. The increase in net sales for the year 2006 was driven primarily by the continued realization of selling price increases implemented in late 2005 and early 2006, unit volume growth in the company's vinyl window operations, as well as the benefit from a stronger Canadian dollar. Gross profit for the year ended Dec. 30, 2006, was $302.3 million, as compared with a gross profit of $267.3 million for the same period in 2005. The company implemented headcount reductions in the fourth quarter of 2006 in response to the difficult market conditions, which are expected to save about $4.5 million in 2007. The company's balance sheet as of Dec. 30, 2006, listed total assets of $786.33 million and total liabilities of $520.26 million, resulting to total stockholders' equity of $266.07 million. Liquidity At Dec. 30, 2006, the company had cash and cash equivalents of $15.01 million and available borrowing capacity of about $80.8 million under the revolving loan portion of its second amended and restated credit facility. The facility requires the company to pay a commitment fee of 0.375% per annum on any unused amounts under the revolving portion of the facility. Outstanding letters of credit at Dec. 30, 2006 totaled about $9.2 million securing various insurance letters of credit. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c24 About Associated Materials Associated Materials, Inc. -- http://www.associatedmaterials.com/ -- manufactures exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. The company produces a range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. The company is a privately held, wholly owned subsidiary of Associated Materials Holdings, Inc., which is a wholly owned subsidiary of AMH Holdings, Inc., which is a wholly owned subsidiary of AMH Holdings II, Inc., which is controlled by affiliates of Investcorp S.A. and Harvest Partners, Inc. * * * Associated Materials, Inc. carries Moody's B3 ratings on the company's corporate family rating and AMH Holdings, Inc.'s senior secured credit facilities. Ratings Outlook is Stable. AVIATION CAPITAL: Moody's Junks Rating on $24 Mil. Class D-1 Notes ------------------------------------------------------------------ Moody's Investors Service downgraded four notes issued by Aviation Capital Group Trust, Series 2000-1. Downgraded * Aviation Capital Group Trust, Series 2000-1 -- $364.0 Million Class A-1 Floating Rate Notes due Nov. 15, 2025, downgraded to Ba3 from Baa2; -- $52.3 Million Class B-1 Floating Rate Notes due Nov. 15, 2025, downgraded to B3 from Baa3; -- $65.7 Million Class C-1 Floating Rate Notes due Nov. 15, 2025, downgraded to Caa3 from B1; -- $24.4 Million Class D-1 Fixed Rate Notes due Nov. 15, 2025, downgraded to Ca from B3. Portfolio maintenance expenses in recent months have drawn heavily upon deal reserves in this transaction, reducing the Investment Agreement Account from $30 million to $12.3 million. Future maintenance expenses could further deplete reserves, thereby further reducing credit support available to the transaction. Lease cash flows may not be sufficient to replenish the reserves, particularly in the near term. BABSON CLO: Moody's Rates $25 Million Class D Notes at Ba2 ---------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Babson CLO Ltd. 2007-I: * Aaa to the $298,000,000 Class A-1 Senior Floating Rate Notes Due 2021 * Aaa to the $220,000,000 Class A-2a Senior Floating Rate Notes Due 2021 * Aa1 to the $55,000,000 Class A-2b Senior Floating Rate Notes Due 2021 * Aa2 to the $42,500,000 Class A-3 Senior Floating Rate Notes Due 2021 * A2 to the $36,500,000 Class B-1 Deferrable Mezzanine Floating Rate Notes Due 2021 * A2 to the $6,000,000 Class B-2 Deferrable Mezzanine Fixed Rate Notes Due 2021 * Baa2 to the $25,000,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2021 * Ba2 to the $21,000,000 Class D-1 Deferrable Mezzanine Floating Rate Notes Due 2021 * Ba2 to the $4,000,000 Class D-2 Deferrable Mezzanine Fixed Rate Notes Due 2021 * A3 to the $10,000,000 Class Q Combination Notes Due 2021 * Aaa to the $8,000,00 Class P Notes Due 2021 The Moody's ratings of the Rated Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the governing documents, and are based on the expected loss posed to holders relative to the promise of receiving the present value of such payments. The rating assigned to the Class Q Combination Notes addresses solely the ultimate repayment of the Rated Amount. The rating assigned to the Class P Notes addresses solely the ultimate repayment of the Class P Rated Balance. Babson Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. BEAR STEARNS: DBRS Puts Low-B Ratings on Four Class Certificates ---------------------------------------------------------------- Dominion Bond Rating Services assigned these ratings to the NIM Notes, Series 2007-N3-VII and Series 2007-N3-VIII issued by Bear Stearns Structured Products Inc. NIM Trust 2007-N3 Notes. * $10.4 million Class VII-A-1 rated at A (low) * $3.8 million Class VII-A-2 rated at BBB (low) * $1.4 million Class VII-A-3 rated at BB (high) * $7.5 million Class VII-A-4 rated at B * $6.8 million Class VIII-A-1 rated at A (low) * $1.6 million Class VIII-A-2 rated at BBB (low) * $0.76 million Class VIII-A-3 rated at BB (high) * $5 million Class VIII-A-4 rated at B The NIM Notes, Series 2007-N3-VII are backed by 100% interest in the underlying Class C Certificates issued by BSMF Trust 2007-SL2; and the NIM Notes, Series 2007-N3-VIII are backed by 100% interest in the underlying Class C Certificates issued by the underlying SACO I Trust 2007-2. The underlying Class C Certificates will be entitled to receive the excess cash flows and prepayment charges, if any, generated by the mortgage loans each month after payment of all the required distributions. The NIM Notes, Series 2007-N3- VII and Series 2007-N3-VIII will also be entitled to the benefits of underlying swap agreements with Bear Stearns Financial Products Inc. Payments on the NIM Notes, Series 2007-N3-VII and Series 2007-N3- VIII will be made on the first business day after the distribution date of the underlying certificates, commencing in March 2007. In the case of NIM Notes, Series 2007-N3-VII, the distribution of interest will be made sequentially to noteholders of Classes VII-A-1 through VII-A-3. Principal distribution will be made sequentially to noteholders of Classes VII-A-1 through VII-A-4 until the principal balance of each such class has been paid to zero. Any remaining amounts will be paid in full to the holders of the Class VII-C Notes issued by the NIM Trust. In the case of NIM Notes, Series 2007-N3-VIII, the distribution of interest and principal will be made sequentially to noteholders of Classes VIII-A-1 through VIII-A-4 until the principal balance of each such class has been paid to zero. Any remaining amounts will be paid in full to the noteholders of the Class VIII-C issued by the NIM Trust. The Classes I-C through X-C Notes, as well as the NIM Notes, Series 2007-N3-I through Series 2007-N3-VI and Series 2007-N3-IX through Series 2007-N3-X are not rated by DBRS. Approximately 76.74% of the mortgage loans in the BSMF Trust 2007-SL2 were purchased by EMC Mortgage Corporation and 23.26% were originated by Bear Stearns Residential Mortgage Corporation. The mortgage loans in the SACO I Trust 2007-2 were primarily originated by Suntrust Mortgage Corporation, SouthStar Funding, LLC, and Aegis Mortgage Corporation. The loans from the BSMF Trust 2007-SL2 and the SACO I Trust 2007-2 are fixed-rate, second- lien mortgage loans, which are subordinate to the senior-lien mortgage loans on the respective properties. BEAR STEARNS: S&P Assigns Low-B Ratings to 4 Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Bear Stearns Commercial Mortgage Securities Trust Series 2007-BBA8's $1.48 billion commercial mortgage pass-through certificates series 2007-BBA8. The preliminary ratings are based on information as of March 23, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying mortgage loans, and the geographic and property type diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the trust pool has a debt service coverage of 1.73x based on a weighted average stressed constant of 10.02% and a beginning and ending LTV of 60.9%. Preliminary Ratings Assigned Bear Stearns Commercial Mortgage Securities Trust Series 2007-BBA8 Recommended Preliminary credit Class Rating amount support ------ ------ ------------- ------------ A-1 AAA $887,019,375 40.188% A-2 AAA $295,673,125 20.250% X-1A* AAA $1,483,000,000 N/A X-1B* AAA $1,483,000,000 N/A X-2* AAA TBD N/A X-3* AAA $82,500,000 N/A X-1M* AAA $835,000,000 N/A X-2M* AAA $598,400,000 N/A B AA+ $40,782,500 17.500% C AA $40,782,500 14.750% D AA- $40,782,500 12.000% E A+ $42,636,250 9.125% F A $25,952,500 7.375% G A- $24,098,750 5.750% H BBB+ $18,514,262 4.502% J BBB $19,588,010 3.181% K BBB- $24,925,228 1.500% L BBB- $22,245,000 0.000% MS-X A+ $236,600,000 N/A MS-1 A+ $26,700,000 N/A MS-2 A $31,040,496 N/A MS-3 A- $27,259,503 N/A MS-4 BBB+ $55,700,000 N/A MS-5 BBB $29,800,000 N/A MS-6 BBB- $48,407,965 N/A MS-7 BB+ $17,692,036 N/A PH-1 BB+ $4,500,000 N/A PH-2 BB $11,250,000 N/A PH-3 BB- $4,540,000 N/A MA-1 NR $4,900,000 N/A MA-2 NR $3,400,000 N/A MA-3 NR $3,500,000 N/A MA-4 NR $5,700,000 N/A CA-1 NR $2,500,000 N/A CA-2 NR $1,500,000 N/A CA-3 NR $1,000,000 N/A *Interest-only class with a notional amount. N/A -- Not applicable. TBD -- To be determined. NR -- Not rated. BEAR STEARNS: S&P Raises Class E Certificates' Rating to CCC ------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating on the class E corporate lease-backed certificates from Bear Stearns Commercial Mortgage Securities Inc.'s series 1999-CLF1 to 'CCC' from 'D'. Concurrently, the ratings were affirmed on the six other classes from the same transaction. The rating on class E was set to 'D' on Dec. 22, 2006, to reflect a principal loss following the liquidation of a property formerly occupied by Winn-Dixie Stores Inc. The liquidation resulted in an 89% loss on the asset, which caused the class certificates E to incur a principal loss of $288,342.63. In response, the trust filed a claim in bankruptcy court for approximately $770,000 for unpaid rent and other charges associated with the liquidated property. This claim was paid in late December 2006 with 35,727 shares of new Winn Dixie stock. The trust's interest in these shares was sold in December 2006, and the proceeds were distributed to the trust. These distributions were reflected on the February 2007 and March 2007 remittance reports. Consequently, the principal balance for the class E certificates was effectively reinstated as of March 2007, which prompted a re- analysis of the transaction. The raised and affirmed ratings reflect the recent analysis. As of the March 21, 2007, remittance report, the transaction consisted of 156 loans with an aggregate balance of $283 million. Rating Raised Bear Stearns Commercial Mortgage Securities Inc. Corporate Lease-Backed Certificates Series 1999-Clf1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ E CCC D 0.11% Ratings Affirmed Bear Stearns Commercial Mortgage Securities Inc. Corporate Lease-Backed Certificates Series 1999-CLF1 Class Rating Credit enhancement ----- ------ ------------------ A-3 AAA 21.45%* A-4 AAA 21.45%* B AAA 15.69% C A+ 10.27% D B 1.47% X AAA N.A. * Does not reflect financial guarantee insurance policy issued by MBIA Insurance Corp. N.A. -- Not applicable. BIRDS EYE: S&P Withdraws Ratings at the Company's Request --------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' corporate credit and all other ratings on Rochester, New York-based Birds Eye Foods Inc. at the company's request. "This action follows the company's successful refinancing of balances outstanding under a $470 million senior secured credit facility," said Standard & Poor's credit analyst Alison Sullivan. BLUEMOUNTAIN CLO: Moody's Rates $21.15 Million Junior Notes at Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned ratings to Notes issued by BlueMountain CLO III Ltd.: * Aaa to the $131,487,500 Class A-1a Senior Floating Rate Notes, due 2021; * Aaa to the $131,487,500 Class A-1b Senior Floating Rate Notes, due 2021; * Aaa to the $50,000,000 Class A-2 Senior Revolving Floating Rate Notes, due 2021; * Aa2 to the $31,500,000 Class B Senior Floating Rate Notes, due 2021; * A2 to the $29,250,000 Class C Deferrable Mezzanine Floating Rate Notes, due 2021; * Baa2 to the $20,250,000 Class D Deferrable Mezzanine Floating Rate Notes, due 2021 and * Ba2 to the $21,150,000 Class E Deferrable Junior Floating Rate Notes, due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. BlueMountain Capital Management L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. BONNIE SNAVELY: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bonnie G. Snavely 29655 232nd Avenue Southeast Black Diamond, WA 98010 Bankruptcy Case No.: 07-11283 Type of Business: The Debtor previously filed for chapter 11 protection on March 15, 2002 (Bankr. W.D. Wash. Case No. 02-13205). Chapter 11 Petition Date: March 25, 2007 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jan Samuel Ostrovsky, Esq. Crocker Kuno Ostrovsky LLC 720 Olive Way, Suite 1000 Seattle, WA 98101 Tel: (206) 624-9894 Fax: (206) 624-8598 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Richard Williams Promissory Note $108,358 2821 St. Thomas Drive Missoula, MT 59803 Joe Wilcynski CPA Accounting Services $104,357 1015 3rd Avenue, Suite 950 Seattle, WA 98104 1st National Bank of Montana Promissory Note $103,777 201 North Higgins Avenue Missoula, MT 59802 DTJ Design Goods/Services $55,206 James A. Patten Legal Services $55,000 Bullivant Houser Legal Services $15,000 Professional Consultants Goods/Services $7,772 Crowley Haughey Legal Services $6,764 Cosner Associates Accounting Services $6,238 Kembel Kosena & Co. Appraisal $4,250 Datsopoulos McDonald Lind Legal Services $2,013 Otten Johnson Legal Services $1,997 BOWATER INC: Moody's Cuts Senior Notes' Rating to B3 from B2 ------------------------------------------------------------ Moody's Investors Service downgraded Bowater Incorporated's long term debt ratings by one notch with the company's corporate family rating downgraded to B2 from B1, and its senior unsecured notes downgraded to B3 from B2. At the same time, Moody's affirmed Bowater's SGL-2 speculative grade liquidity rating. Bowater has announced a plan to merge with Abitibi-Consolidated Inc. that is expected to close in third quarter of this year. In light of continued uncertainty, primarily with respect to the structural status of individual bond issues at each company vis-a-vis the other and a yet-to-be arranged operating credit facility, and the associated potential that ratings for unsecured instruments may need to be revised as a consequence of the pending merger, the ratings outlook remains unchanged as developing. Moody's does not expect the merger to cause a revision to the B2 CFR. The downgrade reflects prospects for weakening financial metrics as a result of pricing declines, higher input costs and the resulting pressure on margins. With the CFR downgraded to B2, credit metrics are now more closely aligned with expected financial performance. With newsprint pricing having come off recent peak levels observed in 2006 and with none of the key industry participants taking steps to idle and or shutter machines, Moody's is concerned that pricing will continue to drift lower during 2007. In addition, pricing has been under pressure in the related coated mechanical papers market in which Bowater has exposure. Bowater also produces market pulp, and while pulp pricing has been strong since the beginning of 2006, elevated prices for wood chips may mute much of what would otherwise be strong profit margins. Elevated wood chip prices will also adversely affect newsprint and uncoated mechanical paper margins, and is a by-product of a weak housing market. This results from lumber supply curtailments that reduce the supply of residual wood chips. There is also the impact of lower lumber prices, a factor that also affects Bowater given its lumber operations. All of these factors point to 2007 being a difficult year. Bowater has some remaining capacity to divest of timberlands and repay debt. While this is positive, it does not change the fact that the underlying business is expected to generate weak returns. This continues a multi-year trend. On balance, and abstracting from one-time events, Moody's expects 2007 financial performance to be broadly similar to what was observed over the past couple of years. Moody's is concerned that the market peak may have passed and that near-to-mid term prospects are weak-to-tepid at best. With Moody's having previously noted that it considered Bowater to be weakly positioned at the prior B1 rating level, with very poor credit protection measures only being partially off-set by favorable rating signals derived from business profile type measures such as aggregate size and scale and cost competitiveness, updated expectations concerning 2007 caused the rating revision. Whereas Moody's had expected margin expansion and debt reduction, it is now unlikely that this will occur, at least by way of cash flow from operations. At the B2 rating level, the company is now seen as being reasonably well positioned in the context of the current outlook. With the corporate family rating downgraded by one notch, and with no changes to the company's capital structure, the ratings on the senior unsecured notes were also downgraded to B3 from B2 as per Moody's loss given default methodology. While market conditions will continue to pose a challenge to Bowater's results, the company's good liquidity arrangements warrant affirmation of the SGL-2 speculative grade liquidity rating. As noted, owing to a number of uncertainties related to the pending merger, the ratings outlook is developing. Downgrades: * Bowater Inc. -- Corporate Family Rating, Downgraded to B2 from B1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 * Bowater Canada Finance Corp. -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2 Bowater Incorporated, headquartered in Greenville, South Carolina is a global leader in newsprint, with additional operations in coated and uncoated groundwood papers, bleached kraft pulp, and lumber products. CANADA MORTGAGE: DBRS Upgrades Rating on Class F Certs. to BB ------------------------------------------------------------- Dominion Bond Rating Service upgraded the ratings of five classes of Canada Mortgage Acceptance Corporation Pass-Through Certificates, Series 2004-C2: * Class B upgraded to AAA from AA * Class C upgraded to AA from A * Class D upgraded to A from BBB * Class E upgraded to BBB from BB * Class F upgraded to BB from B In addition, DBRS has also confirmed two classes of the Certificates as follows: * Class A at AAA * Class IO at AAA The upgrade and confirmation are based on these factors: a. high levels of structural enhancement, which are significantly higher than the initial enhancement levels; b. high quality borrowers; and c. experience of GMAC Residential Funding Company LLC in the residential mortgage market. The Class IO Certificates represent interest only "strips" and are sensitive to prepayment assumptions. The AAA rating reflects the requirement that interest payments are made as per the legal documentation and does not evaluate the risks associated with prepayment. GMAC Residential Funding of Canada, the mortgage originator, is a wholly-owned subsidiary of RFC, which is owned by Residential Capital LLC. RFOC has issued $2 billion RMBS since 2004. This was RFOC's second public securitization transaction. CATHOLIC CHURCH: San Diego Can Borrow $2.7MM to Pay Construction ---------------------------------------------------------------- The Honorable Louise DeCarl Adler of the U.S. Bankruptcy Court for the Southern District of California authorizes The Roman Catholic Bishop of San Diego to borrow $2,700,000 from ALSAM Foundation, on a postpetition basis and on the same terms and secured by the same collateral as the ALSAM Prepetition Financing. The $2,700,000 will pay construction costs incurred for March and much of the budgeted amounts for April as set forth in the budget as are incurred pursuant to the current non-accelerated construction schedule until conclusion of a final hearing on the request, Judge Adler says. According to the Court, the amounts advanced by ALSAM for the Interim Financing will be on the same terms and conditions and the same priority as to collateral as currently in effect pursuant to the ALSAM Loan Documents, and ALSAM will not receive an administrative expense priority for the amounts advanced for the Interim Financing. On or before March 28, 2007, counsel for San Diego and ALSAM will advise the Official Committee of Unsecured Creditors as to whether ALSAM will release its lien on Marian High School, which is currently further security for the ALSAM Prepetition Financing. San Diego will not expend any of its own funds except in the ordinary course with respect to the construction of Mater Dei High School, during the term of the Interim Order, provided that nothing will preclude San Diego from seeking authority to expend the funds. Judge Adler will convene a final hearing on San Diego's request on April 11, 2007, at 2:00 p.m. Property of the Estate Judge Adler declares that by virtue of San Diego's and Bishop Robert Brom's representation, Marian High School and the Mater Dei High School are property of the estate pursuant to Section 541 of the Bankruptcy Code. No third party, including, any civil entity, religious order, institution or juridical person has any interest in Marian and, except for the recorded liens of ALSAM and any interests that might be asserted by any general or sub-contractors for construction of Mater Dei or with respect to the anticipated opening and operation of Mater Dei, no third party has any interest in Mater Dei, Judge Adler adds. The Parishes have not, and will not, assert any interest in Marian or Mater Dei, he continues. Avoidance Actions If third parties, other than ALSAM, assert any interest in Marian, the effect of which would be to reduce the amount realized by San Diego upon a sale of Marian or San Diego's use of the proceeds, San Diego will pursue avoidance of the interests pursuant to its avoidance powers under Section 544 of the Bankruptcy Code, Judge Adler rules. If San Diego does not pursue Avoidance, or if its prosecution of the Avoidance action is not satisfactory to the Committee in its sole and absolute discretion, upon request of the Committee, San Diego will immediately assign the Avoidance action to the Committee. The assignment will only be with respect to Avoidance as to Marian and not as to any other property, claims or rights of the Diocese and will not constitute nor will it be deemed to be: (a) an admission that the Committee or any other third party is entitled to pursue or has a right to an assignment of any of San Diego's avoidance powers including its powers pursuant to Section 544; (b) a basis for determining that any of the avoidance powers of the Diocese provided to it by the Bankruptcy Code, including its powers pursuant to Section 544, should be assigned to or pursued by a Committee or any other third party. San Diego will meaningfully consult with the Committee regarding appointment of a broker to sell any of the Diocese's real estate and any offers or counteroffers received from third parties for the sale of any of the real estate. The Interim Order will be without prejudice to any creditor or party-in-interest with standing, raising any issue regarding the ALSAM Loan at the Final Hearing nor will the Interim Order constitute any findings regarding the nature, extent and validity of any liens, claims or interests of any third party with respect to Marian or Mater Dei, Judge Adler says. About San Diego Diocese Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. The Diocese's exclusive period to file a chapter 11 plan of reorganization expires on June 27, 2007. (Catholic Church Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: San Diego Can File Part of Schedule F Under Seal ----------------------------------------------------------------- The Honorable Louise DeCarl Adler of the U.S. Bankruptcy Court for the Southern District of California allows The Roman Catholic Bishop of San Diego to maintain the confidentiality of the identities of victims of sexual abuse including names of victims of sexual abuse and any other identifying information like social security numbers, addresses, telephone numbers, names of close relatives, email addresses, or other similar information. "Provisionally, [San Diego] is authorized to file portions of Schedule F, and the Master Mailing List containing the Confidential Identifying Information under seal," Judge Adler says. However, the procedure will be reviewed, for modification, if necessary, on April 11, 2007, at 2:00 p.m., Judge Adler maintains. Judge Adler further authorizes San Diego to provide the Sealed Pleadings to the U.S. Trustee who is authorized to use the Pleadings in discharge of its duties and obligations including the solicitation and appointment of any committee. If any party files a pleading, report or other document that contains Confidential Identifying Information, that party must file the original pleading containing the Confidential Identifying Information under seal with the Clerk of the Court, and must file a duplicate of that pleading electronically in the public file with the Confidential Identifying Information redacted. The party filing the pleading, report or other document containing the Confidential Identifying Information must serve a copy of the unredacted version on San Diego and the affected party. According to Judge Adler, nothing will prevent a victim of sexual abuse from choosing to make his or her identity public by affirmatively giving notice to the Court and San Diego that he or she does not want his or her identity kept confidential. The procedure for noticing and soliciting responses from these claimants about whether he or she wants his or her identity to be kept confidential in public Bankruptcy Court records and whether each claimant has used a real name in previous public court records related to their claims will be determined as soon as the Creditors Committee is formed and retains counsel. The Creditors Committee will send the confidential notices to claimants and report the results to the Court as soon as practicable. Moreover, Judge Adler says, any party may file a motion to file a pleading, report, or document under seal. The party filing the Motion to Seal will serve the Motion on the parties on the Official Limited Service List and counsel to Non-Party Press Organization, Copley Press, Inc. The moving party will provide at least 48 hours notice of the Motion to Seal. Nothing will preclude the Court, in its discretion, from acting on the Motion to Seal ex parte, with or without a hearing, Judge Adler clarifies. About San Diego Diocese Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. The Diocese's exclusive period to file a chapter 11 plan of reorganization expires on June 27, 2007. (Catholic Church Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: McCartin Wants Portland's Allied Terms Reported ---------------------------------------------------------------- George McCartin asks the U.S. Bankruptcy Court for the District of Oregon to direct the Archdiocese of Portland in Oregon to provide a summary of the terms and conditions of the commitment letter with Allied Irish Bank. George McCartin, a member of the defendant class that the Bankruptcy Court has ordered on the parishioners of the Archdiocese of Portland in Oregon, asserts that the Catholic community in the Archdiocese deserves to be fully informed of the Allied Irish Bank dealings and of all other transactions in tort claims settlement, and the conditions required for Portland to emerge from bankruptcy. Mr. McCartin relates that the last time that the Archdiocese made an official status report to parishioners regarding this bankruptcy case was almost a year ago. "There has been no accountability to those who, every Sunday, pay eight cents of each dollar they contribute to their parish collection to the Debtor. From those contributions over $15,000,000 has or will be paid to the [D]ebtor's attorneys in this case. From those contributions $100,000 plus other fees and expenses will be paid to Allied Irish Bank up front," Mr. McCartin says. As reported in the Troubled Company Reporter on Feb. 21, 2007, the Archdiocese of Portland in Oregon sought authority from the U.S. Bankruptcy Court for the District of Oregon to execute and deliver its Commitment Letter with Allied Irish Bank, and to pay a $100,000 Commitment Fee. The Amended Joint Plan of Reorganization filed by Portland and the other Plan Proponents require Portland to provide funds to pay certain Allowed Claims and to partially fund and provide collateral for trusts to be established for the benefit the Unresolved Known Tort Claimants and the Future Claimants. The Commitment Letter sets forth the agreement with Allied Irish Bank for the Bank to provide Portland with a $40,000,000 credit facility to assist the Archdiocese in meeting its obligations under the Joint Plan. A full-text copy of Portland's Commitment Letter with Allied Irish Bank is available for free at: http://ResearchArchives.com/t/s?1a12 The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. The Court approved the Debtor's disclosure statement explaining its Second Amended Joint Plan of Reorganization on Feb. 27, 2007. (Catholic Church Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). CENT CDO: Moody's Rates $12.5 Million Class E Junior Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes issued by Cent CDO 14 Limited: * Aaa to the $110,000,000 Class A-1 Senior Term Notes Due 2021; * Aaa to the $236,250,000 Class A-2a Senior Term Notes Due 2021; * Aa1 to the $26,250,000 Class A-2b Senior Term Notes Due 2021; * Aa2 to the $33,750,000 Class B Senior Floating Rate Notes Due 2021; * A2 to the $24,375,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2021; * Baa2 to the $18,750,000 Class D Deferrable Mezzanine Floating Rate Notes Due 2021 and * Ba2 to the $12,500,000 Class E Deferrable Junior Floating Rate Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of senior secured loans and high yield bonds due to defaults, the transaction's legal structure and the characteristics of the underlying assets. RiverSource Investments, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CHAMPION ENTERPRISES: S&P Holds Corporate Credit Rating at B+ ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit ratings on Champion Enterprises Inc. and its subsidiary, Champion Home Builders Co. At the same time, all other Champion-related ratings were affirmed, including the recovery ratings of '4' on the Champion's senior notes and the subsidiary's senior secured credit facility. These actions affect $241 million of debt. The outlook is stable. "Our ratings reflect softening demand for Champion's factory-built housing products as the general decline in the nation's housing markets is negatively affecting modular home sales while the persistent dearth of consumer financing continues to sharply curtail manufactured home sales," said credit analyst James Fielding. "These troubling macro trends will pressure near-term earnings, and have caused the company to seek temporary relief from leverage covenants governing its secured credit facility. However, a successfully restructured manufacturing platform produced good earnings in 2006 and substantial free operating cash flow." The stable outlook reflects our expectation that Champion's currently profitable core manufacturing operations will continue to provide sufficient cash flow to fund debt service and capital needs despite lower anticipated sales volume. The outlook or rating would be negatively affected if liquidity becomes constrained, if borrowing costs increase appreciably due to a technical default under the secured credit facility, or if general housing conditions worsen further and cause negative earnings for the full fiscal year. While the softer housing environment precludes positive ratings momentum at this time, ratings could improve in the future if the company continues to strengthen its balance sheet while profitably growing its more desirable modular construction segments. CHASE MANAGEMENT: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Chase Management Group, L.L.C. 521 Thurston Court Fort Wayne, IN 46825 Bankruptcy Case No.: 07-10728 Chapter 11 Petition Date: March 23, 2007 Court: Northern District of Indiana (Fort Wayne) Judge: Robert E. Grant Debtor's Counsel: Wesley N. Steury, Esq. Burt, Blee, Dixon, Sutton & Bloom, L.L.P. 1000 Standard Federal Plaza 200 East Main Street Fort Wayne, IN 46802 Tel: (260) 426-1300 Fax: (260) 422-3750 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Blackburne $ Brown Chase Manor $2,362,055 c/o Ron Roster, attorney for apartment complex ($2,200,000 plaintiff located at 649 secured) P.O. Box 2706 Tennessee Avenue South Bend, IN 46614 Fort Wayne, IN Korte Electric business service $11,400 10920 Stellhorn Road New Haven, IN 46801 Live Wire Electric business service $6,330 5305 Crandon Lane Fort Wayne, IN 46804 Fort Wayne Newspapers, Inc. business purchases $3,480 Roto Rooter Plumbers business service $990 Peachtree Business Products business purchases $372 Cintas business purchases $180 CIFC FUNDING: Moody's Rates $17 Million Class B-2L Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes issued by CIFC Funding 2007-I, Ltd.: * Aaa to the $100,000,000 Class A-1L Floating Rate Notes Due May 2021, * Aaa to the $77,800,000 Class A-1LAt Floating Rate Notes Due May 2021, and * Aaa to the $75,000,000 Class A-1LAr Variable Funding Notes Due May 2021, * Aa1 to the $38,200,000 Class A-1LB Floating Rate Notes Due May 2021, * Aa2 to the $24,000,000 Class A-2L Floating Rate Notes Due May 2021, * A2 to the $25,000,000 Class A-3L Floating Rate Notes Due May 2021, * Baa2 to the $17,000,000 Class B-1L Floating Rate Notes Due May 2021 and * Ba2 to the $17,000,000 Class B-2L Floating Rate Notes Due May 2021, collectively, the "Notes". The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. Commercial Industrial Finance Corp. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CITIZENS COMMS: Launches Cash Offering for Two Convertible Notes ---------------------------------------------------------------- Citizens Communications Company and Commonwealth Telephone Enterprises Inc., a wholly-owned subsidiary, commenced a cash tender offer to purchase all of the outstanding 3-1/4% Convertible Notes due 2023, and 2005 Series A 3-1/4% Convertible Notes due 2023 of Commonwealth, under the terms of the company's March 23, 2007 purchase offering. Citizens further stated that the tender offer was the result of the March 8, 2007 acquisition of Commonwealth. Thus, Citizen guaranteed all of Commonwealth's obligations under the Notes and indentures. Citizens estimates that the purchase price will be approximately $1,008 per $1,000 principal amount of the 2003 Notes and principal amount of the 2005 Notes equal to 100% of the principal amount of the applicable Note, plus accrued and unpaid interest, excluding, the repurchase date, on April 23, 2007. The tender offer is not contingent on any financing. The Offer will expire on April 20, 2007, at 5:00 p.m., New York City time, unless extended. Holders can withdraw their tendered Notes at any time before April 20, 2007. Holders desires to tender their Notes must follow the Offer to Purchase and Letter of Transmittal. About Citizens Communications Based in Stamford, Connecticut, Citizens Communications Company f.k.a. Citizens Utilities (NYSE: CZN) -- http://www.czn.net/ -- provides phone, TV, and Internet services to more than two million access lines in parts of 23 states, primarily in rural and suburban markets, where it is the incumbent local-exchange carrier operating under the Frontier brand. * * * As reported in the Troubled Company Reporter on March 21, 2007, Standard & Poor's Ratings Services assigned a 'BB+' rating to Citizens Communications Co.'s $750 million of senior unsecured notes due 2015 and 2019. COLLINS & AIKMAN: Former CEO Charged with Securities Fraud ---------------------------------------------------------- An indictment was unsealed revealing charges against David A. Stockman, the former President and CEO of Collins and Aikman Corporation, and seven other former members of C&A's management, U.S. Attorney Michael J. Garcia for the Southern District of New York, and Ron Walker, Inspector-in-Charge of the New York Division of the U.S. Postal Inspection Service, disclosed yesterday. The indictment unsealed in federal court in Manhattan charges Stockman with conspiracy, securities fraud, bank fraud, wire fraud, and obstruction of an agency proceeding, in connection with his participation, from December 2001 through May 2005, in a scheme to conceal from investors and lenders the truth about C&A's declining operating performance and financial results. The indictment also charges: * former C&A Chief Financial Officer J. Michael Stepp; * former Controller David R. Cosgrove; and * former Director of Purchasing Paul C. Barnaba. Four felony information, filed yesterday and last week, charge other C&A executives with related crimes. Mr. Garcia also announced a non-prosecution agreement between his Office and Collins & Aikman Corporation. Summary of the Fraudulent Scheme The indictment alleges that starting in December 2001, Stockman, Stepp and others knew that C&A's true operating performance and financial results were not meeting internal and external expectations. Rather than reveal C&A's true condition, which might trigger default on the financial covenants governing C&A's credit facilities and impede C&A's ability to raise additional capital in the debt markets, Messrs. Stockman, Cosgrove, Stepp, Barnaba and others joined in a scheme to defraud C&A's investors, banks and creditors by manipulating C&A's reported earnings. From December 2001 through 2004, Stockman, Stepp, Cosgrove, Barnaba, and their co-conspirators schemed to misrepresent C&A's true operating performance and financial results by causing C&A's reported figures for EBITDA, operating income, and other financial metrics to be falsely and fraudulently inflated through the systematic premature recognition of cost reductions based on supplier rebates. According to the indictment, to further the scheme and conceal the fraud, Stockman, Stepp, Cosgrove, Barnaba, and their co- conspirators caused C&A to file financial statements with the U.S. Securities & Exchange Commission that presented a misleading picture of C&A's operating performance and financial results, including quarterly and annual reports that misrepresented C&A's expenses, operating income, and earnings per share. At the end of 2004 and the beginning of 2005, C&A's true operating results substantially deteriorated, causing an unprecedented liquidity crisis. The indictment charges that Stockman directed a scheme to further defraud C&A's creditors by, among other things, misrepresenting to General Electric Capital Corporation the nature of C&A's portfolio of accounts receivable, against which GECC was permitting C&A to borrow over a $100 million dollars on a daily basis. Also in the beginning of 2005, as C&A's improper rebate accounting practices came under scrutiny from its auditors, Stockman directed a scheme to further defraud C&A's investors and creditors by making numerous false statements to the public and to C&A's creditors concerning: (a) C&A's current liquidity situation, (b) C&A's forecasted EBITDA for the first quarter of 2005, and (c) the scope of the improper rebate recognition practices that C&A's outside auditors and Audit Committee were beginning to examine. In early April 2005, Stockman repeated many of these false assurances to Credit Suisse First Boston, in order to secure $75 million in additional financing. These additional funds, however, were not sufficient to meet C&A's needs and were depleted by late April 2005, according to the indictment. In May 2005, the Board of Directors discovered that C&A had run out of cash and had, at Stockman's direction, misled C&A's investors about C&A's true operating performance. When the truth about C&A's operations and finances was revealed, C&A went into bankruptcy, its common stock became nearly worthless, and the value of its bonds plummeted, resulting in hundreds of millions of dollars in investor and creditor losses. Charges The eight-count indictment charges Stockman, Stepp, Cosgrove, and Barnaba each with one count of conspiracy to commit securities fraud, make false filings with the SEC, falsify books and records of C&A, commit wire fraud, commit bank fraud, and obstruct justice, and with three counts of securities fraud. Stockman alone is charged with two counts of bank fraud (arising from fraud on GECC and JP Morgan Chase) and one count of wire fraud. Stockman and Stepp together are charged with obstruction of an agency proceeding. The conspiracy charge carries a maximum sentence of five years in prison and a fine of the greater of $250,000, or twice the gross gain or loss resulting from the offense. Each of the securities fraud counts carries a maximum sentence of 20 years in prison and a fine of the greater of $5 million, or twice the gross gain or loss resulting from the offense. Each of the bank fraud counts carries a maximum sentence of 30 years in prison and a fine of the greater of $1 million, or twice the gross gain or loss resulting from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a fine of the greater of $250,000, or twice the gross gain or loss resulting from the offense. Finally, the obstruction of an agency proceeding count carries a maximum sentence of five years in prison and a fine of the greater of $250,000, or twice the gross gain or loss resulting from the offense. Non-Prosecution Agreement With C&A In light of C&A's cooperation with the government's investigation and the current financial situation of C&A, among other factors, the government has entered into a non-prosecution agreement with C&A. C&A will continue to cooperate with the government as a condition of that agreement. U.S. Attorney Garcia, a member of the President's Corporate Fraud Task Force, praised the efforts of the USPIS and thanked the SEC for its assistance in the investigation. Assistant U.S. Attorney Helen V. Cantwell is in charge of the prosecution. The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. About Collins & Aikman Headquartered in Troy, Michigan, Collins & Aikman Corporation (CKCRQ.PK) -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. The Debtors' disclosure statement explaining their First Amended Joint Chapter 11 Plan was approved on Jan. 25, 2007. The hearing to consider confirmation of the Plan is scheduled on April 19, 2007. COLLINS & AIKMAN: Inks Non-Prosecution Agreement with DOJ --------------------------------------------------------- Collins & Aikman Corporation confirmed yesterday that it had reached a non-prosecution agreement with the United States Attorney for the Southern District of New York in connection with that office's investigation into matters investigated by the company's Audit Committee and certain other conduct undertaken by executives and employees who were in place at the company on or before May 1, 2005. The non-prosecution agreement removes the threat of an indictment of Collins & Aikman by the United States government for any such conduct. SEC Settlement The company also confirmed it had reached a settlement with the Securities and Exchange Commission. Under the settlement approved by the SEC, the company agreed, without admitting or denying any wrongdoing, to be enjoined from future violations of the securities laws. The SEC did not impose civil monetary penalties against Collins & Aikman, noting the significant remedial steps and extensive cooperation provided by the company. The SEC settlement was effectuated by the SEC commencing and simultaneously settling a lawsuit alleging violations of federal securities laws. The lawsuit and settlement relate to matters that were the subject of an Audit Committee investigation of, among other things, the company's accounting for certain supplier rebates and the company's forecasts for the first quarter 2005, as well as the company's accounts receivable securitization facility. "Since their inception, we have cooperated fully with the government's investigations and will continue to do so. We are pleased to put the Department of Justice and SEC investigations behind us and consider this a significant milestone as we focus on completing our restructuring activities," said John Boken, Collins & Aikman's Chief Restructuring Officer. About Collins & Aikman Headquartered in Troy, Michigan, Collins & Aikman Corporation (CKCRQ.PK) -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. The Debtors' disclosure statement explaining their First Amended Joint Chapter 11 Plan was approved on Jan. 25, 2007. The hearing to consider confirmation of the Plan is scheduled on April 19, 2007. CONGOLEUM CORP: Earns $679,000 in Year Ended December 31 -------------------------------------------------------- Congoleum Corporation reported net income of $679,000 on net sales of $219.5 million for the year ended Dec. 31, 2006, compared with a net loss of $21.6 million on net sales of $237.6 million in 2005. The 2006 net income included a $1.3 million gain related to replacement of a major production line component required as a result of an explosion in August 2006. The cost of the replacement equipment, which was covered by insurance, exceeded the depreciated book value of the line by this amount. The 2005 net loss included $25.3 million in charges for asbestos-related reorganization costs. Roger S. Marcus, chairman of the board, commented "Even without the travails of our reorganization, 2006 was one of the most difficult years I can recall. As the year began, retail conditions were fair, and we were still enjoying some remnants of manufactured housing demand arising from the 2005 hurricane season. Unfortunately, the hurricanes also contributed to sharp increases in raw material and energy costs, as well as materials shortages that forced us to change some suppliers. The need to qualify alternate materials on an expedited basis hurt our productivity and costs." "As we were resuming normal manufacturing efficiencies in the third quarter and seeing some moderation in inflation, we had an explosion that destroyed a major production line providing 50% of our sheet flooring capacity. Fortunately no one was hurt and our insurance covered the cost of replacing the line, but we believe the disruption probably cost us $1 million to $2 million in sales before our inventories were back to a good service position." "Finally, business declined sharply in the last four months of 2006. After being ahead of prior year sales through August, we ended up with $18.1 million less in sales for the full year as compared to 2005, despite achieving $10 million in price increases. Fourth quarter sales were down 25% from the fourth quarter of 2005. We experienced a $7 million decrease in fourth quarter sales to the manufactured housing industry versus 2005. Sales to this industry were unusually high in the fourth quarter of 2005 due to demand for replacement housing necessitated by that year's hurricane season. In addition, sales to the remodel and new construction markets decreased. The end use demand decline was compounded by inventory reductions in the distribution channel. Our distributors reported all categories of flooring products have suffered from the housing slowdown." Mr. Marcus continued "Despite sharply higher raw material costs, the difficulty of changing materials, an explosion on our major production line, and an $18 million sales decline, we managed to earn a slight profit of $700,000. This performance is testimony to the resolve of our employees who continue to rise to the challenges we face and tighten their belts when needed. We reduced operating expenses by $2 million from 2005 to 2006 despite $1 million of increases in medical and pension costs." Mr. Marcus finished "Finally, the saga of our Chapter 11 journey continues. As we reported last month, the bankruptcy judge overseeing our reorganization issued a ruling that our latest plan did not meet certain legal requirements under the asbestos provisions of the bankruptcy code. While this ruling will delay any confirmation until late in the third quarter at the earliest, at least we understand what we need to address so a plan can be approved. We have resumed the court-authorized mediation process to accomplish this." At Dec. 31, 2006, Congoleum Corp.'s unauadited balance sheet showed $184.2 million in total assets and $230.8 million in total liabilities, resulting in a $46.6 million total stockholders' deficit. About Congoleum Corp. Congoleum Corporation (AMEX: ABL) -- http://www.congoleum.com/-- is a leading manufacturer of resilient flooring, serving both residential and commercial markets. Its sheet, tile and plank products are available in a wide variety of designs and colors, and are used in remodeling, manufactured housing, new construction and commercial applications. Congoleum is a 55% owned subsidiary of American Biltrite Inc. On Dec. 31, 2003, Congoleum Corporation filed a voluntary petition with the United States Bankruptcy Court for the District of New Jersey (Case No. 03-51524) seeking relief under Chapter 11 of the United States Bankruptcy Code as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. On Sept. 15, 2006, Congoleum Corporation filed its Tenth Modified Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code of Congoleum Corporation, et al., and the Asbestos Claimants' Committee, dated as of Sept. 15, 2006, and related proposed Disclosure Statement with the United States Bankruptcy Court for the District of New Jersey. On Feb. 5, 2007, the Court ruled that certain aspects of Congoleum's plan must be modified to comply with the requirements of the U.S. Bankruptcy Code. CREDIT SUISSE: Moody's Cuts Rating on Class B Certificates to B1 ---------------------------------------------------------------- Moody's Investors Service has downgraded one subordinated tranche from one mortgage backed securitization, issued by Credit Suisse First Boston Mortgage Securities Corp. in 2003. The pools include seasoned subprime fixed and adjustable-rate mortgage loans. The downgrade is based on the fact that the bonds' current credit enhancement levels, including excess spread, are low compared to the current projected loss numbers for the current rating level. * Credit Suisse First Boston Mortgage Securities Corp. -- Series 2003-CF14; Class B, downgraded to B1 from Baa2. CREDIT SUISSE: S&P Holds Low-B Ratings on 5 Certificate Classes --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2001-CP4. Concurrently, ratings were affirmed on the remaining classes from the same series. The raised and affirmed ratings reflect the stable performance of the pool and increased credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of collateral securing $379 million (36%) of the loan pool. As of the March 16, 2007, remittance report, the collateral pool consisted of 124 loans with an aggregate trust balance of $1.05 billion, down from 130 loans with a balance of $1.2 billion at issuance. The master servicer, Midland Loan Services Inc., reported full-year 2005 and interim 2006 financial information for 99.6% of the pool, which excludes the defeased collateral. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.53x, up from 1.43x at issuance. There are two loans totaling $14.2 million with the special servicer. One of these loans ($12.6 million) is 90-plus-days delinquent. An appraisal reduction amount related to this loan totaling $4.2 million is in effect. To date, the trust has experienced four losses totaling $12.2 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $304.9 million (29%) and a weighted average DSC of 1.72x, down from 1.74x at issuance. Five of the top 10 loans are on the watchlist and are discussed below. Standard & Poor's 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 the largest loan, Crystal Pavilion/Petry Building ($53.6 million, 5%), and the third-largest loan, Parfinco Office Buildings ($51.9 million, 5%), reflected investment-grade characteristics at issuance and continue to do so. The largest loan in the pool, which is on Midland's watchlist, has a trust balance of $53.6 million and a whole-loan balance of $107.3 million. The loan is secured by two office buildings in Manhattan totaling 876,625 sq. ft. The loan was placed on the watchlist because of existing and upcoming lease expirations for 235,021 sq. ft., or 27% of net rentable area. For the nine months ended Sept. 30, 2006, the net cash flow was $16.4 million and occupancy was 96%. The third-largest exposure has a balance of $51.9 million and is secured by two adjacent office buildings in Pasadena, California, totaling 510,550 sq. ft. The majority of the space (91%) is leased to Kaiser Foundation Health Plan Inc. (A+/Stable/--). The year-end 2006 NCF was $11.2 million and occupancy was 81%. Midland reported a watchlist of 30 loans with an aggregate outstanding balance of $228.9 million (21.8%), which includes the aforementioned largest loan and the fourth-, seventh-, eighth-, and 10th-largest loans in the pool. The fourth-largest loan exposure, Somerset Park, Somerset Center, and Somerset Place ($29.5 million, 3%), consists of two cross-collateralized and cross-defaulted loans secured by office properties in Raleigh, North Carolina, totaling 371,881 sq. ft. The loan exposure was placed on the watchlist due to a decline in DSC attributable to decreased occupancy at the collateral properties. As of Dec. 31, 2006, the combined occupancy was 81% and combined DSC was 1.08x. The seventh-largest loan exposure, Northeast Corporate Center and Plaza ($18.1 million, 2%), is secured by a 173,171-sq.-ft. office building in Novi, Michigan. The property reported a DSC of 1.13x as of year-end 2006 and is on the watchlist because the largest tenant (52% of NRA) filed for Chapter 11 bankruptcy. The tenant continues to make lease payments. The lease is scheduled to expire in August 2007. The eighth-largest loan exposure, Reservoir Corporate Center ($16.9 million, 1.6%), is secured by a 156,766-sq.-ft. office building in Shelton, Connecticut. The loan is on the watchlist for a 90-day monitoring period after being returned from the special servicer in February of this year. As of year-end 2006, the DSC was 1.46x and occupancy was 91%. The 10th-largest loan exposure, Windsor Wichita Portfolio ($16.2 million, 1.5%), is secured by three multifamily properties in Wichita, Kansas. The loan appears on the watchlist due to a low DSC. As of year-end 2005, the DSC was 0.94x and occupancy was 91%. There are two loans totaling $14.2 million with the special servicer, LNR Partners Inc. The larger of these loans, the Princeton Park Corporate Center, is secured by an 86,265-sq.-ft. office property in South Brunswick, New Jersey. The sole tenant vacated in April 2005 but continued to make lease payments until the lease expired in April 2006. The loan was transferred to the special servicer in May 2006 for imminent default. The property remains vacant. A receiver has taken control of the property, and LNR is pursuing foreclosure. An ARA of $4.2 million is in effect based on an appraisal from August 2006. The Oaks Apartments is a 71-unit multifamily property that was transferred to the special servicer in March 2007 because the borrower was experiencing cash flow problems and requested a loan modification. The loan has an unpaid principal balance of $1.6 million. As of year-end 2005, the DSC was 0.64x. Standard & Poor's stressed various loans in the transaction, paying closer attention to the assets with the special servicer and those on the watchlist. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2001-Cp4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D AAA AA+ 12.03% E AA+ AA 10.49% F AA AA- 8.95% Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2001-CP4 Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 24.38% A-3 AAA 24.38% A-4 AAA 24.38% B AAA 18.49% C AAA 14.14% G A 7.82% H BBB+ 5.72% K BB 3.89% L BB- 2.91% J BB+ 2.07% M B 1.37% N B- 0.81% A-CP AAA N/A A-X AAA N/A N/A -- Not applicable. CREDIT SUISSE: S&P Cuts Rating on Class N Certs. to B- from BBB- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes and affirmed its ratings on three classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2005-CND2 and removed them from CreditWatch, where they were placed with negative implications on Nov. 17, 2006. At the same time, the ratings on 13 classes from the same series were affirmed. The lowered ratings reflect our analysis of the remaining loans in the transaction, which indicates that seven loans secured by eight properties are not meeting our initial expectations for condominium conversion and unit sales. There are currently 10 floating-rate loans remaining with a trust balance of $1.31 billion, down from 24 floating-rate loans with a trust balance of $1.99 billion at issuance. All of the remaining loans include senior interests in participated whole loans. Five of the remaining loans have existing mezzanine debt secured by a pledge of equity interests in the related borrower. The three projects of significant concern include the Prestige portfolio, which currently consists of two residential apartment complexes in south-central Florida, the Mizner Court at the Broken Sound apartment complex in Boca Raton, Florida, and the Hotel Gansevoort/Paradiso Residences in Miami Beach, Florida. In addition, four condo conversions in Manhattan are also behind schedule: the Toy Building, Manhattan House, River Terrace, and 80 John Street. The Prestige portfolio and Mizner Court are marketing their properties for sale as rentals. The Prestige properties are located in Delray Beach and the Mizner Court property is in Boca Raton. Both the Delray Beach and Boca Raton markets are experiencing an oversupply of condominium units and a significant decline in demand for this product. Because all three properties had their loan proceeds based on the valuation derived from a successful condominium conversion, Standard & Poor's reevaluation of each property as a rental is lower. The Hotel Gansevoort/Paradiso conversion is proceeding slowly. The hotel portion is scheduled to open in the third quarter of 2007. The hotel and residential condominium units are slated to be completed by July 2007. The Toy Building borrower recently replenished an outstanding interest reserve requirement. Renovations are behind schedule as demolition work continues. It is Standard & Poor's understanding that the property is being marketed for sale as an office building. In addition, the Manhattan House, River Terrace, and 80 John Street projects are behind in their conversion schedules and unit sales primarily because of regulatory and construction delays. Of these four properties, only the John Street project has sold any units. To date, 32 units at John Street have been sold. Standard & Poor's will continue to closely monitor the conversion process and property unit sales to determine if there will be any further impact to the ratings. Ratings Lowered And Removed From Creditwatch Negative Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2005-Cnd2 Rating ------ Class To From ----- -- ---- H BBB BBB+/Watch Neg J BBB- BBB/Watch Neg K BB+ BBB-/Watch Neg L BB- BBB-/Watch Neg M B BBB-/Watch Neg N B- BBB-/Watch Neg Ratings Affirmed And Removed From Creditwatch Negative Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2005-CND2 Rating ------ Class To From ----- -- ---- E A+ A+/Watch Neg F A A/Watch Neg G A- A-/Watch Neg Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2005-Cnd2 Class Rating ----- ------ A-1 AAA A-1J AAA A-1S AAA A-2 AAA B AA+ C AA D AA- A-X-1 AAA A-X-2 AAA A-X-3 AAA A-X-4 AAA A-X-5 AAA A-Y AAA DAIMLERCHRYSLER: Magna Offering Up to $4.7BB for 25% of Chrysler ---------------------------------------------------------------- Canadian auto-parts supplier Magna International Inc. and an unnamed private equity partner have made an offer, between $4.6 billion and $4.7 billion, to buy 25% of DaimlerChrysler AG's Chrysler Group, KeyBanc Capital Markets analyst Brett Hoselton told investors last week, quoting unknown sources, various media sources report. Mr. Hoselton said his sources "indicate DaimlerChrysler is very interested in divesting itself of Chrysler." Mr. Hoselton added that "While Magna views its offer as low and unlikely to prevail, it also views it as an opportunity to purchase an inexpensive stake in the automaker should other bidders retreat." "It is imperative that Magna has a full understanding of the situation regarding the future of the Chrysler Group," the Wall Street Journal reports citing Magna spokeswoman Tracy Fuerst in an e-mailed statement. "Therefore, we continue to review potential alternatives regarding the future of the Chrysler Group," Ms. Fuerst added. DaimlerChrysler is Magna's biggest customer, contributing about 26% of total sales. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA: DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DELTA AIR: Court Approves Extension of Lease-Decision Period ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York, further extended the period within which Delta Air Lines, Inc., and its debtor-affiliates assume or reject more than 400 unexpired leases of non-residential real property and related agreements, to the date the Court confirms a plan of reorganization, without prejudice to their right to seek a further extension. As reported in the Troubled Company Reporter on March 8, 2007, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, told the Court that the Official Committee of Unsecured Creditors supports the Debtors' request. The Debtors' request falls well within the parameters of Section 365(d)(4) deadline extensions granted by courts in other chapter 11 cases of comparable size and complexity, Mr. Huebner said. Since filing for bankruptcy, the Debtors have rejected or sought authority to reject several dozen Leases, and have negotiated modifications of other Leases, Mr. Huebner related. The Debtors will continue to analyze their need for premises covered by the Leases. The completion of the analysis, however, requires a further extension of the Section 365(d)(4) Deadline because a substantial number of the Leases can be properly evaluated only in the context of the Debtors' exit strategy, Mr. Huebner avers. The Debtors' Joint Plan of Reorganization preserves the valuable and necessary flexibility regarding their Lease decisions by contemplating that the lists of most unexpired leases to be assumed or rejected may be amended until the day before the confirmation hearing, presently scheduled for April 25, 2007. Mr. Huebner asserted that sufficient cause exists in the instant case to extend the Section 365(d)(4) Deadline: (a) the Debtors' Chapter 11 cases are complex and involves a large number of Leases; (b) many of the Leases are among the Debtors' most important assets and are vital to their operations. Thus, it is imperative to their ability to successfully reorganize that they and their professionals have sufficient time to carefully identify and evaluate each of the Leases in the time remaining before confirmation; and (c) it is critical that the Debtors retain financial, operational, network and fleet planning flexibility that comes from not yet having to decide whether to assume or reject certain Leases, and the future decisions in those areas are expected to affect whether to assume or reject the Leases. About Delta Air Headquartered in Atlanta, Ga., Delta Air Lines (OTC:DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the adequacy of the Debtors' disclosure statement. The hearing to consider confirmation the Debtors' plan is scheduled on April 25, 2007. DELTA AIR: Exclusive Solicitation Period Extended to June 1 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York further extended Delta Air Lines, Inc., and its debtor-affiliates' exclusive period during to solicit acceptances of their reorganization plan to June 1, 2007. As reported in the Troubled Company Reporter on March 8, 2007, wanted sufficient time to solicit acceptances of their Joint Plan of Reorganization through the Court-approved solicitation process, and thereafter, confirmation of the Plan. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, related that since the most recent extension of the Debtors' Exclusive Solicitation Period, the Debtors have made and continue to make substantial progress in their Chapter 11 cases, including the Court's approval of the disclosure statement to their Plan and the distribution of solicitation packages to creditors. The Official Committee of Unsecured Creditors supported the Debtors' request for an extension. Mr. Huebner contended that ample cause exists to extend the Debtors' Exclusive Solicitation Period: (a) the Debtors' Chapter 11 cases are large and complex; (b) the Debtors need more time to solicit acceptances of a consensual plan of reorganization; (c) the Debtors have made good faith progress toward reorganization; (d) the Debtors have been paying their postpetition debts when due; (e) the Debtors have demonstrated reasonable prospects for filing a viable plan of reorganization and have made progress in negotiating with their creditors; (g) the Debtors' Chapter 11 cases have been pending for a relatively short period compared to other large reorganization cases; (h) the Debtors' motive in requesting the extension is not to pressure the creditors; (i) an extension of the Debtors' exclusive period will enable the Debtors to resolve certain contingencies that will affect a plan of reorganization; and (j) the requested extension is consistent with those granted in other large chapter 11 cases. About Delta Air Headquartered in Atlanta, Ga., Delta Air Lines (OTC:DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the adequacy of the Debtors' disclosure statement. The hearing to consider confirmation the Debtors' plan is scheduled on April 25, 2007. DOLE FOOD: Posts $89 Million Net Loss in Year Ended December 30 --------------------------------------------------------------- Dole Food Company, Inc. incurred a net loss of $88.98 million on net revenues of $6.17 billion for the year ended Dec. 30, 2006, as compared with a net income of $44.09 million on net revenues of $5.82 million for the comparable period ended Dec. 31, 2005. Higher revenues were reported in the company's fresh fruit and packaged foods operating segments. The company earned operating income of $85.61 million in 2006, as compared with $224.59 million earned in 2005. Higher commodity costs, primarily fuel and tinplate, continued to adversely impact operations. Throughout 2006 and 2005, the company has experienced significant cost increases in many of the commodities it uses in production, including containerboard, tinplate, resin and other agricultural chemicals. For the year ended Dec. 30, 2006, the company recorded a charge of $29 million which consisted of $6.4 million of restructuring costs and $22.6 million of non-cash impairment charges related to the write-off of certain assets. The company also currently estimates that an additional $0.8 million of land clearing costs and employee severance will be incurred and paid by the end of 2007. As of Dec. 30, 2006, the company had total assets of $4.6 billion, total liabilities of $4.24 billion, minority interests of $25.33 million, resulting to total shareholders' equity totaling $335.21 million. The company had retained deficit totaling $59.68 million as of Dec. 30, 2006, as compared with retained earnings totaling $192.99 million as of Dec. 31, 2005. As of Dec. 30, 2006, the company increased its cash and cash equivalents to $92.41 million, from $48.81 million as of Dec. 31, 2005. Cash provided by operating activities was $15.92 million, cash used in investing activities was $117 million, and cash provided by financing activities was $142.83 million. Borrowings and Credit Facilities At Dec. 30, 2006, the company had total outstanding long-term borrowings of $2.4 billion, consisting primarily of $1.11 billion of unsecured senior notes and debentures due 2009 through 2013 and $1.13 billion of secured debt, consisting of revolving credit and term loan facilities and capital lease obligations. As of Dec. 30, 2006, the term loan facilities consisted of $223.3 million of Term Loan B and $744.4 million of Term Loan C. The term loan facilities bear interest at LIBOR plus a margin ranging from 1.75% to 2%, dependent upon the company's senior secured leverage ratio. The weighted average variable interest rates at Dec. 30, 2006 for Term Loan B and Term Loan C were LIBOR plus 2%, or 7.5%. The company entered into a new asset based revolving credit facility of $350 million. As of Dec. 30, 2006, the ABL revolver- borrowing base was $294.8 million and the amount outstanding under the ABL revolver was $167.6 million. The ABL revolver bears interest at LIBOR plus a margin ranging from 1.25% to 1.75%, dependent upon the company's historical borrowing availability under this facility. The company had about $109.2 million available for borrowings as of Dec. 30, 2006. In addition, the company had about $82.4 million of letters of credit and bank guarantees outstanding under its pre-funded letter of credit facility as of Dec. 30, 2006. At Dec. 30, 2006, included in the company's capital lease obligations is $85.6 million of vessel financings related to two vessel leases denominated in British pound sterling. The interest rates on these leases are based on LIBOR plus a spread. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c23 Fresh-cut Flowers Fresh-cut flowers revenues in 2006 decreased to $160.07 million from $171.25 million in 2005. The decrease was primarily due to lower sales volumes during the second half of the year associated with changes in the customer base related to the implementation of the third quarter restructuring plan, partially offset by higher overall pricing and additional sales generated from the Valentine's Day holiday. During the third quarter of 2006, the company initiated a plan to restructure its fresh-cut flowers business in order to implement changes that will create efficiencies, improve performance and better align supply with demand. In connection with this initiative, the company expects to incur total costs of about $29.8 million. About Dole Food Headquartered in Westlake Village, California, Dole Food Company, Inc. -- http://www.dole.com/-- is a producer and marketer of fresh fruit, fresh vegetables and fresh-cut flowers, and markets a line of packaged foods. The company has four primary operating segments. The fresh fruit segment produces and markets fresh fruit to wholesale, retail and institutional customers worldwide. The fresh vegetables segment contains operating segments that produce and market commodity vegetables and ready- to-eat packaged vegetables to wholesale, retail and institutional customers primarily in North America, Europe and Asia. The packaged foods segment contains several operating segments that produce and market packaged foods, including fruit, juices and snack foods. Dole's fresh-cut flowers segment sources, imports and markets fresh-cut flowers, grown mainly in Colombia and Ecuador, primarily to wholesale florists and supermarkets in the U.S. * * * As reported in the Troubled Company Reporter on Jan. 31, 2007, Moody's Investors Service downgraded Dole Food Company Inc.'s corporate family rating to B2 from B1; probability of default rating to B2 from B1; senior secured bank credit facilities to Ba3 from Ba2; senior unsecured notes to Caa1 from B3; and various shelf registrations to (P)Caa1 from (P)B3. Moody's said the outlook is stable. On Dec. 11, Standard & Poor's Ratings Services lowered its ratings on Dole Food Co. Inc. and Dole Holding Co. LLC, including its corporate credit rating, to 'B' from 'B+'. DURA AUTOMOTIVE: Can Assume Bayer MaterialScience Sales Contract ---------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorizes Dura Automotive Systems Inc. and its debtor-affiliates to assume a sales contract with Bayer MaterialScience LLC and its affiliates. Pursuant to a sales contract dated Aug. 20, 2003, as amended, Bayer MaterialScience LLC and its affiliates provide the Debtors resin required for the production of side-sliding glass systems used in vans, pick-up trucks and sports utility vehicles. After the Debtors' bankruptcy filing, Bayer required improved trade terms from the Debtors. Bayer also informed the Debtors that it intends to implement a previously announced price increase. Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Del., relates that since their bankruptcy filing, the Debtors have been concerned that suppliers could disrupt production at their automotive operations if they refuse to provide the Debtors with needed parts and equipment. Thus, the Debtors sought to consensually improve their trade terms with Bayer and to resolve its concerns. On March 1, 2007, the Debtors and Bayer informally agreed to the framework for a postpetition agreement amending the Sales Contract. Specifically, the parties agree that: (a) Bayer will grant the Debtors more favorable trade terms and price concessions; (b) the Debtors will assume the Sales Contract; (c) amounts payable pursuant to Section 365(b)(1)(A) of the Bankruptcy Code to cure any defaults will not exceed $564,000. Mr. Samis maintains that assuming the Sales Contract, as amended, will allow the Debtors to benefit from the improved pricing and favorable trade terms. The Debtors have redacted sensitive pricing and customer-specific trade terms from the copies of the Amendment Agreement and Sales Contract filed with the Court. Mr. Samis notes that, if revealed, the information on the Amendment Agreement and the Sales Contract could hinder or negatively influence the Debtors' current and future negotiations with other suppliers. The Debtors have provided unredacted copies of the Amendment Agreement and Sales Contract to the U.S. Trustee, the Official Committee of Unsecured Creditors and the ad hoc committee of certain of their prepetition second lien secured lenders. About DURA Automotive Systems Inc. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expires on May 23, 2007. (Dura Automotive Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DURA AUTOMOTIVE: Exclusive Plan-Filing Period Extended to May 23 ---------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extended Dura Automotive Systems Inc. and its debtor-affiliates' exclusive periods: (i) to propose and file a plan of reorganization through and including May 23, 2007; and (ii) solicit acceptances of that plan through and including July 23, 2007. As reported in the Troubled Company Reporter on March 1, 2007, the Debtors said extending their exclusive periods will permit them to develop an appropriate plan of reorganization that will best meet the creditors' needs and fit into the development of their business plan The Debtors have sufficiently large and complex cases, which involves 41 debtors, with two tranches of secured institutional debt that are the subject of an intricate intercreditor agreement and multiple issuances of unsecured institutional debt in addition to the standard classes of secured, priority, priority tax, and general unsecured claims. Adding complexity to the Debtors' prepetition financial balance sheet and equity structure is the potential avoidance action against the Second Lien Lenders. This potential litigation has taken time to analyze, and will continue to influence the course of the Debtors' Chapter 11 cases and the development of a plan of reorganization. The Debtors said the extension is intended to facilitate an orderly, efficient and cost-effective process for the benefit of all creditors. About DURA Automotive Systems Inc. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expires on May 23, 2007. (Dura Automotive Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). EASTLAND CLO: Moody's Puts Ba2 Rating on $48 Million Class D Notes ------------------------------------------------------------------ Moody's Investors Service assigned ratings to Notes and Class P Securities issued by Eastland CLO, Ltd.: * Aaa to the $100,000,000 Class A-1 Floating Rate Senior Secured Extendable Notes Due 2022; * Aaa to the $825,600,000 Class A-2a Floating Rate Senior Secured Extendable Notes Due 2022; * Aa1 to the $206,000,000 Class A-2b Floating Rate Senior Secured Extendable Notes Due 2022; * Aa2 to the $78,500,000 Class A-3 Floating Rate Senior Secured Extendable Notes Due 2022; * A2 to the $81,500,000 Class B Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2022; * Baa2 to the $68,500,000 Class C Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2022; * Ba2 to the $48,000,000 Class D Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2022; and * Aaa to the $5,000,000 Class P Securities Due 2022. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The Moody's rating of the Class P Securities addresses only the likelihood that the holders of the Class P Securities will receive ultimate payment of principal due at maturity of the Strip. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Highland Capital Management, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. EMPORIA PREFERRED: Moody's Rates $18.5 Mil. Class E Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes issued by Emporia Preferred Funding III, Ltd.: * Aaa to the $100,000,000 Class A-1 First Priority Senior Notes Due 2021; * Aaa to the $40,000,000 Class A-2 First Priority Senior Revolving Notes Due 2021; * Aaa to the $132,580,000 Class A-3 First Priority Delayed Draw Senior Notes Due 2021; * Aa2 to the $26,845,000 Class B Second Priority Senior Notes Due 2021; * A2 to the $37,170,000 Class C Third Priority Subordinated Deferrable Notes Due 2021; * Baa2 to the $20,650,000 Class D Fourth Priority Subordinated Deferrable Notes Due 2021 and * Ba2 to the $18,585,000 Class E Fifth Priority Subordinated Deferrable Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. Emporia Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ENCOMPASS HOLDINGS: Posts $1.58MM Net Loss in Qtr. Ended Dec. 31 ---------------------------------------------------------------- Encompass Holdings, Inc. incurred a net loss of $1.58 million on zero revenues for the three months ended Dec. 31, 2006, as compared with a net loss of $1.19 million on zero revenues for the same period a year earlier. For the six months ended Dec. 31, 2006, the company incurred a net loss of $2.82 million on $16,200 revenues, as compared with a net loss of $2.06 million on zero revenues for the same period a year earlier. The company's balance sheet as of Dec. 31, 2006, showed total assets of $18.37 million, total liabilities of $12.56 million, and minority interests of $5.29 million, resulting to total stockholders' equity of $519,904. The company's December 31 balance sheet also showed strained liquidity with total current assets of $760,042 available to pay total current liabilities of $8.55 million. Cash held by the company as of Dec. 31, 2006, was $42,177, as compared with cash of $42,062 as of June 30, 2006. Full-text copies of the company's quarter report for the period ended Dec. 31, 2006, are available for free at http://ResearchArchives.com/t/s?1c20 Nacio Systems Spin-Off The company stated on March 8, 2007, through a report on Form 8-K, that its board of directors determined to divest itself of its wholly owned non-reporting subsidiary, Nacio Systems, Inc. citing that this action is in the best interests of the company and its shareholders. The divestiture will take the form of a spin-off of all of the issued and outstanding common stock of Nacio held by the company. The spin-off record date, distribution ratio and the distribution date are yet to be determined. The company will prepare and distribute to its shareholders of record and Information Statement substantially in the form required by Regulation 14C of the Securities Exchange Act of 1934 and will file and have declared effective a registration statement on Form 10-SB under the 1934 Act for Nacio prior to the spin-off distribution. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 16, 2006, Timothy L. Steers CPA LLC, expressed substantial doubt about Encompass Holdings, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal year ended June 30, 2006, and 2005. The auditing firm pointed to the company's significant operating losses and working capital deficit. About Encompass Holdings Encompass Holdings, Inc., fka Nova Communications Ltd. -- http://www.encompassholdings.com/-- is involved in acquiring ownership interests in developing companies in a wide range of industries and providing financing and managerial assistance to those companies. ENCOMPASS TELESERVICES: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Encompass Teleservices, Inc. 111 Southwest 5th Avenue, Suite 4090 Portland, OR 97204-3648 Bankruptcy Case No.: 07-31021 Type of Business: The Debtor operates a call center and provides customer care & information services. See http://encompass-ts.com/ Chapter 11 Petition Date: March 22, 2007 Court: District of Oregon Judge: Trish M. Brown Debtor's Counsel: Robert J. Vanden Bos, Esq. Vanden Bos & Chapman LLP 319 Southwest Washington, Suite 520 Portland, OR 97204 Tel: (503) 241-4869 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Employment Trends Trade Debt $391,382 10200 Southwest Eastridge Street Portland, OR 97225-5064 Dunn Carney Legal Fees $202,311 851 Southwest 6th Avenue Suite 1500 Portland, OR 97204-1352 Holmes Royer, LLP Accounting Fees $147,528 c/o Cosgrave Vergeer Kester LLP 805 Southwest Broadway 8th Floor Portland, OR 97205-3339 Markowitz, Herbold, Legal Fees $112,071 Glade & Mehlhaf, P.C. Wells Fargo Bank Credit Line $70,000 PS Business Parks Lease $50,425 American Express Trade Debt $42,505 Aldrich Kilbride & Tatone LLC Trade Debt $36,180 The Hartford Trade Debt $26,949 Avaya Communication Trade Debt $11,091 Travelers Trade Debt $7,979 IEX Trade Debt $7,870 Sprint Trade Debt $6,310 SAIF Corp. Worker's Comp. $6,306 Premium Silvia's Cleaning Services Judgment $5,083 Washington County Trade Debt $4,783 T-Mobile Trade Debt $4,448 Assurant Employee Benefits Trade Debt $3,369 Holman Security Corp. Trade Debt $2,863 PGE Trade Debt $2,854 ENDOCARE INC: Ernst & Young LLP Raises Going Concern Doubt ---------------------------------------------------------- Ernst & Young LLP, in Los Angeles, California, expressed substantial doubt about Endocare Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses, cash flow deficits, and working capital deficiency. Endocare Inc. reported a net loss of $10.8 million on total revenues of $28 million for the year ended Dec. 31, 2006, compared with a net loss of $13.7 million on total revenues of $28.3 million for the year ended Dec. 31, 2006. Results from continuing operations exclude the results of the Timm Medical unit, which was divested in February 2006. Net loss for 2006 included income from discontinued operations of $311,000, while net loss for 2005 included income from discontinued operations of $1.2 million. For the year, the estimated number of domestic cryoablation procedures totaled 7,802 or nearly 22 percent higher than in 2005. Endocare Chief Executive Officer Craig T. Davenport said, "Procedure growth remained strong throughout 2006 and concluded with an exceptional fourth quarter, positioning Endocare very well to execute our 2007 business plan. Historically, as we have shared with investors previously, our procedural growth does vary from quarter to quarter and we believe we will continue to see quarter to quarter differences in growth rates as experienced in the past. Our sales team continued to increase both usage with our established base of physicians and increase adoption by training 152 new cryosurgeons during the year. From a broader perspective, we believe our revenue mix shift toward cryoablation disposable product sales is almost complete, and while total revenues lagged the growth rate of procedures in 2006, we believe that revenues will begin to more closely correlate to procedure growth late in 2007. This shift toward higher sales of cryoablation disposable products reflects our ongoing strategy to focus on higher-margin product sales and away from lower-margin services." Gross margins for the year were 56%, compared to 44% for 2005. For 2006, operating expenses from continuing operations were $31.1 million, compared to $29.2 million in 2005. At Dec. 31, 2006, the company's balance sheet showed $16.2 million in total assets, $10 million in total liabilities, $1.3 million in common stock warrants, $74,000 in deferred compensation, and $4.9 million in total stockholders' equity. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $9.5 million in total current assets available to pay $10 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c1d The balance sheet as of Dec. 31, 2006, showed cash and cash equivalents of $1.8 million. The company had access to an additional $3.3 million under its line of credit with Silicon Valley Bank as of Dec. 31, 2006, and also has continuing access to funds under its stock purchase agreement with Fusion Capital Fund II LLC of up to $16 million of common stock over a two year period. About Endocare Endocare Inc. (OTCBB: ENDO) -- http://www.endocare.com/-- is an innovative medical device company focused on the development of minimally invasive technologies for tissue and tumor ablation. Endocare has initially concentrated on developing technologies for the treatment of prostate cancer and believes that its proprietary technologies have broad applications across a number of markets, including the ablation of tumors in the kidney, lung and liver. ENRON CORP: Judge Harmon Okays $72.5 Million Andersen Settlement ---------------------------------------------------------------- The Honorable Melinda Harmon of the U.S. District Court for the Southern District of Texas has approved, on a final basis, a $72,500,000 settlement agreement between the University of California Board of Regents and Arthur Andersen LLP, Bloomberg News reports. Under the Andersen Settlement, Enron Corp. shareholders would get $2,000,000 in accrued interest, according to Bloomberg News. The Settlement also adds to the more than $7,300,000,000 that investors' lawyers have recovered from Enron's former lenders and lawyers. "This is a very good settlement," Keith Park, Esq., at Milberg Weiss Bershad Hynes & Lerach LLP, in San Diego, California, said at the hearing, Bloomberg News reports. The UC Regents, which lost roughly $145,000,000 on Enron investments, serves as lead plaintiffs in the Enron securities litigation. The remaining defendants in the Class Action Lawsuit include Enron's former lenders, Merrill Lynch & Co., Credit Suisse Group, and Barclays PLC. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 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. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. 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 represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 188 and 183; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FASTENTECH INC: Commences Cash Offer for 11-1/2% Senior Notes ------------------------------------------------------------- FastenTech, Inc. commenced a tender offer to purchase for cash any and all of its outstanding 11-1/2% Senior Subordinated Notes due 2011 on the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement dated March 22, 2007. In connection with the tender offer, the company is soliciting consents to certain proposed amendments to the indenture governing the Notes. If all conditions to the tender offer and consent solicitation are satisfied, holders of the Notes who validly tender their Notes pursuant to the tender offer and validly deliver their consents pursuant to the consent solicitation by 5:00 p.m., New York time, on April 5, 2007, unless such date is extended or earlier terminated by the company, and do not validly withdraw their Notes or revoke their consents by such date, will be paid a total consideration of $1,061.25 for each $1,000 principal amount of the Notes. In addition, holders who validly tender and do not validly withdraw their Notes in the tender offer will receive accrued and unpaid interest from the last interest payment date up to, but not including, the applicable date of payment. In connection with the tender offer, the company is soliciting consents to certain proposed amendments to eliminate substantially all of the restrictive covenants, certain events of default and certain other provisions contained in the Indenture. The company is offering to make a cash consent payment of $20.00 per $1,000 principal amount of the Notes to holders who validly tender their Notes and deliver their consents prior to the Consent Date. Holders who validly tender their Notes after the Consent Date will not receive the consent payment and, therefore, their tender consideration shall be $1,041.25 for each $1,000 principal amount of the Notes. Holders may not tender their Notes without delivering consents and may not deliver consents without tendering their Notes. The tender offer is scheduled to expire at 12:00 Midnight, New York time, on April 18, 2007, unless otherwise extended or earlier terminated by the company. Subject to the terms and conditions of the tender offer, payment for any Notes tendered will be made promptly after the Early Acceptance Date or the Final Acceptance Date, as applicable. The tender offer is conditioned on, among other things, the following: * there being validly tendered prior to the Expiration Date and not validly withdrawn at least a majority in aggregate principal amount of Notes outstanding; * the receipt of consents of holders of at least a majority of the then aggregate outstanding principal amount of the Notes with respect to, and execution of a supplemental indenture providing for, the proposed amendments to the Indenture; and * the consummation of the proposed merger of FasTech, Inc. with Dundee MergerCo, Inc., an affiliate of Doncasters Group Ltd., on or prior to the Expiration Date. Credit Suisse Securities (USA) LLC is the Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the tender offer and consent solicitation should be directed to Credit Suisse at 212-325-7596 (Collect). Requests for documents should be directed to D.F. King & Co., Inc., the Information Agent for the tender offer and consent solicitation, at 48 Wall Street, New York, NY 10005, banks and broker call (212) 269-5550 (Collect) and all others call 800-290- 6429 (Toll Free). About FastenTech FastenTech, Inc. based in Minneapolis, Minn., -- www.fastentech.com -- is a privately held manufacturer of specialty fasteners and fastener systems in the U.S. It manufactures and markets engineered components that support applications in various end-markets, including the power generation, industrial, military, construction, medium- heavy duty truck, recreational and automotive/ light truck markets. * * * As reported in the Troubled Company Reporter on March 5, 2007, Moody's Investors Service placed the ratings of FastenTech, Inc. under review with direction uncertain following the company's report that it is being acquired by Doncasters Group Ltd., a UK- based engineering group for $492 million. FIRST FRANKLIN: Fitch Downgrades Ratings on 9 Certificate Classes ----------------------------------------------------------------- Fitch Ratings has taken rating action on First Franklin Financial Corporation's residential mortgage-backed certificates: Series 2004-FFH1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 is rated 'A' and placed on Rating Watch Negative; -- Class M-6 is rated 'A-' and placed on Watch Negative; -- Class M-7 downgraded to 'BB+' from 'BBB+'; -- Class M-8 downgraded to 'B+' from 'BB'; and -- Class M-9 downgraded to 'C/DR4' from 'BB-'. Series 2004-FFH2 -- Class A-1 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 is rated 'BBB-' and placed on Watch Negative; -- Class B-1 downgraded to 'B+' from 'BB+'; and -- Class B-2 downgraded to 'CC/DR2' from 'BB'. Series 2004-FFH3 --Classes I-A-1, I-A-2, II-A-1, II-A-3, and II-A-4 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 is rated 'BBB' and placed on Watch Negative; -- Class M-9 downgraded to 'BB-' from 'BBB-'; and, -- Class B-1 downgraded to 'B+' from 'BB+'. Series 2004-FFH4 -- Classes I-A-1, II-A-2, and II-A-3 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB+'; -- Class M-9 is rated 'BBB' and placed on Watch Negative; -- Class M-10 is rated 'BBB' and placed on Watch Negative; -- Class M-11 downgraded to 'BB-' from 'BBB-'; and -- Class B-1 downgraded to 'B+' from 'BB'. Series 2005-FFH1 -- Classes A-1A, A-1B, A-2B, & A-2C affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'; and -- Class B-4 affirmed at 'BB+'. Series 2005-FFH2 -- Classes A-1, A-2, & A-3 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; -- Class B-1 affirmed at 'BB+'; and -- Class B-2 affirmed at 'BB'. Series 2005-FFH3 -- Classes I-A-1, II-A-2, & II-A-3 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB'; -- Class M-10 affirmed at 'BBB-'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'BB'; -- Class B-3 affirmed at 'BB-'; and -- Class B-4 affirmed at 'B+'. Series 2005-FFH4 -- Classes I-A-1 & II-A-1 through II-A-4 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'A-'; -- Class M-8 affirmed at 'BBB+'; -- Class M-9 affirmed at 'BBB'; -- Class M-10 affirmed at 'BB+'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'BB'; and -- Class B-3 affirmed at 'BB'. The affirmations, affecting approximately $3.1 billion of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. The downgrades, affecting approximately $92.4 million of the outstanding certificates, are taken as a result of a deteriorating relationship between credit enhancement and expected loss. In addition, the Rating Watch Negative affects $77.1 million of the outstanding certificates. The negative rating actions on the above transactions are primarily the result of losses exceeding excess spread for at least seven of the past nine months and, as a result, eroding the overcollateralization (OC) below target. For series 2004-FFH1 and series 2004-FFH2, the most subordinate bond is downgraded to a distressed recovery rating because Fitch expects the OC to be depleted within the next 6-18 month. After the OC is depleted, the most subordinate bonds will begin to be written down because of collateral losses. The collateral of the above transactions consists of fixed-rate and adjustable-rate subprime mortgage loans secured by first-liens on residential properties. In addition, a majority of the loans had original loan-to-values over 80%. All of the loans were originated or acquired by First Franklin Financial Corp. Also, the loans collateralizing the above transactions are serviced by either HomEq Servicing Corp. ('RPS1'), Saxon Mortgage Inc. ('RPS2+'), Select Portfolio Servicing ('RPS2'), Wilshire Credit Corp. ('RPS1'), or National City Home Loan Services ('RPS2'). The pool factors for the above transactions range from 15% (2004-FFH1) to 78% (2005-FFH4). The seasoning ranges from 14 months (2005-FFH4) to 35 months (2004-FFH1). FLYI INC: Wants Court Approval on Cisco Agreement ------------------------------------------------- FLYi Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a stipulation between the Debtors and Cisco Systems Capital Corp. resolving lease-related claims. Lease Agreement The Debtors and Cisco are parties to a certain master agreement to lease equipment No. 4142 and various schedules. Pursuant to the Lease Agreement, Cisco leased certain communications and other equipment to the Debtors for use in their operations. The Debtors' obligations under the Lease Agreement were secured by the Debtors' grant of a security interest in the Lease Equipment. As a result of the cessation of the Debtors' airline operations, the Debtors no longer needed the bulk of the Leased Equipment, but still needed to retain a portion of it as they wind down their affairs. Accordingly, the Debtors and Cisco have agreed to the Debtors' retention of certain of the Leased Equipment, and the return of the unnecessary equipment to Cisco on June 16, 2006. The Retained Equipment have current fair market value of $38,000, and the Returned Equipment $250,000. The balance due for the remainder of the Lease Agreement on account of the Leased Equipment is $1,024,138. Cisco has filed Claim No. 4875 for $207,854 relating to the postpetition use of the Leased Equipment through March 31, 2006; and Claim No. 4878 for $1,232,937, secured by the Leased Equipment, relating to future amounts due under the Leased Agreement. Stipulation To resolve the issues relating to the Lease Agreement, Leased Equipment and the related claims, the Debtors and Cisco agreed that: -- Claim No. 4875 will be allowed for $42,171 as an administrative claim; -- Claim No. 4878 will be allowed for (i) $38,000 as a secured claim on account of the Retained Equipment, and (ii) $736,138 as a general unsecured claim in account of the deficiency claim for the Leased Equipment; -- the Claims will be allowed in the Debtors' Chapter 11 case in the amounts specified for all purposes, including voting on the Debtors' First Amended Joint Plan and distribution; -- Cisco will not file any additional proofs of claim in connection with the liabilities asserted in the Claims or relating to the Lease Agreement or the Leased Equipment or assert any liabilities against the Debtors or third parties; and -- Cisco will not contest any objection to the Claims to the extent that the objection seeks relief consistent with the stipulation. About FLYi Inc. Headquartered in Dulles, Virginia, FLYi Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. The Debtors' exclusive period to file a chapter 11 expired on Aug. 15, 2006. On the same day, the Debtors filed their Joint Plan of Liquidation. On Nov. 13, 2006, they filed an Amended Plan and Disclosure Statement. The Court approved the Disclosure Statement on Nov. 17, 2006 and the Clerk of Court entered a written disclosure statement order on Nov. 21, 2006. The hearing to consider confirmation of the Debtors' Plan is set for March 12, 2007. (FLYi Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FOSTER WHEELER: Good Performance Cues S&P's to Lift Ratings to BB ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Foster Wheeler Ltd., including its corporate credit rating to 'BB' from 'B+'. The Clinton, New Jersey-headquartered engineering and construction company had total reported debt of approximately $203 million at Dec. 29, 2006. The outlook is stable. "The upgrade reflects the company's improved operating performance and its strengthened financial risk profile, combined with a generally favorable intermediate-term outlook for global energy- related construction markets," said Standard & Poor's credit analyst James Siahaan. Foster Wheeler should have solid book of business in the near to intermediate term, and it has reduced the level of debt on its balance sheet to a reasonable level. Demonstrated consistency in profitability and generation of sufficient free cash flow would strengthen the credit profile and could result in an outlook revision to positive. Conversely, a more aggressive-than-expected acquisition policy, declining liquidity or an unexpected deterioration in performance could prompt an outlook revision to negative, or, in a more severe case, a downgrade. FRANCISCO RIVERA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Francisco J. Baez Rivera 16 Calle Comercio Ponce, PR 00731 Bankruptcy Case No.: 07-01440 Chapter 11 Petition Date: March 20, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Modesto Bigas Mendez, Esq. Modesto Bigas Law Office P.O. Box 7462 Ponce, PR 00732-7462 Tel: (787) 844-1444 Total Assets: $100,000 to 1 million Total Debts: $1 million to 100 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eurobank Bank Loan $392,474 P.O. Box 195447 San Juan, PR 00919-5447 Gualberto Negron $240,251 Martinez C/o LCDO, Epifanio Davila Rodriguez P.O Box 915 Villalba, PR 00766-0915 Internal Revenue Service Trade Debt $225,108 Mercantil Plaza Office 914 2 Ponce De Leon PDA 27 1/2 San Juan, PR 00918-1693 Dawn Food International Inc. $50,000 Internal Revenue Service Trade Debt $33,809 Banco Popular $25,000 Departmento Del Trabajo $24,739 Y Rec Hum Deparmento De Hacienda Trade Debt $22,845 Municipio Autonomo De Ponce Bank Loan $21,323 Senior Distributor $20,168 Cooperativa De A/C Agustin $20,086 Burgos Centro Recaudacion $19,951 Helepan Inc $19,431 RJ Reynolds Tobacco Co. $13,649 Suiza Dairy $12,108 Caribe Bakery Supplies $10,480 Banco Popular $10,000 R&G Premier Bank $7,000 John P. Miller $6,888 Miller Distributors $6,888 FREEPORT-MCMORAN: S&P Rates Proposed $2.5 Bil. Stock Offering at B ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' preferred stock rating to the proposed $2.5 billion 6.75% mandatory convertible preferred stock offering of Freeport-McMoRan Copper & Gold Inc. "Proceeds from the preferred stock offering will be used to repay a portion of the debt incurred for Freeport's acquisition of Phelps Dodge Corp. (BB/Stable/B)," said Standard & Poor's credit analyst Thomas Watters. Pro forma for the Phelps Dodge transaction, the company had approximately $18 billion in debt, adjusted for operating leases, asset-retirement obligations and postretirement obligations. The ratings on New Orleans-based Freeport reflect its leading position in copper mining, its significant and diverse reserve base, its very low cost Indonesian operations, strong liquidity, and current favorable metals prices. The ratings also reflect very aggressive debt levels, exposure to cyclical and volatile commodity prices, rising costs, challenges faced at its mature U.S.-based operations, and exposure to the political and sovereign risks of Indonesia. Ratings List: * Freeport-McMoRan Copper & Gold Inc. -- Corporate Credit Rating, BB/Stable/ -- Senior Secured, BB+ -- Senior Unsecured, B+ -- Preferred Stock, B New rating: -- $2.5 billion 6.75% mandatory convertible preferred stock, B GALE FORCE: Moody's Rates $29.1 Million Notes at Ba2 ---------------------------------------------------- Moody's Investors Service assigned ratings to Notes and Combination Securities issued by Gale Force 3 CLO, Ltd.: * Aaa to the $300,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2021; * Aaa to the $143,300,000 Class A-2 First Priority Senior Secured Floating Rate Term Notes Due 2021; * Aa2 to the $32,400,000 Class B-1 Second Priority Senior Secured Floating Rate Notes Due 2021; * Aa2 to the $12,000,000 Class B-2 Second Priority Senior Secured Fixed Rate Notes Due 2021; * A2 to the $26,100,000 Class C Third Priority Senior Secured Deferrable Floating Rate Notes Due 2021; * Baa2 to the $27,600,000 Class D Fourth Priority Mezzanine Deferrable Floating Rate Notes Due 2021; * Ba2 to the $21,600,000 Class E Fifth Priority Mezzanine Deferrable Floating Rate Notes Due 2021 and * Ba2 to the $7,500,000 Combination Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The Moody's rating of the Combination Notes addresses only the ultimate receipt of the "Rated Balance". GSO Capital Partners LP will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GALLATIN CLO: Moody's $15.5 Million Class B-2L Notes at Ba2 ----------------------------------------------------------- Moody's Investors Service assigned ratings to Notes issued by Gallatin CLO III 2007-1 Ltd.: * Aaa to the $253,000,000 Class A-1L Floating Rate Notes Due 2021; * Aaa to the Up To $60,000,000 Class A-1LR Floating Rate Revolving Notes Due 2021; * Aaa to the $4,800,000 Class X Floating Rate Notes Due 2013; * Aa2 to the $33,000,000 Class A-2L Floating Rate Notes Due 2021; * A2 to the $24,500,000 Class A-3L Floating Rate Notes Due 2021; * Baa2 to the $15,500,000 Class B-1L Floating Rate Notes Due 2021 and * Ba2 to the $15,500,000 Class B-2L Floating Rate Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Bear Stearns Asset Management Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GENERAL MOTORS: Annual Stockholders' Meeting Scheduled on June 5 ---------------------------------------------------------------- General Motors Corporation will hold its annual meeting of stockholders at 9:00 a.m., on June 5, 2007, at the Hotel du Pont, 11th and Market Streets in Wilmington, Delaware. At the meeting, stockholders will be asked to vote on: * The election of directors for the next year; * The ratification of the selection of independent public accountants for the next year; * The approval of the 2007 Annual Incentive Plan; * The approval of the 2007 Long-Term Incentive Plan; and * Ten stockholder proposals, if they are properly presented at the meeting. Holders of GM Common Stock at the close of business on April 9, 2007, will be entitled to vote at the meeting. A full-text copy of the definitive proxy statement for the annual meeting is available for free at: http://ResearchArchives.com/t/s?1c1f About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 284,000 people around the world. It has manufacturing operations in 33 countries including Belgium, France, Germany, India, Mexico, and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and Vauxhall. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. GENERAL MOTORS: Awards Stock Grants to Executives ------------------------------------------------- General Motors Corporation is giving bonuses in the form of stock to Chairman and Chief Executive Rick Wagoner and other top executives, the Wall Street Journal reports. Filings with the U.S. Securities and Exchange Commission show that Mr. Wagoner received restricted stock valued at $2.8 million and 500,000 options. A total of 18 executives also disclosed equity grants in separate filings, the WSJ relates. The move, according to WSJ, could cause difficulties in the company's efforts to get additional concessions from its biggest U.S. labor union. Citing company spokeswoman Renee Rashid-Merem, WSJ relates that GM's GM's board makes a decision annually on granting stock-based compensation. Executive compensation had undergone scrutiny in recent years due to the company's sinking financial position. WSJ further relates that these executives also receive stock grants: * Vice Chairman Bob Lutz with 60,000 restricted stock units valued at $1.8 million and 250,000 options, * Chief Financial Officer Frederick Henderson with 60,000 restricted stock units valued at $1.8 million and 250,000 options; * North American Chief Troy Clarke with 45,000 restricted stock units valued at $1.32 million and 50,000 options; and * Europe Chief Carl-Peter Forster with 40,000 restricted stock units valued at $1.17 million and 40,000 options. The value of the restricted stock units was calculated based on the closing price of $29.35 as of March 20, 2007. Restricted stock units vest in equal installments every year over five years, while their option awards vest annually in three equal installments over three years while the options have an exercise price of $29.11 each, and expire in 2017, WSJ reports. About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 284,000 people around the world. It has manufacturing operations in 33 countries including Belgium, France, Germany, India, Mexico, and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and Vauxhall. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. GETTY IMAGES: Moody's Holds Ba2 Rating on $265 Million Debentures ----------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 Corporate Family Rating and Ba2 rating on the $265 million of convertible subordinated debentures of Getty Images, Inc. The rating outlook remains stable. The Ba1 Corporate Family Rating reflects strong credit metrics for the rating category, a leading market position in the stock imagery market and broad geographic diversification of Getty's customer base. The ratings are constrained by limited business line diversification, the increasing supply of lower priced digital imagery and potential threats from new competitors or technologies. Moody's will continue to monitor developments in Getty's ongoing stock option investigation and may consider taking negative action on the outlook or ratings as more information becomes available. On Feb. 21, 2007, Getty received notice of an Event of Default from the trustee related to the company's failure to file its third quarter 2006 Form 10-Q with the Securities and Exchange Commission. Getty reported that it does not believe it has failed to perform any of its obligations under the indenture because the indenture does not contain an express covenant requiring the company to provide the trustee or the bondholders with periodic reports. Consequently, Getty indicated that, in its view, these notices of default are without merit. Because Getty has received a notice of an "Event of Default" from the trustee, the trustee or holders of at least 25% in aggregate principal amount of the Debentures could declare all unpaid principal and accrued interest on the Debentures then outstanding to be immediately due and payable. Getty reported that it believes that if the Debentures were to be accelerated, it would have adequate financial resources to pay any unpaid principal and any interest that would then be due on the Debentures and also would have the option of contesting the legal basis for the notices of default and any such acceleration. On March 23, 2007, Getty reported that it entered into a new $200 million senior unsecured 364 day revolving credit facility. The revolver is guaranteed by substantially all the domestic operating subsidiaries of the company. The revolver has a committed accordion feature which allows Getty to increase the commitment from $200 million to up to $350 million within 6 months from the closing date, absent a material adverse change in the company's operations. Pro forma for the recently reported MediaVast, Inc. acquisition and the new $200 million revolver, Moody's expects Getty to have about $500 million of combined liquidity in the form of cash, short term investments, available revolver and committed accordion. Under the terms of the new credit facility, Getty must become current on its periodic SEC filings by June 14, 2007, to avoid an event of default. The potential acceleration of the Debentures is not expected to affect the ratings in the near term because Getty's current liquidity can easily fund the acceleration of any, or all, of the Debentures. Affirmed: * $265 million series B convertible subordinated notes due 2023, Ba2, LGD5, 77% from LGD5, 71% * Corporate family rating, Ba1 * Probability of default rating, Ba1 The stable ratings outlook anticipates modest organic revenue growth and continued strong cash flow from operations. Credit metrics are expected to improve modestly in 2007 and remain strong for the Ba1 rating category. Headquartered in Seattle, Washington, Getty Images, Inc. is a leading creator and distributor of high quality imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate marketing departments and other business customers. Revenues are principally derived from licensing rights to use images that are delivered digitally over the internet. Revenues for the year ended Dec. 31, 2006, are expected to be about $807 million. G-FORCE: S&P Junks Rating on Class N Certificates ------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of commercial mortgage-backed securities pass-through certificates from G-FORCE 2005-RR LLC. Concurrently, the ratings on 12 other classes were affirmed. The downgrades reflect expected credit support erosion related to anticipated losses and the negative credit migration of several certificates in the collateral pool. As of the March 22, 2007, remittance report, the collateral pool consisted of 42 classes of subordinated fixed-rate CMBS pass-through certificates with an aggregate principal balance of $489.3 million, compared with 42 classes of certificates totaling $489.4 million at issuance. The collateral pool includes 16 distinct CMBS transactions issued between 1996 and 2000. Fifty-seven percent of the collateral balance is concentrated in five underlying transactions: -- GMAC Commercial Mortgage Securities' series 1999-C1 (17%); -- Chase Commercial Mortgage Securities Corp.'s series 1998-2 (15%); -- Morgan Stanley Capital I Inc.'s series 1999-WF1 (8%), -- Bear Stearns Commercial Mortgage Securities' series 2000- WF1 (8%); and -- DLJ Commercial Mortgage Corp.'s series 1999-CG3 (8%). The 16 CMBS transactions are collateralized by 2,361 loans with an outstanding principal balance of $12.1 billion, down from 2,687 loans with an aggregate principal balance of $17.7 billion at issuance. The certificates in the collateral pool exhibit credit characteristics consistent with a 'B+' rated obligation, unchanged from issuance. While none of the certificates had investment-grade ratings at issuance or received credit estimates commensurate with investment-grade obligations at issuance, the credit quality of 18.3% of the certificates is currently commensurate with an investment-grade rating. Most are equivalent to a low investment-grade rating. Several certificates with credit estimates, however, have experienced downward credit migration, which contributed to the lowered ratings. Since the collateral for the mortgage certificates consists of CMBS pass-through certificates rather than mortgage loans, there is no direct relationship between real estate losses in the loan pools and losses realized by the G-FORCE 2005-RR transaction. Losses associated with the mortgage loans are first realized by the CMBS trusts that issued the pass-through certificates secured by the mortgage loans. The losses on the pass-through certificate balances are then allocated to the balances of the certificates in the 2005-RR transaction. The resultant credit enhancement levels adequately support the lowered and affirmed ratings. Ratings Lowered G-FORCE 2005-RR LLC Commercial Mortgage-Backed Securities Pass-Through Certificates Series 2005-RR LLC Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ L B B+ 8.60% M B- B 7.70% N CCC+ B- 6.67% Ratings Affirmed G-FORCE 2005-RR LLC Commercial Mortgage-Backed Securities Pass-Through Certificates Series 2005-RR LLC Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 37.25 A-2 AAA 37.25 B AA 29.03 C A 23.89 D A- 22.86 E BBB+ 19.39 F BBB 17.72 G BBB- 15.54 H BB+ 12.58 J BB 11.30 K BB- 10.14 X AAA N/A GOLDENTREE LOAN: Moody's Rates $17.8 Million Notes at Ba2 --------------------------------------------------------- Moody's Investors Service assigned ratings to notes and Combination Securities issued by GoldenTree Loan Opportunities III, Limited: * Aaa to the $100,000,000 Class A 1A-S Senior Secured Revolving Floating Rate Notes due 2022; * Aa1 to the $25,000,000 Class A 1A-J Senior Secured Floating Rate Notes due 2022; * Aaa to the $354,500,000 Class A 1B-S Senior Secured Floating Rate Notes due 2022; * Aa1 to the $39,500,000 Class A 1B-J Senior Secured Floating Rate Notes due 2022; * Aa2 to the $34,500,000 Class A 2 Senior Secured Floating Rate Notes due 2022; * A2 to the $43,500,000 Class B Senior Secured Deferrable Floating Rate Notes due 2022; * Baa2 to the $52,500,000 Class C Senior Secured Deferrable Floating Rate Notes due 2022; * Ba2 to the $25,500,000 Class D Secured Deferrable Floating Rate Notes due 2022; * Baa3 to the $3,000,000 Type I Composite Notes due 2022; * Ba2 to the $7,800,000 Type II Composite Notes due 2022 and * Ba2 to the $10,000,000 Type III Composite Notes due 2022. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of debt obligations, Participation Interests, Synthetic Securities and Structured Finance Obligations due to defaults, the transaction's legal structure and the characteristics of the underlying assets. GoldenTree Asset Management LP will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GOODYEAR TIRE: Sells Unit to Carlyle Group for $1.475 Billion ------------------------------------------------------------- The Goodyear Tire & Rubber Company has agreed to sell substantially all of its Engineered Products business to EPD, Inc., an entity sponsored by Carlyle Partners IV, L.P., for $1.475 billion, subject to certain post-closing adjustments. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals as well as EPD's completion of a labor agreement with the United Steelworkers union. As part of the transaction, Goodyear has agreed to a trademark licensing agreement with EPD to use the Goodyear brand and certain other trademarks in connection with the Engineered Products business. Goodyear expects to record a gain on the sale, the amount of which has not yet been finalized. "This transaction reinforces our focus on our core consumer and commercial tire businesses and on improving our balance sheet," said Robert J. Keegan, Goodyear chairman and chief executive officer. "We anticipate using the proceeds for purposes including reducing debt, addressing legacy obligations and supporting growth in our tire businesses." Specific plans regarding debt reduction and investments will be announced at a later date. "Engineered Products is a successful business with outstanding associates who have made important contributions to Goodyear. We thank them for these contributions," Mr. Keegan added. "I'm confident the resources and business philosophy of Carlyle will support Engineered Products' growth and continued success going forward." Timothy R. Toppen, president, Goodyear Engineered Products, said the transaction will not interfere with its daily operations or on meeting customer needs. "The cornerstone of our operating philosophy stays intact - we want to help our customers grow their businesses for the long- term," Mr. Toppen said. About The Carlyle Group The Carlyle Group is one of the world's largest private equity firms with $54.5 billion under management, investments in more than 185 companies and 750 employees in 16 countries. In the aggregate, Carlyle portfolio companies have more than $68 billion in revenue and employ more than 200,000 people around the world. About Goodyear Engineered Products Goodyear Engineered Products operates 32 facilities in 12 countries and has approximately 6,500 associates. It manufactures and markets engineered rubber products for industrial, military, consumer and transportation original equipment end-users. The product portfolio of the business includes hose, conveyor belts, power transmission products, rubber track, molded products and air springs. In 2006, Engineered Products had sales of approximately $1.5 billion. About The Goodyear Tire & Rubber Company Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear Tire has marketing operations in almost every country around the world including Chile, Colombia, Guatemala and Peru in Latin America. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on March 15, 2007, Fitch Ratings affirmed ratings for The Goodyear Tire & Rubber Company and revised the Rating Outlook to Stable from Negative. The ratings affirmed are: Issuer Default Rating at 'B'; $1.5 billion first lien credit facility at 'BB/RR1'; $1.2 billion second lien term loan at 'BB/RR1'; $300 million third lien term loan at 'B/RR4'; $650 million third lien senior secured notes at 'B/RR4'; and Senior unsecured debt at 'CCC+/RR6'. GREAT COMMISSION: Court Approves Province Valuation as Appraiser ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania gave The Great Commission Care Communities Inc. dba The Woods at Cedar Run permission to employ Province Valuation Group, as its appraiser. The firm is expected to provide a market value appraisal for the Debtor's property located at 824 Lisburn Road, in Camp Hill, Pennsylvania. The firm will charge the Debtor $4,500 for preliminary desk review and Phase II fees at $3,000. Carol Reynolds, a principal of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Ms. Reynolds can be reached at: Carol Reynolds Province Valuation Group 5800 Mountain Creddk Drive Sandy Springs, GA 30328 Tel: (404) 459-0066 Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities, Inc., dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. Timothy E. Dixon, Esq., represents the Debtor in bond matters. Michael B. Schaedle, Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors. Howard S. Cohen, CPA, at Parente Randolph LLC gives financial advice to the Committee. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. GREENVILLE HOUSING: Moody's Withdraws Ca Rating on $14 Mil. Bonds ----------------------------------------------------------------- Moody's Investors Service has withdrawn the Ca rating for the $14,355,000 Greenville Housing Finance, LLC Taxable Mortgage Backed Revenue Bonds Series 2003A in connection with the cancellation of these Senior Bonds at the direction of the Senior Bondholders. The project was sold through foreclosure on Nov. 6, 2006. The winning and only bid for the project was $11,500,000 from the lender, Allied Mortgage Capital Corporation, who then took title to the project. At the direction of the Senior Bondholders and after payment of certain fees and expenses, the lender transferred the title and the trustee transferred all remaining trust funds ($15,179) to the Senior Bondholders who, in exchange for the title and the remaining trust funds, tendered $12,215,000 in Series 2003A bonds to the trustee for cancellation. Based on Moody's understanding, the amount tendered represents 85% of outstanding principal on the Senior Bonds, which was $14,330,000 as of Nov. 6, 2006. With regards to the Series 2003B Bonds and the Series 2003C Bonds, the trustee does not anticipate any funds being available to pay the Subordinate Bondholders since no funds remain in the trust. Moody's did not rate the Subordinate Bonds. HANCOCK FABRICS: Can Borrow Up to $10 Million from Wachovia ----------------------------------------------------------- The Hon. Judge Brendan Linehan Shannon of the United States Bankruptcy Court for the District of Delaware has authorized Hancock Fabrics Inc. and its debtors-affiliates to borrow, on an interim basis, up to $10,000,000 in Loans and Letters of Credit from Wachovia Bank, N.A., and certain other lenders, pursuant to financing agreements, as amended by a Ratification and Amendment Agreement dated March 22, 2007. The Debtors have prepared and delivered to the DIP Lenders an initial 13-week budget. The Budget, however, has not been filed with the Court as of March 22, 2007. The Budget sets forth projected weekly cash receipts, projected weekly cash disbursements, and projected weekly amounts of Loans and Letters of Credit available to the Debtors commencing with the week ending March 24, 2007. The Court will convene a final hearing on April 12, 2007, at 10 a.m., to consider the Debtors' request for approval of the DIP Financing. Any party-in-interest who opposes the Debtors' request must serve and file written objections with the Court by April 2, 2006. Any statutory committee of creditors appointed in the case will have until April 6, 2007, to file an objection to the DIP Financing. A full-text copy of the 26-page Ratification Agreement dated March 22, 2007, is available for free at: http://researcharchives.com/t/s?1c15 A full-text copy of the 28-page Interim DIP Order is available for free at http://researcharchives.com/t/s?1c16 Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC:HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Wants to Use Prepetition Lenders' Cash Collateral ------------------------------------------------------------------ Hancock Fabrics Inc. and its Debtor affiliates seek permission from the United States Bankruptcy Court for the District of Delaware to use the Prepetition Lenders' cash collateral pursuant to Section 363(c)(2) of the Bankruptcy Code. Before their bankruptcy filing, the Debtors obtained financing under a Loan and Security Agreement, dated June 29, 2005, as amended, with Wachovia Bank, N.A. The Prepetition Loan Agreement provides the Debtors with a five-year commitment for borrowings up to a $110,000,000 cap. The Loan Agreement also contemplates the issuance of letters of credit aggregating up to $25,000,000, provided total borrowings do not exceed $110,000,000. As of March 21, 2007, the Debtors owed the Prepetition Lenders not less than $64,936,402, consisting of: -- revolving loan obligations not less than $56,095,894; and -- letter of credit obligations not less than $8,840,507. To secure the Debtors' obligations under the Prepetition Loan Agreement, the Lenders hold a first priority lien on substantially all of the Debtors' assets, including inventory. However, the Lenders do not have perfected security interests extending to the Debtors' non-residential real property leases or any proceeds or fixtures with respect to the leases. Jane F. Aggers, president and chief executive officer of Hancock Fabrics Inc., relates that the Debtors will require the ability to use cash and the proceeds of existing accounts receivables to maintain the operation of their businesses and preserve their value as going concern. According to Ms. Aggers, both cash and accounts receivables constitute part of the Prepetition Lenders' collateral. Wachovia and the Prepetition Lenders have consented to the Debtors' use of cash collateral. Ms. Aggers tells the Court that the Debtors have not performed an analysis to determine the validity and enforceability of the Prepetition Lenders' liens, including liens on the cash collateral. Accordingly, the Debtors make no admission as to the validity and enforceability of any liens. The Debtors advise the Court that they do not possess and will not assert any claim, counterclaim, set-off or defense that would affect the validity, enforceability and non-avoidability of the Prepetition Lenders' liens, claims or security interests in the cash collateral. In the event that any Official Committee of Unsecured Creditors appointed in the Debtors' chapter 11 cases wants to challenge the Prepetition Lenders' liens, the Debtors ask the Court to order that any avoidance actions against the Lenders be filed within 60 days following the Committee's appointment. Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC:HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: NYSE Suspends Trading of Common Stock ------------------------------------------------------ NYSE Regulation Inc. has determined that the common stock of Hancock Fabrics Inc. should be suspended immediately. The company is seeking alternate market arrangements for its common stock. The action is being taken in view the bankruptcy filing of the company and its subsidiaries under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company has a right to a review of this determination by a Committee of the Board of Directors of NYSE Regulation. Application to the Securities and Exchange Commission to delist the issue is pending the completion of applicable procedures, including any appeal by the company of the NYSE Regulation staff's decision. The NYSE noted that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable. Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC:HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Organizational Meeting Scheduled for April 4 ------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Hancock Fabrics, Inc. and its debtor- affiliates' joint chapter 11 cases at 10:00 a.m., on April 4, 2007, at the Doubletree Hotel, 700 King Street, Salon L in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. 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 that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC:HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. HEALTHSOUTH CORP: Sells Surgery Division to TPG for $945 Million ---------------------------------------------------------------- HealthSouth Corporation reported an agreement to sell its Surgery Division to TPG for approximately $945 million. The purchase price consists of cash consideration of approximately $920 million and an equity interest whereby HealthSouth has the opportunity to participate in the future success of the newly-formed company. This future consideration is estimated to be worth $25 - $30 million assuming a five-year horizon. HealthSouth's Surgery Division is comprised of a network of 139 outpatient surgery centers and three surgical hospitals that provide high quality surgical services to physicians and their patients across the country. The facilities are located in 35 states, with a concentration of centers in California, Texas, Florida, North Carolina, and Alabama. The new company will be among the nation's largest providers of outpatient surgical services. The transaction is expected to be completed in the third quarter 2007, and is subject to customary closing conditions, including regulatory approval. "[Mon]day's announcement marks a major milestone in the strategic repositioning of HealthSouth as a post-acute healthcare provider, focusing on inpatient rehabilitative services. The proceeds from this transaction will be used to pay down a significant portion of our long-term debt, thereby strengthening our balance sheet and positioning us to grow our core business," said Jay Grinney, HealthSouth president and chief executive officer. "We conducted a rigorous auction process and we congratulate TPG on being the winning bidder. TPG is a well-respected firm with extensive experience in the healthcare industry. We look forward to working with them to ensure a smooth transition as our Surgery Division becomes a stand-alone entity." "TPG is excited about the opportunity to partner with a strong management team and to invest in the largest operator of multi- specialty surgical centers," said Todd Sisitsky, principal at TPG. "We believe that the Surgery Division has excellent growth prospects as a stand-alone business, and look forward to working with management and the facilities' world class physician base to help the company achieve its full potential." "We are pleased to expand TPG's presence in the outpatient surgery sector, which benefits from strong organic growth and attractive fundamentals," said Leonard D. Schaeffer, senior healthcare investment advisor to TPG. "With a reputation for clinical excellence through its network of outstanding physicians, the Surgery Division represents an excellent platform, and TPG, along with management, is committed to strengthening the company and continuing to deliver high quality care for patients." Certain members of HealthSouth's senior management team including Mike Snow, chief operating officer, and Joe Clark, president of the surgery division, will be leaving HealthSouth to join the newly formed company, which is expected to remain headquartered in Birmingham, Alabama. HealthSouth will provide certain corporate support services to the new company for an interim period of time under a Transition Services Agreement. Goldman, Sachs & Co. served as HealthSouth's financial advisor for this transaction. About TPG TPG -- http://www.tpg.com/-- is a private investment partnership that was founded in 1992 and currently has more than $30 billion of assets under management. With offices in San Francisco, London, Hong Kong, New York, Minneapolis, Fort Worth, Melbourne, Menlo Park, Mumbai, Shanghai, Singapore and Tokyo, TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, joint ventures and restructurings. TPG's investments span a variety of industries including healthcare, retail/consumer, airlines, media and communications, industrials, technology and financial services. About HealthSouth Headquartered in Birmingham, Alabama, HealthSouth Corporation (NYSE:HLS) -- http://www.healthsouth.com/-- is the largest provider of rehabilitative health care and ambulatory surgery services in the United States, with 978 facilities and approximately 33,000 full- and part-time employees. The company provides these services through a national network of inpatient and outpatient rehabilitation facilities, outpatient surgery centers, diagnostic centers, and other health care facilities. The company's Dec. 31, 2006, balance sheet showed $3.359 billion in total assets, $4.885 billion in total liabilities, $271.1 million in minority interest, and $387.4 million in convertible perpetual stock, resulting in a $2.184 billion total stockholders' deficit. HEALTHTRONICS INC: Revenue Drop Cues S&P's Negative Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook for Austin, Texas-based urology services and medical device manufacturer HealthTronics Inc. to negative from stable and affirmed its 'BB-' corporate credit rating on the company. "The outlook revision reflects Standard & Poor's concerns about HealthTronics' 8% decline in core urology service revenues (and 6% decline in revenues from continuing operations) in 2006 from 2005, and the company's planned expansion into new urology procedures," explained Standard & Poor's credit analyst Cheryl Richer. "While HealthTronics currently has negligible debt, we anticipate that some portion of future acquisitions will be debt-financed and that these acquisitions will add integration risk." The rating on HealthTronics reflects the company's narrow business focus, vulnerability to third-party reimbursement rates, and significant minority interest payments. The rating also reflects the company's mature lithotripsy operations, which have been experiencing declining volumes, and its acquisition-based growth strategy. These challenges are mitigated by HealthTronics' market leadership in the lithotripsy medical segment, its efforts to leverage its physician-partner base to expand its product portfolio, and its negligible debt. HKW TRADING: Court Sets May 30 as Claim Filing Deadline ------------------------------------------------------- The U.S. District Court for the Middle District of Florida set May 30, 2007, as the deadline for any person or entity owed money by HKW Trading LLC, Howard Waxenberg Trading LLC, and Downing & Associates Technical Analysis nka The Estate of Howard Waxenberg (Downing), to file their proofs of claim against the companies. HKW Trading and its affiliates are under receivership pursuant to a civil action filed by the Securities and Exchange Commission against the companies on June 9, 2005. Burton W. Wiand, Esq., at Fowler White Boggs Banker was appointed as receiver. SEC Civil Action As reported in the Troubled Company Reporter on June 20, 2005, the SEC filed an emergency civil action against HKW Trading, Howard Waxenberg, and Downing & Associates in connection with a Ponzi scheme orchestrated by the deceased Howard K. Waxenberg of Bradenton, Florida. The complaint alleged that from at least 1990 through May 2005, the Defendants raised more than $70 million by offering and selling securities to approximately 200 investors, and that the Defendants operated a Ponzi scheme by paying out approximately 20% annualized returns to investors, in part, from new investors' capital, among other things. Distribution The Receiver and his professionals have examined voluminous documents and reconstructed the books and records relating to the Defendants. Based on their work, the Receiver has determined a net investment amount and loss percentage for investor "accounts". The Receiver explains that the net investment amount for an account is calculated by adding all amounts contributed by the pertinent investor to an account and subtracting all payments made to that account holder, regardless of whether those payments were characterized as interest, earnings, return of principal, consulting fees, or others. The loss percentage for an account is derived by dividing the net investment amount for an account by the total amount contributed by the pertinent investor to that account. The Receiver declares that to the extent the Receivership Entities do not have sufficient funds to pay all valid claims, the recipients and amounts of the Receiver's distributions will be based on the net investment amounts and loss percentages. Claim Filing Details Proofs of claim forms can be obtained by mail from: Maya M. Lockwood, Esq. Fowler White Boggs Banker, P.A. 501 East Kennedy Boulevard, Suite 1700 Tampa, FL 33602 Tel: (813) 228-7411 Modified proof of claim forms can also be retrieved at http://hkw.fowlerwhite.com/ Accomplished proofs of claim must be delivered on or before the May 30 deadline to: Burton W. Wiand, Esq. Receiver c/o Maya M. Lockwood, Esq. Fowler White Boggs Banker, P.A. 501 East Kennedy Boulevard, Suite 1700 Tampa, FL 33602 INSURANCE AUTO: Launches Offering $150 Mil. of 11% Senior Notes --------------------------------------------------------------- Insurance Auto Auctions, Inc. is offering to purchase for cash any and all of its outstanding $150 million aggregate principal amount of 11% Senior Notes due 2013, on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 22, 2007, and the accompanying Consent and Letter of Transmittal. The company is also soliciting consents from holders of the Notes for certain amendments that would, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture under which the Notes were issued. Adoption of the proposed amendments requires the consent of holders of at least a majority of the aggregate principal amount of the Notes outstanding. As previously disclosed on Dec. 22, 2006, the company plans to combine operations with ADESA, Inc., which has entered into a definitive merger agreement under which affiliates of Kelso & Company, GS Capital Partners, ValueAct Capital and Parthenon Capital will acquire all of ADESA, Inc.'s outstanding common stock for $27.85 per share in cash. The completion of the Offer and Consent Solicitation is not a condition to the consummation of the Merger. The Consent Solicitation will expire at 5:00 p.m., New York City time, on April 5, 2007, unless earlier extended or terminated. The Offer will expire at 8:00 a.m., New York City time, on April 23, 2007, unless extended or earlier terminated. The total consideration for each $1,000 principal amount of Notes validly tendered and not properly withdrawn pursuant to the Offer and delivery of consents pursuant to the Offer Documents on or prior to the Consent Time shall be equal to $1,120.00. The total consideration includes a payment of $30 per $1,000 principal amount of Notes payable only in respect of Notes tendered on or prior to the Consent Time. Holders who validly tender their Notes on or prior to the Consent Time will be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Time, but on or prior to the Expiration Time, will be eligible to receive the total consideration less the Consent Payment. In either case, all Holders who validly tender their Notes will receive accrued and unpaid interest up to, but not including, the date of settlement. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Time. The company's Offer and Consent Solicitation are conditioned on, among other things, the following: -- the closing of the Merger shall have occurred; -- all of the loans, reimbursement obligations and other obligations and liabilities of the Company under the company's Credit Agreement, dated May 19, 2005, shall have been paid in full and all commitments of the lenders thereunder to make loans or issue letters of credit shall have been terminated; -- the Company shall have received valid consents from holders of a majority of the aggregate principal amount of the Notes; and -- a supplemental indenture which implements the proposed amendments in respect of the Notes upon receipt of the consents required for those amendments shall have been executed and delivered. The company has retained Bear, Stearns & Co., Inc. to act as sole Dealer Manager for the Offer and as the Solicitation Agent for the Consent Solicitation. Bear, Stearns & Co. Inc. can be contacted at (212) 272-5112 (collect) or (877) 696-BEAR (toll free). D.F. King & Co., Inc. is the Information Agent and can be contacted at (212) 269-5550 (collect) or (888) 887-1266 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent. About Insurance Auto Auctions Insurance Auto Auctions, Inc. -- http://www.iaai.com/-- provides insurance companies with solutions to process and sell total-loss and recovered-theft vehicles. The company currently has 99 sites across the U.S. * * * As reported in the Troubled Company Reporter on Dec. 28, 2006, Standard & Poor's Ratings Services placed its 'BB' corporate credit and debt ratings on Carmel, Indaina-based wholesale vehicle auctioneer ADESA, Inc. on CreditWatch with negative implications. At the same time, S&P placed the 'B' corporate credit and debt ratings on Insurance Auto Auctions Inc. on CreditWatch with positive implications. The ratings actions follow the announcement that ADESA and IAAI have entered into a definitive merger agreement to be acquired by a group of private equity funds consisting of Kelso & Co., GS Capital Partners, ValueAct Capital, and Parthenon Capital in a transaction valued at $3.7 billion. IRON AGE: Taps Great American to Liquidate Assets ------------------------------------------------- Iron Age Corp. will liquidate its assets in a going-out-of- business sale managed by Great American Group LLC, Bill Rochelle of Bloomberg reports. Mr. Rochelle relates that Great American will receive a 3% commission once sales reach 24.5% of retail value and will also receive a bonus if sales reach 50% of retail. The U.S. Bankruptcy Court for the District of Massachusetts had approved the Debtor's request to sell its assets on March 21, 2007. Headquartered in Westborough, Mass., Iron Age Corporation -- http://www.ironageshoes.com/-- is a specialty distributor of work and safety footwear. The company and its affiliate, Iron Age Canada Ltd., filed for chapter 11 protection on Jan. 22, 2007 (Bankr. D. Mass. Case Nos. 07-40217 & 07-40219). Christopher J. Panos, Esq., and Kathleen Rahbany, Esq., at Craig and Macauley, P.C., represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. J. CREW: Good Performance Prompts S&P's Positive Outlook -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on specialty apparel retailer J. Crew Group Inc. to positive from stable. The 'B+' corporate credit rating was affirmed. The outlook revision reflects continued strong operating results, including comparable-store sales that increased 13% and improved profitability for the year ended Feb. 3, 2007. The rating reflects New York City-based J. Crew's participation in the intensely competitive apparel retailing industry, the inherent volatility and seasonality of the apparel business, as well as a relatively short track record of performance at the current level. These factors are mitigated by relatively low debt leverage that resulted from the company's mid-2006 IPO. The IPO should also result in better cash flow coverage of interest in 2007. "The positive outlook reflects J. Crew's good operating momentum as a result of management's successful merchandising initiatives and operating discipline," said Standard & Poor's credit analyst Jackie Oberoi. "We could upgrade the rating over the intermediate term if the positive momentum can be sustained." JP MORGAN: Moody's Junks Rating on Three Class Certificates ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of four classes and affirmed the ratings of 10 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2002-C3: -- Class A-1, $113,610,147, Fixed, affirmed at Aaa -- Class A-2, $395,432,000, Fixed, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $27,950,000, Fixed, affirmed at Aaa -- Class C, $9,316,000, Fixed, affirmed at Aaa -- Class D, $24,224,000, Fixed, affirmed at Aa2 -- Class E, $9,316,000, Fixed, affirmed at Aa3 -- Class F, $22,360,000, WAC, affirmed at Baa1 -- Class G, $11,180,000, WAC, affirmed at Baa3 -- Class H, $14,907,000, Fixed, downgraded to Ba3 from Ba2 -- Class J, $13,043,000, Fixed, downgraded to Caa3 from B2 -- Class K, $2,795,000, Fixed, downgraded to Ca from B3 -- Class L, $3,143,337, Fixed, downgraded to C from Caa2 As of the March 12, 2007, distribution date, the transaction's aggregate certificate balance has decreased by approximately 13.2% to $647.3 million from $745.3 million at securitization. The Certificates are collateralized by 83 mortgage loans ranging in size from less than 1.0% to 6.1% of the pool, with the 10 largest loans representing 38.4% of the pool. Twelve loans, representing 23.7% of the pool, including the second largest loan -- The Long Island Industrial Portfolio III, New York, at $35.6 million (5.5%), have fully defeased and are secured by U.S. Government securities. Two loans have been liquidated from the pool, resulting in a realized loss of approximately $29.5 million. This includes the former third largest loan -- the First National Plaza Portfolio Loan at $33.5 million (4.9%). This loan was secured by three Class B office buildings located in downtown Dayton, Ohio. One loan, the Troy Concept Center - Building 150 Loan, representing 1.5% of the pool, is in special servicing. Moody's is projecting a loss of approximately $4.2 million for this specially serviced loan. Twelve loans, representing 11.4% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 94.3% and 84.6%, respectively, of the pool. Moody's loan to value ratio, excluding the defeased and specially serviced loans, is 85.6%, compared to 87.3% at Moody's last review in Sept. 2006 and compared to 92.4% at securitization. Moody's is downgrading Classes H, J, K and L due to realized losses, decreased credit support and estimated losses on the specially serviced loans. Classes M and N have been completely eliminated due to realized losses. The top three loans represent 14.2% of the outstanding pool balance. The largest loan is the ARC Portfolio B Loan at $39.5 million (6.1%), which is secured by a portfolio of 14 manufactured housing communities containing 2,474 pads. The properties are located in seven states with concentrations in Colorado (30.6%), Texas (29.6%) and Florida (13.7%). The communities were established between 1952 and 1999. Financial performance since Moody's last review appears to be stable. The portfolio's overall occupancy was 84.8% as of year-end 2005, compared to 82.9% at year-end 2004. Occupancy at securitization was 94.1%. The loan sponsor is Affordable Residential Communities, an owner and manager of manufactured home communities. Moody's LTV is 92.5%, compared to 97.6%, at last review and compared to 88.3% at securitization. The second largest loan is Anderson Mall Loan at $28.7 million (4.4%), which is secured 634,000 square foot regional mall, built in 1974 and renovated in 2002. The mall is located in Anderson, South Carolina, 35 miles south of Greenville. The mall includes anchors: Belk, J.C. Penney and Sears as well as 211,000 square feet of in-line space. Since Moody's last review, the property's performance has slipped due to declines in base rent and CAM recoveries. Year-end 2006 in-line occupancy was 69.9%, compared to 71.2% in June 2005 and compared to 87.9% at securitization. The loan sponsor is Simon Property Group. Moody's LTV is 92.4%, compared to 87.2% at last review and compared to 86.5% at securitization. The third largest loan is Crossways Shopping Center Loan at $24.1 million (3.7%), which is secured 379,000 square foot power center, built in 1988 and renovated in 1997. The mall is located in Chesapeake, Virginia. Major tenants include Value City Furniture, DSW, T.J.Maxx, Ross Stores, Marshalls and Office Depot. As of Sept. 2006 in-line occupancy was 97.2%, compared to 94.0% at securitization. The loan sponsor is the Schottenstein family. The loan amortizes on a 240-month schedule. Moody's LTV is 73.4%, compared to 74.7% at last review and compared to 93.3% at securitization. The pool's collateral is a mix of retail (30.9%), U.S. Government securities (23.7%), office and mixed use (20.1%), multifamily and manufactured housing (19.2%), industrial and self storage (4.0%) and lodging (2.1%). The collateral properties are located in 30 states. The highest state concentrations are New Jersey (12.4%), New York (9.8%), Virginia (9.0%), Texas (7.7%) and Florida (6.6%). All the loans are fixed rate. KENDLE INT'L: Posts $4.7 Million Net Loss in Quarter Ended Dec. 31 ------------------------------------------------------------------ Kendle International Inc. reported a net loss of $4.7 million on total revenues of $118.1 million for the fourth quarter ended Dec. 31, 2006, compared with net income of $3.7 million on total revenues of $66.5 million for the same period in 2005. Net service revenues for the fourth quarter of 2006 were $86.4 million, an increase of 64 percent over net service revenues of $52.8 million for the fourth quarter of 2005. Reimbursable out-of-pocket revenues and expenses were $31.7 million for the fourth quarter of 2006 compared to $13.7 million in the same quarter a year ago. Loss from operations for the fourth quarter of 2006 was approximately $1.8 million. Excluding an $8.2 million impairment charge on a customer relationship asset as well as charges for stock-based compensation expense, amortization of acquired intangibles, state tax valuation allowances and severance and other one-time expenses related to the August acquisition of the Phase II-IV clinical services business of Charles River Laboratories International Inc., proforma income from operations was approximately $9.5 million, or 10.9 percent of net service revenues, compared to income from operations of approximately $5.2 million in the fourth quarter of 2005. Excluding the accounts receivable allowance, proforma income from operations in the fourth quarter of 2005 was approximately $6.9 million, or 13 percent of net service revenues. "Kendle ended 2006 with record strong backlog, positioning the company for continued growth," said Candace Kendle, PharmD, chairman and chief executive officer. "Our focus in 2007 will be to build on this momentum to deliver improved value to our customers and shareholders through sustained growth in earnings, revenue and operating margin. We are projecting net service revenues of $400 to $420 million, Earnings Per Share on a GAAP basis of $1.57 to $1.77 and proforma Earnings Per Share, before amortization of acquired intangibles, of $1.75 to $1.95 for 2007, representing growth in excess of 40 percent over 2006." Interest expense in the fourth quarter was approximately $4.4 million primarily related to debt incurred to finance the Charles River Clinical Services acquisition, compared to interest expense of $80,000 in fourth quarter 2005. Cash flow from operations for the quarter was a positive $462,000. Cash and marketable securities totaled $22.3 million, including $2.4 million of restricted cash. Days sales outstanding in accounts receivable were 46 and capital expenditures for the fourth quarter of 2006 totaled $2.7 million. Kendle International Inc. reported net income of $8.5 million on total revenues of $373.9 million for the year ended Dec. 31, 2006, compared with net income of $10.7 million on total revenues of $250.6 million for the year ended Dec. 31, 2005. Net service revenues for the year ended Dec. 31, 2006, were $283.5 million versus net service revenues of $202 million for the year ended Dec. 31, 2005. Income from operations for the year ended Dec. 31, 2006, was approximately $20 million, or 7.1% of net service revenues, compared to income from operations of approximately $17.2 million, or 8.5 percent of net services revenues, in 2005. Excluding the items discussed above, proforma income from operations for 2006 was $340 million or 12 percent of net service revenues. Excluding the accounts receivable allowance in 2005, proforma income from operations for 2005 was $18.9 million, or 9.4% of net service revenues. Cash flow from operations for the year 2006 was $17.6 million. Capital expenditures for the year totaled $8.8 million. At Dec. 31, 2006, the company's balance sheet showed $455.1 million in total assets, $315 million in total liabilities, and $140.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c10 About Kendle Based in Cincinnati, Kendle International Inc. (Nasdaq: KNDL) -- http://www.kendle.com/-- is among the world's leading global clinical research organizations and is the fourth-largest provider of Phase II-IV clinical development services worldwide. The company's global clinical development business is focused on five regions - North America, Europe, Asia/Pacific, Latin America and Africa - to meet customer needs. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service revised Kendle International Inc.'s Corporate Family Rating to B2 from B1. KOALA CORP: Case Summary & 60 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Koala Corp. 12000 East 47th Avenue, Suite 400 Denver, CO 80239 Tel: (303) 539-8500 Bankruptcy Case No.: 07-12690 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- KoalaPlay Group, Inc. 07-12694 SCS Interactive, Inc. 07-12696 Type of Business: The Debtors design, produce and markets commercial products, systems and custom solutions that create family-friendly environments for businesses and other public venues worldwide. See http://www.koala-corporation.com/ Chapter 11 Petition Date: March 23, 2007 Court: District of Colorado (Denver) Judge: A. Bruce Campbell Debtors' Counsel: John C. Smiley, Esq. 600 17th Street, Suite 1800-S Denver, CO 80202 Tel: (303) 573-5900 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million A. Koala Corp.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $61,377 56 Inverness Drive East Englewood, CO 80112-5114 D.H.L. Danzas Air & Ocean $53,501 (Canada), Inc. 135A Matheson Boulevard, West Suite 200, Mississauga, Ontario, CN L5R 3L1 Symmetry Products Group $50,418 55 Industrial Circle Lincoln, RI 02865 Laird Plastics, Inc. $44,904 Attorney General of Texas $38,429 Bankruptcy & Collections Division 008 Transborder Logistics $35,100 International Spherion $34,750 Department of Revenue $34,538 Commonwealth of Pennsylvania Hollaender Manufacturing $34,394 & Company Federal Express Canada Ltd. $32,636 Northwest Plastics Ltd. $27,283 Nomaco, Inc. $24,885 Madison Pacific Management Ltd. $23,052 Allied Tube & Conduit $21,477 Mellon Bank N.A. Canada Branch Barton Insurance Brokers, Inc. $18,421 Selectcom Supply, Inc. $17,756 Redden Net Co. Ltd. $15,002 Composites One, L.L.C. $13,250 Viking Fire Protection, Inc. $13,000 Pacific Endura Finishes, Ltd. $12,646 B. KoalaPlay Group, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Six Flags Chicago $464,310 542 North Route 21 Gurnee, IL 60031 A.I.T. Worldwide Logistics $221,504 1963 Jasper Street, Unit J Aurora, CO 80011 Hein & Associates, L.L.P. $102,240 717 17th Street, Suite 160 Denver, CO 80202 American Express $100,057 White & Case, L.L.P. $89,634 Springs Fabrication, Inc. $82,945 State of New Jersey $79,939 Dept. of the Treasury/ Division of Taxation State of New Jersey $67,401 Sales and Use Tax Ritter Contracting, Inc. $56,005 Dove Valley Business Center, $50,305 L.L.L.P. Faegre & Benson, L.L.P. $41,697 Playtime Creations, Inc. $39,462 Arapahoe County Treasurer $31,441 Sheridan Ross $26,733 Stratecom $24,617 Bo-Mar Scenic & Design, Inc. $21,921 Irtra Agencia Central $21,097 Cab Communications, Inc. $18,774 Hanley-Wood, L.L.C. $18,295 Brock, L.L.C. $18,144 C. SCS Interactive, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Teknafab, Inc. $338,226 815 Northeast 172nd Avenue Vancouver, WA 98684 Ecklund Industries, Inc. $299,358 19830 Southwest Teton Avenue Tualatin, OR 97062 Proslide Technology, Inc. $265,500 2650 Queensview Drive, Suite 150, Ottawa Ontario, CN K2B 8H6 Powder Tech, Inc. $132,691 Martin Steel Products, Inc. $99,670 International Cordage East $72,315 Big Buzz Designs $64,082 West Coast Metals, Inc. $61,676 Sherwin Williams $51,442 Alpine Transportation, Inc. $50,025 Pacific States Galvanizing, Inc. $45,574 L&L Fabrication $33,969 Port Plastics, Inc. $27,606 Crane Valve North America $25,309 Farwest Steel Corp. $23,811 West Coast Netting $22,563 Esco Corp. $21,600 United Healthcare Insurance $21,227 Co. A.F.C.O. $20,422 Cascade Nut & Bolt-Salem $17,207 LEGACY LLC: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Legacy, L.L.C. P.O. Box 308 Lafayette, CA 94549 Bankruptcy Case No.: 07-40885 Chapter 11 Petition Date: March 24, 2007 Court: Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtor's Counsel: Michael J. Primus, Esq. 500 Alfred Nobel Drive, Suite 135 Hercules, CA 94547 Tel: (510) 741-1800 Estimated Assets: $10,000 to $100,000,000 Estimated Debts: $1 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service this $1,842,387 1301 Clay Street debtor is alleged Stop 1000-S to be the alter Oakland, CA 94612 ego and/or successor in interest to Legacy Management Systems Employment Development payroll taxes $200,000 Department 2004-2006 (see Bankruptcy Unit Schedule D); this P.O. Box 826880 debtor is alleged Sacramento, CA 94280 to be the alter ego and/or successor in interest to Legacy Management Systems Ace U.S.A. workers $150,334 EBusiness Insurance Pros Dept. CH 14089 Palatine, IL 60055-4089 Safeco insurance premium $15,330 Producers Dairy supplier $14,902 Chester M. Lee personal loan $13,205 Clean Source supplier $3,868 Mount Hood Chemical supplier $3,232 Bimbo Bakeries, U.S.A. supplier $2,659 Idaho Ice supplier $2,516 Apffels Gourmet Coffee supplier $2,588 Bruce E. Bedig claim of former $2,251 co-owner of Legacy Management Systems Farmer Brothers supplier $2,200 Sysco-Central CA supplier $2,030 Dispenser Juice supplier $1,518 Paul W. Thorndal attorney fees $981 Info Check, Inc. supplier $785 Carlene's T-Shirts supplier $753 LEINER HEALTH: FDA Action Prompts S&P's Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Carson, California-based Leiner Health Products Inc., including its 'B-' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement follows the company's announcement that it has voluntarily suspended the production and distribution of all over-the-counter (OTC) products manufactured, packaged or tested at its facilities in the United States, due to FDA observations about product quality and deficiencies following an inspection at one facility," said Standard & Poor's credit analyst Bea Chiem. While the company believes its OTC products do not pose any safety issues and has implemented several steps to address the FDA's observations, it is unclear at this time how long it will take to resolve the issues and what the financial impact will be to the company. Standard & Poor's believes Leiner currently has sufficient liquidity and adequate cushion on its bank loan covenants. "However," said Ms. Chiem, "we are concerned that the company's financial performance will be negatively impacted, which could also lead to insufficient covenant cushion if it is unable to resume OTC product shipments for an extended period of time." Standard & Poor's will monitor developments including the company's progress in resolving these issues with the FDA, and review Leiner's operating and financial plans before resolving the CreditWatch listing. The ratings could be lowered or affirmed following the completion of Standard & Poor's review. LIGAND PHARMACEUTICALS: Earns $141.4 Million in Qtr. Ended Dec. 31 ------------------------------------------------------------------ Ligand Pharmaceuticals Inc. reported net income of $141.4 million in the fourth quarter ended Dec. 31, 2006, compared with a net loss of $2.8 million in the comparable 2005 quarter. For the fourth quarter of 2006, total revenues were $34.1 million, compared with total revenues of $35.7 million in the fourth quarter of 2005. Net product sales in the quarter were also $34.1 million, compared with net product sales of $33.4 million in the prior-year fourth quarter. Operating expenses in the fourth quarter of 2006 were $32.4 million, compared with operating expenses of $37.5 million in the fourth quarter of 2005. Income from continuing operations in the fourth quarter of 2006 was $40.6 million, compared with a loss from continuing operations of $3.7 million in the comparable 2005 quarter. Income from discontinued operations in the fourth quarter of 2006 was $100.7 million, compared with income from discontinued operations of $931,000 in the comparable 2005 quarter. The company sold its commercial oncology products in October 2006. The results of operations related to the oncology products have been reflected as discontinued operations for all reporting periods. The net loss in 2006 was $31.7 million, compared with a net loss of $36.4 million in 2005. Total revenues in 2006 were $141 million, compared with total revenue of $123 million in 2005. Net product sales were $137 million in 2006, compared with net product sales of $112.8 million in 2005. Operating expenses in 2006 were $181.8 million (excluding a co- promotion termination charge of $131.1 million), compared with operating expenses of $144.9 million in 2005. Loss from continuing operations in 2006 was $135.9 million, compared with a loss from continuing operations of $31.5 million in 2005. Income from discontinued operations in 2006 was $104.1 million, compared with a loss from discontinued operations of $4.9 million in 2005. As of Dec. 31, 2006, Ligand had cash, cash equivalents, short-term investments and restricted cash of $212.5 million. "During the fourth quarter of 2006 and into early 2007, we took several critical steps to restructure Ligand into a highly focused R&D and royalty-driven biotech company," said John L. Higgins, president and chief executive officer. "The extent of the company's transformation is truly revolutionary, and our new business model and highly disciplined operating plan are designed to deliver value to shareholders. Through the sale of AVINZA and of our oncology product line, we now have significant financial resources to continue the development of our proprietary programs and to consider returning cash to our shareholders through a combination of a dividend and share repurchase." At Dec. 31, 2006, the company's balance sheet showed $326.1 million in total assets, $286.4 million in total liabilities, $12.3 million in common stock subject to conditional redemption, and $27.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c1a Sale of Oncology Product Line In October 2006, Ligand completed the sale of its oncology product line to Eisai Co., Ltd. (Tokyo) and Eisai Inc. (New Jersey) for $205 million. Of this, $185.0 million was received in cash and $20 million was placed into escrow. The sale included Ligand's four marketed oncology drugs ONTAK(R) (denileukin diftitox), Targretin(R) (bexarotene) capsules, Targretin(R) (bexarotene) gel 1% and Panretin(R) (alitretinoin) gel 0.1%. Subsequent Events In February 2007, Ligand completed the sale of AVINZA (morphine sulfate extended release capsules) and associated assets to King Pharmaceuticals Inc. in exchange for cash and royalties. Ligand received $280.4 million in cash, which represents the purchase price of $246.3 million, net of certain inventory adjustments of $18.7 million and less $15 million placed into escrow, plus $49.1 million in reimbursement of payments previously made to Organon and others. In January 2007, Ligand announced a restructuring including the elimination of approximately 204 positions across all functional areas. Associated with the restructuring, several executive officers agreed to step down including the company's chief financial officer, chief scientific officer and general counsel. In January 2007, John L. Higgins joined the company as chief executive officer, president and in March 2007 was named a member of its board of directors. As a result of the sale of the company's commercial oncology products in the fourth quarter of 2006, and the sale of AVINZA(R) in February 2007, Ligand expects that revenue in 2007 will be driven primarily by royalty payments related to sales of AVINZA. About Ligand Pharmaceuticals Headquartered in San Diego, California, Ligand Pharmaceuticals Inc. (NASDAQ: LGND) -- http://www.ligand.com/-- discovers and develops new drugs that address critical unmet medical needs of patients in the areas of thrombocytopenia, cancer, hepatitis C, hormone-related diseases, osteoporosis and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on its leadership position in gene transcription technology, primarily related to intracellular receptors. LIGAND PHARMA: Reports $253 Million Cash Dividend to Shareholders ----------------------------------------------------------------- Ligand Pharmaceuticals Incorporated reported return of cash on the company's common stock of $2.50 per share cash dividend to its shareholders payable on April 19, 2007. In addition to its approximately $253 million cash dividend, the company's board of directors has authorized up to $100 million in share repurchases within the next 12 months. "[Ligand's] strategy of building a highly focused R&D- and royalty- driven biotech company allows us the ability to deliver value to shareholders through this one-time cash dividend and open market share repurchases, while maintaining a strong balance sheet and funding ongoing operations," said John L. Higgins, President and Chief Executive Officer. "The cash we are returning to [its] stockholders is a result of the sale of our commercial operations in 2006 and early 2007, and [Wednes]day's announcement follows a formal, third-party valuation analysis and discussion among Company directors and consultants, among other considerations." The company had approximately $415 million of unrestricted cash and investments as of Feb. 28, 2007. The company holds a $35 million of cash held in escrow accounts following the sales of AVINZA and our oncology product line to support potential indemnification claims by the purchasers of those assets. The company's option holders will not receive any proceeds from the payment of the dividend. Subsequently, the compensation committee of the board of directors may evaluate making some form of adjustment to outstanding stock options. In February 2007, shareholders authorized the company to adjust its outstanding stock options in an equitable manner. About Ligand Pharmaceutical Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) -- http://www.ligand.com/-- discovers, develops and markets new drugs that address critical unmet medical needs of patients in the areas of cancer, pain, skin diseases, men's and women's hormone- related diseases, osteoporosis, metabolic disorders, and cardiovascular and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on gene transcription technology, primarily related to intracellular receptors. * * * This concludes the Troubled Company Reporter's coverage of Ligand Pharmaceutical [Company] until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. MAIN STREET: Committee Hires Shutts & Bowen as Counsel ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida gave the Official Committee of Unsecured Creditors of Main Street USA Inc. and its debtor-affiliates permission to retain Shutts & Bowen LLP, as its counsel. The firm is expected to: a. assist, advise, and represent the Committee in its consultation with the Trustee relative to the administration of this Chapter 11 case; b. assist, advise, and represent the Committee in analyzing the Debtors' assets and liabilities, investigating the extend and validity of liens, and in reviewing any proposed assets sales or dispositions; c. attend meetings, and negotiate with representative of the Trustee, secured creditors, and other parties in interests; d. assist and advise the Committee in its examination and analysis of the of the Debtors' affairs; e. assist the Committee in the review, analysis, and negotiation of any plan(s) of reorganization that may be filed and assist the Committee in the review, analysis, and negotiation of the disclosure statement(s) accompanying any plan(s) of reorganization; f. assist the Committee in the review, analysis, and negotiation of any financing or funding arrangements; g. take all necessary action to represent and preserve the interest of the Committee, including, without limitation, prosecuting actions on its behalf, monitoring all litigation in which the estate is involved, and reviewing and analyzing all claims filed against the Debtors' estate; h. prepare the committee's all necessary motions, applications, answers, orders, reports, and papers in support of positions taken by the Committee. i. appear, as appropriate, before this Court, the appellate courts, and other courts in which matters may be heard and protecting the interest of the Committee before the Courts; and j. perform all other necessary legal services in this case. The Committee did not disclose the firm's compensation rates. Andrew M. Brumby, Esq., a partner of the firm, assures the Court he does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Brumby can be reached at: 300 South Orange Avenue, Suite 1000 Orlando, Florida 32801 Tel: (407) 423-3200 Fax: (407) 425-8316 http://www.shutts-law.com/ Headquartered in Kissimmee, Florida, Main Street USA Inc. and its debtor-affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. M.D. Fl. Case No. 06-02582). On Oct. 13, 2006, Lewis B. Freeman was appointed as the Debtors' chapter 11 Trustee. Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MAIN STREET: Trustee Hires Freeman Dawson as Special Accountants ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida gave Lewis B. Freeman, the appointed Chapter 7 Trustee for Main Street USA Inc. and its debtor-affiliates' bankruptcy case, permission to retain Freeman, Dawson, Rosenbaum, & Sobel, P.A., as his special accountants. Specifically, the firm is expected to prepare the Debtors' tax documents with the Internal Revenue Services. The firm's professionals billing rates: Professional Designation Hourly Rate ------------ ----------- ----------- Steven R. Rosenbaum CPA $225 Keith Rienhard CPA $150 Chirs Mefford $40 To the best of the Trustee's knowledge the firm does not hold any interest adverse and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Rosnebaum can be reached at: Steven R. Rosenbaum, CPA Freeman, Dawson, Rosenbaum, & Sobel, P.A. 2701 South Bayshore Drive, Suite 401 Coconut Grove, FL 33133 Fax: (305)444-3479 http://flacpa.com/ Headquartered in Kissimmee, Florida, Main Street USA Inc. and its debtor-affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. M.D. Fl. Case No. 06-02582). On Oct. 13, 2006, Lewis B. Freeman was appointed as the Debtors' chapter 11 Trustee. Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MARIA VISTA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Maria Vista Estates 124 West Main Street, Suite C Santa Maria, CA 93458 Bankruptcy Case No.: 07-10362 Type of Business: The Debtor is a real estate developer and homebuilder. See http://www.mariavista.com/ Chapter 11 Petition Date: March 23, 2007 Court: Central District Of California (Santa Barbara) Debtor's Counsel: Joseph M. Sholder, Esq. Michaelson, Susi & Michaelson 7 West Figueroa Steet, 2nd Floor Santa Barbara, CA 93101-3191 Tel: (805) 965-1011 Fax: (805) 965-7351 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Harvcal, Inc. loan $179,872 124 Main Street, Suite C Santa Maria, CA 93458 Russco vendor $119,112 2240 South Thornburg St. Santa Maria, CA 93455 E.D.A.-Design Professionals vendor $93,323 P.O. Box 1829 San Luis Obispo, CA 93406 Yanez Electric, Inc. vendor $78,184 Superior Framing, Inc. vendor $73,964 Ferguson Enterprises vendor $57,177 Nipomo Community Service development fees $49,251 84 Lumber vendor $46,517 Granite Construction Co. vendor $44,333 McMillen Construction vendor $43,522 Bermuda Imports-Export, Inc. vendor $37,889 Morris & Garritano Insurance vendor $29,132 Pacific West Roofing Supply vendor $27,576 Moreland Consulting, Inc. vendor $26,753 A.A.W. Doors vendor $23,739 Bassett Rain Gutters, Inc. vendor $20,475 Quality Heating and Air vendor $19,820 Conditioning Reuben & Junius, L.L.P. loan $17,945 Santa Maria Tile Encounters vendor $17,698 S.L.O. County Stone & vendor $15,518 Architectural Products MASSACHUSETTS HEALTH: Fitch Holds BB+ Rating on $9 Million Bonds ---------------------------------------------------------------- Fitch Ratings affirms the 'BB+' rating on the outstanding $9.0 million Massachusetts Health and Educational Facilities Authority revenue bonds, series 1993B. Seacoast Regional Health System is the parent and sole corporate member of Anna Jaques Hospital. The Rating Outlook is Stable. The affirmation of the 'BB+' rating and the Stable Outlook are supported by AJH's improving operations, low debt burden, and solid market position. The hospital recruited a new CEO and CFO in early part of calendar 2006. Since management began operations have improved. AJH posted a small operating loss of $692,000 in fiscal 2006, a significant improvement from the $2.4 million loss in fiscal 2005. The three months interim fiscal 2007 data show an operating gain of $407,000. Management's efforts have focused primarily on improving patient, employee, and physician satisfaction and physician recruitment which resulted in outpatient and inpatient volume growth. Additionally, the management was able to successfully curtail expenses by renegotiating contracts with its physician group's hospitalists and anesthesiologists, obtaining savings on supplies by joining a partnership, and reducing nurse agency reliance through recruiting full time floater nurses. AJH's low debt burden is evidenced by debt service coverage of maximum annual debt service, and MADS as a percent of revenues of 3.5x and 2.3%, respectively, through the three months ended Dec. 31, 2006. AJH maintains a leading market share in its service area capturing approximately 32.5% of admissions versus Hale Hospital, part of Merrimack Valley Health System, its next closest competitor, which had a market share of approximately 18.4%. Primary credit concerns include AJH's historically weak profitability, low cash levels relative to expenses, and historically low capital spending. Since fiscal 1998, AJH's capital investment has been well below depreciation expense indicating mounting capital needs. However, Fitch notes that over the last few years, AJH has used operating leases to finance necessary investments in equipment, which management indicated will be used on a more limited basis going forward. In 2006 AJH issued $5 million in privately placed bonds to fund a much needed emergency room expansion, general information technology improvements, and other general upgrades and renovations. AJH is planning to spend approximately $3.5 million annually on capital improvements in the near term which equates to 91.2% of the AJH's depreciation expense in budgeted fiscal 2007 ($3.8 million). At 2006 fiscal year-end AJH had $11.5 million of unrestricted cash and investments equating to 47.8 days cash on hand (DCOH) and 5.3x cushion ratio. Both ratios are well below Fitch's 'BBB' medians of 130.5 DCOH and 8.5x cushion ratio. AJH entered into two interest rate swaps with Morgan Stanley as counterparty on Oct. 1, 2004. The first swap converted the bonds from a fixed to variable rate and the second swap converted the interest rates back to a fixed rate. Neither swap is on parity with existing debt. Termination events are credit related and include a downgrade provision if the rating falls below 'BB+'. The net mark-to-market valuation for both swaps was only negative $146 at Sept. 30, 2006, which is the amount AJH would pay to Morgan Stanley if the swap terminated at that time. Fitch believes any potential termination payment would have an immaterial impact on AJH's financial profile. However, a termination would cause the bonds to revert to their original coupon, which could negatively impact operations. The Stable Outlook is supported by Fitch's expectation that AJH will maintain the current level of profitability. Fitch believes that raising liquidity in concert with making adequate capital outlays will be challenging for AJH in near-to-mid term but achievable in the long term if profitability can be maintained at or above 2%. Located in Newburyport, Massachusetts, AJH is a 160-staffed bed community hospital providing primary and secondary care services. In 2006, SRHS reported total revenues of $95.1 million. AJH only covenants to provide annual disclosure to bondholders in the form of audited financial statements, which Fitch views negatively. However, Fitch notes that annual disclosure was standard industry practice when the series 1993 bonds were issued. Fitch was unable to find all of AJH's audits since the bonds were issued on the nationally recognized municipal securities information repositories. MASTR ALTERNATIVE: Moody's Junks Rating on 2 Certificate Classes ---------------------------------------------------------------- Moody's Investors Service has downgraded three certificates from the MASTR Alternative Loan Trust Mortgage Pass-Through Certificates Series 2002-3 securitization. Moody's also confirmed its rating on one class from the same transaction. The underlying collateral for this securitization consists of "Alternative A" 15- year and 30-year fixed-rate mortgages originated by a number of different originators. Moody's notes that there has been severe erosion of credit enhancement following a $5,919,721.32 loss incurred in February. In the wake of US Mortgage Corp's bankruptcy in Dec. 2006, Wells Fargo has assumed direct responsibility for the servicing. In its trustee remittance report date Feb. 26 , 2007, Wells Fargo Bank N.A. notes among other irregularities that "US Mortgage had diverted loan proceeds representing scheduled payments of $5,919,721.32". The report also notes that additional losses might be reflected in future remittance reports. During the review, Moody's considered the potential recovery on these securities as well as the credit protection available to the Class A-6 and A-7. The A-7 certificates have the benefit of a financial guaranty policy by MBIA Insurance Corporation, which led Moody's to confirm its rating at Aaa. The A-6 downgrade was driven by the reduced enhancement available after the losses in February and the potential for additional losses going forward. The Class M-1 and Class M-2 have already been written down in the amounts of $2,416,252.74 and $98,490.85 respectively. At this stage, the likelihood of any significant recoveries seems remote. These are the rating actions: * MASTR Alternate Loan Trust 2002-3 -- Series 2002-3, Class A-6, downgraded from Aaa to Aa2; -- Series 2002-3, Class M-1, downgraded from Aa2 to Caa3; -- Series 2002-3, Class M-2, downgraded from A2 to C; Confirm: -- Series 2002-3, Class A-7, confirmed at Aaa. MGM MIRAGE: Appoints Daniel J. Taylor to Board of Directors ----------------------------------------------------------- MGM Mirage appointed Daniel J. Taylor the company's Board of Directors on March 20, 2007. Mr. Taylor brings a long record of experience to the Board, beginning his career as a tax manager with Arthur Anderson & Company where he specialized in the firm's entertainment and gaming practice. Throughout his career he has held several top executive positions. He served as Vice President of Taxes at MGM/UA Communications Co., then as an executive of Tracinda Corporation before moving to Metro-Goldwyn-Mayer Inc. where he served as Senior Executive Vice President and Chief Financial Officer. "We are very pleased to welcome Dan to the Board of Directors," said Terry Lanni, Chairman and Chief Executive Officer of MGM MIRAGE. "His financial, entertainment and gaming experience will assist him in providing valuable insight and perspective to our Board and the future growth of the company." In addition, Mr. Taylor served as President of Metro-Goldwyn-Mayer Inc. after the company's purchase by Providence and TPG. At present, Mr. Taylor holds an executive post with Tracinda Corporation. He is a member of Inforte Corporation's Board of Directors as Chair of the Compensation Committee and a member of the Audit Committee. Mr. Taylor will also serve on MGM Mirage's Compensation Committee. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- owns and operates 23 wholly owned casino resorts in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MGM Mirage has also announced plans to develop Project CityCenter, a multi-billion dollar mixed-use urban development project in the heart of Las Vegas, and has a 50% interest in MGM Grand Macau, a hotel-casino resort currently under construction in Macau S.A.R. * * * As reported in Troubled Company Reporter on Dec. 22, 2006, Fitch assigned a rating of 'BB' to the 7.625% $750 million in senior unsecured notes due 2017 offered by MGM Mirage. Fitch also affirmed the company's 'BB' Senior Credit Facility and Senior Notes' Rating. MIRACOR DIAGNOSTICS: Provides Financing Restructuring Update ------------------------------------------------------------ Miracor Diagnostics, Inc. has undertaken an effort to restructure its equipment financing as the company is over-leveraged and the amount of the equipment financing substantially exceeds the fair value of the underlying assets that secure such debts. Cash flow from operations does not support the cash flow required to service such equipment financing. In addition, the recent implementation of the Deficit Reduction Act which cuts certain Medicare payments has had an adverse affect on our industry's revenue, including Miracor's, although the company cannot specifically quantify the impact. Bankruptcy Warning As previously disclosed by the company, principal and interest payments to the secured equipment lenders have been discontinued as well as certain payments to unsecured creditors and preferred shareholders. The company is actively negotiating with its lenders to determine a course of action that will be best for its creditors and shareholders. These efforts may be unsuccessful due to the fact that the amount owed on the financed equipment is substantially in excess of its fair value. In such a case, the company may seek the protection of Chapter 11 of the U.S. Bankruptcy Code in an effort to reorganize the debts of the company. Such a reorganization will require the company to submit a Plan of Reorganization for approval by the court which could result in no value to common and preferred shareholders and may also impair creditors. Special legal counsel and financial advisors have been retained for guidance through the reorganization process. If the Plan of Reorganization is successful, the company could continue as a going concern though there can be no assurances that its shareholders will receive any consideration pursuant to a Plan of Reorganization. Refinancing Miracor also disclosed that it has refinanced its line of credit, which was secured by certain of its accounts receivable, with a new line of credit secured by the same accounts receivable, with a private investor. COO Resignation Leslie Weber, the company's Chief Operation Officer, announced her resignation effective March 31, 2007 to pursue other interests. Ross Seibert, the company's current Chief Executive Officer and Chief Financial Officer will handle her duties in the interim. About Miracor Headquartered in San Diego, Calif., Miracor Diagnostic, Inc. (OTCBB: MRDG) -- http://www.miracor.com/-- is an independent provider of medical diagnostic imaging services, specifically magnetic resonance imaging and computed tomography services through its network of company-owned and operated fixed-site, freestanding outpatient facilities in the United States. Miracor operates13 wholly owned centers, clustered in five states: California, Florida, Illinois, Ohio and Oregon. Seven of the facilities are multi-modality sites, offering various combinations of MRI, CT, mammography, ultrasound, bone densitometry, diagnostic radiology, or X-ray and fluoroscopy. Six of the facilities are single-modality sites, offering MRI only. At its facilities, Miracor provides all of the equipment, as well as all non-medical operational, management, financial and administrative services necessary to provide diagnostic imaging services. MORGAN STANLEY: S&P Puts Notes' B- Rating on Positive CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' rating on the $3 million class A-9 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 on CreditWatch with positive implications. The rating action reflects the March 22, 2007, placement of the rating on the referenced obligations issued by Neiman Marcus Group Inc. on CreditWatch positive. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a swap-dependent synthetic transaction that is weak-linked to the lower of (i) the ratings on the respective reference obligations for each class; (ii) the long-term rating on the swap counterparty and contingent forward counterparty's guarantor, Morgan Stanley ('A+'); and (iii) the credit quality of the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). NATIONAL LAMPOON: Posts $1.7 Million Net Loss in Qtr Ended Jan. 31 ------------------------------------------------------------------ National Lampoon Inc. reported a net loss of $1.7 million on total revenues of $987,388 for the second quarter ended Jan. 31, 2007, compared with a net loss of $1 million on total revenues of $819,997 for the same period ended Jan. 31, 2006. The increase in total revenues is primarily due to the $210,663 increase in advertising and promotion revenue partly offset by the $86,750 decrease in production revenue. The increase in advertising and promotion revenue was a result of increased advertising revenue on internet websites, partially offset by a decrease in promotion revenues. For the three months ended Jan. 31, 2007, production revenues decreased due to the allocation of internal resources directed to the production of a feature film. The increase in net loss for the three months ended Jan. 31, 2007, was a result of increased costs for the issuance of stock, warrants and options, the write down of unamortized production costs and increased costs related to licensing revenue partially offset by an increase in advertising and promotion revenue. At Jan. 31, 2007, the company's balance sheet showed $5.6 million in total assets and $6.5 million in total liabilities, resulting in an $895,706 total stockholders' deficit. The company's balance sheet at Jan. 31, 2007, also showed strained liquidity with $1.3 million in total current assets available to pay $6.5 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2007, are available for free at http://researcharchives.com/t/s?1c1e Going Concern Doubt Stonefield Josephson Inc., in Los Angeles, California, expressed substantial doubt about National Lampoon Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2006. The auditing firm pointed to the company's net loss and negative working capital. About National Lampoon Based in West Hollywood, California, National Lampoon Inc. (AMEX: NLN) -- http://www.nationallampoon.com/-- a media and entertainment company, engages in the creation and distribution of comedic content. The company licenses the National Lampoon brand, as well as content from its library for use in movies, television programming, live events, radio broadcasts, recordings, electronic games, live events, and other consumer products. NEENAH PAPER: Earns $2.7 Million in Quarter Ended December 31 ------------------------------------------------------------- Neenah Paper Inc. reported net income of $2.7 million for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $37.7 million for the same period ended Dec. 31, 2005. Income from continuing operations for the fourth quarter of 2006 was $3.2 million, compared with a loss from continuing operations of $2.7 million for the fourth quarter of 2005. Net sales for the fourth quarter of 2006 increased 30 percent versus the prior year to $177.2 million, while operating income increased from $600,000 in the fourth quarter of 2005 to $9 million in the current quarter. Fourth quarter 2006 results reflect the inclusion of Neenah's German operations, which were acquired from FiberMark on Oct. 11, 2006. Commenting on the performance, Sean Erwin, chairman and chief executive officer said, "Results for the fourth quarter were well ahead of last year, reflecting significant improvement in pulp operations resulting from both higher selling prices and improved costs, a more favorable pricing environment in our paper segments, and growth in Technical Products. Our businesses continued to generate strong cash flows, providing us with sound financial footing and flexibility to act on attractive opportunities like the Fox River acquisition. We made good progress during the quarter toward integrating our German operations and look forward to being able to deliver even more efficiencies as we consolidate Fox River with our fine paper business." Selling, general and administrative expense increased from $12.5 million in the fourth quarter of 2005 to $16.9 million in the current quarter. This increase reflected the inclusion of costs for Neenah Germany, as well as higher expenses in 2006 for stock-based compensation and depreciation of the company's investment in a new enterprise resource planning (ERP) system. Net interest expense was $5.1 million in the fourth quarter of 2006, increasing $700,000 from the fourth quarter of 2005 as a result of new borrowings to finance the German acquisition. The effective tax rate in the fourth quarter of 2006 was approximately 16 percent, compared with 29 percent in the fourth quarter of 2005. The reduction in rate was due to changes in the mix of income between segments and other structural changes following the acquisition of Neenah Germany. For the full year ending Dec. 31, 2006, net sales of $594.3 million increased 11 percent compared to net sales of $534.7 million for 2005. Excluding sales from the acquired German operations, revenues increased two percent, with growth in all three segments. Net income for 2006 was $62.5 million, compared to a net loss of $29.7 million for 2005. Year to date income from continuing operations was $95.4 million, compared with income from continuing operations of $22.3 million in 2005. Net income in 2006 included after-tax gains of $77.5 million related to the sale of timberlands. After excluding the gain from the timberlands sale, net income declined in 2006 as a result of a stronger Canadian dollar, increased raw material and energy costs, losses on pulp price hedges, and higher corporate expenses that offset the benefits of higher volumes and selling prices. Corporate expense increased primarily due to the adoption in January 2006 of SFAS 123R to expense stock-based compensation and from depreciation of costs associated with installing a new ERP system. Discontinued Operations The company's Terrace Bay pulp operation, excluding certain post- retirement obligations, was transferred to Terrace Bay Pulp Inc. and Eagle Logging Inc. on Aug. 29, 2006. Results from Terrace Bay have been classified as discontinued operations for all periods presented. Loss from discontinued operations in the fourth quarter of 2006 was $500,000, compared to loss from discontinued operations of $35 million in the fourth quarter of 2005. Results in 2005 included an after-tax charge of approximately $33.1 million for impairment of Terrace Bay assets. For the full year, losses from discontinued operations were $32.9 million in 2006 and $52 million in 2005. Losses in 2006 included $20.3 million related to the sale of the mill and settlement of the pension plan. Losses in 2005 included $36.9 for impairment and restructuring of Terrace Bay assets. At Dec. 31, 2006, the company's balance sheet showed $744.7 million in total assets, $559.8 million in total liabilities, and $184.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c21 About Neenah Paper Based in Alpharetta, Georgia, Neenah Paper (NYSE: NP) -- http://www.neenah.com/-- manufactures and distributes a wide range of premium and specialty paper grades, with well-known brands such as Classic(R), Environment(R), Starwhite(R), Esse(R), Kimdura(R) and Munising LP(R), Gessner(R) and Varitess(R). The company also produces and sells bleached pulp, primarily for use in the manufacture of tissue and writing papers. Neenah Paper has paper manufacturing operations in the United States and Germany, and a pulp mill and related timberlands in Nova Scotia, Canada. * * * As reported in the Troubled Company Reporter on Sept. 8, 2006, Moody's Investors Service affirmed Neenah Paper Inc.'s corporate family rating at B1. NEW CENTURY: Analysts See Looming Bankruptcy Filing, WSJ Says ------------------------------------------------------------- New Century Financial Corp. likely will file for bankruptcy imminently, Lingling Wei of The Wall Street Journal reports, citing analysts. The analysts, WSJ says, are pointing to the latest move by two of the company's major bank lenders to take possession of loans previously used to secure their financing. As previously reported in the Troubled Company Reporter, the company said that its lenders discontinued their financing for the company. Lenders include Barclays Bank PLC and Morgan Stanley Mortgage Capital Inc. Status of Barclay Credit Agreement As reported yesterday in the Troubled Company Reporter, the company disclosed that as of March 22, 2007, it was still in the process of satisfying the preconditions under a letter agreement with Barclays. Barclay had terminated its master repurchase agreement dated March 31, 2006, as amended, with the company, certain of its subsidiaries, and Sheffield Receivables Corporation. The company also disclosed that it had received notices from Barclays, alleging certain Events of Default and purported to accelerate to March 14, 2007 the obligation of the company's subsidiaries to repurchase all outstanding mortgage loans financed under the Barclays Agreement and to terminate the Barclays Agreement as of that same date. The company had estimated that the aggregate repurchase obligation, the outstanding mortgage loans financed, of its subsidiaries under the Barclays Agreement was approximately $900 Million as of March 12, 2007. Morgan Stanley Sells Loans Morgan Stanley Mortgage Capital Inc. will be selling at a public auction a portfolio of approximately 13,200 residential mortgage loans originated by New Century. Morgan Stanley Agreement On March 8, 2007, New Century, certain of its subsidiaries, and Morgan Stanley, entered into an Amendment No. 8 to a certain Master Repurchase Agreement dated Dec. 12, 2005. The amended agreement allowed to company to add new borrowers and pledge additional assets for $265 million in new financing. The Amended Agreement also provides that Morgan Stanley may, in its discretion, elect to discontinue extending financing to the company. A full-text copy of the Morgan Stanley Agreement, as amended, is available for free at http://researcharchives.com/t/s?1b39 On March 9, 2007, New Century received a letter from Morgan Stanley notifying the company: * of certain purported defaults, * that Morgan Stanley was accelerating certain obligations under the Morgan Stanley Agreement, and * Morgan Stanley was discontinuing financing to the company under the Morgan Stanley Agreement. New Century has tapped Lazard Ltd. as its financial advisor, and O'Melveny & Myers as its legal counsel, according to Reuters relates citing three creditors familiar with the matter. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on New Century Financial Corp. to 'D' from 'CC'. The ratings on the senior unsecured debt and preferred stock remain on CreditWatch with negative implications. In addition, Dominion Bond Rating Service downgraded the Issuer Rating of New Century Financial Corporation to C from CCC. The rating remains Under Review with Negative Implications. As reported in the Troubled Company Reporter on Mar. 9, 2007, Fitch Ratings downgraded New Century Mortgage Corporation's, a subsidiary of New Century Financial Corp., residential primary servicer rating for subprime product to 'RPS4' from 'RPS3+', and places the rating on Watch Negative. According to Fitch, an 'RPS4' rated servicer may not be acceptable for new residential mortgage-backed security transactions unless additional support or structural features are incorporated. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicer's portfolio and financial condition and the company's ability to obtain satisfactory amendments to or waivers of the covenants in its financing arrangements from a sufficient number of its lenders, or obtain alternative funding. NEW CENTURY: Morgan Stanley to Sell 13,200 Mortgage Loans --------------------------------------------------------- Morgan Stanley Mortgage Capital Inc. will be selling at a public auction a portfolio of approximately 13,200 residential mortgage loans. The aucton will be held at Morgan Stanley's offices in Broadway, New York. The loans, having an aggregate unpaid principal balance of approximately $2.48 billion, are originated by New Century Financial Corporation's subsidiaries. The New Century subsidiaries are: * New Century Mortgage Corporation * NC Capital Corporation * Home123 Corporation * New Century Credit Corporation The mortgage loans are being sold "as is, where is" with no representations and warranties regarding the mortgage loans. Indicative bids must be submitted by March 29, 2007, at 11:00 a.m. EDT to Van Cushny or Lisa Farkovits in New York. For further information, contact: a) Van Cushny at (212) 404-9430; or b) Lisa Farkovits at (212) 507-5778. Morgan Stanley Agreement On March 8, 2007, New Century, certain of its subsidiaries, and Morgan Stanley, entered into an Amendment No. 8 to a certain Master Repurchase Agreement dated Dec. 12, 2005. The amended agreement allowed to company to add new borrowers and pledge additional assets for $265 million in new financing. The Amended Agreement also provides that Morgan Stanley may, in its discretion, elect to discontinue extending financing to the company. A full-text copy of the Morgan Stanley Agreement, as amended, is available for free at http://researcharchives.com/t/s?1b39 On March 9, 2007, New Century received a letter from Morgan Stanley notifying the company: * of certain purported defaults, * that Morgan Stanley was accelerating certain obligations under the Morgan Stanley Agreement, and * Morgan Stanley was discontinuing financing to the company under the Morgan Stanley Agreement. Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on New Century Financial Corp. to 'D' from 'CC'. The ratings on the senior unsecured debt and preferred stock remain on CreditWatch with negative implications. In addition, Dominion Bond Rating Service downgraded the Issuer Rating of New Century Financial Corporation to C from CCC. The rating remains Under Review with Negative Implications. As reported in the Troubled Company Reporter on Mar. 9, 2007, Fitch Ratings downgraded New Century Mortgage Corporation's, a subsidiary of New Century Financial Corp., residential primary servicer rating for subprime product to 'RPS4' from 'RPS3+', and places the rating on Watch Negative. According to Fitch, an 'RPS4' rated servicer may not be acceptable for new residential mortgage-backed security transactions unless additional support or structural features are incorporated. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicer's portfolio and financial condition and the company's ability to obtain satisfactory amendments to or waivers of the covenants in its financing arrangements from a sufficient number of its lenders, or obtain alternative funding. NORTH CAROLINA MEDICAL: Fitch Holds BB- Rating on $49.8 Mil. Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB-' rating on the approximately $49.8 million North Carolina Medical Care Commission Hospital revenue bonds series 2003. The Rating Outlook is revised to Stable from Negative. The rating affirmation of 'BB-' and Rating Outlook revision to Stable are primarily supported by Maria Parham Healthcare Association, Inc.'s turnaround initiative and improving financial profile. Offsetting this improvement is Maria Parham's historical operating performance and recent violations of bond covenants. In fiscal 2005 Maria Parham violated its debt service rate covenant of 1.2x and liquidity covenant of 60 days cash on hand and in accordance with bond documents engaged a management consultant. The management consultant is assisting management with a turnaround plan focused on improved productivity, reduced staffing levels, revenue cycle enhancement, stronger physician contracting, case management, supply chain savings and other improved operational efficiencies. The recent improvement in Maria Parham's financial profile is expected to continue as the operational efficiencies and savings associated with the consultant recommendations are fully realized. At Jan. 31, 2007, Maria Parham had 61.2 days cash on hand, 2.8x cushion ratio and 21.5% cash to debt, up from 50.8 days cash on hand, cushion ratio of 2.2x and cash to debt of 18.1% for fiscal 2006. Through Jan. 31, 2007, Maria Parham reported a negative 2.1 operating margin (loss of $532,000) and an excess margin of 0.7% (gain of $191,000), which compares favorably to the negative 3.7% operating margin (loss of $2.9 million) and negative 3.2% excess margin (loss of $2.5 million) for fiscal 2006. Improved operating performance contributed to a coverage of maximum annual debt service coverage by earnings before interest, taxes, depreciation and amortization of 2.0x, up from the 1.3x for fiscal 2006. Credit strengths for Maria Parham are its strong market share, new patient units and new executive leadership. Management reported that Maria Parham's primary service area market share remained stable at 60%. In February 2005, Maria Parham completed the construction of their inpatient beds which expanded their number of private rooms to 76 from 54. Maria Parham also completed an expansion of its rehabilitation services in October of 2005. These facilities coupled with Maria Parham's market share and successful efforts to recruit additional physicians, should help improve patient volume in the medium term. Primary credit concerns include erratic inpatient volume trends, a weak payor mix and poor economic indicators of the primary service area. Patient volume indicators have been uneven for the last few years and while there was some improvement from fiscal 2005 to fiscal 2006, year-to-date admissions are below budget and down when compared to the same period last year. Unemployment rates in Maria Parham's primary service area, which consists of Vance and Warren counties, continue to remain high at 8.9% and 7.3%, respectively, when compared to the North Carolina state average of 5.2% for 2005, and the local population is not growing as strongly as projected. The Stable Rating Outlook reflects Fitch's expectation that Maria Parham's relatively new executive leadership team will continue to make operating profitability of the hospital a top priority. Maria Parham is budgeting a bottom line profitability of approximately $1 million for fiscal 2007 and projects a positive operating margin in fiscal 2008. Maria Parham Healthcare Association serves as the parent corporation and controls operations at the only other member of the obligated group, Maria Parham Medical Center. Maria Parham Medical Center is a 102-licensed bed acute care hospital located in Henderson, North Carolina, approximately 45 miles north of Raleigh. Total annual revenue for the consolidated organization equaled approximately $77.1 million in fiscal 2006. Maria Parham covenants to disclose both annual and quarterly financial information to the Nationally Recognized Municipal Securities Information Repositories. Maria Parham discloses annual and quarterly information to the NRMSIRS through Digital Assurance Certification, LLC. Disclosure to date has been thorough and timely and has included balance sheet, income statement, cash flows, and utilization data, but no management discussion and analysis. NORTHWEST AIRLINES: Court Approves Disclosure Statement ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved Northwest Airlines Corporation's Disclosure Statement explaining its Amended Plan of Reorganization on March 26, 2007, Bloomberg News reports. Judge Gropper said the Disclosure Statement "is adequate and should be approved" but noted that the approval was subject to revisions agreed on by attorneys for the company and creditors at the hearing, Bloomberg says. According to the report, Judge Gropper overruled the objection filed by the Ad Hoc Committee of Equity Security Holders saying it isn't clear whether the hedge fund investors complied with a March 9, 2007 Order directing the Ad Hoc Committee members to fully disclose their holdings in Northwest. To appease the pilots and other objecting parties, Bruce Zirinsky, Esq., at Cadwalader Wickersham & Taft LLP, in New York, said the airline will provide a description of its management equity plan "by the close of business" on March 30. Northwest further disclosed that it will give about 4,000 non-union workers $77.4 million in cash and stock bonuses when it emerges from Chapter 11, Christopher Scinta of Bloomberg News reports. "[Mon]day's approval of Northwest's disclosure statement is another major milestone in our restructuring efforts," the company said. The airline added that it remains on target to exit bankruptcy protection during the second quarter of 2007 with a value of about $7 billion, Bloomberg says. Attorneys expect the Disclosure Statement to be mailed to creditors entitled to vote on the Plan from April 6 to April 9, 2007, according to Bloomberg. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST AIRLINES: Plan Confirmation Hearing Scheduled on May 16 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set a hearing on May 16, 2007, to consider confirmation of Northwest Airlines Corp. and its debtor-affiliates' Amended Plan of Reorganization, Bloomberg News reports. Creditors have until May 7 to cast their votes. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST AIRLINES: Withdraws $129MM Claim for Salaried Employees ----------------------------------------------------------------- Northwest Airlines Corporation disclosed yesterday that it has withdrawn a $129 million salaried employee unsecured claim from its Plan of Reorganization. The company also disclosed partial details of a new salaried equity plan for its 5,200 worldwide salaried and management employees. Under the plan, salaried employees below the director level will receive cash and restricted stock units totaling $77.4 million. Shortly after emergence from bankruptcy, current salaried employees below the director level who took pay and benefit reductions as part of the airline's restructuring efforts will receive cash payments of $31 million. Salaried employees will also be eligible to receive restricted stock units, with a grant date value of $46.4 million. These units will vest one year after emergence and will be converted to common stock of the new Northwest Airlines. Employees must remain with Northwest for the one year period to receive the stock. Doug Steenland, president and chief executive officer of Northwest Airlines, said, "The plan is designed to promote long-term retention of salaried employees and to build on Northwest's commitment to ensuring that all employees participate in the financial success of the company. It also recognizes the contributions salaried employees have made to the company's successful restructuring efforts." "This salaried equity plan will help ensure that Northwest retains a team of experienced salaried employees, and ties the interests of that team to the financial performance of our company." The $77.4 million being distributed via the plan is in lieu of $129 million claim that would have been provided under the salaried employee unsecured claim that Northwest previously filed with the United States Bankruptcy Court for the Southern District of New York. Northwest has advised the court that after consultation with its Unsecured Creditors Committee, it has withdrawn the $129 million salaried and management unsecured claim. The management claim, designated for salaried employees below the director level whose salaries and benefits were reduced by the company, was determined using the same formula as that which was used to determine the claims in the Company's labor agreements. Through unsecured claims that are integral parts of ratified collective bargaining agreements as well as profit-sharing payments, Northwest's 30,000 employees are expected to receive $1.5 billion in distributions during the period of the airline's business plan, which runs through 2010. That figure is the equivalent of a 20 percent economic interest in Northwest going forward. Mr. Steenland added, "Employees recently received their first profit sharing checks and several of our unions have sold up to 40 percent of their unsecured claims, thus delivering the first financial benefits of Northwest's restructuring directly to our employees." The equity plan program details for directors, managing directors and officers will be announced at a later date. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NVE INC: Court Extends Exclusive Plan-Filing Period to April 5 -------------------------------------------------------------- The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New York extended until April 5, 2007, the exclusive period wherein NVE Inc. can file a chapter 11 plan of reorganization. Judge Winfield also gave the Debtors until June 7, 2007 to solicit acceptances of that plan. Based in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now- banned herbal stimulant, Ephedra. The company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05- 35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVIDIA CORP: Judge Efremsky Reverses Decision; Allows Media ----------------------------------------------------------- The Hon. Roger Efremsky of the U.S. Bankruptcy Court for the Northern District of California reversed his decision and agreed to open the court proceedings involving Nvidia Corp. and 3DFX Interactive Inc., to the public and the press, the Mercury News reports. As reported in the Troubled Company Reporter on March 23, 2007, Judge Efremsky had barred the media in the trial and asked parties who wanted to observe the proceedings to sign confidentiality agreements. The reversal came after Mercury News' counsel objected to the non- disclosure order. The Mercury News further relates that although Judge Efremsky allowed reporters to attend the trial without signing non- disclosure agreements, he will ask reporters to leave the courtroom if he deems that the documents involved in a testimony is confidential in nature. About 3DFX Interactive Headquartered in Palo Alto, Calif., 3DFX Interactive Inc. developed graphics chips, graphics boards, software and related technology. On March 27, 2001, 3DFX's shareholders approved proposals to liquidate, wind up and dissolve the company pursuant to a plan of dissolution and to sell certain of its assets to Nvidia US Investment Company, a wholly owned subsidiary of Nvidia Corporation. The Company filed for chapter 11 protection on Oct. 15, 2002 (Bankr. N.D. Calif. Case No. 02-55795). William A. Brandt, Jr. serves as trustee and is represented by Aron M. Oliner, Esq., at the Law Offices of Duane Morris and Craig C. Chiang, Esq, at Buchalter, Nemer, Fields and Younger. Robert S. Gebhard, Esq., at Sedgwick, Detert, Moran and Arnold represents the Official Committee of Unsecured Creditors. At July 31, 2002, the Company had $35,236,000 net liabilities in liquidation from total assets of $106,000 and total liabilities of $35,342,000. About NVIDIA Corp. Headquartered in Santa Clara, Calif., NVIDIA Corporation -- http://www.nvidia.com/-- is a manufacturer of programmable graphics processor technologies. The company creates innovative, industry-changing products for computing, consumer electronics and mobile devices. NVIDIA has annual revenues of over $2.5 billion. * * * As reported in the Troubled Company Reporter on Dec. 8, 2006, Standard & Poor's Ratings Services removed its ratings on Nvidia Corp. from CreditWatch, where they were placed with negative implications on Aug. 15, 2006. S&P said the corporate credit rating was affirmed at 'BB-' and the outlook is stable. OHA PARK: Moody's Assigns Ba2 Rating to $28 Million Class D Notes ----------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes issued by OHA Park Avenue CLO I, Ltd.: * Aaa to the $50,000,000 Class A-1a Senior Secured Revolving Floating Rate Notes, Due 2022; * Aaa to the $346,560,000 Class A-1b Senior Secured Floating Rate Notes, Due 2022; * Aa2 to the $30,940,000 Class A-2 Senior Secured Floating Rate Notes, Due 2022; * A2 to the $36,560,000 Class B Secured Deferrable Floating Rate Notes, Due 2022; * Baa2 to the $25,310,000 Class C Secured Deferrable Floating Rate Notes, Due 2022 and * Ba2 to the $28,130,000 Class D Secured Deferrable Floating Rate Notes, Due 2022. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Oak Hill Advisors, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ORCHID STRUCTURED: S&P Cuts Ratings on Two Certificates to B- ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B, C-1, and C-2 notes issued by Orchid Structured Finance CDO Ltd., a static CDO backed primarily by ABS, and removed them from CreditWatch with negative implications, where they were placed Oct. 25, 2006. At the same time, the ratings on the class A-1MM and A-2 notes were affirmed. The downgrades reflect continuing deterioration in the overcollateralization ratios since the rating actions in September 2005. The decline is primarily due to an increase in defaulted assets and the low recovery value assigned to those defaulted assets for purposes of O/C calculations. Standard & Poor's notes that for the purpose of O/C calculation, the trustee "haircuts" a portion of the collateral to account for excess exposure to lower-rated assets. As of the Feb. 5, 2007, trustee report, this haircut was $3.6 million. The class A/B and class C O/C ratios, without this haircut but after the paydowns on Feb. 20, 2007, would be 108.77% and 100.49%, respectively, down from 112.86% and 106.36%, respectively, in September 2005 (when the haircut was $8.8 million). Any increase in defaults that have recoveries lower than the modeled recovery rates will impair the existing credit support and could lead to negative CreditWatch placements on the class C-1 and C-2 note ratings. The transaction is structured such that the failure of any class C coverage ratio will divert the available interest proceeds--after paying all expenses and interest--to pay down the class C notes. As a result, the balance of the class C-1 and C-2 notes after the last payment date on Feb. 20, 2007, is about 67% of its original size. The affirmed ratings reflect paydowns to the class A-1MM and A-2 notes that have decreased the current outstanding balances of these classes to 29% and 68%, respectively, of their original size (as of the last payment date on Feb. 20, 2007). The paydowns have improved the credit support available to the class A-1MM and A-2 notes. Ratings Lowered And Removed From Creditwatch Negative Orchid Structured Finance CDO Ltd. Rating Balance ------ ------- Class To From Current Original ----- -- ---- ------- -------- B A- A+/Watch Neg $19,375,000 $19,375,000 C-1 B- BB+/Watch Neg $4,201,000 $6,250,000 C-2 B- BB+/Watch Neg $3,361,000 $5,000,000 Ratings Affirmed Orchid Structured Finance CDO Ltd. Balance ------- Class Rating Current Original ----- ------ ------- -------- A-1MM AAA/A-1+ $50,212,000 $175,000,000 A-2 AAA $22,202,000 $32,500,000 PREFERREDPLUS TRUST: S&P Lifts Rating on Class A & B Certs. to BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on the class A and B fixed-rate preferred plus trust certificates issued by PreferredPLUS Trust Series ELP-1 to 'BB-' from 'B' and removed them from CreditWatch, where they were placed with positive implications on Dec. 27, 2006. The upgrades reflect the raising of the rating on the underlying securities, the $40,754,000 7.75% medium-term notes due Jan. 15, 2032, issued by El Paso Corp., and its removal from CreditWatch positive on March 19, 2007. PreferredPLUS Trust Series ELP-1 is a swap-independent synthetic transaction that is weak-linked to the underlying collateral, the $40,754,000 7.75% medium-term notes issued by El Paso Corp. PROTECTION ONE: Dec. 31 Balance Sheet Upside-Down by $79.9 Million ------------------------------------------------------------------ Protection One Inc.'s balance sheet at Dec. 31, 2006, showed $444 million in total assets and $523.9 million in total liabilities, resulting in a $79.9 million total stockholders' deficit. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $64.6 million in total current assets available to pay $69.6 million in total current liabilities. Protection One reported a net loss of $4.7 million for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $2.2 million for the fourth quarter of 2005. The increase in net loss was in part due to an increase in net interest expense of $1.8 million and an increase in tax expense of $400,000. Total revenues in the fourth quarter of 2006 were $69.1 million compared to $66.5 million in the fourth quarter of 2005, an increase of 3.9%. Higher average recurring monthly income in the fourth quarter of 2006 allowed the company to record monitoring and related services revenues of $61.9 million, an increase of nearly 1% from $61.3 million recorded in the fourth quarter of 2005. Fiscal Year 2006 Results Monitoring and related services revenues were $247.4 million for the year ended Dec. 31, 2006, $26.5 million in the 39-day period commencing Jan. 1, 2005, and ending with and including Feb. 8, 2005, (the "pre-push down period"), and $219.5 million in the 326-day period beginning after that date and ending on Dec. 31, 2005, utilizing the new basis of accounting (the "post- push down period"). Total revenues were $270.6 million in 2006 and, in the pre- and post-push down periods of 2005 were $28.5 million and $234.5 million, respectively. Net loss was $17.4 million in fiscal 2006. In the pre- and post- push down periods in 2005, the net loss was $11.4 million and $15.6 million, respectively. As of Dec. 31, 2006, recurring monthly revenue was $20 million compared to $19.9 million as of Dec. 31, 2005. Excluding debt discounts and premiums, the company's total debt outstanding, as of Dec. 31, 2006, was $410.8 million, compared to $344.2 million as of Dec. 31, 2005, reflecting the additional financing obtained through the senior secured credit facility for the purpose of paying a special cash distribution in May 2006. The company had $297.8 million outstanding under its senior secured credit facility as of Dec. 31, 2006. The company's cash and equivalents as of Dec. 31, 2006, were $24.6 million compared to $19.9 million at Dec. 31, 2005. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c25 Push-Down Accounting in 2005 On Feb. 8, 2005, the company consummated a debt-for-equity exchange with affiliates of Quadrangle Group LLC that resulted in Quadrangle reducing the aggregate principal amount outstanding under the company's credit facility with Quadrangle by $120 million, in exchange for 16 million shares of the company's common stock. The issuance of the new shares, together with shares already owned by Quadrangle, resulted in Quadrangle owning approximately 97.3% of the company's common stock. As a result of Quadrangle's increased ownership interest from the Feb. 8, 2005, debt-for-equity exchange, the company has "pushed down" Quadrangle's basis to a proportionate amount of its underlying assets and liabilities acquired, based on the estimated fair market values of the assets and liabilities. The "push-down" accounting adjustments did not impact cash flows. About Protection One Headquartered in Wichita, Kansas, Protection One Inc. (OTC BB: PONN.OB) -- http://www.ProtectionOne.com/-- is one of the largest providers of security monitoring services in the United States. Including its Network Multifamily subsidiary, a leading security provider to the multifamily housing market, Protection One provides monitoring and related security services to approximately one million residential and commercial customers. REALOGY CORP: Moody's Junks Rating on Proposed $2.25 Billion Notes ------------------------------------------------------------------ Moody's Investors Service assigned provisional ratings to Realogy Corporation's proposed offering of $2.25 billion of senior unsecured notes and $900 million of senior subordinated notes. Moody's assigned a Caa1 rating to the proposed senior unsecured notes and a (Caa2 rating to the proposed senior subordinated notes. Additionally, Moody's affirmed Realogy New's B3 Corporate Family Rating and the Ba3 rating previously assigned to the proposed senior secured credit facility. The term loan component of the proposed credit facility has been upsized to $1.95 billion from $1.45 billion. The proceeds of these note offerings, along with borrowings under the senior secured credit facility and an equity contribution by Apollo Management, L.P., will be used to finance the leveraged buyout of the company. The B3 Corporate Family Rating reflects weak pro forma financial strength and profitability metrics, Moody's expectation of continued softness in the residential real estate market in the intermediate term and minimal business line diversification. The ratings are supported by leading market positions, strong brands and long term growth fundamentals for the real estate industry. The Ba3 rating on the $4.77 billion proposed senior secured credit facility reflects the facility's first priority position in the capital structure and a loss given default assessment of LGD2 (23%). The credit facility is secured by a first lien pledge of substantially all of the company's domestic assets and 65% of the stock of foreign subsidiaries. The loss given default assessment reflects the priority position of the proposed credit facility in the capital structure and the significant amount of junior ranking debt and non-debt obligations. Any existing senior notes of Realogy that are not redeemed will become secured in accordance with the terms of the indenture and will rank pari passu with the new secured credit facility. The Caa1 rating on the $2.25 billion of proposed senior unsecured notes reflects a loss given default assessment of LGD5, 73%. The proposed senior notes will be guaranteed by substantially all of the domestic subsidiaries of the company. The loss given default assessment on the proposed senior notes reflects effective subordination to the secured credit facility and any existing notes of Realogy that are not redeemed. The proposed senior notes have a priority claim relative to the proposed senior subordinated notes. The Caa2 rating on the $900 million of proposed senior subordinated notes reflects a loss given default assessment of LGD6, 93%. The senior subordinated notes will be guaranteed by substantially all of the domestic subsidiaries of the company. The loss given default assessment on the proposed subordinated notes reflects contractual subordination to the secured credit facility, any existing notes of Realogy that are not redeemed and the proposed guaranteed senior notes. These are the rating actions: * Assigned $1.5 billion senior unsecured cash pay notes due 2015, Caa1, LGD5, 73% * Assigned $750 million senior unsecured toggle notes due 2015, Caa1, LGD5, 73% * Assigned $900 million senior subordinated notes due 2017, Caa2, LGD6, 93% * Affirmed $750 million senior secured revolving credit facility due 2013, Ba3, LGD2, 23% from LGD2, 19% * Affirmed $1.95 billion (upsized from $1.45 billion) senior secured term loan due 2014, Ba3, LGD2, 23% from LGD2, 19% * Affirmed $1.22 billion senior secured delayed draw term loan facility due 2014, Ba3, LGD2, 23% from LGD2, 19% * Affirmed $850 million senior secured synthetic letter of credit facility due 2014, Ba3, LGD2, 23% from LGD2, 19% * Affirmed Corporate family rating, B3 * Affirmed Probability of Default rating, B3 The stable ratings outlook anticipates continued weakness in the residential real estate market in 2007, with an approximately 7% to 8% decline in homesale volume and flat to modestly declining pricing trends. Although Moody's expects a modest recovery in 2008, credit metrics are expected to remain weak for the rating category over the intermediate term. Realogy Corporation is one of the largest real estate service companies in the world with reported revenues of about $6.5 billion in the year ended Dec. 31, 2006. The company operates in four segments: real estate franchise services, company owned real estate brokerage services, relocation services and title and settlement services. The franchise brand portfolio includes Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby's International Realty. REDDING TANK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Redding Tank and Casing dba Perkins Welding aka Perkins Welding Works P.O. Box 292580 Sacramento, CA 95828 Bankruptcy Case No.: 07-21997 Type of Business: The Debtor, besides being a factory direct distributor of petroleum and industrial handling equipment and of service station equipment, is also a manufacturer of steel tanks for above ground use, be it single wall, double wall or triple wall tanks. See http://www.reddingtank.com/ Chapter 11 Petition Date: March 22, 2007 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Julia P. Gibbs, Esq. 1329 Howe Avenue, Suite 205 Sacramento, CA 95825-3363 Tel: (916) 646-2800 Total Assets: $1,589,967 Total Debts: $3,006,462 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Rober Dunn $812,356 1319 Carter Road Sacramento, CA 95864 Bank of America $62,749 P.O. Box 660576 Dallas, TX 75266-0576 Farwest Steel Corp. $46,261 P.O. Box 4188 Medford, OR 97501 Feralloy Corp. $42,100 Gasboy International, L.L.C./Gilbarco $29,688 Financial Pacific Insurance Co. $26,984 Delta Consolidated Industries, Inc. $24,124 Manpower $19,599 Bank of America-Visa $16,835 Rushway C/O Investment Recovery $15,423 Pomares Gardner, C.P.A. $15,317 Wells Fargo Bank-Visa $14,259 Samson Corp. $13,515 Fuel Technologies International $13,366 Blue Cross of California $10,766 State Board of Equalization $10,314 A.F.C.O.-Vehicle Insurance $10,269 Richards $10,169 Wilke Fleury Hoffelt Gould $8,886 Shasta Welding Supply, Inc. $8,772 REDONDO WASTE: Case Summary & Seven Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Redondo Waste Systems, Inc. P.O. Box 6616 Caguas, PR 00726 Bankruptcy Case No.: 07-01512 Type of Business: The Debtor's successor-in-interest, Big Blue Corporation, filed for chapter 11 protection on February 12, 2007 (Bankr. D. P.R. Case No. 07-00653). Chapter 11 Petition Date: March 23, 2007 Court: District of Puerto Rico (Old San Juan) Judge: Gerardo Carlo Altieri Debtor's Counsel: Carlos Rodriguez Quesada P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 Fax: (787) 724-2463 Total Assets: $990,000 Total Debts: $1,009,009 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Departamento de Hacienda $245,903 Negociado de Contribuciones P.O. Box 2501 San Juan, PR 00902-2501 CRIM $127,869 P.O. Box 195387 San Juan, PR 00919-5387 Departamento del Trabajo (PR) Estate Security $45,775 P.O. Box 37688 San Juan, PR 00981 Ryder Vehicle Lease $36,000 Arrears Municipio de Caguas Municipa Patent $33,189 Interspace Ind. Corp. Commercial Space $18,473 Lease Arrears Banco Popular de Puerto Rico Credit Line $11,800 RGIS INVENTORY: Blackstone Offer Cues S&P's Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B+' corporate rating, on Auburn Hills, Michigan-based RGIS Inventory Specialists on CreditWatch with negative implications. This rating action follows the report that an affiliate of the Blackstone Group has agreed to purchase a majority equity stake in the company. Goldman, Sachs & Co. has committed to provide bank debt and mezzanine financing. "Although specific terms have not been disclosed," said Standard & Poor's credit analyst Charles Pinson-Rose, "we believe that the transaction will most likely result in increased debt leverage and weakened cash flow protection ratios." The current ratings are based on inconsistent operating performance and a highly leveraged capital structure that limits cash flow protection. Standard & Poor's will monitor developments related to the transaction. RIVAS ALVARADO: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Rivas Alvarado Family, Inc. 18058 Mateny Road Germantown, MD 20874 Bankruptcy Case No.: 07-12706 Chapter 11 Petition Date: March 23, 2007 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Steven H. Greenfeld, Esq. Cohen, Baldinger & Greenfeld, LLC 7910 Woodmont Avenue, Suite 760 Bethesda, MD 20814 Tel: (301) 881-8300 Fax: (301) 881-8350 Estimated Assets: Unknown Estimated Debts: Less than $50,000 The Debtor did not file a list of its 20 largest unsecured creditors. ROACH AUTOMOTIVE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Roach Automotive, L.P. 25 West Market Street Burgettstown, PA 15021 Bankruptcy Case No.: 07-21800 Chapter 11 Petition Date: March 23, 2007 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. Calaiaro, Corbett & Brungo, P.C. Grant Building, Suite 1105 330 Grant Street Pittsburgh, PA 15219-2202 Tel: (412) 232-0930 Fax: (412) 232-3858 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. RURAL/METRO CORP: Dec. 31 Balance Sheet Upside Down by $92.9 Mil. ----------------------------------------------------------------- Rural/Metro Corp. reported results for the three and six months ended Dec. 31, 2006. Its balance sheet as of Dec. 31, 2006, showed a total stockholders' deficit of $92.91 million, resulting from total assets of $292.76 million, total liabilities of $383.13 million, and minority interests of $2.54 million. For the three months ended Dec. 31, 2006, the company had a net income of $1.29 million, versus a net income of $2.85 million for the same period a year earlier. Net revenues for the three months ended Dec. 31, 2006, were $116.94 million, versus net revenues of $113.39 million for the same period a year earlier. For the six months ended Dec. 31, 2006, the company had a net income of $3.04 million, versus a net income of $6.43 million for the same period a year earlier. Net revenues for the six months ended Dec. 31, 2006, were $233.78 million, versus net revenues of $224.72 million for the same period a year earlier. Accumulated deficit as of Dec. 31, 2006, was $246.18 million, versus $249.23 million a year earlier. Cash and cash equivalents as of Dec. 31, 2006, were $7.79 million, down from $3.04 million as of June 30, 2006. The company had zero short-term investments at Dec. 31, 2006, and had $6.2 million at June 30, 2006. Full-text copies of the company's three and six months report for the period ended Dec. 31, 2006, are available for free at http://ResearchArchives.com/t/s?1c26 Waiver of Default Due to the restatement of the financial statements, it did not timely file its Quarterly Report on Form 10-Q for the quarter ended Dec. 31, 2006, as disclosed on Form 12b-25 filed on Feb. 12, 2007. As a result, the company received a notice of default on Feb. 22, 2007, from the trustee of its 9.875% Senior Subordinated Notes due 2015, and its 12.75% Senior Discount Notes due 2016. The company's subsidiary, Rural/Metro Operating Company LLC, entered into Waiver No. 1, dated as of March 13, 2006, with its lenders, under which the lenders waive the defaults arising out of the company's failure to timely file its Form 10-Q, for the quarter ended Dec. 31, 2006. The company has been delayed due to the reported inventory restatement relating to certain durable medical equipment within inventory. Unscheduled Principal Payment On March 22, 2007, the company, through its wholly owned subsidiary, Rural/Metro LLC, made a $7 million unscheduled principal payment on its Term Loan B. In connection with this payment, the company wrote-off about $200,000 of deferred financing costs during the third quarter of fiscal 2007. Withdrawal of Shelf Registration On March 22, 2007, the company disclosed that it will withdraw its Registration Statement on Form S-3 that was previously filed with the Securities and Exchange Commission on Feb. 8, 2006. The Registration Statement has not been declared effective by the SEC, and no securities were sold in connection with the Registration Statement. 2005 Credit Facility On Jan. 18, 2007, the company amended its 2005 Credit Facility to modify certain financial covenant requirements contained in the Credit Agreement, including total leverage ratio, interest expense coverage ratio and fixed charge coverage ratio. In addition, Amendment No. 5 modified the definitions of "Consolidated Net Income" and "Consolidated Net Rental and Operating Lease Expense" to exclude discontinued operations prior to June 30, 2006. In connection with Amendment No. 5, the company paid $700,000 in lender and administration fees during the third quarter of fiscal 2007. Of this amount, $500,000 was capitalized and will be amortized to interest expense over the remaining term of the 2005 Credit Facility. As a result of entering into Amendment No. 5, which is effective as of Dec. 31, 2006, the company is in compliance with all of its covenants under the 2005 Credit Facility at Dec. 31, 2006. About Rural/Metro Corp. Headquartered in Scottsdale, Arizona, Rural/Metro Corp. -- http://www.ruralmetro.com/-- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and about 400 communities throughout the U.S. * * * As reported in the Troubled Company Reporter on March 8, 2007, Moody's Investors Service placed a Caa1 rating to Rural/Metro Corp.'s $93.5 million, 12.75% senior discount notes, due 2016, and assigned a B2 Corporate Family Rating. SBBR 1 LLC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: S.B.B.R. 1, L.L.C. 960 Ocean Drive Miami Beach, FL 33139-5013 Bankruptcy Case No.: 07-12013 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- S.B.B.R. 2, L.L.C. 07-12014 S.B.H.I. 1, L.L.C. 07-12015 S.B.H.I. 2, L.L.C. 07-12016 South Beach Hotel Investors, L.L.C 07-12017 South Beach Breakwater Restaurant, L.L.C. 07-12018 Type of Business: The Debtors, owned by Chicago-based and Miami- based hospitality firm The Falor Companies, operate real properties. Chapter 11 Petition Date: March 24, 2007 Court: Southern District of Florida (Miami) Debtors' Counsel: Meredith Mishan, Esq. 848 Brickell Avenue, Suite 1100 Miami, FL 33131 Tel: (305) 577-5999 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Consolidated List of 20 Largest Unsecured Creditors of: * S.B.H.I. 1, L.L.C., * S.B.H.I. 2, L.L.C., * South Beach Hotel Investors, L.L.C, and * South Beach Breakwater Restaurant, L.L.C. Entity Claim Amount ------ ------------ Judy & Jonas Mimoun $1,013,000 [address not provided] P.F.I. Holdings $950,500 500 South Dearborn St. Chicago, IL 60601 F.M.C. Enterprises $950,500 500 South Dearborn St. Chicago, IL 60605 M.S.D. Investments $921,500 500 South Dearborn St. Chicago, IL 60605 Piper Rudnik $355,109 203 North LaSalle, Suite 1900 Chicago, IL 60601 Landmark Services Co. of $273,800 Florida 3006 Sterling Road Fort Lauderdale, FL 33312 C&D Waterproofing $207,010 A.A.C. Flores Construction $197,010 Snapp Industries, Inc. $187,900 Loomis Insurance $171,000 Shakman Const. Hospitality $161,100 Gator Fire Protection, Inc. $139,010 Amerimex Construction of $138,011 Palm Beach, L.L.C. Berman Rennert Vogel & Mandler, $138,000 P.A. Silver, Garvett & Henkell $87,231 Stelnberg and Associates $71,660 Florida Dept. of Revenue $68,368 Julian Prado Paint $59,971 Antico Stone $52,060 Thyssen Krupp Elevator $51,880 SEQUOIA ALTERNATIVE: S&P Holds B Rating on Class B-6 Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 10 classes of certificates issued by Sequoia Alternative Loan Trust 2006-1. The affirmations reflect the stable performance of the collateral as of the Feb. 2007 remittance date. Current credit support percentages are sufficient at the respective rating levels. As of the Feb. 2007 remittance period, total and serious delinquencies were 10.67% and 4.90% of the current principal balance, respectively. While these delinquency percentages are moderate, they have yet to translate into realized losses. If delinquencies translate into losses during the upcoming remittance periods, Standard & Poor's will monitor this deal more frequently. This deal has paid down to 73.71% of its original balance. Credit enhancement is provided through the senior/subordinate and shifting interest structure of this transaction. At origination, the loans consisted primarily of adjustable-rate, conventional, fully amortizing, first-lien Alt-A residential loans, all of which had an original term-to-stated maturity of 30 years. Ratings Affirmed Sequoia Alternative Loan Trust 2006-1 Class Rating ----- ------ A-1, A-2, AR-L, AR AAA B-1 AA B-2 A B-3 BBB B-4 BBB- B-5 BB B-6 B SP NEWSPRINT: Moody's Affirms B1 Ratings & Says Outlook is Stable ----------------------------------------------------------------- Moody's Investors Service revised the ratings outlook for SP Newsprint Company to stable from positive and affirmed the existing B1 corporate family and bank debt ratings. The outlook revision reflects the emerging unfavorable industry trends which include a decline in consumption rates for newsprint, weakening prices, and escalating wastepaper, wood chip, and energy costs. SP's recently improved balance sheet, low cost position with no Canadian dollar exposure, adequate liquidity, and partner support drive the affirmation of the ratings. At the same time, the company's reliance on a single commodity product, the cyclical nature of newsprint prices, and the challenges continuing to impact the paper sector such as overcapacity, weak demand, elevated costs for raw materials and energy, and significant competitive pressures temper the ratings. In Feb. 2006, Moody's highlighted the likelihood that SP's ratings could improve if the company was successful in reducing debt from current levels on a sustainable basis while improving its cost position. Despite a significant reduction in leverage and improved cash flow in 2006, the expectation of significant declines in newsprint pricing and mounting wastepaper and wood chip costs in 2007 will unlikely enable SP to sustain its recent operating performance. The recent increase in ONP costs has been attributable to strong demand in China and shortages in US board mills. Also, SP's Newberg mill is experiencing high wood chip costs as sawmills have been shutting down due to the housing slowdown. Moody's expects that these factors will sharply constrain the company's operating margins in the near term. SP Newsprint Company, headquartered in Atlanta Georgia, operates two paper mills that produce recycled newsprint for a variety of newspaper publishers primarily in the southeastern and western United States. SP is a partnership owned equally by The McClatchy Company, Cox Enterprises, Inc. and Media General, Inc. SPARTA COMMERCIAL: Jan. 31 Balance Sheet Upside-down by $644,623 ---------------------------------------------------------------- Sparta Commercial Services, Inc. disclosed results for the three and nine months ended Jan. 31, 2007. Its balance sheet at Jan. 31, 2007, showed a total stockholders' deficit of $644,623, resulting from total assets of $4,232,370 and total liabilities of $4,876,993. As of Jan. 31, 2007, the company listed an accumulated deficit of $17,230,171, as compared with an accumulated deficit of $14,150,429 as of April 30, 2006. The company's January 31 balance sheet also showed strained liquidity with total current assets of $696,413 available to pay total current liabilities of $2,684,270. For the quarter ended Jan. 31, 2007, reported a net loss of $932,387 on revenues of $214,642, as compared with a net loss of $3,658,551 on revenues of $43,008 for the quarter ended Jan. 31, 2006. For the nine months ended Jan. 31, 2007, the company had a net loss of $2,989,931 on revenues of $625,839, as compared with a net loss of $6,734,000 on revenues of $90,629 for the same period a year earlier. The company stated in its financial report as of Jan. 31, 2007, that for the three months ended Jan. 31, 2007, and 2006, it generated limited, but increasing, sales revenues, incurred significant expenses, and sustained significant losses. The company believes it will continue to earn increasing revenues from operations during the remainder of fiscal 2007 and in the upcoming fiscal year. Liquidity As of Jan. 31, 2007, the company had a working capital deficit of $1,987,857 and generated a deficit in cash flow from operations of $2,530,412 for the nine months ended Jan. 31, 2007. This deficit is primarily attributable to the company's net loss from operations of $2,989,931, an increase in lease receivables of $1,792,942, and a change in warrant liability of $299,663, partially offset by depreciation and amortization of $250,303 and to changes in the balances of current assets and liabilities. Accounts payable and accrued expenses increased by $684,645, deferred revenue increased by $510,340, prepaid expenses decreased by $43,961 and loan proceeds receivable decreased by $389,998. Full-text copies of the company's report for the three and nine months ended Jan. 31, 2007, are available for free at: http://ResearchArchives.com/t/s?1c11 Going Concern Doubt Russell Bedford Stefanou Mirchandani LLP, in New York, raised substantial doubt about Sparta Commercial Services, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended April 30, 2006, and 2005. The auditor pointed to the company's recurring operating losses. About Sparta Commercial Headquartered in New York City, Sparta Commercial Services, Inc. (OTC BB: SRCO) -- http://www.spartacommercial.com/-- is a financial services company in the United States exclusively dedicated to the power sports industry. Sparta's spectrum of financing programs covers all major brands of motorcycles, virtually all semi customs, most ATVs, and select scooters. STANDARD MOTORS: Gets $275 Mil. Credit Facility with GE Capital --------------------------------------------------------------- Standard Motor Products, Inc. entered into a new revolving credit facility, replacing its existing credit facility, with GE Capital Markets acting as Agent for a syndicate of lenders. The new credit facility provides for a line of credit up to $275 million, with an additional $50 million accordion feature, and has a term of five years. The $275 million revolving credit facility will continue to be secured primarily with the company's accounts receivable, inventory and fixed assets similar to the existing advance rate formulas. "We are very pleased to secure this new financing arrangement which capitalizes on current favorable market conditions. This facility will offer immediate benefits and secure an integral component of our capital structure for the next five years. In addition, the $50 million accordion feature allows for future expansion needs," Mr. James J. Burke, Standard Motor Products' chief financial officer, stated. About Standard Motor Headquartered in Long Island City, New York, Standard Motor Products Inc. (NYSE: SMP) -- http://smpcorp.com/-- manufactures and distributes replacement parts for motor vehicles in the automotive aftermarket industry. The company supplies Engine Management and Temperature Control parts for motor vehicles - domestic and imported, new as well as older vehicles. Parts are sold throughout the U.S., Canada, Central and South America, Europe and Asia, by traditional warehouse distributors and auto parts stores, as well as major retail stores. Standard Motor Products Inc has more than 20 factories and distribution centers throughout the U.S., Puerto Rico, Canada, Europe and the Far East. Lawrence I. Sills, grandson of the company's founder, is the current chairman of the board and chief executive officer, and John Gethin is president and chief operating officer. * * * As reported in the Troubled Company Reporter on Feb. 9, 2006, Moody's Investors Service lowered the ratings for Standard Motor Products, Inc. Corporate Family Rating to B3 from B1. STANDARD PACIFIC: S&P Affirms Low-B Ratings & Says Outlook is Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Standard Pacific Corp. to negative from stable. At the same time, the 'BB' corporate credit and senior unsecured debt ratings and the 'B+' subordinated debt rating were affirmed. The rating actions affect $1.25 billion of rated securities. "The outlook revision reflects challenging housing conditions that will continue to weigh on operating performance and EBITDA throughout 2007," explained Standard & Poor's credit analyst George Skoufis. "These pressures will result in a material deterioration in interest coverage and the high probability that such coverage, relative to SPF's bank covenant, will be tight or that a waiver or amendment will be needed to avoid a covenant default. Nonetheless, SPF remains well-positioned in homebuilding markets that have strong long-term prospects, and we believe management is taking appropriate steps to manage its inventory levels and leverage profile." Market conditions are expected to remain challenging throughout 2007, which will have a meaningful impact on SPF's more geographically concentrated platform and will continue to pressure cash flow. Standard & Poor's would lower the ratings one notch if the housing market deteriorates further, resulting in a financial profile for SPF that is weaker than currently expected. The company's financial measures are coming off historic highs; if 2007 reflects the low point, and if management continues to manage the business and its finances appropriately, Standard & Poor's will revise the outlook back to stable once the housing market stabilizes and key credit metrics rebound. STANFIELD DAYTONA: Moody's Rates $21 Mil. Class B-2L Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Stanfield Daytona CLO, Ltd.: * Aaa to the $8,250,000 Class X Floating Rate Notes Due April 2013; * Aaa to the $358,000,000 Class A-1L Floating Rate Notes Due April 2021; * Aaa to the Up To $50,000,000 Class A-1LV Floating Rate Revolving Notes Due April 2021; * Aa2 to the $33,000,000 Class A-2L Floating Rate Notes Due April 2021; * A2 to the $33,000,000 Class A-3L Floating Rate Notes Due April 2021; * Baa2 to the $20,000,000 Class B-1L Floating Rate Notes Due April 2021 and * Ba2 to the $21,000,000 Class B-2L Floating Rate Notes Due April 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of senior secured loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stanfield Capital Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. STEINWAY MUSICAL: Poor Performance Cues S&P to Downgrade Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Waltham, Massachusetts-based Steinway Musical Instruments Inc. to 'B+' from 'BB-', and removed the ratings from CreditWatch with negative implications, where they had been placed on Nov. 3, 2006. The outlook is stable. "The downgrade is based on Steinway's weakened operating performance in fiscal 2006 following several years of fluctuating profitability," said Standard & Poor's credit analyst Patrick Jeffrey. Steinway's fiscal 2006 was negatively impacted by a protracted strike at its Elkhart, Indiana, brass instruments manufacturing facility as well as bankruptcy filings of two customers. As a result, debt leverage remains high at about 5x, which is more in line with the lower rating. "While we expect the company's operating performance to improve somewhat in fiscal 2007, we do not expect leverage to decline to levels that would support the prior 'BB-' rating over the next year," said Mr. Jeffrey. The ratings on Steinway are based on the company's high leverage, narrow product offering, inconsistent operating history and the discretionary nature of spending on musical instruments. These factors are somewhat mitigated by Steinway's well-established market position in both the concert hall and institutional markets for musical instruments; its widely recognized brand names, including Steinway & Sons, Bach, and Selmer; and its geographic diversification. STONE TOWER: Moody's Rates $31 Mil. Class D Notes Due 2021 at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes and Combination Securities issued by Stone Tower CLO VI Ltd.: * Aaa to the $140,000,000 Class A-1 Floating Rate Notes Due 2021; * Aaa to the $550,000,000 Class A-2a Floating Rate Notes Due 2021; * Aa1 to the $61,000,000 Class A-2b Floating Rate Notes Due 2021; * Aa2 to the $56,000,000 Class A-3 Floating Rate Notes Due 2021; * A2 to the $47,000,000 Class B Deferrable Floating Rate Notes Due 2021; * Baa2 to the $37,000,000 Class C Floating Rate Notes Due 2021; * Ba2 to the $31,000,000 Class D Floating Rate Notes Due 2021; * Baa2 to the $3,000,000 Class J Blended Securities; and * Baa2 to the $5,000,000 Class K Blended Securities. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. Moody's rating of the Class J Blended Securities addresses only the ultimate receipt of the Class J Blended Securities Rated Balance. Moody's rating of the Class K Blended Securities addresses only the ultimate receipt of the Class K Blended Securities Rated Balance. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio - consisting primarily of senior secured loans - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stone Tower Debt Advisors LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TEC ELECTRIC: Case Summary & 34 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Tec Electric, Inc. 230 West Parkway Unit A7 Pompton Plains, NJ 07444 Bankruptcy Case No.: 07-14001 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Tec Realty, L.L.C. 07-14002 Type of Business: The Debtor is an electrical contractor. Chapter 11 Petition Date: March 23, 2007 Court: District of New Jersey (Newark) Judge: Morris Stern Debtors' Counsel: Gary K. Norgaard, Esq. Stern, Lavinthal, Frankenberg & Norgaard 184 Grand Avenue Englewood, NJ 07631 Tel: (201) 871-1333 Fax: (201) 871-3161 Total Assets: $2,883,975 Total Debts: $7,733,164 A. Tec Electric, Inc.'s 33 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ace, U.S.A. $3,244,000 P.O. Box 1000 436 Walnut Street Philadelphia, PA 19106 Turtle & Hughes, Inc. $962,767 1900 Lower Road Linden, NJ 07036 Cooper Electric Supply $188,902 P.O. Box 8500-41095 Philadelphia, PA 19178-8500 Alarm & Communications $80,298 Nancy Geist $71,000 System Sales $64,508 Warshauer Electric $55,600 American Express $55,117 B.P.M. Metals, Inc. $36,311 Capital One $29,102 Pro-Tec Systems, Inc. $29,055 Monarch Electric Co. $26,449 Windy City Wire $25,887 American Express $25,177 Wayne Electrical Supply $25,039 Jewel Electric $24,263 Graybar Electric Co. $21,424 Coskey's Electronic Systems $18,154 Feldman Brothers $18,087 Feldman Brothers Electrical Supply $15,838 I.B.E.W. Local 456 $15,657 Home Depot Credit $12,244 Avondata.com $9,609 A.C.E. Wire and Cable $9,018 Tools Plus Industries $7,689 Guardian $7,039 B.P. Services $2,737 Professional Insurance $2,500 Sprint $1,385 The Hole Company $1,225 California Contractor Supplies $792 X.O. Communications Services $131 Pitney Bowes, Inc. $42 B. Tec Realty, L.L.C. Largest Unsecured Creditor: Entity Claim Amount ------ ------------ TD BankNorth $1,567,000 1000 MacArthur Boulevard Mahwah, NJ 07430 TRALEE CDO: Moody's Assigns Ba2 Rating to $13.4 Mil. Class D Notes ------------------------------------------------------------------ Moody's Investors Service assigned ratings to Notes and Combination Securities issued by Tralee CDO I Ltd.: * Aaa to the $273,200,000 Class A-1 Senior Secured Floating Rate Notes due 2022; * Aa2 to the $17,900,000 Class A-2a Senior Secured Floating Rate Notes due 2022; * Aa2 to the $3,500,000 Class A-2b Senior Secured Faced Rate Notes due 2022; * A2 to the $18,800,000 Class B Senior Secured Deferrable Floating Rate Notes due 2022; * Baa2 to the $19,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2022; * Ba2 to the $13,400,000 Class D Secured Deferrable Floating Rate Notes due 2022; * Aa2 to the $5,500,000 Type I Composite Notes due 2022; * Aa2 to the $8,500,000 Type II Composite Notes due 2022 and * Baa1 to the $7,000,000 Type III Composite Notes due 2022. The Moody's ratings of the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class B Notes, the Class C Notes and the Class D Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The Moody's ratings of the Type I Composite Notes, the Type II Composite Notes and the Type III Composite Notes address only the ultimate receipt of their respective"Rated Balance". The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Par IV Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TRAVELPORT: Moody's Junks Rating on New $1 Billion PIK Loan ----------------------------------------------------------- Moody's Investors Service has affirmed the B2 corporate family rating of Travelport LLC and assigned a Caa1 rating to a new holding company PIK loan, proceeds of which will be used to finance a dividend payout to Travelport's shareholders. At the same time, Moody's noted that it would likely affirm the company's Ba3 rating on its existing bank facilities once they are increased in conjunction with the financing of Travelport's proposed acquisition of Worldspan LP. The rating outlook is stable, based on the assumption that Travelport will either consummate its pending Worldspan acquisition or that it will undergo significant debt reduction using asset monetizations including a planned IPO of a portion of Orbitz. Travelport's B2 corporate family rating assumes that the Worldspan acquisition will be consummated in the second or third quarter of 2007. The new $1.1 billion holding company PIK loan will be issued at a "super" holding company without the certainty of the Worldspan acquisition closing. Including the PIK loan, Travelport's pro forma leverage will be a high 7.4x without the benefit of Worldspan's cash flow. Should Travelport fail to consummate the Worldspan acquisition, there would likely be downward rating pressure on Travelport's ratings (including its corporate family rating and the Caa1 rating on the holding company PIK loan) unless the company is able to undergo significant debt reduction using proceeds from potential asset monetizations including a publicly announced planned IPO of a portion of its online assets. Assigned: * $1.1 billion holding company PIK loan due 2012, Caa1, LGD6, 92% Affirmed: * Corporate Family Rating: B2 * Probability of default rating: B2 * $275 million revolving credit facility due 2012, Ba3, LGD2, 27% * $125 million synthetic letter of credit facility due 2013 , Ba3, LGD2, 27% * $2,200 million term loan facility due 2013 , Ba3, LGD2, 27% * $300 million subordinated notes due 2016 , Caa1, LGD5, 84% * EUR160 million subordinated notes due 2016 , Caa1, LGD5, 84% Revised; * EUR235 million senior unsecured notes due 2014 , from Caa1 to B3, LGD5, 71% * $150 million floating rate senior unsecured notes due 2014 , from Caa1 to B3, LGD5, 71% * $450 million fixed senior unsecured notes due 2014 , from Caa1 to B3, LGD5, 71% Rating Outlook is Stable The B2 corporate family rating reflects: (1) Travelport's high pro forma leverage as a result of the Blackstone buyout in August 2006 and the proposed debt financed acquisition of Worldspan; (2) the potential secular decline of GDS as travel bookings continue to shift away from travel agencies to supplier direct distribution; (3) significant pricing concessions with the six major U.S. air carriers and the resultant decline of U.S. GDS revenue; and (4) the on-going and pending integrations facing Travelport's B2C international business as the company integrates its various acquisitions, including the future integration of Worldspan. The B2 corporate family rating is supported by: (1) the continued importance of GDS in the global travel industry including online bookings; (2) Travelport's global footprint with its likely acquisition of Worldspan which will provide complementary strengths in the U.S. GDS business and an additional technology platform; (3) the diversity of Travelport's business portfolio particularly with strength in its non-U.S.. GDS business; and (4) the reasonable certainty of its US GDS business provided by the aforementioned contracts with all six major U.S. carriers, despite pricing concessions. Headquartered in Parsippany, New Jersey, Travelport is one of the world's largest and most geographically diverse travel companies, operating 20 leading brands, including Orbitz, an online travel agency: Galileo, a global distribution system (GDS): and GTA, a wholesaler of global travel content. Worldspan L.P., headquartered in Atlanta, Georgia, is an international provider of computer reservation systems and other IT services for the travel industry. UNIVEST MULTI-STRATEGY: Court Enters Permanent Injunction Order --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York has granted the motion for permanent injunction filed Feb. 16, 2007, by Simon Whicker and Theo Bullmore, the foreign representatives of Univest Multi-Strategy Fund II, Ltd. The permanent injunction order bars all persons, parties and entities from asserting a claim or taking any action of any kind and nature anywhere in the world against Univest and its Foreign Representatives. For copies of the order and other related documents, contact: Kaye Scholer LLP Attorneys for the Univest Foreign Representatives Attn: Madlyn Gleich Primoff, Esq. 425 Park Avenue, NY 10022 Univest Multi-Strategy Fund II Ltd. filed a Section 304 Petition on July 27, 2005 (Bankr. S.D.N.Y. Case No. 05-15776). The company's primary asset is a $37 million Cash-Settled Equity Barrier Call Option to which Univest and Royal Bank of Canada are the sole parties. Mosaic Composite Limited fka Norshield Composite Ltd. purchased from RBC 1,000 European call options for US$15 million and another 1,000 European call option for US$5 million. On Nov. 10, 2004, Mosaic assigned all rights, title and interest it had in the CSEB Call Option in return for 29,667 Class A non- voting Participating Share and 22,949 Class B non-voting Participating Shares in Univest. On June 3, 2005, Globe-X Management Ltd. filed for Section 304 petition in the U.S. Bankruptcy Court for the Southern District of New York. Globe-X wanted to stop RBC from paying Mosaic or its assignee, Univest. The Petitioners want the dissolution of the Globe-X Temporary Restraining Order because they say that there is no basis for the TRO. Globe-X's Section 304 filing was reported in the Troubled Company Reporter on June 6, 2005. VERTRUE INC: Inks $800 Mil. Acquisition Deal with Investor Group ---------------------------------------------------------------- Vertrue Incorporated has entered into a definitive agreement to be acquired by Vertrue's management and an investor group consisting of One Equity Partners, Oak Investment Partners and Rho Ventures in a transaction valued at $800 million with: a) FTN Midwest Securities Corp., financial advisor to the special committee and provided a fairness opinion to the special committee; b) Jefferies Broadview, a division of Jefferies & Co., acted as financial advisor to Vertrue and provided a fairness opinion to the board of directors of Vertrue; c) Lehman Brothers acted as financial advisor to the investor group; d) Sullivan & Cromwell LLP acted as legal advisor to the special committee; e) Dechert LLP acted as legal advisor to the investor group; and f) Morgan, Lewis & Bockius, LLP represented the management. One Equity Partners, Oak Investment Partners, Rho Ventures and members of management will provide the equity for the transaction. Lehman Brothers and JPMorgan will provide the debt financing for the transaction. Gary Johnson will remain in his role as Chief Executive Officer of the company. Under the terms of the agreement, Vertrue's stockholders will receive $48.50 in cash for each share of Vertrue common stock, which represents a 21% premium to the undisturbed stock price of $40.12 per share on Jan. 23, 2007. A special committee of independent directors and the full board of directors of Vertrue Incorporated have approved the merger agreement and have recommended to Vertrue's stockholders that they adopt the agreement. The transaction will be completed in the first fiscal quarter of 2008, which ends on September 30, and is subject to receipt of stockholder and customary regulatory approvals well as satisfaction of additional customary closing conditions. Upon completion of the transaction, Vertrue's executive management team will continue to lead the company. About One Equity Partners One Equity Partners manages $5 billion for direct private equity investments. Partnering with management, OEP invests in transactions that initiate strategic and operational changes in businesses to create long-term value. OEP's investment professionals are located across North America and Europe, with offices in New York, Chicago and Frankfurt. About Oak Investment Partners Oak Investment Partners is a multi-stage venture capital firm with a total of $8.4 billion in committed capital. The investment focus is on high growth opportunities in communications, information technology, Internet, new media, financial services information technology, healthcare services and consumer retail. Over a 30-year history, Oak has achieved a strong track record as a stage-independent investor funding more than 450 companies at key points in their lifecycle. Oak has been involved in the formation of companies, funded spinouts of operating divisions and technology assets, and provided growth equity to mid- and late- stage private businesses and to public companies through PIPE investments. About Rho Ventures Rho -- http://www.rho.com/-- has been backing venture-stage companies in the U.S. since its inception in 1981. Venture capital funds under management currently exceed $1 billion. Rho Ventures has invested in over 165 venture stage companies and helped build market leaders across many high growth industries. Previous investments include Ciena Corporation, Commerce One, Compaq Computer Corporation, Diversa Corporation, Human Genome Sciences, Inc., iVillage, Leukosite, MedImmune, Inc., NitroMed, Senomyx, Tercica, Tripod, Vanda Pharmaceuticals and Vicuron. About Vertrue Incorporated Headquartered in Norwalk, Connecticut, Vertrue Incorporated (Nasdaq: VTRU) -- http://www.vertrue.com/-- is a leading Internet marketing services company. For the twelve months ended Dec. 31, 2006, the company generated adjusted EBITDA of approximately $98 million on revenues of approximately $697 million. * * * Moody's Investors Service placed the ratings of Vertrue Incorporated on review for possible downgrade following the report that it has entered into a definitive agreement to be acquired by Vertrue's management and an investor group consisting of One Equity Partners, Oak Investment Partners and Rho Ventures for approximately $48.50 per Vertrue common stock which totals approximately $800 million. WARD PRODUCTS: Plan Confirmation Hearing Scheduled on April 4 ------------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of Michigan will convene a hearing on April 4, 2007, at 11:00 a.m., to consider confirmation of Ward Products LLC's Chapter 11 Plan of Liquidation. As reported in the Troubled Company Reporter on Jan. 24, 2007, the Plan is premised upon the continued orderly wind down and liquidation of the Debtor, its estate and assets. Treatment of Claims The Debtor proposed to pay Class 1 Priority Claims on the later of: (i) the date funds are available from avoidance action recoveries after payment in full of all professional fees and expenses; and (ii) the date the priority claim becomes an allowed claim, and after full payment of Allowed Administrative Expense Claims and Class 2 Allowed Claims. The Class 2 Claims of Harris N.A. -- the Debtor's prepetition secured lender -- is entitled to an allowed secured claim of $6,314,134 reflecting the Debtor's Nov. 29, 2006 full payment of its prepetition obligation to Harris including professional fees and expenses incurred after. The Debtor reserved $15,500 to secure payment of potential additional fees and other costs that may be incurred by Harris after Nov. 29, 2006. In the event Harris incurs any further professional fees and expenses after Nov. 29, 2006, then it may assert claims against the collateral. The Class 3 Claim of Purchase Money Security Interest Holders will, at the sole discretion of the Debtor: -- retain its lien and security interest in its collateral until such time as its collateral is sold by the Debtor, at which time the Allowed Class 3 Claim will be paid the value of the claimant's interest in the estate's interest in the collateral in accordance with Section 506(a) of the Bankruptcy Code; or -- receive the surrender of the collateral security of its Allowed Class 3 Claim on the effective date of the Plan. Holders of Class 4 Customers' Prepetition Subordinated Participation Interest Claims will receive payment only after: -- payment of the carve-out (for the benefit of professionals) and permitted liens to the extent they existed and were valid, enforceable and non avoidable as of Aug. 7, 2006, and were permitted to be prior to the lien of Harris. -- payment to Harris of any portion of the prepetition obligations that remains outstanding as of Feb. 28, 2007, if any; -- payment to debtor-in-possession financing lenders -- Ford Motor Company and DaimlerChrysler Corporation -- of the amount necessary to reduce the principal amount of the DIP Loans outstanding. Class 5 Non-Priority General Unsecured Claims will receive a pro- rata distribution of the first $500,000 available from the proceeds of the DIP Lenders' collateral only after payment: a) of carve-out and permitted liens; b) to Harris of any portion of the prepetition obligations that remains outstanding as of Feb. 28, 2007, if any; and c) to the DIP Lenders of the amount necessary to reduce the principal amount of the DIP Loans outstanding. Holders of equity interests in the Debtor will receive nothing under the Plan, their interests will be deemed cancelled. Based in Royal Oak, Michigan, Ward Products LLC manufactures receiving antennas. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Glass & Associates Inc. is the Debtor's restructuring advisor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, represents the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor listed $81,489,758 in total assets and $29,586,153 in total debts. WII COMPONENTS: Amends Terms for 10% Senior Notes Offering ---------------------------------------------------------- WII Components, Inc. amended the terms of its Offer for any and all of its outstanding $119,850,000 in aggregate principal amount of 10% senior notes due 2012, CUSIP No. 92929XAB8. All of the holders of the Notes that executed the previously announced "Lock- Up" agreement among holders representing more than a majority of the Notes have agreed to tender their Notes into the amended Offer. Under the amended Offer, the Total Consideration for each $1,000 principal amount of Notes tendered and accepted for payment pursuant to the Offer shall be $1,075. In addition, the Issuer has extended the Consent Date and the Expiration Date. As amended, holders who validly tender their Notes and deliver consents prior to 5:00 p.m., New York time, on March 30, 2007, will be entitled to receive a consent payment, included in the Total Consideration above, of $30.00 for each $1,000 principal amount of Notes validly tendered and not withdrawn. Holders whose valid tenders are received after the Consent Date, but prior to 5:00 p.m., New York time, on April 12, 2007, will not receive the Consent Payment. As of 5:00 p.m., New York time on March 20, 2007, $24,032,000 in aggregate principal amount of the Notes had been tendered into the Offer. The Offer and Consent Solicitation were made upon the terms and subject to conditions set forth in the related Offer to Purchase and Consent Solicitation Statement, dated Feb. 27, 2007. Full details of the terms and conditions of the Offer are included in the Offer to Purchase. Except as set forth herein, the terms of the Offer and Consent Solicitation remain the same as set forth in the Offer to Purchase. Capitalized terms used in this release and not otherwise defined have the meanings assigned to them in the Offer to Purchase. The Issuer's obligation to accept for purchase and to pay for the Notes validly tendered in the Offer remains subject to the satisfaction of certain conditions including, among other things, there being validly tendered and not withdrawn at least a majority of the aggregate principal amount of the Notes, the receipt of the requisite consents necessary to amend the Indenture, the receipt of borrowings under a new senior secured credit facility sufficient to pay the Total Consideration and to refinance certain borrowings of WII Holding, Inc., the Issuer's parent, and acceptance by the Issuer of the Notes for purchase pursuant to the terms of the Offer, each as described in more detail in the Offer to Purchase. The Issuer has retained Credit Suisse Securities (USA) LLC to serve as Dealer Manager and Solicitation Agent and D.F. King & Co., Inc. to serve as Information Agent and Tender Agent for the tender offer and consent solicitation. Requests for documents may be directed to D.F. King & Co., Inc. by telephone at (800) 659- 6590 (toll free) or (212) 269-5550 (collect). Questions regarding the tender offer and consent solicitation should be directed to Credit Suisse Securities (USA) LLC by telephone at (800) 820-1653 (toll free) or (212) 538-0652 (collect). About WII Components WII Components, Inc., headquartered in St. Cloud, MN, -- http://www.wiicomponents.com-- is a manufacturer of wood cabinet doors, hardwood components, and engineered wood products in the U.S., selling primarily to kitchen and bath cabinet OEM's. * * * As reported in the Troubled Company Reporter on Jan. 11, 2007, Standard & Poor's Ratings Services revised its outlook on St. Cloud, Minnesota-based WII Components Inc. to negative from stable. The company's 'B' corporate credit rating was affirmed. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Accuray Inc ARAY (55) 144 (5) AFC Enterprises AFCE (31) 163 7 Alaska Comm Sys ALSK (25) 562 13 Alliance Imaging AIQ (17) 664 29 AMR Corp. AMR (606) 29,145 (1,603) Atherogenics Inc. AGIX (153) 178 112 Bare Essentials BARE (228) 156 54 Blount International BLT (105) 430 118 CableVision System CVC (5,289) 9,844 (763) Carrols Restaurant TAST (26) 452 (31) Centennial Comm CYCL (1,092) 1,422 112 Choice Hotels CHH (62) 303 (53) Cincinnati Bell CBB (791) 2,014 28 Clorox Co. CLX (33) 3,624 (540) Compass Minerals CMP (65) 706 165 Corel Corp. CRE (12) 131 31 Crown Holdings CCK (266) 6,358 106 Crown Media HL CRWN (478) 768 48 CV Therapeutics CVTX (46) 421 303 Dayton Superior DSUP (101) 322 82 Deluxe Corp DLX (66) 1,267 (462) Denny's Corporation DENN (224) 443 (73) Depomed Inc. DEPO (27) 53 26 Domino's Pizza DPZ (565) 380 11 Dun & Bradstreet DNB (396) 1,360 (161) Echostar Comm DISH (219) 9,768 1,008 Embarq Corp EQ (468) 9,091 (241) Emeritus Corp. ESC (119) 703 (42) Empire Resorts NYNY (25) 61 (3) Enzon Pharmaceutical ENZN (56) 404 150 Extendicare Real EXE-U (24) 1,315 (112) Foamex Intl FMXI (404) 607 21 Ford Motor Co F (3,773) 290,217 (2,171) Gencorp Inc. GY (96) 1,021 4 General Motors GM (4,251) 186,192 7,426 Graftech International GTI (110) 906 349 Guidance Software GUID (2) 22 (1) HCA Inc HCA (10,332) 23,611 2,502 Healthsouth Corp. HLS (1,526) 3,359 (381) I2 Technologies ITWO (25) 190 17 ICOS Corp ICOS (18) 285 112 IDEARC Inc IAR (8,846) 1,318 15 IMAX Corp IMAX (33) 243 84 Immersion Corp. IMMR (23) 50 34 Immunomedics Inc IMMU (24) 45 15 Incyte Corp. INCY (85) 354 278 Indevus Pharma IDEV (133) 91 51 Interstate Bakeries IBCIQ (293) 1,147 (423) Investools Inc. IEDU (64) 132 (65) IPG Photonics IPGP (31) 115 24 Koppers Holdings KOP (80) 649 162 Life Sciences LSR (25) 205 23 Lodgenet Entertainment LNET (58) 263 20 Maxxam Inc MXM (201) 992 26 McMoran Exploration MMR (18) 431 (27) Mediacom Comm MCCC (95) 3,652 (266) Movie Gallery MOVI (221) 1,166 (816) National Cinemed NCMI (575) 308 (1) Navisite Inc. NAVI (2) 101 (9) New River Pharma NRPH (110) 151 (19) Nexstar Broadcasting NXST (73) 725 22 NPS Pharm Inc. NPSP (182) 237 150 ON Semiconductor ONNN (205) 1,417 268 Paetec Holding PAET (287) 238 7 Protection One PONN (80) 444 (5) Qwest Communication Q (1,445) 21,239 (1,506) Radnet Inc. RDNT (79) 131 2 Regal Entertainment RGC (20) 2,469 (315) Riviera Holdings RIV (29) 222 10 Rural Cellular RCCC (580) 1,385 160 Rural/Metro Corp. RURL (09) 293 44 Savvis Inc. SVVS (138) 467 25 Sealy Corp. ZZ (152) 1,003 57 Sirius Satellite SIRI (389) 1,658 (258) St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (187) 3,716 (50) Sun-Times Media SVN (360) 900 (364) Syntroleum Corp. SYNM (14) 44 32 Town Sports Int. CLUB (18) 424 (58) Unisys Corp. UIS (64) 4,037 307 Weight Watchers WTW (68) 1,002 (82) Western Union WU (315) 5,321 869 Worldspace Inc. WRSP (1,574) 604 140 WR Grace & Co. GRA (485) 3,637 920 XM Satellite XMSR (253) 2,027 (115) Xoma Ltd. XOMA (38) 91 43 ********* 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. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Ludivino Q. Climaco, Jr., Tara Marie A. Martin, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2007. 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 ***