/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070427.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 27, 2007, Vol. 11, No. 99 Headlines ABFC TRUST: Monthly Losses Prompt S&P's Negative Credit Watch ALLEGHENY COUNTY: S&P Rates $735 Mil. S. 2007A Revenue Bonds at BB AMERICAN TOWER: Launches Tender Offer for $325MM of 7.25% Notes ASSOCIATED ESTATES: Secures $100 Million Revolving Credit Facility BALLY TOTAL: Negotiates Form of Waiver & Forbearance Arrangements BALLY TOTAL: Selling 16 Canadian Operations to 2 Fitness Centers BAYONNE MEDICAL: Taps Lindabury McCormick as Corporate Counsel BENICORP INSURANCE: A.M. Best Withdraws Ratings BION ENVIRONMENTAL: Mar. 31 Balance Sheet Upside-Down by $4.1 Mil. BSC INVESTMENTS: Case Summary & Four Largest Unsecured Creditors BUCYRUS INT'L: Proposed $825 Mil. Term Loan Spurs S&P's BB- Rating CALIBRE ENERGY: Completes $5 Million Private Placement Financing CANTON TIRES: Case Summary & 16 Largest Unsecured Creditors CARRAWAY METHODIST: Court Sets Plan Confirmation Hearing on May 23 CATHOLIC CHURCH: Court Confirms Spokane's Second Amended Plan CDC MORTGAGE: S&P Lowers Rating on S. 2003-HE4-B-3 Certs. to BB CDC MORTGAGE: Fitch Holds Junk Ratings on Three Certificates CENVEO CORP: New $125 Million Notes Cue S&P to Cut Rating to B- CHASE MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates CINEMARK HOLDINGS: Prices 28 Million Shares at $19 Each in IPO CLEAR CHANNEL: Earns $102.2 Million in Quarter Ended March 31 COMM 2001-J2: S&P Lifts Cert. Ratings Due to Improved Performance CREDIT SUISSE: Fitch Takes Rating Actions on Seven Transactions CREDIT SUISSE: Fitch Puts Rating on Two Loans Under Negative Watch CRUM & FORSTER: Fitch Rates $330 Million Senior Notes at B+ CVS CORP: Self-Tender Offer to Purchase 150 Million Shares Expires DELPHI CORP: Cerberus Denies Backing Out of Delphi Agreement DOMTAR CORPORATION: DBRS Confirms 'BB' Issuer Rating DOMTAR INC: DBRS Confirms BB (Low) Rating on Unsecured Debentures EAGLE BROADBAND: Feb. 28 Balance Sheet Upside-Down by $134,000 eLEC COMM: February 28 Balance Sheet Upside-Down by $6.1 Million EPICUS COMMUN: Has $3.3MM Total Stockholders' Deficit at Feb. 28 EQUEST DEVELOPMENT: Voluntary Chapter 11 Case Summary FEDERAL-MOGUL: Wants to Enter into Amended $775 Million DIP Pact FLORIDA SELECT: Case Summary & Eight Largest Unsecured Creditors FLYI INC: Joint Amended Plan Declared Effective March 30 FORD MOTOR: Reports Preliminary Results for First Quarter 2007 FRASER PAPERS: Posts $10MM Recurring Losses in Qtr. Ended March 31 GENESIS HEALTHCARE: Gets $64.75 Per Share Offer from Fillmore GENESIS HEALTHCARE: Allocates Payments for Bonus Program GEORGIA GULF: Weakening Credit Quality Cues S&P to Lower Ratings GLOBAL POWER: Court Extends Exclusive Plan Filing Date Until May 2 GLOBAL POWER: Consulting Pacts w/ Former Execs Stretched to May 2 GLOBAL POWER: Court Approves PricewaterhouseCoopers as Auditors INTEGRAL NUCLEAR: Hires Logan & Co. as Claims and Noticing Agent JARDEN CORPORATION: Agrees to Acquire K2 Inc. for $1.2 Billion JOAN FABRICS: Selects Mintz Levin as Bankruptcy Counsel JOAN FABRICS: Taps Pachulski Stang as Delaware Local Counsel JOAN FABRICS: Court Okays Bankruptcy Services as Claims Agent K2 INC: Agrees to Sell Assets to Jarden Corp. for $1.2 Billion KING PHARMACEUTICALS: Looming Challenges Cue S&P's Stable Outlook L.I.D. LTD: Asks Court to Decide on Cash Collateral Default Issue LEAR CORPORATION: Earns $49.9MM in First Quarter Ended March 31 MARINER ENERGY: Increases Pricing Offer of Senior Unsecured Notes MAYCO PLASTICS: Court OKs Tooling Stipulation with DaimlerChrysler MERRILL LYNCH: Fitch Cuts Rating on Four Certificates to B MERRILL LYNCH: Fitch Lowers Rating on Three Certificates to B+ MILLENNIUM INORGANIC: S&P Puts B+ Rating on Proposed $880MM Loan NEW CENTURY: Three Parties Balk at Rejection of 153 Leases NEW CENTURY: 5 Parties Balk at Sale of Loan Origination Platform NORTHWEST AIRLINES: Inks Tentative CBA with AFA on $182MM Claims NUVOX INC: S&P Affirms B- Corporate Credit Rating OCCAM NETWORKS: Faces Nasdaq Delisting Due to Late 10-K Filing OWNIT MORTGAGE: Rejection of Unexpired Leases & Contracts Okayed OWNIT MORTGAGE: Court Approves Trumbull Group as Claims Agent OWNIT MORTGAGE: Selects John Associates as Compensation Advisor PHH MORTGAGE: Fitch Puts Low-B Ratings on Two Class Certificates RADNOR HOLDINGS: Wants Exclusive Plan Filing Date Moved to July 17 RADNOR HOLDINGS: Assumes & Assigns CIT Contract to TR Acquisition RADNOR HOLDINGS: Can Assume & Assign Carolina Drive Lease to TRA RANGE RESOURCES: Completes Public Offering of 8.05 Million Shares RESIDENTIAL ASSET: Poor Performance Cues S&P's Negative Watch REYNOLDS AMERICAN: Net Income Drops to $328 Million in 1st Qtr '07 RK PROPERTIES: Case Summary & Two Largest Unsecured Creditors ROUGE INDUSTRIES: Court Approves Stipulation With Power Process ROUGE INDUSTRIES: Wants Settlement Agreement w/ Aristeo Approved SECURITY AVIATION: Former Boss Wins Auction with $3.4 Million Bid SIX FLAGS: Improving Liquidity Cues S&P to Hold B- Credit Rating SIX FLAGS: Fitch Rates Proposed $1.1 Billion Facility at BB- SOUNDVIEW HOME: Fitch Downgrades Ratings on 10 Classes SOUNDVIEW HOME: Fitch Holds Low-B Ratings on 12 Loan Classes STRUCTURED ASSET: Fitch Takes Rating Actions on 143 RMBS Classes TELOS CORP: Dec. 31 Balance Sheet Upside-Down by $126.7 Million TRIARC COS: To Sell Interest in Deerfield & Co. for $300 Million VILLEGAS RESTAURANT: Case Summary & 19 Largest Unsecured Creditors WERNER LADDER: Court Approves Sale of Werner Co. for $270 Million WESCO DISTRIBUTION: Inks $365MM Credit Facility with GE Commercial WII COMPONENTS: S&P Withdraws B Rating on Proposed $179MM Facility WOLVERINE TUBE: Posts $79MM Recurring Losses in Year Ended Dec. 31 WOODLAND AUTO: Case Summary & 21 Largest Unsecured Creditors * S&P Puts Ratings on 52 Classes Under Negative CreditWatch * BOOK REVIEW: A Treatise on the Right of Property in Tide Waters ********* ABFC TRUST: Monthly Losses Prompt S&P's Negative Credit Watch ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-3 and B-2 mortgage-backed securities issued by ABFC Trust's series 2002-SB1 and 2005-HE2, respectively. At the same time, the rating on class B-2 was placed on CreditWatch with negative implications, and the rating on class M-3 remains on CreditWatch negative, where it was placed April 19, 2006. Concurrently, the ratings on classes M-3 and M-4 from series 2003- WF1 were placed on CreditWatch with negative implications. Additionally, the ratings on 23 classes issued by the same trusts were affirmed. The lowered ratings and CreditWatch placements are based on pool performance that has negatively affected these transactions. For most of the past six months, monthly losses have exceeded monthly excess spread in each of these transactions. This has caused the overcollateralization percentages to fall below their targets. The O/C amounts in these deals range from 0.00% (series 2002-SB1) to 0.25% (series 2003-WF1). All of these deals have an O/C target of 0.50%. Cumulative losses range from 0.75% (series 2005-HE2) to 5.52% (series 2002-SB1) of the original pool balances. In addition, severe delinquencies (90-plus days, REOs, and foreclosures) range from 9.27% (series 2005-HE2) to 20.17% (series 2002-SB1) of the current pool balances. Standard & Poor's will continue to closely monitor these transactions with ratings on CreditWatch. If losses decline to a point at which they no longer exceed monthly excess spread, and credit support has not been eroded further, S&P will affirm the ratings and remove them from CreditWatch. Conversely, if monthly losses continue to outpace monthly excess interest, further negative rating actions can be expected. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings on the certificates. Credit support percentages are at least 1.01x the original credit support percentages associated with the ratings. The pools in this shelf use a combination of subordination, excess interest, and O/C as credit support. The collateral for these transactions consists of conventional, fixed- and adjustable-rate, first- and second-lien mortgage loans secured by one- to four- family residential properties. Rating Lowered and Remaining on Creditwatch Negative ABFC Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-SB1 M-3 BB/Watch Neg BBB/Watch Neg Rating Lowered and Placed on Creditwatch Negative ABFC Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-HE2 B-2 B/Watch Neg BB Ratings Placed on Creditwatch Negative ABFC Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-WF1 M-3 BBB/Watch Neg BBB 2003-WF1 M-4 BBB-/Watch Neg BBB- Ratings Affirmed ABFC Trust Series Class Rating ------ ----- ------ 2002-SB1 AII-1, M-1 AAA 2002-SB1 M-2 AA+ 2003-WF1 A-2 AAA 2003-WF1 M-1 AA+ 2003-WF1 M-2 A+ 2005-HE2 A-1, A-2A, A-2B, A-2C AAA 2005-HE2 A-2D AAA 2005-HE2 M-1, M-2 AA+ 2005-HE2 M-3 AA 2005-HE2 M-4 AA- 2005-HE2 M-5, M-6 A+ 2005-HE2 M-7 A 2005-HE2 M-8 A- 2005-HE2 M-9 BBB+ 2005-HE2 M-10 BBB 2005-HE2 M-11 BBB- 2005-HE2 B-1 BB+ ALLEGHENY COUNTY: S&P Rates $735 Mil. S. 2007A Revenue Bonds at BB ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' rating to Allegheny County Hospital Development Authority, Pennsylvania's $735 million fixed-rate series 2007A health system revenue bonds, issued for West Penn Allegheny Health System, Pennsylvania. The outlook is stable. Proceeds of series 2007 bonds are expected to refund all Allegheny's debt at closing with the exception of $37 million deeply subordinated floating-rate restructuring certificates. A portion of the 2007 bonds will be used to refinance various outstanding bonds, including all of the series 2000 bonds that were issued at the time of the system's formation. Remaining 2007 proceeds will be used to repay a portion of the Highmark loan and fund certain capital expenditures. As of today, West Penn is waiting for IRS approval to advance refund a portion (46%) of the series 2000 bonds. If approval is not received shortly, West Penn will pursue a tender option for this portion of the bonds. "For the first time in its operating history, West Penn will have a modicum of strategic capital available to invest in new facilities and programs," said Standard & Poor's credit analyst Cynthia Keller Macdonald. "A higher rating is unlikely during the two-year outlook time horizon as the key to a higher rating is improved liquidity, which will take time to accumulate, along with a sustained track record of operating profitability." The 'BB' rating on series 2007 bonds reflects substantial benefits from this debt restructuring, including improved cash flow and debt service coverage. In addition, while there is significant legislative relief for West Penn's pension funding requirements through 2014, substantial funding requirements still remain through fiscal 2008. By lowering the interest rate on the bonds and delaying series 2007 principal payments until 2009, West Penn will significantly increase cash flow over the next two years, which will help address two pressing credit concerns: pension funding and capital investment. Despite the restructuring's benefits, the credit remains speculative grade due to an expectation that the balance sheet will remain under pressure; and improved earnings from fiscals 2004-2006 when compared to the prior three-year period, although margins remain down from fiscal 2005's peak and are in general, extremely thin. Other credit concerns include softness in the year-to-date earnings; significant competition in the Pittsburgh market from University of Pittsburgh Medical Center; and difficult demographics in this market, as its population continues to decline, although an aging population may help drive increased health care demand in the future. The stable outlook reflects the increased financial cushion provided by this debt restructuring. AMERICAN TOWER: Launches Tender Offer for $325MM of 7.25% Notes --------------------------------------------------------------- American Tower Corporation's wholly owned subsidiary, American Towers, Inc., has commenced a cash tender offer for any and all of its outstanding $325,075,000 aggregate principal amount of 7.25% 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 April 23, 2007, and the related Consent and Letter of Transmittal. The company is also soliciting consents to certain proposed amendments to the indenture governing the Notes to eliminate most of the restrictive covenants and certain events of default. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation. The tender offer will expire at midnight, New York City time, on May 18, 2007, unless extended or earlier terminated by the company. The company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation at any time subject to applicable law. The total consideration for each $1,000 principal amount of Notes tendered and accepted for purchase pursuant to the tender offer will be determined as specified in the Statement, on the basis of a yield to the first redemption date equal to the sum of (i) the yield (based on the bid side price) of the U.S. Treasury Security specified in the Statement, as calculated by Credit Suisse Securities (USA) LLC in accordance with standard market practice on the price determination date, plus (ii) a fixed spread of 50 basis points. The company will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes and delivers consents on or prior to 5:00 p.m., New York City time, on May 4, 2007, will be entitled to a consent payment, which is included in the total consideration above, of $30 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offer. Holders who tender Notes are required to consent to the proposed amendments to the indenture. Any tender of Notes may be validly withdrawn and consents may be validly revoked at any time prior to the time at which the Company has received sufficient consents with respect to the proposed amendments to the indenture, accepted for payment then-tendered Notes and executed the Supplemental Indenture, but not thereafter unless the tender offer and consent solicitation are terminated without any Notes being purchased. Holders who tender Notes after the consent date will not receive the consent payment. The company has reserved the right to accept for purchase at any time following the Consent Date but prior to the Expiration Date all Notes then validly tendered. If the Company elects to exercise this option, it will pay for such Notes on a date promptly following the Early Acceptance Time. On the Early Payment Date, the Company will also pay accrued and unpaid interest up to, but not including, the Early Payment Date on the Notes accepted for purchase. Subject to its right to exercise this early acceptance option, the Company currently expects to accept for purchase, and pay the total consideration (as to all Notes tendered prior to the Consent Date) and the tender offer consideration (which is the total consideration less the cash consent payment, as to all Notes tendered after the Consent Date) with respect to, all validly tendered Notes on a date promptly following the Expiration Date. On the Final Payment Date, the company will also pay accrued and unpaid interest up to, but not including, the Final Payment Date on the Notes accepted for purchase. The company's obligation to accept for purchase, and to pay for, Notes validly tendered and not validly withdrawn pursuant to the tender offer and consent solicitation is subject to the satisfaction or waiver of certain conditions, including the receipt of sufficient consents with respect to the proposed amendments to the indenture and the consummation of a new debt financing by a trust formed by an affiliate of the company. The complete terms and conditions of the tender offer and the consent solicitation are set forth in the tender offer documents, which are being sent to holders of Notes. The company has retained Credit Suisse to act as Dealer Manager in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at 212-325-7596 (collect). Copies of the tender offer documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offer and consent solicitation, at 800-967-7921 (toll free) or 212-269-5550 (collect). About American Tower Headquartered in Boston, Massachusetts, American Tower Corporation (NYSE: AMT) -- http://www.americantower.com/-- is an independent owner, operator and developer of broadcast and wireless communications sites in the United States, Mexico and Brazil. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. * * * As reported in the Troubled Company Reporter on Feb. 16, 2007, Moody's Investors Service upgraded the corporate family rating of American Tower Corporation to Ba1 from Ba2, and affirmed the company's SGL-1 liquidity rating. The outlook is stable. ASSOCIATED ESTATES: Secures $100 Million Revolving Credit Facility ------------------------------------------------------------------ Associated Estates Realty Corporation has replaced two smaller secured lines of credit with a $100 Million Senior Unsecured Revolving Credit Facility. The Credit Facility initially bears interest at LIBOR plus a spread of 160 basis points, but the rate can be lower or higher based on various financial ratios. The Credit Facility has a term of three years. National City Bank acted as the Lead Arranger and Administrative Agent. The other participating banks were Wells Fargo, N.A., Raymond James Bank, FSB and The Huntington National Bank. "This unsecured line gives the company greater financial flexibility to execute its strategic plan to rebalance the company's portfolio into higher growth markets," Lou Fatica, chief financial officer, said. For more information, please contact: Michael Lawson Vice President of Investor Relations Tel: (216) 797-8798 Kimberly Kanary Manager of Corporate Communications Tel: (216) 797-8752 About Associated Estates Headquartered in Richmond Heights, Ohio, Associated Estates Realty Corporation (NYSE: AEC) -- http://www.aecrealty.com/-- is a real estate investment trust. The REIT directly or indirectly owns, manages or is a joint venture partner in 103 multifamily communities containing a total of 20,650 units located in nine states. * * * As reported in the Troubled Company Reporter on Nov. 30, 2006, Moody's Investors Service raised the senior unsecured debt shelf rating of Associated Estates Realty Corporation to B1 from B2. The B3 preferred stock shelf rating was affirmed. The rating outlook is stable. BALLY TOTAL: Negotiates Form of Waiver & Forbearance Arrangements ----------------------------------------------------------------- Bally Total Fitness has negotiated the form of limited waiver and forbearance arrangements with advisors representing the Ad Hoc Committee formed by holders of its 10-1/2% Senior Notes due 2011 and 9-7/8% Senior Subordinated Notes due 2007. As reported in the Troubled Company Reporter on April 13, 2007, the waivers relate to the company's inability to timely file its 2006 Annual Report on Form 10-K with the Securities and Exchange Commission and the company's non-payment of interest on its Senior Subordinated Notes, both of which are defaults under the indentures governing the notes. The company has requested that noteholders waive these defaults and forbear from exercising any related remedies until July 13, 2007 on terms similar to the recently executed forbearance agreement under the Company's senior secured credit facility. The company does not intend to pay a fee to the noteholders in connection with these waiver and forbearance arrangements. The Ad Hoc Committee represents certain holders of the Senior Notes and the Senior Subordinated Notes, and has retained Houlihan Lokey Howard & Zukin Capital as financial advisor and Akin Gump Strauss Hauer & Feld, LLP as counsel. The company and its advisors have met with the advisors to the Ad Hoc Committee and have negotiated the form of the limited waiver and forbearance arrangements under the indentures governing the notes. The forbearance agreement under the company's senior secured credit facility requires that forbearance arrangements be in place with respect to each series of notes by May 14, 2007. Holders of the notes are referred, and questions concerning the detailed terms and conditions of the waiver and forbearance arrangements should be directed to: Houlihan Lokey, Attention: Brad Geer 255 South Sixth Street, Suite 4950 Minneapolis, MN 55402-4304 Telephone (612)-338-2910 Holders of the notes who want copies of the proposed forbearance agreements may also contact the company's financial advisor: Jefferies & Company, Inc. Attention: Thomas Carlson 520 Madison Avenue, 12th Floor New York, NY 10022 Telephone (212)-284-2045 About Bally Total Fitness Headquartered in Chicago, Illinois, Bally Total Fitness Holding Corp. (NYSE: BFT) -- http://www.ballyfitness.com/-- is among the largest commercial operators of fitness centers in the U.S., with nearly 390 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on April 19, 2007, Moody's Investors Service downgraded all the credit ratings of Bally Total Fitness Holding Corporation after its failure to make the April 16, 2007 interest payment on $300 million principal amount of senior subordinated notes. Bally's failure to make the interest payment on the subordinated notes constitutes an event of default under the indenture governing its $235 million of senior notes and, upon the expiration of the applicable grace period, will constitute an event of default under the subordinated notes indenture. Moody's downgraded the Probability of Default Rating to D and the Corporate Family Rating to Ca. The rating outlook was changed from negative to stable. As reported in the Troubled Company Reporter on April 17, 2007, Standard & Poor's Ratings Services lowered its subordinated debt rating on Bally Total Fitness Holding Corp. to 'D' from 'CC'. The senior unsecured rating was also lowered to 'D' from 'CCC-'. At the same time, Standard & Poor's lowered the corporate credit rating on Bally to 'D' from 'CCC'. BALLY TOTAL: Selling 16 Canadian Operations to 2 Fitness Centers ---------------------------------------------------------------- Bally Total Fitness has entered into agreements to sell its 16 Toronto, Canada facilities to Extreme Fitness Inc., which is acquiring six of the facilities, and GoodLife Fitness Centres Inc., which is acquiring ten of the facilities. The properties include nine Sports Clubs of Canada and seven Bally Total Fitness clubs. The transactions are subject to customary closing conditions, including lease negotiations. Terms of the transactions were not disclosed. The sale is part of the company's strategy to divest non-core assets in order to focus on the core Bally Total Fitness brand and operations in the United States. Proceeds from the transactions are estimated to be approximately CDN$19.6 million and will be available to support operations. "These transactions are important steps forward in Bally's business and financial restructuring initiatives," Don R. Kornstein, Bally's interim Chairman, said. "The proceeds will enhance Bally's liquidity in support of the company's ongoing efforts to negotiate a consensual restructuring with our debt holders. I would like to acknowledge all of our Canadian employees for their dedicated service to Bally Total Fitness and wish them continued success." About Bally Total Fitness Headquartered in Chicago, Illinois, Bally Total Fitness Holding Corp. (NYSE: BFT) -- http://www.ballyfitness.com/-- is among the largest commercial operators of fitness centers in the U.S., with nearly 390 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on April 19, 2007, Moody's Investors Service downgraded all the credit ratings of Bally Total Fitness Holding Corporation after its failure to make the April 16, 2007 interest payment on $300 million principal amount of senior subordinated notes. Bally's failure to make the interest payment on the subordinated notes constitutes an event of default under the indenture governing its $235 million of senior notes and, upon the expiration of the applicable grace period, will constitute an event of default under the subordinated notes indenture. Moody's downgraded the Probability of Default Rating to D and the Corporate Family Rating to Ca. The rating outlook was changed from negative to stable. As reported in the Troubled Company Reporter on April 17, 2007, Standard & Poor's Ratings Services lowered its subordinated debt rating on Bally Total Fitness Holding Corp. to 'D' from 'CC'. The senior unsecured rating was also lowered to 'D' from 'CCC-'. At the same time, Standard & Poor's lowered the corporate credit rating on Bally to 'D' from 'CCC'. BAYONNE MEDICAL: Taps Lindabury McCormick as Corporate Counsel -------------------------------------------------------------- Bayonne Medical Center Inc. asks the U.S. Bankruptcy Court for the District of New Jersey for permission to employ Lindabury, McCormick, Estabrook & Cooper, P.C. as its general corporate counsel, nunc pro tunc to the date of its bankruptcy filing. The Debtor tells that Court that Lindabury McCormick will render professional services that include, but not be limited to, health care, finance, labor and employment, tax, guardianships, real estate, and other corporate transactional matters. The Debtor discloses that the firm's current hourly rates are: Designation Hourly Rates ----------- ------------ Partners $250 - $350 Associates $160 - $240 Paralegals $100 - $150 To the best of the Debtor's knowledge, Lindabury McCormick does not hold or represent any interest adverse to the Debtors, its lenders, equity security holders, or any other party in interest or its estate. About Bayonne Medical Based in Bayonne, New Jersey, Bayonne Medical Center -- http://www.bayonnemedicalcenter.org/-- provides healthcare services and operates a medical center. The company filed for Chapter 11 protection on April 16, 2007 (Bankr. D. N.J. Case No. 07-15195). Stephen V. Falanga, Esq., at Connell Foley LLP, and Adam C. Rogoff, Esq., at Cooley Godward Kronish LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. The Debtor's exclusive period to file a plan expires on Aug. 14, 2007. BENICORP INSURANCE: A.M. Best Withdraws Ratings ----------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B+ (Good) and has assigned issuer credit ratings (ICR) of "bb-" to Benicorp Insurance Company (Indianapolis, IN) and The Municipal Insurance Company of America (Arlington Heights, IL). The outlook for the FSRs is negative, and the outlook assigned to the ICRs is negative. Subsequently, A.M. Best has withdrawn the ratings and assigned an NR-4 (Company Request) in response to a request from the companies' management to withdraw and be removed from A.M. Best's interactive rating process based on management's disagreement with the ratings. The rating downgrades reflect the companies' large 2006 operating losses and low risk-based capital positions reported. Additionally, A.M. Best believes McKee Heritage Holding Corp. (Delaware), the ultimate parent of both companies, is currently weakly capitalized. The sizeable amount of intangible assets and goodwill on McKee Heritage's books further heightens A.M. Best's concerns regarding the organization's overall capitalization position. Benicorp's and MICA's operating deficits last year were primarily the result of overpayment of claims associated with problems related to the installation of a new claims system in 2006, which became evident in their fourth quarter. The companies have already issued invoices to various medical providers for repayment of a significant amount of claim over payments and are in the process of recovering the over payments. It remains to be seen how successful these efforts will be. McKee Heritage contributed over $6 million of additional capitalization to Benicorp in early 2007. In late 2006, McKee Heritage also restructured its acquisition debt incurred by its acquisition of Benicorp and reduced significantly its interest obligations. Despite these items, the organization's capital position is currently below the levels expected by A.M. Best for secure rated companies due to the severity of the 2006 losses. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. BION ENVIRONMENTAL: Mar. 31 Balance Sheet Upside-Down by $4.1 Mil. ------------------------------------------------------------------ Bion Environmental Technologies Inc.'s balance sheet at March 31, 2007, showed $1,122,237 in total assets and $5,274,112 in total liabilities, resulting in a $4,151,875 total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $870,761 in total current assets available to pay $1,452,371 in total current liabilities. Bion Environmental Technologies Inc. reported a net loss of $84,293 for the third quarter ended March 31, 2007, compared with a net loss of $1,379,341 for the same period ended March 31, 2006. The company reported no revenues in both periods. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?1df5 Bion Environmental Technologies Inc. -- http://www.biontech.com/ -- is currently focused on the completion of the development of applications of its second-generation technology which provides solutions for environmentally sound clean-up of the waste streams of large-scale "confined animal feeding operations" (CAFO's) and creates economic opportunities for integration of renewable energy production, ethanol production, sustainable animal husbandry and organic soil/fertilizer and feed production. BSC INVESTMENTS: Case Summary & Four Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: BSC Investments LLC 6121 Lakeside Drive, Suite 230 Reno, NV 89511 Bankruptcy Case No.: 07-50477 Chapter 11 Petition Date: April 25, 2007 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Stephen R. Harris, Esq. Belding, Harris & Petroni, Ltd. 417 West Plumb Lane Reno, NV 89509 Tel: (775) 786-7600 Fax: (775) 786-7764 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Decal Oregon Inc. Loans $4,500,000 6121 Lakeside Drive, Suite 230 Reno, NV 89511 Fisher Friedman Associates Goods $1,782,000 1485 Park Avenue, Suite 103 Emeryville, CA 94608 Decal Nevada Inc. Loans $500,000 6121 Lakeside Drive, Suite 230 Reno, NV 89511 John Schleining $75,000 440 Columbia Boulevard St. Helens, OR 97051 BUCYRUS INT'L: Proposed $825 Mil. Term Loan Spurs S&P's BB- Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to Bucyrus International Corp.'s proposed first- lien $400 million revolving credit facility due in 2012 and $825 million term loan due in 2014. The 'BB-' rating and a recovery rating of '4' indicate the likelihood of marginal recovery of principal (25%-50%) in the event of a payment default. At the same time, Standard & Poor's assigned its 'BB-' rating to DBT GmbH's (a proposed indirect subsidiary of Bucyrus) proposed EUR50 million unsecured German revolving facility due 2012. The facility is guaranteed by Bucyrus. Proceeds from the financing will be used to purchase DBT, refinance existing debt, make modest additional capital expenditures, and pay transaction expenses. The deal is valued at approximately $731 million, excluding transaction costs. The corporate credit rating on Bucyrus is BB-/Stable/--. The ratings on the company reflect its position in the cyclical niche market for surface mining equipment, and following the DBT acquisition, in underground mining equipment manufacturing. The cyclical upturn in volatile commodity markets has contributed to currently improved financial measures that support Bucyrus' narrow focus. However, the acquisition increases the company's debt leverage, exposure to the cyclical mining business, and its dependence on coal. Bucyrus' 2004 IPO increased the company's financial flexibility and significantly improved credit protection measures. Total debt to EBITDA at Dec. 31, 2006, had declined to slightly more than 1x. As expected, the company's debt leverage is currently low at this point in the cycle. Bucyrus will need to reduce leverage following the acquisition of DBT so that in the next cyclical downturn, the company can be prepared for a possible decline in demand and potentially earnings. Standard & Poor's expectations for the ratings over the volatile mining cycle are for debt to EBITDA to average in the 3x area. Pro forma for the all-debt- financed transaction, the company will be levered at about 3.5x. After the acquisition of DBT, S&P ratings and outlook do not incorporate any other major acquisition. Ratings List Bucyrus International Inc. Corporate credit rating BB-/Stable/-- Ratings Assigned Senior secured revolving credit facility BB- Recovery rating 4 Senior secured term loan BB- Recovery rating 4 DBT GmbH Unsecured German revolving facility* BB- (* guaranteed by Bucyrus) CALIBRE ENERGY: Completes $5 Million Private Placement Financing ---------------------------------------------------------------- Calibre Energy Inc. completed a $5,000,000 financing through the private placement of 8,000,000 shares of Series A Convertible Preferred Stock with BlueWater Capital Group, LLC, a Houston, Texas-based private investment fund, managed by Prentis B. Tomlinson, Jr., Calibre's Chairman and Chief Executive Officer. The company anticipates that the proceeds from the Series A Preferred will be sufficient to fund its planned capital budget and general and administrative expenditures for the remainder of 2007. The 8,000,000 shares of Series A Preferred were issued at $0.625 per share, have a liquidation preference of $5 million, carry no coupon and are not accompanied by or issued in conjunction with any warrants or options. Each share of the Series A Preferred shall be convertible at the election of BlueWater Capital Group, LLC into shares of Common Stock based on the ratio required to cause the number of shares of Common Stock issuable upon the conversion of 8,000,000 shares of Series A Preferred Stock to equal 75% of the number of shares of Common Stock then issued and outstanding. The issuance of the Series A Preferred, which is authorized and designated to have that number of votes equal to 51% of the total votes entitled to be cast by all classes of stock of the company, results in the holder of the Series A Preferred exercising substantial influence over the outcome of all matters requiring a stockholder vote. The conversion of the Series A Preferred into Common Stock will result in significant dilution to the company's stockholders and the book value of their shares of the company's common stock. Accordingly, any investment in the company's common stock will continue to be highly speculative. About Calibre Energy Headquartered in Washington, DC, with operating offices in Houston, Texas, Calibre Energy Inc. (OTC BB: CBRE) -- http://www.calibreenergy.com/-- is a publicly traded exploration and production company focused on the acquisition and development of high quality unconventional gas and oil shale properties in selected producing basins in North America. Calibre's current concentration is the active drilling and development of its leasehold interests in the Barnett Shale as well as continuing to add selective new properties to its acreage inventory. Going Concern Doubt Malone & Bailey, PC in Houston, Texas, expressed substantial doubt about Calibre Energy, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses since inception. CANTON TIRES: Case Summary & 16 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Canton Tires and Automotive Services, Inc. dba The Car Place 300 Old Ball Ground Highway Waleska, GA 30183 Bankruptcy Case No.: 07-66299 Chapter 11 Petition Date: April 23, 2007 Court: Northern District of Georgia (Atlanta) Judge: James Massey Debtor's Counsel: Leon S. Jones, Esq. Jones & Walden, LLC 21 Eighth Street Northeast Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Georgia Department of Revenue Sales Tax Debt $75,000 Compliance Division 1800 Century Boulevard Suite 16102 Atlanta, GA 30345-3205 Bank of America Line of Credit $71,188 P.O. Box 15102 Wilmington, DE 19886 Wells Fargo Line of Credit $58,491 P.O. Box 29746 Phoenix, AZ 85038-9746 Wells Fargo Financial Leasing Equipment Lease $56,326 Citi Cards Business Credit $5,700 Card Credit Card $20,510 Wachovia Bank, N.A. Business $25,760 Line of Credit American Express Credit Card $19,658 Cherokee County Tax Comm. $19,069 Kauffman Tire Business Debt $13,550 Santa Barbara Bank & Trust Equipment Lease $10,541 FIA Card Services Line of Credit $8,361 O'Reilly Auto Parts Business Debt $6,956 Discover Platinum Credit Card $6,507 AT&T Universal Card Credit Card $5,355 Amano Business Credit $5,140 Citibusiness Credit Card $4,305 CARRAWAY METHODIST: Court Sets Plan Confirmation Hearing on May 23 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Alabama will convene a hearing on May 23, 2007, at 11:00 a.m., to consider confirmation of Carraway Methodist Health Systems and its debtor- affiliates' Amended Joint Chapter 11 Plan of Liquidation. Objections to the confirmation of the Plan are due on May 16, 2007. The Court approved the Debtors' Disclosure Statement describing their Plan on April 17, 2007. The Court determined that the Disclosure Statement contained adequate information -- the right kind of the right amount for creditors to make informed decisions when asked to vote for the Plan. Sources of Distribution Funds As reported in the Troubled Company Reporter on April 16, 2007, the Debtors have sold substantially all their assets to Doctors Community Healthcare Corporation for $26.5 million. The Debtors also have cash, securities, and other deposits of $1.6 million in aggregate, which were the proceeds of gifts made to the Debtors for educational purposes. Before the Debtors filed for bankruptcy, they disclosed a $500,000 cash deposit in favor of the Alabama Department of Industrial Relations regarding their status as self-insured under the workers' compensation laws of Alabama. Additionally, the Debtors have $400,000 in cash deposit posted with the Unemployment Compensation Division of the Alabama Department that provides for payment of post-petition unemployment compensation claims to the unsecured creditors. Overview of the Plan The Plan contemplates the distribution of the proceeds of the asset sale to all valid claims, as well as the creation of a trust that will liquidate the Debtors' remaining assets, including the Med Mal Fund. The Med Mal Fund refers to the fund established and administered under Carraway Methodist Medical Center Contingent Liability Management Revocable Trust Agreement dated June 30, 1976. Treatment of Claims Under the Plan, Administrative and Priority Claims will be paid in full, in cash from the administrative and priority reserve. The Debtor will transfer to Bradley Arant Rose & White LLP the portion of the carveout allocable. Remaining balance, if any, will be transferred to the representative of the unsecured creditors distribution. Assumed Cost Report Claims holders will retain their legal, equitable, and contractual right with respect to their claims. Each holder of Other Priority Claims will be paid in cash on the Plan's effective date from the Administrative and Priority Claim Reserve. Lenders Claim will receive a pro rata share, in accordance with intercreditor agreements. Holders of Other Secured Claims will receive, to the extent possible, the collateral securing their claims. Otherwise, the collateral securing the claim without warranty, or cash equal to the amount from the net proceeds of the collateral. Holders of Unsecured Claims will receive their pro rata share of the dividend on the initial distribution date. Each Holder of Med Mal Claims will be paid from the Med Mal Fund in accordance with the Med Mal Trust. All parties in interest will reserve all rights and interests. Med Mal Claims will be liquidated. Claims not paid, if any, due to insufficient Med Mal Fund will be treated as Punitive Damages Claims. Punitive Damages Claims will be paid in full after all valid claims have been paid. Holder of Equity Interests will not receive any distribution under the Plan. A full-text copy of Carraway Methodist's Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070413012120 About Carraway Methodist Health Systems Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. James R. Sacca, Esq., and John D. Elrod, Esq., at Greenberg Traurig, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more than $100 million. CATHOLIC CHURCH: Court Confirms Spokane's Second Amended Plan ------------------------------------------------------------- The Hon. Patricia Williams of the U.S. Bankruptcy Court for the Eastern District of Washington confirmed Second Amended Joint Plan of Reorganization proposed by the Diocese of Spokane, the Official Committee of Tort Claimants, the Future Claims Representative, and the Executive Committee of the Association of Parishes. Judge Williams found that the Plan complies with the statutory requirements. All objections to the Joint Plan, including those asserted by Larry E. Miller and Leo J. Driscoll, if not withdrawn, waived or settled, are overruled on the merits, Judge Williams said. At the confirmation hearing, the Court had some concerns regarding the language in the proposed order regarding post- confirmation fees, which is not what was represented in the Joint Plan. To solve the problem, Judge Williams ordered the Diocese's counsel to serve the confirmation order, without exhibits, on the master mailing list together with a notice to creditors of the process should they have an objection to post-confirmation fees. Spokane's notice indicate where the exhibits to the confirmation order can be viewed. The Plan Proponents have made certain additions and modifications to the Joint Plan to resolve actual or potential objections. However, the revisions do not materially or adversely affect or impair the interests of Spokane's creditors. No further solicitation notice is, required with respect to those changes, Judge Williams said. The Plan modifications include, among other things, the provision that each holder of a Class 7 Tort Claim, except the FCR, Future Tort Claimants, Settled Compromise Tort Claimants, Settled Matrix Tort Claimants, and Non-Releasing Litigation Tort Claimants, who does not elect to be treated as a holder of a Convenience, Compromise, Matrix or Litigation Tort Claim, will be deemed to have conditionally elected to be treated as a holder of a Matrix Tort Claim. Additionally, the Tort Claimants Reviewer, the Plan Trustee and their professional persons may send monthly applications to the Court for the approval of their fees and expenses. Unless the Applicant receives a written objection within 15 days after sending the invoices, the Applicant's fees and expenses will be deemed allowed and may be paid from the Plan Trust. After the confirmation hearing, Bishop Skylstad apologized and asked for forgiveness from the victims and their families, The Associated Press reports. "When I think of what brought us to this point, I can only pray in hope that never again will a child's trust be betrayed by an individual representing the love of Christ," Bishop Skylstad said, reports the AP. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. (Catholic Church Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CDC MORTGAGE: S&P Lowers Rating on S. 2003-HE4-B-3 Certs. to BB --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B-3 certificates from CDC Mortgage Capital Trust's series 2003-HE3 and 2003-HE4. Concurrently, the rating on class B-3 from series 2003-HE4 was placed on CreditWatch with negative implications and the rating on class B-3 from series 2003-HE3 remains on CreditWatch negative, where it was placed Jan. 22, 2007. At the same time, the ratings on the remaining classes from these two transactions were affirmed. The lowered ratings and CreditWatch placements reflect the deteriorating performance of the collateral pool. Credit support for these transactions is derived from a combination of subordination, excess interest, and overcollateralization. For the past six months, losses have been outpacing excess spread to the extent that the level of projected credit support is insufficient to support the prior 'BBB-' rating level. As of the March 2007 remittance period, cumulative losses for series 2003- HE3 and 2003-HE4 had reached 1.58% and 1.25% of the original pool balances, respectively. O/C levels for both deals are below their targets. Total delinquencies for series 2003-HE3 and 2003-He4 constitute 35.97% and 28.04% of the current pool balances, respectively. Severe delinquencies (90-plus-days, foreclosure, and REO) for these two pools constitute 23.56% and 17.00% of the current pool balances, respectively. Standard & Poor's will continue to closely monitor the performance of these two pools. If the delinquent loans cure to a point at which monthly excess interest begins to outpace monthly net losses, thereby allowing O/C to build and provide sufficient credit enhancement, S&P will affirm the ratings and remove them from CreditWatch. Conversely, if delinquencies cause substantial realized losses in the coming months and continue to erode credit enhancement, S&P will take further negative rating actions on these two classes. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. The collateral backing these transactions consists of pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Rating Lowered and Placed on Creditwatch Negative CDC Mortgage Capital Trust 2003-HE4 Rating ------ Class To From ----- -- ---- B-3 BB/Watch Neg BBB- Rating Lowered and Remaining on Creditwatch Negative CDC Mortgage Capital Trust 2003-HE3 Rating ------ Class To From ----- -- ---- B-3 BB/Watch Neg BBB-/Watch Neg Ratings Affirmed CDC Mortgage Capital Trust Series Class Rating ------ ----- ------ 2003-HE3 M-1 AA+ 2003-HE3 M-2 A 2003-HE3 M-3 A- 2003-HE3 B-1 BBB+ 2003-HE3 B-2 BBB 2003-HE4 A-1, A-3 AAA 2003-HE4 M-1 AA 2003-HE4 M-2 A 2003-HE4 M-3 A- 2003-HE4 B-1 BBB+ 2003-HE4 B-2 BBB CDC MORTGAGE: Fitch Holds Junk Ratings on Three Certificates ------------------------------------------------------------ Fitch has taken rating actions on these mortgage pass-through certificates: CDC Mortgage Capital Trust, series 2002-HE3 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'BBB'; -- Class B1 remains at CC/DR3'; -- Class B2 remains at 'C/DR6'. CDC Mortgage Capital Trust, series 2003-HE1 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A+'; -- Class M3 affirmed at 'BBB+'; -- Class B1 downgraded to 'CCC' from 'B+' and assigned distressed recovery rating of 'DR1'; -- Class B2 remains at 'C/DR6'. CDC Mortgage Capital Trust, series 2003-HE3 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 downgraded to 'BB-' from 'BBB-'and removed from Rating Watch Negative; CDC Mortgage Capital Trust, series 2003-HE4 -- Classes A-1 and A-3 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 downgraded to 'BB' from 'BBB'; -- Class B3 downgraded to 'BB-' from 'BBB-'and removed from Rating Watch Negative; CDC Mortgage Capital Trust, series 2004-HE1 -- Class M1 upgraded to 'AA+' from 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3, rated 'BBB-', placed on Rating Watch Negative; CDC Mortgage Capital Trust, series 2004-HE2 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3, rated 'BBB-', placed on Rating Watch Negative; -- Class B4, rated 'BB+', placed on Rating Watch Negative; CDC Mortgage Capital Trust, series 2004-HE3 -- Class M1 upgraded to 'AA+' from 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'; -- Class B4 affirmed at 'BB+'. IXIS Real Estate Capital Trust, series 2004-HE4 -- Classes A-1 and A-4 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'; -- Class B4 affirmed at 'BB+'. The affirmations reflect satisfactory relationship between credit enhancement and future loss expectations and affect approximately $616 million of outstanding certificates, as of the March 2007 distribution date. The upgrades reflect an improvement in the relationship between CE and future expected losses and affect approximately $88 million of outstanding certificates. The negative rating actions, affecting approximately $17 million of outstanding certificates, reflect the deterioration of CE relative to expected future losses. The underlying collateral for the transactions listed above consists of 30 year fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties extended to subprime borrowers. The servicer for series 2002-HE3 is Select Portfolio Servicing, Inc. and the servicer for the series 2003-HE1, 2003-HE3 and 2003-HE4 is Ocwen Loan Servicing, LLC. The servicer for the 2004 transactions listed above is Countrywide Home Loans, Inc. Fitch rates Select Portfolio Servicing, Inc and Ocwen Loan Servicing, LLC 'RPS2' for subprime transactions. Countrywide Home Loans Inc is rated 'RPS1' by Fitch, for Subprime transactions. As of the March 2007 distribution, the overcollateralization (OC) for the 2002-HE3 transaction was zero versus a target of $3,299,492. Since November 2006, the cumulative write down for the B-2 bond ($527,413 outstanding) has been $1,215,634. The B-1 bond ($4,801,854 outstanding) has 1.24% of CE remaining versus an initial CE of 3.05%, in the form of subordination. The OC for the 2003-HE1 transaction was $7,858 versus a target of $3,302,846. The B-1 bond ($3,443,549 outstanding) has 4.54% of CE remaining versus an initial CE of 3.30%, in the form of OC and subordination. The pools are seasoned from a range of 28 months (series 2004-HE4) to 52 months (series 2002-HE3). The pool factors (current principal balance as a percentage of original balance) range from 6% to 22%. The 60+ delinquencies range from 18.90% (series 2004- HE3) to 30.52% (series 2002-HE3) of respective current collateral balances. The cumulative losses range from 0.48% (series 2004- HE4) to 2.62% (series 2002-HE3) of respective original collateral balances. All of the mortgage loans were purchased by Morgan Stanley ABS Capital I Inc., the depositor, from either CDC Mortgage Capital Inc., or IXIS Real Estate Capital, Inc., who previously acquired the mortgage loans from various other corporations. Fitch will continue to closely monitor these transactions. CENVEO CORP: New $125 Million Notes Cue S&P to Cut Rating to B- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Cenveo Corp.'s newly assumed $125 million notes due 2014 to 'B-' from 'B'. The rating was removed from CreditWatch, where it was placed with negative implications on Dec. 27, 2006. Cadmus Communications Corp., the former issuer, has merged into Cenveo, and the notes obligation has been assumed by Cenveo. The downgrade reflects the expiration of Cenveo's cash tender offer for the notes, for which $21 million has been validly tendered. The remainder of the notes (approximately $104 million) will remain outstanding in Cenveo's capital structure. At the same time, Standard & Poor's withdrew its 'B+' loan rating and '2' recovery rating on Cenveo Corp.'s $125 million delayed- draw term loan due 2013, as the company has terminated the lenders' commitment to increase the delayed-draw facility to fund the purchase of the Cadmus notes. The delayed-draw term loan was funded only up to $20 million, approximately the amount of Cadmus notes tendered. The corporate credit rating on Stamford, Conn.-based parent company Cenveo Inc. is 'B+'. The rating reflects the company's high leverage pro forma for recent acquisitions, the likelihood of more debt-financed acquisitions in the intermediate term, and Cenveo's participation in highly competitive and fragmented markets. These factors are somewhat offset by operating improvements in 2006 and the expectation of continued growth in profitability and cash flow generation. Ratings List Cenveo Inc. Corporate Credit Rating B+/Positive/-- Rating Revised To From -- ---- Cenveo Corp. 8.375% Sub Nts B- B/Watch Neg CHASE MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates ------------------------------------------------------------ Chase Mortgage Finance Trust, series 2007-S3 is rated by Fitch as: -- $1,026,798,700 classes 1-A1 through 1-A25, 1-AX, 2-A1, 2-AX, A-P, and A-R (senior certificates) 'AAA'; -- $18,278,000 classes A-M and M-1 'AA+'; -- $15,052,600 class B-1, 'AA'; -- $5,913,500 class B-2, 'A'; -- $3,763,100 class B-3, 'BBB'; -- $2,150,400 privately offered B-4, 'BB'; -- $1,075,200 privately offered B-5, 'B'. The 'AAA' rating on the senior classes reflects the 4.50% subordination provided by the 0.80% class A-M, the 0.90% class M- 1, the 1.40% class B-1, the 0.55% class B-2, the 0.35% class B-3, the 0.20% privately offered class B-4, the 0.10% privately offered class B-5 and the 0.20% privately offered and not rated class B-6 certificates. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the primary servicing capabilities of JPMorgan Chase Bank, N.A. (rated 'RPS1' by Fitch). This transaction contains certain classes designated as exchangeable certificates and others as regular certificates. Class 1-A18, 1-A20, 1-A22, 1-A23 and 1-A24 are exchangeable certificates. Classes 1-A1 through 1-A17, 1-A19, 1-A25, 1-AX, 2- A1, 2-AX, A-P, A-R, A-M, M-1 and B-1 through B-5 are regular certificates. The holder of the Exchangeable Initial Certificates in any Exchangeable Combination may exchange all or part of each class of such Exchangeable Initial Certificates for a proportionate interest in the related Exchangeable Certificates. The holder of any class of Exchangeable Certificates may exchange all or part of such class for a proportionate interest in each such class of Exchangeable Initial Certificates or for other Exchangeable Certificates in the related Exchangeable Combination set forth in Annex F. The classes of Exchangeable Initial Certificates and Exchangeable Certificates that are outstanding on any date and the outstanding principal balances (or notional amounts, as applicable) of any such classes will depend upon the aggregate distributions of principal made to such classes, as well as any exchanges that may have occurred on or prior to such date. For the purposes of the exchanges set forth in Annex E and the calculation of the principal balance of any class of Exchangeable Initial Certificates, to the extent that exchanges of Exchangeable Initial Certificates for Exchangeable Certificates occur, the aggregate principal balance of the Exchangeable Initial Certificates will be deemed to include the principal balance (or notional amount, as applicable) of such Exchangeable Certificates issued in the exchange, and the principal balance (or notional amount, as applicable) of such Exchangeable Certificates will be deemed to be zero. Exchangeable Initial Certificates in any Exchangeable Combination and the related Exchangeable Certificates may be exchanged only in the specified proportions set forth in Annex F. Any holders of Exchangeable Certificates will be the beneficial owners of an interest in the Exchangeable Initial Certificates in the related Exchangeable Combination and will receive a proportionate share, in the aggregate, of the aggregate distributions on those certificates. With respect to any Distribution Date, the aggregate amount of principal and interest distributable to any classes of Exchangeable Certificates and the Exchangeable Initial Certificates in the related Exchangeable Combination then outstanding on such Distribution Date will be equal to the aggregate amount of principal and interest otherwise distributable to all of the Exchangeable Initial Certificates in the related Exchangeable Combination on such Distribution Date as if no Exchangeable Certificates were then outstanding. The trust consists of 1,693 first-lien residential mortgage loans with stated maturity of not more than 30 years with an aggregate principal balance of $1,075,181,901 as of the cut-off date, April 1, 2007. The mortgage pool has a weighted average original loan- to-value ratio of 71.79% with a weighted average mortgage rate of 6.407%. The weighted-average FICO score of the loans is 744. The average loan balance is $635,075 and the loans are primarily concentrated in California (27.9%), New York (21.4%) and Florida (10.8%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The Bank of New York Trust Company, N.A will serve as trustee. Chase Mortgage Finance Corporation deposited the loans in the trust which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CINEMARK HOLDINGS: Prices 28 Million Shares at $19 Each in IPO -------------------------------------------------------------- Cinemark Holdings Inc. disclosed the pricing of its initial public offering of 28,000,000 shares of common stock at a price of $19 per share. Cinemark Holdings Inc. is offering 13,888,889 shares of its common stock in this initial public offering, and selling stockholders are offering an additional 14,111,111 shares. The selling stockholders have also granted the underwriters a 30-day option to purchase up to an aggregate of 2,800,000 additional shares of common stock if the underwriters sell more than 28,000,000 shares in the offering. Cinemark Holdings Inc. will not receive any proceeds from the sale of shares by the selling stockholders. The shares are scheduled to begin trading on the New York Stock Exchange on April 24, 2007 under the ticker "CNK." Cinemark Holdings, Inc. intends to use the net proceeds that it receives from the initial public offering to repurchase a portion of its outstanding 9-3/4% senior discount notes or repay debt outstanding under its new senior secured credit facility. The company's 9-3/4% senior discount notes are not currently subject to repurchase at its option. Accordingly, if Cinemark Holdings, Inc. is unable to repurchase the 9-3/4% senior discount notes at prices that it deems acceptable, the net proceeds that it receives from this offering will be used to repay term loan debt outstanding under its new senior secured credit facility. The initial public offering is being led by Lehman Brothers, Credit Suisse, Merrill Lynch & Co. and Morgan Stanley & Co. Incorporated, acting as joint book-running managers. The offering will be made only by means of the written prospectus forming part of the effective registration statement. A copy of the final prospectus relating to the offering, when available, may be obtained from: a) Lehman Brothers Prospectus Department c/o Qiana Smith Broadridge 1155 Long Island Avenue Edgewood, NY 11717 Fax (631) 254-7268 b) Credit Suisse Prospectus Department One Madison Avenue New York, NY 10010 Telephone (800) 221-1037 c) Morgan Stanley & Co. Incorporated Prospectus Department 180 Varick Street New York, NY 10014 d) Merrill Lynch & Co. Prospectus Department 4 World Financial Center New York, NY 10080 About Cinemark Holdings Inc. Cinemark Holdings Inc. (NYSE: CNK) -- http://www.cinemark.com/-- through Cinemark Inc., operates 396 theatres and 4,488 screens in the U.S. and Latin America, which includes Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, and Peru. Its circuit is the third largest in the U.S. with 281 theatres and 3,523 screens in 37 states. The company has the most geographically diverse circuit in Latin America with 115 theatres and 965 screens in 12 countries. * * * As reported in the Troubled Company Reporter on Feb. 6, 2007, Moody's Investors Service changed the outlook for Cinemark Inc. to positive from stable. The outlook change reflects the potential for additional debt reduction with proceeds from the proposed initial public offering of Cinemark Holdings Inc., which, when combined with possible debt reduction from the proposed initial public offering of National CineMedia Inc. could reduce leverage to at or slightly below 6x debt-to-EBITDA. Moody's also affirmed Cinemark's B1 corporate family rating. As reported in the Troubled Company Reporter on Dec. 7, 2006, Standard & Poor's Ratings Services revised its outlook on Cinemark Inc. and subsidiary Cinemark USA Inc., which are analyzed on a consolidated basis, to positive from stable. At the same time, S&P affirmed its existing ratings on Cinemark, including the 'B' corporate credit ratings. CLEAR CHANNEL: Earns $102.2 Million in Quarter Ended March 31 ------------------------------------------------------------- Clear Channel Communications Inc. reported net income of $102.2 million for the first quarter of 2007, compared with net income of $96.8 million for the first quarter of 2006. The company's first quarter 2006 net income included approximately $39.6 million of pre-tax gains, primarily on the divestiture of radio assets and the swap of certain outdoor assets. The company reported revenues of $1.6 billion in the first quarter of 2007, an increase of 8% from the $1.5 billion reported for the first quarter of 2006. Included in the company's revenue is a $31.2 million increase due to movements in foreign exchange; excluding the effects of these movements in foreign exchange, revenue growth would have been 6%. Clear Channel's income before discontinued operations increased 2% to $99.2 million, as compared to $97.1 million for the same period in 2006. Clear Channel's expenses increased 5% to $1.1 billion during the first quarter of 2007 compared to 2006. Included in the company's 2007 expenses is a $28.9 million increase due to movements in foreign exchange; excluding the effects of these movements in foreign exchange, growth in expenses would have been 3%. The company's operating income before depreciation & amortization, non-cash compensation expense and gain on disposition of assets - net) was $435.7 million in the first quarter of 2007, a 12% increase from 2006. Mark P. Mays, chief executive officer of Clear Channel Communications, commented, "The company delivered solid first quarter results and we are very pleased with our overall performance. We want to thank and congratulate all of our employees, who work extremely hard every day to help Clear Channel achieve its goals and objectives." Proposed Merger Transaction On April 18, 2007, the company amended its agreement to be acquired by a group of private equity funds led by Bain Capital Partners LLC and Thomas H. Lee Partners L.P. to provide for an increase to $39.00 per share in the price shareholders will receive in cash for each share of common stock they hold. The transaction is subject to shareholder approval, antitrust clearances, FCC approval and other customary closing conditions. The company filed its supplement to the definitive proxy statement with the Securities and Exchange Commission on April 25, 2007, and the shareholder meeting will be held on May 8, 2007. Radio and Television Divestitures On April 20, 2007, the company entered into a definitive agreement to sell its Television Group for approximately $1.2 billion. The sale includes 56 television stations (including 18 digital multicast stations) located in 24 markets across the United States. Also included in the sale are the stations' associated Web sites, the Television Operations Center, and Inergize Digital Media, which manages the Television Group's online and wireless initiatives. The transaction is expected to close in the fourth quarter of 2007, subject to regulatory approvals and other customary closing conditions. Clear Channel estimates net proceeds after taxes and customary transaction costs will be approximately $1.1 billion for the Television Group. To date the company has entered definitive agreements to sell 161 radio stations in 34 markets for a total consideration of approximately $331 million. The company expects these transactions to close during the second half of 2007. The company estimates net proceeds after taxes and customary transaction costs for these 161 stations will be approximately $300 million. Liquidity and Total Debt For the quarter ended March 31, 2007, cash flow from operating activities was $337.9 million, cash flow used by investing activities was $75.7 million, cash flow used by financing activities was $283.2 million, and net cash provided by discontinued operations was $14.6 million for a net decrease in cash of $6.4 million. At March 31, 2007, Clear Channel had total debt of $7.4 billion. About Clear Channel Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a global media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on April 23, 2007, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Clear Channel Communications Inc. to 'B+' from 'BB+'. The ratings remain on CreditWatch with negative implications, where they were placed on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value. COMM 2001-J2: S&P Lifts Cert. Ratings Due to Improved Performance ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 10 classes of commercial mortgage pass-through certificates from COMM 2001-J2. At the same time, the ratings on the remaining eight classes from this transaction were affirmed. The raised ratings primarily reflect the recent defeasance of 15% of the mortgage pool balance and the overall improved operating performance of the nine nondefeased loans. The AT&T Building loan, the second-largest loan in the pool with a balance of $212.8 million, was defeased last month. Standard & Poor's has underwritten and resized four of the nine remaining nondefeased loans: -- Citigroup Center is the largest loan in the pool, with a $316.9 million in-trust balance, and is secured by a 1.6 million-sq.-ft. class A office tower in Midtown Manhattan. The $489.0 million whole loan consists of the Citigroup senior portion (the $316.9 million Citigroup Center senior interest, which is part of this trust, and the $51.0 million Citigroup Center subordinate certificates, which are held in COMM 2001-CITI) and two privately held subordinate interests (a $46.6 million senior subordinate interest and a $74.5 million junior subordinate interest). The property has performed well since issuance, as evidenced by a 9% increase in reported net cash flow. Using operating results for the nine months ended Sept. 30, 2006, and incorporating the borrower's budget for 2007, Standard & Poor's adjusted the management fees, leasing commissions, tenant improvements, and capital expenditures to arrive at an NCF of $48.2 million. Using a capitalization rate of 8.50%, the loan-to-value ratio is estimated at 55%, and debt service coverage is 1.60x, based on a refinance constant of 9.5%. -- The Wyndham Anatole Hotel (now known as the Hilton Anatole Hotel) is the fourth-largest loan in the pool, with a $138.8 million whole-loan in-trust balance, and is secured by a 1,614-room, business convention-type hotel in Dallas, Texas. The property is in good condition and is well located on Stemmons Highway, which serves as the major thoroughfare into downtown Dallas from the Dallas-Fort Worth Airport. The operating performance of the hotel has rebounded strongly over the past couple of years. Reported NCF was up 36% in 2006 compared with 2004. -- Guardian Life Building is the fifth-largest loan in the pool, with a $125.2 million whole-loan in-trust balance. The loan was initially secured by an 823,458-sq.-ft. office building located at Seven Hanover Square in lower Manhattan and two smaller ancillary buildings, 46 Water Street and 78 Pearl Street. The borrower has asked for the release of the two smaller buildings. With the exception of 4,219 sq. ft. of ground-level retail space, almost all of the Seven Hanover building is leased to Guardian Life Insurance Co. of America (AA/Positive/--) through 2019. Using full-year 2006 operating results for the Seven Hanover office building only, Standard & Poor's current estimated value for this asset is 12% below its underwritten level at issuance. -- Oakdale Mall is the smallest loan in the pool and is secured by 483,482 sq. ft. of an 848,876-sq.-ft. retail shopping mall in Johnson City, New York. The whole loan consists of a $45.3 million senior portion and a $7.3 million subordinate portion, both of which are part of this trust. Cash flow from the Oakdale Mall is the sole source of cash flow for classes OM-1, OM-2, and OM-3. Using operating results for the nine months ended Sept. 30, 2006, Standard & Poor's current estimated value for this asset is 6% above its underwritten level at issuance. Ratings Raised COMM 2001-J2 Commercial mortgage pass-through certificates series 2001-J2 Rating ------ Class To From Credit Support ----- -- ---- ------------ C AAA AA 7.89% D AA A+ 6.06% E A+ A- 3.87% E-CS A+ A- 3.87% E-IO A+ A- N/A F A- BBB+ 3.08% G BB+ BB 1.16% OM-1 AAA A N/A OM-2 AA- A- N/A OM-3 BBB+ BBB N/A Ratings Affirmed COMM 2001-J2 Commercial mortgage pass-through certificates series 2001-J2 Class Rating Credit Support ----- ------ -------------- A-1 AAA 19.96% A-1F AAA 19.96% A-2 AAA 19.96% A-2F AAA 19.96% B AAA 14.63% X AAA N/A X-C AAA N/A X-P AAA N/A CREDIT SUISSE: Fitch Takes Rating Actions on Seven Transactions --------------------------------------------------------------- Fitch Ratings has taken rating actions on these Credit Suisse First Boston Home Equity Asset Trust transactions: CSFB Home Equity Asset Trust, series 2005-2 -- Class A 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-'; -- Class B-4 affirmed at 'BB+'. CSFB Home Equity Asset Trust, series 2005-4 -- Class A 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 'AA-'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A'; -- Class M-7 affirmed at 'A'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB'. CSFB Home Equity Asset Trust, series 2005-5 -- Class A 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 B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, series 2005-6 -- Class A 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 'AA-'; -- Class M-5 affirmed at 'AA-'; -- Class M-6 affirmed at 'A'; -- Class M-7 affirmed at 'A-'; -- Class M-8 affirmed at 'BBB+'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BB+'; -- Class B-4 rated 'BB+', placed on Rating Watch Negative. CSFB Home Equity Asset Trust, series 2005-7 -- Class A 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 B-1 affirmed at 'BBB'; -- Class B-2 rated 'BBB', placed on Rating Watch Negative; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative; -- Class B-4 downgraded to 'B+' from 'BB+'; -- Class B-5 downgraded to 'B+' from 'BB'. CSFB Home Equity Asset Trust, series 2005-8 -- Class A 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 B-1 affirmed at 'BBB'; -- Class B-2 rated 'BBB', placed on Rating Watch Negative; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative; -- Class B-4 downgraded to 'BB' from 'BB+'; -- Class B-5 downgraded to 'B+' from 'BB'. CSFB Home Equity Asset Trust, series 2005-9 -- Class A 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 'AA-'; -- 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 B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative. The collateral of the above transactions consists of first and second lien fixed-rate and adjustable-rate subprime mortgage loans. As of the March 2007 distribution date, the transactions are seasoned from a range of 14 to 23 months, and the pool factors (current collateral balance as a percentage of original collateral balance) range from approximately 39% to 77%. All of the mortgage loans were purchased by an affiliate of the depositor from various sellers in secondary market transactions. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $4.434 billion of outstanding certificates. The negative rating actions in the 2005-6, 2005-7, 2005-8, and 2005-9 reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $82.750 million of outstanding certificates. The affected transactions have pool factors ranging from 68% to 77%. All transactions have delinquency figures well above the industry average. The high delinquency appears to be partially driven by high concentrations of loans with reported piggyback second liens. Approximately 35% of the pools consist of loans with piggyback second liens. Loans with piggyback second liens have performed particularly poorly as the housing market has cooled. Several classes in the series were placed on Rating Watch Negative due to early trends in the relationship between serious delinquency and credit enhancement. For 2005-6, the amount of loans in Foreclosure and REO at 17 months seasoning as a percentage of the current pool balance is 6.1%. The subordination of the B-4 class is 1.85%. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.05%. For 2005-7, the amount of loans in Foreclosure and REO at 16 months seasoning as a percentage of the current pool balance is 7.2%. The subordination of the B-2, B-3, B-4 and B-5 classes is 4.71%, 3.83%, 2.36% and 1.62% respectively. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.08%. For 2005-8, the amount of loans in Foreclosure and REO at 15 months seasoning as a percentage of the current pool balance is 6.8%. The subordination of the B-2, B-3, B-4 and B-5 classes is 5.21%, 3.74%, 2.64% and 1.61% respectively. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 0.96%. For 2005-9, the amount of loans in Foreclosure and REO at 14 months seasoning as a percentage of the current pool balance is 5.6%. The subordination of the B-3 class is 2.93%. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.00%. The mortgage loans are being serviced by Wells Fargo Home Mortgage, Inc. ('RPS1' rated by Fitch) and Select Portfolio Servicing, Inc. ('RPS2'). The depositor is Credit Suisse First Boston Mortgage Securities Corp. Fitch will continue to closely monitor the above transactions. CREDIT SUISSE: Fitch Puts Rating on Two Loans Under Negative Watch ------------------------------------------------------------------ Fitch Ratings has taken rating actions on these Credit Suisse First Boston Home Equity Asset Trust transactions: Series 2006-1 -- Class A 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 B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'BBB-'; -- Class B-3, rated 'BB+', placed on Rating Watch Negative. Series 2006-2 -- Class A 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 'AA'; -- Class M-5 affirmed at 'AA-'; -- Class M-6 affirmed at 'A+'; -- Class M-7 affirmed at 'A'; -- Class M-8 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'; -- Class B-4 affirmed at 'BB+'; -- Class B-5, rated 'BB', placed on Rating Watch Negative. Series 2006-3 -- Class A 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 'AA-'; -- 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 B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'; -- Class B-4 affirmed at 'BB+'; -- Class B-5 affirmed at 'BB'. The collateral of the above transactions consists of first and second lien, fixed-rate and adjustable-rate subprime mortgage loans. As of the March 2007 distribution date, the transactions are seasoned from a range of 11 months to 13 months, and the pool factors (current collateral balance as a percentage of original collateral balance) range from approximately 72% to 87%. All of the mortgage loans were purchased by an affiliate of the depositor from various sellers in secondary market transactions. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $2.222 billion of outstanding certificates. Two classes in the 2006-1 and 2006-2 series, representing $10.4 million of outstanding certificates, were placed on Rating Watch Negative due to early trends in the relationship between serious delinquency and credit enhancement. Both transactions have delinquency figures well above the industry average. The high delinquency appears to be partially driven by high concentrations of loans with reported piggyback second liens. Approximately 40% of the pools consist of loans with piggyback second liens. Loans with piggyback second liens have performed particularly poorly as the housing market has cooled. For 2006-1, the amount of loans in foreclosure and real estate owned (REO) at 13 months seasoning as a percentage of the current pool balance is 6.6%. The subordination of the B-3 class is 3.22%. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.72%. For 2006-2, the amount of loans in foreclosure and REO at 12 months seasoning as a percentage of the current pool balance is 5.2%. The subordination of the B-5 class is 0.63%. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.66%. The mortgage loans are being serviced by Wells Fargo Home Mortgage, Inc. (rated 'RPS1' by Fitch) and Select Portfolio Servicing, Inc. (rated 'RPS2' by Fitch). The depositor is Credit Suisse First Boston Mortgage Securities Corp. Fitch will continue to closely monitor the above transactions. CRUM & FORSTER: Fitch Rates $330 Million Senior Notes at B+ ----------------------------------------------------------- Fitch Ratings has assigned a 'B+' rating to Crum & Forster Holdings Corp.'s $330 million issue of unsecured senior notes due 2017. Fitch has also affirmed C&F's 'BB-' Issuer Default Rating (IDR) and 'B+' senior unsecured debt rating. C&F is a wholly- owned subsidiary of Fairfax Financial Holdings Limited. The ratings of Fairfax and its other holding company and insurance company subsidiaries are not affected by this action. The Rating Outlook is Stable. The offering proceeds are expected to be used to purchase C&F's $300 million 10.375% senior notes due June 15, 2013. The company's debt to total capital ratio of about 20% at year-end 2006 is expected to remain essentially unchanged following the refinancing. Fitch assigns this rating with a Stable Outlook: Crum & Forster Holdings Corp. -- $330 million unsecured due May 1, 2017 'B+'. Fitch affirms these ratings, with a Stable Outlook: -- Issuer Default Rating 'BB-'; -- $300 million unsecured due June 15, 2013 'B+'. These ratings remain unchanged by Fitch: Fairfax Financial Holdings Limited -- Issuer Default Rating 'BB-'; -- $62 million unsecured due April 15, 2008 'B+'; -- $464 million unsecured due April 15, 2012 'B+'; -- $100 million unsecured due Oct. 1, 2015 'B+'; -- $184 million unsecured due April 15, 2018 'B+'; -- $92 million unsecured due April 15, 2026 'B+'; -- $91 million unsecured due July 15, 2037 'B+'; -- $135 million convertible due July 15, 2023 'B+'. Fairfax, Inc. -- Issuer Default Rating 'BB-'; Odyssey Re Holdings Corp.: -- Issuer Default Rating 'BBB-'; -- $50 million series A unsecured due March 15, 2021 'BB+'; -- $50 million series B unsecured due March 15, 2016 'BB+'; -- $40 million series C unsecured due Dec. 15, 2021 'BB+'; -- $24 million convertible due June 22, 2022 'BB+'; -- $225 million unsecured due Nov. 1, 2013 'BB+'; -- $125 million unsecured due May 1, 2015 'BB+'; -- $50 million series A preferred shares 'BB'; -- $50 million series B preferred shares 'BB'. Odyssey Re Group: Odyssey America Reinsurance Corporation Clearwater Insurance Company -- Insurer financial strength 'BBB+'. TIG Holdings, Inc. -- Issuer Default Rating (IDR) 'BB-'; -- TIG Capital Trust I $18 million trust preferred stock due 2027 'B'. TIG Insurance Group: TIG Indemnity Company TIG Insurance Company TIG Specialty Insurance Company -- Insurer financial strength 'BB+'. Crum & Forster Insurance Group: Crum & Forster Insurance Company Crum & Forster Indemnity Company The North River Insurance Company United States Fire Insurance Company -- Insurer financial strength 'BBB-'. Northbridge Financial Insurance Group: Commonwealth Insurance Company Commonwealth Insurance Company of America Federated Insurance Company of Canada Lombard General Insurance Company of Canada Lombard Insurance Company Markel Insurance Company of Canada Zenith Insurance Co. (Canada) -- Insurer financial strength 'BBB'. CVS CORP: Self-Tender Offer to Purchase 150 Million Shares Expires ------------------------------------------------------------------ CVS/Caremark Corporation reported the expiration and final results of its tender offer to purchase up to 150 million shares of its outstanding common stock at a price of $35 per share. The offer to purchase shares commenced on March 28, 2007 and expired at 12:00 midnight April 25, 2007. As of April 25 stock market close, CVS/Caremark's shares were trading at $36.71 per share, up approximately 7% since the tender offer commenced. Based on the final count by the depositary for the tender offer, approximately 10.4 million shares of common stock were properly tendered and not withdrawn. Given that the number of shares tendered was less than the number of shares that CVS/Caremark offered to purchase, pro-ration was not necessary. The depositary will promptly issue payment of $35 per share for all of the shares properly tendered and not withdrawn. The company stated that it will continue to evaluate its alternatives for optimizing its capital structure on an ongoing basis. Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated were dealer managers for the tender offer and Morrow & Co., Inc. was the information agent. Questions regarding the tender offer should be directed to Morrow & Co., Inc. at (800) 245-1502 (Toll-free). About CVS/Caremark CVS/Caremark Corporation -- http://www.cvs.com/-- fka CVS Corporation operates in the retail drugstore industry in the United States. As of Dec. 30, 2006, it operated 6,202 retail and specialty pharmacy stores in 43 states and the District of Columbia. It has two segments: Retail Pharmacy and Pharmacy Benefit Management. It sells prescription drugs and an assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods, through its CVS/pharmacy retail stores. The PBM business provides a range of prescription benefit management services to managed care and other organizations. On June 2, 2006, it acquired approximately 700 standalone drugstores and a distribution center (collectively, the Standalone Drug Business) from Albertson's, Inc. In March 2007, CVS Corporation completed the acquisition of Caremark Rx Inc. The combined company is named CVS/Caremark Corporation. * * * As reported in the Troubled Company Reporter on March 8, 2007, Moody's Investors Service confirmed the Ba1 rating of CVS Corp.'s $125 million Series A-2 lease obligations. DELPHI CORP: Cerberus Denies Backing Out of Delphi Agreement ------------------------------------------------------------ Cerberus Capital Management, L.P., dismissed a statement from Delphi Corporation that it withdrawing from a consortium of investors who would infuse up to $3.4 billion into Delphi, The Associated Press reports. Delphi has said that Cerberus would leave the consortium consisting of affiliates of Appaloosa Management L.P., Harbinger Capital Partners Master Fund I, Ltd., as well as Merrill Lynch & Co. and UBS Securities LLC. Cerberus doubts if Delphi will be profitable enough to make the investment worth its while after it reviewed Delphi's financial records and performance for the past four months, Bloomberg News said last week. Under the Delphi agreement, Cerberus, together with Appaloosa, et al., will fund a plan of reorganization for Delphi in exchange for shares of common stock and preferred shares in Reorganized Delphi. They will also purchase any unsubscribed shares of Delphi common stock in connection with a rights offering to existing Delphi shareholders. "There has not been any decision made," Cerberus spokeswoman J.J. Rissi told AP. Asked if it was possible that Cerberus would remain part of the Delphi deal, Ms. Rissi replied, "It's not impossible," declining further comment. According to AP, Delphi had planned to emerge from Chapter 11 by the end of June, but Delphi said that would be delayed until the second half of 2007 even without the Cerberus withdrawal. Delphi spokesman Lindsey Williams told AP that none of the equity investors, including Cerberus, has given notice that it will exit from the deal, and Delphi and Cerberus are still talking. Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. The Debtors' exclusive plan-filing period expires on July 31, 2007. DOMTAR CORPORATION: DBRS Confirms 'BB' Issuer Rating ---------------------------------------------------- Dominion Bond Rating Service confirmed an Issuer Rating of BB to Domtar Corporation and a BBB (low) rating to the company's Senior Secured Credit Facility. The trends are Stable and remain on track. The Issuer Rating reflects a business risk that is higher than industry averages due to the company's high earnings dependency on uncoated free sheet (UFS) papers. Improvements in the UFS paper market in 2006 have been largely due to disciplined industry producers that closed sufficient capacity to bring supply in line with demand. The narrowing of the supply gap supported higher product prices and associated revenues that offset high/rising input costs, and strength in the Canadian dollar, enabling Domtar to record improved profitability. The structural decline in UFS demand from electronic media penetration, grade substitution, and conservation, among other factors, is well established and remains the key issue facing Domtar. DBRS expects that UFS demand will remain under pressure going forward, particularly with moderating U.S. economic growth. Industry capacity curtailments will continue to be required to provide pricing support. Domtar, as the leading North American UFS producer, is expected to take an aggressive role in supply management. Successful supply management would support cost-push price increases and perpetuate the recent upward trend in earnings and cash flows. Incremental cash flow from the Weyerhaeuser fine paper business will be only partially offset by higher interest expense, producing a substantial improvement in free cash flow in 2007, prior to costs of synergies and restructuring. Acquisition synergies of US$200 million and limiting capital expenditures to 75% of depreciation will also benefit cash generation. Acquisition financings in first quarter 2007 are expected to enable Domtar to record corporate leverage in the 45% to 50% range and cash flow interest coverage in the 0.10 to 0.20 times range in the near term, consistent with a BB rating. Liquidity is not expected to be an issue over the near- to medium- term, given a lack of debt maturities until 2011, and a new unused $750 million senior secured credit facility. DOMTAR INC: DBRS Confirms BB (Low) Rating on Unsecured Debentures ----------------------------------------------------------------- Dominion Bond Rating Service confirmed the Unsecured Notes and Debentures rating of Domtar Incorporated at BB (low) and the company's Preferred Share rating at Pfd-5 (high). The trends are Stable and remain on track. The ratings reflect a business risk that is higher than industry averages due to the company's high earnings dependency on uncoated free sheet papers. Improvements in the UFS paper market in 2006 have been largely due to disciplined industry producers that closed sufficient capacity to bring supply in line with demand. The narrowing of the supply gap supported higher product prices and associated revenues that offset high/rising input costs, and strength in the Canadian dollar, enabling Domtar to record improved profitability. The structural decline in UFS demand from electronic media penetration, grade substitution, and conservation, among other factors, is well established and remains the key issue facing Domtar. DBRS expects that UFS demand will remain under pressure going forward, particularly with moderating U.S. economic growth. Industry capacity curtailments will continue to be required to provide pricing support. Successful supply management will support cost-push price increases and perpetuate the recent upward trend in earnings and cash flows. Liquidity is not expected to be an issue over the near- to medium-term, given a lack of debt maturities until 2011. Capex is expected to be maintained below depreciation in 2007 and 2008, a strategy that will benefit cash flow. EAGLE BROADBAND: Feb. 28 Balance Sheet Upside-Down by $134,000 -------------------------------------------------------------- Eagle Broadband Inc. disclosed that as of Feb. 28, 2007, its balance sheet showed total assets of $19,145,000 and total liabilities of $19,279,000, resulting in a total stockholders' deficit of $134,000. The company's February 28 balance sheet also showed strained liquidity with total current assets of $2,092,000 and total current liabilities of $16,014,000. Accumulated deficit was recorded at $248,804,000 as of Feb. 28, 2007. Net loss for the second quarter ended Feb. 28, 2007, of $4.3 million, slightly higher than the $4.1 million net loss for the same quarter last year. Compared to the second quarter of last year, revenues increased by $100,000 to $870,000 and gross margins improved by almost $500,000. Loss from operations for the quarter was $2.4 million, an improvement of more than $1 million from the same quarter last year. "The improvement in operating results reflects the implementation of our cost-cutting efforts and our continued focus on selling our products and services at healthier margins," said Dave Micek, president and CEO of Eagle Broadband. "Operating expenses for the first six months of fiscal 2007 are down by more than $1.75 million compared to fiscal 2006, when you exclude the one- time, $900,000 credit to bad debt expense we recognized in the first quarter of last year." Mr. Micek continued, "We have our costs under control, our super- headend is complete and delivering more than 250 channels of IPTV content to multiple customers, and we have successfully integrated the Connex and Alliance Telecom assets into our IT services division. The positive effect of acquiring Connex and ATS, as well as bringing Tony Cordaro to Eagle, is starting to show positive results." Operational highlights for the quarter include: -- Signed a contract with FrontGate Broadband to deliver IPTVComplete(TM) in Florida; -- Shipped 500 units of Eagle's newest set-top box, the MediaPro IP3000HD, to a hospitality solutions provider; -- Signed a contract with the same hospitality solutions provider under which Eagle could ship more than $6 million in set-top boxes over a 13-month period if delivered according to the customer's service schedule; -- Acquired the customer base of Connex Services Inc., a Houston-based IT services company; -- Appointed Tony Cordaro, the former president and chief executive officer of Connex, as vice president of IT Services, and Kane Brushwood, a former Connex executive, as a director of IT Services; -- Secured a satellite communications system contract with Fort Bend County, Texas, to provide a portable SatMAX(R) Emergency Communications System and pre-wire the county's emergency operations center; -- Received a patent on the company's advanced set-top box technology that ensures secure delivery of digital television content; -- Received a series of contracts and completed installations of VoIP office support systems at five regional hurricane- recovery program offices for a world-renowned international disaster-relief organization; and -- With ANEW Broadband, launched a joint collaboration of ANEW Vision; a triple-play service offering, specifically designed for multi-dwelling buildings. Full-text copies of the company's 2007 second quarter report is available for free at http://ResearchArchives.com/t/s?1df4 About Eagle Broadband Headquartered in League City, Texas, Eagle Broadband Inc. (AMEX: EAG) -- http://www.eaglebroadband.com/-- provides bundled digital services, satellite communications products, project management, and enterprise management products and services. Going Concern Doubt LBB & Associates Ltd. LLP in Houston, Texas, raised substantial doubt about Eagle Broadband Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended Aug. 31, 2006, and 2005. The auditing firm pointed to the company's negative working capital, losses in 2005 and 2006, and need for additional financing necessary to support its working capital requirements. eLEC COMM: February 28 Balance Sheet Upside-Down by $6.1 Million ---------------------------------------------------------------- eLEC Communications Corp.'s balance sheet at Feb. 28, 2007, showed $2,936,765 in total assets and $9,093,230 in total liabilities, resulting in a $6,156,465 total stockholders' deficit. The company's balance sheet at Feb. 28, 2007, also showed strained liquidity with $1,869,904 in total current assets available to pay $8,890,825 in total current liabilities. eLEC Communications Corp. reported a net loss of $2,000,458 on revenues of $1,741,123 for the first quarter ended Feb. 28, 2007, compared with a net loss of $663,479 on revenues of $2,496,854 for the same period in fiscal 2006. Results for the first quarter of fiscal 2007 includes warrant expense of approximately $960,000 due to the significant increase in the market value of the company's common stock, compared to warrant expense of approximately $22,000 in fiscal 2006. Revenue for the three-month period ended Feb. 28, 2007, decreased approximately $756,000, mainly resulting from the decrease in the number of local access lines served by the company's two competitive local exchange carriers (CLECs), New Rochelle Telephone Corp. and Telecarrier Services Inc. IP telephony revenue increased by approximately $164,000 period over period. Gross profit for the three-month period ended Feb. 28, 2007, decreased approximately $539,000, mainly as a result of the decrease in the size of the company's customer base. Selling, general and administrative expenses decreased by approximately $107,000, to approximately $1,140,000 for the three- month period ended Feb. 28, 2007, mainly due to the decrease in salaries in the first quarter of 2007 over the same period last year. Full-text copies of the company's consolidated financial statements for the quarter ended Feb. 28, 2007, are available for free at http://researcharchives.com/t/s?1df1 About eLEC Communications eLEC Communications Corp. (OTCBB: ELEC) -- http://www.elec.net/-- through its wholly owned subsidiary, VoX Communications Corp., provides an integrated suite of IP-based communications services and offers wholesale broadband voice, origination and termination services for cable operators, carriers, ISPs, CLECs, resellers and other wireless and wireline operators, as well as enhanced VoIP telephone service to the small business and residential marketplace. EPICUS COMMUN: Has $3.3MM Total Stockholders' Deficit at Feb. 28 ---------------------------------------------------------------- Epicus Communications Group Inc. reported a net loss of $503,306 for the third quarter ended Feb. 28, 2007, compared with a net loss of $1,197,760 for the period Dec. 8, 2005, through Feb. 28, 2006. Results of operations for the period Dec. 8, 2005, through Feb. 28, 2006, included a charge to operations for the recognition of bad debts of approximately $407,000. For the three months ended Feb. 28, 2007, and for the period from Dec. 8, 2005, through Feb. 28, 2006, the company reported net revenues of $1,786,000 and $2,917,000, respectively, with gross profit of approximately $668,671 and $373,000. These revenues were solely derived from telecommunication service sales. At Feb. 28, 2007, the company's balance sheet showed $8,935,913 in total assets, $1,869,795 in total liabilities, $6,694,206 in convertible debentures, and $3,750,000 in callable secured convertible note, resulting in a $3,378,088 total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the quarter ended Feb. 28, 2007, are available for free at http://researcharchives.com/t/s?1dec About Epicus Communications Epicus Communications Group Inc., through its wholly owned subsidiary, ECG on the Net LLC, provides low cost VoIP telephone services to consumers nationwide. On Oct. 25, 2004, Epicus Communications Group Inc. and its subsidiary, Epicus Inc., filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Florida seeking reorganization relief under the provisions of Chapter 11 of Title 11 of the United States Code. The company's plan of reorganization was confirmed by the Bankruptcy Court on Sept. 30, 2005, and became effective on Dec. 8, 2005. EQUEST DEVELOPMENT: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Equest Development, LLC 2381 Arbor Hill Road Canton, GA 30115 Bankruptcy Case No.: 07-66418 Chapter 11 Petition Date: April 24, 2007 Court: Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtor's Counsel: Robert A. Chambers, Esq. Donovan Chambers, P.C. 8440 Courthouse Square Douglasville, GA 30134 Tel: (770) 947-3540 Total Assets: $3,141,600 Total Debts: $1,461,000 The Debtor does not have any creditors who are not insiders. FEDERAL-MOGUL: Wants to Enter into Amended $775 Million DIP Pact ---------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to enter into an amended DIP financing commitment letter and fee letter with Citicorp USA, Inc., and JPMorgan Chase Bank, N.A. As previously reported, the Debtors sought the Court's authority to enter into a separate commitment letter under which Citigroup, JPMorgan, and a syndicate of lenders will provide the Debtors with necessary financing upon the consummation of the Debtors' Chapter 11 plan. Under the proposed Exit Financing Commitment Letter, the Proposed Exit Lenders committed to provide the Debtors with an amended DIP financing facility if the Debtors' exit financing does not close by July 1, 2007, the maturity date of the Debtors' Existing Credit and Guaranty Agreement with JPMorgan, as administrative agent, and a group of lenders. In light of the impending maturity of the Existing DIP Agreement, the Debtors' need for postpetition financing to fund their ongoing business operations, and in connection with their Exit Commitment, the Debtors, Citigroup and JPMorgan engaged in discussions regarding the extension of the Debtors' current postpetition financing arrangements. After extensive negotiations, the Debtors, Citigroup and JPMorgan entered into a Commitment Letter for an amended DIP Agreement, James E. O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, informs the Court. The Amended DIP Agreement extends the term of the Existing DIP Agreement through the earlier of: (a) December 31, 2007; or (b) the date of substantial consummation of a Court-approved plan of reorganization. In addition, the Amended DIP Agreement refinances approximately $330,000,000 in loans and deems the re-issuance of approximately $10,400,000 in letters of credit at more favorable rates of interest than the current interest rates. In particular, Citigroup and JPMorgan will provide the Debtors with a: (a) $500,000,000 committed superpriority senior secured revolving credit facility, with a letter of credit sublimit in at least the U.S. dollar equivalent of $110,000,000; and (b) $275,000,000 committed, plus up to $330,000,000 incremental, superpriority senior secured term loan facility. The Amended DIP Agreement also grants the Proposed DIP Lenders pari passu liens and superpriority claims in respect of the Debtors' obligations under postpetition ordinary course hedging transactions in an aggregate notional amount of up to $150,000,000. Moreover, the Agreement will fund additional liens of up to $35,000,000 for certain contemplated hedging transactions. According to Mr. O'Neill, the Amended DIP Agreement may also contain other discrete modifications to the Existing DIP Agreement that will enable the Debtors to use their financing more effectively and in a manner that more accurately tracks the Debtors' present strategic business plan. Substantially all of the material terms of the Debtors' postpetition financing, however, will remain unchanged, Mr. O'Neill says. A full-text copy of the Amended DIP Facility Commitment Letter is available for free at http://ResearchArchives.com/t/s?1dff The Amended DIP Agreement has not been finalized, Mr. O'Neill relates. The Debtors will furnish the Court a copy of the Amended DIP Agreement before the Court hears their request. An extension of the Maturity Date of the Existing DIP Agreement will afford the Debtors sufficient time to secure confirmation of their Fourth Amended Joint Plan of Reorganization and will permit them to emerge from bankruptcy without requiring another extension of their DIP financing, Mr. O'Neill notes. Fee Letter In return for Citigroup's and JPMorgan's DIP financing commitments, the Debtors have agreed to pay certain arrangement and other fees set forth in a fee letter dated April 16, 2007. The Debtors believe that the fees provided for in the Fee Letter are at normal and customary levels for comparable postpetition financing facilities, and that the payment of those fees is reasonable and appropriate. Mr. O'Neill asserts that the Fee Letter contains sensitive information that is highly confidential to the Debtors' business and proprietary to Citigroup and JPMorgan. Thus, the Debtors further ask the Court to authorize them to file the Fee Letter under seal. The Debtors propose to serve unredacted copies of the Fee Letter to the Court, the office of the U.S. Trustee, and the counsel for the five co-Plan Proponents: * The Official Committee of Unsecured Creditors, * The Official Committee of Asbestos Claimants, * The Legal Representative for Future Claimants, * JPMorgan Chase Bank, N.A., and * The Official Committee of Equity Security Holders. In addition to the amounts set forth in the Fee Letter, the Commitment Letter requires the Debtors to pay various expenses incurred by Citigroup and JPMorgan in connection with the negotiation, documentation, approval and closing of the transactions contemplated by the Commitment Letter, Mr. O'Neill notes. The Debtors also seek the Court's permission to enter into any ancillary documents that may be necessary to effect the terms of the Amended DIP Agreement, including, but not limited to, an amended security and pledge agreement, if necessary, with respect to the collateral to secure the obligations under the Amended DIP Agreement. The Amended DIP Agreement will offer the Debtors an interest rate on the refinanced Tranche C Loans that may be approximately 1.75% better than the interest rate the Debtors currently pay with respect to the Tranche C Loans, Mr. O'Neill states. "This would result in a savings to the Debtors' estates of hundreds of thousands of dollars per month," Mr. O'Neill points out. Furthermore, since the Tranche C Loans previously enjoyed postpetition claim status and were junior in lien and claim priority only to the obligations under the Existing DIP Facility, Mr. O'Neill assures the Court that repaying the Loans with the DIP proceeds will not harm creditors. "It is both more efficient and cost-effective for the Debtors to enter into the Amended DIP Agreement rather than negotiating and entering into a new financing facility from scratch with a new agent and group of lenders," Mr. O'Neill avers. About Federal-Mogul Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. They then submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The confirmation hearing is set for June 8, 2007. (Federal-Mogul Bankruptcy News, Issue No. 134; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FLORIDA SELECT: Case Summary & Eight Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Florida Select Insurance Agency, Inc. 300 Riverhills Business Park, Suite 340 Birmingham, AL 35242 Bankruptcy Case No.: 07-01849 Type of Business: The Debtor provides residential insurance for Florida and South Carolina property owners. See http://www.floridaselect.com/ Chapter 11 Petition Date: April 24, 2007 Court: Northern District of Alabama (Birmingham) Judge: Thomas B. Bennett Debtor's Counsel: Rufus Dorsey, IV, Esq. Parker Hudson Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, Northeast Atlanta, GA 30303 Tel: (404) 523-5300 Fax: (404) 822-8409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Business Credit Card $1,044 P.O. Box 360001 Fort Lauderdale, FL 33336-0001 Danka Office Imaging Company Trade Debt $943 P.O. Box 25084 Bethlehem, PA 18015 Dataquick Information Trade Debt $441 Systems, Inc. Lock Box - File 50261 Los Angeles, CA 90074-0261 Computer Consultants Copier Maintenance $193 Modern Waste Solutions Trade Debt $52 EOP - Sarasota City Lease Unknown Center, LLP Robert Moreno Lawsuit Unknown Ocean Club Associates Inc. Trade Debt Unknown FLYI INC: Joint Amended Plan Declared Effective March 30 -------------------------------------------------------- FLYi, Inc. and its subsidiaries, including Independence Air, Inc., its principal operating subsidiary, said that their Amended Joint Plan was declared effective on March 30, 2007. According to a document filed with the U.S. Securities and Exchange Commission, as a result of the Plan being declared effective, FLYi's existing common stock has been cancelled without consideration as of March 30, 2007, and has no value. No shares are being reserved for future issuance in respect of claims and interests filed and allowed under the Plan. Thus, all existing common stock of FLYi is cancelled and has no value, and there is no value to the conversion rights of convertible debt, Richard Kennedy, FLYi's president, general counsel & corporate secretary, states. FLYi has filed a Form 15 with the SEC to terminate its reporting obligations under the Securities Exchange Act of 1934. FLYi will cease to file information with the SEC. 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 Court confirmed the Debtor's Joint Amended Plan of Reorganization on March 15, 2007. (FLYi Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FORD MOTOR: Reports Preliminary Results for First Quarter 2007 -------------------------------------------------------------- Ford Motor Company reported a net loss of $282 million, for the first quarter of 2007. This compares with a net loss of $1.4 billion, in the first quarter of 2006. Ford's first-quarter loss from continuing operations, excluding special items, was $171 million, compared with a profit of $223 million, in the same period a year ago. Special items, which primarily reflected the impact of restructuring efforts, reduced pre-tax results by $113 million in the first quarter. Ford's first-quarter revenue was $43 billion, up from $40.8 billion a year ago. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume. "We are making progress on executing the four priorities of our plan - restructuring the company, accelerating product development, funding our plan and working effectively as one team," said president and chief executive officer Alan Mulally. "I am pleased that the basics of our business are improving, but we still have a lot of work to do. "Our first quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance," Mulally added. Automotive Sector On a pre-tax basis, worldwide Automotive sector losses in the first quarter were $225 million. This compares with a pre-tax loss of $203 million during the same period a year ago. The 2007 losses were more than explained by net interest expense, partially offset by automotive operating profits of $116 million during the quarter. Worldwide Automotive revenue for the first quarter was $38.6 billion, up from $37 billion in the same period last year. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume. Vehicle wholesales in the first quarter were 1,650,000, down from 1,756,000 a year ago. Automotive gross cash, which includes cash and cash equivalents, net marketable securities, loaned securities and short-term VEBA assets, was $35.2 billion at March 31, 2007, up from $33.9 billion at the end of the fourth quarter. Ford North America: In the first quarter, Ford's North America Automotive operations reported a pre-tax loss of $614 million, compared with a pre-tax loss of $442 million a year ago. The increase in losses primarily reflected unfavorable volume and mix, partially offset by cost reductions. Revenue was $18.2 billion, down from $19.8 billion for the same period a year ago. Ford South America: Ford's South America Automotive operations reported a first-quarter pre-tax profit of $113 million, compared with a pre-tax profit of $137 million a year ago. The decline primarily reflected the non-recurrence of hedging gains. First quarter revenue improved to $1.3 billion from $1.2 billion in 2006. Ford Europe: Ford Europe's first-quarter pre-tax profit was $219 million compared with a pre-tax profit of $65 million during the same period in 2006. The improvement was more than explained by favorable volume and mix, partially offset by higher incentive spending. During the first quarter of 2007, Ford Europe's revenue was $8.6 billion, compared with $6.8 billion during the first quarter of 2006. Premier Automotive Group (PAG): PAG reported a record pre-tax profit of $402 million for the first quarter, compared with a pre- tax profit of $152 million for the same period in 2006. The improvement is more than explained by favorable volume and mix, favorable net pricing and lower costs, partially offset by adverse currency exchange. First-quarter 2007 revenue was $8.4 billion, compared with $7.1 billion a year ago. Ford Asia Pacific and Africa: For the first quarter, Ford Asia Pacific and Africa reported a pre-tax loss of $26 million, compared with a pre-tax profit of $2 million a year ago. Adverse currency exchange and unfavorable volume and mix were partially offset by favorable cost performance. Revenue was $1.8 billion for the first quarter of 2007, compared with $1.7 billion in 2006. Mazda: For the first quarter, Ford earned $22 million from its investment in Mazda and associated operations, compared with $45 million during the same period a year ago. The decline is largely explained by the non-recurrence of gains on an investment in Mazda convertible bonds. Other Automotive: First-quarter results included a pre-tax loss of $341 million, compared with a loss of $162 million a year ago. The year-over-year decline is largely explained by higher interest expense and related costs associated with the debt increase in the fourth quarter of 2006. This was partially offset by increased interest income on a larger cash portfolio. Financial Services Sector For the first quarter, Financial Services sector earned a pre-tax profit of $294 million, compared with a pre-tax profit of $375 million a year ago. Ford Motor Credit Company: Ford Motor Credit reported net income of $193 million in the first quarter of 2007, down $55 million from earnings of $248 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $294 million in the first quarter, compared with $382 million in the previous year. The decrease in earnings was more than explained by higher borrowing costs and higher depreciation expense for leased vehicles. The non-recurrence of losses related to market valuation adjustments from non-designated derivatives was a partial offset. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's US$3 billion of senior convertible notes due 2036. FRASER PAPERS: Posts $10MM Recurring Losses in Qtr. Ended March 31 ------------------------------------------------------------------ Fraser Papers Inc. reported financial results for the first quarter ended March 31, 2007. The company recorded a net loss of $10.1 million compared to a net loss of $11 million in the fourth quarter of 2006. The 2007 results represent a significant improvement over the loss of $78.4 million during the same quarter in 2006. The company's quarter highlights include: -- The company withdrawing its proposal to Brookfield Asset Management that it would not be proceeding with the planned acquisition of Katahdin Holdings LLC. Extensive discussions with a number of shareholders have indicated that there is not widespread support for the transaction. As a result of the termination of the purchase, the company intends to repay all of the outstanding 8.75% Senior Notes before the end of July 2007. The Senior Notes were scheduled to mature in March of 2015. -- On Jan. 31, 2006, Fraser Papers sold its timberland assets in New Brunswick to Acadian Timber Income Fund. Net proceeds were $125 million, including $93.5 million in cash and $31.5 million of securities which are exchangeable for 3.6 million units of the Fund, representing a 30% interest in the equity of the Fund, or a 22% interest in the Fund on a fully diluted basis. The sale of the NB Timberlands assets resulted in a gain of $71 million. -- In conjunction with the sale, Fraser Papers entered into agreements with Acadian whereby Fraser Papers retained the right to purchase fibre, in amounts approximately equal to its historical consumption, for a period of up to 20 years at prevailing market prices. Liquidity and Capital Resources Cash flow from operations after changes in working capital was an outflow of $26.8 million as compared to $34.3 million during the same quarter of 2006. During the first quarter, Fraser Papers invested $19.7 million in working capital primarily in the form of log inventory in anticipation of seasonal spring supply constraints and paper inventory in anticipation of the peak financial printing season. Operating cash flow before changes in working capital in the first quarter improved to an outflow of $7.1 million compared to an outflow of $14 million in 2006, due to reduced funding of employee benefits. Long term debt of $78.6 million includes $68.5 million of senior, unsecured notes which bear interest at 8.75% and are due in 2015, net of transaction costs of $1.9 million. The indenture agreement governing the notes contains certain covenants, the more significant of which include restrictions on the incurrence of additional indebtedness, sale of assets and reinvestment of proceeds, mergers, creation of liens, payment of dividends and repurchase of the company's shares. The remaining $12 million in long term debt consists of borrowings under the company's committed, revolving credit facility. Borrowings under the $90 million facility are at market rates. At quarter end, $39.7 million of this facility was utilized in support of letters of credit. During 2006, the company reduced its total long-term debt by $79 million. Net debt as of March 31, 2007 was $83.7 million resulting in a net debt to net debt plus equity ratio of 21%. For the quarter, capital investments totaled $3 million compared to $1 million in the first quarter of 2006. The spending of $3 million was primarily focused on maintenance of the business and capital in preparation for the Edmundston pulp mill planned outage in the second quarter. At March 31, 2007, the company's balance sheet showed total assets of $560.9 million, total liabilities of $238.5 million, and total shareholders' equity of $322.4 million. Dominic Gammiero to Step Down as CEO At the Board of Directors' meeting, Dominic Gammiero disclosed that he would be stepping down as CEO of the company. Mr. Gammiero has served as CEO since the corporation was established in June 2004. Mr. Gammiero will remain on the board and has agreed to become the chairman of the company. J. Peter Gordon, formerly president of the company, will assume the role of CEO. Mr. Gordon joined Fraser Papers in January 2006 as chief financial officer and was appointed president in October 2006. In addition, the board approved the appointment of Glen McMillan, formerly senior vice president and chief administrative officer, as chief financial officer of the company, effective April 25, 2007, reporting to Mr. Gordon. Mr. McMillan joined Fraser Papers in June 2004 after spending nine years at the company's former parent company, Norbord Inc. About Fraser Papers Fraser Papers Inc. (TSE: FPS) -- http://www.fraserpapers.com/-- is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec. * * * As reported in the Troubled Company Reporter on Feb. 15, 2007, Standard & Poor's Ratings Services lowered its ratings on Fraser Papers Inc., including the long-term corporate credit rating, to 'CCC+ from 'B-'. The outlook is negative. The company also carries Moody's Caa2 long-term corporate family and probability of default ratings as well as the ratings agency's Caa3 senior unsecured debt rating. GENESIS HEALTHCARE: Gets $64.75 Per Share Offer from Fillmore ------------------------------------------------------------- Genesis HealthCare Corp. received a $64.75 per share offer from Fillmore Capital Partners LLC, the Wall Street Journal reports. The offer is 50 cents more that Formation Capital and JER Partners' amended offer of $64.25 per share. The company had previously disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that Formation and JER had upped its offer from $63 per share. The company's Board of Directors had given its nod on Formation/ JER's amended offer. The company had set a May 4 meeting for shareholders to approve the merger. WSJ relates that the company has said that it will consider the new offer relative to Formation/JER's amended offer. About Formation Formation Capital -- http://www.formationcapital.com/-- is a private equity firm in the senior housing and long-term care industry. Over the past five years Formation Capital has completed over $1.5 billion of acquisitions in the sector and provides asset management services to over 250 facilities nationwide. About JER Partners ER Partners -- http://www.jer.com/-- is the private equity investment arm of J.E. Robert Companies, a real estate investment management company with more than 25 years of experience in sourcing, underwriting and managing a broad spectrum of real estate equity investments and debt products in North America and Europe. JER has completed over $1.1 billion of acquisitions in the senior housing sector. JER's primary investments are in office, hospitality, retail, multi-family, healthcare-related real estate and industrial properties. Other areas of investment include commercial mortgage-backed securities and mezzanine financing. About Fillmore Capital Fillmore Capital Partners, LLC -- http://www.fillmorecap.com/-- is a private real estate equity firm specializing in structured investments in operating intensive sectors. The firm's current investment portfolio exceeds $3.0 billion and outstanding capital commitments exceed $1.0 billion. FCP serves a growing list of large institutional pension funds and a select group of private investment companies. FCP invests on behalf of its clients in large healthcare, lodging and operating company platforms. About Genesis HealthCare Genesis HealthCare Corporation -- http://www.genesishcc.com/-- (NASDAQ: GHCI) is one of the United States' largest long-term care providers with over 200 skilled nursing centers and assisted living residences in 13 eastern states. Genesis also supplies contract rehabilitation therapy to over 600 healthcare providers in 20 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Jan. 19, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Genesis HealthCare to 'B+' from 'BB-' and placed the rating on CreditWatch with negative implications, after the report that the company has agreed to be acquired by a joint venture between Formation Capital and JER Partners. At the same time, Moody's Investors Service placed the Ba3 Corporate Family Rating and all debt instrument ratings of Genesis HealthCare under review for possible downgrade. GENESIS HEALTHCARE: Allocates Payments for Bonus Program -------------------------------------------------------- Genesis HealthCare Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on April 18, 2007, it allocated the payments that may be made pursuant to the Bonus Program to eleven employees of the company, including the potential payment of $250,000 to James V. McKeon, the company's Chief Financial Officer. The company says that no payment may be made under the Bonus Program to the extent it would cause the recipient to be subject to the excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended. Bonus Program On January 12, 2007, the Compensation Committee of the company's Board of Directors adopted a bonus program providing for up to an aggregate of $1 million in bonus payments to employees of the company, other than the Chief Executive Officer, and in amounts designated in the discretion of the Compensation Committee in consultation with the Chief Executive Officer. The amounts become payable on or as soon as reasonably practicable following the closing of the pending merger with an affiliate of Formation Capital LLC and JER Partners and are contingent upon the participant's remaining employed by the company or one of its subsidiaries through the date of the closing of the merger. About Genesis HealthCare Genesis HealthCare Corporation -- http://www.genesishcc.com/-- (NASDAQ: GHCI) is one of the United States' largest long-term care providers with over 200 skilled nursing centers and assisted living residences in 13 eastern states. Genesis also supplies contract rehabilitation therapy to over 600 healthcare providers in 20 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Jan. 19, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Genesis HealthCare to 'B+' from 'BB-' and placed the rating on CreditWatch with negative implications, after the report that the company has agreed to be acquired by a joint venture between Formation Capital and JER Partners. At the same time, Moody's Investors Service placed the Ba3 Corporate Family Rating and all debt instrument ratings of Genesis HealthCare under review for possible downgrade. GEORGIA GULF: Weakening Credit Quality Cues S&P to Lower Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Georgia Gulf Corp. by one notch, including its corporate credit rating to 'B+' from 'BB-'. At the same time, S&P removed its ratings from CreditWatch with negative implications where they were placed on March 6, 2007. The outlook is negative. As of Dec. 31, 2006, Georgia Gulf had approximately $1.7 billion in debt (adjusted for capitalized operating leases and for the securitized sale of receivables). Atlanta, Georgia-based Georgia Gulf is an integrated producer of chlorovinyl products, aromatic chemicals, and PVC products with a combined 2006 annual revenue of approximately $3.4 billion, pro forma for a recent acquisition. "The downgrade reflects Georgia Gulf's weakening credit quality measures, against our expectation at the previous rating for a gradual trend of improvement," said Standard & Poor's credit analyst Paul Kurias. A worse-than-anticipated softening in the U.S. new-housing market negatively affected earnings and cash flow in a meaningful way in the fourth quarter of 2006, resulting in the deterioration of credit metrics and increasing concern that the current operating environment will limit credit quality improvement this year. S&P believe that a period of protracted demand softness could offset the benefits from PVC price improvements in the second quarter, and limit earnings improvement at a time when debt levels are high, and integration of the large Royal Group acquisition continues to be a challenge. S&P also note that capacity additions in the PVC sector in the U.S. announced for late 2007 and beyond could result in an oversupply situation if demand does not grow as anticipated. The ratings on Georgia Gulf reflect risks associated with the integration of a large acquisition relative to existing operations, cyclical and highly competitive end markets, and a highly leveraged financial profile. The integration and execution challenges stem from the expected complexity of integrating Royal's large fabricated vinyl product business. These risks are partly offset by our assessment that several important potential benefits of the acquisition could strengthen the business profile in the intermediate term if the integration is successful. GLOBAL POWER: Court Extends Exclusive Plan Filing Date Until May 2 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware entered a bridge order extending Global Power Equipment Group Inc. and its debtor-affiliates' exclusive period to file a plan until a hearing scheduled for May 2, 2007. The Court also gave the Debtors until July 2, 2007, to solicit acceptances of that plan. In their motion, the Debtors requested an August 24, 2007 extension of their exclusive period to file a plan. The Debtors told the Court that they have continued to make substantial progress in addressing major issues facing their estates, including: a) stabilizing each of the Debtors' major business segments and developing new business opportunities; b) addressing issues regarding the wind down of Deltak LLC and Deltak Construction Services Inc.'s heat recovery steam generation business segment; c) reaching additional accommodation agreements with key customers; and d) developing a five-year business plan, which was recently presented to the Debtors' Official Committee of Unsecured Creditors. Notwithstanding the substantial progress to date, the Debtors explained that a significant amount of work remains to be done before they will be able to propose a plan consistent with their fiduciary duties to maximize value, including, inter alia, the refinement and testing of their business plan, evaluation and reconciliation of claims filed against them, and an analysis of their intercompany assets and liabilities. Moreover, the Debtors said they continue to meet with the Committee on a regular basis, and in anticipation of preparing a chapter 11 plan of reorganization, are now preparing a plan term sheet, which they intend to share with the Committee in the near future. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. GLOBAL POWER: Consulting Pacts w/ Former Execs Stretched to May 2 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware permitted Global Power Equipment Group Inc. and its debtor-affiliates to extend their consulting agreements, as modified, with former executives Larry Edwards and James P. Wilson until May 2, 2007. The Order is without prejudice to the Debtor's right to request for further extension of the agreements. The Official Committee of Unsecured Creditors consented to the extension. The Debtors tell the Court that they need Messrs. Edward's and Wilson's services particularly in relation to the continuing transition in senior management of the Debtors. Although their full-time services are no longer required, the Debtors explain that the consulting agreements provide the Debtors with the flexibility to continue to take advantage of Messrs. Edward's and Wilson's significant experience and expertise in a manner that will provide significant benefits to the Debtors' estates while minimizing costs. Effective Nov. 21, 2006, Mr. Edwards resigned from his officer position as president and chief executive officer of the Debtors. He continues to serve as a non-executive member of Global Power's Board of Directors. Also effective Nov. 21, 2006, Mr. Wilson resigned from his officer position as vice president of finance and chief financial officer of Global Power. Mr. Wilson joined the company in 1986. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. GLOBAL POWER: Court Approves PricewaterhouseCoopers as Auditors --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Global Power Equipment Group and its debtor-affiliates permission to employ PricewaterhouseCoopers LLP as its tax advisors and auditors. As reported in the Troubled Company Reporter on Feb. 14, 2007, PricewaterhouseCoopers is expected to: a) prepare and sign the Debtors' federal tax returns for the tax years starting Jan. 1, 2005 through Dec. 31, 2006; b) prepare and sign federal tax returns for a number of the Debtors' foreign subsidiaries for the tax years starting Jan. 1, 2005 through Dec. 31, 2006, and assist in the preparation of forms and related computations for the foreign tax credit; c) prepare and sign the Debtors' state corporate income tax returns, for the tax years starting Jan. 1, 2005 through Dec. 31, 2006; d) serve as the Electronic Return Originator with respect to the tax returns that must be filed electronically; and e) provide the Debtors with additional tax services as requested, including, but not limited to, providing recurring tax consulting services, assisting with matters involving tax authorities, and preparing additional tax forms. Among other things, PricewaterhouseCoopers is also expected to: a) perform consolidated audits of the Debtors' financial statements related to the years ended Dec. 31, 2005, and, if expressly requested by the Debtors, Dec. 31, 2006; b) audit management's assessment of the effectiveness of the Debtors' internal control over financial reporting and the effectiveness of management's internal control over financial reporting for the period under audit; and c) report to the Debtors any matter discovered that may require material modifications to the quarterly financial information so that it conforms to generally accepted accounting principles. The firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $585 - $802 Managers/Senior Managers $342 - $446 Associate/Senior Associates $118 - $225 Administration $77 - $105 David S. Colwell, a PricewaterhouseCoopers member, assured the Court that his firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. INTEGRAL NUCLEAR: Hires Logan & Co. as Claims and Noticing Agent ---------------------------------------------------------------- Integral Nuclear Associates LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Logan & Company Inc., as their claims and noticing agent. Logan will: a. serve the First Day Motions; b. prepare and serve required notices in the Chapter 11 cases including, * the Section 341(a) Notices; * Notice of the claims bar date; * Notice of objections to claims; * Notice of hearings on a disclosure statement and confirmation of a plan or reorganization; and * other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the chapter 11 cases; c. within office business days after the mailing of a particular notice, file with the Clerk's Office a declaration of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was served and the date and manner of service; d. maintain copies of all proofs of claim and interest filed; e. maintain official claims registers for the Debtors by docketing all proofs of claim and interest on claims registers including, among other things: * the name and address of the claimant or interest holder and any agent if the proof of claim or interest was filed by an agent; * the date received; * the claim number assigned; and * the asserted amount and classification of the claim. f. implement necessary security measures to ensure the completeness and integrity of the claims registers; g. transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; h. maintain an up-to-date mailing list for all entities that have filed a proof of claim or interest, which is available free of charge upon request of a party in interest on the limited service list or the Clerk's Office and at the expense of any other party in interest upon the request of the party, and comply with all requests for mailing labels duplicated from the mailing list; i. provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; j. record all transfers of claims and provide notice of the transfers pursuant to Federal Rule of Bankruptcy Procedure 3001(e); k. comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; l. promptly comply with such further conditions and requirements as the Clerk's Office or Court may at any time prescribe or require; m. tabulate acceptances and/or rejections to any plan of reorganization and/or liquidation filed by the Debtors; n. provide such other claims processing, noticing, and related administrative services as may be required from time to time by the Debtors; o. act as the Debtors' balloting agent, which may include some or all of these services: * printing of ballots; * preparing voting reports by plan class, creditor or shareholder and amount for review and approval by the client and its counsel; * coordinating the mailing of ballots, disclosure statement and plan of reorganization to all voting and non-voting parties and provide affidavit of service; and * receiving ballots at a post office box, inspecting ballots for conformity to voting procedures, date stamping and numbering ballots consecutively, and tabulating and certifying the results. Kathleen M. Logan, President of Logan & Co., tells the Court that BSI will be paid according to the rates set in the Standard Bankruptcy Services Agreement. The Debtors disclose that they have paid BSI a $3,000 retainer. Ms. Logan assures the Court that her firm is a "disinterested person" as that term is defined is Section 101(14) of the Bankruptcy Code. About Integral Nuclear Based in Paoli, Pennsylvania, Integral Nuclear Associates, LLC -- http://www.integralpet.com/-- operates nuclear imaging centers. The company and 25 of its affiliates filed for Chapter 11 protection on April 15, 2007 (Bankr. D. N.J. Case Nos. 07-15183 through 07-15215). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. JARDEN CORPORATION: Agrees to Acquire K2 Inc. for $1.2 Billion -------------------------------------------------------------- Jarden Corporation and K2 Inc. have signed a definitive merger agreement pursuant to which Jarden will acquire K2. Under the terms of the agreement, Jarden will pay $10.85 per share of K2 common stock in cash and will issue 0.1086 of a share of Jarden common stock for each share of K2 common stock outstanding as of the closing. The cash and Jarden stock to be issued in the transaction has a combined value of approximately $15.50 per K2 share, based on the closing price of Jarden common stock on the date of signing the merger agreement. The total enterprise value of the transaction, including the assumption or repayment of indebtedness, is approximately $1.2 billion. The transaction is expected to be accretive to Jarden's earnings and to close early in the third quarter of this year. K2 has a strong presence in North America as well as Europe and Asia and fits well with Jarden's stated strategy of building and acquiring leading, niche consumer-oriented brands. Its strength in the specialty and multi-store sporting goods, marine, and outdoor retail channels and proven international presence, combined with its focus on new product introductions and market innovations, would provide Jarden with significant growth opportunities and the ability to expand into adjacent markets. K2's primary business lines would be reported through Jarden's Outdoor Solutions segment upon closing of the transaction. "We are enormously excited about the announcement as it marks another important step in our planned and disciplined growth strategy as a world class, diversified, niche oriented consumer products company," Martin E. Franklin, Jarden's Chairman and Chief Executive Officer, said. "Adding K2's broad portfolio of leading brands to our portfolio would create cross selling opportunities both domestically and internationally, would expand our presence in specialty channels, would further diversify our products, revenues and earnings, and would create additional scale to leverage in our supply chain, distribution, manufacturing and sourcing networks." "We believe that Jarden is the perfect strategic partner for us," Richard J. Heckmann, K2's Executive Chairman of the Board, said. "Combining our world-renowned brands with Jarden's scale and innovative resources should bring tremendous value to our employees, retail partners and customers. I am extremely proud of our employees' accomplishments over the last five years, and I am excited about the road ahead for K2 as part of the Jarden family." "We believe the timing is ideal to make this acquisition," Mr. Franklin concluded. "We have spent the last two years successfully integrating American Household and we believe that we now have the appropriate resources in place around the world to focus on delivering results from this combination. We feel that K2 is well positioned to continue its growth and that it will benefit from the leverage of our combined resources to deliver strong financial performance. I have been impressed by the many people I have met at K2 from around the world and I look forward to welcoming the K2 team to Jarden. We have always said that Jarden's most important assets are our employees, and our commitment to them, in addition to our customers and stockholders, will continue to guide our company." The board of directors for both companies has unanimously approved the transaction, which is expected to close during the third quarter of 2007, subject to Hart-Scott-Rodino approval, the approval of K2's stockholders and other customary closing conditions. About K2 Inc. Headquartered in Carlsbad, California, K2 Inc. (NYSE: KTO) -- http://www.k2inc.net/-- designs manufactures and distributes sporting equipment, apparel and accesories. About Jarden Corp. Headquartered in Rye, New York, Jarden Corporation (NYSE: JAH) -- http://www.jarden.com/-- manufactures and distributes niche consumer products used in and around the home. The company's primary segments include Consumer Solutions, Branded Consumables, and Outdoor. * * * As reported in the Troubled Company Reporter on Feb. 14, 2007, Moody's Investors Services has affirmed the B1 corporate family rating for Jarden Corporation following the upsizing of the company's proposed aggregate senior subordinated offering from $400 million to $650 million. The rating outlook remains positive. JOAN FABRICS: Selects Mintz Levin as Bankruptcy Counsel ------------------------------------------------------- Joan Fabrics Corporation and its debtor-affiliate, Madison Avenue Designs LLC, ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as their counsel. Mintz Levin will: a. advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and property; b. represent the Debtors at all hearings and matters pertaining to their affairs as debtors and debtors-in- possession; c. attend meetings and negotiate with representatives of the Debtors' creditors and other parties in interest, as well as respond to creditor inquiries; d. take all necessary action to protect and preserve the Debtors' estates; e. prepare on behalf of the Debtors all necessary and appropriate motions, applications, answers, orders, reports and papers necessary to the administration of Debtors' estates; f. review applications and motions filed in connection with these cases; g. negotiate and prepare on the Debtors' behalf a plan of reorganization, disclosure statement, and all related agreements and/or documents, and take any necessary action on behalf of the Debtors to obtain confirmation of such plan; h. advise the Debtors in connection with any potential sale of assets or business, or in connection with any strategic partnering; i. review and evaluate the Debtors' executory contracts and unexpired leases and represent the Debtors in connection with the rejection, assumption or assignment of such leases; j. consult with and advise the Debtors regarding labor and employment matters; k. represent the Debtors in connection with any adversary proceedings or automatic stay litigation which may be commenced by or against the Debtors; l. review and analyze various claims of the Debtors' creditors and the treatment of those claims and the preparation, filing or prosecution of any objections to those claims; and m. perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with these chapter 11 cases. The Debtors disclose that the firm's current hourly rates are: Designation Hourly Rates ----------- ------------ Members $480 - $695 Associates $335 - $475 Paraprofessionals $200 The Debtors relate that the firm has received a $100,000 retainer. To the best of the Debtors' knowledge, the firm does not hold or represent an interest adverse to the estate. The firm can be reached at: Richard E. Mikels, Esq. Member Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. One Financial Center Boston, MA 02111 Tel: (617) 348-1691 http://www.mintz.com/ About Joan Fabrics Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation manufactures automotive and furniture upholstery fabrics. The company has a manufacturing facility in North Carolina and an affiliate entity in Mexico. The Debtor and its affiliate, Madison Avenue Designs, LLC, filed for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case Nos. 07-10479 and 07-10480). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Aug. 8, 2007. JOAN FABRICS: Taps Pachulski Stang as Delaware Local Counsel ------------------------------------------------------------ Joan Fabrics Corporation and its debtor-affiliate, Madison Avenue Designs LLC, ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Pachulski Stang Ziehl Young Jones & Weintraub LLP, nunc pro tunc to the bankruptcy filing, as their Delaware and conflicts counsel. Pachulski Stang will: a. provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their businesses and management of their properties; b. prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports, and other legal papers; c. appear in Court on behalf of the Debtors and in order to protect the interests of the Debtors before the Court; d. prepare and pursue confirmation of a plan[s] and approval of a disclosure statement[s]; and e. perform all other legal services for the Debtors that may be necessary and proper in these proceedings. The Debtors disclose that Pachulski Stang's professionals bill: Professional Hourly Rates ------------ ------------ Laura Davis Jones, Esq. $750 Michael R. Seidl, Esq. $450 Curtis A. Hehn, Esq. $375 Karina K. Yee $190 To the best of the Debtors' knowledge, Pachulski Stang does not hold any interest adverse to their estates. The firm can be reached at: Laura Davis Jones, Esq. Pachulski Stang Ziehl Young Jones & Weintraub LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Tel: (302) 652-4100 http://www.pszyjw.com/ About Joan Fabrics Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation manufactures automotive and furniture upholstery fabrics. The company has a manufacturing facility in North Carolina and an affiliate entity in Mexico. The Debtor and its affiliate, Madison Avenue Designs, LLC, filed for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case Nos. 07-10479 and 07-10480). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Aug. 8, 2007. JOAN FABRICS: Court Okays Bankruptcy Services as Claims Agent ------------------------------------------------------------- Joan Fabrics Corporation and its debtor-affiliates, Madison Avenue Designs LLC, obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Bankruptcy Services LLC as their notice, claims and balloting agent. BSI will: a. serve as the Court's noticing agent to mail notices to certain of the estates' creditors and other parties in interest; b. provide computerized claims, objection and balloting database services; c. provide expertise, consultation and assistance in claim and ballot processing and other administrative information related to the Debtors' chapter 11 cases; and d. provide disbursement services with respect to the Debtors' bankruptcy cases, if requested. In addition, the Debtors anticipate BSI will: a. assist the Debtors in the preparation and filing of their Schedules of Assets and Liabilities and Statement of Financial Affairs; b. prepare and serve required notices in the Debtors' chapter 11 cases, including: -- a notice of commencement of the Debtors' chapter 11 cases and the initial meeting of creditors; -- a notice of the claims bar date; -- notices of objections to claims; -- notices of hearings on a disclosure statement and confirmation of a plan of reorganization; -- assistance in the publication of required notices, as necessary; and -- such other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the Debtors' chapter 11 cases; c. within five business days after the service of a particular notice, prepare for filing with the Clerk's Office and affidavit of service that includes: -- a copy of the notice served; -- an alphabetical list of persons on whome the notice was served, along with their addresses; and -- the date and manner of service; d. maintain copies of all proofs of claim of interest filed in the cases; e. maintain official claims registers iin the cases by docketing all proofs of claim and proofs of interest in a claims database that includes these information for each claim and interest asserted: -- name and address of the claimant or interest holder and any agent if the proof of claim or proof of interest was filed by an agent; -- the date the proof of claim or interest was received by BSI and/or the Court; -- the claim number assigned to the proof of claim or interest; and -- the asserted amount and classification of the claim. f. implement necessary security measures to ensure the completeness and integrity of the claims registers; g. transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; h. maintain a current mailing list for all entities that have filed proofs of claim or interest and make the list available to the Clerk's Office or any party in interest upon request; i. provide access to the public for examination of copies of the proofs of claim or interest filed in the cases withour charge during regular business hours; j. create and maintain a public access Web site setting forth pertinent case information and allowing access to electronic copies of proofs of claim or interest; k. record all transfers of claims and give notice of the transfers as required by Bankruptcy Rule 3001(e); l. comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; m. assign temporary employees to process claims, as necessary; n. promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; o. provide balloting and soliciting services, including preparing ballot, producing personalized ballots and tabulating creditor ballots on a daily basis; and p. provide other claims processing, noticing, balloting and related administrative services as may be requested from time to time by the Debtors. Lorenzo Mendizabal, Managing Director of BSI, discloses that it has received a $10,000 retainer from the Debtor. To the best of the Debtors' knowledge, BSI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Joan Fabrics Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation manufactures automotive and furniture upholstery fabrics. The company has a manufacturing facility in North Carolina and an affiliate entity in Mexico. The Debtor and its affiliate, Madison Avenue Designs, LLC, filed for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case Nos. 07-10479 and 07-10480). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Aug. 8, 2007. K2 INC: Agrees to Sell Assets to Jarden Corp. for $1.2 Billion -------------------------------------------------------------- K2 Inc. and Jarden Corporation have signed a definitive merger agreement pursuant to which Jarden will acquire K2. Under the terms of the agreement, Jarden will pay $10.85 per share of K2 common stock in cash and will issue 0.1086 of a share of Jarden common stock for each share of K2 common stock outstanding as of the closing. The cash and Jarden stock to be issued in the transaction has a combined value of approximately $15.50 per K2 share, based on the closing price of Jarden common stock on the date of signing the merger agreement. The total enterprise value of the transaction, including the assumption or repayment of indebtedness, is approximately $1.2 billion. The transaction is expected to be accretive to Jarden's earnings and to close early in the third quarter of this year. K2 has a strong presence in North America as well as Europe and Asia and fits well with Jarden's stated strategy of building and acquiring leading, niche consumer-oriented brands. Its strength in the specialty and multi-store sporting goods, marine, and outdoor retail channels and proven international presence, combined with its focus on new product introductions and market innovations, would provide Jarden with significant growth opportunities and the ability to expand into adjacent markets. K2's primary business lines would be reported through Jarden's Outdoor Solutions segment upon closing of the transaction. "We are enormously excited about the announcement as it marks another important step in our planned and disciplined growth strategy as a world class, diversified, niche oriented consumer products company," Martin E. Franklin, Jarden's Chairman and Chief Executive Officer, said. "Adding K2's broad portfolio of leading brands to our portfolio would create cross selling opportunities both domestically and internationally, would expand our presence in specialty channels, would further diversify our products, revenues and earnings, and would create additional scale to leverage in our supply chain, distribution, manufacturing and sourcing networks." "We believe that Jarden is the perfect strategic partner for us," Richard J. Heckmann, K2's Executive Chairman of the Board, said. "Combining our world-renowned brands with Jarden's scale and innovative resources should bring tremendous value to our employees, retail partners and customers. I am extremely proud of our employees' accomplishments over the last five years, and I am excited about the road ahead for K2 as part of the Jarden family." "We believe the timing is ideal to make this acquisition," Mr. Franklin concluded. "We have spent the last two years successfully integrating American Household and we believe that we now have the appropriate resources in place around the world to focus on delivering results from this combination. We feel that K2 is well positioned to continue its growth and that it will benefit from the leverage of our combined resources to deliver strong financial performance. I have been impressed by the many people I have met at K2 from around the world and I look forward to welcoming the K2 team to Jarden. We have always said that Jarden's most important assets are our employees, and our commitment to them, in addition to our customers and stockholders, will continue to guide our company." The board of directors for both companies has unanimously approved the transaction, which is expected to close during the third quarter of 2007, subject to Hart-Scott-Rodino approval, the approval of K2's stockholders and other customary closing conditions. About Jarden Corp. Headquartered in Rye, New York, Jarden Corporation (NYSE: JAH) -- http://www.jarden.com/-- manufactures and distributes niche consumer products used in and around the home. The company's primary segments include Consumer Solutions, Branded Consumables, and Outdoor. About K2 Inc. Headquartered in Carlsbad, California, K2 Inc. (NYSE: KTO) -- http://www.k2inc.net/-- designs manufactures and distributes sporting equipment, apparel and accesories. * * * As reported in the Troubled Company Reporter on Nov. 3, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its Ba3 Corporate Family Rating for K2 Inc., and its B1 rating on the company's $200M senior unsecured notes due 2014. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 61% loss in the event of a default. KING PHARMACEUTICALS: Looming Challenges Cue S&P's Stable Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on King Pharmaceuticals Inc. to stable from negative. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on the Bristol, Tennessee-based specialty pharmaceutical company. "The ratings on King Pharmaceuticals reflect the looming competitive challenges facing a number of the company's core products, an uncertain product pipeline, and the potential need for significant debt-financed product acquisitions," explained Standard & Poor's credit analyst Arthur Wong. "Still, King has a relatively diverse product portfolio and remains very conservatively financed." The company's credit protection measures are very strong for the rating. Debt to EBITDA is only 0.6x compared with the 'BB' median of 3.8x. Funds from operations to total debt was well over 100% for 2006. However, S&P believe that the company's ratios will deteriorate somewhat over the intermediate term, either as a result of EBITDA declines due to patent expirations or increased product acquisition-related debt to shore up the portfolio. However, given the financial capacity the company has at the current ratings level, Standard & Poor's believes that King Pharmaceuticals will continue to maintain a financial risk profile that is consistent with the current ratings. L.I.D. LTD: Asks Court to Decide on Cash Collateral Default Issue ----------------------------------------------------------------- L.I.D. Ltd. seeks determination that it did not default under the express terms of an interim order issued by the U.S. Bankruptcy Court for the Southern District of New York on March 27, 2007, authorizing the Debtor to utilize its lenders' cash collateral. The cash collateral secures the Debtor's indebtedness to Bank Leumi, USA, ABN AMRO Bank N.V., Sovereign Bank, New England and HSBC Bank, USA, who are collectively owed $43 million in the aggregate. Interim Cash Collateral Order The interim cash collateral order provides, among others, that the transfer of any collateral outside the territorial limits of the United States will be considered an event of default. The interim order also provides that the Debtor will have the right to cure an alleged default within three business days after receipt, in writing, of an alleged default. Should the alleged default remain un-cured, the interim order says that the lenders will have the right to take immediate action to protect the collateral from harm, free from the restrictions of Section 362 of the Bankruptcy Code. However, the Debtor argues that the interim order entitles it to seek Court order to restrain or enjoin the lenders from taking any action, provided that the Debtor gives the appropriate notice to the lenders of any hearing in which it seeks to obtain the order. Accordingly, each of the lenders have agreed that a hearing to consider the alleged default may be considered by the Court on May 2, 2007, the same day as the contested hearing on the interim cash collateral. Lenders Allege Default The lenders alleged two separate grounds for default under the terms and conditions of the interim order: 1) The Debtor has transferred approximately $2,300,000 of collateral to the Debtor's affiliate in India. 2) The Debtor transferred approximately $62,000 of collateral to its affiliate in Israel. Debtor Counters Allegations The Debtor tells the Court that the alleged transfer of approximately $2,300,000 of collateral to the Debtor's affiliate in India occurred in the normal course of the Debtor's business. According to the Debtor, the transfer occurred prior to the entry of the interim order and prior to the time that the Debtor and the lenders entered into any agreement barring the Debtor from transferring collateral outside the territorial limits of the United States. The Debtor explains that the alleged "transfer" was not a transfer, rather it was a sale of goods. "The transaction was the identical sale that has been the basic methodology of the Debtor's business for years," says Avrum J. Rosen, Esq., in Huntington, New York. Debtor Says Transfer Benefited Lenders The Debtor contends that the lenders did not suffer any prejudice by the alleged transfer of the collateral to India. Mr. Rosen notes that on March 15th and 16th of this year, just one and two days prior to the Debtor's bankruptcy filing, the Debtor received $2,341,740 in inventory from its affiliate in India. Additionally, Mr. Rosen says, during the period of March 15, 2007 through April 19, 2007, the Debtor received a total of $4,210,919 in goods from its affiliate in India. In return, the Debtor sold goods to its affiliate in India in the amount of $3,369,479. Thus, Mr. Rosen asserts, the net effect was to improve the collateral position of the lenders in the amount of $841,422. The Debtor believes that pursuant to Section 546(c) of the Bankruptcy Code as well as Section 503(b)(9), the Debtor's affiliate in India was either vested with reclamation rights or in the alternative, the ability to establish a claim to an administrative expense priority as to the goods that it shipped to the Debtor. Thus, in making a determination as to shipping goods to its affiliate in India, the Debtor considered the possible consequences of continuing to receive goods from India, Mr. Rosen avers. Moreover, Mr. Rosen says that the Court should keep in mind that when the Debtor received the goods from its affiliate in India, prior to the filing, the Debtor was not planning on filing for bankruptcy relief. It was not until Bank Leumi seized the Debtor's bank account containing over $700,000, that the Debtor was forced to file for bankruptcy. Thus, Mr. Rosen says, the Debtor's affiliate in India was not concerned about shipping goods to New York. Addressing the lenders' allegation that the Debtor transferred approximately $62,000 in collateral to its affiliate in Israel, the Debtor states that the collateral transferred to Israel was from a parcel of approximately $500,000 worth of goods that were shipped within 30 days prior to the instant filing. The Debtor informs the Court that L.I.D. LTD. (Israel) identified a specific buyer for those particular goods. The goods were shipped to Israel in the normal course of the Debtor's business. Given the small amount of the collateral shipped, the amount was simply overlooked as the total sales for the month in question exceeded $1,400,000. However, to be certain that the lenders' position is not negatively effected by the transfer, the Debtor has directed that its parent in Israel return goods of equal value to the Debtor. The Debtor expected to have the collateral back in its possession no later than the close of business on Wednesday, April 25, 2007. About L.I.D. Ltd. Headquartered in New York, L.I.D. Ltd., a jeweler, filed a chapter 11 petition on March 17, 2007 (Bankr. S.D. N.Y. Case No. 07-10725) Attorneys at The Law Offices of Avrum J. Rosen in Huntington, New York represent the Debtor in its restructuring efforts. When the Debtor sought protection from its creditors, it listed total assets of $157,784,935 and total debts of $143,867,465. LEAR CORPORATION: Earns $49.9MM in First Quarter Ended March 31 --------------------------------------------------------------- Lear Corporation reported financial results for the first quarter with a net income of $49.9 million including restructuring costs and other special items, for the first quarter of 2007. This compares with net income of $17.9 million including restructuring costs and other special items, for the first quarter of 2006. It also updated its 2007 financial outlook. For the first quarter of 2007, the company reported net sales of $4.4 billion and pretax income of $82.3 million, including restructuring costs of $15.8 million and other special items totaling $10.7 million. For the first quarter of 2006, Lear reported net sales of $4.7 billion and pretax income of $14.8 million. Excluding restructuring costs and other special items, Lear would have had pretax income of $108.8 million in the first quarter of 2007. This compares with pretax income before restructuring costs and other special items of $15.5 million in the same period a year earlier. A reconciliation of pretax income before restructuring costs and other special items to pretax income as determined by generally accepted accounting principles is provided in the supplemental data pages. Bob Rossiter, Lear chairman and chief executive officer, said, "Now that we have completed the divestiture of the Interior business, our full attention is on strengthening our core seating, electronics and electrical distribution businesses." The decline in net sales for the quarter reflects primarily lower production in North America and the divestiture of Lear's European Interior business, offset in part by new business mainly outside of North America and favorable foreign exchange. Operating improvement reflects favorable cost performance and the benefit of new business, offset in part by lower production in North America. First-quarter free cash flow was negative $32.1 million, as compared with negative $91.3 million in the first quarter of 2006. The improvement primarily reflects lower capital spending and the increase in earnings. As of March 31, 2007, the company listed total assets of $7.6 billion and total liabilities of $6.9 billion, resulting in a $692.5 million in total stockholders' equity. Key Events in 2006 During the quarter, the company made important progress on strategic priorities by completing the North American Interior business joint venture. In addition, Lear maintained its quality and customer service momentum and was the recipient of several customer awards and recognition, including GM Supplier of the Year, three World Excellence awards from Ford and Superior Supplier Diversity and Excellence in Quality from Toyota, as well as other performance awards from Porsche, Fiat-Brazil, Mazda and Shanghai GM. The company also continued to implement its global restructuring plan, expand its infrastructure in Asia and grow its global sales with Asian manufacturers. Full-Year 2007 Outlook The outlook excludes results for Lear's Interior business for the full year. On this basis, Lear expects 2007 net sales of about $14.8 billion. Lear anticipates 2007 income before interest, other expense, income taxes, restructuring costs and other special items to be in the range of $580 to $620 million, an improvement of $20 million from our prior forecast. The revised full-year outlook reflects more favorable production volumes and improved cost performance in international operations. Restructuring costs in 2007 are estimated to be approximately $100 million. Interest expense is estimated to be in the range of $210 million to $220 million. Pretax income before restructuring costs and other special items is estimated to be in the range of $290 to $330 million. Tax expense is expected to be between $100 million and $120 million, depending on the mix of earnings by country. Capital spending in 2007 is estimated at about $250 million. Depreciation and amortization expense is estimated to be about $310 million. Free cash flow is expected to be positive at about $240 million for the year. Key assumptions underlying Lear's financial outlook include expectations for industry vehicle production of about 15.2 million units in North America and 19.3 million units in Europe. Lear continues to see production for the Big Three in North America being down slightly, as compared with 2006. In addition, the company is assuming an exchange rate of $1.32/Euro. About Lear Corporation Headquartered in Southfield, Michigan, Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- supplies automotive interior systems and components. Lear provides complete seat systems, electronic products, electrical distribution systems, and other interior products. The company has 104,000 employees at 275 locations in 33 countries. * * * Lear Corporation carries Moody's Investors Service's B2 corporate family rating and speculative grade liquidity rating of SGL-2. MARINER ENERGY: Increases Pricing Offer of Senior Unsecured Notes ----------------------------------------------------------------- Mariner Energy Inc. has priced its $300 million of 8% senior unsecured notes due 2017, an increase of $100 million from $200 million, reported in April 24, 2007. The notes are expected to be sold in an underwritten public offering at par. Mariner plans to use the net proceeds from the offering to repay debt under its secured bank credit facility. Interest is payable May 15 and November 15 of each year. The first interest payment will be made on Nov. 15, 2007 and will consist of interest from closing to that date. Delivery of the notes is expected to occur on April 30, 2007. Mariner may redeem the notes at any time before May 15, 2012 at a price equal to the principal amount redeemed plus a make-whole premium, using a discount rate of the Treasury rate plus 0.50% and accrued but unpaid interest. Beginning on May 15 of the years indicated below, Mariner may redeem the notes from time to time, in whole or in part, at the prices set forth below, expressed as percentages of the principal amount redeemed plus accrued but unpaid interest: -- 2012 at 104.000%; -- 2013 at 102.667%; -- 2014 at 101.333%; and -- 2015 and thereafter at 100.000% In addition, before May 15, 2010, Mariner may redeem up to 35% of the notes with the proceeds of equity offerings at a price equal to 108% of the principal amount of the notes redeemed plus accrued but unpaid interest. J.P. Morgan Securities Inc. acted as sole book-running manager of the offering. The offering of notes was made only by means of a prospectus, copies of which may be obtained from: J.P. Morgan Securities Inc. Attention: Syndicate Desk 8th Floor No. 270 Park Ave. New York, NY 10019 Tel: (212) 834-4555 About Mariner Energy Headquartered in Houston, Texas, Mariner Energy Inc. (NYSE: ME -- http://www.mariner-energy.com/--, is engaged in the exploration and production of oil and gas primarily in the Gulf of Mexico and West Texas. * * * As reported in the Troubled Company Reporter on April 26, 2007, Moody's assigned a B3 rating to Mariner Energy Inc.'s proposed offering of at least $200 million of senior unsecured notes (the proceeds of which will be used to repay secured revolver borrowings) and affirmed the company's B2 corporate family rating. MAYCO PLASTICS: Court OKs Tooling Stipulation with DaimlerChrysler ------------------------------------------------------------------ The Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation between Mayco Plastics Inc. and its customers, the DaimlerChrysler Entities. The agreement satisfies the Debtor's production and tooling payable claims against DaimlerChrysler. Customers Withhold Payments DaimlerChrysler Corporation, DaimlerChrysler Motors Company, LLC, DaimlerChrysler Canada, Inc., General Motors Corporation, TRW Automotive U.S. LLC, and Lear Corporation depended heavily on plastic parts produced by the Debtor for the operation of their assembly lines, and in the case of TRW and Lear, their customers' assembly lines as well, relates Stephen M. Gross, Esq., at McDonald Hopkins, LLC. As such, due to the Participating Customers' "just-in-time" requirements for parts, if the business operations of Debtor were to be interrupted, the Participating Customers' respective manufacturing lines would also be significantly disrupted, resulting in substantial harm to the Participating Customers, the Debtor and the estate, says Mr. Gross. As a result of their alleged actual and potential consequential damages, as well as certain claimed ordinary course set-offs, the Participating Customers refused to pay their accounts payable to the Debtor. The Debtor asserted that: -- DaimlerChrysler had accounts payable to the Debtor for component parts for approximately $2,330,000; and -- accounts payable to Debtor arising out of manufactured tooling pursuant to purchase orders issued by DaimlerChrysler for $4,349,000. However, DaimlerChrysler disputed the amount of the accounts payables, and asserted that certain of the tooling purchase payables were not yet due under the terms of the purchase orders, relates Mr. Gross. In order to resolve these claims, the Debtor and DaimlerChrysler entered into a Court-approved stipulation. Terms of the Stipulation In the stipulation, the parties agree that: 1) DaimlerChrysler will pay $1,823,660 to PNC Bank, the Debtor's lender, in full satisfaction of the Debtor's production payable claims; 2) DaimlerChrysler will pay the Debtor $1,569,057, in full satisfaction of the Debtor's tooling payable claims. This amount consists of: * $1,331,424 payable to Omega Tool Corporation, for application to its secured claims arising from its liens and security interests in the applicable tooling payable claims; and * $237,633 payable to PNC Bank, for application to its secured claims against the Debtor, in full satisfaction of all tooling payable claims. About Mayco Plastics Headquartered in Sterling Heights, Michigan Mayco Plastics Inc. -- http://www.mayco-mi.com/-- is an automotive supplier of injection molded plastics. Stonebridge Industries Inc., the majority shareholder and parent of Mayco Plastics, is an investment firm that acquires companies and helps them grow their business in order to increase shareholder value. Mayco and Stonebridge filed for chapter 11 protection on Sept. 12, 2006 (Bankr. E.D. Mich. Case Nos. 06-52727 & 06-52743). Stephen M. Gross, Esq., and Jeffrey S. Grasl, Esq., at McDonald Hopkins Co. LPA represent the Debtors. AlixPartners LLC serves as the Debtors' financial advisor. Shannon L. Deeby, Esq., at Clark Hill PLC is counsel to the Official Committee of Unsecured Creditors while Grant Thornton LLP serves as its Financial Advisor. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. As reported in the Troubled Company Reporter on Jan. 18, 2007, the Court granted preliminary approval to the Debtor's combined Plan of Liquidation and Disclosure Statement. MERRILL LYNCH: Fitch Cuts Rating on Four Certificates to B ---------------------------------------------------------- Fitch has taken rating these rating actions on the Merrill Lynch Mortgage Investors Trust mortgage pass-through certificates listed below: Merrill Lynch Mortgage Investors, series 2002-NC1 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B1 downgraded to 'B+' from 'BBB'; -- Class B2 downgraded to 'B' from 'BBB-'. Merrill Lynch Mortgage Investors, series 2002-AFC1 Group 1 -- Class MF-1 affirmed at 'AAA'; -- Class MF-2 affirmed at 'A'; -- Class BF-1 affirmed at 'B+'. Merrill Lynch Mortgage Investors, series 2002-AFC1 Group 2 -- Class MV-2 upgraded to 'AA-' from 'A+'; -- Class BV-1 downgraded to 'B' from 'BB'. Merrill Lynch Mortgage Investors, series 2002-HE1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA-'; -- Class B affirmed at 'BBB'. Merrill Lynch Mortgage Investors, series 2003-HE1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A+'; -- Class M3 affirmed at 'A'; -- Class B1 affirmed at 'A-'; -- Class B2 affirmed at 'BB+; -- Class B3 downgraded to 'B' from 'BB-'. Merrill Lynch Mortgage Investors, series 2003-OPT1 -- Class A affirmed at 'AAA'; -- Class M1 upgraded to 'AAA' from 'AA+'; -- Class M2 affirmed at 'A+'; -- Class M3 affirmed at 'A'; -- Class B1 affirmed at 'A-'; -- Class B2 affirmed at 'BBB+'; -- Class B3 affirmed at 'BBB-'. Merrill Lynch Mortgage Investors, series 2003-WMC1 -- Class M2 upgraded to 'AA+' from 'AA'; -- Class B1 downgraded to 'BB-' from 'BBB'; -- Class B2 downgraded to 'B' from 'BB+'. Merrill Lynch Mortgage Investors, series 2003-WMC2 -- Class M2 affirmed at 'AA-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BB+'. Merrill Lynch Mortgage Investors, series 2003-WMC3 -- Class M3 affirmed at 'A+; -- Class M4 affirmed at 'A'; -- Class B1 affirmed at 'BBB+'; -- Class B2 downgraded to 'BB' from 'BBB'; -- Class B3 downgraded to 'BB-' from 'BBB-'. Merrill Lynch Mortgage Investors, series 2004-HE1 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 rated 'BBB-', placed on Rating Watch Negative. Merrill Lynch Mortgage Investors, series 2004-HE2 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB; -- Class B3 affirmed at 'BBB-'. Merrill Lynch Mortgage Investors, series 2004-OPT1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'. Merrill Lynch Mortgage Investors, series 2005-HE3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'. The underlying collateral for the transactions listed above consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties extended to subprime borrowers. All of the mortgage loans from Series 2002-HE1, 2003-HE1, 2004- HE1, 2004-HE2, and 2005-HE3 were originated or acquired by various originators and subsequently purchased by Merrill Lynch Mortgage Capital, Inc. The mortgage loans for Series 2002-AFC1 were originated or acquired by Superior Bank FSB at origination. The primary originator for the remaining transactions has its name denoted in each of the series' name (NC for New Century Mortgage Corporation, OPT for Option One Mortgage Corporation, and WMC for WMC Mortgage Corporation). The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $1.29 billion of outstanding certificates as of the March 2007 distribution date. The upgrades, affecting approximately $82.7 million of outstanding certificates, reflect an improvement in the relationship between CE and future loss expectations. The downgraded classes and the classes placed on Rating Watch Negative reflect deterioration in the relationship of CE to future loss expectations and affect approximately $51.2 million of outstanding certificates. The overcollateralization of all the transactions with negative action is below the target amount. The deteriorating relationship of losses to excess spread in the trusts has put negative pressure on the subordinate bonds. Servicers for the aforementioned transactions include Litton Loan Servicing, Option One Mortgage Corporation, HomEq Servicing Corporation, and Wilshire Credit. Corp. (all four rated 'RPS1' by Fitch), and Select Portfolio Servicing, Inc. (rated 'RPS2' by Fitch.) Fitch will continue to closely monitor these transactions. MERRILL LYNCH: Fitch Lowers Rating on Three Certificates to B+ -------------------------------------------------------------- Fitch has taken rating these rating actions on the Merrill Lynch Mortgage Investors Trust mortgage pass-through certificates listed below: Merrill Lynch Mortgage Investors, series 2005-SL1 -- Class M2 affirmed at 'AA+'; -- Class M3 affirmed at 'AA-'; -- Class B1 affirmed at 'A+'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'A-'; -- Class B4 downgraded to 'BBB' from 'BBB+'; -- Class B5 downgraded to 'B+' from 'BB+'. Merrill Lynch Mortgage Investors, series 2005-SL2 -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'A+'; -- Class B1 affirmed at 'A-'; -- Class B2 affirmed at 'BBB+'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BBB-'; -- Class B5 downgraded to 'B+' from 'BB+'. Merrill Lynch Mortgage Investors, series 2005-SL3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'; -- Class B4 rated 'BB+', placed on Rating Watch Negative; -- Class B5 downgraded to 'B+' from 'BB'. Merrill Lynch Mortgage Investors, series 2005-NCA -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A+'; -- Class B1 affirmed at 'A-'; -- Class B2 affirmed at 'BBB+'; -- Class B3 rated at 'BBB', placed on Rating Watch Negative; -- Class B4 rated at 'BBB-', placed on Rating Watch Negative; -- Class B5 rated at 'BB+', placed on Rating Watch Negative. Merrill Lynch Mortgage Investors, series 2005-NCB -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'; -- Class B4 affirmed at 'BB+'; -- Class B5 affirmed at 'BB'. The underlying collateral for the transactions listed above consists of fixed-rate, closed-end, second lien residential mortgage loans on one- to four-family residential. The mortgage loans in Series 2005-SL1, 2005-SL2, and 2005-SL3 were originated or acquired by various originators and subsequently purchased by Merrill Lynch Mortgage Capital, Inc. The mortgage loans in Series 2005-NCA and 2005-NCB were acquired by Merrill Lynch Mortgage Capital, Inc. and Merrill Lynch Mortgage Lending, Inc. from NC Capital Corporation (which in turn acquired them from New Century Mortgage Corporation). As of the March 2007 distribution date, the affirmations affect approximately $886.7 million in outstanding certificates and reflect adequate relationships of credit enhancement (CE) to future loss expectations. The downgraded classes and the classes placed on Rating Watch Negative reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $108.6 million and $20 million in outstanding certificates, respectively. The above transactions were structured to have growing overcollateralization. Faster-than-expected prepayment rates and rising interest rates have negatively impacted the generation of excess spread and, in turn, the growth of OC. It is unlikely that OC will grow to targeted levels. In addition to not growing to the target amount, the OC for Series 2005-SL1, 2005-SL2, and 2005- SL3 have all had consecutive months of deterioration in the last year and for Series 2005-NCA the deterioration has been in the past six months. The servicer for all of the above transactions is Wilshire Credit Corporation, rated 'RPS1' by Fitch. MILLENNIUM INORGANIC: S&P Puts B+ Rating on Proposed $880MM Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Millennium Inorganic Chemicals. The outlook is stable. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to the company's proposed $880 million senior secured credit facilities, which will consist of a $100 million first-lien revolving credit facility due 2012, a $550 million first-lien term loan B due 2014, and a $230 million second-lien term loan due 2014. The first-lien facilities are rated 'B+' (one notch above the corporate credit rating) with recovery ratings of '1', indicating the expectation for full recovery of principal (100%) in the event of default. The second-lien term loan is rated 'CCC+' (two notches below the corporate credit rating) with a recovery rating of '5', indicating the expectation of negligible (0%-25%) recovery of principal in the event of default. Millennium Inorganic Chemicals is being acquired by The National Titanium Dioxide Co. Ltd. from Lyondell Chemical Co. "The ratings reflect the company's limited business diversity, exposure to cyclical end markets and commodity product cycles, mediocre operating margins in recent years, and weak cash flow protection measures," said Standard & Poor's credit analyst Wesley E. Chinn. Mitigating factors include the company's good geographic diversity, solid position in global titanium dioxide (TiO2) markets, and Millennium being acquired by an industry player with experience operating a very profitable TiO2 plant in the Middle East. Credit quality also incorporates the expectation that increased capital expenditures during the next several years will result in improved sales volume and operating income. Millennium (with sales of roughly $1.4 billion) is the second- largest global producer of TiO2, a white pigment used in paper, plastics, and coatings. The TiO2 sector, although mature and characterized by limited growth, has slightly more attractive business attributes than some other commodity chemicals because of industry concentration (five producers account for more than 60% of global capacity) and because raw material costs do not fluctuate as much as those of oil- and natural gas-derived chemical products. Still, the financial performance of TiO2 producers can exhibit meaningful swings in profitability, depending on economic conditions and the timing of new capacity additions. The company also derives moderate, but increasing profitability from its performance chemicals segment, which includes titanium tetrachloride (revenues are largely correlated with titanium metal demand) and ultrafine TiO2. NEW CENTURY: Three Parties Balk at Rejection of 153 Leases ---------------------------------------------------------- Three parties delivered their objections to the U.S. Bankruptcy Court for the District of Delaware regarding New Century Financial Corporation and its debtor-affiliates' motion to reject: -- 45 unexpired nonresidential real property leases effective April 2, 2007; and -- 108 unexpired nonresidential real property leases effective April 30, 2007. Mills Enterprises Mills Enterprises, LLC, asks the Court to require the Debtors to remove certain equipment left at a property it leased to the Debtors. The Debtors seek to reject, effective as of April 2, 2007, a lease for nonresidential real property located at 7401 104th Avenue, in Kenosha, Wisconsin. Although Debtors have vacated the premises, they have left thousands of dollars worth of office equipment and furniture behind. Brian A. Sullivan, Esq., at Werb & Sullivan, in Wilmington, Delaware, asserts that Mills Enterprises should not be required to remove the equipment at its own expense. It is well settled that a rejection of a lease does not rescind the substantive rights and obligations of the parties as set forth in the lease, Mr. Sullivan notes, citing Cinicola v. Scharffenberger, 248 F.3d 100, 188 at n.8 (3rd Cir.2001). Mills Enterprises submits that the effective date of the Lease's rejection should be the date that the equipment is removed from the premises. Mills Enterprises also seeks entitlement to an administrative expense claim for the cost of storage of the equipment and subsequent expenses associated with its removal. RBC Mortgage RBC Mortgage Company, RBC Holdco Corporation, and New Century Financial Corporation entered into a sale of certain assets on Sept. 2, 2005, which includes the assignment of real and personal property leases. RBC is liable for 26 of the real property leases assigned as part of the transaction. On April 2, 2007, the Debtors moved to reject certain unexpired leases of nonresidential real property, including 15 RBC leased premises located at: * 5555 Tech Center Drive #100, Colorado Springs, Colo. * 17107 Chesterfield Airport Rd. Suite 140, Chesterfield, Mo. * 6100 Lake Forest Drive Suite 350, Atlanta, Ga. * 201 Mission Street, Suite 1300, San Francisco, Calif. * Valencia Town Center I 24300 Town Cent Drive, Valencia, Calif. * 4250 E. Camelback Road Suite K190, Phoenix, Ariz. * 707 Richards Street Suite PH 3, Honolulu, Hawaii * 12813 Flushing Meadows Drive Suite 170 Town & Country, Mo. * Gainey Ranch Financial Center I & II 7373, East Doubletree Ranch, Scottsdale, Ariz. * 500 Peterson Road Libertyville, Ill. * 3131 Camino Del Rio North Suite 860, San Diego, Calif. * 11235 SE 6th Street-Bldg A- Suite 130, Bellevue, Wash. * 6565 Americas Parkway Suite 620, Albuquerque, N.M. * 7401 104th Avenue Suite 160, Kenosha, Wis. * 4700 42nd Avenue SW Suite 580, Seattle, Wash. RBC notes that a reasonable reading of the Debtors' request to approve procedures for the sale of their Loan Origination Platform Assets indicates that Leases are part of the assets subject to the sale. Francis A. Monaco, Jr., Esq., at Monzack and Monaco, P.A., in Wilmington, Delaware, relates that RBC has repeatedly asked Debtors' counsel to identify which, if any, of the leases slated for rejection are also to be considered for sale under the bidding procedures, but the Debtors have not been able to clarify this issue. The Debtors cannot be permitted to seek early rejection of assets that they are marketing for sale, Mr. Monaco asserts. RBC is also the assignee of 196 personal property leases for copiers, faxes and other equipment as part of the Sept. 2, 2005 transaction. The assignment of personal property includes leases with GE Capital, Danka Office Imaging, CIT Technology Services, Inc., De Lage Landen, Wells Fargo, Ikon Financial Services, Ricoh Americas Corp. and US Bank. The property subject to the assignment is believed to be located in more than 40 locations leased by the Debtors, and RBC does not know where the Debtors have located or relocated the personal property. Mr. Monaco notes that the Debtors have not identified any personal property located in the leased premises, failed to notify RBC as assignor of the personal property located in the real property leases slated for rejection, and failed to provide RBC with an opportunity to retrieve the personal property subject to the lease assignments. Canpro Investments Canpro Investments, Ltd., is the landlord to a lease between Debtor Home 123 Corporation and RBC Mortgage Company. RBC assigned its rights to Canpro subsequent to the execution of the lease. The lease covers certain nonresidential teal property located at 621 NW 53rd Street, Suite 600, Boca Raton, Florida. The current monthly rental is $35,753. The Lease does not expire, by its terms, until Nov. 30, 2009. Canpro does not object to the rejection of the Lease. However, Canpro objects to the nunc pro tunc rejection of the Lease. Robert F. Reynolds, Esq., at Slatkin & Reynolds, P.A., in Fort Lauderdale, Florida, relates that although the Debtors may not be using the premises to conduct business, the Debtors' furniture, files, computers, office supplies and other personal property have remained on the premises for some time. Mr. Reynolds tells the Court that Canpro is currently unable to relet the premises as the Debtors' personal property continues to occupy the space. Canpro has attempted to mitigate its damages by taking steps to relet the premises but cannot relet them until the Debtors remove the personal property. In addition, according to Mr. Reynolds, as long as the Debtors do not remove the personal property left at the premises, Canpro is entitled to rent as an administrative expense of the estate pursuant to Sections 503(b)(I)(A) of the Bankruptcy Code. Debtors' Motion In their motion, the Debtors told the Court that they are in the process of exiting non-core and unprofitable locations, returning unnecessary equipment and terminating burdensome contracts to minimize costs and strengthen their business. The locations at the premises encompassed by the 45 Rejected Leases are no longer operational and to reduce losses, the Debtors have already ceased possession of the properties subject to those leases, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, the Debtors' proposed counsel, said. The Debtors are also in the process of vacating the properties subject to the 108 Rejected Leases, Mr. Collins added. Based on current market conditions, it would be difficult if not impossible for the Debtors to recruit tenants to sublease the spaces, even if they were offered to prospective tenants at substantially lower rental rates than those currently due under the leases, Mr. Collins explained. If the leases aren't rejected, the Debtors will incur substantial amounts of rent and other charges without commensurate benefit to their estates, Mr. Collins said. The aggregate monthly rent due under the 45 Leases is in excess of $335,700, and the aggregate monthly rent due under the 108 Leases is in excess of $516,700. A schedule of the 45 Leases is available at no charge at: http://researcharchives.com/t/s?1d4d A schedule of the 108 Leases is available at no charge at: http://researcharchives.com/t/s?1d4e 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. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: 5 Parties Balk at Sale of Loan Origination Platform ---------------------------------------------------------------- Five parties filed with the U.S. Bankruptcy Court for the District of Delaware their objections to New Century Financial Corp. and its debtor-affiliate's motion to sell assets related to their loan origination platform through an auction. (1) U.S. Trustee Kelly Beaudin Stapleton, the United States Trustee for Region 3, contends that the Debtors' request does not provide sufficient information for the U.S. Trustee to determine whether a consumer privacy ombudsman needs to be appointed to protect personally identifiable information about individuals. Given that there is little detail in the Debtors' request regarding the assets that comprise the Loan Origination Platform, it is unclear whether customer lists or other assets containing personally identifiable information are proposed to be sold, U.S. Trial Attorney Joseph J. McMahon, Jr., Esq., explains. The U.S. Trustee will report to the Court on this issue at the hearing and, to the extent necessary, the related matter of whether a consumer privacy ombudsman should be appointed, Mr. McMahon relates. The U.S. Trustee notes that Section 363(o) of the Bankruptcy Code provides that notwithstanding Section 363(f), if a person purchases any interest in a consumer credit transaction that is subject to the Truth in Lending Act or any interest in a consumer credit contract, and if the interest is purchased through a sale under Section 363, then that person will remain subject to all claims and defenses that are related to the consumer credit transaction or the consumer credit contract, to the same extent as the person would be subject to the claims and defenses of the consumer had the interest been purchased at a sale outside of Section 363. The U.S. Trustee maintains that the Debtors do not clearly state whether they propose to sell any interests in either consumer credit transactions that are subject to TILA or interests in consumer credit contracts. To the extent that they are, the U.S. Trustee asserts that the sale order should acknowledge that the proposed sale will not be free and clear of claims and defenses that are related to a consumer credit transaction subject to TILA or any consumer credit contract as defined by Section 363(o). (2) GE Capital General Electric Capital Corp. seeks assurance that it is fully and completely protected in connection with any attempt by the Debtors to sell or otherwise use the assets that are pledged as collateral to GE Capital or that are being leased by GE to any of the Debtors. Pursuant to, among other things, a Master Security Agreement dated as of Feb. 18, 2004, as amended, and various recorded financing statements, GE Capital is a secured creditor of Debtors New Century Mortgage Corp., New Century Financial Corp. and New Century TRS Holdings, Inc. GE is also a lease creditor of the Debtors New Century Financial, New Century Mortgage and Home 123 Corp. pursuant to certain master lease agreements of certain equipment. Michael G. Gallerizzo, Esq., at Gebhardt & Smith LLP, in Wilmington, Delaware, relates that, aside from failing to provide protections to GE Capital, the Debtors' request is both procedurally and legally deficient. Mr. Gallerizzo notes that, while the Debtors are initially asking the Court to approve bidding procedures with respect to the proposed sale of their Loan Origination Platform, they are also, prematurely, asking approval of any sale. He asserts that any consideration of the sale of the Loan Origination Platform should only take place at the sale hearing scheduled for May 15, 2007. Mr. Gallerizzo also notes that the Debtors failed to identify the tangible assets of the Debtors that are to be sold. The Debtors had stated that Loan Origination Platform consists of, among other things, "supporting infrastructure such as proprietary technology and risk management practices and other physical assets upon which it is based." GE Capital is concerned that some or all of these assets may serve as collateral for the obligations due and owing to GE by New Century Mortgage, New Century Financial or New Century TRS or may be assets, which GE is leasing to New Century Mortgage, New Century Financial or Home 123 Corp. GE Capital wants the Debtors to identify the tangible assets they intend to sell. Moreover, Mr. Gallerizzo points out, the Debtors fail to provide creditors with an adequate opportunity to object to the sale. He notes that the deadline to object to the sale is on May 10, the same day the auction is scheduled. Creditors would not be given an adequate opportunity to review the auction itself, as well as the sale price, prior to the expiration of the time to object. Mr. Gallerizzo further points out that the Debtors propose a transaction, which involves a sale of various assets without requiring that following the auction of same and prior to the deadline for creditors to object to the sale, that there will be an allocation of the proceeds of the sale to the assets sold. Under this scenario, he says, secured creditors will be left following the auction to guess how much their collateral sold for and how much they can expect to receive from the sale transaction. GE Capital wants the Court to prohibit commencement of the sale process where the Debtors do not afford each of the secured creditors following the auction, but prior to the deadline to object to the sale, specific and detailed information as to the dollar amounts they will receive from the sale, so that each creditor can make its own determination prior to the objection deadline whether or not the proposed dollar amount to be remitted to it is fair and reasonable. GE Capital further notes that the Debtors have sought to move this sale forward on an extremely expedited basis. The proposed procedures, however, provide that, the Debtors will (i) inform counterparties of contracts to be assumed and assigned to the bidder within three days after the Court enters the Bidding Procedures, (ii) advise counterparties of any cure amounts associated with the assumption and assignment of any contract or lease, within 15 days prior to the Sale Hearing. In view of the expedited nature of the sale, GE Capital asks the Court require the Debtors to immediately notify lessors as to whether or not their leases will be assumed as part of the sale and if so, the cure amounts proposed to be paid to the lessors as part of the sale. GE Capital also complains that the Bidding Procedures effectively negate its credit-bid rights under Section 363(k) of the Bankruptcy Code. Mr. Gallerizzo notes that the Debtors contemplate bids being made for all of the assets to be sold and do not provide a mechanism for secured creditors to bid on the specific assets against which they hold liens. By structuring the bidding procedures in this manner, GE Capital is not allowed an effective way to exercise its credit bid rights. (3) Positive Software Positive Software Solutions, Inc., developed and owns a software application and data storage system known as LoanForce, which is used by mortgage lenders to market mortgage loan products and to otherwise facilitate originating mortgage loans. Positive Software granted New Century Mortgage Corporation a non-exclusive license of LoanForce, pursuant to a license agreement. In February 2003, Positive Software charged New Century for breach of the License Agreement, theft, and conversion of, and infringement on, Positive Software's copyrights and trade secrets. Positive Software sued New Century in the federal district court for the Northern District of Texas for monetary damages and injunctive relief. The License Agreement expired at the end of 2002. During license renewal negotiations, Positive Software relates, New Century was preparing to steal the software product by reverse engineering LoanForce and incorporate much of LoanForce in an alleged proprietary software platform. The Texas District Court issued a preliminary injunction against New Century and a protective order in favor of Positive Software. Both of those orders are still in effect, and the essence of those rulings prohibits New Century from using LoanForce and a number of other software products on the grounds that the use of all the software products posed a substantial likelihood of copyright infringement and other violations of Positive Software's intellectual property rights. The Texas District Court has also found that New Century knowingly and repeatedly violated the terms of its injunction and protective orders, and that Positive Software has a substantial likelihood of success on the merits of its infringement and related claims against New Century. Positive Software says New Century will no doubt claim that its current loan origination software program is untainted by LoanForce. Positive Software contends that New Century's past conduct and the Texas District Court's own orders, however, leave little doubt that New Century's current system is derived from LoanForce and violates Positive Software's copyrights. Therefore, Positive Software objects to any attempt by the Debtors to convey intellectual property assets as part of the sale of the loan origination platform free from Positive Software's rights. Any order approving of bid procedures and any subsequent order approving of a sale of the Debtors' loan original platform should clarify that any software license or other intellectual property rights conveyed remain subject to Positive Software's rights to protect its copyrights and other intellectual property. Positive Software also objects to the use of any infringing software in the data room to be established by the Debtors and their financial advisors. As a requisite of permitting the establishment of a data room, Positive Software wants reasonable opportunity prior to the establishment of the data room to analyze the software to be used and to bring an action to enjoin the use or seek an administrative claim for damages. (4) GMAC, et al. GMAC Commercial Finance LLC, Countrywide Home Loans, Inc., Countrywide Financial Corporation, Countrywide Warehouse Lending, Countrywide Securities Corporation, and Countrywide Bank point out that there is no list of the assets to be sold, no buyer for the assets, and no proposed asset purchase agreement setting forth the material terms and conditions under which the Asset would be transferred to a buyer. GMAC, et al., contend that certain aspects of the proposed bidding procedures and the overly expedited nature of the sale process will not maximize value to the Debtors' estates and their creditors. Each of the Countrywide Creditors was engaged in prepetition relationships with one or more of the Debtors relating to the purchase or sale of whole loans and securities or transactions through Countrywide's correspondent lending division, William E. Chipman, Jr., Esq., Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware, says. GMAC CF made a prepetition loan to New Century Mortgage Corporation, New Century TRS Holdings, Inc. and New Century Financial Corporation for the purpose of funding the acquisition and development of software and hardware that operates the Debtors' loan originations. That loan is secured by collateral that consists of certain software and hardware, among other things, Mr. Chipman adds. GMAC, et al., assert that the best way to maximize the potential value that can be recovered for the Debtors' estates through the auction process is to: -- fully and completely market the Assets; and -- allow bidders ample time to evaluate the Assets and submit bids. The proposed bidding procedures should also allow the Debtors to accept bids in whole or in part, without requiring that every bidder take the entirety of the Assets, GMAC, et al., assert. (5) RBC In September 2005, RBC Mortgage Company, RBC Holdco Corporation and New Century Financial Corporation entered into an agreement of sale for certain assets and assumption of liabilities. The Agreement includes the assignment of real and personal property leases to New Century. RBC is liable for 26 of the real property leases and in excess of 196 personal property leases for copiers, faxes and other office equipment. The buyout for the personal property leases is approximately $1,800,000. The personal property lessors under the Agreement include, but may not be limited to, GE Capitol, Danka Office Imaging, CIT Technology Financial Services, Inc., Key Equipment Finance, Canon Financial Services, Inc., DeLage Landen, Wells Fargo, IKON Financial Services, Ricoh Americas Corporation and US Bank. The 26 nonresidential real property leases and more than 196 personal property leases that were the subject of the Agreement are believed to be part of the proposed sale of the Debtors' Loan Origination Platform business, however, none of the real property leases or personal property leases are identified in the Debtors' request or proposed sale procedures, Rachel B. Mersky, Esq., at Monzack and Monaco, P.A., in Wilmington, Delaware, tells the Court. Ms. Mersky contends that the Debtors must identify the personal property and real property leases and assignments of leases that are to be included in the sale. Without notice, any bidder would not have adequate notice of liabilities being assigned and parties-in-interest would not have notice an opportunity to object to adequate assurance. The Debtors must be required to identify leased equipment by lessor and by assignor of the lease, Ms. Mersky adds. In addition, all assignors must be given adequate notice and an opportunity to object, she says. Ms. Mersky relates that the RBC leased personal property is located in more than 40 separate facilities maintained by the Debtors and there must be a reasonable procedure to identify the assignor of equipment in each of the leased premises to provide lessors and assignors of leases, including RBC, an adequate opportunity to protect its interests in the property. Sufficient notice must be provided to remove equipment in leased premises when the lease is determined to be rejected, she adds. 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. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue Nos. 6 and 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). NORTHWEST AIRLINES: Inks Tentative CBA with AFA on $182MM Claims ---------------------------------------------------------------- Northwest Airlines Corp. reached a tentative contract agreement with its flight attendants, represented by the Association of Flight Attendants-CWA. "Over the past several days, we have engaged in many hours of intense negotiations with the AFA on a new collective bargaining agreement," Mike Becker, Northwest Airlines senior vice president- human resources and labor relations, said. "We are pleased to have reached this tentative agreement, which would give our flight attendants a $182 million unsecured claim in the airline's bankruptcy." The tentative agreement will be submitted to the AFA's Northwest Master Executive Council. The MEC will decide whether to allow flight attendants to vote on the agreement. "The agreement also includes additional contract modifications that Northwest believes will improve the flight attendants' work environment," Becker continued. "Finally, this agreement allows us to continue to achieve the required $195 million in cost savings needed from our flight attendants. "A ratified agreement would allow our flight attendants, along with our other contract and salaried employees, to participate fully in Northwest's profit sharing programs." During the period of the airline's business plan, which runs through 2010, all contract employees and non-executive salaried employees are expected to receive approximately $1.6 billion in distributions through unsecured claims, profit sharing and a performance incentive plan. The tentative contract agreement with the AFA will not impact the timetable for the airline's planned emergence from Chapter 11 protection. Assuming final creditor and court approvals, Northwest expects to complete its restructuring in June of this year. 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. Plan Update On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed wan Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. The hearing to consider confirmation of the Debtors' Plan is set for May 16, 2007. NUVOX INC: S&P Affirms B- Corporate Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on privately owned Greenville, South Carolina-based NuVox Inc., a competitive local exchange carrier. At the same time, S&P assigned a 'B-' bank loan rating to its funding conduits Gabriel Communications Finance Co. and NuVox Transition Subsidiary LLC's $260 million first-lien credit facilities. A recovery rating of '5' was also assigned, indicating S&P's expectation of negligible (0%-25%) recovery of principal in the event of a payment default or bankruptcy. The corporate credit rating was also removed from CreditWatch, where it had been placed with developing implications on March 21, 2007, after NuVox announced a definitive agreement to acquire Florida Digital Network, a CLEC. The outlook is positive. Borrowings under the bank loan will be used to refinance existing debt, including debt of FDN, as well as fund a $130 million special dividend to shareholders. "The positive outlook reflects our belief that the company has good prospects to generate positive levels of net free cash flow as early as 2008," said Standard & Poor's credit analyst Catherine Cosentino. Therefore, if the company can accomplish the integration synergies from the FDN purchase, maintain a capital structure similar to the current one, and demonstrate that it is on track to generate positive net free cash flow within a year, the ratings could be raised. The rating on NuVox reflects its vulnerable business position and aggressive financial profile. NuVox's business risk is very high as a CLEC facing competitive threats from the much larger, financially stronger incumbent telephone company AT&T Inc. OCCAM NETWORKS: Faces Nasdaq Delisting Due to Late 10-K Filing -------------------------------------------------------------- Occam Networks Inc. received a notice from the Nasdaq Stock Market on April 18, 2007, stating that Occam is not in compliance with NASDAQ'S Marketplace Rule 4310(c)(14) because Occam has not timely filed its Report on Form 10-K for the fiscal year ended Dec. 31, 2006. As a result of the filing delay, NASDAQ will broadcast an indicator over its market data dissemination network noting Occam's non-compliance. The presence of an indicator does not constitute a trading halt or delisting. Occam has delayed the filing of its Form 10-K for the fiscal year ended Dec. 31, 2006 because its Audit Committee is reviewing Occam's commitments to provide customers with software, hardware and software maintenance, upgrades, training, and other services in connection with customers' purchases of Occam's network equipment. Occam is working diligently to complete this review and to file its Form 10-K for the fiscal year ended Dec. 31, 2006. Occam has requested a hearing before a NASDAQ Listing Qualifications Panel for continued listing on The NASDAQ Global Market. This appeal resulted in an automatic stay of the delisting and Occam's common stock will remain listed on The NASDAQ Global Market pending a decision by the Listing Qualifications Panel. Based in Santa Barbara, California, Occam Networks Inc. (OTCBB:OCNW) -- http://www.occamnetworks.com/-- develops and markets innovative Broadband Loop Carrier networking equipment that enable telephone companies to deliver voice, data and video services. Based on Ethernet and Internet Protocol technologies, Occam's equipment allows telecommunications service providers to profitably deliver traditional phone services, as well as advanced voice-over-IP, residential and business broadband, and digital television services through a single, all-packet access network. As of Sept. 24, 2006, the company's balance sheet showed a stockholders' deficit of $16,276,000. OWNIT MORTGAGE: Rejection of Unexpired Leases & Contracts Okayed ---------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California gave Ownit Mortgage Solutions Inc. authority to reject its unexpired leases and executory contracts. As reported in the Troubled Company Reporter on April 11, 2007, the Debtor told the Court that in light of the closing of all of its office locations with the exception of its headquarters, it does not need the leases and contracts going forward. The Debtor explained that rejection of the leases and contracts will eliminate the possibility of exposure to further administrative expense claims. Further, the Debtor said that none of the leases and contracts had any value to the estate. Due to the type of equipment leased and the services delivered, the Debtor concluded that the expense involved in attempting to market the agreements and assuming and assigning them would outstrip any possible value in the agreements. A list of the unexpired leases and executory contracts is available for free at http://ResearchArchives.com/t/s?1cee Headquartered in Agoura Hills, California, Ownit Mortgage Solutions Inc. is a subprime mortgage lender, which specializes in making loans to borrowers with poor credit or limited incomes. The Debtor filed for chapter 11 protection on Dec. 28, 2006 (Bankr. C.D. Calif. Case No. 06-12579). Ira D. Kharasch, Esq., Linda F. Cantor, Esq., Jonathan J. Kim, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represent the Debtor. Stutman, Treister & Glatt represents the Official Committee of Unsecured Creditors. The Debtor's schedules show total assets of $697,550,849 and total liabilities of $819,131,179. The Debtor's exclusive period to file a chapter 11 plan expires today, April 27, 2007. OWNIT MORTGAGE: Court Approves Trumbull Group as Claims Agent ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California gave Ownit Mortgage Solutions Inc. permission to employ Trumbull Group LLC dba Wells Fargo Trumbull as its claims, noticing, balloting and disbursing agent. The firm is expected to: a. prepare and serve required notices in this Chapter 11 case, including: i. notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization or liquidation; and ii. other miscellaneous notices as the Debtor or Court may deem necessary or appropriate for an orderly administration of this Chapter 11 case. b. file with the clerk's office a certificate or affidavit of service within five business days after the service of a particular notice, including: i. a copy of the notice served; ii. an alphabetical list of persons on whom the notice was served, along with their address; and iii. the date and manner of service; c. maintain copies of all proofs of claim filed in this case; d. maintain an official claims register in this case by docketing all proofs of claim in a claims database that includes the following information for each claim asserted: i. the name and address of the claimant and any agent thereof, if the proof of claim was filed by an agent; ii. the date the proof of claim was received by the firm and the Court; iii. the claim number assigned to the proof of claim; iv. the asserted amount and classification of the claim; v. implement necessary security measures to ensure the completeness and integrity of the claims register; vi. transmit to the clerk's office a copy of the claims register on a weekly basis, unless requested by the clerk's office on a more or less frequent basis; vii. maintain an up-to-date mailing list for all entities that have filed proofs of claim and make a list available on request to the clerk's office or any party in interest; viii. provide access to the public examination of proofs of claims filed in this case without charge during regular business hours; ix. record all transfers of claims pursuant to Fe. R. Bankr. P. 3001(e) and provide notice of the transfers as required by Rule 3001(e), if directed to do so by the Court; x. comply with applicable federal, state, municipal and local statues, ordinances, rules, regulations, orders and other requirements; xi. provide temporary employees to process claims, as necessary; xii. promptly comply with further conditions and requirements as the clerk's office or the Court may at any time prescribe; and xiii. provide other claims processing, noticing, balloting, and relating administrative services as may be request from time to time by the Debtor. In addition, the firm is expected to assist, among other things: a. the reconciliation and resolution of claims; b. the preparation, mailing and tabulation of ballots of certain creditors for the purpose of voting to accept or reject a plan or plans of reorganization or liquidation; c. the disbursement of funds to creditors. The Debtor tells the Court that the firm has agreed to provide services at its regular hourly rates ranging between $55 and $295. To the best of the Debtor's knowledge, the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Agoura Hills, California, Ownit Mortgage Solutions Inc. is a subprime mortgage lender, which specializes in making loans to borrowers with poor credit or limited incomes. The Debtor filed for chapter 11 protection on Dec. 28, 2006 (Bankr. C.D. Calif. Case No. 06-12579). Ira D. Kharasch, Esq., Linda F. Cantor, Esq., Jonathan J. Kim, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represent the Debtor. Stutman, Treister & Glatt represents the Official Committee of Unsecured Creditors. The Debtor's schedules show total assets of $697,550,849 and total liabilities of $819,131,179. The Debtor's exclusive period to file a chapter 11 plan expires today, April 27, 2007. OWNIT MORTGAGE: Selects John Associates as Compensation Advisor --------------------------------------------------------------- Ownit Mortgage Solutions Inc. asks the U.S. Bankruptcy Court for the Central District of California for permission to employ John Associates Inc. as its compensation advisor. The firm will: a. analyze, advise and consult with the Debtor with respect to the postpetition compensation of its executives and employees; b. assist the Debtor, as necessary, in any potential disputes or litigation with respect thereto and, if necessary and if so selected by the Debtor, provide expert testimony at deposition and hearings related thereto; c. advise the Debtor, as necessary, on other compensation and incentive or stay bonus related matters; and d. render their other advisory services as determined necessary by the Debtor. The firm tells the Court that it incurred approximately $1,987 in fees and $263 in expenses for the engagement as of April 3, 2007. The firm's professionals and their standard hourly rates are: Professional Hourly Rate ------------ ----------- Jeffrey Visithpanich $300 Alan Johnson $575 Staff and Associates $155-$300 Jeffrey Visithpanich, principal of the firm, assures the Court the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Visithpanich can be reached at: Jeffrey Visithpanich Principal Johnson Associates Inc. 19 W. 44th Street, Suite 511 New York, NY 10036 Tel: (212) 221-7400 Fax: (212) 221.3191 http://www.johnsonassociates.com/ Headquartered in Agoura Hills, California, Ownit Mortgage Solutions Inc. is a subprime mortgage lender, which specializes in making loans to borrowers with poor credit or limited incomes. The Debtor filed for chapter 11 protection on Dec. 28, 2006 (Bankr. C.D. Calif. Case No. 06-12579). Ira D. Kharasch, Esq., Linda F. Cantor, Esq., Jonathan J. Kim, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represent the Debtor. Stutman, Treister & Glatt represents the Official Committee of Unsecured Creditors. The Debtor's schedules show total assets of $697,550,849 and total liabilities of $819,131,179. The Debtor's exclusive period to file a chapter 11 plan expires today, April 27, 2007. PHH MORTGAGE: Fitch Puts Low-B Ratings on Two Class Certificates ---------------------------------------------------------------- PHH Mortgage Capital LLC mortgage pass-through certificates, series 2007-2, are rated by Fitch as: -- $155,271,118.00 classes A-1, A-2, A-3, and A-4, R-I, R-II (publicly offered senior certificates) and A-5 and A-6 (privately offered senior certificates)'AAA'; -- $7,515,783.00 privately offered class B-1 'AA'; -- $908,501.00 publicly offered class B-2 'A'; -- $578,137.00 publicly offered class B-3 'BBB'; -- $330,364.00 privately offered class B-4 'BB'; -- $330,364.00 privately offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 6.00% subordination provided by the 4.55% privately offered class B-1, 0.55% publicly offered class B-2, 0.35% publicly offered class B- 3, 0.20% privately offered class B-4, 0.20% privately offered class B-5, and 0.15% privately offered class B-6 (which is not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of PHH Mortgage Corporation, which is rated 'RPS1-' by Fitch. The certificates represent ownership in a trust fund, which consists primarily of 270 one- to four-family conventional, fixed- rate mortgage loans secured by first liens on residential mortgage properties. As of the cut-off date (April 1, 2007), the mortgage pool has an aggregate principal balance of approximately $165,182,041, a weighted average original loan-to-value ratio (OLTV) of 72.16%, a weighted average coupon (WAC) of 6.2285%, a weighted average remaining term (WAM) of 356 months, and an average balance of $611,785. The loans are primarily located in California (27.89%), New Jersey (6.31%) and Florida (5.73%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. William J. Mayer Securities, LLC acted as Agent for PHH Mortgage, structuring and underwriting this deal. Citibank N.A. will serve as Trustee. For federal income tax purposes, an election will be made to treat the trust fund as two real estate mortgage investment conduits. RADNOR HOLDINGS: Wants Exclusive Plan Filing Date Moved to July 17 ------------------------------------------------------------------ Radnor Holdings Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend: a) until July 17, 2007, the exclusive period wherein the Debtors can file a plan of reorganization; and b) until Sept. 15, 2007, the period wherein the Debtors can solicit acceptances of that plan. The Debtors explain that they need additional time to file a plan because in the course of their bankruptcy cases, they had devoted substantial time and efforts to consummating the sale of substantially all of their assets to TR Acquisition Co. Inc. for $95 million, based on a timeframe permitted by the terms of the Debtors' bankruptcy financing and the liquidity needs of their businesses. Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Assumes & Assigns CIT Contract to TR Acquisition ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Radnor Holdings Corporation and its debtor-affiliates to assume and assign an executory contract with CIT Group/Equipment Financing Inc. TR Acquisition Co. LLC, the Debtors' purchaser, acquired certain rights to designate executory contracts and unexpired leases for assumption, assignment, or rejection, pursuant to a Court-approved November 2006 sale of substantially all of the Debtors' assets to the purchaser. The purchaser required the Debtors to assume the CIT Contract and assign it to TR Acquisition. Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Can Assume & Assign Carolina Drive Lease to TRA ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Radnor Holdings Corporation and its debtor-affiliates to assume and assign an unexpired lease of non-residential real property located at 1250 Carolina Drive, West Chicago, Illinois. Upon the recommendation of their purchaser, TR Acquisition Co. LLC, the Debtors will assume the Carolina Drive lease and assign the property to the purchaser. TR Acquisition obtained certain rights to designate executory contracts and unexpired leases for assumption, assignment, or rejection, pursuant to a Court-approved sale of substantially all of the Debtors' assets to the purchaser, which closed on November 2006. Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RANGE RESOURCES: Completes Public Offering of 8.05 Million Shares ----------------------------------------------------------------- Range Resources Corporation closed its public offering of 8.05 million shares of its common stock at a price of $36.28 per share. This includes the purchase by the underwriters of an additional 1.05 million shares of common stock to cover over- allotments. As a result of the public offering, Range now has 147.7 million shares of common stock outstanding. Range intends to use the net proceeds from the offering to fund acquisitions. Pending such use, the funds will be used to pay down a portion of the outstanding balance of Range's senior credit facility. The offering was being led by J.P. Morgan Securities Inc. and Credit Suisse Securities (USA) LLC as joint book-runners. Co- managers in the underwriting group were Deutsche Bank Securities Inc.; Friedman, Billings, Ramsey & Co., Inc.; Morgan Stanley & Co. Incorporated; Raymond James & Associates, Inc.; Johnson Rice & Company L.L.C.; KeyBanc Capital Markets Inc.; BMO Capital Markets Corp.; Calyon Securities (USA) Inc.; Fortis Securities LLC; Natexis Bleichroder Inc.; Pickering Energy Partners, Inc.; RBC Capital Markets Corporation; Simmons & Company International; and SunTrust Capital Markets, Inc. Headquartered in Forth Worth, Texas, Range Resources Corporation (NYSE:RRC) -- http://www.rangeresources.com/-- is an independent oil and gas company operating in the Southwestern, Appalachian and Gulf Coast regions of the United States. The Company pursues a balanced growth strategy that targets exploitation of its sizeable inventory of lower risk development drilling locations with higher potential exploration projects and a complementary acquisition effort. Range seeks to manage risk in every aspect of its business while generating attractive returns. * * * As reported in the Troubled Company Reporter on Dec. 28, 2006, Moody's Investors Service confirmed the ratings for Range Resources Corp. but changed the outlook to positive. The confirmed ratings are Range's Ba3 corporate family rating, the Ba3 probability of default rating, and the B1 and LGD5, 76% ratings on the senior subordinated notes. RESIDENTIAL ASSET: Poor Performance Cues S&P's Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 11 classes of mortgage pass-through certificates issued by five Residential Asset Securitization Trust series. Also, the ratings on three classes from three Residential Asset Securitization Trust transactions were placed on CreditWatch with negative implications. At the same time, the ratings on the remaining certificate classes from these and other Residential Asset Securitization Trust transactions were affirmed. The upgrades reflect increased current and projected credit support percentages that are sufficient to support the higher ratings. Current credit support ranges from 0.73% to 7.51%, at least 2x the loss coverage levels associated with the higher rating levels. Credit support includes subordination, overcollateralization, and excess interest. The CreditWatch placements reflect early signs of poor performance of the collateral backing the affected transactions. The transactions were issued during the first half of 2006. The percentage of loans in these pools that are severely delinquent (90-plus days, foreclosure, and REO) are: 3.34% for series 2006-E, 3.51% for series 2006-H, and 3.94% for series 2006-D. Losses range from zero to 0.01% (series 2006-D). These transactions have not experienced significant losses. Placing S&P's ratings on CreditWatch when a transaction has not experienced a loss represents a new methodology derived from S&p's normal practice. The combination of early high delinquencies and minimal or no loss experience had not been seen in the performance exhibited by prior vintages. Because there have been no substantial cumulative realized losses, we measured deal performance against the stressed time to disposition of the loans and a reinstatement rate assumption of zero for all severely delinquent loans. The three transactions may be showing weakness because of origination issues, such as aggressive residential mortgage loan underwriting, first-time home-buyer programs, piggyback second- lien mortgages, speculative borrowing for investor properties, and the concentration of affordability loans. The subordinate ratings being placed on CreditWatch from these three transactions were issued during the first half of 2006, before S&P raised its loss coverage levels for loans with the layered risks mentioned above. Standard & Poor's consecutively raised the 'BBB' loss coverage levels for transactions issued from the first through fourth quarters of 2006. The average quarterly 'BBB' loss coverage levels during the year were as follows: 7.36% in the first quarter, 7.83% in the second quarter, 12.10% in the third quarter, and 12.70% in the fourth quarter. The extent to which the high levels of severely delinquent mortgage loans result in increased levels of actual realized losses will ultimately determine the extent of future rating actions on these transactions and others in the 2006 vintage. Standard & Poor's will continue to closely monitor the performance of these transactions. Over the next three months, S&P will monitor the losses incurred as a result of the liquidation of REO assets. If these losses are material, and if delinquencies continue at their present pace, S&P would expect to lower its ratings up to three notches depending on individual performance. Conversely, if the delinquency rates decline and substantial cumulative losses are not realized, S&P will affirm the ratings and remove them from CreditWatch negative. Additionally, Standard & Poor's has determined that the CreditWatch placements affecting the ratings on these RMBS tranches will have no impact on outstanding CDO ratings. The affirmations reflect the adequate credit support currently available to protect these classes from actual and projected losses. As of the March 25, 2007, remittance period, the total delinquency rates for the current pool balances ranged from 1.34% (series 2003-L) to 11.43% (2006-H), and cumulative losses, as a percentage of the original trust balances, ranged from 0.00% (various series) to 0.30% (1999-C). Ratings Raised Residential Asset Securitization Trust Rating ------ Trust Series Class To From ----- ------ ----- -- ---- 2002-A13 2002-M B-2 AA A+ 2002-A13 2002-M B-3 A BBB+ 2002-A14J 2002-N B-3 A+ A 2002-A16 2002-P B-1 AA+ AA 2002-A16 2002-P B-2 AA A 2002-A16 2002-P B-3 A- BBB 2003-A1 2003-A B-1 AA+ AA 2003-A1 2003-A B-2 AA A 2003-A1 2003-A B-3 A BBB 2003-A2 2003-B B-1 AA+ AA 2003-A2 2003-B B-2 AA- A Ratings Placed on Creditwatch Negative Residential Asset Securitization Trust Rating ------ Trust Series Class To From ----- ------ ----- -- ---- 2006-A4IP 2006-D B-5 B/Watch Neg B 2006-A8 2006-H B-9 B/Watch Neg B 2006-A5CB 2006-E B-5 B/Watch Neg B Ratings Affirmed Residential Asset Securitization Trust Trust Series Class Rating ----- ------ ----- ------ 1999-A3 1999-C A-1, PO, X, B-1, B-2 AAA 1999-A3 1999-C B-3 AA 2000-A6 2000-F X AAA 2002-A12 2002-L 1-A-1. 1-A-2, 1-A-3, A-4, A-6 AAA 2002-A12 2002-L PO, A-X, 2-A-1, 2-A-2, 2-A-3 AAA 2002-A12 2002-L 2-A-5, 2-A-7, 2-A-8, 2-A-9 AAA 2002-A12 2002-L B-1 AAA 2002-A12 2002-L B-2 AA+ 2002-A12 2002-L B-3 AA- 2002-A13 2002-M A-2, A-3, A-4, A-5, A-6, PO AAA 2002-A13 2002-M A-X AAA 2002-A13 2002-M B-1 AA+ 2002-A14J 2002-N A-1, A-2, A-3, A-4, A-5 AAA 2002-A14J 2002-N A-7, A-9, A-10, A-11 AAA 2002-A14J 2002-N A-12, A-15, PO, A-X AAA 2002-A14J 2002-N B-1 AA+ 2002-A14J 2002-N B-2 AA 2002-A15 2002-O A-11, PO, A-X AAA 2002-A15 2002-O B-1 AA 2002-A15 2002-O B-2 A 2002-A15 2002-O B-3 BBB 2002-A16 2002-P A-1, A-2, A-3, PO, A-X AAA 2003-A1 2003-A A-1, A-2, A-3, A-4 AAA 2003-A1 2003-A A-11, A-12, PO, A-X AAA 2003-A2 2003-B A-1, A-2, A-3 AAA 2003-A2 2003-B A-7, A-8, A-9, PO, A-X AAA 2003-A2 2003-B B-3 BBB 2003-A2 2003-B B-4 BB 2003-A2 2003-B B-5 B 2003-A4 2003-D A-1, A-2, A-3, A-4 AAA 2003-A4 2003-D A-9, PO, A-X AAA 2003-A4 2003-D B-1 AA 2003-A4 2003-D B-2 A 2003-A4 2003-D B-3 BBB 2003-A5 2003-E A-1, A-2, A-3, A-4, A-5, A-6 AAA 2003-A5 2003-E A-7, PO, A-X AAA 2003-A5 2003-E B-1 AA 2003-A5 2003-E B-2 A 2003-A5 2003-E B-3 BBB 2003-A5 2003-E B-4 BB 2003-A5 2003-E B-5 B 2003-A6 2003-F A-1, A-2, A-3, A-4, A-5 AAA 2003-A6 2003-F A-6, A-7, PO, A-X AAA 2003-A6 2003-F B-1 AA 2003-A6 2003-F B-2 A 2003-A6 2003-F B-3 BBB 2003-A6 2003-F B-4 BB 2003-A6 2003-F B-5 B 2003-A7 2003-G A-1, A-2, A-3, A-4, A-5 AAA 2003-A7 2003-G A-6, A-7, A-8, A-9, A-10 AAA 2003-A7 2003-G A-11, A-12, PO, A-X AAA 2003-A7 2003-G B-1 AA 2003-A7 2003-G B-2 A 2003-A7 2003-G B-3 BBB 2003-A7 2003-G B-4 BB 2003-A7 2003-G B-5 B 2003-A8 2003-H A-1, A-2, A-3, A-4, A-5 AAA 2003-A8 2003-H PO, A-X AAA 2003-A8 2003-H B-1 AA 2003-A8 2003-H B-2 A 2003-A8 2003-H B-3 BBB 2003-A8 2003-H B-4 BB 2003-A8 2003-H B-5 B 2003-A9 2003-I A-1, A-2, A-3, A-4, A-5 AAA 2003-A9 2003-I A-7, A-8, PO, A-X AAA 2003-A9 2003-I B-1 AA 2003-A9 2003-I B-2 A 2003-A9 2003-I B-3 BBB 2003-A9 2003-I B-4 BB 2003-A9 2003-I B-5 B 2003-A10 2003-J A-1, A-2, A-3, A-4, A-5 AAA 2003-A10 2003-J PO, A-X AAA 2003-A10 2003-J B-1 AA 2003-A10 2003-J B-2 A 2003-A10 2003-J B-3 BBB 2003-A10 2003-J B-4 BB 2003-A10 2003-J B-5 B 2003-A11 2003-K A-1, A-2, A-3, A-6 AAA 2003-A11 2003-K A-7, A-8, A-9, PO, A-X AAA 2003-A11 2003-K B-1 AA 2003-A11 2003-K B-2 A 2003-A11 2003-K B-3 BBB 2003-A11 2003-K B-4 BB 2003-A11 2003-K B-5 B 2003-A12 2003-L A-1, A-2, A-3, PO, A-X AAA 2003-A12 2003-L B-1 AA 2003-A12 2003-L B-2 A 2003-A12 2003-L B-3 BBB 2003-A12 2003-L B-4 BB 2003-A12 2003-L B-5 B 2003-A13 2003-M A-1, A-2, A-3, A-4, A-5 AAA 2003-A13 2003-M PO, A-X AAA 2003-A13 2003-M B-1 AA 2003-A13 2003-M B-2 A 2003-A13 2003-M B-3 BBB 2003-A13 2003-M B-4 BB 2003-A13 2003-M B-5 B 2003-A14 2003-N A-1, PO, A-X, A-R AAA 2003-A14 2003-N B-1 AA 2003-A14 2003-N B-2 A 2003-A14 2003-N B-3 BBB 2003-A14 2003-N B-4 BB 2003-A14 2003-N B-5 B 2003-A15 2003-O 1-A-1, 1-A-2, 1-A-3, 1-A-5 AAA 2003-A15 2003-O 1-A-7, 1-A-8, 1-A-X, 1-PO AAA 2003-A15 2003-O 2-A-1, 2-A-2, 2-A-3, 2-A-4 AAA 2003-A15 2003-O 2-A-5, 2-A-X, A-R AAA 2003-A15 2003-O B-1 AA 2003-A15 2003-O B-2 A 2003-A15 2003-O B-3 BBB 2003-A15 2003-O B-4 BB 2003-A15 2003-O B-5 B 2004-A1 2004-A A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-A1 2004-A PO, A-X, A-R AAA 2004-A1 2004-A B-1 AA 2004-A1 2004-A B-2 A 2004-A1 2004-A B-3 BBB 2004-A1 2004-A B-4 BB 2004-A1 2004-A B-5 B 2004-A2 2004-A2 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2004-A2 2004-A2 1-A-5, 1-A-6, 1-A-8, 1-A-9 AAA 2004-A2 2004-A2 1-A-10, 1-A-X, 1-PO, A-R AAA 2004-A2 2004-A2 2-A-1, 2-A-2, 2-B-X AAA 2004-A2 2004-A2 1-B-1 AA 2004-A2 2004-A2 1-B-2 A 2004-A2 2004-A2 1-B-3 BBB 2004-A2 2004-A2 1-B-4 BB 2004-A2 2004-A2 1-B-5 B 2004-A3 2004-C A-1, A-2, A-3, A-4, A-6, A-7 AAA 2004-A3 2004-C A-X, PO, A-R AAA 2004-A3 2004-C B-1 AA 2004-A3 2004-C B-2 A 2004-A3 2004-C B-3 BBB 2004-A3 2004-C B-4 BB 2004-A3 2004-C B-5 B 2004-A4 2004-D A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-A4 2004-D A-7, A-8, A-9, A-10, A-11 AAA 2004-A4 2004-D A-13, A-14, A-15, PO, A-X AAA 2004-A4 2004-D A-R AAA 2004-A4 2004-D B-1 AA 2004-A4 2004-D B-2 A 2004-A4 2004-D B-3 BBB 2004-A4 2004-D B-4 BB 2004-A4 2004-D B-5 B 2004-A5 2004-E A-1, PO, A-X, A-R AAA 2004-A5 2004-E B-1 AA 2004-A5 2004-E B-2 A 2004-A5 2004-E B-3 BBB 2004-A5 2004-E B-4 BB 2004-A5 2004-E B-5 B 2004-A6 2004-F A-1, PO, A-X, A-R AAA 2004-A6 2004-F B-1 AA 2004-A6 2004-F B-2 A 2004-A6 2004-F B-3 BBB 2004-A6 2004-F B-4 BB 2004-A6 2004-F B-5 B 2004-A7 2004-G A-1, A-2, A-3, A-4, A-5 AAA 2004-A7 2004-G A-6, PO, A-X, A-R AAA 2004-A7 2004-G B-1 AA 2004-A7 2004-G B-2 A 2004-A7 2004-G B-3 BBB 2004-A7 2004-G B-4 BB 2004-A7 2004-G B-5 B 2004-A8 2004-H A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-A8 2004-H A-7, A-8, PO, A-X, A-R AAA 2004-A8 2004-H B-1 AA 2004-A8 2004-H B-2 A 2004-A8 2004-H B-3 BBB 2004-A8 2004-H B-4 BB 2004-A8 2004-H B-5 B 2004-A9 2004-I A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-A9 2004-I A-7, A-9, A-10, PO, A-X, A-R AAA 2004-A9 2004-I B-1 AA 2004-A9 2004-I B-2 A 2004-A9 2004-I B-3 BBB 2004-A9 2004-I B-4 BB 2004-A9 2004-I B-5 B 2004-A10 2004-J A-1, A-2, A-3, PO, A-R, A-X AAA 2004-A10 2004-J B-1 AA 2004-A10 2004-J B-2 A 2004-A10 2004-J B-3 BBB 2004-A10 2004-J B-4 BB 2004-A10 2004-J B-5 B 2004-IP2 2004-IP2 1-A-1, 1-A-2, 2-A-1, 2-A-2 AAA 2004-IP2 2004-IP2 2-A-3, 3-A-1, 3-A-2, 4-A,A-R AAA 2004-IP2 2004-IP2 B-1 AA 2004-IP2 2004-IP2 B-2 A 2004-IP2 2004-IP2 B-3 BBB 2004-IP2 2004-IP2 B-4 BB 2004-IP2 2004-IP2 B-5 B 2004-R1 2004-R1 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-R1 2004-R1 A-R AAA 2004-R2 2004-R2 A-1, A-2, A-3, A-4, A-5, A-R AAA 2005-A1 2005-A1 A-1, A-2, A-3, P-O, A-R, A-X AAA 2005-A1 2005-A1 B-1 AA 2005-A1 2005-A1 B-2 A 2005-A1 2005-A1 B-3 BBB 2005-A1 2005-A1 B-4 BB 2005-A1 2005-A1 B-5 B 2005-A11CB 2005-K 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-A11CB 2005-K 1-A-5, 1-A-6, 2-A-1, 2-A-2 AAA 2005-A11CB 2005-K 2-A-3, 2-A-4, 2-A-5, PO AAA 2005-A11CB 2005-K 1-A-X, 2-A-X, A-R AAA 2005-A11CB 2005-K B-1 AA 2005-A11CB 2005-K B-2 AA- 2005-A11CB 2005-K B-3 A 2005-A11CB 2005-K B-4 A- 2005-A11CB 2005-K B-5 BBB 2005-A11CB 2005-K B-6 BBB- 2005-A11CB 2005-K B-7, B-8 BB 2005-A11CB 2005-K B-9 B 2005-A12 2005-L A-1, A-2, A-3, A-4, A-5, A-6 AAA 2005-A12 2005-L A-6, A-7, A-8 A-9,A-10,A-11 AAA 2005-A12 2005-L A-12, PO, A-X, A-R AAA 2005-A12 2005-L B-1 AA+ 2005-A12 2005-L B-2 AA 2005-A12 2005-L B-3 A+ 2005-A12 2005-L B-4 A 2005-A12 2005-L B-5 BBB+ 2005-A12 2005-L B-6 BBB 2005-A12 2005-L B-7 BB 2005-A12 2005-L B-8 B 2005-A13 2005-M 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-A13 2005-M 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-A13 2005-M 2-A-1, 2-A-2, PO, A-X, A-R AAA 2005-A13 2005-M B-1 AA 2005-A13 2005-M B-2 A 2005-A13 2005-M B-3 BBB 2005-A13 2005-M B-4 BB 2005-A13 2005-M B-5 B 2005-A14 2005-N A-1, A-2, A-3, A-4, A-5, A-6 AAA 2005-A14 2005-N A-7, PO, A-X, A-R AAA 2005-A14 2005-N B-1 AA 2005-A14 2005-N B-2 A 2005-A14 2005-N B-3 BBB 2005-A14 2005-N B-4 BB 2005-A14 2005-N B-5 B 2005-A15 2005-0 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2005-A15 2005-0 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2005-A15 2005-0 1-A-9, 2-A-1, 2-A-2, 2-A-3 AAA 2005-A15 2005-0 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2005-A15 2005-0 2-A-8, 2-A-9, 2-A-10, 2-A-11 AAA 2005-A15 2005-0 2-A-12, 2-A-13, 3-A-1, 4-A-1 AAA 2005-A15 2005-0 5-A-1, 5-A-2, 5-A-3, 1-A-X AAA 2005-A15 2005-0 2-A-X, PO, A-R AAA 2005-A15 2005-0 B-1 AA 2005-A15 2005-0 B-2 A 2005-A15 2005-0 B-3 BBB 2005-A15 2005-0 B-4 BB 2005-A15 2005-0 B-5 B 2005-A16 2005-P A-1, A-2, A-3, PO, A-X, A-R AAA 2005-A16 2005-P B-1 AA 2005-A16 2005-P B-2 A 2005-A16 2005-P B-3 BBB 2005-A16 2005-P B-4 BB 2005-A16 2005-P B-5 B 2005-A2 2005-B A-1, A-2, A-3, A-4, PO AAA 2005-A2 2005-B A-X, A-R AAA 2005-A2 2005-B B-1 AA 2005-A2 2005-B B-2 A 2005-A2 2005-B B-3 BBB 2005-A2 2005-B B-4 BB 2005-A2 2005-B B-5 B 2005-A3 2005-C A-1, A-2, A-3, A-4, PO AAA 2005-A3 2005-C A-X, A-R AAA 2005-A3 2005-C B-1 AA 2005-A3 2005-C B-2 A 2005-A3 2005-C B-3 BBB 2005-A3 2005-C B-4 BB 2005-A3 2005-C B-5 B 2005-A4 2005-D A-1, A-2, PO, A-X, A-R AAA 2005-A4 2005-D B-1 AA 2005-A4 2005-D B-2 A 2005-A4 2005-D B-3 BBB 2005-A4 2005-D B-4 BB 2005-A4 2005-D B-5 B 2005-A5 2005-E A-1, A-2, A-3, A-4, A-5 AAA 2005-A5 2005-E A-6, A-7, A-8, A-9, A-10 AAA 2005-A5 2005-E A-11, A-12, A-13, PO, A-X AAA 2005-A5 2005-E A-R AAA 2005-A5 2005-E B-1 AA 2005-A5 2005-E B-2 A 2005-A5 2005-E B-3 BBB 2005-A5 2005-E B-4 BB 2005-A5 2005-E B-5 B 2005-A6CB 2005-F A-1, A-2, A-3, A-4, A-5 AAA 2005-A6CB 2005-F A-6, A-7, A-8, A-9, PO AAA 2005-A6CB 2005-F A-X, A-R AAA 2005-A6CB 2005-F B-1 AA 2005-A6CB 2005-F B-2 A 2005-A6CB 2005-F B-3 BBB 2005-A6CB 2005-F B-4 BB 2005-A6CB 2005-F B-5 B 2005-A7 2005-G A-1, A-2, A-3, A-4, A-5 AAA 2005-A7 2005-G A-6, A-7, PO, A-X, A-R AAA 2005-A7 2005-G B-1 AA 2005-A7 2005-G B-2 A 2005-A7 2005-G B-3 BBB 2005-A7 2005-G B-4 BB 2005-A7 2005-G B-5 B 2005-A8CB 2005-H A-1, A-2, A-3, A-4, A-5 AAA 2005-A8CB 2005-H A-6, A-7, A-8, A-9, A-10 AAA 2005-A8CB 2005-H A-11, A-12, A-13, A-PO, A-X AAA 2005-A8CB 2005-H A-R AAA 2005-A8CB 2005-H B-1 AA 2005-A8CB 2005-H B-2 A 2005-A8CB 2005-H B-3 BBB 2005-A8CB 2005-H B-4 BB 2005-A8CB 2005-H B-5 B 2005-A9 2005-I A-1, A-2, A-3, A-4, A-5 AAA 2005-A9 2005-I PO, A-X, A-R AAA 2005-A9 2005-I B-1 AA 2005-A9 2005-I B-2 A 2005-A9 2005-I B-3 BBB 2005-A9 2005-I B-4 BB 2005-A9 2005-I B-5 B 2006-A1 2006-A1 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2006-A1 2006-A1 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2006-A1 2006-A1 A-X, PO, A-R, 2-A-1, 2-A-2 AAA 2006-A1 2006-A1 3-A-1, 3-A-2, 3-A-3, 3-A-4 AAA 2006-A1 2006-A1 3-A-5 AAA 2006-A1 2006-A1 I-B-1, II-B-1 AA 2006-A1 2006-A1 I-B-2, II-B-2 A 2006-A1 2006-A1 I-B-3, II-B-3 BBB 2006-A1 2006-A1 I-B-4, II-B-4 BB 2006-A1 2006-A1 I-B-5, II-B-5 B 2006-A10 2006-A10 A-1, A-2, A-3, A-4, A-5 AAA 2006-A10 2006-A10 A-6, A-7, A-X, P-O, A-R AAA 2006-A10 2006-A10 B-1 AA 2006-A10 2006-A10 B-2 A 2006-A10 2006-A10 B-3 BBB 2006-A10 2006-A10 B-4 BB 2006-A10 2006-A10 B-5 B 2006-A11 2006-K 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2006-A11 2006-K 1-A-5, 1-A-7, 1-PO, 1-A-X AAA 2006-A11 2006-K 2-A-1, 2-A-2, 2-A-3, 3-A-1 AAA 2006-A11 2006-K A-R AAA 2006-A11 2006-K B-1 AA 2006-A11 2006-K B-2 A 2006-A11 2006-K B-3 BBB 2006-A11 2006-K B-4 BB 2006-A11 2006-K B-5 B 2006-A2 2006-B A-1, A-2, A-3, A-4, A-5, A-6 AAA 2006-A2 2006-B A-7, A-8, A-9, A-10, A-11 AAA 2006-A2 2006-B A-12, A-13, A-3, PO, A-X, A-R AAA 2006-A2 2006-B B-1 AA 2006-A2 2006-B B-2 A 2006-A2 2006-B B-3 BBB 2006-A2 2006-B B-4 BB 2006-A2 2006-B B-5 B 2006-A3CB 2006-C A-1, PO, A-X, A-R AAA 2006-A3CB 2006-C B-1 AA 2006-A3CB 2006-C B-2 A 2006-A3CB 2006-C B-3 BBB 2006-A3CB 2006-C B-4 BB 2006-A3CB 2006-C B-5 B 2006-A4IP 2006-D 1-A-1, 2-A-1, 2-A-2, 2-A-3 AAA 2006-A4IP 2006-D 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2006-A4IP 2006-D 2-A-8, 2-A-9, 2-A-10, 2-A-11 AAA 2006-A4IP 2006-D 2-PO, 2-A-X, A-R AAA 2006-A4IP 2006-D B-1 AA 2006-A4IP 2006-D B-2 A 2006-A4IP 2006-D B-3 BBB 2006-A4IP 2006-D B-4 BB 2006-A5CB 2006-E A-1, A-2, A-3, A-4, A-5, A-6 AAA 2006-A5CB 2006-E A-7, PO, A-X, A-R AAA 2006-A5CB 2006-E B-1 AA 2006-A5CB 2006-E B-2 A 2006-A5CB 2006-E B-3 BBB 2006-A5CB 2006-E B-4 BB 2006-A6 2006-F 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2006-A6 2006-F 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2006-A6 2006-F 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2006-A6 2006-F 1-A-13, 1-A-14, 2-A-1, 2-A-2 AAA 2006-A6 2006-F 2-A-3, 2-A-4, 2-A-5, 2-A-6 AAA 2006-A6 2006-F 2-A-7, 2-A-8, 2-A-9, 2-A-10 AAA 2006-A6 2006-F 2-A-11, 2-A-12, 2-A-13, PO AAA 2006-A6 2006-F A-X, A-R AAA 2006-A6 2006-F B-1 AA 2006-A6 2006-F B-2 A 2006-A6 2006-F B-3 BBB 2006-A6 2006-F B-4 BB 2006-A6 2006-F B-5 B 2006-A7CB 2006-G 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2006-A7CB 2006-G 1-A-5, 1-A-6, 2-A-1, 2-A-2 AAA 2006-A7CB 2006-G 2-A-3, 2-A-4, 2-A-5, 2-A-6 AAA 2006-A7CB 2006-G 2-A-7, 3-A-1, 3-A-2, A-X, PO AAA 2006-A7CB 2006-G A-R AAA 2006-A7CB 2006-G B-1 AA 2006-A7CB 2006-G B-2 A 2006-A7CB 2006-G B-3 BBB 2006-A7CB 2006-G B-4 BB 2006-A7CB 2006-G B-5 B 2006-A8 2006-H 1-A-1, 1-A-2, 1-A-3, 1-A-4 AAA 2006-A8 2006-H 1-A-5, 2-A-1, 2-A-2, 2-A-3 AAA 2006-A8 2006-H 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2006-A8 2006-H 2-A-8, 3-A-1, 3-A-2, 3-A-3 AAA 2006-A8 2006-H 3-A-4, 3-A-5, 3-A-6, 3-A-7 AAA 2006-A8 2006-H 3-A-8, 3-A-9, 3-A-10, 3-A-11 AAA 2006-A8 2006-H PO, A-X, A-R AAA 2006-A8 2006-H B-1 AA 2006-A8 2006-H B-2 AA- 2006-A8 2006-H B-3 A+ 2006-A8 2006-H B-4 A- 2006-A8 2006-H B-5 BBB 2006-A8 2006-H B-6 BBB- 2006-A8 2006-H B-7 BB+ 2006-A8 2006-H B-8 BB 2006-A9CB 2006-I A-1, A-2, A-3, A-4, A-5, A-6 AAA 2006-A9CB 2006-I A-7, A-8, A-9, A-10, A-11 AAA 2006-A9CB 2006-I A-12, A-13, PO, A-X, A-R AAA 2006-A9CB 2006-I B-1 AA 2006-A9CB 2006-I B-2 A 2006-A9CB 2006-I B-3 BBB 2006-A9CB 2006-I B-4 BB 2006-A9CB 2006-I B-5 B 2006-R1 2006-R1 A-1, A-2, A-R AAA 2006-R2 2006-R2 A-1, A-2, A-R AAA REYNOLDS AMERICAN: Net Income Drops to $328 Million in 1st Qtr '07 ------------------------------------------------------------------ Reynolds American Inc. reported net income of $328 million on net sales of $2.15 billion for the first quarter ended March 31, 2007, compared with net income of $345 million on net sales of $1.96 billion for the same period a year earlier. Results from the year-ago quarter included a $65 million extraordinary gain on acquisition, resulting from a favorable resolution of prior-years' tax matters. "The first-quarter performance of each of our reportable segments - R.J. Reynolds and Conwood - reflects Reynolds American's ongoing success in building financial and marketplace strength," said Susan M. Ivey, RAI's chairman and chief executive officer. "During the quarter, total growth-brand share gains at R.J. Reynolds continued to drive improvements in the company's overall share trend. Conwood's additional share and volume gains further solidified that company's position as the growth leader in the growing moist-snuff category," she said. "Both segments delivered double-digit profit growth compared with the prior-year quarter." R.J. Reynolds R.J. Reynolds delivered first-quarter adjusted operating income of $488 million, a 16.5 percent gain, as margins of almost 26 percent were bolstered by improvements in pricing and operating costs, as well as favorabilities in the timing of promotions and pension expense. The combined effect of these factors significantly offset a rise in Master Settlement Agreement (MSA) expense, as well as a 4 percent volume decline. Daniel M. Delen, R.J. Reynolds' president and chief executive officer, noted that the timing of promotional spending decreased R.J. Reynolds' margins in the fourth quarter of 2006 - but helped drive margins higher in the first quarter. In addition to the company's strong first-quarter financial performance, R.J. Reynolds also continued to enhance its marketplace strength, with a combined growth-brand market share of 12.63 percent - up 0.69 share points from the first quarter of last year. Conwood Conwood's adjusted operating income of $80 million was significantly offset by debt expense associated with its acquisition by Reynolds American Inc. on May 31, 2006. "With adjusted pro-forma profits up 18 percent, volume up 14 percent and a 1.8 point share gain from the year-ago quarter, we're very pleased with Conwood's first-quarter performance," said William M. Rosson, Conwood's president and chief executive officer. Conwood's 25.72 percent share of moist-snuff shipments was up 1.79 share points from the first quarter of 2006. At March 31, 2007, the company's balance sheet showed $17.71 billion in total assets, $10.61 billion in total liabilities, and $7.10 billion in total stockholders' equity. About Reynolds American Headquartered in Winston-Salem, N.C., Reynolds American Inc. (NYSE: RAI) -- http://www.ReynoldsAmerican.com/-- is the parent company of R.J. Reynolds Tobacco Company, Conwood Company LLC, Santa Fe Natural Tobacco Company Inc, and R.J. Reynolds Global Products Inc. R.J. Reynolds Tobacco Company, the second-largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company's brands include five of the 10 best- selling U.S. brands: Camel, Kool, Winston, Salem and Doral. Conwood Company LLC is the nation's second-largest manufacturer of smokeless tobacco products. Santa Fe Natural Tobacco Company Inc. manufactures Natural American Spirit cigarettes and other additive-free tobacco products. R.J. Reynolds Global Products Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. * * * As reported in the Troubled Company Reporter on April 16, 2007, Standard & Poor's Ratings Services raised its senior secured debt rating on Reynolds American Inc.'s existing senior secured notes to 'BBB-', from 'BB', and revised the recovery rating to '1' from '3', indicating that lenders can expect full (100%) recovery of principal in the event of payment default. All other ratings on the company, including the 'BB+' corporate credit rating, were affirmed. RK PROPERTIES: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------- Debtor: R.K. Properties, Inc. 3802 Fox Valley Drive Rockville, MD 20853 Bankruptcy Case No.: 07-13673 Chapter 11 Petition Date: April 23, 2007 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Christopher Hamlin, Esq. McNamee Hosea 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Fax: (301) 982-9450 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Choice Hotels International Clarion Hotel $40,000 10750 Columbia Pike Prince Charles Senior Lien: Silver Spring, MD 20901-4491 $3,900,000 Office of the $30,000 Tax Administrator 117 Dick Street, 5th Floor Fayetteville, NC 28302 ROUGE INDUSTRIES: Court Approves Stipulation With Power Process --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between Rouge Industries Inc. and its debtor- affiliates; and Power Process Piping Inc., resolving Power Process' construction claims against the Debtors. Power Process had filed proofs of claim asserting $287,593 in construction liens upon certain of the Debtors' real property. After negotiations, the parties agree in the stipulation that: -- the Power Process claim will be allowed as a secured claim of $87,500; and -- the remaining balance of $188,672 will be allowed as an unsecured, nonpriority claim. Headquartered in Dearborn, Michigan, Rouge Industries Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272). Adam G. Landis, Esq., at Landis Rath & Cobb LLP and Alicia Beth Davis, Esq., at Morris Nichols Arsht & Tunnell represent the Debtors. Kurt F. Gwynne, Esq., and Richard Allen Keuler, Jr., Esq., at Reed Smith LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $558,131,000 in total assets and $558,131,000 in total debts. On Dec. 19, 2003, the Court approved the sale of substantially all of the Debtors' assets to SeverStal N.A. for $285.5 million. The Asset Sale closed on Jan. 30, 2005. ROUGE INDUSTRIES: Wants Settlement Agreement w/ Aristeo Approved ---------------------------------------------------------------- Rouge Industries, Inc. and its debtor-affiliates ask the U.S. Bankruptcy for the District of Delaware to approve certain settlement agreements and releases between the Debtors and Aristeo Construction Company. Aristeo Construction had asserted construction liens upon certain of the Debtors' real property, in order to secure payment of an alleged debt for approximately $194,879. Aristeo consequently filed a secured claim against the Debtors. The parties had since disputed the Aristeo lien's validity, priority, and enforceability in an adversary proceeding. In order to save time and minimize costs, the parties agreed in the stipulation to reclassify and allow the $194,879 Aristeo claim as an unsecured, non-priority claim. Based in Dearborn, Michigan, Rouge Industries Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272). Adam G. Landis, Esq., at Landis Rath & Cobb LLP and Alicia Beth Davis, Esq., at Morris Nichols Arsht & Tunnell represent the Debtors. Kurt F. Gwynne, Esq., and Richard Allen Keuler, Jr., Esq., at Reed Smith LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $558,131,000 in total assets and $558,131,000 in total debts. On Dec. 19, 2003, the Court approved the sale of substantially all of the Debtors' assets to SeverStal N.A. for $285.5 million. The Asset Sale closed on Jan. 30, 2005. SECURITY AVIATION: Former Boss Wins Auction with $3.4 Million Bid ----------------------------------------------------------------- Joe Kapper, the former owner and stepson of the founder of Security Aviation Inc., won back the company in an auction conducted by the U.S. Bankruptcy Court for the District of Alaska, topping a $3.35 million bid of partners Daniel Owen and Randy Dewar by $50,000, Lisa Demer of Anchorage Daily News reports. According to the source, Seacor Holdings Inc., a third player in the game, withdrew after it decided that it has not completely reviewed company's status. Last week, Ms. Demer relates, Mr. Kapper offered $3 million, which was $5 million less than he sold in 2005, to buy back Security Aviation in a bankruptcy sale but before the sale was approved by the Court, Mr. Owen and Mr. Dewar presented a $3.25 million bid. Security Aviation is being sold with six planes, four Cessnas and two Pipers, Mr. Demer says. Headquartered in Anchorage, Arkansas, Security Aviation, Inc. -- http://www.securityaviation.biz/-- provides air charter services. The Debtor filed for chapter 11 protection on Dec. 21, 2006 (Bankr. D. Ala. Case No. 06-00559). Cabot C. Christianson, Esq., at Christianson & Spraker, represents the Debtor. No Committee of Unsecured Creditors has been appointed in the Debtor's case. The Debtor's schedules filed with the Court listed assets of $14,928,446 and liabilities of $54,771,582. SIX FLAGS: Improving Liquidity Cues S&P to Hold B- Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Six Flags Inc., including the 'B-' corporate credit rating, and removed the ratings from CreditWatch. Ratings were originally placed on CreditWatch with negative implications on Sept. 18, 2006, reflecting weak profitability, negative discretionary cash flow, and rising debt leverage. At the same time, Standard & Poor's assigned to operating company Six Flags Theme Parks Inc. (B-/Negative/--) a 'B' bank loan rating, one notch above the corporate credit ratings on both companies, and a recovery rating of '1', on $1.1 billion of new senior secured credit facilities, indicating high expectation of full recovery of principal in the event of a payment default. The facilities consist of a $300 million revolving credit facility due 2013 and an $800 million term loan B due 2015. The rating outlook is negative. New York-based regional theme park owner and operator Six Flags had $2.5 billion of debt and preferred stock outstanding as of Dec 31, 2006. "The affirmation reflects improving liquidity based on the sale this month of seven of the company's smaller parks and the pending refinancing of the credit agreement, which extends the company's bank debt maturities and loosens financial covenants," said Standard & Poor's credit analyst Hal F. Diamond. The rating on Six Flags reflects the company's high debt leverage, operating challenges, and negative discretionary cash flow. These considerations are only partially mitigated by the size and diversity of the company's regional theme parks. SIX FLAGS: Fitch Rates Proposed $1.1 Billion Facility at BB- ------------------------------------------------------------ Fitch Ratings has assigned a 'BB-/RR1' rating to Six Flags Theme Parks Inc.'s proposed $1.1 billion senior secured credit facility. The new facility consists of a $300 million revolving credit facility maturing in 2015 and $800 million term loan B due in 2013 and is expected to be primarily used to refinance amounts outstanding under its existing credit facility and for general corporate purposes. Fitch also recommends affirming these ratings: Six Flags Theme Parks, Inc. -- Issuer Default Rating 'B-'; Six Flags, Inc. -- Issuer Default Rating 'B-'; -- Senior unsecured notes 'CCC+/RR5'; -- Preferred stock (PIERS) 'CCC-/RR6'. Approximately $2.5 billion of debt is affected. The Rating Outlook remains Negative. The ratings continue to reflect Six Flags, Inc.'s significant debt load, negative free cash flow, and rising leverage due to weak operating performance in the last 12 months ended Dec. 31, 2006 as well as uncertainties surrounding the successful execution of the new management team's turn-around strategy. Rating concerns are balanced somewhat by the company's position as the largest regional theme park operator with broad geographic presence in many of the top designated market areas, solid competitive positioning due to high barriers to entry and market leadership, as well as meaningful real estate ownership underlying many of its remaining 21 parks. Fitch expects that positive rating momentum will be determined by a sustained improvement in Six Flags' financial profile primarily from operating performance and successful execution of the new management team's strategy in the spring and summer of 2007 and going forward. Fitch recognizes that the completion of the park sales in April 2007 enhances financial flexibility with approximately $255 million of cash available for debt reduction at the parent company level and general corporate use as the bank lenders refused their first-option to the proceeds. Fitch also notes that the company's near-term maturities are minimal until 2009 following the proposed refinancing of the existing facilities. Six Flags' operating performance has been weak over the past several years and deteriorated further in 2006 due to a double- digit decline in attendance and higher costs associated with the implementation of a new operating strategy somewhat offset by a double-digit increase in total revenue per capita. The new management team is pursuing several initiatives in an effort to create more family friendly destinations with a renewed emphasis on advertising and promotion, resulting in higher operating expenses offset by lower capital spending. The team has been successful in developing sponsorship and corporate alliances which will likely support the core operations. Fitch understands the strategic rationale for the company's portfolio repositioning and believes management is pursuing its strategy prudently. If the plans gain traction as management anticipates, then the outlook could be stabilized. The recovery ratings and notching reflect Fitch recovery expectations under a distressed scenario. Six Flags recovery ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation. The 'RR1' rating for the company's secured bank credit facility reflects Fitch's belief that 100% recovery is realistic given its priority position in the capital structure and meaningful estimated enterprise value in a distress scenario. The 'RR5' recovery rating for the Six Flags Inc. senior unsecured debt reflects that 11%-30% recovery is reasonable due to subordination with respect to bank debt and the 'RR6' recovery rating for the preferred stock (PIERS) reflects negligible recovery prospects due to its position in the capital structure. SOUNDVIEW HOME: Fitch Downgrades Ratings on 10 Classes ------------------------------------------------------ Fitch affirms 34, downgrades 10 & places 1 RMBS Class on Rating Watch Negative from these Soundview Home Equity Loan Trust Second Lien Issues: Series 2005-A -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA+'; -- Class M-4 affirmed at 'AA+'; -- Class M-5 affirmed at 'AA+'; -- Class M-6 affirmed at 'AA-'; -- Class M-7 affirmed at 'A+'; -- Class M-8 affirmed at 'A'; -- Class M-9 affirmed at 'A-'; -- Class M-10 affirmed at 'BBB+'; -- Class M-11 affirmed at 'BBB'; -- Class B-1 downgraded from 'BBB-' to 'BB-'; -- Class B-2 downgraded from 'BB+' to 'B'; -- Class B-3 downgraded from 'BB' to 'C' and assigned a Distressed Recovery rating of 'DR6'; -- Class B-4 remains at 'C/DR6'; Series 2005-B -- Class A 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 'AA'; -- Class M-5 affirmed at 'AA-'; -- Class M-6 affirmed at 'A+'; -- Class M-7 affirmed at 'A'; -- Class M-8 affirmed at 'A-'; -- Class M-9 affirmed at 'A-'; -- Class M-10 affirmed at 'BBB+'; -- Class M-11 downgraded from 'BBB' to 'BB'; -- Class M-12 downgraded from 'BBB-' to 'B'; -- Class M-13 downgraded from 'BB+' to 'C' and assigned a DR rating of 'DR6'; -- Class M-14 downgraded from 'B+' to 'C' and assigned a DR rating of 'DR6'; -- Class M-15 remains at 'C/DR6' and the rating is subsequently withdrawn; Series 2006-A -- Class A 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 'BBB-'; -- Class M-11 rated 'BB+' is placed on Rating Watch Negative; -- Class M-12 downgraded from 'BB-' to 'B+'; -- Class M-13 downgraded from 'B+' to 'C' and assigned a DR rating of 'DR6'; -- Class M-14 downgraded from 'B' to 'C' and assigned a DR rating of 'DR6'. The mortgage pool consists of fixed-rate, second lien, fully amortizing and balloon payment mortgage loans. The loans were purchased by Financial Asset Securities Corp from Greenwich Capital Acceptance Corporation, which acquired them from various originators. The deals are serviced by Countrywide (rated 'RPS1' by Fitch), GMAC (rated 'RPS1' by Fitch), and Litton Loan Servicing (rated 'RPS1' by Fitch). As of the March 2006 distribution date, the transactions are seasoned from 8 (2006-A) to 21 (2005-A) months, and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 30.9% (2005-A) to 77.1% (2006-A). The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $709.86 million of outstanding certificates. The negative actions reflect deterioration in the relationship between CE and future loss expectations and affect approximately $117.58 million in outstanding certificates. For the 2005 vintage series the downgrades are due to the fact that the growing OC never reached its target due to prepays that were faster than expected, leading to less available excess interest. Combined with the levels of early losses that the trusts have experienced, this has led to write-downs on some of the subordinate bonds. For the 2006-A transaction, the downgrades are due to high levels of early delinquency and high levels of losses. As of the March remittance report, the trust has serious delinquencies of approximately 12.36% of its current balance, and has suffered approximately 1.14% in cumulative losses to date while only being 8 months seasoned. Fitch will continue to closely monitor these transactions. If losses continue to further corrode the CE available to the bonds, further rating actions may be necessary. SOUNDVIEW HOME: Fitch Holds Low-B Ratings on 12 Loan Classes ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Soundview Home Equity Loan Trust Issues: Series 2001-1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA-'; -- Class M-2 remains at 'CC', Distressed Recovery rating is raised from 'DR5' to 'DR2'. Series 2003-2 -- Class A affirmed at 'AAA'; -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 upgraded to 'AA-' from 'A'; -- Class M-3 upgraded to 'AA-' from 'A-'; -- Class M-4 upgraded to 'A+' from 'BBB+'; -- Class M-5 upgraded to 'A' from 'BBB'. Series 2004-1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- 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-'. Series 2005-1 -- Class A 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+'. Series 2005-2 -- Class A 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+'; -- Class B-2 affirmed at 'BB'. Series 2005-3 -- Class A 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 'AA-'; -- 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-'. Series 2005-4 -- Class A affirmed at 'AAA'; -- Class M-1A affirmed at 'AA+'; -- Class M-1B affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- 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 'BBB-'; -- Class M-11, rated 'BB+', placed on Rating Watch Negative. Series 2005-CTX1 -- Class A 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 'AA-'; -- Class M-5 affirmed at 'AA-'; -- 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 'BBB-'; -- Class B-1 affirmed at 'BB'. Series 2005-DO1 -- Class A 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 'AA-'; -- 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 downgraded to 'BB+' from 'BBB-'; -- Class M-11 downgraded to 'BB' from 'BB+'; -- Class B-1 downgraded to 'BB-' from 'BB'; -- Class B-2 downgraded to 'B+' from 'BB-'. Series 2005-OPT1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- 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 'BBB-'. Series 2005-OPT2 -- Class A 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 downgraded to 'BBB-' from 'BBB'; -- Class M-9 downgraded to 'BB+' from 'BBB-'. Series 2005-OPT3 -- Class A 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 'BB+'; -- Class M-11 affirmed at 'BB'; -- Class M-12 affirmed at 'BB-'. Series 2005-OPT4 -- Class A 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 'BB+'; -- Class M-11 affirmed at 'BB'. Series 2006-1 -- Class A 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 'AA-'; -- 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 affirmed at 'BB'. Series 2006-OPT1 -- Class A 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 'BB+'; -- Class M-11 affirmed at 'BB'. The mortgage pools consist of fixed-rate and adjustable-rate loans secured by first and second liens, primarily on one-to-four family residential properties. The loans were purchased by Financial Asset Securities Corp from Greenwich Capital Acceptance Corporation, which acquired them from various originators. The deals are serviced by various servicers, including Countrywide (rated 'RPS1' by Fitch), Option One (rated 'RPS1' by Fitch), NationStar (formerly Centex; rated 'RPS2' by Fitch) and GMAC (rated 'RPS1' by Fitch). As of the March 2006 distribution date, the transactions are seasoned from 12 months (2006-OPT1) to 71 months (2001-1), and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 8.1% (2001-1) to 78% (2005-4). The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $6.59 billion of outstanding certificates. The negative actions reflect deterioration in the relationship between CE and future loss expectations and affect approximately $46.028 million in outstanding certificates. The positive rating actions reflect an improvement in the relationship between credit enhancement and future loss expectations and affect approximately $41.16 million in outstanding certificates. The upgrades on the 2003-2 transaction are a result of very low losses to date and lower than expected delinquencies. The 60+ delinquencies for the trust compose only 1.26% of the trust, and to date, it has only sustained approximately 18 basis points of loss. The CE for all of the affected bonds has grown to 2 times (x) - 3x its original levels, and the overcollateralization is currently at its target. The downgrades on the 2005-DO1 and 2005-OPT2 are the result of higher than expected serious delinquencies (loans that are more than 60 days delinquent, including all loans in bankruptcy, foreclosure, and real estate owned (REO)), which have been continuing to rise, leading to increased credit risk to the subordinate bonds. As of the March remittance report, the 2005- DO1 had serious delinquencies accounting for approximately 15.16% of its current balance, and the 2005-OPT2 had approximately 11.88% of its current balance in serious delinquency. In both of these transactions, the OC is below its target due to losses exceeding excess spread, reducing the OC available to the trust. Fitch will continue to closely monitor these transactions. If losses continue to further corrode the credit enhancement available to the bonds, further rating actions may be necessary. STRUCTURED ASSET: Fitch Takes Rating Actions on 143 RMBS Classes ---------------------------------------------------------------- Fitch has taken rating actions on these Structured Asset Investment Loan mortgage pass-through certificates: Series 2005-1: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 affirmed at 'BBB-'; -- Class B affirmed at 'BB'. Series 2005-2: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'. Series 2005-3: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'. Series 2005-4: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA+'; -- Class M3 affirmed at 'AA'; -- Class M4 affirmed at 'AA-'; -- Class M5 affirmed at 'A+'; -- Class M6 affirmed at 'A'; -- Class M7 affirmed at 'A-'; -- Class M8 affirmed at 'BBB+'; -- Class M9 affirmed at 'BBB'. Series 2005-5: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 affirmed at 'BBB-'. Series 2005-6: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB'; -- Class M8 affirmed at 'BBB-'; -- Class M9 affirmed at 'BBB-'; -- Class M10-A affirmed at 'BB+'; -- Class M10-F affirmed at 'BB+'. Series 2005-7: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 affirmed at 'BBB-'; -- Class B1 affirmed at 'BBB-'. Series 2005-9: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 rated 'BBB-', is placed on Rating Watch Negative; -- Class B1 downgraded to 'BB-' from 'BBB-'; -- Class B2 downgraded to 'B+' from 'BB'. Series 2005-10: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 affirmed at 'BBB-'; -- Class B1 rated 'BBB-', is placed on Rating Watch Negative; -- Class B2 rated 'BBB-', is placed on Rating Watch Negative. Series 2005-11: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'AA-'; -- Class M3 affirmed at 'A+'; -- Class M4 affirmed at 'A'; -- Class M5 affirmed at 'A-'; -- Class M6 affirmed at 'BBB+'; -- Class M7 affirmed at 'BBB'; -- Class M8 rated 'BBB-', is placed on Rating Watch Negative; -- Class B1 downgraded to 'B+' from 'BB+'; -- Class B2 downgraded to 'B+' from 'BB'. Series 2005-HE1: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 downgraded to 'BB+' from 'BBB'; -- Class B1 downgraded to 'BB-' from 'BBB-'. Series 2005-HE2 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 affirmed at 'BBB'; -- Class M10 affirmed at 'BBB-'; -- Class B1 downgraded to 'BB' from 'BB+'; -- Class B2 downgraded to 'BB-' from 'BB'. Series 2005-HE3: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-; -- Class M7 affirmed at 'A-'; -- Class M8 affirmed at 'BBB+'; -- Class M9 affirmed at 'BBB'; -- Class M10 downgraded to 'BB+' from 'BBB'; -- Class M11 downgraded to 'BB-' from 'BB+'. The collateral in the aforementioned transactions consists primarily of conventional, first and second lien, adjustable and fixed rate, fully amortizing and balloon loans secured by residential properties. The collateral was originated by multiple lenders which include BNC Mortgage, Inc., New Century Mortgage Corporation, The Provident Bank, Oakmont Mortgage, WMC Mortgage Corp., Finance America, LLC, and others. Aurora Loan Services, Inc. is the master servicer for all transactions and is rated 'RMS1-' by Fitch. The affirmations reflect a stable relationship between credit enhancement and future expected losses, and affect approximately $12.62 billion in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and future expected losses and high delinquencies. The downgrades affect approximately $136.98 million in outstanding certificates. The pools with negative rating actions have a greater percentage of loans in the 60+ delinquency buckets (includes Bankruptcy, Foreclosure, and Real Estate Owned) than the vintage average for Fitch-rated transactions. These pools also have a higher concentration of adjustable-rate and interest-only loans, in addition to a higher concentration of loans in California and the Rust Belt states. Furthermore, the overcollateralization amounts are off their targets. The pool factors (current collateral balance as a percentage of initial collateral balance) for all transactions range from approximately 32% to 70%, and are seasoned within a range of 14 months to 25 months. The amounts of collateral in the 60+ buckets range from approximately 11.59% to 18.89%, and the losses to date range from approximately 0.32% to 0.87%. Fitch will continue to closely monitor these transactions. TELOS CORP: Dec. 31 Balance Sheet Upside-Down by $126.7 Million --------------------------------------------------------------- Telos Corporation's balance sheet at Dec. 31, 2006, showed $48.5 million in total assets and $175.2 million in total liabilities, resulting in a $126.7 million total stockholders' deficit. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $39.7 million in total current assets available to pay $57.8 million in total current liabilities. Telos Corp. reported a net loss of $29.7 million for the year ended Dec. 31, 2006, compared with a net loss of $15.1 million for the year ended Dec. 31, 2005. The increase in net loss is primarily attributable to interest expense which increased $11.8 million in 2006, primarily due to the accretion and dividend accrual adjustments on the Public Preferred Stock. Revenue decreased by 1.2% to $140.9 million for 2006, compared to revenue of $142.6 million for 2005. The decrease in revenue from 2005 to 2006 was due to a decrease of $14.8 million in product revenue, offset by an increase of $13 million in services revenue. Gross profit decreased 9.2% from $24.1 million for 2005 to $21.8 million for 2006. The decrease was attributable to a relatively higher percentage of sales concentrated in lower margin products. Selling, general, and administrative expenses increased 3.2% from $29.9 million for 2005 to $30.9 million for 2006. The company recorded $134,000 and $468,000 of losses from affiliate for 2006 and 2005, respectively, representing equity losses from Enterworks. At Dec. 31, 2006, the company had outstanding borrowings of $12.6 million and unused borrowing availability of $700,000 on the $22.5 million revolving credit facility with Wells Fargo Foothill. For the year ended Dec. 31, 2006, cash provided by continuing operating activities was $1.4 million. Cash used in investing activities was approximately $800,000. Cash used in financing activities was approximately $500,000. 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?1df3 About Telos Corporation Telos Corporation (OTC BB: TLSRP.OB) -- http://www.telos.com/-- provides IT solutions and services to the federal government. Xacta Corporation, its subsidiary for security solutions, offers enterprise IT security management solutions, enterprise security consulting services, secure networking, secure enterprise messaging, and secure identity management solutions. TRIARC COS: To Sell Interest in Deerfield & Co. for $300 Million ---------------------------------------------------------------- In connection with its corporate restructuring, Triarc Companies Inc. disclosed that a definitive agreement has been entered into pursuant to which Deerfield Triarc Capital Corp., a diversified financial company that is externally managed by a subsidiary of Deerfield & Company LLC, will acquire Deerfield, a Chicago-based fixed income asset manager in which Triarc owns a controlling interest. The total consideration to be received by Triarc and other members of Deerfield is approximately $300 million, consisting of: * $145 million in cash, approximately 9.6 million shares of DFR common stock (having a current value of approximately $145 million), * the distribution of approximately 309,000 shares of DFR common stock currently owned by Deerfield (having a current value of approximately $4.6 million), and * cash distributions from Deerfield of approximately $4 million prior to the closing. The consideration to be received by the sellers is subject to adjustment under certain circumstances. Accordingly, Triarc expects to receive a minimum of approximately $170 million in consideration for its capital interest of approximately 64% and its profits interest of at least 52% in Deerfield. As a result of the transaction, Triarc expects that it will own in excess of 10% of DFR's common stock. The consideration to be received by Triarc is subject to adjustment under certain circumstances. The total consideration to be received by the sellers is approximately two times Deerfield's enterprise value of approximately $145 million when Triarc purchased its control stake in July 2004. The transaction, which is expected to close during the 2007 third quarter, is subject to customary closing conditions, including, without limitation, the receipt by DFR of financing for the cash portion of the purchase price and related transaction costs, receipt of certain third party consents and other conditions set forth in the definitive agreement, including the expiration or termination of the applicable waiting periods under the Hart- Scott-Rodino Antitrust Improvements Act of 1976. Deerfield has the right to terminate the definitive agreement if DFR does not deliver by May 19, 2007 financing commitments for the transaction in form and substance reasonably satisfactory to Deerfield. In addition, the transaction is subject to approval by DFR stockholders representing: (1) a majority of the votes cast at a meeting to approve the transaction and (2) a majority of the votes cast by stockholders not affiliated with Deerfield. A stockholders' vote on the proposed transaction is expected to be held during the 2007 third quarter. When the transaction closes, DFR will discontinue the use of "Triarc" in its name. Since Triarc's acquisition of its controlling interest in July 2004, Deerfield has significantly expanded its investment advisory platform. With offices in Chicago, New York and London, Deerfield is an SEC-registered fixed income alternative asset manager with strong growth potential. Deerfield specializes in credit and structured investment solutions and products, with teams dedicated to government arbitrage, bank loans, asset-backed securities, corporate debt securities, real estate and leveraged finance. In addition, since July 2004, assets under management have grown from approximately $8.1 billion to approximately $13.2 billion (including $765 million of assets relating to DFR) at Dec. 31, 2006. The combination of DFR with Deerfield creates a well-positioned publicly traded fixed income alternative asset manager. By internalizing its investment manager, DFR effectively aligns interests, diversifies and expands its revenue and fee income stream without the payment of management and related incentive fees and provides immediate opportunity to create an efficient, lower costing operating structure, thus creating the potential for significant capital appreciation for DFR shareholders through increased earnings, higher return on equity and multiple expansion. This combination, furthermore, is expected to enhance Deerfield's brand positioning in the alternative investments marketplace, thereby providing DFR with greater access to both additional capital and new talent. The definitive agreement to sell Deerfield to DFR was the result of an extensive sale process and provides Triarc shareholders with an attractive valuation for Deerfield as well as the potential opportunity to participate in the future growth of DFR. Following the consummation of the sale of Deerfield, Triarc's sole operating business will be the Arby's(R) restaurant business. Triarc, through its subsidiaries is the franchisor of the Arby's(R) restaurant system and the owner and operator of over 1,000 Arby's restaurants. There are approximately 3,600 Arby's restaurants worldwide. Shareholders' Dividend Triarc also said that options for the shares of DFR common stock to be received upon the sale of Deerfield are under review and could include a special dividend or distribution to shareholders of such shares. In 2006, in addition to regular quarterly cash dividends, Triarc declared special extraordinary cash dividends on its outstanding common stock, totaling $0.45 per share. "Upon completion of the sale, we will have realized substantial value from our investment in Deerfield," Triarc's President and Chief Operating Officer, Peter W. May said. "In the last several years, we have worked closely with Greg Sachs and his team at Deerfield to expand its unique alternative assets platform. We are proud of what we have accomplished with the Deerfield team. "Upon the consummation of the Deerfield transaction, Triarc will be one step closer towards finalizing our corporate restructuring that seeks to unlock the significant value of our two key businesses, Deerfield and Arby's. We expect to update our shareholders on other matters related to our corporate restructuring as soon as practicable." "Roland Smith and his talented team have worked diligently over the last year to prepare for the coming months when Triarc will be a restaurant company," Triarc's Chairman and Chief Executive Officer, Nelson Peltz said. "We are excited about the evolution of Triarc into a publicly traded restaurant company given its potential for growth, its strong cash flow generation, its best- in-class restaurant operations, coupled with a vibrant 40 year old brand and a highly supportive and strong franchisee network. We believe that Arby's will be able to significantly increase value through both organic growth and the acquisition of other restaurant companies." Goldman Sachs & Co. and Jefferies & Company acted as Triarc's financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Triarc's legal counsel in the Deerfield transaction. Triarc is a holding company and, through its subsidiaries, is currently the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield, an asset management firm. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of December 31, 2006, 1,061 were owned and operated by our subsidiaries. Deerfield, through its wholly owned subsidiary Deerfield Capital Management LLC, is a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with approximately $13.2 billion under management as of Dec. 31, 2006. About Triarc Triarc Companies, Inc., (NYSE: TRY.B) -- http://www.triarc.com/-- is a holding company and, through its subsidiaries, is currently the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield & Company LLC, an asset management firm. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of December 31, 2006, 1,061 were owned and operated by our subsidiaries. Deerfield, through its wholly-owned subsidiary Deerfield Capital Management LLC, is a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with approximately $13.2 billion under management as of Dec. 31, 2006. Sale-Leaseback Obligations A significant number of the underlying leases for the company's sale-leaseback obligations and its capitalized lease obligations, as well as its operating leases, require or required periodic financial reporting of certain subsidiary entities within its restaurant segment or of individual restaurants, which in many cases has not been prepared or reported. The company has negotiated waivers and alternative covenants with its most significant lessors which substitute consolidated financial reporting of its restaurant segment for that of individual subsidiary entities and which modify restaurant level reporting requirements for more than half of the affected leases. Nevertheless, as of Dec. 31, 2006, the company said that it was not in compliance, and remain not in compliance, with the reporting requirements under those leases for which waivers and alternative financial reporting covenants have not been negotiated. However, none of the lessors has asserted that they are in default of any of those lease agreements. The company doesn't believe that this non-compliance will have a material adverse effect on its consolidated financial position or results of operations. VILLEGAS RESTAURANT: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Villegas Restaurant, Ltd. 1735 Grand River Avenue Okemos, MI 48864 Tel: (517) 347-2080 Bankruptcy Case No.: 07-03003 Type of Business: The Debtor operates a Midwestern-themed restaurant. See http://www.restaurantvillegas.com/ Chapter 11 Petition Date: April 25, 2007 Court: Western District of Michigan (Grand Rapids) Debtor's Counsel: Kevin B. Schumacher, Esq. Glassen Rhead McLean Campbell & Schumacher 533 South Grand Avenue Lansing, MI 48933 Tel: (517) 482-3800 Fax: (517) 482-8253 Estimated Assets: Unknown Estimated Debts: $50,000 to $100,000 Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Rewards Network Inc. $45,000 2 North Riverside Plaza, Suite 950 Chicago, IL 60605 Consumers Energy $7,329 Lansing, MI 48937-0001 Auto-Owners Insurance $4,696 P.O. Box 30315 Lansing, MI 48864-1803 Stan Setas Produce $4,591 Meridian Township $3,061 R. Hirt Jr., Co. $2,916 NP Premium Finance Company $1,800 Community Based Interventions $1,414 Delau Fire Services $1,330 Ecolab $923 Accident Fund $772 Sugar Bush Supplies Co. $619 Westwind Milling Co. $530 Earthly Delights, Inc. $469 Cross Refrigeration, Inc. $355 Meijer $285 TDS Metrocom $211 Deluxe Business Checks & Solutions $104 Great Lakes Window Cleaning $35 WERNER LADDER: Court Approves Sale of Werner Co. for $270 Million ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has entered an order approving the sale of substantially all of the assets of Werner Holding Co. (DE), Inc. aka Werner Ladder Co. to a group including Black Diamond Capital Management, Brencourt Advisors LLC, Levine Leichtman Capital Partners III, L.P., Milk Street Investors LLC, Schultze Asset Management LLC, and the TCW Group, Inc. (TCW). The transaction is expected to close in May of 2007. The transaction, valued at approximately $270 million, represents a higher price than the Stalking Horse bid selected by the Company in March of 2007. The transaction includes a comprehensive agreement among each of the creditor constituencies, the repayment of the company's first lien debt, a cash distribution to second lien holders, the payment of significant trade claims in the normal course and the potential for unsecured creditors to realize incremental value. The company will continue to operate in the normal course of business and ongoing customers, vendors, and employees will be unaffected. The sale transaction will substantially reduce Werner's debt and overall leverage as over $300 million of liabilities will be extinguished through this transaction. Werner will benefit from an improved capital structure and liquidity that will allow the company to serve its customers and meet all of its future obligations. "We are very pleased the Court has approved the sale order," James J. Loughlin, Jr., Werner's Interim Chief Executive Officer, said. "This is a good result for Werner and its employees and positions the Company for future success. We remain committed to serving our customers and teaming with our suppliers and other business partners to remain the leader in each of our product segments." Werner Co. was advised by Loughlin Meghji + Company, Willkie Farr & Gallagher LLP, and Rothschild Inc. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. WESCO DISTRIBUTION: Inks $365MM Credit Facility with GE Commercial ------------------------------------------------------------------ GE Commercial Finance Corporate Lending provided a $365 million asset-based credit facility to WESCO Distribution, Inc. The transaction, arranged by GE Capital Markets, refinances a previous facility and includes a significant line increase. WESCO will use the facility for ongoing working capital needs. "By extending our relationship with GE, we have a lender who knows our business and works closely with our organization to understand our evolving financing needs," Stephen A. Van Oss, CFO for WESCO, said. "The new facility GE has structured provides us with increased flexibility and liquidity to help foster our growth strategy." "Understanding the business lifecycles of our clients allows us to continuously deliver financing to help support their business plans," Tom Quindlen, President and CEO of GE Corporate Lending, said. "Whether asset-based, cash flow or structured finance, we're dedicated to finding the right solution to meet their needs." Founded in 1922 in Pittsburgh, Pennsylvania, WESCO Distribution Inc., a primary operating entity of WESCO International, Inc. (NYSE: WCC), distributes electrical construction products and electrical and industrial maintenance, repair and operating supplies. WESCO operates seven fully automated distribution centers and approximately 400 full-service branches in North America and selected international markets. As of April 24, 2007, WESCO Distribution, Inc., carries Moody's Investors Service's Ba3 Senior Unsecured rating. WII COMPONENTS: S&P Withdraws B Rating on Proposed $179MM Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B' rating and '2' recovery rating on the proposed $179 million first-lien credit facility and its 'CCC+' rating and '5' recovery rating on the proposed $64 million second-lien facility of WII Components Inc.(B/Negative/--). "The withdrawal of the ratings on the proposed bank facilities followed the company's announcement that it was not proceeding with the previously planned refinancing," said Standard & Poor's credit analyst Sean McWhorther. As a result, the tender offer for WII's existing senior unsecured notes was not satisfied, and the notes will remain in place. WII Components is a leading manufacturer of wood cabinet doors, hardwood components, and engineered wood products in the U.S., selling primarily to kitchen and bath cabinet OEMs. WOLVERINE TUBE: Posts $79MM Recurring Losses in Year Ended Dec. 31 ------------------------------------------------------------------ Wolverine Tube Inc. reported results for the full year and fourth quarter of 2006. Net loss for the year ended Dec. 31, 2006, was $79.2 million compared with a net loss of $38.6 million for 2005. Included in these results were after tax restructuring and other charges of $75.3 million in 2006 and $17.2 million in 2005. The charges in 2006 related to providing: a) a $23.9 million, non-cash allowance to reflect an adjustment to the valuation of the company's Canadian company's deferred tax assets; b) a $44 million in restructuring and other charges in conjunction with the closing of the Montreal, Ontario and Jackson, Tennessee facilities, well as the consolidation of the company's U.S. distribution facility into the Decatur, Alabama plant site; and c) a $7.4 million for advisory fees and expenses for professional services incurred in conjunction with the company's balance sheet restructuring. In 2005, the restructuring and other charges of $17.2 million related to: a) a $12.6 million, non-cash charge to provide a partial adjustment to the valuation allowance for deferred tax assets; b) charges associated with the termination and freezing of the company's U.S. defined benefit plants; c) employee costs associated with restructuring of the company's corporate organization; and d) a loss on the sale of the Jackson facility's real estate well as the corporate airplane. Excluding these restructuring and other charges, the net loss would have been $3.9 million in 2006 compared with a net loss of $21.4 million in 2005. Net sales were $1.4 billion in 2006, compared to $873.5 million in 2005. This 61% increase in net sales reflects the 84%, year over year, increase in the average COMEX price of copper, which is a direct pass through to our commercial products customers. Additionally, a 7.2% volume improvement and a 9.4% increase in unit fabrication revenues contributed to the improved net sales. For the fourth quarter of 2006, which historically is the company's weakest, the net loss was $34 million as compared to a net loss of $19.2 million in the same period of 2005. Included in the 2006 and 2005 results were $25 million and $16 million in after tax charges, relating primarily to the deferred tax valuation allowance, restructuring charges and advisory fees and expenses. Excluding these charges in both periods, the net loss would have been $9 in the fourth quarter of 2006 and a net loss of $3.3 million in the fourth quarter of 2005. In mid February 2007 the company completed the first phase of its recapitalization plan," Jed Deason, chief financial officer, said. "A sale of $50 million in preferred stock to The Alpine Group, Inc. and a fund managed by Plainfield Asset Management LLC. The company's recapitalization plan will ultimately provide at least $75 million, and could provide up to approximately $135 million, in total equity proceeds to Wolverine. The investment by these two organizations with proven track records speaks well for the future of Wolverine." "Further, 2006 was an unusual year from an operating perspective," Deason stated. "The year began with the residential air conditioning OEMs transitioning to the manufacturing of 13 SEER units which increased demand in the first half of the year, proceeded by a weaker third and fourth quarter as the OEMs adjusted their levels of inventory. Demand and pricing in the wholesale markets were extremely robust in the second quarter and while pricing remained above average in the last half of the year, demand dropped by almost 446% with the slowing in residential construction and the continuing substitution effect of plastic in the market. Additionally, in 2006 the company was able to manage its working capital and cash requirements through improved inventory turns and decreasing days sales outstanding as required to respond to the historically high copper prices." The company has completed the initial phase of its balance sheet restructuring with the preferred equity investment of $50 million by The Alpine Group Inc. and a fund managed by Plainfield Asset Management LLC. The company is now working on phases two and three of the capitalization plan which will include a $51.1 million common stock rights offering and the potential exchange offer to exchange and modify the terms of its 7.375% Senior Notes, due in August 2008. The company utilized the initial $50 million of proceeds from its recapitalization plan to reduce the amounts outstanding on the company's liquidity facilities. Thus, as of March 2, 2007, total North American cash and availability under the receivables sales facility and the secured revolving credit facility was approximately $101.7 million, of which $23.3 million is utilized, leaving total North American cash and liquidity facility availability of $78.4 million, which is made up of: (1) $11.7 million in cash on hand in North America; (2) $55 million in availability under the receivables sales facility; and (3) $11.7 million in additional borrowing availability under the secured revolving credit facility. At Dec. 31, 2007, the company's balance sheet showed total assets of $455.33 million, total liabilities of $366.15 million, and total stockholders' equity of $89.18 million. About Wolverine Tube Wolverine Tube Inc. (Pink Sheets:WLVT) -- http://www.wlv.com/and http://www.silvaloy.com/-- supplies copper and copper alloy tube, fabricated products and metal joining products. * * * As reported in the Troubled Company Reporter on Feb. 8, 2007, Standard & Poor's Ratings Services revised the CreditWatch implications to positive from negative for all of its ratings on Wolverine Tube Inc., including its 'CC' corporate credit rating. The ratings had first been placed on CreditWatch on Nov. 1, 2006. WOODLAND AUTO: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Woodland Auto Valet, LLC 555 Chester Avenue Woodland Park, CO 80863 Tel: (719) 687-3939 Bankruptcy Case No.: 07-14059 Type of Business: The Debtor's members, Kenneth G. Hazlett & Diana N. Hazlett, filed for Chapter 11 protection on November 20, 2006 (Bankr. D. Colo. Case No. 06-18535). Chapter 11 Petition Date: April 24, 2007 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Michael A. Slivka, Esq. Michael A. Slivka, P.A. 225 Thames Drive Colorado Springs, CO 80906-5952 Tel: (719) 576-6990 Fax: (719) 576-6963 Total Assets: $2,665,507 Total Debts: $2,005,126 Debtor's 21 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Park State Bank & Trust $35,171 P.O. Box 9 Secured: Woodland Park, CO 80866 $50,000 Tim Levulis $20,000 175 Still Forest Lane Woodland Park, CO 80863 Aquila $10,503 P.O. Box 4649 Carol Stream, IL 60197-4648 Woodland Park Utilities $8,314 Innovation Giftware Corp. $4,206 Keeping Peace, Inc. $4,132 Big Sky Carvers/MT Silversmith $3,968 Gift Box Corporation of America $3,690 Department 56 $3,569 Hutchinson Lumber $3,276 Blair Enterprises, LLC $2,632 Design Design, Inc. $2,446 Rial Heating & Air Conditioning $2,446 Ty, Inc. $2,111 Frontier Mechanical Systems, Inc. $2,070 Fitz and Floyd, Inc. $1,924 Colorado Department of Revenue $1,917 Master Roofing Co., LLC $1,887 Aurora World, Inc. $1,669 The Ashton Co. $1,750 Ashton Fine Arts $1,750 * S&P Puts Ratings on 52 Classes Under Negative CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 52 subordinate classes from 45 residential mortgage-backed securities transactions issued in 2005 on CreditWatch with negative implications. The affected classes are rated 'A-','BBB+', 'BBB-', 'BB+', 'BB', and 'B'. The CreditWatch placements reflect early signs of poor performance of the collateral backing these transactions. The percentage of loans in these pools that are severely delinquent (90-plus days, foreclosure, and REO) for the Alt-A transactions ranges from 0.47% (IndyMac INDA Mortgage Loan Trust 2005-AR2) to 11.20% (American Home Mortgage Assets Trust 2005-2, loan group 1) of the current pool balances. Cumulative losses range from zero (several of the pools) to 0.20% (Adjustable Rate Mortgage Trust 2005-1, loan group 5) of the original pool balances. The percentage of loans in these pools that are severely delinquent for the subprime transactions ranges from 7.37% (Ownit Mortgage Loan Trust series 2005-5) to 17.04% (Aegis Asset Backed Securities Trust 2005-5) of the current pool balances. Cumulative losses range from to 0.03 (CWABS Asset-Backed Certificates Trust 2005-IM2) to 0.88% (Structured Assets Investment Loan Trust 2005-HE1) of the original pool balances. Most of these transactions have not experienced significant losses. The placement of our ratings on CreditWatch when a transaction has not experienced a loss represents a new methodology derived from our normal surveillance practice. S&P had not used this methodology before applying it to the 2006 and 2005 vintages because transactions from earlier vintages did not see the combination of early high delinquencies and minimal or no losses. Because these deals have not incurred substantial cumulative realized losses, S&P measured deal performance against the stressed time to disposition of the loans and a reinstatement rate assumption of zero for all severely delinquent loans. Many of the 2005-vintage transactions may be showing weakness because of origination issues, such as aggressive residential mortgage loan underwriting, first-time homebuyer programs, piggyback second-lien mortgages, hybrid ARMs entering their reset periods, and the concentration of affordability loans. Credit support for each series is derived from either subordination or a combination of subordination, excess interest, and overcollateralization. O/C levels generally are below their targets because early losses are outpacing available excess interest, prohibiting growth toward the targeted amounts, and subordination amounts have not yet declined. Standard & Poor's will continue to closely monitor the performance of these transactions. Over the next three months, S&P will monitor any losses incurred from the liquidation of REO assets. If these losses are material, and if delinquencies continue at their present pace, S&P will likely lower its ratings up to three notches, depending on individual performance. Conversely, if the delinquency rates decline and the transactions do not realize substantial cumulative losses, S&P will affirm the ratings and remove them from CreditWatch negative. These transactions are collateralized by Alt-A and subprime mortgage loans. The transactions were initially backed by pools of fixed- and adjustable-rate mortgage loans secured by first, second, or third liens on one- to four-family residential properties. ALT-A RATINGS PLACED ON CREDITWATCH NEGATIVE Adjustable Rate Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-1 5-M-4 BBB-/Watch Neg BBB- 2005-2 6-M-5 BBB/Watch Neg BBB 2005-12 5-M-5 BBB-/Watch Neg BBB- Alternative Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-2 B-3 BB/Watch Neg BB 2005-AR1 M-7 BBB+/Watch Neg BBB+ American Home Mortgage Assets Trust 2005-2 Rating ------ Series Class To From ------ ----- -- ---- 2005-2 1-B-4 BB/Watch Neg BB 2005-2 1-B-5 B/Watch Neg B 2005-2 2-B-5 B/Watch Neg B Bear Stearns Asset Backed Securities I Trust 2005-AC5 Rating ------ Series Class To From ------ ----- -- ---- 2005-AC5 II-B-5 B/Watch Neg B Citigroup Mortgage Loan Trust Inc. Rating ------ Series Class To From ------ ----- -- ---- 2005-5 I-B5 B/Watch Neg B CWABS Asset-Backed Certificates Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-AB4 B BBB+/Watch Neg BBB+ 2005-AB5 B BBB+/Watch Neg BBB+ 2005-IM1 B BBB-/Watch Neg BBB- 2005-IM3 B BBB/Watch Neg BBB Deutsche Alt-A Securities Inc. Mortgage Loan Trust Series 2005-AR1 Rating ------ Series Class To From ------ ----- -- ----- 2005-AR1 B-4 B/Watch Neg B GMACM Mortgage Loan Trust 2005-AF2 Rating ------ Series Class To From ------ ----- -- ---- 2005-AF2 B-2 B/Watch Neg B ] Impac CMB Trust Series 2005-5 Rating ------ Series Class To From ------ ----- -- ---- 2005-5 B A-/Watch Neg A- IndyMac INDA Mortgage Loan Trust 2005-AR2 Rating ------ Series Class To From ------ ----- -- ---- 2005-AR2 B-5 B/Watch Neg B IndyMac INDB Mortgage Loan Trust 2005-1 Rating ------ Series Class To From ------ ----- -- ---- 2005-1 B-5 B/Watch Neg B IndyMac INDX Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ----- 2005-AR19 B-5 B/Watch Neg B 2005-AR21 B-5 B/Watch Neg B 2005-AR33 B-5 B/Watch Neg B Lehman XS Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-3 1-M3 BBB/Watch Neg BBB 2005-8 1-M6 BBB/Watch Neg BBB Morgan Stanley Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-2AR B-5 B/Watch Neg B 2005-5AR 1-B-3 BBB-/Watch Neg BBB- 2005-5AR B-5 B/Watch Neg B 2005-11AR B-5 B/Watch Neg B Terwin Mortgage Trust Series TMTS Rating ------ Series Class To From ------ ----- -- ---- 2005-18ALT B-4 BB/Watch Neg BB 2005-18ALT B-5 B/Watch Neg B Wells Fargo Alternative Loan Trust 2005-2 Rating ------ Series Class To From ------ ----- -- ---- 2005-2 B-2 BBB-/Watch Neg BBB- 2005-2 B-3 BB+/Watch Neg BB+ Subprime Ratings Placed on Creditwatch Negative Ace Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ----- 2005-HE2 B-2 BB/Watch Neg BB 2005-HE3 B-3 BB/Watch Neg BB 2005-HE5 B-3 BB/Watch Neg BB Aegis Asset Backed Securities Trust Rating ------ Series Class To From ------ ----- -- ----- 2005-5 B7 BB/Watch Neg BB CWABS Asset-Backed Certificates Trust Rating ------ Series Class To From ------ ----- -- ----- 2005-IM2 B BBB/Watch Neg BBB FBR Securitization Trust 2005-2 Rating ------ Series Class To From ------ ----- -- ---- 2005-2 M-10 BBB-/Watch Neg BBB- Fremont Home Loan Trust 2005-2 Rating ------ Series Class To From ------ ----- -- ---- 2005-2 B-5 BB-/Watch Neg BB- Merrill Lynch Mortgage Investors Trust 2005-FM1 Rating ------ Series Class To From ------ ----- -- ---- 2005-FM1 B-3 BBB-/Watch Neg BBB- Option One Mortgage Loan Trust 2005-1 Rating ------ Series Class To From ------ ----- -- ---- 2005-1 M-9 BBB-/Watch Neg BBB- Ownit Mortgage Loan Trust Series 2005-5 Rating ------ Series Class To From ------ ----- -- ---- 2005-5 B-3 BBB-/Watch Neg BBB- Structured Asset Investment Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-8 B BB+/Watch Neg BB+ 2005-9 B2 BB/Watch Neg BB 2005-11 B1 BB+/Watch Neg BB+ 2005-11 B2 BB/Watch Neg BB 2005-HE1 B3 BB+/Watch Neg BB+ Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-2HE B-3 BBB-/Watch Neg BBB- 2005-6HE B-5 BBB/Watch Neg BBB 2005-6HE B-6 BBB-/Watch Neg BBB- 2005-10HE B-7 BB/Watch Neg BB 2005-14HE B-3 BBB-/Watch Neg BBB- * BOOK REVIEW: A Treatise on the Right of Property in Tide Waters ----------------------------------------------------------------- Author: Joseph K. Angell Publisher: Beard Books Paperback: 440 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/158798105X/internetbankrupt Jospeh Angell's A Treatise on the Right of Property in Tide Waters has been widely received as a leading authority on this topic both in the United States and in England. This was the first detailed work published in the United States concerning principles which relate to the right of property in tide waters, i.e., those waters in which there is an ebbing and flowing of the tide. There is a broad scope of topics covering such areas as the development of common law doctrines, the right of fishery, delimitation, the right to seaweed, rights acquired by prescription and custom, statutes and usage, adjoining owner rights, and wrecked property thrown on the shore. ********* 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, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, 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 ***