/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070621.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 21, 2007, Vol. 11, No. 145 Headlines 201 FOREST: Case Summary & Two Largest Unsecured Creditors 360 GLOBAL: Wants Exclusive Plan Filing Period Extended to Oct. 3 AINSWORTH LUMBER: S&P Rates Proposed CDN$115 Million Loan at B- AKRON THERMAL: Lease Pact Rejection Prompts Bankruptcy Filing AKRON THERMAL: Case Summary & 20 Largest Unsecured Creditors AKRON THERMAL: Seeks Court Approval to Use TVII's Cash Collateral AMERIPATH INC: Quest Diagnostics Completes $350MM Notes Offering AMERIPATH INC: S&P Withdraws Ratings on Completed Quest Offer AMP'D MOBILE: U.S. Trustee Appoints Seven-Member Creditors' Panel AMP'D MOBILE: Wants Further Access to Kings Road Cash Collateral ANTHONY MCFADDEN: Case Summary & Three Largest Unsecured Creditors AQUILA INC: Redeems $344 Million Debt Securities ASARCO LLC: Court Okays Tax Protocol Agreement with ASARCO Inc. ASARCO LLC: Court Gives Nod on Grant Thornton as Auditors ASARCO LLC: Court Okays Patton Boggs as Special Counsel ASSET ACCEPTANCE: Board Affirms Special One-Time Cash Dividend BANC OF AMERICA: Fitch Affirms Low-B Ratings on Six Classes BRIDGETECH HOLDINGS: March 31 Balance Sheet Upside-Down by $5.1MM CARIBOU RESOURCES: July 30 Meeting Set to Decide on Jed Oil Offer CATALYST PAPER: Plans $200 Million Senior Notes Private Placement CHIQUITA BRANDS: Executives Adopt Prearranged Stock Trading Plan CITY OF DENVER: Moody's Junks Rating on $275 Million Bonds CLEVELAND-CLIFFS: Will License Kobe Steel's Iron Nugget Technology CMP SUSQUEHANNA: Debt Leverage Prompts S&P's Positive Outlook CMS ENERGY: Closes Sale of Brazilian Unit for $211.1 Million COUNTERPATH SOLUTIONS: Inks Deal to Purchase NewHeights Software CREDIT SUISSE: Fitch Lowers Ratings on Class M & N Certificates DANKA BUSINESS: Inks New $145 Million Senior Facility with GE DDS TECHNOLOGIES: Board Gives Nod to Cease All Business Operations DIRECTV HOLDINGS: Fitch Affirms BB Issuer Default Rating DYNEA CANADA: Highly Leveraged Capital Cues S&P's B Credit Rating EINSTEIN NOAH: Redemption Cues Moody's to Withdraw B3 Rating ENVIRONMENTAL ENERGY: Posts $172,530 Net Loss in Qtr. Ended Mar 31 EXPEDIA INC: S&P Cuts Ratings to BB+ and Puts Negative Watch EXPRESS GROUP: Weak Operating Results Cue S&P's B Credit Rating EXPRESS LLC: Moody's Puts Corporate Family Rating at B2 FAIRFAX FINANCIAL: Completes 7-3/4% Senior Notes Exchange Offer FIELDSTONE MORTGAGE: S&P Lowers Ratings on Three Classes FIRST UNION: Fitch Holds Low-B Ratings on Class L & M Certificates FOOT LOCKER: S&P Retains Negative CreditWatch on BB+ Credit Rating FREEDOM COMMS: Weak Results Cue S&P to Revise Outlook to Negative FRESENIUS MEDICAL: Plans $500 Million Senior Notes Offering GABRIEL TECH: Posts $5.2 Million Net Loss in Qtr. Ended March 31 GLOBAL ENT: Posts $593,959 Net Loss in Quarter Ended March 31 GS MORTGAGE: Fitch Rates $533.9MM Class L Certificates at BB+ HARBORVIEW MORTGAGE: Moody's Rates Class B-8 Certificates at Ba2 HOME EQUITY: Increase in Projected Loss Cues Moody's Review HUDSON PRODUCTS: Planned Smithco Buy Cues S&P to Affirm B Rating HYDROCHEM INDUSTRIAL: S&P Junks Rating on $50 Million Term Loan HYDROGEN POWER: Posts $16.6 Mil. Net Loss in Qtr. Ended March 31 INDUSTRIAL DEVELOPMENT: S&P Rates $105 Mil. Revenue Bonds at BB+ INSMED INC: Has Until December 17 to Regain Nasdaq Compliance INTELSAT LTD: Sale of 76% Stake Prompts S&P to Lower Ratings INTERTAPE POLYMER: Board Finds Dissident's Proposals Flawed INTERTAPE POLYMER: Annual and Special Meeting Set for June 26 ISLE OF CAPRI: Competitive Conditions Cue S&P's Negative Outlook INVERNESS MEDICAL: S&P Affirms B+ Credit Rating and Removes Watch JED OIL: Caribou Shareholders to Decide on Merger at July 30 Meet JOURNAL REGISTER: Revenues at $37.6MM in Four Weeks Ended June 3 KAMP RE: S&P Retains Negative Watch on Senior Debt's CC Rating KID CASTLE: Losses Cue Brock Schechter's Going Concern Doubt KOWBOYS KARS: U.S. Trustee Wants Case Converted to Chapter 7 LAZARD LTD: Affiliate Prices $600 Million Senior Notes Offering MERRILL LYNCH: Fitch Affirms Low-B Ratings on Six Certificates MORGAN STANLEY: Fitch Affirms Low-B Ratings on Six Classes MORGAN STANLEY: Moody's Rates Class B-5 Certificates at (P)Ba2 MORGAN STANLEY: S&P Lowers Rating on Class A-5 Notes to B from B+ NEW CENTURY: Mood's Downgrades Ratings on 18 Tranches NY WESTCHESTER: Court OKs InterCare as Special Medicare Consultant PPM AMERICA: Fitch Puts Ratings on 3 Notes Under Negative Watch PRESIDENT CASINOS: Deloitte & Touche Raises Going Concern Doubt PROSPECT MEDICAL: Moody's Rates Proposed $160 Mil. Facility at B3 PROSPECT MEDICAL: Increased Leverage Cues S&P's B+ Credit Rating QPC LASERS: March 31 Balance Sheet Upside-Down by $3.5 Million RAPID LINK: April 30 Balance Sheet Upside-Down by $4.04 Million REGENCY GAS: Partner's Interest Sale Cues S&P's Developing Watch REYNOLDS AMERICAN: S&P Puts Corporate Credit Rating at BB+ RICHARD BRUHN: Case Summary & 20 Largest Unsecured Creditors SHEKHAR GIRI: Voluntary Chapter 11 Case Summary SMITHFIELD FOODS: Moody's Rates New $500 Million Sr. Notes at Ba3 SMITHFIELD FOODS: S&P Rates $500 Million Sr. Unsecured Notes at BB SOLUTIA INC: Wants Equistar & Millenium Settlements Approved SOLUTIA INC: Recorded June 1 to 15 Claim Transfers SOURCE INTERLINK: Moody's Places Corporate Family Rating at B2 SOUTH COAST: Fitch Downgrades Rating on $26MM Class B Notes to B STATER BROS.: Redeems $175 Million Floating Rate Senior Notes STEEL DYNAMICS: Expands Credit Facility from $350MM to $750MM SWEETSKINZ HOLDINGS: Judge Sontchi Confirms Amended Chap. 11 Plan TERWIN MORTGAGE: S&P Puts Default Rating on Class B-1 Loans THERMACLIME INC: Good Operating Results Cue S&P to Lift Ratings TRIBEWORKS INC: Inks Deal with West Coast for $5MM Debt Financing TRIUMPH HEALTH: Debt Increase Cues Moody to Affirm B2 Corp. Rating TURNING STONE: Moody's Affirms B1 Corporate Family Rating TURNING STONE: S&P Upgrades Ratings and Removes Developing Watch UNITED AIR: Moody's Rates Class C Certificates at B1 UNITED AIR: S&P Puts Preliminary B Rating on Class C Certificates VALENCE TECHNOLOGY: PMB Helin Raises Going Concern Doubt VENOCO INC: Plans Public Offering for 6.1 Million Shares WARNER CHILCOTT: Moody's Lifts SGL Rating to SGL-2 from SGL-1 WENDY'S INT'L: Moody's Cuts All Ratings & May Downgrade Further WENDY'S INT'L: Possible Sale Prompts S&P to Lower Ratings to BB- WHOLE FOODS: CEO Posts Blog on FTC's Challenge of Merger Deal WYNN RESORTS: Calls for $250 Mil. 6% Convertible Notes Redemption * Sean McGuinness Joins Chadbourne & Parke as Counsel in DC Office * HughesWattersAskanase Adds Four Counsel to Various Practices * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 201 FOREST: Case Summary & Two Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 201 Forest Street LLC 40 Mechanic Street, Suite 300 Marlborough, MA 01752 Bankruptcy Case No.: 07-42296 Type of Business: The Debtor's affiliate, 219 Forest Street LLC, filed for Chapter 11 protection on May 9, 2007 (Bankr. Case No. 07-41768). Chapter 11 Petition Date: June 19, 2007 Court: District of Massachusetts (Worcester) Debtor's Counsel: D. Ethan Jeffery, Esq. Hanify & King P.C. One Beacon Street Boston, MA 02108 Tel: (617) 423-0400 Fax: (614) 423-0498 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ National Grid $1,245 Processing Center Woburn, MA 01807 Verizon $65 P.O. Box 1 Worcester, MA 01654-0001 360 GLOBAL: Wants Exclusive Plan Filing Period Extended to Oct. 3 ----------------------------------------------------------------- 360 Global Wine Company Inc. and its debtor-affiliate, 360 Viansi LLC, ask the United States Bankruptcy Court for the District of Nevada to extend the exclusive periods to: a. file a Chapter 11 plan until Oct. 3, 2007; and b. solicit acceptances of that plan until Dec. 2, 2007. The Debtors' exclusive plan filing will expire on July 5, 2007. The Debtors tells the Court that they are in the process of formulating a plan of reorganization and creating business plans to optimize the value of the estate and restructure their debt. Consequently, the Debtors say, they need more time to propose a plan. In addition, the Debtors tell the Court that plans filed by July 5, 2007, by any party would be premature. The Debtors' request for extension is made in good faith and not to pressure creditors. Headquartered in Los Angeles, California, 360 Global Wine Company and 360 Viansi LLC -- http://www.360wines.com/-- are small, diversified marketers of wine and alcoholic beverages. The company filed for Chapter 11 protection on March 7, 2007 (Bankr. Nev. Case No. 07-50205). rett A. Axelrod, Esq., at Beckley Singleton, Chartered, represents the Debtors in their restructuring efforts. David A. Honig, Esq., at Winston & Strawn LLP, represent the Official Committee of Unsecured Creditors. When the Debtors sought protection from their creditors, they listed estimated assets at $43,000,000 and debts at $39,000,000. AINSWORTH LUMBER: S&P Rates Proposed CDN$115 Million Loan at B- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' bank loan rating to Ainsworth Lumber Co. Ltd.'s proposed CDN$115 million senior secured term loan, with a recovery rating of '2', indicating a substantial (70%-90%) recovery of principal in the event of default. At the same time, Standard & Poor's affirmed the ratings, including the 'CCC+' long-term corporate credit rating, on the company. The outlook is negative. The term loan will replace the company's existing revolver and proceeds from the loan will be used for general corporate purposes, primarily to support liquidity during a period of negative free cash flow. On a pro forma basis, Ainsworth Lumber will have total debt outstanding of CDN$1.16 billion, including capitalized operating leases. "The ratings on Ainsworth Lumber reflect a highly leveraged capital structure, weak liquidity, and exposure to the volatile oriented strand board market," said Standard & Poor's credit analyst Jatinder Mall. These risks are partially mitigated by the company's strong position in the oriented strand board market and its low cost position stemming from strong assets. Ainsworth Lumber's performance continues to deteriorate due to weakness in the U.S. new home construction market. The current OSB price of about $157 per thousand square feet is very low, and should remain weak until at least year-end 2007. As well, high interest expense and capital expenditure on the Grande Prairie, Alberta, mill expansion in first-quarter 2007 resulted in negative free cash flow for the first three months of 2007. The company is taking steps to preserve liquidity and slow down its cash burn rate per quarter. As of April 2007, Ainsworth Lumber has stopped expansion of its Grande Prairie mill, which was the single biggest contributor to the high cash burn rate. In addition, the company is reducing costs, idling high cost capacity, and increasing overseas exports. Nevertheless, based on weak OSB prices S&P expect the company to continue to generate negative free cash for at least a year and a half. The negative outlook reflects the possibility of further deteriorating OSB prices or unexpected capital expenditures that could reduce liquidity further. However, a small improvement in OSB prices could boost margins and liquidity. Nevertheless, only a sustained improvement in Ainsworth Lumber's operating cash flow could help arrest the decline in liquidity and prompt us to raise the ratings on the company. AKRON THERMAL: Lease Pact Rejection Prompts Bankruptcy Filing ------------------------------------------------------------- Akron Thermal L.P. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Northern District of Ohio on June 18, 2007. The bankruptcy came as a result of recurring operating losses, and the City of Akron's drastic termination of its operating lease agreement with the Debtor. Events Leading to Bankruptcy The Debtor was formed for the purposes of operating a public utility located in the City of Akron, Ohio, specifically to provide steam and related services for heating commercial and residential properties. The Debtor's operation is comprised of two steam generation plants and 18 miles of distribution piping, which the Debtor leases from the City of Akron. As of December 2006, the Debtor owed approximately $28.4 million to the City of Akron. The accrual of these obligations was directly related to operating losses incurred dating back to 1997, under prior management. Opportunity Parkway, LLC president Jeffrey P. Bees, the general partner of the Debtor, relates that the City of Akron entered into a 10-year Operating Lease Agreement with the Debtor for the district energy system. The lease however, provided the Debtor the ability to extend and renew the initial term for one additional period of ten years. Mr. Bees tells the Court that, in line with the Agreement, the Debtor has continued restructuring its debts to the City and its major creditors. However, the City of Akron delivered on June 13, 2007 a "Notice to Leave Premises" purporting to terminate the lease. The City of Akron also issued a press release announcing its decision to turn over the district energy system to a new entity. Because of the abrupt notice, the Debtor was forced to file for bankruptcy in order to "preserve the status quo" and work toward completing the restructuring, relates Mr. Bees. Additionally, the Debtor notified the City of Akron that it exercised its right to renew and extend the initial 10-year term of the Lease. About Akron Thermal Based in Akron, Ohio, Akron Thermal L.P. -- http://www.thermalventures.com/-- operates a public utility located in the City of Akron, Ohio, and provides heating services commercial and residential properties. AKRON THERMAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Akron Thermal, L.P. 226 Opportunity Parkway Akron, OH 44307 Tel: (330) 374-0600 Bankruptcy Case No.: 07-51884 Type of Business: The Debtor operates a public utility located in the City of Akron, Ohio, and provides heating services commercial and residential properties. See http://www.thermalventures.com/ Chapter 11 Petition Date: June 18, 2007 Court: Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Daniel R. Swetnam, Esq. Tyson A. Crist, Esq. Schottenstein Fox & Dunn, Co. L.P.A. 250 West Street, Suite 700 Columbus, OH 43215 Tel: (614) 462-2225 Fax: (614) 462-5135 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thermal Ventures II, L.P. loans, advances $10,451,958 236 North Champion Street and management Youngstown, OH 44503 fees Ohio Edison electricity and $7,379,562 P.O. Box 3637 interest Akron, OH 44309-3637 City of Akron water and sewer $5,288,344 Public Utilities Bureau P.O. Box 3674 Akron, OH 44309-3674 Ohio Department of gross receipts $4,738,555 Taxation tax Public Utility Tax Section P.O. Box 530 Columbus, OH 43216-0530 Thermal Ventures, Inc. $3,643,443 29 East Front Street Youngstown, OH 44503 Ohio E.P.A. emissions fees $1,350,700 50 West Town Street, Suite 700 Columbus, OH 43215 City of Akron lease and franchise $1,227,449 Attention: Lease and Franchise Department P.O. Box 3674 Akron, OH 44309-3674 University of Akron, pre-payments $794,216 B.V.A. Attention: Mr. F. John Case, V.P. for Finance and Administration- Chief Financial Officer Buchtel Hall 222 Akron, OH 44325 North Coast Energy, Inc. natural gas $309,742 P.O. Box 71-4352 supplier Columbus, OH 43271-4352 Akron Thermal Cooling, intercompany $302,751 L.L.C. loans 236 North Champion Street Youngstown, OH 44503 Summit County, Ohio personal property $269,074 Treasurer tax 175 South Main Street, Suite 320 Akron, OH 44308-1353 East Fairfield Coal fuel supplier $263,671 10900 South Avenue P.O. Box 217 North Lima, OH 44452 Nalco Chemical Company chemical supplier $205,206 North American Energy $180,993 Ventures Ohio Edison, C.W. electricity $130,966 Probex Fluids Recovery, oil supplier $93,637 Inc. Thermal Engineering Group, engineering $87,582 Inc. services Op-Tech services $54,410 Summit Tree and Landscape fuel supplier $48,575 Seneca Steel Erectors, Inc. settlement $38,086 AKRON THERMAL: Seeks Court Approval to Use TVII's Cash Collateral ----------------------------------------------------------------- Akron Thermal L.P. asks authority from the U.S. Bankruptcy Court for the Northern District of Ohio to use the cash collateral securing the repayment of its obligations to Thermal Ventures, L.P. Financing Agreements In financing statements on record with the Office of the Ohio Secretary of State, Thermal Ventures, Inc. had a claimed interest covering the Debtor's accounts receivable resulting from providing steam service to Akron General Medical Center. The Debtor disputes this claimed interest. In addition, Thermal Ventures, L.P. filed a financing statement with the Delaware Secretary of State, covering the Debtor's collateral: -- all accounts receivable; -- all deposit accounts; and -- all proceeds and products. Subsequently, immediately prior to the Debtor's filing for bankruptcy, the Debtor obtained a loan from TVII pursuant to a: a) June 15, 2007 Demand Promissory Note in the original principal amount of up to $750,000; b) June 15, 2007 Security Agreement; and c) Open-End Leasehold Mortgage; Under the Security Agreement, the Debtor granted to TVII a security interest in substantially all of its assets. Pursuant to the Mortgage, the Debtor also granted TVII an interest in the Debtor's leasehold in the district energy system. Debtor's Cash Collateral The Debtor has three accounts: * a primary operating account; * a petty cash account; and * a payroll account. The cash in the Existing Accounts constitutes proceeds from the Debtor's sale of steam to its customers. As such, the balances in the Existing Accounts constitute cash collateral of one or more of the above secured creditors. The estimated balance in the Existing Accounts as of the Debtor's bankruptcy filing was approximately $58,000, and the Debtor received checks from customers on the date of bankruptcy totaling approximately an additional $22,000. Debtor is in the process of closing the operating and petty cash accounts. The Debtor says that it needs the cash collateral to continue its operations, including needed fuel purchases, pay operating expenses and make payroll. In order to provide TVII with adequate protection of its interest in the cash collateral under Section 363(e) of the Bankruptcy Code, the Debtor will provide TVII with replacement liens in the Debtor's post bankruptcy filing cash collateral. About Akron Thermal Based in Akron, Ohio, Akron Thermal L.P. -- http://www.thermalventures.com/-- operates a public utility located in the City of Akron, Ohio, and provides heating services commercial and residential properties. AMERIPATH INC: Quest Diagnostics Completes $350MM Notes Offering ---------------------------------------------------------------- AmeriPath Inc. reported that Quest Diagnostics Incorporated has completed its cash tender offer for the company's outstanding $350 million, 10-1/2% Senior Subordinated Notes due 2013 (CUSIP Nos. 03071D AC 3 and 03071D AA 7). The cash tender offer expired, on June 18, 2007, at 12:00 midnight, Eastern Time. As of the Expiration Date, approximately $348 million in aggregate principal amount, or 99.4% of the $350 million outstanding Notes had been validly tendered and not withdrawn. The total consideration, payable to holders who tendered their notes at or prior to June 4, 2007, 5:00 p.m., ET, was $1,088.58 for each $1,000 principal amount of Notes, while the tender offer consideration, which is payable to holders who tendered their notes after the Consent Deadline, was $1,058.58 for each $1,000 principal amount of notes validly tendered and not withdrawn prior to the Expiration Date. In addition, after receipt of the requisite consents, the company and U.S. Bank National Association, the trustee under the Indenture governing the Notes, entered into a supplemental indenture, which amended the Indenture governing the Notes to, among other things, eliminate substantially all of the restrictive covenants, certain events of default and other related provisions. The amendments to the Indenture became operative on June 8, 2007. The tender offer and the related consent solicitation to amend the indenture pursuant to which the Notes were issued were made upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated May 21, 2007, and the related Letter of Transmittal and Consent. Morgan Stanley & Co. Incorporated acted as Dealer Manager for the tender offer and consent solicitation. The Information Agent and Depositary was Global Bondholder Services Corporation. Questions regarding the tender offer and consent solicitation should contact Morgan Stanley & Co. Incorporated at (212) 761-5384 (attn: Tate Forrester). About Quest Diagnostics Headquartered in Lyndhurst, N.J., Quest Diagnostics Inc. (NYSE: DGX) -- http://www.questdiagnostics.com/-- diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. About Ameripath Inc. Headquartered in Palm Beach Gardens, Florida, Ameripath Inc. - http://www.ameripath.com/-- provides physician-based pathology, dermatopathology and molecular diagnostic services to physicians, hospitals, clinical laboratories and surgery centers. A team of sub-specialized pathologists and Ph.D. scientists provide medical expertise, diagnostic quality, and personal consultation services. AmeriPath's team of more than 400 highly trained, board-certified pathologists provide medical diagnostics services in outpatient laboratories owned, operated and managed by Ameripath, as well as in hospitals and ambulatory surgical centers. Specialty Laboratories supports local pathology and community- based medicine by partnering with pathologists and hospitals to improve patient care and reduce episodes-of-care costs. Specialty offers hospitals an extensive menu of highly advanced clinical tests used by physicians to diagnose, monitor and treat disease and a single-source solution for esoteric testing needs. AMERIPATH INC: S&P Withdraws Ratings on Completed Quest Offer ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on AmeriPath Inc., including the 'B+' corporate credit and 'B-' subordinated debt ratings. "The rating action follows the June 18, 2007 completion of Quest Diagnostics Inc.'s tender offer for AmeriPath's senior subordinated notes," explained Standard & Poor's credit analyst Jesse Juliano. Quest completed its acquisition of AmeriPath on May 31, 2007. AMP'D MOBILE: U.S. Trustee Appoints Seven-Member Creditors' Panel ----------------------------------------------------------------- Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code, Kelly Beaudin Stapleton, the United States Trustee for Region 3, appointed seven creditors to the Official Committee of Unsecured Creditors in the Chapter 11 case of Amp'd Mobile Inc.: 1. Sitel Operating Corporation f/k/a ClientLogic Operating Corporation Attn: Edward King Two American Center 3102 West End Avenue, Suite 1000 Nashville, Tennessee 37203 Tel No.: (502)589-5400 Fax No.: (502)581-1087 2. Celluphone USA, LLC Attn: Michael Mohr 6119 Washington Bldv. Los Angeles, California 90040 Tel No.: (800)927-8060 Fax No.: (800)927-2060 3. Apex Systems, Inc. Attn: Buddy Omohundro 4400 Cox Road, Suite 200 Glen Allen, Virginia 23060 Tel No.: (804)237-8333 Fax No.: (804)523-8265 4. Best Buy Company Attn: Mark Mosiniak 7601 Penn Avenue South Richfield, Minnesota 55423 Tel No.: (612)291-1000 Fax No.: (612)292-5310 5. Motorola, Inc. Attn: Brian Farley 600 North U.S. Highway 45, MD: W426P Libertyville, Illinois Tel No.: (847)523-9268 Fax No.: (847)761-1819 6. Printing Management Associates Attn: Michael Lane 17128 Edwards Road Cerritos, California 90703 Tel No.: (562)407-9977 Fax No.: (562)407-9999 7. Taxi, Inc. Attn: Richard Muhlstock 11 Beach Street 10th Floor New York, New York 10013 Tel No.: (212)414-8294 Fax No.: (212)414-8444 Headquartered in Los Angeles, Calif., Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm represent the Debtor in its restructuring efforts. When it sought bankruptcy, Amp'D Mobile listed total assets of between $1 million to $100 million and estimated debts of more than $100 million. The Debtor's exclusive period to file a plan expires on Sept. 29, 2007. (Amp'd Mobile Bankruptcy News, Issue No. 5; Bankruptcy Creditors'Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000) AMP'D MOBILE: Wants Further Access to Kings Road Cash Collateral ---------------------------------------------------------------- Amp'd Mobile Inc. seeks authority from the U.S. Bankruptcy Court for the District of Delaware to further use the cash collateral securing repayment of its obligations to Kings Road Investment Ltd. for up to $7,518,000, provided that $1,700,000 reserved in the revised budget will only be used if Kings Road has given its prior written consent. The Debtor intends to use the cash collateral to, among other things, fund its payroll to satisfy employee obligations, pay vendors and suppliers, and meet other ongoing business obligations. As reported in the Troubled Company Reporter on June 13, 2007, the Court granted Amp'd Mobile authority, on an interim basis, to use Kings Road's cash collateral in an aggregate amount not exceeding $4,118,000. The Debtor contends that once its authority to use the cash collateral expires today, it will have no available cash or assets readily convertible to cash that are not subject to liens and security interests of Kings Road. According to Mr. Sutty, the Debtor expects to make these cash disbursements pursuant to a budget for the period from June 1 through 25, 2007: Projected Cash Disbursements From June 1 to June 25, 2007 Payroll and Benefits $1,138,000 Content 84,000 Vendor Payments & Professional Fees 1,383,000 Foreign Subsidiaries 125,000 Reserve 2,450,000 ----------- $5,180,000 Total Disbursements from June 1 to June 15 2,338,000 ----------- $7,518,000 =========== The Debtor also proposes to provide adequate protection to Kings Road in the form of replacement liens, avoidance actions, a lien on the Debtor's intellectual property and a superpriority claim. Kings Road's adequate protection is subordinate only to the Carve-Out for (i) bankruptcy professionals' fees not exceeding $200,000, and (ii) disbursements to the Debtor's professionals not exceeding $780,000 and to disbursements of professionals retained by the Official Committee of Unsecured Creditors not exceeding $100,000. The Court will convene a hearing on the Debtor's request for further use of the Cash Collateral on June 25, 2007, at 2:00 p.m. Moderati Responds Moderati, Inc., and the Debtor are parties to a ring tone service agreement, which includes a licensing agreement under which the parties grant each other particular non-exclusive license rights. The RTSA also provides that the Agreement is personal to each party and is non-assignable without consent. Brett D. Fallon, Esq., at Morris James, LLP, in Wilmington, Delaware, asserts that the Debtor cannot assign the RTSA to Kings Road, whether as a grant of collateral or otherwise, because applicable non-bankruptcy law would preclude assignment without Moderati's consent. Moderati does not consent to an assignment of the RTSA, Mr. Fallon tells the Court. Accordingly, Moderati asks that if the Court enters a final Cash Collateral Order, that Final Order should expressly carve out the RTSA from the assets that are subject to the replacement lien granted to Kings Road. Headquartered in Los Angeles, Calif., Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm represent the Debtor in its restructuring efforts. When it sought bankruptcy, Amp'D Mobile listed total assets of between $1 million to $100 million and estimated debts of more than $100 million. The Debtor's exclusive period to file a plan expires on Sept. 29, 2007. (Amp'd Mobile Bankruptcy News, Issue No. 5; Bankruptcy Creditors'Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). ANTHONY MCFADDEN: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Anthony McFadden fdba McFadden Mobile aka Anthony I McFadden 512 Weeks Street East Palo Alto, CA 94303 Bankruptcy Case No.: 07-30741 Type of Business: The Debtor filed for Chapter 11 protection on March 28, 2002 (Bankr. N.D. Calif. Case No. 02-30795). Chapter 11 Petition Date: June 15, 2007 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Renee C. Mendoza, Esq. Cathleen C. Moran, Esq. Moran Law Group, Inc. 1674 North Shoreline Boulevard, Suite 140 Mountain View, CA 94043-1375 Tel: (650) 694-4700 Fax: (650) 694-4818 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's List of its Three Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ America's Servicing Company $658,250 P.O. Box 10328 Des Moines, IA 50306-0328 Option One Mortgage Deed of Trust $603,000 6501 Irvine Center Drive Mail Stop DC Irvine, CA 92618 Stanford Federal Credit Union Purchase Money $12,650 P.O. Box 10690 Palo Alto, CA 94303 AQUILA INC: Redeems $344 Million Debt Securities ------------------------------------------------ Aquila Inc. transferred, on June 15, 2007, $347.4 million to Union Bank of California, N.A., acting as trustee, to redeem in whole $344 million in aggregate principal amount of Aquila debt securities. The securities that were redeemed in whole and cancelled on June 15, 2007, included: (i) $287.5 million in aggregate principal amount of Aquila's 7.875% quarterly interest bonds due March 1, 2032; (ii) $51.5 million in aggregate principal amount of Aquila's 8% senior notes due March 1, 2023; and (iii) $5 million in aggregate principal amount of Aquila's 9% senior notes due Nov. 15, 2021. The quarterly interest bonds will be de-listed from the New York Stock Exchange as a result of the redemption. About Aquila Inc. Headquartered in Kansas City, Missouri, Aquila Inc. -- http://www.aquila.com/-- is an integrated electric and natural gas utility. Aquila began as Missouri Public Service Company in 1917 and reincorporated in Delaware as UtiliCorp United Inc. in 1985. In March 2002, UtiliCorp United Inc. changed its name to Aquila, Inc. Aquila's business is organized into three business segments: Electric Utilities, Gas Utilities and Merchant Services. Substantially all of Aquila's revenues are generated by Aquila's Electric and Gas Utilities. * * * As reported in the Troubled Company Reporter on June 14, 2007, Fitch upgraded Aquila Inc.'s issuer default rating to 'BB-' from 'B'; senior secured to 'BB+' from 'BB'; and senior unsecured to 'BB-' from 'B+'. Approximately $1.3 billion of debt is affected. The ratings remain on rating watch positive. ASARCO LLC: Court Okays Tax Protocol Agreement with ASARCO Inc. --------------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas approves the tax protocol for dealing with tax issues and exchanging tax information between and among ASARCO LLC and its debtor-affiliates and Asarco Incorporated. Judge Schmidt overrules all objections that have not been resolved or withdrawn. As reported in the Troubled Company Reporter on Feb. 12, 2007, the Court had instructed ASARCO LLC and Asarco Incorporated to develop a protocol for dealing with tax issues and exchanging tax information. In response, ASARCO LLC's counsel drafted a proposed tax protocol agreement and sent the proposal to Asarco Inc. and Americas Mining Corporation, ASARCO LLC's parent, for consideration and comment. ASARCO LLC says that Asarco Inc. and AMC have been wholly unresponsive to ASARCO LLC's attempts to work out tax protocols and have been only marginally responsive to its requests to exchange certain tax-related information. Under the Protocol, ASARCO LLC will: * provide AMC book trial balance, detailed book and tax differences, depreciation calculations, state apportionment information, and other information in the agreed electronic formal required for the federal tax and state income tax returns at least 45 days before the extended due date; * provide AMC will all ASARCO LLC financial information required for the return or report for state registrations at least 45 days before the extended due date; * prepare tax returns for its annual state registrations; and * provide AMC with an estimate of taxable income year to date for quarterly estimated tax payments. On the other hand, AMC and Asarco Inc. will: * prepare federal tax and annual state income tax returns; * notify ASARCO LLC of any proposed material changes to the information it provided at least 15 days before the return is filed; * provide ASARCO LLC a copy of final return, including consolidated schedules, within 15 days after tax returns were filed; * provide ASARCO LLC with amounts of estimated regular tax and amounts of tax paid on ASARCO LLC' behalf; and * provide updated cumulative schedule of net operating loss carryforwards for tax purposes and all credit carryforwards. A full-text copy of the proposed Tax Agreement Protocol is available for free at http://researcharchives.com/t/s?19a5 ASARCO also asks the Court to require AMC and Asarco Inc. to provide certain outstanding tax-related information: (a) With respect to the refund claim filed by Asarco Inc. for the tax years ending December 31, 1987, December 31, 1988 and December 31, 1989, assistance in locating the sources and amounts of losses from calendar years ending December 31, 1994, December 31, 1995, December 31, 1998, and December 31, 1999, that were carried back to calendar years ending December 31, 1987, December 31, 1988, and December 31, 1989, as part of the refund claim; (b) A schedule containing AMC's calculations of the portions of the estimated consolidated federal and state income tax and alternative minimum tax liabilities of the AMC Consolidated Group for each quarterly estimated tax period during 2006, which are attributable to the ASARCO LLC Subgroup; (c) An updated cumulative schedule of AMC's estimates of the amounts of consolidated net operating loss carryforwards for both alternative minimum tax and regular tax purposes, which are attributable to the ASARCO LLC Subgroup; and (d) Further assistance in locating, accessing and interpreting information related to the historical tax basis of the assets of ASARCO LLC, Asarco Inc. and their subsidiaries. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Court Gives Nod on Grant Thornton as Auditors --------------------------------------------------------- ASARCO LLC and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ Grant Thornton LLP as auditors. As reported in the Troubled Company Reporter on May 28, 2007, ASARCO LLC's DIP Financing requires the company to engage the services of a nationally recognized firm for the audit of the 2006 accounts. The Firm will audit the consolidated balance sheet of ASARCO and its subsidiaries as of Dec. 31, 2006, and the consolidated earnings, changes in members' equity and cash flows for the year then ended. In addition, Grant Thornton will audit the consolidated balance sheet of Silver Bell Mining, LLC, as of Dec. 31, 2006. Silver Bell is a company that is 75% owned by AR Silver Bell, Inc., which in turn is ASARCO's wholly owned subsidiary. ASARCO will pay for Grant Thornton's services based on the firm's customary hourly rates ranging from $160 to $500 per hour, plus actual costs and expenses. Based on ASARCO's records, the total estimated fees for the ASARCO audit will range from $700,000 to $800,000 and fees for Silver Bell audit will range from $50,000 to $75,000. Should fees exceed the range of estimates, Grant Thornton has agreed to bill all hours incurred thereafter at $213 per hour. If ASARCO does not employ Grant Thornton to do the ASARCO audit for the 2007 financial statements, ASARCO will reimburse $150,000 to Grant Thornton for the time expended in reviewing the Debtors' accounting records. Edward O'Brien, Esq., a partner at Grant Thornton, assures the Court that his firm does not represent any interest adverse to the Debtors and their estates and is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Court Okays Patton Boggs as Special Counsel ------------------------------------------------------- ASARCO LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Patton Boggs LLP as its special counsel nunc pro tunc to Aug. 9, 2006. As reported in the Troubled Company Reporter on May 28, 2007, the Debtors want to hire Patton Boggs to represent and advise the Debtors with respect to compliance matters under the rules and regulations of the Mine Safety and Health Administration and the Occupational Safety and Health Administration and other related areas of the law. ASARCO will pay Patton Boggs for its services according to the firm's customary rates: Designation Hourly Rate ----------- ----------- Partners $275 - $800 Counsel $275 - $800 Associates $180 - $380 Paralegals $50 - $210 Prior to the Debtors' bankruptcy filing, the firm had rendered services to ASARCO that have not yet been billed or that have not yet been paid, Mark N. Savit, Esq., a partner at Patton Boggs, informed the Court. The amount owing for those services is $134,867. Patton Boggs' claim for those services has now been transferred to Liquidity Solutions, Inc. Mr. Savit assures the Court that Patton Boggs does not have or represent any interest adverse to the Debtors for matters for which it is contemplated to be retained as special counsel. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASSET ACCEPTANCE: Board Affirms Special One-Time Cash Dividend -------------------------------------------------------------- Asset Acceptance Capital Corp. board of directors has declared a special one-time cash dividend of $2.45 per share payable July 31, 2007, to shareholders of record July 19, 2007. On April 24, 2007, the company disclosed its plan to recapitalize its balance sheet and return $150 million to shareholders. The company has agreed to repurchase $75 million of its shares through 1) a modified "Dutch auction" tender offer, which expired at 5 p.m. EDT, on June 12, 2007; and 2) purchases from AAC Quad-C Investors LLC, the company's largest shareholder, the chief executive officer and the chief financial officer, who collectively own 50.4% of the company's stock, with these purchases occurring outside and after the tender offer, allowing these three holders to maintain their ratable ownership interests in the company. The balance of the $150 million return of capital, or approximately $75 million, will be paid to shareholders in the form of the special one-time cash dividend the company. The company is funding its return of capital to shareholders through its expanded $250 million credit agreement. The expanded credit agreement contains a $150 million term loan used to fund the return of capital to shareholders and a $100 million revolving loan facility that will be used to supplement cash flows available for the acquisition of purchased receivables and other general corporate purposes. "The company's plan to recapitalize Asset Acceptance has afforded shareholders the opportunity to benefit from the financial performance of the company, while balancing the strategic needs of our business to support sustained, profitable growth," Brad Bradley, chairman, president and CEO of Asset Acceptance Capital Corp., said. "Between the substantial cash flows generated by Its business and the expanded credit agreement it secured earlier, the company has retained a level of liquidity sufficient to support its investment in charged-off consumer receivables and other emerging opportunities, which it believes positions the company to continue to grow the economic value of the company." "The company is pleased with the results of the entire transaction, including favorable financing terms and the success of the tender offer," Mark Redman, senior vice president-finance and CFO of Asset Acceptance, concluded. "The company believes the increased efficiency and financial flexibility of its capital structure remains a competitive advantage for the company, particularly as it seeks to identify avenues of growth capable of creating value for its shareholders." About Asset Acceptance Headquartered in Warren, Michigan, Asset Acceptance Capital Corp. (Nasdaq: AACC) -- http://www.AssetAcceptance.com/-- purchases charged-off consumer debt from credit issuers, and then uses proprietary methods to collect on these receivables. * * * As reported in the Troubled Company Reporter on May 11, 2007, Standard & Poor's Rating Services assigned its 'BB-' long-term counterparty credit rating to Asset Acceptance Capital Corp. In addition, S&P assigned a 'BB' rating to the company's six-year, $150 million, first-lien, senior secured term loan and five-year $100 million senior secured credit facility. BANC OF AMERICA: Fitch Affirms Low-B Ratings on Six Classes ----------------------------------------------------------- Fitch Ratings affirms Banc of America Commercial Mortgage Inc., series 2006-2 as: -- $91.1 million class A-1 at 'AAA'; -- $182.5 million class A-1A at 'AAA'; -- $68.6 million class A-2 at 'AAA'; -- $145 million class A-3 at 'AAA'; -- $118.6 million class A-AB at 'AAA'; -- $1,269.3 million class A-4 at 'AAA'; -- $269.9 million class A-M at 'AAA'; -- $215.9 million class A-J at 'AAA'; -- Interest-only class X-W at 'AAA'; -- $50.6 million class B at 'AA'; -- $27 million class C at 'AA-'; -- $40.5 million class D at 'A'; -- $27 million class E at 'A-'; -- $30.4 million class F at 'BBB+'; -- $27 million class G at 'BBB'; -- $33.7 million class H at 'BBB-'; -- $10.1 million class J at 'BB+'; -- $13.5 million class K at 'BB'; -- $10.1 million class L at 'BB-'; -- $3.4 million class M at 'B+'; -- $6.7 million class N at 'B'; -- $6.7 million class O at 'B-'; Fitch does not rate the $37.1 million class P. The rating affirmations reflect stable transaction performance and minimal paydown since issuance. As of the June 2007 distribution date, the pool's aggregate certificate balance has decreased 0.5% to $2.68 billion from $2.7 billion at issuance. There have been no delinquent or specially serviced loans since issuance. At issuance, Fitch credit assessed the following six loans: Faneuil Hall, 277 Park Avenue, 841-853 Broadway, 250 Park Avenue South, Myles Standish Plaza, and 160 East 84th Street. These loans maintain their investment grade credit assessments based on stable performance and occupancy levels since issuance. BRIDGETECH HOLDINGS: March 31 Balance Sheet Upside-Down by $5.1MM ----------------------------------------------------------------- Bridgetech Holdings International Inc. reported a net loss of $5,086,332 for the first quarter ended March 31, 2007, compared with a net loss of $2,571,222 for the same period ended March 31, 2006. Consolidated revenues decreased to $46,170 in March 31, 2007, from $125,030 reported in 2006, a decrease of $78,860. General and administrative costs increased to $5,034,857 for the first quarter ended March 31, 2007, compared to $2,645,153 in March 31, 2006. The increase of $2,389,704 is primarily the result of an increase in parent company overhead costs. At March 31, 2007, the company's balance sheet showed $1,601,749 in total assets and $6,780,858 in total liabilities, resulting in a $5,179,109 total stockholders' deficit. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $984,133 in total current assets available to pay $6,780,858 in total current liabilities, 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?2111 Going Concern Doubt Jewett, Schwartz, Wolfe & Associates, in Hollywood, Florida, expressed substantial doubt about Bridgetech Holdings International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has operating and liquidity concerns, has incurred an accumulated deficit of approximately $17,812,985 through the period ended Dec. 31, 2006, and current liabilities exceeded current assets by approximately $5,170,899 at Dec. 31, 2006. About Bridgetech Holdings Bridgetech Holdings International Inc. (OTC BB: BGTH.PK) -- http://www.bridgetechholdings.com/-- is an emerging healthcare products company focused on providing healthcare products and services in the U.S. and Asian markets. CARIBOU RESOURCES: July 30 Meeting Set to Decide on Jed Oil Offer ----------------------------------------------------------------- The Court of Queen's Bench of Alberta has issued an order which provides for meetings of Caribou Resources Corp.'s creditors and shareholders to be held on July 30, 2007. The meeting of Caribou's creditors will consider approval of a Plan of Arrangement under the Companies' Creditors Arrangement Act (Canada), in relation with JED Oil Inc.'s acquisition of Caribou. Caribou had filed for protection under the CCAA which is similar to "Chapter 11" protection in the U.S. Under the CCAA Plan, Caribou's creditors ranking in priority behind the major secured creditor, whose position JED has acquired, are being offered cash of approximately $345,500 plus the issuance of 5 million JED common shares. Under the CCAA Plan the secured creditors whose security ranks behind JED's will share in the net proceeds from 1.8 million of the JED common shares and the unsecured creditors will share in the balance of the cash and JED common shares. Creditors of Caribou who have security that ranks ahead of JED's will not be affected by the CCAA Plan and will be paid by JED. Shareholders' Meeting The meeting of Caribou's shareholders will consider, among other things, approval of a Plan of Arrangement under the Business Corporation's Act (Alberta). Under the ABCA Arrangement, Caribou's shareholders would transfer all of the Caribou common shares to JED in exchange for JED common shares, on the basis of one JED Common share for each ten Caribou common shares, and Caribou would become a wholly owned subsidiary of JED. Outstanding stock options to acquire Caribou common shares, if not exercised by the effective date of the ABCA Arrangement, would be cancelled. JED has reserved up to 4 million common shares for the ABCA Arrangement. The issuance by JED of up to 9 million common shares is also subject to the approval of JED's common shareholders under the rules of the American Stock Exchange and JED will hold a special meeting of its shareholders on July 30, 2007. JED's common shareholders and Series B Preferred shareholders will also be asked to approve amendments to JED's Articles of Incorporation to amend the terms of the Series B Preferred shares to extend the maturity date to Feb. 1, 2010 and change the conversion prices to $3.50. An Information Circular with detailed information will be mailed to JED shareholders in the first week of July. Guidance for 2007 and 2008 As a result of this combination with Caribou, JED expects to have combined production of approximately 1,500 barrels of oil equivalent per day. Current estimates for 2007 year-end production is approximately 2,900 BOE/d. Utilizing existing lands, the current capital base and the significant reduction in debt, the forecasted exit rate for Q1 2008 is expected to be approximately 4,100 BOE/d and the Q2 2008 exit rate is expected to be 4,500 BOE/d. Funds provided by operating activities before changes in operating assets and liabilities on a combined basis for Q3 2007 are expected at approximately $2.9 million and $8 million for Q4. Funds from operations for Q1 2008 are expected at approximately $13 million with $26.5 million expected for the first six months of 2008. Common shares outstanding on a combined basis will be approximately 23.8 million. On a fully diluted basis there would be approximately 29.8 million shares based on existing stock options, share purchase warrants, convertible notes and convertible preferred stock. A private placement in Canada of an additional 1.4 million convertible preferred shares is currently being considered by JED, which, if completed, would increase the aggregate common shares on a fully diluted basis to approximately 31.2 million. If the amendments to JED's Articles of Incorporation to change the conversion price of the Series B Preferred shares are approved, the aggregate of common shares would be approximately 37.65 million on a fully diluted basis. In these estimates on a fully diluted basis, the conversion of the convertible notes is based on the current exercise price of $16.00. To accomplish the company's development drilling programs over the next year it plans to use existing cash flow, bank lines of credit and certain asset sales. The above guidance includes those sources of funds. The company does not plan any equity offering during the next year, other than the private placement of preferred shares. JED believes that it can exit 2008 at a production rate of approximately 5,900 BOE/d while significantly reducing its debt. Based on current varied pricing estimates of the New York Mercantile Exchange, estimated revenue for the full year of 2008 is expected to be $92 million resulting in operating cash flow of approximately $63 million. About JED Oil Based in Didsbury, Alberta, JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an oil and natural gas company that commenced operations in the second quarter of 2004 and has begun to develop and operate oil and natural gas properties principally in western Canada and the United States. About Caribou Resources Based in Calgary, Canada, Caribou Resources Corp. (TSX VENTURE:CBU) -- http://www.cariboures.com/-- is a full cycle exploration and development company primarily focused on exploring for natural gas in Northern Alberta, and oil and natural gas in Central Alberta. With a mix of oil and gas prospects, the company is committed to creating shareholder value by conducting exploration and development activities in a highly focused area. In January 2007, Caribou filed for protection under the Canadian Companies' Creditors Arrangement Act. CATALYST PAPER: Plans $200 Million Senior Notes Private Placement ----------------------------------------------------------------- Catalyst Paper Corporation intends to sell, on a private placement basis, $200 million in aggregate principal amount of senior notes with a proposed maturity of 2017 through an offering within the United States pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended, and in certain Canadian Provinces and other jurisdictions under Regulation S under the U.S. Securities Act of 1933, as amended. The net proceeds of the offering of the senior notes will be used for general corporate purposes, which may include acquisitions and investments to support our continued growth. The senior notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United Sates absent registration or an applicable exemption from the registration requirements. Headquartered in Vancouver, British Columbia, Catalyst Paper Corporation (TSE:CTL) -- http://www.catalystpaper.com/-- together with its subsidiaries, is a newsprint and specialty ground wood paper producer in North America. The company operates four manufacturing divisions, and one paper recycling division in British Columbia, Canada. The company operates in three business segments: Specialty Papers, engaged in the manufacture and sale of ground wood specialty printing paper; Newsprint, engaged in the manufacture and sale of newsprint, and Pulp, engaged in the manufacture and sale of long and short fiber pulp and containerboard. The primary market for the company's paper products is North America. The primary markets for the company's pulp products are Asia, Australasia and Europe. * * * Catalyst Paper's 8-5/8% Series C Senior Notes carry Moody's Investors Service's B2 rating, Standard & Poor's B+ rating, and Dominion Bond Rating Service's BB rating. CHIQUITA BRANDS: Executives Adopt Prearranged Stock Trading Plan ---------------------------------------------------------------- Chiquita Brands International Inc.'s executive officers has adopted a prearranged stock trading plan in accordance with guidelines specified by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Rule 10b5-1 allows plans to be established that permit corporate executives to prearrange sales of company securities at a time when they are not aware of any material non-public information. Such plans typically involve a plan to sell shares over a set period of time. These pre-arranged planned trades will be executed at a specified later date, as set forth in the plan, without further action or oversight by the executive officer. A plan can provide for sales of stock on a particular date or at a particular price or a combination of both of these factors, along with others. The rules allow corporate executives to diversify their investment portfolios and avoid concerns about initializing stock transactions while possibly in possession of material non- public information. Chiquita's president and chief operating officer of its Chiquita Fresh Group, Robert F. Kistinger, has adopted a plan under Rule 10b5-1 which is in accordance with company's stock ownership guidelines and provides for the liquidation of portions of his holdings over multiple quarters, as part of systematic financial planning for the benefit of his family. Shares sold pursuant to the plan will be disclosed publicly through Form 144 filings and Form 4 filings as required by the SEC. About Chiquita Brands Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Panama. * * * As reported in the Troubled Company Reporter on May 16, 2007, Moody's Investors Service Ratings affirmed these ratings on Chiquita Brands International Inc.: (i) corporate family rating at B3; (ii) probability of default rating at B3; (iii) $250 million 7.5% senior unsecured notes due 2014 at Caa2(LGD5, 89%); and (iv) $225 million 8.875% senior unsecured notes due 2015 at Caa2 (LGD5, 89%). Moody's changed the rating outlook for Chiquita Brands to negative from stable. Troubled Company Reporter reported on May 4, 2007, that Standard & Poor's Ratings Services placed its 'B' corporate credit and other ratings on Cincinnati, Ohio-based Chiquita Brands International Inc. on CreditWatch with negative implications, meaning that the ratings could be lowered or affirmed following the completion of their review. Total debt outstanding at the company was about $1.3 billion as of March 31, 2007. CITY OF DENVER: Moody's Junks Rating on $275 Million Bonds ---------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to $275 million of City and County of Denver, Colorado Special Facilities Airport Revenue Refunding Bonds, Series 2007A. In a related action, Moody's also assigned ratings of Baa2 to the Class A, Ba2 to the Class B and B1 to the Class C Certificates of the United Air Lines Pass Through Certificates, Series 2007-1. Moody's affirmed all debt ratings of UAL Corporation and its subsidiaries, corporate family rating at B2, and the outlook remains stable. Rating of the Denver Facility Bonds The Caa1 rating on the Denver Facility Bonds is based on the Special Facilities and Ground Lease which obligates United to pay sufficient amounts to the City and County of Denver, Colorado to pay the principal, premium, if any and interest on the Bonds. In addition, United provides a direct, unconditional guaranty of full and prompt payment on the Denver Facility Bonds. Ratings of the Certificates The Certificate ratings considers the credit quality of United as obligor, the value of the aircraft pledged as security, the credit support provided by the liquidity facilities on the Class A and Class B Certificates, and the additional structural features of the transaction. The ratings reflect Moody's opinion of the ability of the Pass Through Trustees to make timely payment of interest and the ultimate payment of principal at a date no later than January 2019, the final maturity date. Moody's also notes that this transaction includes cross-collateralization of the aircraft securing the individual notes underlying the transaction, which enhances the potential recovery for investors in the event of default, as well as a revised waterfall and cross-default at the final maturity date of the Notes. Structure of the United Airlines Pass Through Certificates, 2007-1 EETCs Property of the Pass Through Trust will be Equipment Notes to be issued by United, which will be secured by a perfected security interest in the aircraft being financed by this transaction. Each aircraft will be subject to a separate indenture with a separate loan trustee. It is the opinion of counsel to United that the Notes will be entitled to benefits under Section 1110 of the U.S. Bankruptcy Code. Under this provision, if United fails to pay its obligations under the Notes, the collateral trustee has the right to repossess any aircraft which have been rejected by United. The Certificates are not obligations of, nor are they guaranteed by, United. However, the amounts payable by United under the Notes will be sufficient to pay all principal and interest on the Certificates when due. The Class C Certificates rank junior in priority to the Class B Certificates and the Class B Certificates rank junior to the Class A Certificates. Interest on the Class A Certificates and Class B Certificates will be supported by liquidity facilities intended to pay up to three semi-annual interest payments in the event United defaults on its obligations under the Notes. The liquidity facilities do not provide for payments of principal due, and there is no liquidity facility for the Class C Certificates. The liquidity provider is Morgan Stanley Senior Funding, Inc. whose obligations will be unconditionally guaranteed by Morgan Stanley which has a Moody's short-term rating of P-1. The liquidity provider has a priority claim on proceeds from liquidation ahead of any of Certificate holders and is also the controlling party following default. Cross Collateralization Feature The ratings of all Certificates benefit from cross collateralization, because Moody's believes this feature potentially enhances recovery prospects. Under the cross collateralization structure, if all aircraft are sold, then surplus proceeds from the sale of any aircraft are made available to cover any shortfall due under the Notes related to the sale of any other aircraft. All surplus proceeds will be retained until maturity of the financing or the indentures are cancelled. Moody's believes expected recovery is enhanced because of: * the number of aircraft, * that no single aircraft type comprises a substantial portion of the equipment pool, and * while there is some correlation in the value of the aircraft types in the transaction, there is sufficient diversity to produce the benefit of cross collateralization. This transaction was accorded the maximum rating benefit from the existence of cross collateralization because of the number of aircraft and the different types of aircraft. Collateral for the 2007-1 EETC Proceeds from the sale of the Certificates will be used to purchase Notes to finance two B767-300ER, four B777-200, four B777-200ER and three B747-400 aircraft originally delivered to United between 1998 and 2002. While there is some commonality among these aircraft as they are all long-haul widebody commercial jets, there are some differences in terms of their current and future usage which is reflected in their expected valuations. The B767-300ER is one of the most widely accepted widebody aircraft among commercial airlines, and is generally used for long-range flights. The B777-200, while intended for transcontinental, regional and international routes with cargo capacity similar to that of the B747, has largely been superceded by the 777-200ER. The B777-200ER has a range about 50% higher than the -200. The B747-400, which has been superceded by next-generation commercial passenger aircraft, has primary value as a freighter conversion. Moody's believes the current aircraft values are supported by particularly strong market conditions which may be nearing the peak of the demand cycle. Should a downturn in the demand occur, Moody's believes the impact on the values of the aircraft in this transaction operating in passenger configuration would be greater than for other aircraft types. First, widebody aircraft would likely have less operational flexibility than narrowbody aircraft in a softer economic environment, and their use would likely be discontinued sooner. Second, these aircraft are at or near their economic half lives. Some models have been superceded by newer, more efficient aircraft types which is likely to generate greater value volatility in an economic downturn. Finally, the cost of modification of these aircraft to cargo configuration is significant and potentially prohibitive. Assignments: Issuer: Denver (City & County of) CO -- Senior Unsecured Revenue Bonds, assigned Caa1 (LGD5, 86%) Issuer: United Air Lines, Inc. 2007-1 Pass Through Trusts -- Class A Certificates, Assigned Baa2 -- Class B Certificates, Assigned Ba2 -- Class C Certificates, Assigned B1 UAL Corporation which, through its primary subsidiary United Airlines, Inc. is one of the largest airlines in the world providing scheduled passenger service throughout North America, Latin America, Europe and Asia, is headquartered in Chicago, Illinois. CLEVELAND-CLIFFS: Will License Kobe Steel's Iron Nugget Technology ------------------------------------------------------------------ Kobe Steel has agreed to license its patented ITmk3(R) iron-making process to Cleveland-Cliffs, Inc. The alliance, which has a 10-year term, covers use of the proprietary process in the United States and Canada, Australia and Brazil, and may be expanded to include other geographic regions. Commenting on the new alliance, Cliffs Chairman, President and Chief Executive Officer Joseph A. Carrabba stated, "One of Cliffs' major strategic initiative is to sustain its leadership position in pioneering processes related to metallics. By constructing a commercial-scale facility that will produce iron in nearly pure form, we will further that mission and be able to offer North America's non-integrated steel mills a consistently available and very high-quality domestic metallic feed, which is similar in quality to imported pig iron. Moreover, as Cliffs currently sells the majority of its pellets to integrated steel companies in North America, this opportunity has the potential to open a new market. "We have been very interested in this technology since successfully testing the process in a pilot plant located at our Northshore facility. The alliance with Kobe moves us closer to realizing our mutual goal of commercializing and exploiting this innovative process." Used for the production of high-purity iron nuggets containing more than 96% iron, the ITmk3 process provides the means to create high-quality raw material for electric arc furnaces (EAFs). Steel producers utilizing EAFs currently account for nearly half of North America's steelmaking capacity. The company also announced that the two parties have agreed to participate on a joint-venture basis as strategic equity partners in a 500,000 ton per annum iron nugget facility to be constructed at one of Cliffs' United States mining properties. The timing of this project and the site location will ultimately depend on permitting issues. About Cleveland-Cliffs Inc. Based in Cleveland, Ohio, Cleveland-Cliffs Inc. (NYSE: CLF) -- http://www.cleveland-cliffs.com/-- produces iron ore pellets in North America, and sells the majority of its pellets to integrated steel companies in North America and Canada. The company operates six iron ore mines located in Michigan, Minnesota and Eastern Canada. The company is a majority owner of Portman Limited, an iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. * * * Cleveland-Cliffs, Inc.'s preferred stocks carry Moody's Investor Service's 'B3' rating. CMP SUSQUEHANNA: Debt Leverage Prompts S&P's Positive Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on radio broadcaster CMP Susquehanna Corp. to positive from stable, based on the company's progress in reducing costs and debt leverage since its May 2006 acquisition. The ratings, including the 'B-' corporate credit rating, were affirmed. "The rating on CMP Susquehanna reflects its still very high leverage, the unfavorable secular trends in radio advertising, advertising cyclicality, and the potential for more acquisitions," said Standard & Poor's credit analyst Michael Altberg. "These factors are partially offset by CMP Susquehanna's portfolio of large-market radio stations, radio broadcasting's good margin and discretionary cash flow potential, and healthy station asset values." CMP Susquehanna was formed on May 5, 2006, when the company's parent, Cumulus Media Partners LLC--along with Bain Capital Partners LLC, The Blackstone Group, and Thomas H. Lee Partners L.P.--acquired Susquehanna Radio Corp. for $1.2 billion. CMS ENERGY: Closes Sale of Brazilian Unit for $211.1 Million ------------------------------------------------------------ CMS Energy Corporation and its subsidiary, CMS Electric and Gas L.L.C., closed the sale of CMS Energy Brasil S.A., the holding company for a group of Brazilian electric distribution companies, and related assets to CPFL Energia S.A., a Brazilian utility, for $211.1 million. Proceeds from the sale will be used to reduce debt at CMS Energy and invest in CMS Energy's Michigan utility, Consumers Energy. About CMS Energy Headquartered in Michigan, CMS Energy Corporation -- http://www.cmsenergy.com/-- is an electric and natural gas utility, natural gas pipeline systems, and independent power generation. CMS Energy Brasil provides electric service to about 172,000 customers, primarily in the state of Sao Paulo. CMS Energy purchased a controlling interest in CMS Energy Brasil in 1999. It was CMS Enterprises' sole business in Brazil. * * * As reported in the Troubled Company Reporter on June 12, 2007, Moody's Investors Service upgraded the senior unsecured long- term rating of CMS Energy Corporation to Ba1 from Ba3, and its senior secured rating on CMS Energy's subsidiary Consumers Energy Company to Baa1 from Baa2. Moody's revised the outlook of both companies to stable from positive. COUNTERPATH SOLUTIONS: Inks Deal to Purchase NewHeights Software ---------------------------------------------------------------- CounterPath Solutions Inc. has entered into a definitive agreement to acquire NewHeights Software Corp. Under the terms of the agreement, CounterPath will acquire all of the shares of NewHeights through the issuance of 40,250,000 shares of CounterPath's common stock. In addition, CounterPath will issue 13,750,000 shares of common stock at $0.40 per share for an investment of $5.5 million for an aggregate transaction value of $21.6 million. The acquisition and investment will allow CounterPath to combine its existing softphone solutions with NewHeights' enterprise softphone and IP application server products, enabling the company to provide best in class voice and multimedia collaboration services to a wider range of customers within the IP communications market. As part of the transaction, Wesley Clover, a private equity firm headed by Sir Terence H. Matthews, will invest in CounterPath to advance the company's strategy of being the dominant endpoint provider for fixed and mobile operators and infrastructure providers across all desktop, embedded and mobile device platforms. "NewHeights and CounterPath are both innovative and agile companies, joining forces at an opportune time as their respective markets take off and companies are making long term product decisions," Sir Matthews, chairman of Wesley Clover, said. "I believe that the potential for business growth is excellent. Mr. Clover has mentored and made significant investments in more than 50 successful technology companies and the company is pleased to include CounterPath among its investments." The combined company will: a) maintain the CounterPath name and brand; b) have approximately 100 employees; and c) be headquartered in Vancouver, British Columbia with a development office in Ottawa, Ontario. Sir Matthews, chairman of Mitel Corporation and Wesley Clover, will become the chairman of CounterPath. Greg Pelling, president of NewHeights, formerly with Cisco Systems and PricewaterhouseCoopers, will be the company's chief executive officer. Mark Bruk, CounterPath's founder, will remain active in the company and on the board as vice chairman. "The acquisition of NewHeights will deliver value to the company's customers, partners, employees and shareholders, while making it the clear choice for new customers," Mr. Bruk, current chairman and chief executive officer of CounterPath, said. "This transaction allows it to advance the company's roadmap and bring in additional capital and a strong strategic investment partner. The company's focus and resolve is strengthened as it continues on its path to create the industry's leading consumer and enterprise softphone solution provider." After the completion of the transaction, the combined company will focus on integrating the sales, marketing and development teams, consolidating and strengthening soft-client and softphone offerings and further commercializing its server solutions. The new products will be made available to CounterPath's list of more than 250 customers across 50 countries well as to new customers in the service provider, Original Equipment Manufacturer and enterprise sectors. CounterPath's roster of customers includes Adtran, Alcatel-Lucent, AT&T, BT (British Telecom), Cisco Systems, Deutsche Telekom, Portugal Telecom and Vonage. "By bringing together the unique strengths of each company, this transaction accelerates the company's respective growth strategies," Mr. Pelling said. "CounterPath's VoIP applications are recognized as the SIP-based softphones in the industry. By layering on enterprise software and features, the company believes it can offer an attractive solution to the rapidly growing IP communications market." Immediately prior to closing, NewHeights will be debt free and have $2.5 million in cash to contribute to the combined entities. Wesley Clover has committed a further $3.5 million to be invested over a seven month period for 8,750,000 shares of common stock bringing the total cash contribution to CounterPath by NewHeights and Wesley Clover to $6 million. Upon closing, CounterPath's convertible debenture holders have agreed to convert their existing debentures in the amount of $4 million and invest a further $2 million for 15 million shares of common stock at $0.40 per share. At closing, CounterPath expects to be debt free, and have an additional $8 million of new cash or cash commitments. After the investments of the convertible debenture holders and Wesley Clover, CounterPath expects that there will be a total of 101,940,983 shares of common stock outstanding. The closing of the transaction contemplated by the definitive agreement is subject to various conditions, including approval by NewHeights' securityholders, court approval and other customary closing conditions. The transaction is expected to close within 60 days. The shares of CounterPath's common stock to be issued in connection with the proposed acquisition and investments have not been and will not be registered under the Securities Act of 1933 as amended, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration, under the Act. About NewHeights Software Headquartered in Ontario, Canada, NewHeights Software Corporation -- http://www.newheights.com/-- delivers evolved next-generation communications software clients. Sold under the brands of Service Providers, Softswitch vendors and IP-PBX vendors, NewHeights' soft-clients are driving a new communications experience within small and large businesses. Extracting the value of SIP/IMS, MGCP and proprietary networks, NewHeights' soft-clients integrate feature-rich call control with custom and enterprise applications to enable a unified, contextual communications environment for fixed and mobile users. NewHeights is a privately held company with development offices in Victoria, British Columbia, Canada and sales offices in the United Kingdom and Australia. Its major shareholders include Wesley Clover and Bell Canada. To date more than CDN$25 million has been invested in NewHeights since it was formed in 1998. About Counterpart Solutions Based in Vancouver, British Columbia, Counterpath Solutions Inc. (OTC BB: CTPS.OB) -- http://www.counterpath.com/-- designs and develops multimedia application software. Software applications are based on session initiation protocol (SIP) which is the recognized standard for interactive end points that involve multimedia elements such as voice, video, instant messaging, presence, online games and virtual reality. The company's balance sheet at Dec. 31, 2006, showed $4,834,927 in total assets and $4,867,658 in total liabilities, resulting in a $32,731 total stockholders' deficit. CREDIT SUISSE: Fitch Lowers Ratings on Class M & N Certificates --------------------------------------------------------------- Fitch Ratings downgrades and removes from Rating Watch Negative these classes of Credit Suisse First Boston's commercial mortgage pass-through certificates, series 2005-CND2: -- $23 million class M to 'BB' from 'BBB-'; -- $18.8 million class N to 'BB-' from 'BBB-'. In addition, Fitch affirms the ratings on these classes: -- $375.4 million class A-2 at 'AAA'; -- Interest-only class A-X-1 at 'AAA'; -- Interest-only class A-X-2 at 'AAA'; -- Interest-only class A-X-3 at 'AAA'; -- Interest-only class A-X-4 at 'AAA'; -- Interest-only class A-X-5 at 'AAA'; -- Interest-only class A-Y at 'AAA'; -- $64 million class B at 'AAA'; -- $63 million class C at 'AA'; -- $39 million class D at 'AA'; -- $36 million class E at 'AA-'; -- $35 million class F at 'A+'; -- $37 million class G at 'A'; -- $33 million class H at 'A-'; -- $36 million class J at BBB+'; -- $32 million class K at 'BBB'; -- $32 million class L at 'BBB-'. Classes A-1, A-1S, and A-1J have been paid in full. As of the June 2007 remittance date, the transaction's principal balance had decreased by 58.6% to $824.3 million from $2 billion at issuance due to the payment in full of twelve loans. Eight loans remain in the transaction. Five are secured by multifamily rental properties that are undergoing conversion to individual condominiums. Three loans are secured by multifamily properties with cancelled condominium conversions. All loans are current, and none are specially-serviced. There have been no losses to the trust. The downgrades are due to several Fitch concerns about the transaction's remaining loans; upcoming 2007 maturity dates, geographic concentration, concentration by size, oversupply in various Florida condominium markets, and delays at the largest loan in the transaction - Manhattan House (54.6%). All of the loans mature in 2007. Four (17.8%) of the eight remaining loans are in Florida. Three of the loans in Florida are secured by multifamily properties that are no longer being converted to condos: Mizner Court (7%), Spring Harbor (4.6%) and Spring Landing (3.8%). All three are being re- leased as rental properties. Fitch is concerned that they do not generate sufficient cash flows as rentals to support their current debt levels, and as a result the loans no longer maintain investment-grade credit assessments. The Manhattan House loan is secured by a 583-unit multifamily rental building located on the Upper East Side of Manhattan, New York. As of the June 2007 remittance, there had been no sales or contracts signed for any of the units. Fitch is monitoring the ongoing status of litigation between the partners and its impact on the loan's performance. DANKA BUSINESS: Inks New $145 Million Senior Facility with GE ------------------------------------------------------------- Danka Business Systems PLC entered into an agreement with GE Corporate Lending for a new senior secured credit facility totaling $145 million, subject to a number of customary closing conditions. The company expects the transaction to close by tomorrow, June 22, 2007. Proceeds, together with the proceeds of the company's previously completed sale of its European operations, will be used to reduce and refinance the company's existing indebtedness. Upon completion of this financing, the company expects to reduce its overall debts to about $120 million, down from $254 million. It will also reduce annual interest expense to about $13 million from the current $29 million. The new credit facility includes a $40 million senior secured revolving credit facility, a $60 million senior secured term loan and a $45 million second lien loan. Representing Danka in the transaction was the investment banking firm Houlihan Lokey and the law firm Skadden, Arps, Slate, Meagher & Flom. "T[he] agreement with GE Corporate Lending represents another significant milestone in the reshaping of Danka," said A.D. Frazier, chairman and chief executive officer. "This credit facility, along with the other important financial and operational steps we have taken in the past year, will provide Danka with the appropriate long-term flexibility from which to grow our business. It also reaffirms the company's commitments to our valued vendors and existing customers, and significantly enhances the ability of our talented team of employees to compete for and win new customers, as well as deliver even greater value." About Danka Danka Business Systems PLC -- http://www.danka.com/-- provides enterprise imaging systems and services. * * * Danka Business Systems Plc continues to carry Moody's B3 ratings on the company's long-term corporate family, senior unsecured debt, and probability-of-default ratings. The ratings outlook remains negative. The company also carries Standard & Poor's B- long-term foreign and local issuer credit ratings and negative ratings outlook. DDS TECHNOLOGIES: Board Gives Nod to Cease All Business Operations ------------------------------------------------------------------ DDS Technologies USA Inc.'s board of directors has determined, in a meeting held June 18, 2007, to immediately cease all business operations of the company. The board has instructed the officers of the company to take the appropriate steps to liquidate the company's assets in the event that additional, sufficient equity capital commitments are not obtained within the next 10 days. Pursuant to the achievement of additional capital investment, the company has entered into two contracts with Crescent Fund LLC under the first of which Crescent Fund will perform institutional investor relations services on behalf of the company for a fee of 8 million shares of the company's common stock. The company has issued 3 million shares of its common stock to Crescent Fund in a private placement, with the remaining 5 million shares of common stock to be issued subject to stockholder approval. Under the second agreement, Crescent Fund will seek to obtain bridge financing and additional equity investments in the company for a fee equal to 7% of any amounts so obtained. Headquartered in Boca Raton, Florida, DDS Technologies USA Inc. (OTC Bulletin Board: DDSU) -- http://www.ddstechusa.com/-- is the developer of advanced milling, extraction and processing technologies that preserve nutritional content, enhance economic value, and derive higher quality products from grains, agricultural commodities, and other biomass resources. DIRECTV HOLDINGS: Fitch Affirms BB Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed these ratings of DIRECTV Holdings LLC: -- Issuer Default Rating at 'BB'; -- Senior secured credit facility at 'BB+'; -- Senior unsecured debt at 'BB'. The Rating Outlook for all of DIRECTV's debt remains Stable. DIRECTV is a wholly owned subsidiary of The DIRECTV Group, Inc. Approximately $3.4 billion of debt as of March 31, 2007 is affected. The ratings reflect the size and scale of DIRECTV's operations as the second largest multichannel video programming distributor in the United States, Fitch's expectation for continued generation of free cash flow and DIRECTV's ability to up-sell subscribers to take more advance video services. The ratings acknowledge DIRECTV's strong credit protection metrics relative to its rating category, which is primarily attributable to DIRECTV's improved operating profile and the introduction of a lease program which impacts the accounting treatment of customer premise equipment. Additionally, Fitch notes that DIRECTV's EBITDA and free cash flow metrics have in part been positively impacted by the slower pace of gross additions. Rating concerns center on DIRECTV's lack of revenue diversity and narrow product offering relative to its cable multiple system operator and growing telephone company competition. Additionally Fitch believes that the convergence of service offerings between the cable MSOs and the telephone companies have weakened DIRECTV's competitive position, which in Fitch's opinion will limit DIRECTV's growth potential and increase the business risks related to DIRECTV's credit profile over the long term. Fitch expects that over time DIRECTV's operating environment will become more competitive as AT&T and Verizon continue to scale their respective video build outs. However with that said, Fitch believes that DIRECTV's strategy to focus on providing the best in class video offering can provide DIRECTV with a defensible market niche positioning DIRECTV to compete with cable and telephone companies and to continue to grow its subscriber base and control churn. This strategy will focus on providing differentiated and exclusive programming content, aggressively expanding its HD programming, and launching interactive and video on demand services. In Fitch's opinion, DIRECTV's historically low leverage provides DIRECTV with tremendous financial flexibility and capacity at the current ratings level. As of March 31, 2007, DIRECTV's leverage was 0.96 times, which is a significant improvement from as recent as December 2004 when leverage was 5.64x. However DIRECTV's current leverage profile does not reflect a shift of DIRECTV's financial policy or strategy, and Fitch does not expect DIRECTV to maintain its current leverage position. In Fitch's view, given DIRECTV's operating profile and the competitive operating environment, DIRECTV can maintain leverage between 3.5 times and 4 times at the 'BB' rating category. Such a leverage profile would indicate additional debt capacity ranging between $9 billion and $10.8 billion based on the latest 12-months EBITDA as of March 31, 2007. Fitch notes that the leverage targets are well within the financial covenants contained within the DIRECTV's senior secured credit facility and senior unsecured debt. In Fitch's opinion the proceeds from the incremental debt could be used in some combination to fund an investment in a wireless broadband network, make further investments in video content and returned to shareholders in the form of a share repurchase program or special dividend. On Dec. 22, 2006 Liberty Media Corporation and News Corporation entered into a Share Exchange Agreement. As a result of the transaction, Liberty Media will become DTVG's largest shareholder. Fitch believes that over time Liberty's influence over DIRECTV's financial and operational strategy will become stronger and have a positive effect on DIRECTV's operational profile. While Liberty Media does not own nearly as broad or diverse broadcast and programming assets as New Corp., Liberty Media does hold ownership interests in businesses that can complement DIRECTV's strengths and strategic direction. However Fitch points out that the benefits of the transaction do not directly address DIRECTV's weak competitive position relative to the cable MSO's triple play service offering. The Stable Rating Outlook incorporates Fitch's expectation that any potential recapitalization of DIRECTV's balance sheet will demonstrate credit protection metrics consistent with a 'BB' credit profile. DYNEA CANADA: Highly Leveraged Capital Cues S&P's B Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Mississauga, Ontario-based Dynea Canada Ltd. The outlook is stable. At the same time, S&P assigned its bank loan and recovery ratings to Dynea's, and its subsidiary, Bond U.S. Holdings Inc.'s, proposed $220 million first-lien senior secured credit facility and $30 million second-lien senior secured loan. The first lien is rated 'B+', with a recovery rating of '2', indicating a substantial (70%-90%) recovery of principal in the event of default. The second lien is rated 'CCC+', with a recovery rating of '6', indicating an expectation of negligible (0%-10%) recovery of principal in the event of default. Proceeds from the bank facilities will be used to fund the purchase of Dynea International Oy's (B/Watch Dev/--) North American assets by private equity sponsor Teachers' Private Capital. "The ratings on Dynea reflect its highly leveraged capital structure, cyclical and low-margin commodity resin business, and relatively small size compared with its main competitors," said Standard & Poor's credit analyst Jatinder Mall. "These risks are partially offset by a strong market position in the resins and overlays markets, the ability to pass through incremental raw material costs, and some product and end-market diversity," Mr. Mall added. Dynea is a manufacturer of formaldehyde-based adhesive resins and overlays product, with operations in Canada, the U.S., and Mexico. The company generates about 57% of its revenues from panelboard resins, and the overlays segment makes up the balance of revenues. Dynea generates most of its revenues from the U.S. and Canada. A large portion of the company's business is in commodity resins, which tend to be low margin and price-sensitive. The outlook is stable. Dynea has a highly leveraged capital structure, but its current ability to pass through high raw material costs and generate positive cash flows support the ratings. The outlook could be revised to negative if a downturn in the industry weakens the company's margins or volumes, or if Dynea can no longer pass through high raw material costs. In addition, the ratings could be lowered if there are additional capital costs or delays in construction of the Sexsmith, Alberta facility. S&P could revise the outlook to positive if Dynea improves costs and reduces leverage as projected. EINSTEIN NOAH: Redemption Cues Moody's to Withdraw B3 Rating ------------------------------------------------------------ Moody's Investors Service withdrew the B3 rating on Einstein Noah Restaurant Group, Inc.'s $65 million senior secured 2nd lien term loan upon its full redemption in June 2007. The company recently completed a public offering and used the majority of the proceeds to retire the entire 2nd lien debt. Moody's will later withdraw the ratings on the company's 1st lien term loan and revolver after they are to be re-syndicated at the end of June 2007. Moody's also withdraw the B2 corporate family rating of Einstein Noah for business reasons. These ratings were withdrawn: -- The B2 Corporate Family Rating; -- The B2 Probability of Default Rating; -- The B3 (LGD4, 65%) rated $65 million senior secured 2nd lien term loan due 2012; Einstein Noah Restaurant Group, Inc., headquartered in Golden, Colorado, operates quick casual restaurants principally under the Einstein Bros. Bagels, Einstein Bros. Cafe and Noah's New York Bagels trade names. The company currently operates, franchises and licenses approximately 600 locations in 34 states and the District of Columbia. ENVIRONMENTAL ENERGY: Posts $172,530 Net Loss in Qtr. Ended Mar 31 ------------------------------------------------------------------ Environmental Energy Services Inc. reported a net loss of $172,530 on revenues of $77,425 for the first quarter ended March 31, 2007, compared with net income of $24,277 on revenues of $196,457 for the same period in 2006. All of the company's revenues in 2007 and 2006 were derived from its share of royalty payments under a technology license agreement. In April 2003, the company settled litigation that resulted in the resolution of amounts due the company under the technology license agreement, as well as the release of royalty payments accrued in prior periods that had been escrowed pending resolution of the dispute. The company expects to receive royalty payments under the license agreement in an undetermined amount though February 2008. The company reported a loss from operations during the three months ended March 31, 2007, of $350,213, as compared to income from operations of $23,253 during the three months ended March 31, 2006. The decrease in income from operations was primarily attributable to increased general and administrative expenses arising from costs incurred in connection with recently acquired oil and gas leases in Oklahoma, Arkansas, Louisiana and Alaska, as well as reduced royalty income. Provided the company is able to raise sufficient capital, the company intends to begin drilling gas wells on the leased acreage by the third quarter of 2007. During the quarter ended March 31, 2007, the recorded a gain of $192,610 from the settlement of claims by and between Duke and the Company. At March 31, 2007, the company's consolidated balance sheet showed $18,359,754 in total assets, $7,695,559 in total liabilities and $10,664,195 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $88,340 in total current assets available to pay $7,695,559 in total current liabilities. 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?2110 Going Concern Doubt As reported in the Troubled Company Reporter on May 10, 2007, Turner Jones & Associates PLLC, in Vienna, Virginia, expressed substantial doubt about Environmental Energy Services Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditor reported that the company's operating activities, except collection on a royalty agreement, have ceased. Without substantial input of equity capital, the company will not be able to resume meaningful revenue-producing activities. The company has been dependent on the proceeds from a technology royalty to pay ongoing general and administrative costs, and there is substantial doubt as to the amount of royalty payments that the company will receive in future periods. In addition, the company needs to raise substantial capital to meet its obligations to fund the drilling of oil and gas wells on acreage it has leased. About Environmental Energy Headquartered in Boise, Idaho, Environmental Energy Services Inc. (Other OTC: EESV.PK) -- http://www.eesvinc.com/-- is an oil and gas exploration, development and production company. During fiscal 2006, the company acquired oil and gas leases in Arkansas, Louisiana, Oklahoma and Alaska. Its largest property to date is a working interest in over 50,000 acres of leases in the Fayetteville Shale Field in Arkansas. Its current focus is on developing its working interest in the Fayetteville Shale Field in Arkansas, and secondarily the exploration and development of its gas field in Louisiana. EXPEDIA INC: S&P Cuts Ratings to BB+ and Puts Negative Watch ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on online travel agency Expedia Inc. to 'BB+' from 'BBB-' and placed them on CreditWatch with negative implications, indicating the potential for further negative rating movement. Total debt outstanding as of March 31, 2007, was $500 million. The rating action followed the announcement that Expedia intends to repurchase up to 116.7 million shares in a tender offer at not less than $27.50 and not greater than $30.00 per share. "This represents a dramatic change in Expedia's previously investment-grade financial policy," said Standard & Poor's credit analyst Andy Liu. "Upon completion, the tender offer will increase debt leverage, reduce liquidity, and curtail discretionary cash flow." In resolving the CreditWatch listing, Standard & Poor's will meet with management, evaluate the company's new financial policy, and assess its business performance. EXPRESS GROUP: Weak Operating Results Cue S&P's B Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating ton Columbus, Ohio-based Express Group, LLC. The outlook is stable. Standard & Poor's also assigned a 'B' bank loan rating to the company's planned $125 million term loan B due 2014. This rating and the '4' recovery rating indicate Standard & Poor's expectation for a average (30%-40%) recovery of in the event of payment default. The ratings reflect the volatility of the specialty apparel industry, the company's participation in a highly competitive market segment, the company's weak operating results for the past few years and high pro forma leverage. "The company's good financial flexibility supports the ratings, including the stable outlook," said Standard & Poor's credit analyst Diane Shand, "but we would consider a negative outlook if consumers do not respond well to its new merchandise, causing profits and cash flow protection measures to deteriorate." EXPRESS LLC: Moody's Puts Corporate Family Rating at B2 ------------------------------------------------------- Moody's Investors Service assigned first time ratings to Express, LLC, including a corporate family rating of B2 and a senior secured term loan rating of B2. The rating outlook is stable. The ratings are conditioned upon review of final documentation. These ratings are assigned: -- Corporate family rating at B2; -- Probability-of-default rating at B2; -- $125 million senior secured term loan at B2; (LGD4-56%). On May 15, 2007, Limited Brands announced that it would be selling 67% of Express to Golden Gate Capital in a transaction valued at $778 million. The transaction will be funded with the proceeds of the $125 million senior secured term loan, borrowings under the $200 million asset based revolving credit facility, $216 million of equity from Limited, and $431 million in equity from Golden Gate Capital. Limited will continue to own 33% of Express and will provide ongoing support services. The B2 corporate family rating of Express is constrained by the inherent volatility in the specialty apparel retail sub segment in which the company operates as well as Express's history of poor operating performance under the Limited ownership. Under the prior management team, the company implemented an unsuccessful strategy to shift away from its core customer which resulted in a history of poor operating performance which included very weak operating margins that are well below its industry peer group and negative comparable store sales for the past three fiscal years. In response to this poor operating performance Limited hired a new CEO two years ago, Jay Margolis. Under his tenure, the company has begun to exhibit signs of stabilization as reflected by turning profitable during fiscal year 2007 and by posting positive comparable store sales during the last two quarters. Offsetting these weaknesses is the company's appropriate post transaction capital structure which consists of a modest level of funded debt, its healthy free cash flow generation relative to the amount of its funded debt, and its good liquidity as provided by a financial covenant free $200 million asset based revolving credit facility. The B2 rating also reflects the company's high seasonality, modest scale with top line revenues for the last fiscal year of $1.7 billion, and the expectation for shareholder friendly financial policies given the 67% ownership by a financial sponsor. The rating category also acknowledges Express's national diversification and its well recognized brand name. The stable outlook reflects Moody's expectation that the company will maintain healthy liquidity from its $200 million asset based revolving credit facility and incorporates the expectation that operating margins will remain well below industry peer group for the next twenty four months. The B2 rating on the $125 million senior secured term loan reflects the overall probability of default of B2 and the loss given default of LGD4-56%. The term loan is rated at the corporate family rating reflecting its size and scale within the capital structure as well as its second lien of the accounts receivable and inventory. The senior secured term loan will be secured by all of the assets of the company, excluding accounts receivable and inventory on which the term loan will have a second lien behind the asset based revolving credit facility. However, given the lack of sizable tangible assets excluding accounts receivable and inventory, Moody's estimates the term loan to be approximately 61% deficient. The term loan will also be guaranteed by direct and indirect domestic subsidiaries. Express LLC, currently a division of Limited Brands Inc. headquartered in Columbus, Ohio, is a specialty apparel retailer. The company operates 614 mall based stores in the United States. Revenues for the fiscal year ended February 3, 2007 were approximately $1.7 billion. FAIRFAX FINANCIAL: Completes 7-3/4% Senior Notes Exchange Offer --------------------------------------------------------------- Fairfax Financial Holdings Limited has closed its registered offer to exchange all of its outstanding 7-3/4% Notes due 2012 for new 7-3/4% Senior Fairfax Notes due 2017. A total of $282.6 million principal amount of old notes was tendered in the exchange offer, representing a 60.9% participation rate. In exchange, Fairfax has issued $282.6 million principal amount of new notes and paid $11.2 million in cash early participation payments to tendering holders, plus accrued and unpaid interest. Based in Toronto, Ontario, Fairfax Financial Holdings Ltd. (TSX: FFH)(NYSE: FFH) -- http://www.fairfax.ca/-- is a financial services holding company with subsidiaries engaged in property and casualty insurance and reinsurance, investment management and insurance claims management. * * * Fairfax Financial Holdings Ltd.'s 7-3/4% Senior Notes due 2012 carry Moody's Investors Service's 'Ba3' rating and Standard & Poor's 'BB' rating. Fitch Ratings assigned a 'B+' rating to Fairfax Financial Holdings Limited's $464 million issue of unsecured senior notes due 2022. Fitch has also affirmed Fairfax's 'BB-' Issuer Default Rating and 'B+' senior unsecured debt rating. The Rating Outlook is Stable. The ratings of Fairfax's other holding company and insurance company subsidiaries are not affected by this action. FIELDSTONE MORTGAGE: S&P Lowers Ratings on Three Classes -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes from three Fieldstone Mortgage Investment Trust transactions originated in 2004. Concurrently, S&P placed its ratings on these classes and one rating from series 2006-1 on CreditWatch with negative implications. At the same time, S&P affirmed its ratings on the remaining classes from seven Fieldstone Mortgage Investment Trust transactions. The lowered ratings and CreditWatch placements reflect the deteriorating performance of the collateral pools. Credit support for these transactions is derived from a combination of subordination, excess interest, and overcollateralization. In the past six months, realized losses have outpaced excess spread to the extent that credit support for these classes is no longer sufficient to support the prior ratings. As of the May 2007 remittance period, O/C for the pool backing series 2004-3 had been reduced to $12.01 million, or 1.20% of the original pool balance, below its target of 1.35% of the original pool balance. Moreover, the deal will step down in July 2007, at which point O/C will be reduced to $5.00 million, further reducing the credit support for class M-9. Cumulative realized losses reached $8.24 million, or 0.82% of the original pool balance. Total delinquencies and severe (90-plus-days, foreclosures, and REOs) delinquencies constitute 30.41% and 18.77% of the current pool balance, respectively. For the same time period, O/C for the pool backing series 2004-4 had been reduced to $4.44 million, or 0.51% of the original pool balance, below its target of 0.60% of the original pool balance. Cumulative realized losses reached $7.26 million, or 0.83% of the original pool balance. Total and severe delinquencies constitute 34.13% and 20.04% of the current pool balance, respectively. As of the May 2007 remittance period, O/C for the pool backing series 2004-5 had been reduced to $5.95 million, or 0.66% of the original pool balance, below its target of 0.85% of the original pool balance. Cumulative realized losses reached $7.33 million, or 0.81% of the original pool balance. Total and severe delinquencies constitute 30.62% and 18.00% of the current pool balance, respectively. S&P placed the rating on class M-11 from series 2006-1 on CreditWatch negative because of high severe delinquencies. As of the May 2007 remittance period, O/C for this deal was on target at $6.06 million, but foreclosures and REOs amounted to $74.46 million. Even though this deal has been generating significant excess spread, it may not be enough to cover losses if these properties were liquidated quickly. Total and severe delinquencies constitute 17.01% and 10.22% of the current pool balance, respectively. Standard & Poor's will continue to closely monitor the performance of the classes with ratings on CreditWatch. 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 classes. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. The collateral backing this transaction consists mostly of conventional, first- or second-lien, adjustable- or fixed-rate, fully amortizing, residential mortgage loans. Ratings Lowered and Placed on Creditwatch Negative Fieldstone Mortgage Investment Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-3 M-9 BB/Watch Neg BBB- 2004-4 M-7 BB-/Watch Neg BBB- 2004-5 M-7 BB/Watch Neg BBB- Rating Placed On Creditwatch Negative Fieldstone Mortgage Investment Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-11 BBB-/Watch Neg BBB- Ratings Affirmed Fieldstone Mortgage Investment Trust Series Class Rating ------ ----- ------ 2004-3 M3 AA 2004-3 M4 A+ 2004-3 M5 A 2004-3 M6 A- 2004-3 M7 BBB+ 2004-3 M8 BBB 2004-4 M1 AA+ 2004-4 M2, M3 AA 2004-4 M4 AA- 2004-4 M5 A+ 2004-4 M6 A 2004-5 M-1 AA+ 2004-5 M-2 A+ 2004-5 M-3 A 2004-5 M-4 A- 2004-5 M-5 BBB+ 2004-5 M-6 BBB 2005-1 1-A1, 1-A2, 2-A2, 2-A3 AAA 2005-1 M1 AA+ 2005-1 M2 AA 2005-1 M3 AA- 2005-1 M4 A+ 2005-1 M5 A 2005-1 M6 A- 2005-1 M7 BBB+ 2005-1 M8 BBB 2005-1 M9, M10 BBB- 2005-2 1-A1, 1-A2, 2-A1, 2-A2, 2-A3 AAA 2005-2 M1, M2, M3 AA+ 2005-2 M4, M5 AA 2005-2 M6 AA- 2005-2 M7, M8 A+ 2005-2 M9 A 2005-2 M10 BBB- 2005-3 1-A, 2-A1, 2-A2, 2-A3 AAA 2005-3 M1, M2, M3, M4 AA+ 2005-3 M5, M6 AA 2005-3 M7, M8 A+ 2005-3 M9 A 2005-3 M10 A- 2005-3 M11 BBB+ 2005-3 M12 BBB 2005-3 M13 BBB- 2006-1 A1, A2, A3 AAA 2006-1 M1, M2 AA+ 2006-1 M3, M4 AA 2006-1 M5 AA- 2006-1 M6 A+ 2006-1 M7 A 2006-1 M8 A- 2006-1 M9, M10 BBB FIRST UNION: Fitch Holds Low-B Ratings on Class L & M Certificates ------------------------------------------------------------------ First Union National Bank Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2000-C1 are upgraded by Fitch Ratings as follows: -- $29.1 million class G to 'A' from 'A-'; -- $3.9 million class J to 'BBB+' from 'BBB'; -- $7.8 million class K to 'BBB-' from 'BB+'. In addition, Fitch affirms the ratings on these classes: -- $7.3 million class A-1 at 'AAA'; -- $480.9 million class A-2 at 'AAA'; -- Interest-only class, IO at 'AAA'; -- $38.8 million class B at 'AAA'; -- $34.9 million class C at 'AAA'; -- $11.6 million class D at 'AAA'; -- $25.2 million class E at 'AAA'; -- $11.6 million class F at 'AAA'; -- $7.8 million class H at 'BBB+'; -- $5.8 million class L at 'BB'; -- $8.7 million class M at 'B-'. The $8.8 million class N is not rated by Fitch. The rating upgrades are a result of scheduled loan amortization and additional defeasance (8.8%) since Fitch's last rating action. Thirty-eight loans (36.7%) have defeased to date, including the second, third and fifth largest loans in the pool. As of the June 2007 distribution date, the transaction's aggregate principal balance has decreased 12.1% to $682.4 million from $776.3 million at issuance. The transaction remains diverse geographically and by property type. There is currently one loan (2.7%) in special servicing. The loan is secured by a multifamily property located in Coral Springs, Florida. The loan is current for principal and interest. The special servicer continues to seek reimbursement from the borrower for the cost of the wind-storm insurance coverage that was placed on the property. FOOT LOCKER: S&P Retains Negative CreditWatch on BB+ Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings, including the 'BB+' corporate credit rating, on New York City-based specialty footwear retailer Foot Locker Inc. remain on CreditWatch with negative implications. This rating action follows the announcement that Genesco (BB- /Watch Developing/--) accepted an offer from The Finish Line Inc. for $1.53 billion ($54.50 per share) on June 18, 2007. Foot Locker made two bids for Genesco earlier this year, but they were subsequently rejected after Genesco's board concluded the proposals were not in the best interest of its shareholders. "The CreditWatch listing continues to reflect Standard & Poor's concern that the range of matters for which Evercore Partners was hired in 2006 could include shareholder-friendly initiatives that could potentially weaken protection measures for bondholders if there are changes in the company's financial policy," said Standard & Poor's credit analyst David Kuntz. Standard & Poor's will monitor developments associated with this process in order to assess the implications for the ratings. FREEDOM COMMS: Weak Results Cue S&P to Revise Outlook to Negative ----------------------------------------------------------------- Standard & Poor's Rating Services revised its rating outlook on Freedom Communications Inc. to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. "The outlook revision reflects the current weak operating results at Freedom Communications' newspaper segment, particularly at The Orange County Register," noted Standard & Poor's credit analyst Peggy Hebard. "It also reflects the potential for additional borrowings in May 2009 associated with the company's contractual obligation to fund a repurchase of the equity interests held by its minority shareholders." The ratings reflect Irvine, California-based Freedom Communication's significant debt levels attributable to its recapitalization in 2004. As part of the transaction, The Blackstone Group and Providence Equity Partners acquired about 40% equity interest in Freedom Communications Holdings Inc., the holding company parent of Freedom Communications. About 55% of Freedom Holdings' voting stock is owned by shareholders who held stock in the former Freedom Communications, 27% by Blackstone, and 18% by Providence. Freedom Holdings now has an option to purchase a portion of Blackstone's and Providence's equity interests, and Blackstone and Providence have an option, beginning in May 2009, to sell their entire equity positions back to Freedom Holdings. Standard & Poor's expects that Freedom Holdings ultimately will buy back all of its equity interests held by Blackstone and Providence. Standard & Poor's assumption is that a major portion, if not all, of the repurchases would be debt financed by Freedom Communications, resulting in a re-leveraging of its balance sheet. The company does not publicly disclose its financial statements. However, since the recapitalization, Freedom Communications has used its cash flow after capital expenditures and dividends primarily for debt reduction. FRESENIUS MEDICAL: Plans $500 Million Senior Notes Offering ----------------------------------------------------------- Fresenius Medical Care AG & Co. KGaA intends to sell approximately $500 million senior unsecured notes. Proceeds from the offering will be used to reduce the company's debts under its senior secured bank credit facility, short-term debt, and for general corporate purposes. The company expects to complete the offering at the beginning of July 2007. The notes will be offered mainly to US institutional investors. The proposed offering will not be registered under the Securities Act of 1933, but will be offered in the United States pursuant to an exemption from registration under Rule 144A as well as outside the United States under Regulation S. About Fresenius Headquartered in Bad Homburg, Germany, Fresenius Medical Care AG (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS/P) -- http://www.fmc-ag.com/-- provides products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,500,000 individuals worldwide. Fresenius Medical Care also provides dialysis products such as hemodialysis machines, dialyzers and related disposable products. Through its network of around 2,194 dialysis clinics in North America, Europe, Latin America, Asia- Pacific and Africa, Fresenius Medical Care provides dialysis treatment to around 128,200 patients around the globe. Fresenius AG holds around 37% of Fresenius Medical Care AG & Co. KgaA's capital. In Latin America, Fresenius Medical has operations in Argentina, Brazil, Colombia, Chile, Mexico and Venezuela. * * * The company carries Moody's Investors Service's Ba2 corporate family rating. GABRIEL TECH: Posts $5.2 Million Net Loss in Qtr. Ended March 31 ---------------------------------------------------------------- Gabriel Technologies reported a net loss of $5,279,087 on revenues of $785,760 for the third quarter ended March 31, 2007, compared with a net loss of $6,005,394 on revenues of $889,803 for the same period ended March 31, 2006. Consolidated gross profit decreased to $34,901 for the third quarter ended March 31, 2007, compared to gross profit of $136,043 for the same period in 2006. As a percentage of revenues, gross profit decreased to 39.6% for the three months ended March 31, 2007, from 46.3% for the three months ended March 31, 2006. Total expenses decreased to $953,141 for the current period compared to total expenses of $1,740,449 for the same period last year. For the three months ended March 31, 2007, loss from operations amounted to $918,240 compared to $1,604,406 for the three months ended March 31, 2006. The improved results for the current quarter compared to the same period in the prior year reflects the results of increased sales efforts and cost cutting measures. Other expenses for the three months ended March 31, 2007, were $132,429 compared to other expenses of $1,607,635 for the three months ended March 31, 2006. The decrease in other expenses was due mainly to financing expense of $737,078 for the three months ending March 31, 2006, as compared to $57,851 for the three months ended March 31, 2007. In addition, during the 2006 quarter, the company recorded a loss from change in derivative liability of $772,450. At March 31, 2007, the company's consolidated balance sheet showed $18,568,429 in total assets, $5,004,257 in total liabilities, and $13,564,172 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $1,430,939 in total current assets available to pay $4,229,144 in total current liabilities. 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?210e Going Concern Doubt Williams & Webster, PS, in Spokane, Wash., expressed substantial doubt about Gabriel Technologies Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the company's significant operating losses and accumulated deficit at June 30, 2006. About Gabriel Technologies Based in Omaha, Nebraska, Gabriel Technologies Corporation (OTC: GWLK) -- http://www.gabrieltechnologies.com/-- sells locking systems for truck trailers, railcars, and intermodal shipping containers under the WAR-LOK brand name. Its products are manufactured by contractors and distributed from Gabriel's assembly center. Gabriel also offers Trace Location Services, an asset-tracking system for vehicle fleet operators that is based on the Global Positioning System. The trucking industry accounts for more than 85% of the company's sales. Gabriel added biometric technology to its product mix in 2006 by acquiring a majority stake in Resilent, an Omaha, Nebraska-based company that does business as Digital Defense Group, but pursuant to an exchange and mutual release agreement entered into by the company and Resilent on Dec. 30, 2006, the company reduced its ownership interest in Resilent to approximately 44%. Gabriel Technologies was originally incorporated in 1990 as Princeton Video Image Inc. In 2004, Princeton Video Image Inc. filed for bankruptcy and emerged as a reorganized company on June 10, 2004. On July 23, 2004, the company changed its name to Gabriel Technologies Corporation. GLOBAL ENT: Posts $593,959 Net Loss in Quarter Ended March 31 ------------------------------------------------------------- Global Entertainment Holdings/Equities Inc. reported a net loss of $593,959 for the first quarter ended March 31, 2007, compared with a net loss of $991 for the same period last year. The company has never generated any revenues from its motion picture business. Selling, general and administrative expenses increased to $602,920 for the quarter ended March 31, 2007, compared with $991 for the quarter ended March 31, 2006. Other income, net, increased to $9,761, compared to nil for the quarter ended March 31, 2006. At March 31, 2007, the company's consolidated balance sheet showed $61,385,620 in total assets, $2,554,928 in total liabilities, and $58,830,692 in total stockholders' equity. Of the company's total assets, film assets account for $59,800,000. Going Concern Doubt Spector and Wong LLP, in Pasadena, California, expressed substantial doubt about Global Entertainment Holdings/Equities Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's operating losses of $1,105,375 and $743,019 for the years ended Dec. 31, 2006, and 2005, respectively. Management is attempting to develop sales to cover expenses and obtain an infusion of capital from private investors. Although short-term loans from management will be sufficient to fund the company's short-term capital needs, the company will need to sell equity or debt securities, obtain credit lines from financial institutions, or sell or distribute its films to meet longer-term capital requirements. About Global Entertainment Headquartered in Miami, Global Entertainment Holdings/Equities Inc. (Other OTC: GAMT.PK) -- http://www.globalentertainmentco.com/ -- is engaged in management and production of motion pictures in the United States. Its theatrical movies include its in house production and films acquired from third parties. The company has a library worth approximately 60 million dollars in motion picture titles. GS MORTGAGE: Fitch Rates $533.9MM Class L Certificates at BB+ ------------------------------------------------------------- Fitch rates GS Mortgage Securities Corporation II pass-through certificates, Series 2007-EOP, commercial mortgage pass-through certificates are rated as: -- $2,773,357,000 Class A-1 'AAA'; -- $584,790,000 Class A-2 'AAA'; -- $606,540,000 Class A-3 'AAA' -- $6,867,198,760* Class X 'AAA' -- $370,255,000 Class B 'AA+' -- $432,330,000 Class C 'AA'; -- $220,002,000 Class D 'AA-'; -- $237,884,000 Class E 'A+' -- $214,684,000 Class F 'A' -- $142,388,000 Class G 'A-' -- $142,388,000 Class H 'BBB+'; -- $395,045,000 Class J 'BBB'; -- $213,582,000 Class K 'BBB-' -- $533,953,760 Class L 'BB+'. * Notional Amount and Interest-Only All classes are privately placed pursuant to Rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are one floating rate loan having an aggregate principal balance of approximately $6,867,198,760, as of the cutoff date. HARBORVIEW MORTGAGE: Moody's Rates Class B-8 Certificates at Ba2 ---------------------------------------------------------------- Moody's Investors Service has assigned a Aaa rating to the senior certificates issued by HarborView Mortgage Loan Trust 2007-4, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by first lien, adjustable-rate, Alt-A mortgage loans originated by Paul Financial, LLC (25.83%), Plaza Home Mortgage, Inc (15.92%), First Federal Bank of California. (14.90%) and various other originators (43.35%). The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, excess spread, overcollateralization and an interest swap agreement provided by HSBC Bank USA, National Association. Moody's expects collateral losses to range from 0.90% to 1.10%. GMAC Mortgage, LLC, will service the loans. The complete rating actions are: -- HarborView Mortgage Loan Trust 2007-4 -- Mortgage Loan Pass-Through Certificates, Series 2007-4 -- Cl. 1A-1, Assigned Aaa -- Cl. 2A-1, Assigned Aaa -- Cl. 2A-2, Assigned Aaa -- Cl. 2A-3, Assigned Aaa -- Cl. B-1, Assigned Aa1 -- Cl. B-2, Assigned Aa2 -- Cl. B-3, Assigned Aa3 -- Cl. B-4, Assigned A2 -- Cl. B-5, Assigned A3 -- Cl. B-6, Assigned Baa2 -- Cl. B-7, Assigned Baa3 -- Cl. B-8, Assigned Ba2 HOME EQUITY: Increase in Projected Loss Cues Moody's Review ----------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible downgrade certain certificates from two transactions issued by Home Equity Mortgage Trust in 2006. The transactions are backed by closed-end second lien loans. The projected pipeline loss has increased over the past few months and may affect the credit support for these certificates. The certificates are being placed on review for possible downgrade based on the fact that the bonds' current credit enhancement levels, including excess spread, may be too low compared to the current projected loss numbers at the current rating level. Complete rating actions are: Issuer: Home Equity Mortgage Trust Review for Possible Downgrade: -- Series 2006-2, Class 1M-7, Current rating Baa1, under review for possible downgrade; -- Series 2006-2, Class 1M-8, Current rating Baa2, under review for possible downgrade; -- Series 2006-2, Class 1M-9, Current rating Baa3, under review for possible downgrade; -- Series 2006-5, Class M-9, Current rating Baa3, under review for possible downgrade; -- Series 2006-5, Class B-1, Current rating Ba1, under review for possible downgrade; Downgrade and Review for Possible Downgrade: -- Series 2006-2, Class 1B-1, downgraded from Ba1 to B3 and on review for possible further downgrade; -- Series 2006-2, Class 1B-2, downgraded from Ba2 to Caa3 and on review for possible further downgrade; HUDSON PRODUCTS: Planned Smithco Buy Cues S&P to Affirm B Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said affirmed its 'B' corporate credit rating on Hudson Products Holdings Inc. The rating action follows the announcement that Hudson plans to acquire privately held Smithco Engineering Inc. and Metal Services Inc. for $35 million. Hudson will fund the transaction with increased borrowing capacity under its term loan B financing, which now totals $135 million. Standard & Poor's has affirmed the 'B+' senior secured rating on Hudson's expanded $160 million first-lien credit facility, which consists of a $135 million term loan B and a $25 million revolving credit facility. The recovery rating on the facility remains at '2', indicating an expectation for substantial (70%-90%) recovery in the event of a payment default. The outlook is stable. "The ratings on Hudson reflect its high debt leverage, weak debt service coverage, and somewhat limited scope of operations," said Standard & Poor's analyst Paul Harvey. "Buffering these factors are a leading market share, stable operating margins in its fan business, some market and product diversity, and the ability to generate free cash flow through most points in the business cycle." The stable outlook reflects expectations of limited near-term debt repayment and improving EBITDA levels as Hudson continues to expand its markets. S&P would lower the ratings if Hudson pursues a more aggressive growth strategy than expected to the detriment of debt leverage and cash flow generation. Positive rating actions are possible over the longer term if Hudson is able to materially expand its business while improving debt leverage and financial performance. HYDROCHEM INDUSTRIAL: S&P Junks Rating on $50 Million Term Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to HydroChem Industrial Services Inc.'s $230 million senior secured credit facilities. S&P assigned a 'B+' rating and a recovery rating of '2' to the first-lien credit facilities, reflecting their expectation of substantial (70%-90%) recovery of principal in a payment default. The first-lien credit facilities consist of a $50 million revolving credit facility, a $30 million term loan B, and a $100 million delayed draw term loan. In addition, Standard & Poor's assigned its 'CCC+' bank loan rating and '6' recovery rating to the company's $50 million second-lien delayed draw term loan, indicating negligible (0%-10%) recovery in the event of a payment default. At the same time, S&P affirmed its 'CCC+' rating on the company's senior subordinated notes due 2013 and the 'B' corporate credit rating. The outlook is stable. Total debt is about $240 million, including $52 million of payment-in-kind notes issued by HydroChem Holding Inc., the direct parent of Deer Park, Texas-based HydroChem Industrial Services. Private equity firm Harvest Partners LLC and its portfolio company Aquilex Holdings LLC used part of the proceeds of the credit facilities to finance the acquisition of HydroChem on June 8, 2007. The first-lien and second-lien delayed draw term loans are in place to backstop the existing $150 million senior subordinated notes due 2013. These notes have a provision granting noteholders the right to require the purchase of all of the notes upon a change of control, which was triggered because of the acquisition. S&P will withdraw the rating on the notes once the tender process is completed. "The ratings on HydroChem reflect a relatively narrow scope of operations, a concentrated customer base, high debt leverage, and modest free cash generation," said Standard & Poor's credit analyst Robyn Shapiro. "Somewhat offsetting these weaknesses is the company's position as a leading participant in the $2.5 billion domestic market for industrial cleaning services, with relatively stable revenues supported by long-term contracts and recurring services." With revenues of about $250 million, HydroChem offers industrial cleaning services, including high-pressure water cleaning, chemical cleaning, industrial vacuuming, tank cleaning, and related services to the petrochemical (about 50% of revenues), oil refining (about 25%), utilities (about 10%), and other process industries. HYDROGEN POWER: Posts $16.6 Mil. Net Loss in Qtr. Ended March 31 ---------------------------------------------------------------- Hydrogen Power Inc. reported a net loss of $16,696,341 for the first quarter ended March 31, 2007, compared with a net loss of $42,193 for the same period in 2006. The company had zero revenues in both periods. Total costs and expenses increased to $13,742,454 for the first quarter ended March 31, 2007, from $841,924 for the same period last year. Costs and expenses for the 2007 quarter included costs incurred related to acquired technology, trade name and sub- license agreement of $12,779,926, compared to nil in 2006. Consolidated other expenses for the three months ended March 31, 2007 was $2,953,887 compared to $406,462 for the three months ended March 31, 2006. During the three months ended March 31, 2007, pursuant to transactions described in the Redemption Agreement, the company recognized an expense of $2,516,157 related to the partial disposition of its investments in FastFunds Financial Corporation, and the disposition of its wholly owned subsidiaries, Key Financial Systems, Nova Financial Systems, and its majority-owned subsidiary, Denaris Corp. The company also recorded a loss of $388,021 on its investment in FFFC for the three months ending March 31, 2007. Discontinued operations for 2006 have been reclassified to add Denaris and Nova to previous discontinued operations of FFFC and Key. The income from discontinued operations was $1,519,193 for the three months ended March 31, 2006. At March 31, 2007, the company's consolidated balance sheet showed $10,691,930 in total assets, $2,845,503 in total liabilities, and $7,846,427 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $2,656,748 in total current assets available to pay $2,845,503 in total current liabilities. 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?2112 Going Concern Doubt Peterson Sullivan PLLC, in Seattle, Washington, expressed substantial doubt about Hydrogen Power Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company incurred significant losses and has an accumulated deficit of approximately $55 million, and a working capital deficit of $2,038,000 at Dec. 31, 2006. Hydrogen Power Headquartered in Seattle, Washington, Hydrogen Power Inc. (OTC BB: HYDP.OB) -- http://www.hydrogenpowerinc.com/-- is an alternative energy company that has developed a proprietary method of producing hydrogen called Hydrogen Now(TM). This patented process safely generates pure hydrogen using aluminum, one of the most abundant and cost-effective natural resources on earth. Hydrogen Now(TM) combines aluminum, water, and an environmentally friendly catalyst to create a water-split reaction, generating hydrogen on- site and on-demand. The company's objective is to develop and market its licensed proprietary hydrogen production process for use in commercial applications that require hydrogen, but where hydrogen storage and/or distribution is too costly or not feasible. Currently, the company is at the early stage of testing and evaluating the commercial application of the licensed technology and the design and engineering of prototypes. INDUSTRIAL DEVELOPMENT: S&P Rates $105 Mil. Revenue Bonds at BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to the New York City Industrial Development Agency's $105 million series 2007 civic facility refunding revenue bonds, issued for Polytechnic University. The outlook is stable. "We expect that Polytechnic University will continue to improve financial performance and that enrollment will improve with continued implementation of new initiatives," said Standard & Poor's credit analyst Lori Torrey. "We also expect that the university's financial resources will continue to improve and that management will not issue any additional debt." The 'BB+' rating reflects the university's variable demand characteristics, evidenced by historical declines in enrollment; challenged operating performance on a GAAP basis; and high, although declining, endowment spending rate of 6.5% in fiscal 2006. The rating also reflects the still negative, although improving, liquidity, with unrestricted resources of approximately $14 million, representing negative 12% of operations and 14% of pro forma debt; and moderately high pro forma maximum annual debt service burden of 6.5%. Positive factors precluding a lower rating include the university's implementation of new recruiting initiatives, with improving graduate demand and enrollment, which is somewhat offset by a declining matriculation rate; a largely restricted endowment of $134.4 million as of June 30, 2006; no plans to issue any additional debt; and a solid management team that focuses on tight financial controls and has a clear strategic vision for the future of the university. The series 2007 refunding revenue bonds are being issued to refund in whole the series 2000 civic facility revenue bonds, which were issued to finance a portion of the costs of various civic facilities renovations and upgrades at the university's Brooklyn campus, as well as to pay certain costs of issuance. INSMED INC: Has Until December 17 to Regain Nasdaq Compliance ------------------------------------------------------------- Insmed Incorporated has received a NASDAQ Staff Deficiency Letter from The NASDAQ Stock Market, stating that for the last 30 consecutive business days, the closing bid price per share for the company's common stock has been below the $1 minimum per share requirement for continued inclusion under NASDAQ Marketplace Rule 4450(a)(5). In accordance with NASDAQ Marketplace Rule 4450(e)(2), Insmed will be provided 180 calendar days, or until Dec. 17, 2007, to regain compliance by maintaining a closing bid price per share of $1 or higher for a minimum of 10 consecutive business days. If Insmed is unsuccessful in meeting the minimum bid requirement during this initial compliance period the company may transfer the listing of its shares of common stock to The NASDAQ Capital Market and receive an additional 180 day compliance period if the company meets all initial listing criteria, except for the minimum bid requirement, for that market as set forth in Marketplace Rule 4310(c). If Insmed does not demonstrate compliance within the required period the company will be issued a delisting letter, which may be appealed at that time. The NASDAQ Letter received on June 18, 2007 has no effect on the listing of the company's common stock at this time. The company will seek to regain compliance within this cure period and is considering alternatives to address compliance with the continued listing standards of The NASDAQ Stock Market. Headquartered in Glen Allen, Virginia, Insmed Inc. (NasdaqGM: INSM) -- http://www.insmed.com/-- is a biopharmaceutical company focused on the development and commercialization of drug candidates for the treatment of metabolic diseases and endocrine disorders with unmet medical needs. Going Concern Doubt Ernst & Young LLP, in Richmond, Virginia, expressed substantial doubt about Insmed Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses and negative cash flows from operations. INTELSAT LTD: Sale of 76% Stake Prompts S&P to Lower Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Pembroke, Bermuda-based Intelsat Ltd. and affiliated entities, including the corporate credit rating, which was lowered to 'B+' from 'BB-'. All ratings were immediately placed on CreditWatch with negative implications. About $11.4 billion of debt is outstanding. The rating actions follow news of a definitive agreement by Intelsat to sell an approximate 76% stake in the company to a group of investors led by BC Partners for $5 billion. Current Intelsat shareholders will retain the balance of the ownership. The 'B' ratings on three issues were not lowered but were placed on CreditWatch Negative because the company has indicated it may retire or defease the debt. These issues are Intelsat Ltd.'s $400 million 5.25% senior unsecured notes due 2008, and Intelsat Bermuda Ltd.'s $260 million floating-rate senior notes due 2013 and $600 million floating-rate senior notes due 2015. Intelsat is a major global provider of fixed satellite services. "The anticipated financing for the transaction will increase Intelsat's debt by about $3.85 billion, pushing up leverage to the 10x area from an already-aggressive 7.4x," said Standard & Poor's credit analyst Susan Madison. The CreditWatch action indicates that, despite a business position that S&P view as investment grade, the elevated leverage may not be supportive of even the 'B+' corporate credit rating. Unless the company can demonstrate a path toward meaningful debt reduction within a reasonable time frame after the transaction, the rating could be further lowered. The acquisition, which will require regulatory approvals, is expected to close in six to nine months. INTERTAPE POLYMER: Board Finds Dissident's Proposals Flawed ----------------------------------------------------------- Intertape Polymer Group Inc.'s board of directors met early this week to consider a dissident proxy circular issued by 6789536 Canada Inc., a newly incorporated company. In the meeting, the board determined that the dissident's proposals are not in the best interests of Intertape shareholders and involve significant risks. The board also found the dissident proxy circular to be vague and lacking specifics. The board also noted significant flaws and other deficiencies in the dissident's proposals. The dissident proxy circular solicited proxies to prevent the previously announced sale of the company and to replace the board of directors with nominees supported by the dissident. Intertape's board confirmed its support for the proposed plan of arrangement involving the company and an entity formed by Littlejohn Fund III, L.P., pursuant to which all of the outstanding common shares of the company are to be acquired at a price of $4.76 per share in cash as fully detailed in Intertape's management information circular dated May 25, 2007. The board continues to recommend that shareholders vote in favor of the arrangement. "The dissident is attempting to frustrate the board's process of maximizing value to shareholders without providing a clear plan for value realization or creation," said Michael L. Richards, chairman of Intertape. "Obstructing the Arrangement and failing to provide a viable alternative is clearly detrimental to the shareholders, exposes them to significant risk and the board of directors advises shareholders to ignore the dissident's proxy solicitation attempts and only to execute the form of proxy provided with Intertape management's proxy circular." The dissident's stated intention is to use proxies it receives to vote against the arrangement and to vote for a slate of director nominees that for the most part have had little or no involvement with the company. The board strongly recommends that shareholders reject the dissident action for several reasons, including: -- The dissident would prevent shareholders from receiving immediate and fair value for their investment. -- Change of board of directors would have immediate negative financial consequences for Intertape and its shareholders: -- The dissident's nominees have no material ownership in Intertape and would gain control of the company with no compensation for shareholders. -- The measures proposed by the Dissident for Intertape are vague and without particularity. -- The dissident proxy circular omits important information. "The dissident offers shareholders only a number of nominees for directors without any indication of strategy for the company," said Mr. Richards. "The dissident proxy circular lacks concrete proposals that could reasonably be expected to create value for the Intertape shareholders. In fact, the only certain result of the dissident's proposals will be the lost opportunity for realizing fair value, in cash, for their investment through the arrangement." The shareholders of Intertape, if they were to support the dissident, would be adopting an uncertain, speculative and hypothetical path through measures with no clear objective or plan. "The shareholders of Intertape should make an informed decision, based on facts. The dissident is asking shareholders to make a leap of faith and supporting a poorly considered corporate direction," concluded Mr. Richards. About Intertape Polymer Headquartered in Quebec, Canada, Intertape Polymer Group (TSX: ITP) (NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. The company employs about 2450 employees with operations in 18 locations, including 13 manufacturing facilities in North America, one in Europe and in Mexico. * * * Intertape Polymer Group, Inc. carries Standard & Poor's Ratings' 'B-' corporate credit and senior secured ratings. In addition, the company also carries Standard & Poor's 'CCC' senior subordinated rating. INTERTAPE POLYMER: Annual and Special Meeting Set for June 26 ------------------------------------------------------------- Intertape Polymer Group 's annual and special meeting of shareholders will be held at 4:00 p.m., Montreal time, on June 26, 2007, at the Hotel Omni Mount Royal in Montreal, Quebec. Shareholders voting by proxies should ensure that the completed forms of proxy that accompanied the management proxy circular are received at the office of the company's Canadian transfer agent, CIBC Mellon Trust Company, 2001 University Street, 16th Floor, Montreal, Quebec, Canada, H3A 2A6, by 4:00 p.m., Montreal time, today, June 21, 2007. This will ensure that proxies are recognized at the meeting. Shareholders who have questions about the information contained in the circular or require assistance in completing the proxy should contact Georgeson at its North America toll free number of 1-866-717-7668. About Intertape Polymer Headquartered in Quebec, Canada, Intertape Polymer Group (TSX: ITP) (NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. The company employs about 2450 employees with operations in 18 locations, including 13 manufacturing facilities in North America, one in Europe and in Mexico. * * * Intertape Polymer Group, Inc. carries Standard & Poor's Ratings' 'B-' corporate credit and senior secured ratings. In addition, the company also carries Standard & Poor's 'CCC' senior subordinated rating. ISLE OF CAPRI: Competitive Conditions Cue S&P's Negative Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Isle of Capri Casinos Inc. to negative from stable. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. In addition, Standard & Poor's assigned its loan and recovery ratings to Isle's proposed $1.35 billion senior secured credit facilities. The loan was rated 'BB+' with a recovery rating of '1', indicating the expectation for very high (90%-100%) recovery in the event of a payment default. Net proceeds from the bank credit facility, along with some cash on hand, will be used to refinance existing bank debt, to call the company's 9% senior subordinated notes, and to fund future capital expenditure projects. Total pro forma debt outstanding at Isle is $1.4 billion. "The outlook revision follows our review of the competitive operating conditions in key markets that Isle serves, such as Lake Charles, Black Hawk, and Biloxi, which have resulted in materially weak year-over-year performance for the third quarter ended Jan. 28, 2007," said Standard & Poor's credit analyst Ariel Silverberg. "This, coupled with management's aggressive growth strategy, will cause leverage to remain weak for the current rating, at more than 6.0x over the next couple of years. S&P have factored an estimated $320 million into its capital expenditure assumptions, related to the West Harrison County project in Mississippi." The rating on Biloxi, Mississippi-based Isle of Capri Casinos reflects the company's aggressive growth strategy, vulnerability to competitive pressures due to the second-tier market position of many of its properties, and weak credit measures. These factors are somewhat tempered by the geographically diverse portfolio of the company's gaming assets. INVERNESS MEDICAL: S&P Affirms B+ Credit Rating and Removes Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and 'B-' subordinated debt ratings on Inverness Medical Innovations Inc. The ratings were removed from CreditWatch, where they had been placed on April 10, 2007 with negative implications. The outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to Inverness's $1.05 billion first-lien senior secured credit facility, comprised of a $150 million revolver due 2013 and a $900 million term loan due 2014. The debt is rated 'BB' with a recovery rating of '1', indicating that lenders can expect very high recovery (90%-100%) in the event of a payment default or bankruptcy. S&P also rated Inverness's $250 million second-lien senior secured term facility, assigning a rating of 'B-', with a recovery rating of '6', indicating negligible recovery (0%-10%) prospects. "These actions reflect two pending transactions: the $1.5 billion cash acquisition of unrated Biosite Inc., and a merger with unrated Cholestech Corp. in an exchange of stock valued at about $340 million," explained Standard & Poor's credit analyst David Lugg. The newly rated facilities will fund, in part, the Biosite acquisition. Inverness has a significant cash balance available for the acquisition, given an early 2007 common equity placement that netted about $261 million and the formation of a joint venture with Procter & Gamble (AA-/Stable/A-1+). Inverness contributed development, marketing and sales assets of its consumer diagnostics business in exchange for $325 million. These three transactions will transform Inverness from a mixed-market, rapid diagnostic test provider to a leading provider of rapid diagnostic tests to the medical professional market. The ratings on Inverness Medical Innovations Inc. reflect its highly leveraged position as a result of its acquisition of Biosite and emerging position as a leading provider of professional rapid diagnostic products. Waltham, Massachusetts- based Inverness has grown its professional and consumer diagnostics businesses through a series of acquisitions that leveraged its key technology patents. The company's largest and fastest-growing operating segment provides a variety of rapid diagnostic tests and equipment for medical professionals for use both in laboratories and in point-of-care settings. Acquisitions and organic growth in this area have increased professional diagnostics' share of overall sales to more than 60% from about one-third in 2003. JED OIL: Caribou Shareholders to Decide on Merger at July 30 Meet ----------------------------------------------------------------- The Court of Queen's Bench of Alberta has issued an order which provides for meetings of Caribou Resources Corp.'s creditors and shareholders to be held on July 30, 2007. The meeting of Caribou's creditors will consider approval of a Plan of Arrangement under the Companies' Creditors Arrangement Act (Canada), in relation with JED Oil Inc.'s acquisition of Caribou. Caribou had filed for protection under the CCAA which is similar to "Chapter 11" protection in the U.S. Under the CCAA Plan, Caribou's creditors ranking in priority behind the major secured creditor, whose position JED has acquired, are being offered cash of approximately $345,500 plus the issuance of 5 million JED common shares. Under the CCAA Plan the secured creditors whose security ranks behind JED's will share in the net proceeds from 1.8 million of the JED common shares and the unsecured creditors will share in the balance of the cash and JED common shares. Creditors of Caribou who have security that ranks ahead of JED's will not be affected by the CCAA Plan and will be paid by JED. Shareholders' Meeting The meeting of Caribou's shareholders will consider, among other things, approval of a Plan of Arrangement under the Business Corporation's Act (Alberta). Under the ABCA Arrangement, Caribou's shareholders would transfer all of the Caribou common shares to JED in exchange for JED common shares, on the basis of one JED Common share for each ten Caribou common shares, and Caribou would become a wholly owned subsidiary of JED. Outstanding stock options to acquire Caribou common shares, if not exercised by the effective date of the ABCA Arrangement, would be cancelled. JED has reserved up to 4 million common shares for the ABCA Arrangement. The issuance by JED of up to 9 million common shares is also subject to the approval of JED's common shareholders under the rules of the American Stock Exchange and JED will hold a special meeting of its shareholders on July 30, 2007. JED's common shareholders and Series B Preferred shareholders will also be asked to approve amendments to JED's Articles of Incorporation to amend the terms of the Series B Preferred shares to extend the maturity date to Feb. 1, 2010 and change the conversion prices to $3.50. An Information Circular with detailed information will be mailed to JED shareholders in the first week of July. Guidance for 2007 and 2008 As a result of this combination with Caribou, JED expects to have combined production of approximately 1,500 barrels of oil equivalent per day. Current estimates for 2007 year-end production is approximately 2,900 BOE/d. Utilizing existing lands, the current capital base and the significant reduction in debt, the forecasted exit rate for Q1 2008 is expected to be approximately 4,100 BOE/d and the Q2 2008 exit rate is expected to be 4,500 BOE/d. Funds provided by operating activities before changes in operating assets and liabilities on a combined basis for Q3 2007 are expected at approximately $2.9 million and $8 million for Q4. Funds from operations for Q1 2008 are expected at approximately $13 million with $26.5 million expected for the first six months of 2008. Common shares outstanding on a combined basis will be approximately 23.8 million. On a fully diluted basis there would be approximately 29.8 million shares based on existing stock options, share purchase warrants, convertible notes and convertible preferred stock. A private placement in Canada of an additional 1.4 million convertible preferred shares is currently being considered by JED, which, if completed, would increase the aggregate common shares on a fully diluted basis to approximately 31.2 million. If the amendments to JED's Articles of Incorporation to change the conversion price of the Series B Preferred shares are approved, the aggregate of common shares would be approximately 37.65 million on a fully diluted basis. In these estimates on a fully diluted basis, the conversion of the convertible notes is based on the current exercise price of $16.00. To accomplish the company's development drilling programs over the next year it plans to use existing cash flow, bank lines of credit and certain asset sales. The above guidance includes those sources of funds. The company does not plan any equity offering during the next year, other than the private placement of preferred shares. JED believes that it can exit 2008 at a production rate of approximately 5,900 BOE/d while significantly reducing its debt. Based on current varied pricing estimates of the New York Mercantile Exchange, estimated revenue for the full year of 2008 is expected to be $92 million resulting in operating cash flow of approximately $63 million. About Caribou Resources Based in Calgary, Canada, Caribou Resources Corp. (TSX VENTURE:CBU) -- http://www.cariboures.com/-- is a full cycle exploration and development company primarily focused on exploring for natural gas in Northern Alberta, and oil and natural gas in Central Alberta. With a mix of oil and gas prospects, the company is committed to creating shareholder value by conducting exploration and development activities in a highly focused area. In January 2007, Caribou filed for protection under the Canadian Companies' Creditors Arrangement Act. About JED Oil Based in Didsbury, Alberta, JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an oil and natural gas company that commenced operations in the second quarter of 2004 and has begun to develop and operate oil and natural gas properties principally in western Canada and the United States. The company had $36,015,655 in total assets, $78,266,519 in total liabilities, and a stockholders' deficit of $42,250,864 at Dec. 31, 2006. JOURNAL REGISTER: Revenues at $37.6MM in Four Weeks Ended June 3 ---------------------------------------------------------------- Journal Register Company reported total revenues from continuing operations for period five, the four weeks ended June 3, 2007, of $37.6 million compared to $41.4 million for the four weeks ended May 28, 2006, a decrease of 9.2%. Excluding results from the Michigan cluster, total revenues decreased 7.9% as compared to the prior year period. Total advertising revenues for period five in 2007, from continuing operations, were $29 million, compared to $32.8 million for period five in 2006, a decrease of 11.5%. Senior vice president and chief financial officer Julie A. Beck said, "Our unsatisfactory revenue results for period five reflect the difficult advertising market across all categories, generally, and the transitioning economies in two of our clusters - Michigan and Greater Cleveland. We are encouraged by the improvement in automotive advertising, which had the best performance trend of the year and by our continued growth in online revenue." Revenue Performance by Category Continued strong performance from the company's online operations produced online revenues for period five of $1.5 million, and an increase of 22.1% as compared to period five of 2006. The company's Web sites had 4 million unique visitors generating 28.8 million page views in period five, representing an increase of 16.2% and 5.2%, respectively, as compared to the prior year period. Retail advertising revenues were down 13.8% in period five, as compared to the prior year period. The company's retail advertising revenues were down 13% excluding the results of the company's Michigan cluster. Softness in the financial/insurance and building/hardware/garden stores advertising revenue categories was partially offset by strength in the political advertising revenue category. Classified advertising revenues for period five decreased 8.4%, as compared to the prior year period. Excluding the results from the Michigan cluster, total classified advertising revenues decreased 5.7% for the period. Classified other advertising revenues increased 0.3% in period five, as compared to the prior year period. Excluding the results from the company's Michigan cluster, classified other advertising revenues increased 2.8% in period five. Classified auto advertising revenues were down 6.8%, as compared to period five of 2006. Excluding results from the company's Michigan cluster, classified auto advertising revenues were down 1.6% for the period. Classified employment advertising revenues decreased 7.3% in period five, as compared to period five of 2006. The company's classified employment advertising revenues were down 7.2% excluding the results from the company's Michigan cluster. The company's classified real estate advertising revenues decreased 18.9%. The company's classified real estate advertising revenues were down 14.4% excluding the results of the company's Michigan cluster. National advertising revenues, which represent approximately four% of total advertising revenues, decreased 9.6% in period five, as compared to the prior year period, with softness in the telecommunications advertising revenue category. Circulation revenues for period five decreased 1%, as compared to the prior year period. About Journal Register Journal Register Company - http://www.JournalRegister.com/-- owns 22 daily newspapers and 345 non-daily publications. It currently operates 226 individual Web sites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment Web sites that can be accessed through the company's Web site. All of the company's operations are clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 premier employment Web sites. * * * Journal Register Co. continues to carry Moody's Ba3 long-term family and bank loan debt ratings, as well as B1 probability-of- default rating. The outlook remains stable. The company also carries Standard & Poor's BB- long-term foreign and local issuer credit ratings. KAMP RE: S&P Retains Negative Watch on Senior Debt's CC Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CC' senior secured debt rating on KAMP RE 2005 Ltd.'s $190 million floating- rate principal-at-risk notes are remaining on CreditWatch with negative implications, where it was placed on Oct. 13, 2005. The notes are due Dec. 14, 2007. "Since the last CreditWatch update on this rating, there have been no significant developments," said Standard & Poor's credit analyst Gary Martucci. "We will continue to monitor the transaction for any developments and will issue updates or take ratings actions as appropriate." The notes continue to pay a spread over LIBOR of 0.10%, and the outstanding principal amount has still not been reduced. KID CASTLE: Losses Cue Brock Schechter's Going Concern Doubt ------------------------------------------------------------ Brock, Schechter & Polakoff LLP of Buffalo, N.Y., expressed substantial doubt about Kid Castle Educational Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficit. The company posted a $46,211 net loss on $9.7 million of total revenues for the year ended Dec. 31, 2006, as compared with a $1.7 million net loss on $10.2 million of total revenues in the prior year. At Dec. 31, 2006, the company's balance sheet showed $9.4 million in total assets, $10 million in total liabilities and $54,561 in minority interest, resulting to a $634,753 stockholders' deficit. The company also reported strained liquidity in its Dec. 31, 2006, balance sheet with $5.9 in total current assets and $6.7 in total current liabilities, resulting to an $808,531 working capital deficit. Liquidity and Capital Resources As of Dec. 31, 2006, the company's principal sources of liquidity included cash and bank balances of $1.4 million, which increased from $613,391 at Dec. 31, 2005. The increase was mainly due to reductions in expenses in their Shanghai operations. Net cash provided by operating activities was $1.7 million and net cash used in operating activities was $1.3 million during fiscal years 2006 and 2005, respectively. Net cash provided by operating activities during fiscal year 2006 was primarily attributed to the decrease in net loss. Net cash provided by investing activities was $671,018 and $1.5 million during fiscal years 2006 and 2005, respectively. The $843,246 decrease is due to the change in the amount due from a shareholder/director of $977,838 during fiscal year 2005. Net cash used in financing activities during fiscal year 2006 was $1.6 million and net cash provided by financing activities was $262,196 during fiscal year 2005. The $1.8 million decrease was primarily attributable to proceeds from bank borrowings of $213,357 during fiscal year 2006, as compared to that of $3.1 million during fiscal year 2005. Full-text copies of the company's 2007 financial statements are available for free at http://ResearchArchives.com/t/s?2102 About Kid Castle Based in Taipei, Taiwan Kid Castle Educational Corp. (PNK: KDCE) - - http://www.kidcastle.com/-- provides English language instruction and educational services in China and Taiwan to children between two and 12 years old for whom Chinese is the primary language. The company also provides management and consulting services to its franchised kindergarten and language schools and sells educational tools and equipment that are complementary to its business. KOWBOYS KARS: U.S. Trustee Wants Case Converted to Chapter 7 ------------------------------------------------------------ The U.S. Trustee for Region 5 asks the United States Bankruptcy Court for the Southern District of Mississippi to convert Kowboy's Kars LLC's Chapter 11 case to a chapter 7 liquidation proceeding, or in the alternative, dismiss the Debtor's case. The Trustee tells the Court that the Debtor has failed to take necessary steps to achieve an orderly expeditious outlook of its case. The Trustee cites these reasons: -- continuing loss to or diminution of the estate and absence of a reasonable likelihood of rehabilitation; -- unreasonable delay that is prejudicial to creditors; -- inability to effectuate a plan and failure to propose a confirmable plan under Section 1121 within the time fixed by the court; -- failure to timely file monthly operating reports; -- failure to pay fees or charges required under chapter 123 of title 28; and -- other grounds to be assigned at a hearing. Headquartered in Natchez, Mississippi, Kowboy's Kars LLC file for Chapter 11 protection on Jan. 8, 2007 (Bankr. S.D. Ms .Case No. 07-00080). Jeffrey Kyle Tyree, Esq., at Harris, Jernigan & Geno, PPLC, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors appointed in the Debtor's case. When the Debtors sought protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. LAZARD LTD: Affiliate Prices $600 Million Senior Notes Offering --------------------------------------------------------------- Lazard Ltd.'s subsidiary, Lazard Group LLC has priced an offering of $600 million aggregate principal amount of senior notes due 2017. The notes will be senior unsecured obligations of Lazard Group LLC. The notes will be sold at 99.702% and will bear interest at a rate of 6.85%. The sale of the notes is expected to close on June 21, 2007, subject to customary closing conditions. Lazard Group intends to use the net proceeds from the sale of the notes for: a) expansion of its Financial Advisory and Asset Management businesses; b) other strategic acquisitions or investments; c) repayment of Lazard Group's $96 million senior promissory note and $50 million subordinated promissory note, each of which are due in February 2008; and d) general corporate purposes. The notes are offered in a private placement under Rule 144A, have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Lazard Ltd. (NYSE: LAZ) -- http://www.lazard.com/-- a preeminent financial advisory and asset management firm operates from 29 cities across 16 countries in North America, Europe, Asia, Australia and South America. With origins dating back to 1848, the firm provides advice on mergers and acquisitions, restructuring and capital raising, as well as asset management services to corporations, partnerships, institutions, governments, and individuals. * * * As reported in the Troubled Company Reporter on May 10, 2007, Lazard Ltd. reported total assets of $2.6 billion, total liabilities of $2.8 billion, and minority interest at $55.7 million, resulting in a total stockholders' deficit of $206.8 million as of March 31, 2007. MERRILL LYNCH: Fitch Affirms Low-B Ratings on Six Certificates -------------------------------------------------------------- Fitch Ratings has upgraded Merrill Lynch Mortgage Trust's commercial mortgage pass-through certificates, series 2004-BPC1, as: -- $12.4 million class C to 'AA' from 'AA-'; -- $18.6 million class D to 'A+' from 'A'; -- $9.3 million class E to 'A' from 'A-'. In addition, Fitch affirms the ratings on these classes: -- $28.6 million class A-1 at 'AAA'; -- $177.9 million class A-1A at 'AAA'; -- $138.5 million class A-2 at 'AAA'; -- $171.3 million class A-3 at 'AAA'; -- $48.8 million class A-4 at 'AAA'; -- $397.2 million class A-5 at 'AAA'; -- $94.8 million class AJ at 'AAA'; -- Interest-only class XC at 'AAA'; -- Interest-only class XP at 'AAA'; -- $26.4 million class B at 'AA'; -- $15.5 million class F at 'BBB+'; -- $10.9 million class G at 'BBB'; -- $15.5 million class H at 'BBB-'; -- $6.2 million class J at 'BB+'; -- $4.7 million class K at 'BB'; -- $6.2 million class L at 'BB-'; -- $4.7 million class M at 'B+'; -- $3.1 million class N at 'B'; -- $3.1 million class P at 'B-'. The $17.1 million class Q is not rated by Fitch. The rating upgrades reflect additional defeasance, scheduled amortization and stable performance since Fitch's last review. As of the June 2007 distribution date, the pool's aggregate collateral balance has been reduced approximately 2.6% to $1.21 billion from $1.24 billion at issuance. There are currently no delinquent or specially serviced loans. To date, seven loans (9.7%) have been defeased. Two loans (14.7%) maintain investment grade credit assessments by Fitch. Bank of America Center (10.7%) is a 1,780,748 square foot office property located in San Francisco, California. Occupancy as of YE 2006 remained stable at 93.5% compared to 93.7% at issuance. Dallas Market Center (4%) is a 3,179,069 sf merchandise mart located in Dallas, Texas. Occupancy as of January 2007 was 90.9% compared to 93.4% at issuance. MORGAN STANLEY: Fitch Affirms Low-B Ratings on Six Classes ---------------------------------------------------------- Fitch Ratings has affirmed Morgan Stanley Capital I Trust 2005 IQ9, as: -- $35.9 million class A-1 at 'AAA'; -- $262.7 million class A-1A at 'AAA'; -- $112.6 million class A-2 at 'AAA'; -- $194.7 million class A-3 at 'AAA'; -- $94.4 million class A-4 at 'AAA'; -- $43.8 million class A-AB at 'AAA'; -- $446.2 million class A-5 at 'AAA'; -- $130.2 million class A-J at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- Interest-only class X-Y at 'AAA'; -- $32.6 million class B at 'AA'; -- $11.5 million class C at 'AA-'; -- $26.8 million class D at 'A'; -- $15.3 million class E at 'A-'; -- $15.3 million class F at 'BBB+'; -- $11.5 million class G at 'BBB'; -- $17.2 million class H at 'BBB-'; -- $5.7 million class J at 'BB+'; -- $7.7 million class K at 'BB'; -- $5.7 million class L at 'BB-'; -- $5.7 million class M at 'B+'; -- $3.8 million class N at 'B'; -- $5.7 million class O at 'B-'; Fitch does not rate the $11.5 million class P. The rating affirmations reflect stable transaction performance and minimal paydown since issuance. As of the May 2007 distribution date, the pool's aggregate certificate balance has decreased 2.3% to $1.5 billion from $1.53 billion at issuance. Currently, there are no delinquent loans or loans in special servicing. At issuance, Fitch credit assessed the 540 Madison Avenue loan. The loan maintains its investment grade credit assessment due to stable performance. The loan is secured by a 39-story, 280,830 square foot office property located in midtown Manhattan. Occupancy remains strong at 99.1% as of YE 2006. MORGAN STANLEY: Moody's Rates Class B-5 Certificates at (P)Ba2 -------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to certificates issued by Morgan Stanley ABS Capital I Inc. Trust 2007-NC4. The complete provisional rating actions are: -- Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 -- Mortgage Pass-Through Certificates, Series 2007-NC4 -- Cl. A-1, Assigned (P)Aaa -- Cl. A-2a, Assigned (P)Aaa -- Cl. A-2b, Assigned (P)Aaa -- Cl. A-2c, Assigned (P)Aaa -- Cl. A-2d, Assigned (P)Aaa -- Cl. M-1, Assigned (P)A2 -- Cl. M-2, Assigned (P)A3 -- Cl. B-1, Assigned (P)Baa1 -- Cl. B-2, Assigned (P)Baa1 -- Cl. B-3, Assigned (P)Baa3 -- Cl. B-4, Assigned (P)Ba1 -- Cl. B-5, Assigned (P)Ba2 MORGAN STANLEY: S&P Lowers Rating on Class A-5 Notes to B from B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $3 million class A-5 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'B' from 'B+'. At the same time, S&P placed the 'B+' rating on the $3 million class A-11 secured fixed- rate notes from the same series on CreditWatch with positive implications. The downgrade of the class A-5 notes reflects the June 15, 2007, lowering of the rating on the referenced obligations issued by Bowater Inc. (B/Negative/--). The rating action on the class A-11 notes reflects the June 15, 2007, placement of the rating on the referenced obligations issued by Rock-Tenn Co. (BB/Watch Pos/--) on CreditWatch with positive implications. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a credit linked note transaction that is weak- linked to the lower of (i) the ratings on the respective reference obligations for each class; (ii) the long-term rating on the credit default swap's, interest rate swap's and contingent forward counterparty's guarantor, Morgan Stanley ('A+'); and (iii) the credit quality of the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). NEW CENTURY: Mood's Downgrades Ratings on 18 Tranches ----------------------------------------------------- Moody's Investors Service has downgraded eighteen tranches, placed under review for possible downgrade five tranches, and confirmed the rating on three tranches from several 2001, 2002, and 2003 deals with loans originated by New Century Mortgage Corporation. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. The certificates have been downgraded and placed on review for possible downgrade based upon recent and expected pool losses and the resulting erosion of credit support. Overcollateralization amounts in all of the transactions are currently below their floors and pipeline losses are likely to cause further erosion of the overcollateralization, which could put pressure on the subordinate tranches. Furthermore, existing credit enhancement levels may be low given the current projected losses on the underlying pools. Although the deals' losses are performing within the area of original expectations, credit support deterioration seen in many of these deals can be partially attributed to the deals passing performance triggers and therefore releasing large amounts of overcollateralization. Finally, Moody's has confirmed the current ratings on the Class M- 5 and M-6 certificates from New Century Home Equity Loan Trust, Series 2003-3 and on the Class B-1 certificates from Morgan Stanley Dean Witter Capital I Inc., Series 2001-NC3 as credit support is sufficient to support the current ratings on these certificates. Complete rating actions are: Downgrade Issuer: Ace Securities Corporation Home Equity Loan Trust -- Series 2003-NC1, Class M-5, downgraded from Baa2 to Ba3 -- Series 2003-NC1, Class M-6, downgraded from Baa3 to B2 Issuer: Asset Backed Securities Corporation Home Equity Loan Trust -- Series 2001-HE1, Class B, downgraded from Ba1 to B3 Issuer: Merrill Lynch Mortgage Investors Trust -- Series 2002-NC1, Class B-1, downgraded from Baa2 to Ba2 -- Series 2002-NC1, Class B-2, downgraded from Baa3 to Ba3 Issuer: Morgan Stanley Capital I Inc. -- Series 2003-NC4, Class B-2, downgraded from Baa2 to Ba2 -- Series 2003-NC4, Class B-3, downgraded from Baa3 to B3 Issuer: Morgan Stanley Dean Witter Capital I Inc. -- Series 2001-NC4, Class B-1, downgraded from B1 to Caa1 -- Series 2002-NC2, Class B-1, downgraded from Ba1 to Caa1 -- Series 2002-NC4, Class M-2, downgraded from Aa2 to A3 -- Series 2002-NC4, Class B-1, downgraded from Baa3 to B3 -- Series 2002-NC4, Class B-2, downgraded from B1 to Ca -- Series 2003-NC1, Class B-1, downgraded from Baa2 to Ba3 -- Series 2003-NC1, Class B-2, downgraded from Baa3 to B3 -- Series 2003-NC2, Class B-1, downgraded from Baa2 to Ba1 -- Series 2003-NC2, Class B-2, downgraded from Baa3 to Ba3 Issuer: New Century Home Equity Loan Trust -- Series 2003-2, Class M-3, downgraded from Baa2 to Ba2 -- Series 2003-2, Class M-4, downgraded from Baa3 to B2 Review for Downgrade Issuer: Morgan Stanley Dean Witter Capital I Inc. -- Series 2003-NC3, Class B-2, current rating Baa2, under review for possible downgrade -- Series 2003-NC3, Class B-3, current rating Baa3, under review for possible downgrade Issuer: Morgan Stanley ABS Capital I Inc. -- Series 2003-NC5, Class B-1, current rating Baa1, under review for possible downgrade -- Series 2003-NC5, Class B-2, current rating Baa2, under review for possible downgrade -- Series 2003-NC5, Class B-3, current rating Baa3, under review for possible downgrade Confirm Issuer: Morgan Stanley Dean Witter Capital I Inc. -- Series 2001-NC3, Class B-1, confirmed at Ba1 Issuer: New Century Home Equity Loan Trust -- Series 2003-3, Class M-5, confirmed at Baa2 -- Series 2003-3, Class M-6, confirmed at Baa3 NY WESTCHESTER: Court OKs InterCare as Special Medicare Consultant ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York has granted authority to New York Westchester Square Medical Center to employ InterCare Consulting Inc. as its special medicare consultant. As Debtor's Medicare Consultant, InterCare is expected to: a. assist the Debtor in identifying DSU adjustment opportunities by seeking out additional Medicaid paid and eligible days and to successfully appeal the findings with the appropriate Medicare fiscal intermediary; b. assist the Debtor in appealing the current Medicare final settlement or request a reopening of previously settled HCFA-2552's; c. contact the Department of Health for paid PPS Medicaid program days and identify and verify Medicaid IPRO denied days which have not been included in the DOH database; d. assist in creating a hospital non-Medicare/Medicaid PPS database to be crossmatched to the NYC EMEVS system for potential Medicaid "eligible" days and testing of eligible days to confirm patients access to covered Medicaid inpatient services; e. prepare and submit 2006 CMS-2552 and Institutional Cost Report; f. prepare 2007 Operating and Capital Budgets; g. prepare and analyze of third party billing and receivable issues, including acquisition, review and analysis of Medicaid revised and newly issued inpatient and outpatient rates. h. review of any and all third party payer informational or reimbursement data requests that may impact the Debtor's financial position; i. assist with the review of other third party rate information as it impacts both the Debtor's billing and medical records systems; j. assist with the preparation of the IRS-990 tax return; and k) provide general advice concerning the billing or write off policies and procedures in place or those needed to be updated to coincide with current practices and regulations. Under the Debtor's contract with InterCare, the existing fee arrangements for each of the services provided are: Service Fee ------- ---------------- Medicare Adjustments/ Based on hourly rates for first Reimbursements 120 hours up to $15,000, plus incremental revenue of 15% of any Recovery Preparation of Cost Reports Flat Fee of $12,500 for first 100 hours of services rendered; hourly rates for any services provided thereafter Analysis of Third Party Based on hourly rates Billings Preparation of 2007 Based on hourly rates Operating and Capital Budgets Gary Introcaso, president of InterCare, assures the Court that he does not hold or represent any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. Mr. Introcaso can be reached at: Gary Introcaso InterCare Consulting Inc. 4 Paddock Road Rye Brook, New York 10573 Based in Bronx, New York, New York, Westchester Square Medical Center -- http://www.nywsmc.org/-- is a not-for-profit, community acute care hospital and certified stroke center that has served a working class population in the Bronx community since 1929. Its primary facility, located at 2475 St. Raymond Avenue, Bronx, New York 10461, houses 205 beds and provides acute adult medical and surgical care, emergency medicine and ambulatory services. NYWSMC is a membership corporation whose members are selected by the New York-Presbyterian Healthcare System, Inc. The company filed for chapter 11 protection on Dec. 19, 2006 (Bankr. S.D.N.Y. Case No. 06-13050). Burton S. Weston, Esq., at Garfunkel, Wild & Travis, P.C., represents the Debtor. Louis A. Scarcella, Esq., and Robert C. Yan, Esq., at Farrell Fritz PC, represent the Official Committee Of Unsecured Creditors. The Debtor's schedules showed total assets of $49,283,477 and total debts of $35,502,088. The Debtor's exclusive period wherein it can file a plan of reorganization ends on Aug. 16, 2007. PPM AMERICA: Fitch Puts Ratings on 3 Notes Under Negative Watch --------------------------------------------------------------- Fitch has placed these classes of notes issued by PPM America High Grade CBO I, Ltd. on Rating Watch Negative: -- $48,000,000 class B-1 notes 'BB+'; -- $10,000,000 class B-2 notes 'BB+'; -- $14,193,562 class C notes 'CCC+/DR2'. PPM High Grade I is a collateralized bond obligation that closed Dec. 19, 2000 and is managed by PPM America, Inc. PPM High Grade I pays a coupon on a semi-annual basis and has a portfolio composed of primarily investment grade corporate bonds. The rating action is the result of several factors, including negative credit migration of the portfolio, a reduction in weighted average coupon, and a declining class B interest coverage ratio. According to the portfolio dated June 15, 2007, the WAC of the assets decreased to 6.41% from inception, relative to a trigger of 7.45%. The weighted average rating factor also deteriorated to 28.30 ('BBB-/BB+'), and the class B interest coverage ratio decreased to 102.85%, relative to a trigger of 102.5%. Given the current state of the portfolio, Fitch has conducted cash flow model simulations that show that the deal may not be able to withstand a requisite level of defaults that are commensurate with the current ratings of the class B and C notes. The ratings of the class B-1 and B-2 notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class C notes addresses the likelihood that investors will ultimately receive the stated balance of principal by the legal final maturity date. PRESIDENT CASINOS: Deloitte & Touche Raises Going Concern Doubt --------------------------------------------------------------- Deloitte & Touche LLP in St. Louis, Missouri, expressed substantial doubt about President Casinos, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Feb. 28, 2007, and 2006. The auditing firm pointed to the company's recurring losses from continuing operations and absence of any ongoing revenue producing activities. The company's consolidated selling, general and administrative expenses were $2.1 million and $2.6 million during the years ended Feb. 28, 2007, and 2006, respectively. The decrease is the result of the departure of two executives in the first quarter of fiscal 2007. The company had operating losses of $2.1 million and $2.6 million during the years ended Feb. 28, 2007, and 2006, respectively. The company posted reorganization income of $9.8 million during the year ended Feb. 28, 2007, compared with expense of $700,000 during the year ended Feb. 28, 2006. The company had $200,000 in minority interest income during the year ended Feb. 28, 2007, compared with expense of $600,000 during the year ended Feb. 28, 2006. The company posted net income from continuing operations of $8 million during the year ended Feb. 28, 2007, compared with a net loss from continuing operations of $3.6 million during fiscal year 2006. For the three straight fiscal years ended Feb. 28, 2007, the company had no operating revenue, which resulted to operating losses. The company posted net income of $10.1 million and $34.3 million for the years ended Feb. 28, 2007, and 2006, respectively. At Feb. 28, 2007, the company's balance sheet showed $7.4 million in total assets, $5.1 million in total liabilities and $2.3 million in stockholders' equity. At Feb. 28, 2006, the company's balance sheet showed $66.8 million in total assets and $74.6 million in total liabilities, resulting in a $7.8 stockholders' deficit. Discontinued Operations As of Feb. 28, 2007, the company had sold its Biloxi and St. Louis operations that include dockside gaming casinos. The company's St. Louis operating segment had operating income of $4.4 million, consisting of revenues of $51.7 million and operating expenses of $47.3 million, during the year ended Feb. 28, 2007, compared to operating income of $10.2 million, consisting of revenues of $67.3 million and operating expenses of $57.1 million, during the year ended Feb. 28, 2006. The company's Biloxi segment had operating income of less than $100,000, consisting of post-closing adjustments during the year ended Feb. 28, 2007, compared to operating income of $600,000, consisting of revenues of $5.6 million and operating expenses of $5 million during the year ended Feb. 28, 2006. The Biloxi segment had net income of $100,000 for the year ended Feb. 28, 2007, compared to net income of $27.7 million for the year ended Feb. 28, 2006. Liquidity and Capital Resources During fiscal 2007, the company met its working capital requirements from a combination of internally generated sources including cash from operations and the sale of assets. The company and its subsidiaries, with the exception of PBLLC, President Riverboat Casino-Iowa, Inc. and President Riverboat Casino-New York, Inc., are debtors-in-possession under Chapter 11 of the Bankruptcy Code. Following the consummation on Dec. 20, 2006, of the sale of the company's St. Louis gaming operations, the company no longer owns any operating entities and its assets consist primarily of cash and certain pending litigation claims. The company's business activities currently consist of managing its existing litigation matters, discharging its liabilities and administering the bankruptcy reorganization plans of its former Biloxi and St. Louis operations. In addition to the cash requirements necessary to fund the company's remaining business activities, the company anticipates that it will continue to incur significant professional fees and other costs in connection with its bankruptcy proceedings. "As a result of the uncertainty surrounding the company's current circumstances, it is difficult to predict the company's actual liquidity needs at this time," Deloitte & Touche said. The auditing firm noted that based upon the company's current budgeting assumptions and anticipated levels of activity in the litigation matters and bankruptcy proceeding, the company's management believes that its liquidity and capital resources will be sufficient to fund its remaining corporate activities through the next fiscal year and the end of certain current litigation. "At this time, the company does not anticipate access to any additional cash or capital other than potential recoveries from its outstanding litigation claims," the auditing firm said. Bankruptcy Proceedings On June 20, 2002, the company and its then subsidiary, President Riverboat Casino-Missouri, Inc., filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Mississippi. On July 11, 2002, substantially all of the company's other operating subsidiaries filed voluntary reorganization petitions. On Apr. 15, 2005, the company completed a sale of its properties and operations in Mississippi with the approval of the Missouri Bankruptcy Court. The company, with the prior approval of the Missouri Bankruptcy Court, completed a sale of substantially all of the real and personal property associated with the company's Biloxi operations to Broadwater Development, LLP and Silver Slipper Casino Venture, LLC for about $82 million. On Dec. 4, 2006, the Missouri Bankruptcy Court confirmed a Plan of Reorganization for President Missouri, which enabled the company to complete a previously approved sale of the stock of President Missouri on Dec. 20, 2006. On Dec. 20, 2006, the company, with the prior approval of the Missouri Bankruptcy Court, completed a sale of the capital stock of President Missouri to Pinnacle Entertainment, Inc. for about $31.5 million, subject to certain working capital adjustments. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?20f8 About President Casinos Headquartered in St. Louis, Mo., President Casinos, Inc. -- http://www.presidentcasino.com/-- does not have significant operations. Prior to Dec. 2006, it was engaged in the ownership and operation of a dockside gaming casino in St. Louis, Missouri. President Casinos filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Mississippi in June 2002. The company operates as a debtors-in-possession. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. Thomas E. Patterson, Esq., and Ronn S. Davids, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP and E. Rebecca Case, Esq., and Howard S. Smotkin, Esq., at Stone, Leyton & Gershman, P.C., represent the Official Committee of Equity Security Holders. PROSPECT MEDICAL: Moody's Rates Proposed $160 Mil. Facility at B3 ----------------------------------------------------------------- Moody's Investors Service has assigned a B3 senior secured debt rating to Prospect Medical Holdings, Inc.'s proposed $160 million senior secured credit facility consisting of a $145 million term loan and a $15 million revolving credit facility. Prospect and Prospect Medical Group, Inc., an affiliated physician organization controlled by Prospect, will be co-borrowers under the credit facility. The proceeds will be used to finance the acquisition of Alta Healthcare System Inc., and retire existing debt at Prospect. In addition, Moody's assigned a B3 corporate family rating to Prospect. The outlook on the ratings is stable. The rating agency said that the ratings are driven by Prospect's limited geographic area, small membership base and focus on HMO membership. The proposed acquisition of Alta Healthcare System, Inc. and its four hospitals is perceived as increasing Prospect's risk profile due to the company's lack of experience in operating a hospital system, although Alta's senior management will join the pro forma company's management team, and Alta's concentration in the Medicare and Medi-Cal business segments. The rating also reflects Prospect's weak financial profile, in particular, its consistent although somewhat low earnings margins, which are offset by the increased debt and high financial leverage resulting from the financing of the proposed acquisition and low interest coverage ratio. The rating agency also noted that over the last few years Prospect has been very acquisitive, with fifteen affiliated physician organizations currently under its control, having completed another IPA acquisition, ProMed, on June 1, 2007. Moody's anticipates that the company will continue to seek additional IPAs and possibly hospital acquisitions. Prospect is a health care management services organization that provides management services to affiliated physician organizations that operate as independent physician associations or medical clinics. Prospect's operations are concentrated in Orange County, Los Angeles County and San Bernardino County in California. The affiliated physician organizations have entered into agreements with managed care companies to provide HMO enrollees with a full range of non- hospital medical services in exchange for fixed capitation payments. Prospect currently provides management services to fifteen affiliated physician organizations, including PMG, of which thirteen of the affiliated physician organizations are controlled by PMG, one is 55% owned by PMG and the other is a joint venture in which PMG owns 50% interest. Moody's commented that the B3 senior secured and corporate family ratings are based on the expectation that there will be no losses or impairments to PMG's contracts with the managed care companies as a result of the transaction and that the terms of the credit facility will require that at least 50% of excess cash flow be used for debt repayment. The rating agency added that the ratings could move up if debt to EBIT falls below 3x, EBIT to interest expense exceeds 4x, and the company produces consistent net income margins of at least 5%. However, if the enrolled membership at PMG declines by 5% or more, if the medical ratio exceeds 82%, if cash flow from operations is less than one times net income or if there is an acquisition of another hospital system, then Moody's said the ratings could be lowered. These ratings were assigned with a stable outlook: Prospect Medical Holdings, Inc. -- senior secured debt rating of B3; -- corporate family rating of B3. Prospect Medical Holdings, Inc. is headquartered in Culver City, California. For the fiscal year ending September 30, 2006 total revenue was $136 million with ending HMO enrollees of approximately 171,400. As of September 30, 2006 the company reported shareholder's equity of $33.8 million. PROSPECT MEDICAL: Increased Leverage Cues S&P's B+ Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating on Prospect Medical Holdings Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' bank loan and '3' recovery ratings to Culver City, California-based Prospect's proposed $160 million senior secured bank facilities, consisting of a $15 million revolving credit facility due 2012 and a $145 million term loan due 2014. The facilities are rated the same as the corporate credit rating on Prospect, with a recovery rating of '3', indicating the expectation for meaningful recovery of principle in the event of payment default. "The assigned ratings are based on the counterparty credit rating on Prospect and reflect the company's geographic and client concentrations, acquisition-oriented growth strategy, and increased financial leverage," said Standard & Poor's credit analyst Hema Singh. "Offsetting factors include the company's integrated operational relationship with Prospect Medical Group, its established competitive position in core markets, good earnings/cash flow profile, and mostly unregulated business." The proceeds of the loan will be used to refinance Prospect's current outstanding term loan, to partially finance its planned acquisition of Alta, which is a privately owned for-profit hospital management company that owns and operates four community- based hospitals in the greater Los Angeles area and to refinance Alta's indebtedness. Prospect operates as a medical services organization to HMO enrollees in California where it provides care for about 250,000 HMO enrollees including 199,000 commercial, 27,000 Medi-Cal, and 24,000 seniors through 12 Individual Practice Associations and three medical clinics. Its largest customers are PacifiCare, Health Net, Blue Cross California, and Blue Shield California. Standard & Poor's expects Prospect Medical to remain focused on managing the medical risk of its affiliated physician organizations and maintaining efficient operations. Prospect Medical's established market presence in its core market will facilitate its sustained competitiveness and enable the company to grow and diversify its business profile. The outlook also reflects S&P's expectation for Prospect Medical to sustain its earnings profile and prudently manage its overall growth objectives, which includes the integration of Alta. By year-end 2007, we expect combined pro forma revenue to be $300 million-$325 million and for the company to serve 240,000- 250,000 members. Pretax ROR is expected to be 5%-7%, resulting in financial leverage and coverage metrics considered moderately conservative for the rating category. By year-end 2007, debt to EBITDA and pro forma interest coverage are expected to be 2.75x- 3.25x and 4x-5x, respectively. QPC LASERS: March 31 Balance Sheet Upside-Down by $3.5 Million -------------------------------------------------------------- QPC Lasers Inc. reported a net loss of $2.4 million for the first quarter ended March 31, 2007, an improvement over the net loss of $3.3 million reported in the first quarter of 2006. The improvement in net loss was primarily attributable to the growth in product revenues year-over-year, as well as a reduction in interest expenses. "We achieved several significant milestones for the company during the first quarter," said Dr. Jeffrey Ungar, chairman and chief executive officer of QPC. "The company has begun the transition from the R&D stage to the production stage. During the quarter we announced the availability our next generation BrightLase(TM) Direct-Diode Laser modules and made continued progress with our military applications. We continued to receive strong orders for our medical lasers, and currently have $2 million in contracts and purchase orders for our generation II medical module, a significant milestone as we target the large and growing medical laser sector." George Lintz, chief financial officer and executive vice chairman added "we are continuing to position the company for strong growth in 2007 and beyond. Our pipeline of product solutions continues on track, and we currently anticipate significant growth throughout the remainder of the year." Total revenue for the first quarter of 2007 was $1.1 million, up 317% when compared to approximately $266,000 reported in the first quarter of 2006. The increase is attributable to an increase in commercial sales and government contracts due to the increased product offerings and expanded sales and marketing efforts. Product revenue for the first quarter of 2007 was $653,000, an increase of 178% compared to product revenue of $235,000 reported in the first quarter of 2006, and an increase of 19% compared to product revenue of $548,000 reported in the fourth quarter of 2006. Strong growth in product revenue is primarily attributable to initial production shipments of the Generation II fiber coupled products to defense, industrial and medical customers along with ongoing shipments of the Generation I varicose vein treatment laser. Total operating expense for the first quarter of 2007 was $2.2 million, flat when compared to the $2.2 million reported in the first quarter of 2006. Gross Margin for the first quarter of 2007 was 23%, a substantial improvement as compared to the negative 5% reported in the first quarter of 2006. Cash and cash equivalents (including restricted cash) at March 31, 2007 was $4.7 million. "In April we closed a $7.4 million financing, which will enhance our ability to focus on growing our product pipeline by successfully introducing and marketing our dynamic products. As we look forward in 2007, we believe it is too early to provide formal guidance; however we are currently targeting revenues to be in the range of $6 to $7.5 million for the full year versus $3.1 million for 2006." Lintz concluded. At March 31, 2007, the company's consolidated balance sheet showed $8,678,613 in total assets and $12,207,787 in total liabilities, resulting in a $3,529,174 total stockholders' deficit. 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?210f Going Concern Doubt Weinberg and Company P.A., in Los Angeles, expressed substantial doubt about QPC Lasers' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company incurred a net loss of $18,692,607 and used $8,219,053 of cash in operations for the year ended Dec. 31, 2006, and had a stockholders' deficiency of $1,231,330 as of Dec. 31, 2006. About QPC Lasers QPC Lasers Inc. (OTC BB: QPC.OB) -- http://www.QPClasers.com/-- is engaged in the development and commercialization of high- brightness, high-power semiconductor lasers for the defense, homeland security, industrial, and medical markets. Founded in the year 2000, QPC is vertically integrated from epitaxy through packaging and performs all critical fabrication processes at its state-of-the-art high-technology facility in the Los Angeles suburb of Sylmar, California. RAPID LINK: April 30 Balance Sheet Upside-Down by $4.04 Million --------------------------------------------------------------- Rapid Link Inc. reported a net loss of $637,297 on revenues of $3,720,098 for the second quarter ended April 30, 2007, compared with a net loss of $846,329 on revenues of $2,121,018 for the same period ended April 30, 2006. Revenues for the second quarter of fiscal 2007 increased $1.6 million, or 75.4%, as compared to the same period of fiscal 2006. These increases are primarily attributable to the inclusion of Telenational revenues since the May 2006 acquisition of Telenational. Costs of revenues for the second quarter of fiscal 2007 increased $948,000, or 58.8%, as compared to the same period of fiscal 2006. Costs of revenues as a percentage of revenues decreased approximately 7.2% during the second quarter of fiscal 2007 as compared to the same period of fiscal 2006 due to cost savings derived from the addition of alternative carrier sources brought to the company through the Telenational acquisition. At April 30, 2007, the company's consolidated balance sheet showed $7,727,278 in total assets and $11,769,784 in total liabilities, resulting in a $4,042,506 total stockholders' deficit. The company's consolidated balance sheet at April 30, 2007, also showed strained liquidity with $1,651,954 in total current assets available to pay $11,769,784 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended April 30, 2007, are available for free at http://researcharchives.com/t/s?210d Going Concern Doubt KBA GROUP LLP, in Dallas, expressed substantial doubt about Rapid Link Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Oct. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from continuing operations during each of the last two fiscal years. Additionally, the auditing firm reported that at Oct. 31, 2006, the company's current liabilities (which includes significant amounts of past due payables) exceeded its current assets by $4.7 million and the company has a shareholders' deficit totaling $2.6 million. About Rapid Link Headquartered in Los Angeles, California, Rapid Link Inc. (OTC BB: RPID.OB) -- http://www.rapidlink.com/ -- provides various forms of telephony services to wholesale and retail customers around the world. The company targets individual customers, as well as small and medium sized enterprises. These services include the transmission of voice and data traffic over public and private networks, and telecommunications services for both the foreign and domestic termination of international long distance traffic into the wholesale market. The company has also begun to utilize Voice over Internet Protocol packetized voice technology. REGENCY GAS: Partner's Interest Sale Cues S&P's Developing Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Regency Gas Services L.P. on CreditWatch with developing implications. The rating action follows the company's announcement that its former general partner owner, HM Capital Partners LLC (formerly Hicks, Muse, Tate & Furst), has sold its general and limited partner ownership interests to GE Energy Financial Services. "Although we would expect the change in ownership and control to have favorable implications for Regency's capital structure, we await additional information on what exactly the company's strategic direction and financial policy will be going forward," said Standard & Poor's credit analyst Plana Lee. Regency remains highly leveraged following its TexStar Field Services L.P. acquisition, and maintaining its current rating would require a sizable equity issuance. REYNOLDS AMERICAN: S&P Puts Corporate Credit Rating at BB+ ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB' rating to Winston-Salem, North Carolina-based Reynolds American Inc.'s proposed $1.55 billion in aggregate secured notes, comprising $400 million senior secured floating rate notes due 2011, $700 million secured notes due 2017, and $450 million secured notes due 2037. The 'BBB' is two notches above the corporate credit rating. The secured notes were also assigned a recovery rating of '1', which indicates that secured lenders could expect to receive very high (90%-100%) recovery in the event of a payment default. The $1.55 billion in aggregate notes will be drawn off of RAI's recently filed shelf registration. Proceeds from these debt issuances will be used to refinance the outstanding balance ($1.54 billion) of the company's $1.55 billion five-year senior secured term loan facility. At the same time, S&P assigned its preliminary 'BBB'/'BB-' rating to recently filed Rule 415 shelf registration for debt securities. The preliminary 'BBB' debt rating applies to potential secured debt issues, and the preliminary 'BB-' debt rating applies to potential senior unsecured and subordinated debt issues. RAI's corporate credit rating is 'BB+', which reflects the company's participation in the contracting domestic cigarette industry, its declining shipment volumes and market share, and significant litigation risk partly offset by relatively moderate financial policies. The outlook is positive. The assigned shelf ratings are preliminary; given the high level of senior secured debt in the company's capital structure, a substantial increase in additional secured debt issuance may cause Standard & Poor's to reassess its position on RAI's senior secured ratings. Ratings List Reynolds American Inc. Corporate Credit Rating BB+/Positive/-- Ratings Assigned Reynolds American Inc. $400 Million Floating Rate Secured Notes Due 2011 BBB (Recovery Rating: 1) $700 Million Fixed Rate Secured Notes Due 2017 BBB (Recovery Rating: 1) $450 Million Secured Notes Due 2037 BBB (Recovery Rating: 1) Rule 415 Unlimited Shelf Secured Debt BBB (Preliminary) Unsecured/Subordinated Debt BB- (Preliminary) RICHARD BRUHN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Donna Bruhn as Conservator for Richard L. Bruhn P.O. Box 2563 Salinas, CA 93902 Bankruptcy Case No.: 07-51826 Type of Business: The Debtor is a former CEO of Dick Bruhn, Inc., which filed for Chapter 11 protection on May 4, 2007 (Bankr. N.D. Calif. Case No. 07-51338). Chapter 11 Petition Date: June 15, 2007 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Laine Lucas, Esq. Binder and Malter LLP 2775 Park Avenue Santa Clara, CA 95050 Tel: (408) 295-1700 Fax: (408) 295-1531 Estimated Assets: $17,657,693 Estimated Debts: $14,466,819 Debtor's List of its 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ The Kearney Trust Noteholder at 5.5% $302,530 617 Park Street Salinas, CA 93901 Surf and Sand Investment Noteholder at 5.5% $250,987 8545 Carmel Valley Road Carmel, CA 93923 The Carrithers Trust Noteholder at 5.5% $202,049 c/o Cunningham & Associates 771 East Daily Drive Suite 350 Camarillo, CA 93010 Rianda Living Trust Noteholder at 5.5% $175,902 Joshia Y. Arios Noteholder at 5.5% $145,574 Guerra Nut Shelling Noteholder at 5.5% $134,235 Proctor Family Living Trust Noteholder at 5.5% $125,343 Internal Revenue Service Taxes $118,506 Insolvency Section Claudia Higgins Noteholder at 5.5% $116,663 Robert Wayman Noteholder at 5.5% $114,088 William Kroeger Noteholder at 5.5% $106,265 Clarkson Living Trust Noteholder at 5.5% $106,089 Janet S. Ames Noteholder at 5.5% $104,689 Pankaj N. Patel Noteholder at 5.5% $103,534 Donald J. & Lorrayne Barsotti Personal Promissory $100,000 Note Alvin W. Robert, Sr. Family Noteholder at 5.5% $96,348 Barton Family Trust Noteholder at 5.5% $96,290 Cinde L. Bryant Noteholder at 5.5% $92,366 Sancho Manzano Noteholder at 7% $91,045 Hubert E. Jackson Noteholder at 5.5% $89,462 SHEKHAR GIRI: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Shekhar Giri 147-25 97th Avenue Jamaica, NY 11435 Bankruptcy Case No.: 07-43234 Type of Business: The Debtor filed for Chapter 11 protection on January 4, 2007 (Bankr. E.D. N.Y. Case No. 07-40027). Chapter 11 Petition Date: June 15, 2007 Court: Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: James E. Hurley, Jr., Esq. James E. Hurley, Jr., PLLC 75 Maiden Lane, Suite 233 New York, NY 10038 Tel: (212) 402-6822 Fax: (212) 405-2119 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtor did not file a list of its 20 largest unsecured creditors. SMITHFIELD FOODS: Moody's Rates New $500 Million Sr. Notes at Ba3 ----------------------------------------------------------------- Moody's Investors Service assigned a rating of Ba3 to the new $500 million senior unsecured notes of Smithfield Foods, Inc. The company's other ratings, including its Ba2 corporate family rating and Ba2 Probability of Default rating, were affirmed. The rating outlook remains negative. Rating assigned: -- $500 million senior unsecured notes at Ba3 (LGD5, 82%) Ratings affirmed: -- Corporate family rating at Ba2 -- Probability of default rating at Ba2 -- Senior unsecured debt at Ba3 (LGD5, 82%) -- Senior subordinated debt at B1 (LGD6,97%) -- Speculative Grade Liquidity Rating of SGL-3 The new senior unsecured notes, like the existing senior unsecured notes, are rated one notch below the corporate family rating because of the significant amount of unrated senior debt that benefits from security and from the guarantees of certain domestic subsidiaries. The rating affirmation is based on Moody's expectation that the company's credit metrics will strengthen as Smithfield integrates recent acquisitions which have boosted the company's scale and diversification. Smithfield's Ba2 corporate family rating reflects the company's high leverage, somewhat volatile earnings and cash flow stream, aggressive acquisition strategy, and increasingly complex business structure. It also reflects the integration risks that Smithfield faces as it consolidates a series of acquisitions made over the past year, as well as higher-than-average event risk of additional leveraged acquisitions within the consolidating protein industry. Furthermore, ratings reflect concerns over some aspects of Smithfield's corporate governance. Smithfield's ratings are supported by the company's large size, very strong market position, increasing geographic and product diversity, and solid brand in the US pork industry. Moody's considers Smithfield's ratings in the context of the key rating drivers cited in Moody's Rating Methodology for Global Natural Products Processors -- Protein and Agriculture. Using the methodology's 22 rating factors as well as pro forma and projected metrics which account for recent acquisitions, fully and proportionally consolidate material joint ventures, and incorporate Moody's standard analytic adjustments, Smithfield's rating would be B1 which is two notches lower than its actual Ba2 corporate family rating. Moody's believes that over the intermediate term, Smithfield's recent acquisitions will create a stronger, more diversified protein processing business which should help it increase operating margins and cash flow stability. The negative rating outlook reflects the challenges Smithfield faces in integrating its recent acquisitions, notably Premium Standard Farms, and managing a more complex business portfolio while simultaneously attempting to reduce debt and increase financial flexibility. It also reflects the continued event risk of additional leveraged acquisitions as the company pursues its global growth strategy. Smithfield Foods, headquartered in Smithfield Virginia, is the world's largest pork producer and processor and the fifth largest US beef processor. Sales for the fiscal year ended April 29, 2007 exceeded $11.9 billion. SMITHFIELD FOODS: S&P Rates $500 Million Sr. Unsecured Notes at BB ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' rating to Smithfield Foods Inc.'s shelf drawdown of $500 million senior unsecured notes due 2017. The corporate credit rating on the Smithfield, Virginia-based company is 'BB+' and the rating outlook is negative. "The 'BB+' rating reflects the highly competitive, commodity- based, cyclical nature of the swine industry; the high fixed costs of pork processing operations; and Smithfield Foods' acquisitiveness," said Standard & Poor's credit analyst Jayne Ross. "These factors are mitigated by the company's position as the leading producer, processor, and marketer of fresh and processed pork in the U.S.; its position as a leading beef processor; an experienced management team; and a track record of successfully integrating acquisitions." Ratings List Smithfield Foods Inc. Corporate Credit Rating BB+/Negative/-- Rating Assigned Smithfield Foods Inc. $500M Senior Unsecured Notes Due 2017 BB SOLUTIA INC: Wants Equistar & Millenium Settlements Approved ------------------------------------------------------------ Equistar Chemicals LP and Millenium both supply Solutia Inc. with chemical products and raw materials that Solutia would otherwise have a significant difficulty obtaining for its Nylon and Saflex Businesses. Equistar is a wholly owned subsidiary of Lyondell Chemical Company, which is among North America's largest independent, publicly traded chemical company. Equistar operates two chemical-producing units as a guest at Solutia's chemical plant at Chocolate Bayou in Alvin, Texas. Millenium was purchased by Lyondell in 2004 and is a wholly owned subsidiary of Lyondell. Contracts with Suppliers (1) Equistar Solutia relates that the most critical among the raw materials is propylene, which Equistar supplies to its Chocolate Bayou plant pursuant to a chemical grade propylene sales agreement, dated January 1, 1999, as amended. Because of the importance of their relationship and desire to continue doing business with each other, Solutia, Equistar and Millenium have reached an agreement that enables Solutia to assume the amended Propylene Agreement and continue to receive the chemical products and raw materials it needs from Equistar and Millenium. Equistar also leases land at the Chocolate Bayou Plant from Solutia pursuant to a real estate lease, effective October 16, 1981, between Solutia's predecessor, Monsanto Company, and Equistar's predecessor-in-interest, Conoco, Inc. To minimize Solutia's operational costs at the Chocolate Bayou Plant, Solutia and Equistar entered into an amended and restated utilities and services agreement, effective September 30, 1999. The U&S Agreement governs Solutia's provision of certain site services and utility feeds to Equistar, including compressed air, nitrogen, electricity, treated water and the operation of a barge dock facility. In addition to the Executory Contracts, Equistar and Solutia were also parties to certain chemical supply contracts, pursuant to which Equistar supplied Solutia with, among other things, ethanol, methanol and benzene; and benzene sales contract, effective January 1, 2003. Solutia and Equistar have agreed to the terms of a new benzene sales contract -- amended Benzene Sales Contract. (2) Millenium Solutia purchased vinyl acetate monomer from Millenium pursuant to a vinyl acetate monomer agreement, dated January 1, 1985, until its expiration on December 31, 2004. On January 1, 2005, both entered into a certain VAM sales contract as a replacement for the Original VAM Contract. Solutia uses VAM in the production of its Saflex(R) brand windshield and architectural glass interlayer. Dispute Jonathan S. Henes, Esq., Kirkland & Ellis LLP, in New York, says that because of the breadth and complexity of their relationship, various commercial disputes often arise between Solutia and Equistar in connection with the Contract and the Supply Contracts. Some of the disputes relate to the Propylene Agreement. At various times from January 2001 to July 2005, there were certain inaccuracies in the meter that measured volume of propylene Equistar delivered to Solutia. As a result of the inaccuracies, Solutia contends that it paid for more than it actually received. It sought a $925,036 refund from Equistar. Solutia has also claimed entitlement to certain refunds based on certain years' annual average weighted purity -- calculated based on the ratio of propylene molecules to molecules of other chemicals in the product delivered. Solutia believes that is owed a purity credit of $1,373,228 for propylene delivered through December 31, 2006. Assumption of Contracts To facilitate their continued negotiations, Solutia and Equistar entered into a series of bridge agreement extending the term of the Propylene Agreement, and adjusting the price, to allow them to continue to negotiate the terms of the amended Propylene Agreement, resolve outstanding disputes and enter into other commercial agreements between the parties. These negotiations resulted in Solutia and Equistar reaching agreement on the Amended Propylene Agreement and the settlement agreement between Solutia, Equistar and Millenium. The Amended Propylene Agreement salient terms include: -- the initial term is through December 31, 2010. However, there is an evergreen provision pursuant to which the Amended Propylene Agreement would renew for 2-year periods unless terminated by either party on two years' notice. To terminate, Equistar or Solutia must provide the other party with two years' written notice prior to December 31, 2010, or any subsequent December 31 anniversary; -- highly competitive pricing and commercial terms that are equal to or better than terms Solutia would expect to receive in the absence of the Amended Propylene Agreement. The pricing is consistent with the pricing contained in a series of bridging agreements that have been in effect since January 1, 2007; -- Solutia has the right to purchase and store excess amounts of propylene, which would provide it more supply security when market conditions are tight and allow Solutia to take advantage of price hedging; -- Equistar may adjust its price for a limited quantity of propylene, or allow the affected quantity to be released from the contract if, due to significant change in market conditions, Solutia presents a competitive offer for the purchase of that quantity of propylene at a lower price and on similar terms from a different propylene supplier; -- if either party plans a substantial restructuring reduction in the production of propylene or usage of propylene, it may elect a reduction n sale/purchase of propylene by providing advance notice. The reduction must be in increments over two years with a limit on the circumstances that will justify the reduction, and on the total quantity that can be reduced using the provision; and -- Equistar will provide Solutia with a higher maximum credit limit than it has been providing Solutia since prior to the commencement of the Debtors' Chapter 11 cases. Solutia also agreed to assume the Real Estate Lease, without modifications, and to amend and assume the U&S Agreement, with salient terms including: -- the term is extended to December 31, 2010, to align it with the Amended Propylene Agreement; -- the U&S Agreement and the Amended Propylene Agreement contain cross termination rights. If one party gives the other written notice to terminate either agreement, the other party can terminate the other agreement; and -- a performance monitoring system is provided to define certain performance targets covering areas of reliability, quality, environmental and administrative. The Amended Benzene Sales Contract will be assumed to ensure that Solutia has a secure supply source of the cyclohexane grade benzene. As part of the settlement agreement and Solutia's payment of Equistar allowed cure claim, Solutia and Equistar will enter into a certain letter agreement dated June 7, 2007. Pursuant to the Credit Agreement, Equistar will provide Solutia with payment terms for the propylene supplied pursuant to the Amended Propylene Agreement that are better than those in place prepetition. Mr. Henes notes that the Credit Agreement: -- contemplates that Equistar will provide Solutia with a $25,000,000 credit line for Solutia's purchases from Equistar and Millenium; -- Equistar has agreed to provide Solutia with an additional $25,000,000 credit line, for a total of up to $50,000,000, contingent upon Equistar being able to obtain put option credit assurance through the financial services market on commercially reasonable terms. Equistar and Solutia will share the cost of obtaining the Credit Assurance equally; and -- will provide Solutia with approximately $43,000,000 of additional liquidity that Solutia can use for significant additional working capital flexibility and a meaningful reduction of its interest expense. Claims Equistar filed Claim No. 5625 against Solutia for $6,013,617, which is premised upon prepetition amounts Solutia allegedly owed pursuant to Equistar Contracts. Pursuant to a reclamation demand letter, dated December 17, 2003, and a supplemental letter, dated December 19, 2003, Equistar asserted a total of $6,539,394 for shipments of goods between December 7, 2003, and December 16, 2003. Millenium filed Claim No. 1041, amended by Claim No. 14733, asserting $757,004 against Solutia. Solutia does not dispute the Millenium Prepetition Claim. Settlement Agreement Mr. Henes tells the U.S. Bankruptcy Court for the Southern District of New York that the Settlement Agreement will resolve the Metering Error Claim; Purity Credit; and the Millenium Prepetition Claim. Specifically: -- the Metering Error Claim will be set off and deducted from the Equistar Prepetition Claim, reducing the claim by $925,036; -- $799,938 of the Purity Credit Claim will be set off against the Millenium Prepetition Claim, as well as the portion of the Equistar Prepetition Claim not related to either the Contracts nor included in Equistar's $42,934 reclamation claim; and -- the remaining portion of the Purity Credit Claim will be set off against the Equistar Prepetition Claim, reducing it by an additional $573,290. Pursuant to the Settlement Agreement, the amount of the Equistar Prepetition Claim allowed as a cure claim will be $4,472,357, Mr. Henes says. Equistar has alleged that pursuant to the terms of the Propylene Agreement, it is entitled to be paid interest at the rate of 18% on any unpaid amounts related to the Propylene Agreement. Equistar has agreed to waive its claim for interest through the settlement effective date, and the amount of the Equistar Allowed Cure Claim does not include the interest. Solutia will pay the Equistar Allowed Cure Claim in full within five business days of the settlement effective date. Solutia's obligation to pay the Equistar Allowed Cure Claim is conditioned upon the Credit Agreement being effective, Mr. Henes informs the Court. Moreover, Solutia has agreed to withdraw and dismiss the adversary proceedings it commenced against Equistar and Millenium with prejudice. In the Equistar Adversary, Adversary Proceeding No. 05-3348, Solutia sought to recover $46,444,743 in potential preferential transfers. Solutia sought to recover $5,870,293 in potential preferential transfers from Millenium in Adversary Proceeding No. 05-3349. Mr. Henes asserts that Solutia should be authorized to enter into the settlement agreement because: * the assumption of executory contracts will enable Solutia to continue to receive the propylene it needs to manufacture acrylonitrile -- AN, which is the first step in the multiple-step nylon manufacturing process chain that spans four different Solutia plant sites -- on favourable terms and reduce its fixed costs at the Chocolate Bayou Plant; * pursuant to the Settlement Agreement, Equistar and Millenium will provide Solutia with credit terms that will increase its liquidity by up to $43,000,000; and * it enables Solutia, Equistar and Millenium to amicably resolve various disputes on favourable terms without the need for protracted litigation. Solutia seeks the Court's authority to enter into the Settlement Agreement and assume the Executory Contracts, as amended. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Court is set to consider approval of the Disclosure Statement describing Solutia's First Amended Reorganization Plan on July 10, 2007. Objections to the Disclosure Statement, if any, are due on June 28, 2007. The Debtors' exclusive period to file a plan expires on July 30, 2007. (Solutia Bankruptcy News, Issue No. 89; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Recorded June 1 to 15 Claim Transfers -------------------------------------------------- The Bankruptcy Clerk of the U.S. Bankruptcy Court for the Southern District of New York recorded these claim transfers from June 1, 2007, to June 15, 2007: Face Amount Transferor Transferee Claim No. of Claims ---------- ---------- --------- --------- Allied Sales & Hain Capital 2330 $45,487 Service Co. Holdings, LLC Allied Sales & Hain Capital 2331 3,372 Service Co. Holdings, LLC Altenahr Group Ltd. Argo Partners - 3,736 Andon Specialties Argo Partners - 3,652 Inc. Applied Thermal Fair Harbor - 3,529 Capital, LLC Systems Inc. Blue Ridge Grain & Argo Partners 14629 8,945 Marketing Inc. Bobcat of Greater Debt Acquisition - 790 Springfield Company of America V, LLC BRI Inc. Contrarian - 24,047 Funds, LLC Bruggemann Chemical Argo Partners 1263 22,605 U.S. Brusco Rich Contrarian - 204 Funds, LLC Brusco Rich Contrarian 3778 24,065 Funds Burgess Manning Inc. Debt Acquisition 1196 408 Company of America V, LLC Calabrian Corp. Hain Capital 1236 28,672 Holdings, LLC Campbell, Campbell Argo Partners - 20,701 & Edwards PC Carlson-Dimond & Fair Harbor 929 2,892 Wright Inc. Capital, LLC Central Machine Hain Capital 1888 21,858 Works Inc. Opportunities, LLC Chattowah Open Hain Capital 1927 24,007 Land Trust Holdings, LLC Cintas Corporation Fair Harbor - 5,490 Capital Cobalt Electric Inc. Debt Acquisition 477 250 Company Compressors Argo Partners - 2,668 Engineering Corp. De Kalb Feeds Inc. Fair Harbor - 2,516 Capital Dillon Supply Co. Argo Partners 1210 4,288 Fluid Engineering Fair Harbor - 5,740 Inc. Capital, LLC Frilot Partridge Liquidity - 25,989 Kohnke & Clements Solutions, Inc. George Rozelle & Debt Acquisition - 2,422 Associates Inc. Company George Rozelle & Debt Acquisition - 1,874 Associates Inc. Company Gulf City Body & Liquidity 3597 5,600 Trailer Works Inc. Solutions Hunter Assoc Labs Liquidity 3355 5,743 Solutions Hyspan Precision Fair Harbor - 8,624 Products Inc. Capital Ionics Incorporated Debt Acquisition - 600 Company JV Industrial Ore Hill Hub 319 467,693 Companies, Ltd. Fund, Ltd. Lummus Corporation Fair Harbor - 6,544 Capital Mallinckrodt, Inc. Hain Capital 974 66,134 Holdings, LLC McNaughton-McKay Fair Harbor 4460 2,499 Electric Co. Capital Metalforms Hain Capital 604 118,433 Incorporated Holdings, LLC Mitchell Engineering Fair Harbor 4489 2,000 Inc. Capital Penske Truck Leasing Liquidity - 1,157 Co. LP Solutions Precision Sierra Asset - 2,943 Electronics Management Printing Partners Liquidity - 5,340 Solutions Promac, Inc. Sierra Asset - 39,732 Management Riviera Utilities Argo Partners 3696 284,054 Royalty Products Debt Acquisition 1129 1,540 Company Company S. R. Hansen & Liquidity - 9,375 Associates Solutions Safety Source Inc. Debt Acquisition - 2,674 Company Search Enterprises Argo Partners 6189 14,375 South, Inc. Seaway Mechanical Hain Capital 1208 89,127 Contractors Inc. Holdings, LLC Southern Technical CVI GVF (Lux) - 149,548 Services Inc. Master S.a.r.l. Southwest Electric Hain Capital 2040 43,049 Co. Holdings, LLC Spectrum Systems Debt Acquisition 737 2,231 Inc. Company Sun Valley Fire Debt Acquisition 856 1,228 Equipment Company Sun Valley Fire Debt Acquisition 864 330 Equipment Company Tidland Corporation Liquidity 3784 2,739 Solutions Town Hall Archery Liquidity - 1,781 Solutions Unisource Worldwide, Contrarian 439 1,516 Inc. Funds Unisource Worldwide, Contrarian 11569 114,637 Inc. Funds Unisource Worldwide Debt Acquisition 439 1,516 Inc. Company Vigilar Liquidity - 3,479 Solutions Wal-Tech Marine Liquidity 1607 8,682 Inc. Solutions Liquidity Solutions is doing business as Revenue Management. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Court is set to consider approval of the Disclosure Statement describing Solutia's First Amended Reorganization Plan on July 10, 2007. Objections to the Disclosure Statement, if any, are due on June 28, 2007. The Debtors' exclusive period to file a plan expires on July 30, 2007. (Solutia Bankruptcy News, Issue No. 89; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOURCE INTERLINK: Moody's Places Corporate Family Rating at B2 -------------------------------------------------------------- Moody's Investors Service has assigned a first-time B2 Corporate Family rating to Source Interlink SCompanies Inc. in connection with its proposed acquisition of PRIMEDIA Enthusiast Media, Inc. Details of the assigned ratings are: -- $300 million senior secured asset based revolving credit facility due 2013 -- Ba3, LGD2, 27% -- $880 million senior secured term loan B due 2014 -- B1, LGD3, 35% -- $465 million senior subordinated facility due 2017 -- Caa1, LGD5, 89% -- Corporate Family rating -- B2 -- Probability of Default rating -- B2 The rating outlook is stable The B2 CFR reflects the heavy debt burden, high leverage and integration risk which Source will assume in connection with the PEM acquisition, as well as the thin margins, customer concentration and pressured growth prospects faced by most of the merged entity's product offerings. Ratings are supported by Source's leading market position in the magazine, CD and DVD distribution segments, the good reputation of the magazine titles being acquired from PEM, and the cost efficiencies which the merged entity can expect through synergies, overhead reduction and the development of a more vertically integrated media platform. The rating outlook is stable. On May 14, 2007, Source Interlink Companies Inc. announced that it had concluded a definitive agreement to acquire approximately 76 enthusiast magazines and related offerings from PRIMEDIA Inc., in a transaction valued at approximately $1.2 billion. Source plans to fund this acquisition as well as $59 million in fees payable to lenders, legal counsel, accountants and financial advisors including its sponsor, The Yucaipa Companies LLC with the proceeds of $1,345 million from its fully underwritten senior secured and subordinated credit facilities. Although Source plans to fund the acquisition entirely with the proceeds of debt, Yucaipa has provided an equity commitment of up to $100 million if necessary to conclude the acquisition. In addition, Yucaipa has agreed to a lockup provision whereby it will refrain from selling any of its investment in AEC Corporation until the acquisition has closed. Availability under the revolving credit facility will be governed by a borrowing base of between 65% to 85% of eligible inventory and 85% of eligible accounts receivable. Revolver lenders will receive a first priority lien on all inventory and accounts receivable and a second lien on the borrower and subsidiary capital stock and their other tangible and intangible assets. The term loan lenders will be granted a first priority lien over the capital stock of the borrower and subsidiaries as well all tangible and intangible assets, except for inventory and accounts receivable to which they are granted a second lien security interest. Subordinated lenders are unsecured, however they benefit from an upstream subordinated guarantee from the operating subsidiaries. The subordinated facility is a bridge facility which management expects to refinance after closing with the proceeds of exchange notes. There will be no financial covenants to provide protection to creditors. Ratings are subject to Moody's satisfactory review of documentation, a draft of which is currently unavailable. Pro-forma for the acquisition of PRIMEDIA Enthusiast Media, Inc, Source Interlink Companies will be one of the largest integrated marketing, merchandising, publishing and fulfillment of media- related products in the US. Headquartered in Bonita Springs Florida, the company reported sales of approximately $2.4 billion for the LTM period ended April 30, 2007, pro-forma for the acquisition. SOUTH COAST: Fitch Downgrades Rating on $26MM Class B Notes to B ---------------------------------------------------------------- Fitch downgrades one and affirms two classes of notes issued by South Coast Funding I, Ltd. These rating actions are the result of Fitch's review process and are effective immediately: -- $260,334,311 class A-1 notes affirmed at 'AAA'; -- $38,000,000 class A-2 notes affirmed at 'A-'; -- $26,000,000 class B notes downgraded to 'B'/'DR3' from 'BB'. South Coast I is a collateralized debt obligation managed by TCW Investment Management Company, which closed on December 21, 2001. South Coast I is composed of residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, CDOs, and real estate investment trust debt. Fitch has conducted cash flow modeling utilizing various default timings, interest rate scenarios, and prepayment assumptions. In addition, Fitch has discussed the current state of the portfolio with the asset manager. As a result of this analysis, Fitch has determined that the current ratings assigned to the class B notes no longer reflect the current risk to noteholders. South Coast I exited its revolving period in December 2005, although reinvestment was permitted under the indenture through June 30, 2006. Since the last rating action in March 2006, the collateral has continued to decline in credit quality affecting various quality tests and projected cashflows. Fitch weighted average rating factor has increased to 20 ('BBB-'/'BB+') from 18 ('BBB'/'BBB-') and continues to fail its covenant of 16 ('BBB'/'BBB-'). The class A overcollateralization ratio remains stable at 109.69% as of the May 2007 trustee report as compared to 109.0% as of the February 2006 report. During the same period of time the class B OC test has decreased to 100.9% from 101.59% and started to fail its trigger level of 101.5% again. The class A interest coverage ratio has decreased slightly to 113.12% which is above the trigger of 112.0%. The class B IC has decreased to 101.28% from 103.11% and remains below the trigger level of 107.0%. The failures of the B coverage tests have led to additional amortization to the class A-1 notes with the interest proceeds remaining after interest payments to the class B notes. The ratings of the class A-1 and class A-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. STATER BROS.: Redeems $175 Million Floating Rate Senior Notes ------------------------------------------------------------- Stater Bros. Holdings Inc. redeemed on June 18, 2007, all $175 million in aggregate principal amount of its outstanding floating rate senior notes due 2010. The redemption price was equal to 101% per $1,000 principal amount of such notes, plus accrued and unpaid interest to the redemption date. About Stater Bros. Stater Bros. Holdings Inc. is a privately held supermarket chain headquartered in Colton, California. It operates 163 supermarkets through its wholly owned subsidiary, Stater Bros. Markets. Stater Bros. Markets also owns and operates Santee Dairies, manufacturer of quality "Heartland Farms" dairy products. * * * As reported in the Troubled Company Reporter on April 4, 2007, Standard & Poor's Ratings Services revised the rating outlook on Stater Bros. Holdings Inc. to negative from stable. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $275 million senior notes due 2015. All other ratings, including the 'B+' corporate credit rating on Stater Bros., were affirmed. STEEL DYNAMICS: Expands Credit Facility from $350MM to $750MM ------------------------------------------------------------- Steel Dynamics Inc. has amended, restated and expanded its senior secured revolving credit facility from the prior $350 million level to a renewed 5-year $750 million facility. Subject to certain conditions, Steel Dynamics also has the opportunity to increase the facility size by an additional $350 million. The amended facility is guaranteed by certain of Steel Dynamics subsidiaries and is secured by substantially all of its accounts receivable and inventories. The proceeds from the revolver will be available to fund working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes. Headquartered in Fort Wayne, Indiana, Steel Dynamics Inc. (Nasdaq: STLD) -- http://www.steeldynamics.com/-- produces a broad array of high-quality flat-rolled, structural and bar steels at its three Indiana steel mini-mills and steel-processing operations. * * * As reported in the Troubled Company Reporter on March 30, 2007, Moody's Investors Service assigned a Ba2 rating to Steel Dynamics Inc.'s $400 million debt issuance. Proceeds will be used to refinance the $300 million of 9.5% notes maturing March 2009 and for general corporate purposes. At the same time, Moody's affirmed SDI's Ba1 corporate family rating, the Ba2 rating on its existing senior unsecured bonds and debentures, and the Ba2 rating on its convertible subordinated notes. The rating outlook is positive. On March 30, 2007, issue of Troubled Company Reporter, Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured rating to the proposed $400 million senior unsecured notes of Steel Dynamics Inc. (BB+/Stable/--) to be offered under Rule 144A with registration rights. SWEETSKINZ HOLDINGS: Judge Sontchi Confirms Amended Chap. 11 Plan ----------------------------------------------------------------- The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware confirmed Sweetskinz Holdings Inc. and its debtor-affiliate Sweetskinz Inc.'s Amended Chapter 11 Plan of Reorganization. The Plan contemplates distribution of payments derived from the proceeds of the DIP Loan, business operations and the sale of 1.4 million shares of new company interests. Treatment of Claims Under the Plan, Administrative and Priority Unsecured Claims will be paid in full. Each holder of DIP Lender Claims will receive full payment and 1.6 million in new company interest. Secured Debenture Claims holders, totaling $6,135,238, will recover 44%-50% of their claim through a pro rata share of new notes in aggregate principal amount of $2.7 million and 3.4 million of new company interests. At the Debtors' option, Other Secured Claims holders, totaling $56,372, will receive, either: a. cash equal to the amount of the holder's claim; or b. the collateral securing their claim. Each holder of General Unsecured Claim will receive a pro rata share of up to $200,000. Additionally, Other Secured and General Unsecured Claims will recover 100% of their claim. Holders of Intercompany and Equity Interests claims will not receive any distribution under the Plan. About SweetskinZ Inc. SweetskinZ Inc. -- http://www.sweetskinz.com/-- has developed the only manufacturing methodology which imbues pneumatic tires with any type of durable color graphic, design or logo, adding new and original dimensions of style to the traditional black or white walled tire. In addition, SweetskinZ is able to produce tires with greatly enhanced reflectivity and tires that virtually glow in the dark during dusk. SweetskinZ Holdings and SweetskinZ Inc. filed for chapter 11 protection on March 5, 2007 (Bankr. D. Del. Case Nos. 07-10288 and 07-10289). Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represent the Debtors. When the Debtors sought protection from their creditors, they listed estimated assets between $100,000 and $1 million and estimated debts between $1 million and $100 million. TERWIN MORTGAGE: S&P Puts Default Rating on Class B-1 Loans ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class B-1 from Terwin Mortgage Trust 2004-EQR1 to 'D' from 'CCC'. At the same time, S&P placed its 'AAA' rating on class M-1 from this transaction on CreditWatch with negative implications. Additionally, the 'A' rating on class M-2 remains on CreditWatch with negative implications, where it was placed on March 8, 2007. This transaction is backed solely by nonperforming collateral, which means that most of the loans are seriously delinquent. Consequently, the transaction is not generating significant cash flow, which is typically realized from the liquidation of the mortgage loans. Additionally, HomeEq Servicing Corp., the servicer, stopped advancing for these delinquent loans in March 2005. After that distribution date, the servicer was no longer required to advance on delinquent payments of interest and principal. All of the funds that support this transaction are allocated first to pay interest then to pay principal. The lowered rating on class B-1 reflects a $92,080 principal write-down incurred by the class during the April 2007 distribution, which was followed by an interest shortfall that occurred during the May 2007 distribution. This write-down was the result of prior losses that depleted the overcollateralization. As of the May distribution, the deal had been paid down to 11.51% of its original principal balance and there were 29 loans still outstanding. The CreditWatch placements affecting the 'AAA' rating on class M-1 and S&P's 'A' rating on class M-2 reflect our concerns regarding the transaction's cash flow. S&P are concerned that these classes may experience interest shortfalls in the near future. A detailed report provided by HomeEq Servicing Corp. on the individual mortgage loans revealed that significant cash flow from the liquidation of the mortgage loans is not likely in the coming months. Currently, this deal has a reserve fund that S&P expect to help pay the interest on the certificates in a timely fashion. As of the May 2007 distribution date, this reserve fund had $135,496 remaining. Given the current performance of this transaction, this fund will supplement interest payments for only a short period of time. If an interest shortfall affects these certificates, it could be repaid from cash received from a liquidated loan. Additionally, interest should be paid on any interest shortfall that occurs. Standard & Poor's will continue to closely monitor classes M-1 and M-2. If the transaction does not generate sufficient funds to pay the certificates and the reserve fund is further eroded, Standard & Poor's will take further negative rating actions on these classes. Conversely, if enough funds are received from either the borrowers or liquidated mortgage loans to pay timely interest to the certificate holders in the upcoming months, S&P will affirm the ratings on these classes and remove them from CreditWatch negative. The collateral for this transaction consists of nonperforming fixed- and adjustable-rate mortgage loans. Rating Lowered Terwin Mortgage Trust 2004-EQR1 Rating ------ Class To From ----- -- ---- B-1 D CCC Rating Placed on Creditwatch Negative Terwin Mortgage Trust 2004-EQR1 Rating ------ Class To From ----- -- ---- M-1 AAA/Watch Neg AAA Rating Remaining on Creditwatch Negative Terwin Mortgage Trust 2004-EQR1 Class Rating ----- ------ M-2 A/Watch Neg THERMACLIME INC: Good Operating Results Cue S&P to Lift Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on ThermaClime Inc., including raising its corporate credit rating to 'B' from 'B-'. S&P raised its rating on the $50 million senior secured term loan to 'BB-' from 'B-', two notches above the corporate credit rating, and revised our recovery rating to '1' from '2'. All ratings are removed from CreditWatch, where they had been placed with positive implications on June 5, 2007. The outlook is stable. "The upgrade reflects the meaningful improvement in the company's operating results and credit measures over the past several quarters and the expectation that this positive momentum will continue in the near term," said Standard & Poor's credit analyst Sean McWhorter. "In addition, we expect that the company will be able to maintain its improved operating performance, underscored by increased demand for its climate control products, throughout the intermediate term. The ratings also reflect our expectations that improved earnings and cash flows will be used to reduce debt, resulting in an improved credit risk profile to a level more consistent with a higher rating." ThermaClime is the primary operating subsidiary of unrated LSB Industries Inc., a public company, and operates within two distinct business segments--chemicals and climate control, each representing about 50% of revenues. "We could revise the outlook to negative if demand in the company's climate control end markets deteriorate, resulting in decreased prospects for continued growth and profitability," Mr. McWhorter said. "We would consider a positive outlook if the company's financial profile continues to demonstrate sustained improvements because of higher production rates and margin growth in the chemical business and continued positive volume and earnings momentum in its climate control segment." TRIBEWORKS INC: Inks Deal with West Coast for $5MM Debt Financing ----------------------------------------------------------------- Tribeworks Inc. has entered into an agreement with West Coast Opportunity Fund LLC, for $5 million in debt financing to further expand the company's IT support business. The financing provided by West Coast, a private fund managed by West Coast Asset Management Inc., is at 5% per annum based on growth milestones over an eighteen month period. In return, WCAM will receive 6.5 million shares of TWKS and may invest an additional $16.9 million, for a total of $21.9 million, upon the exercise of warrants granted to WCAM at a strike price of $2.60 per share. "The company believes Tribeworks offers a best-in-class product addressing an enormous and largely untapped market," Atticus Lowe, chief investment officer of WCAM, stated. "Management's track record with companies such as Microsoft, JP Morgan, and Avanade is outstanding, and the company is pleased to be partnering with them." The promissory notes, common stock and warrants issued in connection with the above referenced transaction have not been registered under the Securities Act of 1933, or any state securities laws, and were sold in a private transaction. These securities may not be re-offered or resold in the United States unless the re-offer or resale is registered or unless exceptions from the registration requirements of the Securities Act of 1933 and applicable state laws are available. About West Coast West Coast Opportunity Fund LLC -- http://www.wcam.com-- was co- founded in 2000 by Kinko's founder Paul Orfalea. The company is an independent money manager with over $500 million in assets under management. About Tribeworks Inc. Tribeworks Inc. (OTC BB: TWKS) -- http://www.tribeworks.com/-- through its principal subsidiary, Atlas Technology Group, provides outsourced application software support services for clients with large information technology functions worldwide. The company specializes in remotely supporting custom-built applications, using process and monitoring systems, from data centers in Maltam Seattle, and New Zealand. Its head operating office is located in Malta. During 2006 Tribeworks Inc. substantially repositioned its business model and objectives, to concentrate on the $220 Billion worldwide IT support market, by selling its Tribeworks Development Company subsidiary, and purchasing all of the assets of Atlas Technology Group. Going Concern Doubt As reported in the Troubled Company Reporter on May 2, 2007, Williams & Webster, P.S. reported that Tribeworks Inc.'s significant operating losses raise substantial doubt about its ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. TRIUMPH HEALTH: Debt Increase Cues Moody to Affirm B2 Corp. Rating ------------------------------------------------------------------ Moody's Investors Service affirmed the B2 Corporate Family Rating of Triumph Healthcare Second Holdings, LLC following the announcement that the company would increase debt by $86 million through an add-on to its first and second lien term loans. Moody's also affirmed the B1 ratings on the company's first lien credit facilities and the Caa1 rating on the company's second lien term loan. Moody's understands that the incremental debt will be used to fund the $32 million acquisition of the long-term acute care hospital operations of Memorial Hermann Health Systems and pay a $50 million dividend to shareholders. Triumph has grown through a combination of acquisitions and de novo development; however, the company is still relatively small and therefore scale and diversity factors continue to constrain the rating. Moody's estimates that pro forma revenue for the twelve months ended March 31, 2007 would have approximated $414 million, which is consistent with other healthcare enterprises in the single B rating category. The acquisition will also result in an increase in the already high concentration of revenue from the Houston, Texas market. Triumph's reliance on Medicare revenues also leaves the company vulnerable to changes in reimbursement regulations. The Center for Medicare and Medicaid Services has focused a great deal of attention on reimbursement for LTACH services resulting in considerable reductions in reimbursement. While Triumph has been able to moderately increase its net revenue per patient day over the past year, Moody's expects continued pressure on revenue growth as the company continues to be affected by Medicare reimbursement changes that become effective July 1, 2007. Further, the ratings reflect the relatively aggressive financial policy of Triumph. This is the second time in two years that the company has increased financial leverage in order to fund a dividend. Moody's believes these transactions result in decreased financial flexibility at a time when the company and the sector continue to face significant pressure. Further, Moody's believes this indicates an appetite for operating with considerable leverage and demonstrates that a meaningful delevering of the company is unlikely. Also considered in the ratings is Triumph's demonstrated ability to maintain margins in the face of the reimbursement pressure through increased acuity and expense management. Additionally, the proposed acquisition of Memorial's LTACH operations is expected to result in continued growth, both through the assumption of Memorial's remaining operating LTACH facility and an affiliation agreement with the Memorial Hermann Health System. The following summarizes Moody's ratings actions: Ratings affirmed/LGD assessments revised: -- Senior secured revolving credit facility due 2012, to B1 (LGD3, 37%) from B1 (LGD3, 35%) -- Senior secured first lien term loan due 2013 (inclusive of proposed $76 million add-on), to B1 (LGD3, 37%) from B1 (LGD3, 35%) -- Senior secured second lien term loan due 2014 (inclusive of proposed $10 million add-on), to Caa1 (LGD5, 88%) from Caa1 (LGD5, 86%) Triumph, through its subsidiaries, operates long-term acute care hospital facilities. As of March 31, 2007, the company operated 21 facilities in six states. Moody's estimates that the company recognized $370 million in revenue for the twelve months ended March 31, 2007. TURNING STONE: Moody's Affirms B1 Corporate Family Rating --------------------------------------------------------- Moody's confirmed Turning Stone Casino Resorts' B1 corporate family rating, Ba3 probability of default rating, and B1 (LGD-4, 67%) senior note rating in response to the U.S. Department of Interior's decision last week not to withdraw the 1993 approval of Turning Stone's compact. As a result of that decision, the compact remains in effect. A stable rating outlook was assigned. The Department of Interior's decision was based on its conclusion that it lacked the authority to make a decision based on the fact that no party challenged the compact within six years of its publication, the stated amount of time that challenges to an approved compact must be made according to the Administrative Procedure Act. The confirmation of Turning Stone's ratings also consider that the State of New York and third party citizens groups, for different reasons and to different degrees, may still find a way to challenge the validity of Turning Stone's compact even though the Department of Interior decision is expected to make it more difficult for future challenges to succeed in shutting down the Turning Stone Casino. Turning Stone has not received any indication from the State of New York regarding whether or not it plans on challenging the validity of the compact. It's not known at this time what third party citizens groups may do in terms of pursuing further challenges. The assignment of a stable rating outlook considers that while further challenges are possible, the outcome of which would be difficult to assess at this time, decisions related to future challenges would likely occur over the longer term and outside of the 18-24 month ratings horizon. However, ratings could be negatively impacted if the State of New York decides to challenge the validity of the compact and/or it appears that attempts by third party citizens groups to challenge the compact might be successful. Ratings upside is limited until it becomes clearer on whether or not the validity of the compact will be challenged by the State of New York and/or third party citizens groups. Also considered will be the status of negotiations between the Oneida Nation and the State of New York regarding a new compact agreement. This rating action concludes the review process initiated on March 21, 2007 when Moody's lowered Turning Stone's ratings and placed the ratings on review for further possible downgrade following notification by the Oneida Indian Nation that the U.S. Secretary of Interior was reconsidering the 1993 approval of the gaming compact between the Nation and the State of New York. Turning Stone Casino Resort owns and operates a gaming and hotel facility located approximately 30 miles east of Syracuse, NY. Turning Stone is a business enterprise of the Oneida Indian Nation that is located in New York. TURNING STONE: S&P Upgrades Ratings and Removes Developing Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Turning Stone Casino Resort Enterprise and removed them from CreditWatch, where they were placed with developing implications on May 23, 2007. The corporate credit rating was raised to 'B+' from 'B', and the rating outlook is stable. The one-notch upgrade reflects S&P's positive view of the Department of Interior's June 13, 2007 determination that the Oneida Indian Nation's 1993 compact with New York State continues to be in effect for purposes on the Indian Gaming Regulation Act. "This DOI letter removed a large part of the uncertainty regarding the status of the compact and, therefore, improves the risk profile of Turning Stone's operations," explained Standard & Poor's credit analyst Ariel Silverberg. "Notwithstanding the positive result on this aspect of the tribe's litigation, recent operating performance has been weak when compared with historical trends, placing downward pressure on the rating and limiting prospects for a further rating upgrade at this time." Oneida, New York-based Turning Stone does not publicly file financial statements; however, operating performance has been weak in the March quarter and in the recent months when compared with the prior-year period. S&P view this performance as being somewhat temporary and due, in part, to weather-related issues and increasing gas prices. Still, the financial profile remains solid for the new rating. Before taking any further positive rating action, however, S&P would like to see the operating trend stabilize and improve. The recent weak operating performance is tempered somewhat by recent capital improvements at the facility, as well as limited competition. While the nearby Vernon Downs racino, which began operating video lottery terminals in October 2006, provides additional competition in the market, Vernon Downs operates at a disadvantage due to its high tax burden. Therefore, S&P do not expect the racino to materially affect Turning Stone's performance. The tribe still has litigation outstanding regarding land claims, multigame use, foreclosure claims related to property taxes, and construction claims. Certain of these cases, including the Madison County and Oneida County tax foreclosure suits, have had favorable rulings for the tribe as recently as June 2006; however, these cases are being appealed and the final outcome is yet to be determined. While Standard & Poor's is not in a position to determine the likely outcome of these issues, S&P do not view these claims as having the potential for near-term material downside regarding Turning Stone's business profile, given the recent outcome of the DOI regarding the validity of the compact. The affirmation of the compact is expected to present a greater hurdle for parties challenging the compact or gaming at Turning Stone pursuant to the compact. Any settlement payments related to either the outstanding tax foreclosure suits or the construction claims are expected to be manageable. UNITED AIR: Moody's Rates Class C Certificates at B1 ---------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to $275 million of City and County of Denver, Colorado Special Facilities Airport Revenue Refunding Bonds, Series 2007A. In a related action, Moody's also assigned ratings of Baa2 to the Class A, Ba2 to the Class B and B1 to the Class C Certificates of the United Air Lines Pass Through Certificates, Series 2007-1. Moody's affirmed all debt ratings of UAL Corporation and its subsidiaries, corporate family rating at B2, and the outlook remains stable. Rating of the Denver Facility Bonds The Caa1 rating on the Denver Facility Bonds is based on the Special Facilities and Ground Lease which obligates United to pay sufficient amounts to the City and County of Denver, Colorado to pay the principal, premium, if any and interest on the Bonds. In addition, United provides a direct, unconditional guaranty of full and prompt payment on the Denver Facility Bonds. Ratings of the Certificates The Certificate ratings considers the credit quality of United as obligor, the value of the aircraft pledged as security, the credit support provided by the liquidity facilities on the Class A and Class B Certificates, and the additional structural features of the transaction. The ratings reflect Moody's opinion of the ability of the Pass Through Trustees to make timely payment of interest and the ultimate payment of principal at a date no later than January 2019, the final maturity date. Moody's also notes that this transaction includes cross-collateralization of the aircraft securing the individual notes underlying the transaction, which enhances the potential recovery for investors in the event of default, as well as a revised waterfall and cross-default at the final maturity date of the Notes. Structure of the United Airlines Pass Through Certificates, 2007-1 EETCs Property of the Pass Through Trust will be Equipment Notes to be issued by United, which will be secured by a perfected security interest in the aircraft being financed by this transaction. Each aircraft will be subject to a separate indenture with a separate loan trustee. It is the opinion of counsel to United that the Notes will be entitled to benefits under Section 1110 of the U.S. Bankruptcy Code. Under this provision, if United fails to pay its obligations under the Notes, the collateral trustee has the right to repossess any aircraft which have been rejected by United. The Certificates are not obligations of, nor are they guaranteed by, United. However, the amounts payable by United under the Notes will be sufficient to pay all principal and interest on the Certificates when due. The Class C Certificates rank junior in priority to the Class B Certificates and the Class B Certificates rank junior to the Class A Certificates. Interest on the Class A Certificates and Class B Certificates will be supported by liquidity facilities intended to pay up to three semi-annual interest payments in the event United defaults on its obligations under the Notes. The liquidity facilities do not provide for payments of principal due, and there is no liquidity facility for the Class C Certificates. The liquidity provider is Morgan Stanley Senior Funding, Inc. whose obligations will be unconditionally guaranteed by Morgan Stanley which has a Moody's short-term rating of P-1. The liquidity provider has a priority claim on proceeds from liquidation ahead of any of Certificate holders and is also the controlling party following default. Cross Collateralization Feature The ratings of all Certificates benefit from cross collateralization, because Moody's believes this feature potentially enhances recovery prospects. Under the cross collateralization structure, if all aircraft are sold, then surplus proceeds from the sale of any aircraft are made available to cover any shortfall due under the Notes related to the sale of any other aircraft. All surplus proceeds will be retained until maturity of the financing or the indentures are cancelled. Moody's believes expected recovery is enhanced because of: * the number of aircraft, * that no single aircraft type comprises a substantial portion of the equipment pool, and * while there is some correlation in the value of the aircraft types in the transaction, there is sufficient diversity to produce the benefit of cross collateralization. This transaction was accorded the maximum rating benefit from the existence of cross collateralization because of the number of aircraft and the different types of aircraft. Collateral for the 2007-1 EETC Proceeds from the sale of the Certificates will be used to purchase Notes to finance two B767-300ER, four B777-200, four B777-200ER and three B747-400 aircraft originally delivered to United between 1998 and 2002. While there is some commonality among these aircraft as they are all long-haul widebody commercial jets, there are some differences in terms of their current and future usage which is reflected in their expected valuations. The B767-300ER is one of the most widely accepted widebody aircraft among commercial airlines, and is generally used for long-range flights. The B777-200, while intended for transcontinental, regional and international routes with cargo capacity similar to that of the B747, has largely been superceded by the 777-200ER. The B777-200ER has a range about 50% higher than the -200. The B747-400, which has been superceded by next-generation commercial passenger aircraft, has primary value as a freighter conversion. Moody's believes the current aircraft values are supported by particularly strong market conditions which may be nearing the peak of the demand cycle. Should a downturn in the demand occur, Moody's believes the impact on the values of the aircraft in this transaction operating in passenger configuration would be greater than for other aircraft types. First, widebody aircraft would likely have less operational flexibility than narrowbody aircraft in a softer economic environment, and their use would likely be discontinued sooner. Second, these aircraft are at or near their economic half lives. Some models have been superceded by newer, more efficient aircraft types which is likely to generate greater value volatility in an economic downturn. Finally, the cost of modification of these aircraft to cargo configuration is significant and potentially prohibitive. Assignments: Issuer: Denver (City & County of) CO -- Senior Unsecured Revenue Bonds, assigned Caa1 (LGD5, 86%) Issuer: United Air Lines, Inc. 2007-1 Pass Through Trusts -- Class A Certificates, Assigned Baa2 -- Class B Certificates, Assigned Ba2 -- Class C Certificates, Assigned B1 UAL Corporation which, through its primary subsidiary United Airlines, Inc. is one of the largest airlines in the world providing scheduled passenger service throughout North America, Latin America, Europe and Asia, is headquartered in Chicago, Illinois. UNITED AIR: S&P Puts Preliminary B Rating on Class C Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB' rating to United Air Lines Inc.'s (B/Stable/--) series 2007-1 Class A pass-through certificates, its preliminary 'BB-' rating to the Class B certificates, and its preliminary 'B' rating to the Class C certificates. The expected maturity for the Class A certificates is Jan. 2, 2022, for the Class B certificates Jan. 2, 2019, and for the Class C certificates Jan. 2, 2014. The final legal maturities will be 18 months after the expected maturities for the Class A and Class B certificates only. The issues are a drawdown under a Rule 415 shelf registration. Final ratings will be assigned upon conclusion of a legal review of the documentation. "The preliminary ratings are based on United's credit quality, substantial collateral coverage by aircraft that are important to the airline's international operations, and on legal and structural protections available to the pass-through certificates," said Standard & Poor's credit analyst Philip Baggaley. Proceeds of the offering are being used to refinance 2 B767-300ER, 4 B777-200, 4 B777-200ER, and 3 B747-400 widebody aircraft originally delivered to United over 1998-2002. The pass-through certificates are a form of enhanced equipment trust certificate, and benefit from legal protections afforded under Section 1110 of the federal bankruptcy code and, in the case of the Class A and Class B certificates, by liquidity facilities provided by Morgan Stanley Senior Funding Inc., guaranteed by Morgan Stanley (A+/Positive/A-1). The liquidity facilities are intended to cover up to three semi-annual interest payments, a period during which collateral could be repossessed and remarketed following any default by the airline. As with other EETCs, the Class A certificates rank senior to the Class B certificates, which in turn rank senior to the Class C certificates. Standard & Poor's criteria for rating EETCs start with the airline's corporate credit rating and add credit for: The likelihood that airline would continue to make payments in bankruptcy in order to maintain control of the aircraft, and,If that is not the case, credit for the possibility that full payment could be achieved through repossession and sale of the planes or restructuring of the obligations with the bankrupt airline. The planes in this transaction are important to United's international operations, which now represent a greater portion of the airline's revenues following operational changes and restructuring undertaken in Chapter 11. United currently has no aircraft on order, and, even when it does order new widebody aircraft to operate its international routes, the planes in this transaction, as relatively recent deliveries, would likely be at lesser risk of being returned to creditors than older planes. In evaluating collateral quality for an EETC, S&P consider technological risk, resale liquidity, and diversification of the aircraft. This transaction was scored somewhat lower on technological risk and resale liquidity than some other recent EETCs, based on the types of aircraft collateral. Diversification is a lesser consideration in judging collateral quality, but the 2007-1 collateral has reasonable diversity. The 'B' corporate credit rating on United and parent UAL Corp. (B/Stable/--) reflects United's participation in the price- competitive, cyclical, and capital-intensive airline industry; pricing pressure from low-cost carriers in the U.S. domestic market; and an overall highly leveraged financial profile. These weaknesses are mitigated somewhat by United's extensive and well- positioned route system and by reductions in labor costs and financial obligations achieved in bankruptcy. United is the second-largest U.S. airline, with strong positions in the Midwest and Western U.S. and on trans-Pacific routes, and a solid position on trans-Atlantic routes. VALENCE TECHNOLOGY: PMB Helin Raises Going Concern Doubt -------------------------------------------------------- PMB Helin Donovan LLP of Austin, Tex., expressed substantial doubt about Valence Technology, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operations and net stockholders' capital deficit. The company posted a $22.2 million net loss on $16.7 million of total revenues for the year ended March 31, 2007, as compared with a $32.9 million net loss on $17.2 million of total revenues in the prior year. At March 31, 2007, the company's balance sheet showed $19.2 million in total assets and $78.5 million in total liabilities, resulting to a $67.9 million stockholders' deficit. Liquidity and Capital Resources At March 31, 2007, the company's principal sources of liquidity were cash and cash equivalents of $1.2 million. The company expects their sources of liquidity will not be sufficient for the remaining fiscal year. The company anticipates product sales during fiscal 2008 from the N-Charge(R) Power System and the battery pack for Segway, Inc., which are subject to seasonal fluctuations and the sale of the U-Charge(R) Power System will be insufficient to cover the company's operating expenses. The company's use of cash from operations during fiscal 2007, fiscal 2006 and fiscal 2005 was $20.3 million, $33.1 million and $33.1 million, respectively. The cash used for operating activities during all periods was primarily for operating losses and working capital. Cash used for operating loss in fiscal 2007 was lower than in fiscal 2006 and 2005 primarily from the impact of decreases in some of the operating expenses. In fiscal 2007, the company spent net cash from investing activities of $2.2 million primarily on property, plant, and equipment for their China facilities. The company obtained net cash from financing activities of $23.2 million and $32.4 million during the fiscal 2007 and 2006, respectively. The 2007 financing includes $8.4 million in sales of common stock to private investors, 9.5 million in sales of common stock to a related party, and $5 million in short term convertible notes payable to a stockholder. The company had a net increase in cash and cash equivalents of $556,000 during fiscal 2007, a net decrease of $1.9 million during fiscal 2006, and a net decrease of $192,000 during fiscal 2005. Transactions West Coast Venture Capital purchased common shares from the company on: -- Feb. 1, 2007 with 657,894 shares for $1 million -- Jan. 18, 2007 with 662,252 shares for $1 million -- Dec. 27, 2006 with 613,497 shares for $1 million -- Dec. 15, 2006 with 549,541 shares for $1 million -- Aug. 15, 2006 with 534,759 shares for $1 million -- Aug. 3, 2006 with 1,298,702 shares for $2 million -- May 11, 2006 with 646,552 shares for $1.5 million -- Apr. 3, 2006 with 401,606 shares for $1 million A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2101 About Valence Technology Headquartered in Austin, Texas, Valence Technology, Inc. (Nasdaq: VLNC) -- http://www.valence.com/-- develops and markets battery systems using its Saphion(R) technology, the industry's first commercially available, safe, large-format Lithium-ion rechargeable battery technology. Valence Technology holds an extensive, worldwide portfolio of issued and pending patents relating to its Saphion technology and lithium-ion phospate rechargeable batteries. The company has facilities in Austin, Texas, Las Vegas, Nevada, and Suzhou and Shanghai, China. VENOCO INC: Plans Public Offering for 6.1 Million Shares -------------------------------------------------------- Venoco Inc. intends to offer 6.1 million shares of common stock to the public through an underwritten offering. Two selling stockholders will offer a total of 600,000 additional shares of common stock in the offering. The underwriters will have the option to purchase up to an aggregate of 1,005,000 additional shares of common stock from the company and the selling stockholders to cover any over-allotments. Venoco intends to use the net proceeds from the offering to reduce outstanding indebtedness under its revolving credit facility and to fund capital expenditures. Credit Suisse Securities (USA) LLC and Lehman Brothers Inc. will act as Joint Book-Running Managers for the offering. Copies of the prospectus may be obtained from the offices of Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010, 1-800-221-1037, or Lehman Brothers, c/o Broadridge Prospectus Fulfillment, 1155 Long Island Avenue, Edgewood, NY 11717. Headquartered in Denver, Colorado, Venoco Inc. (NYSE: VQ) -- http://www.venocoinc.com/--is an independent energy company primarily engaged in the acquisition, exploitation and development of oil and natural gas properties in California and Texas. It has regional headquarters in Carpinteria, California and in Houston, Texas. Venoco operates three offshore platforms in the Santa Barbara Channel, has non-operating interests in three other platforms, and also operates two onshore properties in Southern California, approximately 250 natural gas wells in Northern California and more than 100 wells in Texas. * * * As reported in the Troubled Company Reporter on April 25, 2007, Moody's Investors Service assigned a Caa1, LGD 4 (61%) rating to Venoco, Inc.'s proposed $500 million second lien term loan facility. At the same time, Moody's affirmed Venoco's B3 Corporate Family Rating, B3 Probability of Default Rating, Caa1, LGD 4 (61%, changed from 64%) senior note rating, and SGL-3 Speculative Grade Liquidity rating. The rating outlook remains negative. Troubled Company Reporter reported on April 25, 2007, that Standard & Poor's Ratings Services raised the corporate credit rating on independent exploration and production company Venoco Inc. to 'B' from 'B-'. In addition, a 'B-' issue rating and '3' recovery rating (indicating the expectation of meaningful (50%-80%) recovery of principal in the event of a payment default) were assigned to Venoco's proposed $500 million second-lien term loan facility. Venoco's existing $150 million senior notes were affirmed at 'B-' and assigned a '3' recovery rating. WARNER CHILCOTT: Moody's Lifts SGL Rating to SGL-2 from SGL-1 ------------------------------------------------------------- Moody's Investors Service raised the speculative-grade liquidity rating for Warner Chilcott Company, Inc. to SGL-1 from SGL-2, indicating very good liquidity. The Corporate Family Rating is B2, with a positive rating outlook. Continuation of positive cash flow trends and reduced uncertainty related to several items potentially affecting core product franchises could result in an upgrade of the company's Corporate Family Rating and other ratings. Rating upgraded: Warner Chilcott Company, Inc. -- Speculative grade liquidity rating to SGL-1 from SGL-2 Warner Chilcott Company, Inc. is a wholly-owned subsidiary of Warner Chilcott Limited, a New Jersey-based, publicly-traded company (NASD:WCRX) that markets and develops branded pharmaceutical products focused on the U.S. women's healthcare and dermatology markets. Warner Chilcott Limited reported $754 million of total revenue during 2006. WENDY'S INT'L: Moody's Cuts All Ratings & May Downgrade Further --------------------------------------------------------------- Moody's Investors Service lowered all ratings of Wendy's International, Inc. and placed all ratings on review for further possible downgrade as follows; Ratings lowered and placed on review for further possible downgrade are; -- Corporate family rating lowered to Ba3 from Ba2 -- Probability of default rating lowered to Ba3 from Ba2 -- Senior unsecured notes lowered to Ba3/54%/LGD-4 from Ba2/54%/LGD-4. -- Senior unsecured shelf rating lowered to (P)Ba3/54%/LGD-4 from (P)Ba2/54%/LGD-4 -- Subordinated shelf lowered to (P)B2/97%/LGD-6 from (P)Ba3/97%/LGD-6. -- Preferred stock shelf lowered to (P)B2/97%/LGD-6 from (P)B1/97%/LGD-6. The ratings downgrade was prompted by the company's continued weak operating performance due in part to significant competition and commodity cost pressures resulting in debt protection metrics that remain weak with debt to EBITDA of over 4.5x and EBIT coverage of interest of under 1.5 as of year-end 2006. The ratings are supported by Wendy's brand strength, more stable revenue stream provided by its franchised focused business model, and a relatively good geographic presence within the U.S. The review for possible downgrade reflects Wendy's recent announcement that the special committee of its board of directors has decided to explore a possible sale of the company and is also evaluating a possible securitization financing that could be used by a potential acquirer. The review also incorporates Wendy's weaker than expected operating performance and the lowering of its financial guidance. A sale or capital restructuring of Wendy's that results in a material deterioration in debt protection metrics could result in a lowering of the company's ratings by multiple rating levels. Wendy's International, Inc., headquartered in Dublin, Ohio, owns and franchises Wendy's Old Fashion Hamburger restaurants. Total revenues in 2006 were approximately $2.4 billion. WENDY'S INT'L: Possible Sale Prompts S&P to Lower Ratings to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Wendy's International Inc. to 'BB-' from 'BB+'. All ratings remain on CreditWatch with negative implications, where they were placed on April 26, 2007. The rating actions follow the Dublin, Ohio-based quick-service operator's announcement that the Special Committee of its Board of Directors has decided to explore a possible sale of the company. "We view this action as a more aggressive financial policy that could result in a highly leveraged capital structure and reduced cash flow protection," said Standard & Poor's credit analyst Diane Shand. WHOLE FOODS: CEO Posts Blog on FTC's Challenge of Merger Deal ------------------------------------------------------------- Whole Foods Market Inc.'s Chief Executive Officer, John Mackey, has posted a blog about the Federal Trade Commission's attempt to block the proposed merger between Whole Foods Market and Wild Oats Markets Inc. Early this month, the FTC advised Whole Foods that it will file a complaint in the U.S. District Court for the District of Columbia seeking to block the proposed acquisition. The FTC also advised Whole Foods that it will ask the Court to enter a temporary restraining order that prohibiting the company from completing its acquisition of the shares of Wild Oats until the Court has resolved the FTC's request for a preliminary injunction. According to Mr. Mackey, his blog posting provides a detailed look into Whole Foods Market's decision-making process regarding the merger, as well as the company's experience interacting with the FTC staff assigned to the merger. "I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency. Finally, I provide answers in my FAQ section to many of the questions that various Team Members have fielded from both the media and company stakeholders," said Mr. Mackey. The new blog posting by Mr. Mackey addresses: -- Why Whole Foods Market wants to buy Wild Oats, -- Whole Foods Market's Objections to the FTC's Investigation, -- What the FTC is Claiming in its Objections to the Merger, and -- FAQs Mr. Mackey's blog can be viewed at: http://wholefoodsmarket.com/blogs/jm/ Wild Oats Merger Deal On Feb. 21, 2007, Whole Foods Market and Wild Oats Markets entered into a merger agreement pursuant to which Whole Foods Market commenced a tender offer to purchase all the outstanding shares of Wild Oats Markets at a purchase price of $18.50 per share in cash, plus assumed debt. The U.S. District Court for the District of Columbia had scheduled a preliminary injunction hearing to begin on July 31, 2007, and to conclude on Aug. 1, 2007, to decide whether to approve the FTC's application for an injunction to block the proposed merger between the two companies. Whole Foods Market and Wild Oats Markets consented to a temporary restraining order pending the hearing. About Wild Oats Markets Headquartered in Boulder, Colorado, Wild Oats Markets Inc. -- http://www.wildoats.com/-- is a natural and organic foods retailer in North America with annual sales of approximately $1.2 billion. Wild Oats Markets was founded in Boulder, Colorado in 1987. Wild Oats Markets currently operates 110 stores in 24 states and British Columbia, Canada under four banners: Wild Oats Marketplace (nationwide), Henry's Farmers Market (Southern California), Sun Harvest (Texas), and Capers Community Market (British Columbia). About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market, Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- is a Fortune 500 company and the largest natural and organic foods retailer. The company had sales of $5.6 billion in fiscal year 2006 and currently has 191 stores in the United States, Canada and the United Kingdom. * * * As reported in the Troubled Company Reporter on May 1, 2007, Standard & Poor's Ratings Services said that while the ratings on Whole Foods Market Inc., including the 'BBB-' corporate credit rating, currently remain on CreditWatch with negative implications, where they were placed on Feb. 22, 2007, S&P will lower the corporate credit rating to 'BB+' from 'BBB-' upon closure of its acquisition of Wild Oats Inc. At this time, ratings will also be removed from CreditWatch. The outlook will be stable. WYNN RESORTS: Calls for $250 Mil. 6% Convertible Notes Redemption ----------------------------------------------------------------- Wynn Resorts Limited has called for redemption on July 20, 2007, all of the $250 million outstanding principal amount of its 6% Convertible Subordinated Debentures due 2015. Prior to 5:00 p.m., New York City time, on July 20, 2007, holders may convert their Debentures into shares of Wynn Resorts common stock at a conversion price of $23 per share by following the instructions set forth in the indenture governing the Debentures. Cash will be paid in lieu of fractional shares. On June 14, 2007, the last reported sale price of Wynn Resorts common stock on the Nasdaq Global Select Market was $94.67 per share. Any of the Debentures not converted prior to 5:00 p.m., New York City time, on July 20, 2007, will be automatically redeemed by Wynn Resorts on July 20, 2007, for cash in the amount of $1,036 per $1,000 principal amount of the Debentures, plus accrued and unpaid interest up to but not including July 20, 2007. No further interest will accrue on the Debentures on or after July 20, 2007. A Notice of Redemption was mailed by U.S. Bank National Association, the Trustee, Conversion Agent and Paying Agent for the Debentures, to all registered holders of the Debentures. Copies of the Notice of Redemption may be obtained from U.S. Bank National Association by calling Ray Haverstock at (651) 495-3909. The address of U.S. Bank National Association is 60 Livingston Avenue, St. Paul, Minnesota 55107. About Wynn Resorts Wynn Resorts Limited (Nasdaq: WYNN) -- http://www.wynnresorts.com/ -- together with its subsidiaries, develops, owns, and operates destination casino resorts in the U.S. It owns and operates Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip. * * * Wynn Resorts Ltd. and its wholly owned subsidiary Wynn Las Vegas LLC carry Standard & Poor's Ratings Services' 'BB-' corporate credit ratings. * Sean McGuinness Joins Chadbourne & Parke as Counsel in DC Office ------------------------------------------------------------------ Chadbourne & Parke LLP has employed Sean P. McGuinness as counsel in the Washington, DC office. Mr. McGuinness will draw on his experience serving major clients in his new role as a member of Chadbourne's corporate department. "Sean's 25 years of legal experience in Washington have given him an understanding of the business and regulatory issues faced by clients in that environment," Charles O'Neill, Chadbourne managing partner, said. "He is an addition to Chadbourne's practice in Washington." Mr. McGuinness, 52, recently a partner at the Washington law firm of Fleischman & Walsh LLP, has specialized in transactional matters for the oil and gas industry involving securities offerings and mergers and acquisitions. He has also represented a wide range of corporate clients, including companies in the telecommunications industry, on M&A transactions, public and private securities offerings, securities law compliance, corporate governance, negotiations of commercial transactions and the corporate aspects of bankruptcies. "Sean knows Washington inside and out, and he can guide clients through the most complicated corporate transactions. His experience in key areas will greatly strengthen the firm's corporate practice," Andrew Giaccia, Chadbourne Washington office managing partner, said. Mr. McGuinness holds a B.S, magna cum laude, in philosophy and mathematics from Tufts University and a J.D. from Georgetown University, where he was executive editor of The Georgetown Law Journal. About Chadbourne & Parke LLP Headquartered in New York City, Chadbourne & Parke LLP -- http://www.chadbourne.com/-- is an international law firm that provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, and Latin America. The firm has offices in New York, Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg, Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent, Beijing, and a multinational partnership, Chadbourne & Parke, in London. * HughesWattersAskanase Adds Four Counsel to Various Practices -------------------------------------------------------------- HughesWattersAskanase LLP recently promoted one attorney and added three new team members in response to the continuing success of the firm. Janet Casciato Northrup, Esq. joined the firm in an of counsel capacity, bringing 25 years of bankruptcy experience to complement the firm's existing bankruptcy practice. Ms. Northrup is recognized as one of the top consumer bankruptcy experts in Texas. She is certified by the Texas Board of Legal Specialization in consumer bankruptcy law. She has been a Chapter 7 Trustee for the Southern District of Texas since 1986 and has been named a Super Lawyer by Texas Monthly magazine. Promoted from of counsel, Scott G. Camp, Esq. is the 10th partner at the firm and has more than 20 years of experience in civil litigation and business representation. He has represented plaintiffs and defendants in state and federal courts with an emphasis on complex commercial disputes, business torts, executive/management representation and employer-employee relations. His practice focuses on complex corporate and governmental legal issues. Previously, Mr. Camp was a shareholder with Cotton, Bledsoe, Tighe & Dawson, P.C., in Houston. As a new associate in the litigation practice area, James E. Potts, Esq. represents clients in a variety of civil matters, including commercial and consumer lending, financial transactions, business disputes, deceptive trade practices, fraud and breach of contract. He is fluent in Spanish and has worked in Latin America. Mr. Potts began working for the firm as a summer associate while in law school and became an associate upon his admission to the Texas Bar in November 2006. Jan Whaley joined the firm as a real estate paralegal for partner Gary S. Gunn, Esq. She received her paralegal certificate from the University of Houston and has multiple continuing education credits issued through Banker Systems, Inc., and Prosperity Bank. Whaley has 10 years of experience in real estate and was previously employed with Southern National Bank of Texas (now Prosperity Bank) as a real estate closer for both residential and commercial real estate transactions. "HWA is committed to delivering superior client service, while fostering a workplace culture centered on collaboration, continuous improvement and respect. Scott, Janet, Jim and Jan are great assets to our firm and complement our existing legal and professional team. Each of them plays a key role in the ongoing growth and development of our firm, and each one matches our values and culture," said Gunn. About HughesWattersAskanase For more than 29 years, HughesWattersAskanase LLP -- http://www.hwa.com/-- has helped business organizations, financial institutions and individuals succeed with their business endeavors. The firm's attorneys play a strategic role and support clients through every stage of existence and operation, from formation to liquidation. The practice focuses on the six interrelated areas which provide the greatest opportunities and most challenging obstacles: bankruptcy, business planning and strategy, commercial finance, commercial real estate, consumer financial services, and litigation. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Robert W. Laird Bankr. M.D. Ala. Case No. 07-10768 Chapter 11 Petition filed June 13, 2007 See http://bankrupt.com/misc/almb07-10768.pdf In Re Lucky Manufacturing Company, Inc. Bankr. N.D. Ala. Case No. 07-81486 Chapter 11 Petition filed June 13, 2007 See http://bankrupt.com/misc/alnb07-81486.pdf In Re D.&E. Limited Partnership #5 Bankr. N.D. Ind. Case No. 07-11619 Chapter 11 Petition filed June 13, 2007 See http://bankrupt.com/misc/innb07-11619.pdf In Re Luis G. Rodriguez Fernandez Bankr. D. P.R. Case No. 07-03264 Chapter 11 Petition filed June 13, 2007 See http://bankrupt.com/misc/prb07-03264.pdf In Re The Illustrated Plumbing Supply, Inc. Bankr. N.D. Tex. Case No. 07-32828 Chapter 11 Petition filed June 13, 2007 See http://bankrupt.com/misc/txnb07-32828.pdf In Re Meadowbrook Construction, Inc. Bankr. D. Ariz. Case No. 07-02755 Chapter 11 Petition filed June 14, 2007 See http://bankrupt.com/misc/azb07-02755.pdf In Re Performance Line Hardware, L.L.C. Bankr. M.D. Fla. Case No. 07-05047 Chapter 11 Petition filed June 14, 2007 See http://bankrupt.com/misc/flmb07-05047.pdf In Re Today's Fresh Catch, Inc. Bankr. M.D. Fla. Case No. 07-05066 Chapter 11 Petition filed June 14, 2007 See http://bankrupt.com/misc/flmb07-05066.pdf In Re The House of Brown Funeral Home, Inc. Bankr. N.D. Fla. Case No. 07-40325 Chapter 11 Petition filed June 14, 2007 See http://bankrupt.com/misc/flnb07-40325.pdf In Re Jorge Saliva Mantilla Bankr. D. P.R. Case No. 07-03292 Chapter 11 Petition filed June 14, 2007 See http://bankrupt.com/misc/prb07-03292.pdf In Re N. Cerino & Company, Ltd. Bankr. D. Conn. Case No. 07-31359 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/ctb07-31359.pdf In Re Rossi Distributors, Inc. Bankr. N.D. Ill. Case No. 07-10782 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/ilnb07-10782.pdf In Re Zenus is Jewelry, Inc. Bankr. D. N.H. Case No. 07-11245 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/nhb07-11245.pdf In Re Frederick W. Parkison Bankr. W.D. N.Y. Case No. 07-21575 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/nywb07-21575.pdf In Re Robert Mark Milele Bankr. M.D. Tenn. Case No. 07-04180 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/tnmb07-04180.pdf In Re Orange County Ventures, L.L.C. Bankr. E.D. Va. Case No. 07-11528 Chapter 11 Petition filed June 15, 2007 See http://bankrupt.com/misc/vaeb07-11528.pdf In Re First Thessalonian Baptist Church, Inc. Bankr. M.D. Fla. Case No. 07-02577 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/flmb07-02577.pdf In Re Cannon Lighting, L.L.C. Bankr. S.D. Ga. Case No. 07-50441 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/gasb07-50441.pdf In Re Monte Wayne Puhrmann Bankr. N.D. Iowa Case No. 07-01080 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/ianb07-01080.pdf In Re Zeus Concepts, L.L.C. Bankr. N.D. Ill. Case No. 07-10880 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/ilnb07-10880.pdf In Re Painter Tool, Inc. Bankr. W.D. Penn. Case No. 07-23855 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/pawb07-23855.pdf In Re Gregory Starinchak Bankr. W.D. Penn. Case No. 07-23860 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/pawb07-23860.pdf In Re Rafael F. Rodriguez Abella Bankr. D. P.R. Case No. 07-03369 Chapter 11 Petition filed June 18, 2007 See http://bankrupt.com/misc/prb07-03369.pdf In Re Charles D Herlien Bankr. W.D. Ark. Case No. 07-71849 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/arwb07-71849.pdf In Re American Executives International Realty, Inc. Bankr. D. Ariz. Case No. 07-02837 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/azb07-02837.pdf In Re Susan Clark-Levin Bankr. D. Conn. Case No. 07-31387 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/ctb07-31387.pdf In Re Great Balls A Fire, L.L.C. Bankr. W.D. Ky. Case No. 07-32070 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/kywb07-32070.pdf In Re Florida Star Shipping Corp. Bankr. D. Mass. Case No. 07-13825 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/mab07-13825.pdf In Re Carson Communications Group, Inc. Bankr. E.D. N.C. Case No. 07-02234 Chapter 11 Petition filed June 19, 2007 See http://bankrupt.com/misc/nceb07-02234.pdf ********* 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, John Paul C. Canonigo, Sheena Jusay, 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 ***