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/raid1/www/Hosts/bankrupt/TCR_Public/070629.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 29, 2007, Vol. 11, No. 152 Headlines AEGIS ASSET: Moody's Downgrades Ratings on Two Class Certificates AMERCABLE INC: S&P Assigns Corporate Credit Rating at B- AMERCABLE INC: Buyout Cues Moody's B2 Corporate Family Rating AMP'D MOBILE: Sec. 341(a) Creditors' Meeting Slated for July 12 AMP'D MOBILE: Wants Until July 10 to File Schedules AMR CORPORATION: Sees $12 Million Cut in Annual Interest Expense ANDREW CORPORATION: Inks $2.6 Billion Buyout Deal with CommScope ANDREW CORP: $2.6BB CommScope Deal Cues S&P to Cut Rating to BB- ARKANSAS CATFISH: Public Sale for Assets Scheduled on July 11 AURIGA LABS: L. Dreimann and T. Heck Appointed as Directors BALLY TOTAL: Commences Solicitation for Pre-Packaged Ch. 11 Plan BALLY TOTAL: Discloses Treatment of Claims Under Pre-Packaged Plan BEAR STEARNS: Fitch Rates $8.2 Million Class Q Certificates at B- BIKE SPRING: Voluntary Chapter 11 Case Summary BONNY WEISS: Case Summary & 20 Largest Unsecured Creditors C-BASS MORTGAGE: Moody's Rates Class B Certificates at Ba1 CENTENNIAL COMMUNICATIONS: Fitch Affirms B- Issuer Default Rating CHASE COMMERCIAL: S&P Affirms B- Rating on Class I Certificates CKE RESTAURANTS: Incurs $15.4 Million Loss in Quarter Ended May 21 CMALT: Fitch Rates $3.397 Million Class B-5 Certificates at B COMMSCOPE INC: Inks Pact to Buy Andrew Corp. for $2.6 Billion COMMSCOPE INC: Moody's Reviews Ratings after Announced Acquisition COMMSCOPE INC: Andrew Corp. Buy Prompts S&P's Negative Watch CRESCENT REAL: Shareholders to Vote on Deal at August 1 Meeting DAIMLERCHRYSLER: Executive Says Russia a Key Market for Chrysler DAIMLERCHRYSLER AG: MAN and Freightliner Settle ERF Case DANKA BUSINESS: March 31 Balance Sheet Upside-Down by $316.4 Mil. DELTATECH CONTROLS: S&P Rates Proposed $166 Million Loan at B+ DEREK FARRINGTON: Case Summary & 20 Largest Unsecured Creditors DYNCORP INTERNATIONAL: Awarded LOGCAP IV Contract by US Army ENCYSIVE PHARMACEUTICALS: Cuts 70% of US Work Force ENCYSIVE PHARMACEUTICALS: George Cole Named as President and CEO ENVIRONAMICS: Case Summary & 17 Largest Unsecured Creditors EPD INC: Moody's Affirms B2 Corporate Family Rating FIDELITY NATIONAL: eFunds Acquisition Cues Fitch's Negative Watch FIDELITY NATIONAL: eFunds Buy Cues Moody's to Review Ratings FIDELITY NATIONAL: eFunds Acquisition Cues S&P's Negative Watch FIRST CONSUMERS: S&P Puts Default Rating on Class B Notes FORD CREDIT: Fitch Rates $39.839 Million Class D Notes at BB GENCORP INC: May 31 Balance Sheet Upside-Down by $96 Million GENERAL MOTORS: Selling Unit to Carlyle Group & Onex for $5.6 Bil. GLOWPOINT INC: March 31 Balance Sheet Upside-down by $14.1 Million GREAT LAKES: Refinancing Cues S&P to Withdraw BB- Ratings GUITAR CENTER: Inks $2.1 Billion Deal with Bain Capital GUITAR CENTER: Bain Capital Offer Cues Moody's to Review Ratings HERCULES INC: S&P Revises Outlook from Stable to Positive HOME DIRECTOR: Has $1.7 Million Stockholders' Deficit at March 31 INTERGEN N.V.: S&P Puts Preliminary BB- Rating on $1.9 Bil. Notes INVENTIV HEALTH: Moody's Affirms Ba3 Corporate Family Rating INVENTIV HEALTH: S&P Rates S&P Rates $800MM Facilities at BB- INVERNESS MEDICAL: Completes Tender Offer for Biosite Shares INVESTORS BANK: Moody's Lifts Strength Rating to B+ from B J.P. MORGAN: Moody's Rates Class M10 Certificates at Ba1 JACK IN THE BOX: Strong Performance Prompts S&P's Stable Outlook JO-ANN STORES: Improved Performance Cues S&P's Stable Outlook K-SEA TRANSPORTATION: Moody's Places B1 Rating under Review KEYSTONE AUTO: Poor Same-Store Sales Cues S&P's Negative Outlook LASALLE COMMERCIAL: Fitch Holds B- Rating on $1.2MM Class M Certs. LE-NATURE'S INC: Chap. 11 Trustee, et al. Want Cases Continued LE-NATURE'S INC: Harbinger, et al. Commits $15MM Exit Facility LEHMAN ABS: Moody's Assigns Low-B Ratings on Two Certificates LEINER HEALTH: March 31 Balance Sheet Upside-Down by 137.1 Million LOEHMANN'S HOLDINGS: S&P Cuts Corporate Credit Rating to B- MERRILL LYNCH: Fitch Cuts Rating on 2005-HE1 Class B5 Certs. to B+ MERRILL LYNCH: Fitch Rates $1.6 Mil. 2007-2 Class B-2 Certs. at B MERRILL LYNCH: Fitch Cuts Rating on 2006-SL2 Class B2 Certs. to B MORGAN STANLEY: Moody's Assigns Low-B Ratings on Two Certificates MORTGAGE ASSET: Fitch Lowers on 2005-FRE1 Class M-10 Certs. to B MTR GAMING: Selling Binion's Hotel to TLC Casino for $32 Mil. Cash MYERS INDUSTRIES: S&P Junks Rating on Proposed $265 Mil. Notes OGLEBAY NORTON: Annual Shareholders Meeting Set for Sept. 24 OMI CORP: Moody's Withdraws Ba3 Corporate Family Rating PACIFIC LUMBER: Scopac Taps Greenfield Advisors as Appraisers PAETEC HOLDING: Prices $300 Mil. Offering of 9.5% Senior Notes PETRA CRE: Fitch Rates $32.5 Mil. Class K Deferrable Notes at B PLEASANT CARE: Court Okays Paul Delano Wolf as Special Counsel PRIMEDIA INC: Commences Cash Tender Offer for Three Notes R.J. GATORS: Case Summary & 20 Largest Unsecured Creditors RAG SHOPS: DJM Realty Tapped to Sell All 61 Location Leases RAYMOND KADALEC: Case Summary & 18 Largest Unsecured Creditors REAL ESTATE: Moody's Assigns Low-B Ratings to Six Certificates SCHOONER TRUST: Moody's Assigns Low-B Ratings to Six Certificates SPINNAKER CAPITAL: Moody's Rates $200 Million Series 1 Notes at B1 STOLLE MACHINERY: Loan Add-On Prompts S&P to Revise Ratings STRUCTURED ASSET: Moody's Junks Rating on 2002-HF1 Class B Certs. STRUCTURED ASSET: S&P Cuts Ratings on Five Certificates to B SYNIVERSE TECHNOLOGIES: S&P Affirms BB- Rating w/ Stable Outlook TIMOTHY SHELTON: Case Summary & 17 Largest Unsecured Creditors TWEETER HOME: U.S. Trustee Picks Five-Member Creditors' Panel TWEETER HOME: Court Okays Kurtzman Carson as Claims Agent UNIVERSAL HOSP: Engages Deloitte & Touche as New Accountant VARIETAL DISTRIBUTION: Reports Results of Notes Tender Offer VARIETAL DISTRIBUTION: Inks Pact to Buy Bie & Berntsen in Cash VENOCO INC: Prices 6.1 Million Shares at $18.50 per Share VISTAR CORP: Moody's Places Corporate Family Rating at B2 WAMU ASSET: Moody's Rates Class B Certificates at Ba1 WELLS FARGO: Fitch Rates $5.656 Mil. Class B-5 Certificates at B WERNER LADDER: Creditors' Committee Files Liquidating Plan WERNER LADDER: Treatment of Claims Under the Committee's Plan WERNER LADDER: Panel Wants Solicitation Procedures Approved WGL HOLDINGS: S&P Revises Outlook to Stable from Negative WHITING PETROLEUM: Prices 5 Million Common Stock Public Offering * BOOK REVIEW: As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America ********* AEGIS ASSET: Moody's Downgrades Ratings on Two Class Certificates ----------------------------------------------------------------- Moody's Investors Service downgraded two certificates and placed one certificate on watch for possible downgrade from three transactions issued in 2003 and 2004 by Aegis Asset Backed Securities Trust. The transactions are backed by primarily first lien, adjustable and fixed rate subprime mortgage loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to expected losses. Complete rating actions are: Downgrade: Issuer: Aegis Asset Backed Securities Trust 2003-2 -- Class B, downgraded to B2 from Baa2. Issuer: Aegis Asset Backed Securities Trust 2004-1 -- Class B3, downgraded to B3 from Baa3. Review for possible downgrade: Issuer: Aegis Asset Backed Securities Trust 2003-3 -- Class B, currently Baa2, under review for possible downgrade AMERCABLE INC: S&P Assigns Corporate Credit Rating at B- -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to El Dorado, Arkansas-based AmerCable Inc., a provider of power and control cables and cable assemblies to the mining, and oil and gas sectors. The outlook is stable. At the same time, S&P assigned its 'B-' bank loan rating and '3' recovery rating to AmerCable's proposed $135 million senior secured term loan. The bank loan and recovery rating indicate expectations of meaningful recovery (50%-70%) in the event of a payment default. The bank loan ratings are based on preliminary terms and conditions. Private equity firm Quintana Energy Partners L.P. is acquiring AmerCable, which was formed in 1984 as part of Associated Materials Inc. (B-/Stable/--). The most recent transaction follows a management buyout in 2002 and subsequent acquisition by Industrial Growth Partners, a private equity firm, in 2005. Pro forma for the transaction, the company will have $135 million of term debt and $77 million in equity from QEP and AmerCable's senior management. AmerCable operates in two end markets--oil and gas, and mining. "We expect AmerCable's maintenance, repair, and overhaul segment to continue to generate stable cash flow and that new project opportunities will be sufficiently robust in the near term, given the outlook for mining and oil and gas spending," said Standard & Poor's credit analyst Marie Shmaruk. "However, a significant and rapid drop in copper prices or additional leverage could result in a negative rating action, although S&P don't expect this in the near term. A cyclical downturn in the mining and oil and gas industries could also pressure ratings. S&P could raise ratings if operating performance improved, debt levels fell significantly, and financial measures strengthened." AMERCABLE INC: Buyout Cues Moody's B2 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned ratings to AmerCable Incorporated in connection with the leveraged buyout of AmerCable by Quintana Energy Partners L.P. Moody's assigned a B2 Corporate Family Rating, a Ba2 rating to the proposed $15 million senior secured revolver and a B2 rating to the proposed $135 million senior secured term loan. The rating outlook for AmerCable is stable. AmerCable entered on June 8, 20074 into a definitive agreement to be acquired by Quintana Energy Partners L.P. and its affiliated investment funds for about $212 million in total consideration. While the deal represents a financial investment by Quintana, the sponsor and its affiliates also bring significant strategic benefits to AmerCable given that it owns in excess of 20 billion tons of coal reserves, representing roughly 5% of domestic reserves, and over 5 million mineral acres in the U.S. Moody's assigned these proposed ratings: -- $15 million senior secured revolver due 2012, rated Ba2 (LGD1, 1%) -- $135 million senior secured term loan due 2014, rated B2 (LGD3, 38%) -- Corporate Family Rating, rated B2 -- Probability of Default Rating, rated B3 -- The ratings outlook is stable The proceeds from this new indebtedness will be utilized to purchase the company's equity, repay existing senior bank debt and pay transaction fees and expenses. The assignment of a B2 Corporate Family rating primarily reflects the following factors: 1) moderate leverage; 2) modest free cash flow; and 3) moderate interest coverage resulting from the re-leveraging of the company's balance sheet to effect the buyout. The ratings also reflect the company's small size relative to the company's primary competitors and as compared to other companies rated by Moody's. Factors that serve to mitigate these risks include the company's leading market share positions in its core North American markets for cable products used in the mining and oil & gas markets, the favorable demand fundamentals in both the oil & gas and mining sectors for the foreseeable future, the quality and diversification of its customer base, its seasoned, cohesive management team as well as the company's superior margins relative to major competitors in the wire and cable business, both in the U.S. and Europe. The ratings are also bolstered by the fact that the company employs an effective demand-pull strategy by maintaining direct dialogues with the end users while selling through distributors. The outlook is stable, reflecting Moody's belief that AmerCable will continue to grow revenues at a double-digit pace fueled primarily by anticipated growth in the pace of deep-water oil & gas exploration and production as well as increasing demand for coal in the U.S. and, most particularly, in non-OECD countries. We also assume that the firm will maintain a close association with end users by means of its engineering specialists and that it will continue to invest in research and development activities that, in tandem with its customer-centric approach to its markets, will enable it to continue to develop durable, leading edge products for its clientele. In the event that a major acquisition or market expansion adds material debt to the company's balance sheet the expectation is that AmerCable will utilize cash flow to rapidly de-lever in a disciplined manner in keeping with its conservative long-term financial goals. The rating could move down if the company encounters difficulties in managing its expansion into new markets or experiences softness in demand in its primary end markets, resulting in slowing revenue growth with a concomitant weakening of margins and a deterioration of free cash flow to adjusted debt to less than 1.5% on a sustained basis. The rating could also be downgraded in the event that the company embarks upon a major acquisition or pays a substantial dividend to the sponsor group, thereby increasing total debt to EBITDA above 7.0 times on a sustained basis. The rating could come under upward pressure if adjusted free cash flow to adjusted debt improves to a range of 5% or more or if adjusted debt to EBITDA declines to 4.5 times or below on a sustained basis. Headquartered in El Dorado, Arkansas, AmerCable develops, manufactures and sells highly engineered, jacketed electrical cable products, cable assemblies and customer-driven solutions for power, control and instrumentation applications used in severe operating environments. Primary end-markets for the company's products include the mining and offshore and gas industries. AMP'D MOBILE: Sec. 341(a) Creditors' Meeting Slated for July 12 --------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene a meeting of Amp'd Mobile Inc.'s creditors at 10:00 a.m., on July 12, 2007 at Room 2112, J. Caleb Boggs Federal Building, 844 King Street, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtor's bankruptcy cases. Attendance by the Debtor's creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtor's representative under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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. 6; Bankruptcy Creditors'Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000) AMP'D MOBILE: Wants Until July 10 to File Schedules --------------------------------------------------- Amp'd Mobile Inc. asks the U.S. Bankruptcy Court for the District of Delaware to extend the time for it to file its schedules and statements until July 10, 2007. Since its bankruptcy filing, the Debtor has focused considerable effort on obtaining use of cash collateral, negotiating a possible debtor-in-possession financing and resolving expedited litigation critical to its bankruptcy case, Mary E. Augustine, Esq., at The Bayard Firm, in Wilmington, Delaware, the Debtor's proposed counsel, relates. Those activities have consumed most of the time and attention of the Debtor's employees, attorneys and financial advisors, hence the Debtor may be unable to complete its schedules and statements by the July 1 deadline, Ms. Augustine contends. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the District of Delaware to extend the time for it to file its schedules and statements until July 10, 2007. Ms. Augustine tells the Court that the Debtor is in the process of reviewing its books, records and other documents relating to a multitude of transactions to prepare the required SAL and SOFA. The Debtor has also mobilized its employees to work diligent on the assembly of the necessary information, Ms. Augustine says. The Court will convene a hearing July 10, 2007, to consider the Debtors' request. By application of Delaware Local Rule 9006-2, the Debtor's time to file its schedules and statements is extended until conclusion of that hearing. 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. 6; Bankruptcy Creditors'Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000) AMR CORPORATION: Sees $12 Million Cut in Annual Interest Expense ---------------------------------------------------------------- AMR Corporation, the parent company of American Airlines Inc., provided an update on actions taken in the second quarter of 2007 as part of its ongoing efforts to strengthen its balance sheet and build a stronger financial foundation. The company said that these actions are expected to eliminate about $12 million in annual net interest expense. Actions in the second quarter include: -- American amended the $442 million floating rate term loan portion of its credit facility, which has been outstanding since December 2004, lowering the interest rate from 3.25% over LIBOR to 2% over LIBOR. -- AMR's wholly-owned subsidiary, American Eagle Airlines Inc., prepaid $48.2 million in principal amount of aircraft debt. The debt prepayment is in addition to AMR's $1.3 billion in scheduled principal payments in 2007. -- American refinanced $127.7 million of bonds that were originally issued to fund facilities expansion and renovation at Dallas/Fort Worth International Airport, reducing the interest rate by 1.75 percentage points to 5.5%. -- American refinanced $108.7 million in bonds that were originally issued to fund expansion and improvements at O'Hare International Airport in Chicago, reducing the interest rate by 2.7 percentage points to 5.5%. These efforts by AMR to improve its balance sheet follow similar actions taken by the company earlier in 2007, which resulted in the elimination of more than $15 million in annual net interest expense. AMR anticipates ending the second quarter of 2007 with about $6.2 billion in cash and short-term investments, including a restricted balance of about $500 million, compared to a cash and short-term investment balance of $5.7 billion, including a restricted balance of $525 million, at the end of the second quarter of 2006. The company expects to end the second quarter of 2007 with total debt, which the company defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, of about $17.3 billion. AMR's total debt was about $19.4 billion at the end of the second quarter of 2006 and about $20.1 billion at the end of 2005. The company expects to end the second quarter of 2007 with net debt, which the company defines as Total Debt less unrestricted cash and short-term investments, of about $11.6 billion, compared to net debt of about $14.2 billion at the end of the second quarter of 2006 and about $16.3 billion at end of 2005. "We continue to make progress in strengthening our balance sheet, which gives us greater flexibility and builds our foundation for the future," said Thomas W. Horton, executive vice president of finance and planning and chief financial officer of AMR. "We have more work ahead of us to reduce debt and improve our overall cost structure, but we believe that we are on the right path to position the company for long-term success." About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on June 21, 2007, Moody's Investors Service assigned a rating of Caa1 to the Chicago O'Hare International Airport Special Facility Revenue Refunding Bonds, Series 2007 (American Airlines Inc. Project). Moody's affirmed all ratings of AMR Corporation and its subsidiaries, corporate family rating at B2, and the outlook remains stable. ANDREW CORPORATION: Inks $2.6 Billion Buyout Deal with CommScope ---------------------------------------------------------------- CommScope, Inc. and Andrew Corporation on Wednesday entered into a definitive agreement, unanimously approved by their respective Boards of Directors, under which CommScope will acquire all of the outstanding shares of Andrew for $15.00 per share, at least 90% in cash, creating a global leader in infrastructure solutions for communications networks. The transaction, which is valued at approximately $2.6 billion, is expected to be accretive to CommScope's cash earnings per share, excluding special items, in the first full year after closing. The $15.00 per share purchase price represents a premium of approximately 13% over Andrew's average closing share price for the last 30 trading days, a 21% premium over Andrew's average closing share price for the last 60 trading days, and a 16% premium over the closing price of Andrew's common stock on Tuesday, June 26, 2007. Key Strategic Benefits of the Transaction The combined company will be a global leader in infrastructure solutions for communications networks, including structured cabling solutions for the business enterprise; broadband cable and apparatus for cable television applications; and antenna and cable products, base station subsystems, coverage and capacity systems, and network solutions for wireless applications. The combination of the companies' respective operations is expected to result in meaningful operating, cost and sales synergies, and other important benefits to shareholders, customers and employees, including: * Building upon complementary global product offerings that will provide customers with a broader array of infrastructure solutions for video, voice, data and mobility; * Expanding global distribution and manufacturing capabilities; * Enhancing growth opportunities by combining marquee brands, innovative technologies, and global service models; * Strengthening industry-leading R&D and intellectual property portfolio; * Affording scale in procurement, logistics and manufacturing in an increasingly competitive market; * Diversifying top-tier customer base; and * Providing greater opportunities for employees as part of a larger, more diversified global corporation. Based on CommScope's and Andrew's results for fiscal year 2006, on a pro forma basis, the combined companies would have had: * sales of approximately $3.8 billion comprised of approximately 35% in wireless antenna and cable products; * 29% in carrier and network solutions; * 21% in enterprise products; and * 15% in broadband/cable television solutions. The combined companies' revenues on a geographic basis would have been approximately: * 57% in North America; * 24% in Europe, the Middle East and Africa; * 12% in Asia/Pacific Rim; and * 7% in Latin America. The combined company will have more than 2,200 global patents and pending patent applications and approximately 16,000 employees serving more than 130 countries. "We are pleased to have reached this agreement with Andrew, which we believe is extremely beneficial to the shareholders of both companies," said Frank M. Drendel, Chairman and Chief Executive Officer of CommScope. "By combining CommScope and Andrew, we are enhancing CommScope's position as a worldwide leader in 'last mile' solutions. Combining our innovative technologies, premier brands and a top-tier customer base, we will expand our global service model and create an enhanced offering of communications infrastructure solutions that addresses a broader spectrum of customer needs. With the acquisition of Andrew, we are advancing CommScope's stated global strategy and creating important cost reduction and growth opportunities that we believe will drive increased shareholder value." Mr. Drendel continued, "We are also pleased to welcome Andrew's talented and dedicated employees to the CommScope team. We intend to invest in the combined business for profitable growth, and the employees of both companies will be important to our continued success. CommScope is a proven and successful integrator of strategic transactions and we expect to begin realizing the benefits of this combination immediately after the transaction closes and enjoy them fully over the next few years." "We believe that the combination of Andrew and CommScope creates a strong company with long-term advantages for our customers and employees," said Ralph Faison, President and Chief Executive Officer of Andrew Corporation. "Our two companies fit together strategically with leading complementary product offerings and geographical strengths. This transaction provides our shareholders with a significant cash premium and offers our global employees an even more promising future as part of a larger and more diversified company. We are excited to unite the strengths of Andrew and CommScope and further expand our range of services to the benefit of our many customers around the world." Cost Savings and Revenue Synergies Given CommScope's track record of successfully integrating acquisitions, manufacturing discipline and commitment to operational excellence, the combined company expects to generate substantial annual pretax cost savings, excluding one-time transition items, of approximately $90 million to $100 million in the second full year after completion of the transaction, of which approximately $50 million to $60 million are expected to be achieved in the first full year after completion. The cost savings are expected to come from a combination of procurement savings, rationalization of duplicate locations, streamlining overhead and integration of infrastructure, and building upon best practices in technology and manufacturing. No assurance can be given that these cost savings can be achieved in the amounts or during the periods predicted. Transition cash costs are expected to total approximately $70 million to $80 million in the first two years after completion. CommScope has also identified potential revenue synergies, including expected benefits from the combination of Andrew's industry-leading in-building wireless products with CommScope's global leadership in the Enterprise market. In addition, CommScope sees the potential to increase sales of its integrated cabinet solutions through Andrew's leading global channel to wireless carriers as well as opportunities to expand broadband connectivity product offerings. Following the close of the transaction, Andrew will become a wholly-owned subsidiary of CommScope. Frank Drendel will remain Chairman and CEO of CommScope, and CommScope will retain its global headquarters in Hickory, North Carolina. The combined company also plans to maintain its Chicago-area presence, exemplified by building upon Andrew's state-of-the-art manufacturing and office facility in Joliet, Illinois. Terms, Financing and Capital Structure Under the terms of the agreement, each share of Andrew common stock will be converted into $15.00, comprised of $13.50 per share in cash and an additional $1.50 per share in either cash, CommScope common stock, or a combination of cash and CommScope common stock totaling $1.50 per share, at CommScope's option. If CommScope determines to pay the $1.50 portion of the purchase price entirely in CommScope common stock, each share of Andrew common stock would be converted into $13.50 in cash, plus a fraction of a share of CommScope common stock equal to $1.50 divided by the volume weighted average of the closing sale price of CommScope common stock over the ten consecutive trading days ending two trading days prior to the closing date of the merger. The total transaction value is approximately $2.6 billion, based on Andrew's estimated 176 million shares outstanding on a fully diluted basis, which includes shares associated with Andrew's existing convertible notes. CommScope expects to fund the cash portion of the purchase price through a combination of new credit facilities and available cash on hand. CommScope has obtained customary fully underwritten debt financing commitment letters from Bank of America and Wachovia Bank, N.A., and their respective affiliates. Following completion of the transaction, CommScope plans to reduce leverage by continuing to grow its historically strong cash flow, improving the combined company's operational performance, and by identifying and selectively divesting non-core or underperforming assets during the first year after completion. CommScope expects to grow its earnings per share through a combination of increased top-line performance, operational improvements and debt reduction. Approvals and Timing The companies expect to close the transaction by the end of 2007, subject to completion of customary closing conditions, including effectiveness of a registration statement on Form S-4, approval by Andrew's shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any other applicable laws or regulations. The transaction is not conditioned on receipt of financing by CommScope. Advisors Banc of America Securities LLC is acting as financial advisor to CommScope and Duff & Phelps LLC provided a fairness opinion to CommScope. Fried, Frank, Harris, Shriver & Jacobson LLP, Baker & McKenzie LLP and Robinson, Bradshaw & Hinson, P.A. are acting as CommScope's legal counsel. Citi is acting as the primary financial advisor to Andrew, and Merrill Lynch provided a fairness opinion. Mayer, Brown, Rowe & Maw LLP is acting as Andrew's primary outside legal counsel. About CommScope CommScope, Inc. -- http://www.commscope.com/-- (NYSE: CTV) leads in infrastructure solutions for communication networks. Through its SYSTIMAX(R) SolutionsTM and Uniprise(R) Solutions brands CommScope is the global leader in structured cabling systems for business enterprise applications. The company also manufactures coaxial cable for Hybrid Fiber Coaxial applications and one of the leading North American providers of environmentally secure cabinets for DSL and FTTN applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions. About Andrew Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. ANDREW CORP: $2.6BB CommScope Deal Cues S&P to Cut Rating to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Andrew Corp. to 'BB-' from 'BB' and placed the rating on CreditWatch with negative implications, following an announcement that the company had agreed to be acquired by CommScope Inc. for approximately $2.6 billion, of which at least 90% would be debt- funded. Andrew, based in Westchester, Illinois, will be acquired by Hickory, North Carolina-based CommScope, in a transaction expected to close by the end of the year, pending customary regulatory and shareholder approval. CommScope has obtained fully underwritten financing commitment letters to fund the transaction. CommScope will assume Andrew's existing debt. The combined company will be a major supplier of communications infrastructure products including structured cabling solutions for enterprises; broadband cable and apparatus for cable television applications; and antenna and cable products, and base station subsystems. Anticipated synergies include manufacturing, sales and distribution efficiencies, as well as a more diversified revenue base. The transaction would increase the combined company's pro forma financial leverage to over 7x, although divestiture proceeds and operating efficiencies could result in lower leverage over the intermediate term. "The 'BB-' rating reflects an anticipated best case scenario, recognizing these potential benefits, but post- transaction ratings could be lower, depending on an assessment of those factors," said Standard & Poor's credit analyst Bruce Hyman. CommScope had considered acquiring Andrew in August 2006, although the price at the time was approximately $1.7 billion in cash, but that agreement was rejected as inadequate, and the offer was withdrawn. Following closing, Andrew's corporate credit rating will be withdrawn and its existing convertible subordinated notes will be rated the same as CommScope's subordinated debt. ARKANSAS CATFISH: Public Sale for Assets Scheduled on July 11 ------------------------------------------------------------- The Circuit Clerk of Chicot County, Arkansas will conduct a public sale of Arkansas Catfish Growers LLC's assets on July 11, 2007, 2:00 p.m. CDT, at the Chicot County Courthouse, in Lake Village, Arkansas. Assets to be sold are Arkansas Catfish's: a) accounts, accounts receivable, inventory and deposit accounts; b) furniture, fixtures, and equipment located at the Lake Village, Arkansas facility; and c) real property in Lake Village, Chicot County, Arkansas. The sale will be on a credit of 90 days with a 10% interest per annum. Successful purchaser/s will be required to give a bond equal to the amount of the bid to secure the payment of the purchase price. A lien will also be retained in favor of the Circuit Clerk of Chicot County, Arkansas and the Arkansas Development Finance Authority, on all property purchased to further secure the payment of the purchase price. For further information regarding the sale, contact: Allen W. Bird II, Esq. Suite 1000 212 Center St. Little Rock, AR 72201-2441 Tel: (501) 907-7436 Arkansas Catfish Growers LLC dba SeaCat is a limited liability Corporation created and existing under the laws of the State of Arkansas. AURIGA LABS: L. Dreimann and T. Heck Appointed as Directors ----------------------------------------------------------- Auriga Laboratories Inc. appointed Leonhard Dreimann and Thomas Heck to become members of the board effective as of June 26, 2007. Mr. Dreimann served as chief executive officer of Salton Inc. since its inception in August 1988 until earlier this year and was a founder of the company. He is currently a director at Salton. Mr. Dreimann served as deputy chairman of AMAP a public electronics and housewares company until 2005. He was managing director and founder of Salton Australia Pty. Ltd., a distributor of Salton brand kitchen appliances. Mr. Dreimann is currently a trustee of the Goodman Theatre, on the board of the Housewares Charity Foundation and a director of BBB. With a marketing degree from Melbourne Univesity, Mr. Dreimann has over 35 years experience in consumer goods sales and marketing, married with three daughters and a son. He and his family reside in Illinois. Mr. Heck has over 14 years of specialty pharmaceutical experience in a collection of start-up and growth companies. He currently serves as the vice president of business development at Victory Pharma. Prior to that he served as vice president of business development at Cornerstone BioPharma Inc. where he engaged in acquisition and licensing efforts for numerous products. While at Cornerstone, Mr. Heck also acted in the capacity of vice president of sales and marketing where he significantly contributed to building the company's commercial infrastructure and growing its respiratory and pain franchises. Prior to Cornerstone, he held marketing roles of increasing responsibility at DJ Pharma and Biovail Pharmaceuticals Inc., where he led multiple product launches. Prior to Biovail, Mr. Heck built a successful track record in sales and sales management at Dura Pharmaceuticals. Mr. Heck earned a B.A. in Business Applied Professional Sciences from the University of South Carolina. As compensation for his service as a director, each new director will be paid $2,500 per month and reimbursed for his expenses for attending meetings of the board and committees of the board, both in accordance with the company's established practices. Each new director has entered into the company's standard indemnification agreement for directors and officers of the company. The indemnification agreement provides, among other things, that the company will indemnify the director, for defense expenses, damages, judgments, fines and settlements incurred by him in connection with actions or proceedings to which he may be a party as a result of his position as a director of the company, and otherwise to the full extent permitted under the company's bylaws and state law. In addition, the board approved the issuance to each new director of a non-statutory stock option to purchase 150,000 shares of the company's common stock with an exercise price of $1.10, the closing price of the common stock of the company on the over-the- counter bulletin board on June 22, 2007, the date the option was granted to Mr. Dreimann and Mr. Heck. The option vests are: (a) 25%of the option is exercisable on June 26, 2007; and (b) subject to Mr. Dreimann and Mr. Heck's continued service on the board, 1/24th of the total number of shares of common stock subject to the option will vest each month that follows. "Auriga is fortunate to have attracted two such accomplished marketing executives at such a significant period in its development," said Philip S. Pesin, chief executive officer of Auriga. "Leon has been highly successful in building profitable consumer brands, including the George Foreman line of grills, one of the most successful consumer products. His experience and success in this area should help us increase adoption of our branded line of products. Tom also has an outstanding record of sales and marketing of pharmaceutical products. His counsel in this area should help us as we build our product portfolio and enter new markets." Steve Glover Leaves Board Post Steve Glover resigned from the Board of Directors of Auriga Laboratories, Inc. effective as of June 22, 2007. Mr. Glover was serving on the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. To the knowledge of the Board and the executive officers of the company, Mr. Glover did not resign because of a material disagreement with the company on any matter relating to the Company's operations, policies or practices. About Auriga Laboratories Based in Norcross, Ga., Auriga Laboratories Inc. (OTCBB: ARGA) -- http://www.aurigalabs.com/-- is a pharmaceutical company capitalizing on high-revenue markets and opportunities in the pharmaceutical industry through aggressive sales, integrated marketing and advanced in-house drug development capabilities. Going Concern Doubt As reported in the Troubled Company Reporter on April 3, 2007, Williams & Webster P.S., in Spokane, Wash., raised substantial doubt about Auriga Laboratories 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 auditor pointed to the company incurring significant operating and net losses and being unable to meet its cash flow needs. BALLY TOTAL: Commences Solicitation for Pre-Packaged Ch. 11 Plan ---------------------------------------------------------------- Bally Total Fitness on Wednesday commenced the formal process of soliciting approvals for a prepackaged Chapter 11 plan of reorganization from holders of the company's: * 10-1/2% Senior Notes due 2011 and * 9-7/8% Senior Subordinated Notes due 2007. The voting agent must receive votes on the Plan no later than 4:00 p.m. ET on July 27, 2007, unless this deadline is extended. The company plans to continue normal club operations during the solicitation period and throughout the pendency of the anticipated bankruptcy case. If the company does not receive the necessary votes during the solicitation period, it will need to evaluate other options, including filing a traditional, non-prepackaged Chapter 11 case. The Plan sets out the terms of the reorganization contemplated in the Restructuring Support Agreement previously announced on June 18, 2007. Holders of 63% of the Senior Notes and more than 80% of the Senior Subordinated Notes signed the RSA, which requires that they vote in favor of the Plan following receipt of the solicitation materials and subject to certain conditions. Implementation of the Plan is conditioned upon, among other things, receipt of signed consents from 66-2/3% in principal amount and a majority in number of the holders of Senior Notes and of the holders of Senior Subordinated Notes who vote on the Plan. If the Company receives the requisite noteholder approvals, it will proceed to implement the Plan by promptly filing a voluntary prepackaged petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code as described in the solicitation materials. The Company also announced that it has entered into a Backstop Purchase Agreement with holders of more than 80% of the principal amount of the Senior Subordinated Notes, in which those noteholders have agreed to subscribe in the rights offering to be made pursuant to the Plan for their pro rata share of $90 million in principal amount of new senior subordinated notes and to purchase their respective pro rata shares of any Rights Offering Senior Subordinated Notes not subscribed for by other noteholders. No offering of the Rights Offering Senior Subordinated Notes will be made through the solicitation; any such offering will be made only pursuant to the terms of the Plan, if approved by the bankruptcy court. Don R. Kornstein, Interim Chairman and Chief Restructuring Officer, stated, "We are pleased that so many of our noteholders have expressed support for the Plan and look forward to executing it and emerging promptly from Chapter 11 protection. The restructuring process laid out in the Plan will allow us to maximize our resources and enhance our capital structure, better enabling us to invest in our clubs to meet the needs of our members and thereby facilitate operating performance improvements." Copies of the Plan and the Company's solicitation materials may be accessed at http://www.kccllc.net/bally/ Noteholders seeking additional information about the balloting process may contact Glen Linde of MacKenzie Partners, Inc., the voting agent, at (212) 929-5500 (Call Collect) or (800) 322-2885 (Toll Free). About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (NYSE: BFT)(OTC BB: BFTH) -- http://www.ballyfitness.com/-- is a commercial operator of fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Bally Total Fitness reached an agreement in principle on the proposed terms of a consensual restructuring with certain holders of over 80% in amount of its 9-7/8% Senior Subordinated Notes due 2007. The company plans to implement the proposed restructuring through a pre-packaged Chapter 11 bankruptcy filing of the parent company, Bally Total Fitness Holding Corporation, and certain of its subsidiaries. BALLY TOTAL: Discloses Treatment of Claims Under Pre-Packaged Plan ------------------------------------------------------------------ Bally Total Fitness Holding Corp., and its affiliates, in injunction with the commencement of the solicitation of approvals for its pre-packaged chapter 11 plan of reorganization, filed with the U.S. Securities and Exchange Commission its pre-packaged chapter 11 plan and an accompanying disclosure statement explaining that plan. Treatment of Claims Under the pre-packaged chapter 11 plan, the claims are expected a 100% recovery; * Administrative Claims, estimated at $24,704,600; * Priority Tax Claims, estimated at $17,904,440; * Non-Tax Priority Claims, estimated at $25,265,635; * Other Secured Claims, estimated at $15,040,312; * Unimpaired Unsecured Claims, estimated at $107,222,660; and * Lenders Claims, estimated at $262,400,000. Holders of Senior Notes, with claims estimated at $235,000,000, on the effective date, will receive the Prepetition Senior Notes Indenture Amendment Fee and the New Senior Second Lien Notes, which alter their contractual rights as set forth in the New Senior Second Lien Notes Indenture. Holders of Prepetition Senior Subordinated Notes, owed an estimated $323,041,667, and Holders of Rejection Claims against Bally Total will receive: (a) New Subordinated Notes with a principal amount equal to 24.8% of the amount of such Allowed Claim, (b) New Junior Subordinated Notes with a principal amount equal to 21.7% of the amount of such Allowed Claim, (c) 0.00093 shares of New Common Stock per $1.00 of Allowed Claim and (d) Rights to purchase Rights Offering Senior Subordinated Notes with a principal amount equal to 27.9% of the amount of such Allowed Claim. Holders of Rejection Claims against any of Bally's affiliates, at the company's option, will receive either: (a) cash in an amount equal to the amount of the Claim, (b) other less favorable treatment to which the Holder and the Debtors agree or (c) quarterly installments over a 5 year period equal to the amount of the Claim plus interest at 12-3/8% per annum. Holders of Subordinated Claims will receive nothing under the plan. On the Effective Date, the Old Equity Interests of Bally will be canceled and the Holders will receive no distribution. The Reorganized Debtors will retain the Interests they hold in Affiliate Debtors. A full-text copy of the Pre-Packaged Chapter 11 Plan and Disclosure Statement may be viewed for free at: http://ResearchArchives.com/t/s?214a About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (NYSE: BFT)(OTC BB: BFTH) -- http://www.ballyfitness.com/-- is a commercial operator of fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Bally Total Fitness reached an agreement in principle on the proposed terms of a consensual restructuring with certain holders of over 80% in amount of its 9-7/8% Senior Subordinated Notes due 2007. The company plans to implement the proposed restructuring through a pre-packaged Chapter 11 bankruptcy filing of the parent company, Bally Total Fitness Holding Corporation, and certain of its subsidiaries. BEAR STEARNS: Fitch Rates $8.2 Million Class Q Certificates at B- ----------------------------------------------------------------- Bear Stearns Commercial Mortgage Securities Trust 2007-PWR16, commercial mortgage pass-through certificates are rated by Fitch Ratings as follows: -- $83,000,000 class A-1 'AAA'; -- $681,000,000 class A-2 'AAA'; -- $58,200,000 class A-3 'AAA'; -- $130,700,000 class A-AB 'AAA'; -- $954,361,000 class A-4 'AAA'; -- $412,497,000 class A-1A 'AAA'; -- $331,395,000 class A-M 'AAA'; -- $273,400,000 class A-J 'AAA'; -- $3,313,941,288 class X 'AAA'; -- $33,139,000 class B 'AA+'; -- $33,140,000 class C 'AA'; -- $33,139,000 class D 'AA-'; -- $20,712,000 class E 'A+'; -- $24,855,000 class F 'A'; -- $28,997,000 class G 'A-'; -- $41,424,000 class H 'BBB+'; -- $33,139,000 class J 'BBB'; -- $33,140,000 class K 'BBB-'; -- $16,569,000 class L 'BB+'; -- $12,428,000 class M 'BB'; -- $12,427,000 class N 'BB-'; -- $8,285,000 class O 'B+'; -- $8,285,000 class P 'B'; -- $8,285,000 class Q 'B-'. Class X are notional amounts and interest-only. The $41,424,288 class S is not rated by Fitch. Classes A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, and A-J are offered publicly, while classes X, B, C, D, E, F, G, H, J, K, L, M, N, O, P, Q, and S 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 261 fixed rate loans having an aggregate principal balance of approximately $3,313,941,289, as of the cutoff date. BIKE SPRING: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Bike Spring, L.L.C. dba Bike Spring Bicycle Shop 5542 Monterey Road, Unit 241 San Jose, CA 95138 Bankruptcy Case No.: 07-51920 Type of business: The Debtor sells bicycles and supplies bicycle parts. Chapter 11 Petition Date: June 27, 2007 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Joan M. Chipser, Esq. 1 Green Hills Court Millbrae, CA 94030 Tel: (650) 697-1564 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not have file a list of its 20 largest unsecured creditors. BONNY WEISS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Bonny Lynn Weiss aka Bonny Lynn Womack Weiss aka Lynn Weiss aka Lynn W. Weiss 2320 Hillwood Drive West Mobile, AL 36605 Bankruptcy Case No.: 07-11627 Chapter 11 Petition Date: June 19, 2007 Court: Southern District of Alabama (Mobile) Debtor's Counsel: A. Richard Maples, Jr. Maples & Fontenot, L.L.P. P.O. Box 1281 Mobile, AL 36633-1281 Tel: (251) 432-2629 Fax: (251) 432-3629 Total Assets: $5,114,730 Total Debts: $4,248,429 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Compass Bank $1,197,728 P.O. Box 830927 Birmingham, AL 35283-0927 Helix Properties $54,929 80 St. Michael Street, Suite 305 Mobile, AL 36602 Compass Bank $29,767 P.O. Box 830927 Birmingham, AL 35283 Mercedes Benz Financial value of $27,831 collateral: $25,000 Navigator Credit Union value of $15,613 collateral: $15,000 Internal Revenue Service $17,500 Lincoln Pharmacy $10,000 Staples $6,201 Bank of America $5,032 Alabama Dept. of Revenue $2,796 Legal Division Adjustable Heating $2,785 Prudential Cooper & Co. $2,460 M.B.N.A. Corporate Card $2,229 Winkler Electric $1,839 Lifeline $1,450 Heron Lakes Country Club $1,195 Assisted Living Association $816 of Alabama Duke Animal Clinic $670 Ecolab $640 Batchelor's Service $594 C-BASS MORTGAGE: Moody's Rates Class B Certificates at Ba1 ---------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-RP1, and ratings ranging from Aa2 to Ba1 to the mezzanine and subordinate certificates in the deal. The securitization is backed fixed-rate and adjustable-rate re- performing mortgage loans acquired by Credit-Based Asset Servicing and Securitization LLC. The credit quality of this seasoned re- performing mortgage pool is weaker than typical C-Bass newly originated mortgage loans. 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. The ratings will also benefit from an interest rate swap agreement and an interest rate cap agreement. Moody's expects collateral losses to range from 14.45% to 14.95%. Litton Loan Servicing LP will service the loans. Moody's has assigned Litton its top servicer quality rating both as a primary servicer of subprime loans and as a special servicer. The complete rating actions are: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-RP1 -- Cl. A, Assigned Aaa -- Cl. M-1, Assigned Aa2 -- Cl. M-2, Assigned A2 -- Cl. M-3, Assigned A3 -- Cl. M-4, Assigned Baa1 -- Cl. M-5, Assigned Baa2 -- Cl. M-6, Assigned Baa3 -- Cl. B, Assigned Ba1 CENTENNIAL COMMUNICATIONS: Fitch Affirms B- Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings for Centennial Communications Corp. and its subsidiaries as: Centennial Communications Corp.: -- Issuer default rating 'B-'; -- Senior unsecured notes 'CCC/RR6'. Centennial Cellular Operating Co.: -- Issuer default rating 'B-'; -- Senior secured credit facility 'BB-/RR1'; -- Senior unsecured notes 'B+/RR2'; -- Senior subordinated notes 'CCC+/RR5'. The Rating Outlook has been revised to Positive from Stable. Approximately $2 billion of debt securities are affected by these actions. The Positive Rating Outlook reflects the improved credit profile of the company due to CYCL's operating performance improvements in the U.S. and Puerto Rico and its recent debt reduction efforts. Fitch expects CYCL will continue to improve financial performance during fiscal 2008, which should result in positive organic revenue growth, higher margins, greater free cash flow and lower leverage. Leverage at the end of the third fiscal quarter 2007 decreased to 5.7 times, proforma for the $80 million redemption of senior subordinated notes. The ratings at Centennial incorporate the high leverage and smaller scale as a regional wireless operator in an exceedingly competitive operating environment. Fitch also believes a higher level of uncertainty and event risk is present with universal service funding reform, particularly wireless companies receiving competitive eligible telecommunications carrier disbursements. For CYCL, high-cost support through USF funding has risen since fiscal 2004 when CYCL collected $15 million, to fiscal 2006, when CYCL received approximately $41 million. If the FCC were to implement a proposed cap affecting wireless disbursements, Fitch believes CYCL could reduce the capital investment in USF related sites to at least offset a significant portion of the decrease. CYCL's liquidity is adequate based on its cash position, undrawn revolver availability and lack of near-term maturities. Cash at the end of the third quarter of FY2007 was $84 million. CYCL's senior secured credit facility consists of a seven-year term loan that matures in 2011 with $550 million outstanding, with no annual amortization payments. The senior secured credit facility also includes a six-year $150 million revolving facility that matures in 2010 that is undrawn. CYCL has minimal near-term maturities with $45 million of senior subordinated notes maturing in December 2008. Based on the past subordinated note redemptions of $100 million in fiscal 2007, Fitch expects CYCL to redeem the remaining $45 million over the near-term. CYCL is limited by a restricted payments basket associated with its 10.125% notes, which had approximately $65 million of availability at the end of the third fiscal quarter, proforma for the latest note redemption. CHASE COMMERCIAL: S&P Affirms B- Rating on Class I Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 10 classes of commercial mortgage pass-through certificates from Chase Commercial Mortgage Securities Corp.'s series 2000-1. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The ratings are constrained by concerns regarding several assets that are either with the special servicer or on the master servicer's watchlist. As of the June 15, 2007, remittance report, the trust collateral consisted of 79 mortgage loans and one real estate owned asset with an outstanding principal balance of $463.4 million, down from 91 loans with a balance of $697.1 million at issuance. The master servicer, Wachovia Bank N.A., reported primarily year-end 2006 financial information for 97% of the pool, which excludes $100.2 million (22%) of the pool for which the collateral has been defeased. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.31x, compared with 1.29x at issuance. Four assets ($29.2 million, 6%; two are among the top 10 real estate exposures) are with the special servicer, LNR Partners Inc., while the aforementioned REO asset ($10.3 million, 2%) is the only delinquent asset in the pool. To date, the trust has experienced eight losses totaling $20.3 million (3%). The top 10 real estate exposures have an aggregate outstanding balance of $169.6 million (37%). Year-end 2006 financial information was not available for two of the top 10 real estate exposures as the assets are with the special servicer. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.28x, the same as at issuance. In addition to the two top 10 real estate exposures with the special servicer, six other top 10 real estate exposures are on the master servicer's watchlist. Excluding these two real estate exposures with the special servicer, Standard & Poor's reviewed the property inspection reports provided by Wachovia for the assets underlying the remaining top eight exposures, and all of the properties were reported to be in "good" condition. One REO asset ($10.3 million, 2%) and three loans that are current ($18.9 million, 4%) are with the special servicer, LNR. Details are as follows: -- The seventh-largest real estate exposure in the pool, Meadows of Catalpa, is the largest asset with the special servicer. The loan was secured by a 323-unit multifamily apartment complex in Dayton, Ohio, which currently has a related total exposure of $11.1 million. It was transferred to LNR in April 2005 due to payment default and became REO in January 2007. LNR is pursuing a value- add disposition strategy, which includes curing deferred maintenance items such as repairing the deck, retaining walls, and foundation and replacing soft goods, as well as, upgrading the community center and exterior siding of the buildings. Upon completing $1.5 million in capital improvements, LNR plans to lease up and market the property for sale. The property is currently 68% occupied. -- Corona Towne Center, the eighth-largest real estate exposure ($9.8 million, 2%), is secured by a 139,000-sq.- ft. anchored retail center in Corona, California. It was transferred to LNR in February 2005 after the borrower terminated Albertsons' lease without the lender's approval. The borrower has not provided recent financial information for the property but has re-leased the space to Cardenas Markets. The loan is current and LNR is monitoring the loan before returning it to the master servicer. -- Three cross-collateralized, cross-defaulted loans, all of which are current, totaling $6.1 million (1%) were transferred to the special servicer in October 2005 because the three properties securing the loans sustained significant damage during Hurricane Katrina. The loans are secured by three office buildings--FGS, Favrot and Shane, and Bankers Trust Buildings--totaling 117,700 sq. ft. in Kenner and Metairie, Louisiana. The borrower has completed repairs to the properties and the special servicer plans to return the loans to the master servicer this month. The combined occupancy and DSC were 90% and 1.08x, respectively, as of May 2007. -- Campus Medical Arts Building ($3 million, 1%) is secured by a 59,100-sq.-ft. office building in Westlake, Ohio. The loan was transferred to LNR in August 2006 due to a payment default that resulted from a dispute over the ground lease calculation. The borrower has subsequently brought the loan current after paying all the outstanding past due amounts through May 2007. The borrower has not provided recent financial information for the property. LNR will continue to monitor the loan. The master servicer's watchlist includes 18 loans totaling $147.4 million (32%). Six of the top 10 real estate exposures ($103.1 million, 22%) constitute approximately 70% of the watchlist. Details are as follows: -- One of the two cross-collateralized, cross-defaulted loans that make up the largest exposure ($42.6 million, 9%) is on the watchlist because of upcoming lease expirations during 2007 at three of the four properties. The Orange County Industrial/Office Portfolio IV loan ($19.6 million, 4%) is secured by two office buildings totaling 75,600 sq. ft. in Newport Beach, California, and two industrial warehouse/office buildings totaling 137,300 sq. ft. in Costa Mesa and Laguna Hills, California. The borrower has not provided any leasing updates. Reported combined DSC was 1.40x as of December 2006 and occupancy was 98% as of April 2007. -- 40 Worth Street, the second-largest real estate exposure ($37.5 million, 8%), is secured by a 560,400-sq.-ft. office building in downtown Manhattan, N.Y. The loan was placed on the watchlist because the City of New York's lease (37% of the gross leasable area) expires this month. The borrower is negotiating a new lease. Occupancy was 99% as of February 2007 and DSC was 1.13x as of December 2006. -- The 98,000-sq.-ft. Media Works office building in Marina Del Ray, California, secures the third-largest exposure in the pool ($15.5 million, 3%). The loan appears on the watchlist because two of the largest tenants occupying 42% of the building vacated the premises after their leases expired in early 2007. The current occupancy is 58% and the borrower is actively marketing the vacant space. DSC was 1.20x as of December 2006. -- AEC II - Bradford at Easton Apartments, the fourth-largest exposure ($13.1 million, 3%), is secured by a 324-unit multifamily apartment complex in Columbus, Ohio. The loan is on the watchlist because the property reported a low DSC due to high advertising expenses. DSC and occupancy were 1.05x and 95%, respectively, as of December 2006. -- Embassy Suites St. Louis Airport, a 159-room hotel in Bridgeton, Mo., secures the ninth-largest exposure ($9.0 million, 2%) that is on the watchlist due to a low DSC of 0.75x as of March 2007. The borrower stated that the property's performance is seasonal and should improve during the busier period of May through October. Occupancy was 68% as of February 2007. -- 696 Pennsylvania Avenue, a 48-unit multifamily apartment complex in San Francisco, California, secures the 10th- largest exposure in the pool ($8.4 million, 2%). The loan is on the watchlist due to a low DSC. As of year-end 2006, DSC was 1.10x due to lower rental rates and higher operating expenses. Occupancy was 100% as of January 2007. Standard & Poor's stressed various assets in the mortgage pool as part of its analysis, including those with the special servicer, those on the watchlist, and those otherwise considered credit impaired. The resultant credit enhancement levels adequately support the affirmed ratings. Ratings Affirmed Chase Commercial Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2000-1 Class Rating Credit enhancement ----- ------ ---------------- A-2 AAA 35.49% B AAA 27.59% C AAA 20.44% D AA+ 18.19% E A 12.92% F BBB+ 10.66% G BB 5.40% H B+ 4.27% I B- 2.95% X AAA N/A N/A - Not applicable. CKE RESTAURANTS: Incurs $15.4 Million Loss in Quarter Ended May 21 ------------------------------------------------------------------ CKE Restaurants Inc. reported net income of $15.4 million, versus $16.2 million for the 16 weeks ended May 21, 2007. The company's consolidated revenue for the current year quarter was $481.8 million, a 1.6% increase from consolidated revenue of $474 million for the prior year quarter. First Quarter Highlights -- Same-store sales for the first fiscal quarter of fiscal 2008 were flat at Carl's Jr.(R) and increased 1.8% at Hardee's(R) company-operated restaurants. -- Restaurant operating costs at Carl's Jr. company-operated restaurants increased 240 basis points, compared to the prior year quarter, to 77.5% of company-operated revenue. The increase was primarily due to higher rent and depreciation expenses primarily related to relocation and system implementation costs at our distribution center. -- Restaurant operating costs at Hardee's company-operated restaurants were flat compared to the prior year quarter, at 82% of company-operated revenue. Reduced labor expense as a percent of company-operated revenue was offset by higher food and occupancy expense. -- Average unit volumes for the trailing thirteen periods increased to $1,461,000 and $923,000 at company-operated Carl's Jr. and Hardee's restaurants, respectively. -- The company returned about $86 million to its stockholders during the quarter through share repurchases and quarterly cash dividends, including the repurchase of 4,380,020 shares of common stock during the quarter at a total cost of $83.3 million and cash dividends paid of $2.7 million. Executive Commentary Andrew F. Puzder, president and chief executive officer, said, "Net income for the first quarter of fiscal 2008 was $15.4 million, or $0.23 per diluted share as compared to net income of $16.2 million or $0.23 per diluted share in the prior year quarter. However, this year's income before income taxes and discontinued operations was reduced by $1.3 million due to increased share-based compensation expense (a non-cash expense) as well as an additional $1.3 million due to costs and startup inefficiencies associated with the recently completed relocation of the Carl's Jr. food distribution center and the simultaneous installation of a new overall distribution management system. These distribution center costs and startup inefficiencies negatively impacted food costs and franchise operating expenses at Carl's Jr." "Nonetheless, during the quarter, we returned approximately $86 million to our shareholders through share repurchases and quarterly cash dividends. We increased our share repurchase authorization by $50 million and announced a 50% increase in our quarterly cash dividend, to six cents per share. We also amended our credit facility to reduce our interest rate on borrowings and to increase our borrowing capacity. Further, we announced our plans to refranchise approximately 200 company-operated Hardee's restaurants in a number of markets across the Midwest and Southeast. All of these items reflect our confidence in the strength of our financial position as well as our continuing efforts to further enhance our financial strength and stability." "Subsequent to the end of the quarter, we announced our plans to sell La Salsa Fresh Mexican Grill(R). This transaction will allow us to direct our resources and focus on growing our burger brands as well as expanding our dual-branded Mexican concepts. We expect to close on the sale of La Salsa during the second quarter of fiscal 2008." As of the end of its fiscal 2008 first quarter, CKE Restaurants, through its subsidiaries, had a total of 3,022 franchised, licensed or company-operated restaurants in 43 states and in 13 countries, including 1,101 Carl's Jr. restaurants and 1,905 Hardee's restaurants. About CKE Restaurants Headquartered in Carpinteria, California, CKE Restaurants Inc. (NYSE: CKR) -- http://www.ckr.com/-- operates some of the most popular U.S. regional brands in quick-service and fast-casual dining, including the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and Green Burrito(R) restaurant brands. As of the end of its fiscal fourth quarter on Jan. 29, 2007, the company, through its subsidiaries, had a total of 3,105 franchised or company-operated restaurants in 43 states and in 13 countries, including 1,087 Carl's Jr. restaurants, 1,906 Hardee's restaurants and 96 La Salsa Fresh Mexican Grill restaurants. * * * As reported in the Troubled Company Reporter on March 29, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on CKE Restaurants. The outlook is stable. CMALT: Fitch Rates $3.397 Million Class B-5 Certificates at B ------------------------------------------------------------- Fitch rates CMALT (CitiMortgage Alternative Loan Trust), series 2007-A6 REMIC pass-through certificates as: -- $920,250,676 classes IA-1 through IA-22, IA-IO, IIA-1, IIA-IO and A-PO certificates (senior certificates) 'AAA'; -- $25,238,000 class B-1 'AA'; -- $8,252,000 class B-2 'A'; -- $6,309,000 class B-3 'BBB'; -- $4,369,000 class B-4 'BB'; -- $3,397,000 class B-5 'B'. The $2,912,939 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 5.20% subordination provided by the 2.60% class B-1, the 0.85% class B- 2, the 0.65% class B-3, the 0.45% privately offered class B-4, the 0.35% privately offered class B-5, and the 0.30% privately offered class B-6. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities (rated 'RPS1' by Fitch) as primary servicer. As of the cut-off date, June 1, 2007, the mortgage pool consists of 2,898 conventional, fully amortizing, 10- to 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $970,728,616, located primarily in California (35.95%), Florida (8.92%) and New York (8.90%). The weighted average current loan to value ratio of the mortgage loans is 72.33%. Approximately 73.71% of the loans were originated under a reduced documentation program. Condo and co-op properties account for 11.46% of the total pool. Cash-out refinance loans and investor properties represent 37.42% and 8.76% of the pool, respectively. The average balance of the mortgage loans in the pool is approximately $334,965. The weighted average coupon of the loans is 6.540% and the weighted average remaining term is 354 months. COMMSCOPE INC: Inks Pact to Buy Andrew Corp. for $2.6 Billion ------------------------------------------------------------- CommScope, Inc. and Andrew Corporation on Wednesday entered into a definitive agreement, unanimously approved by their respective Boards of Directors, under which CommScope will acquire all of the outstanding shares of Andrew for $15.00 per share, at least 90% in cash, creating a global leader in infrastructure solutions for communications networks. The transaction, which is valued at approximately $2.6 billion, is expected to be accretive to CommScope's cash earnings per share, excluding special items, in the first full year after closing. The $15.00 per share purchase price represents a premium of approximately 13% over Andrew's average closing share price for the last 30 trading days, a 21% premium over Andrew's average closing share price for the last 60 trading days, and a 16% premium over the closing price of Andrew's common stock on Tuesday, June 26, 2007. Key Strategic Benefits of the Transaction The combined company will be a global leader in infrastructure solutions for communications networks, including structured cabling solutions for the business enterprise; broadband cable and apparatus for cable television applications; and antenna and cable products, base station subsystems, coverage and capacity systems, and network solutions for wireless applications. The combination of the companies' respective operations is expected to result in meaningful operating, cost and sales synergies, and other important benefits to shareholders, customers and employees, including: * Building upon complementary global product offerings that will provide customers with a broader array of infrastructure solutions for video, voice, data and mobility; * Expanding global distribution and manufacturing capabilities; * Enhancing growth opportunities by combining marquee brands, innovative technologies, and global service models; * Strengthening industry-leading R&D and intellectual property portfolio; * Affording scale in procurement, logistics and manufacturing in an increasingly competitive market; * Diversifying top-tier customer base; and * Providing greater opportunities for employees as part of a larger, more diversified global corporation. Based on CommScope's and Andrew's results for fiscal year 2006, on a pro forma basis, the combined companies would have had: * sales of approximately $3.8 billion comprised of approximately 35% in wireless antenna and cable products; * 29% in carrier and network solutions; * 21% in enterprise products; and * 15% in broadband/cable television solutions. The combined companies' revenues on a geographic basis would have been approximately: * 57% in North America; * 24% in Europe, the Middle East and Africa; * 12% in Asia/Pacific Rim; and * 7% in Latin America. The combined company will have more than 2,200 global patents and pending patent applications and approximately 16,000 employees serving more than 130 countries. "We are pleased to have reached this agreement with Andrew, which we believe is extremely beneficial to the shareholders of both companies," said Frank M. Drendel, Chairman and Chief Executive Officer of CommScope. "By combining CommScope and Andrew, we are enhancing CommScope's position as a worldwide leader in 'last mile' solutions. Combining our innovative technologies, premier brands and a top-tier customer base, we will expand our global service model and create an enhanced offering of communications infrastructure solutions that addresses a broader spectrum of customer needs. With the acquisition of Andrew, we are advancing CommScope's stated global strategy and creating important cost reduction and growth opportunities that we believe will drive increased shareholder value." Mr. Drendel continued, "We are also pleased to welcome Andrew's talented and dedicated employees to the CommScope team. We intend to invest in the combined business for profitable growth, and the employees of both companies will be important to our continued success. CommScope is a proven and successful integrator of strategic transactions and we expect to begin realizing the benefits of this combination immediately after the transaction closes and enjoy them fully over the next few years." "We believe that the combination of Andrew and CommScope creates a strong company with long-term advantages for our customers and employees," said Ralph Faison, President and Chief Executive Officer of Andrew Corporation. "Our two companies fit together strategically with leading complementary product offerings and geographical strengths. This transaction provides our shareholders with a significant cash premium and offers our global employees an even more promising future as part of a larger and more diversified company. We are excited to unite the strengths of Andrew and CommScope and further expand our range of services to the benefit of our many customers around the world." Cost Savings and Revenue Synergies Given CommScope's track record of successfully integrating acquisitions, manufacturing discipline and commitment to operational excellence, the combined company expects to generate substantial annual pretax cost savings, excluding one-time transition items, of approximately $90 million to $100 million in the second full year after completion of the transaction, of which approximately $50 million to $60 million are expected to be achieved in the first full year after completion. The cost savings are expected to come from a combination of procurement savings, rationalization of duplicate locations, streamlining overhead and integration of infrastructure, and building upon best practices in technology and manufacturing. No assurance can be given that these cost savings can be achieved in the amounts or during the periods predicted. Transition cash costs are expected to total approximately $70 million to $80 million in the first two years after completion. CommScope has also identified potential revenue synergies, including expected benefits from the combination of Andrew's industry-leading in-building wireless products with CommScope's global leadership in the Enterprise market. In addition, CommScope sees the potential to increase sales of its integrated cabinet solutions through Andrew's leading global channel to wireless carriers as well as opportunities to expand broadband connectivity product offerings. Following the close of the transaction, Andrew will become a wholly-owned subsidiary of CommScope. Frank Drendel will remain Chairman and CEO of CommScope, and CommScope will retain its global headquarters in Hickory, North Carolina. The combined company also plans to maintain its Chicago-area presence, exemplified by building upon Andrew's state-of-the-art manufacturing and office facility in Joliet, Illinois. Terms, Financing and Capital Structure Under the terms of the agreement, each share of Andrew common stock will be converted into $15.00, comprised of $13.50 per share in cash and an additional $1.50 per share in either cash, CommScope common stock, or a combination of cash and CommScope common stock totaling $1.50 per share, at CommScope's option. If CommScope determines to pay the $1.50 portion of the purchase price entirely in CommScope common stock, each share of Andrew common stock would be converted into $13.50 in cash, plus a fraction of a share of CommScope common stock equal to $1.50 divided by the volume weighted average of the closing sale price of CommScope common stock over the ten consecutive trading days ending two trading days prior to the closing date of the merger. The total transaction value is approximately $2.6 billion, based on Andrew's estimated 176 million shares outstanding on a fully diluted basis, which includes shares associated with Andrew's existing convertible notes. CommScope expects to fund the cash portion of the purchase price through a combination of new credit facilities and available cash on hand. CommScope has obtained customary fully underwritten debt financing commitment letters from Bank of America and Wachovia Bank, N.A., and their respective affiliates. Following completion of the transaction, CommScope plans to reduce leverage by continuing to grow its historically strong cash flow, improving the combined company's operational performance, and by identifying and selectively divesting non-core or underperforming assets during the first year after completion. CommScope expects to grow its earnings per share through a combination of increased top-line performance, operational improvements and debt reduction. Approvals and Timing The companies expect to close the transaction by the end of 2007, subject to completion of customary closing conditions, including effectiveness of a registration statement on Form S-4, approval by Andrew's shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any other applicable laws or regulations. The transaction is not conditioned on receipt of financing by CommScope. Advisors Banc of America Securities LLC is acting as financial advisor to CommScope and Duff & Phelps LLC provided a fairness opinion to CommScope. Fried, Frank, Harris, Shriver & Jacobson LLP, Baker & McKenzie LLP and Robinson, Bradshaw & Hinson, P.A. are acting as CommScope's legal counsel. Citi is acting as the primary financial advisor to Andrew, and Merrill Lynch provided a fairness opinion. Mayer, Brown, Rowe & Maw LLP is acting as Andrew's primary outside legal counsel. About CommScope CommScope, Inc. -- http://www.commscope.com/-- (NYSE: CTV) leads in infrastructure solutions for communication networks. Through its SYSTIMAX(R) SolutionsTM and Uniprise(R) Solutions brands CommScope is the global leader in structured cabling systems for business enterprise applications. The company also manufactures coaxial cable for Hybrid Fiber Coaxial applications and one of the leading North American providers of environmentally secure cabinets for DSL and FTTN applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions. About Andrew Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. COMMSCOPE INC: Moody's Reviews Ratings after Announced Acquisition ------------------------------------------------------------------ Moody's Investors Service placed CommScope Inc.'s ratings under review for downgrade after their announced intent to acquire Andrew Corp for $2.6 billion. Although CommScope's Ba2 corporate family rating could accommodate some level of debt financed acquisitions, the size of the Andrew acquisition is substantial and could potentially increase leverage well above 4x which could result in a downgrade. Moody's notes the details of the capital structure and synergies have not been disclosed at this time. Both companies have leading market positions in their particular industries and the combination offers numerous opportunities for cost savings and sharing of facilities. The Andrew acquisition has been approved by both company's boards but is still conditioned on Andrew shareholder and regulatory approval. Moody's review of CommScope will assess (1) the challenges of integrating Andrew, a company that is roughly equal to CommScope's size in terms of revenue and EBITDA, (2) proposed synergies, plant consolidation plans and potential asset sales (3) proposed capital structure and (4) cash flow generating prospects. The ratings could be confirmed at their current level depending on the outcome of the review. Ratings under review for downgrade include: -- Corporate Family Rating -- Ba2 -- $250 million Convertible Senior Subordinated Debentures due 2024 - Ba3 Moody's notes that the existing CommScope convertible debt conversion price is significantly below the current market price of the stock. To the extent the debt is converted, the instrument ratings will be withdrawn. Headquartered in Hickory, North Carolina, CommScope is a provider of cable and connectivity solutions for enterprise, cable, and telecom industries. COMMSCOPE INC: Andrew Corp. Buy Prompts S&P's Negative Watch ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on CommScope Inc. to 'BB-' from 'BB' and placed the ratings on CreditWatch with negative implications. The action reflects Hickory, North Carolina-based CommScope's definitive agreement to acquire Westchester, Illinois-based Andrew Corp. for approximately $2.6 billion, of which at least 90% would be in cash. The transaction is expected to close by the end of the year, pending regulatory and shareholder approvals. CommScope will assume Andrew's existing debt. "The combined company will be a major supplier of communications infrastructure products including structured cabling solutions for enterprises; broadband cable and apparatus for cable television applications; and antenna and cable products, and base station subsystems," said Standard & Poor's credit analyst Stephanie Crane Mergenthaler. In addition to a more diversified revenue base, anticipated synergies include manufacturing, sales and distribution efficiencies. Still, the transaction would increase the combined company's pro forma financial leverage to over 7x. Proceeds from selective divestitures and realization of anticipated synergies could result in lower leverage over the intermediate term. The 'BB-' corporate credit rating reflects an anticipated best-case scenario, recognizing these potential benefits, but post-transaction ratings could be lower, depending on an assessment of those factors. CommScope had considered acquiring Andrew in August 2006, although the price at the time was approximately $1.7 billion in cash, but that agreement was rejected as inadequate, and the offer was withdrawn. S&P will review the synergies anticipated in the acquisition, as well as the ability of the combined companies to reduce leverage through operating cash flows and selective divestitures, to resolve the CreditWatch. CRESCENT REAL: Shareholders to Vote on Deal at August 1 Meeting --------------------------------------------------------------- Crescent Real Estate Equities Company will hold a special meeting of shareholders at 10:00 a.m., Central Daylight Saving Time, on Aug. 1, 2007, at the Hotel Crescent Court, 400 Crescent Court in Dallas, Texas. At a special meeting, the company's shareholders of record as of the close of trading on June 22, 2007, will be eligible to vote on the proposed acquisition of Crescent by Morgan Stanley Real Estate for $22.80 per share in cash. Crescent has filed definitive proxy materials with the Securities and Exchange Commission related to the proposed transaction. The company's trust managers, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the company in favor of the proposed transaction. Morgan Stanley Deal As reported in the Troubled Company Reporter on May 25, 2007, the company entered into a definitive agreement in which funds managed by Morgan Stanley Real Estate will acquire Crescent in an all cash transaction for $22.80 per share, and the assumption of liabilities for total consideration of approximately $6.5 billion. The transaction has been unanimously approved by the company's Board of Trust Managers, which will recommend that the common shareholders approve the transaction. Mr. Richard E. Rainwater has entered into a voting agreement whereby he has agreed to vote in favor of the transaction. Completion of the transaction, which is expected to occur by the end of the third quarter of 2007, is subject to approval by the company's common shareholders, as well as to certain other customary closing conditions. The exact timing of the closing of the transaction is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission and other governmental authorities. Greenhill & Co., LLC acted as the financial advisor to Crescent, while Pillsbury Winthrop Shaw Pittman LLP provided legal advice. Morgan Stanley acted as financial advisor to Morgan Stanley Real Estate with Goodwin Procter LLP and Jones Day acting as legal counsel. About Crescent Real Headquartered in Fort Worth, Texas, Crescent Real Estate Equities Company (NYSE: CEI) -- http://www.crescent.com/-- is a real estate investment trust. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 68 premier office buildings totaling 27 million square feet located in select markets across the United States with major concentrations in Dallas, Houston, Denver, Miami, and Las Vegas. Crescent also holds investments in resort residential developments in locations such as Scottsdale, Arizona, Vail Valley, Colorado, and Lake Tahoe, California; and in the wellness lifestyle leader, Canyon Ranch(R). * * * As reported in the Troubled Company Reporter on May 31, 2007, Standard & Poor's Ratings Services placed its ratings on Crescent Real Estate Equities Co. and Crescent Real Estate Equities L.P. on CreditWatch with negative implications. These ratings were placed on Creditwatch: corporate credit from BB- (Stable) to BB- (Watch Negative); senior unsecured from B to B (Watch Negative); and preferred stock from B- to B- (Watch Negative). DAIMLERCHRYSLER: Executive Says Russia a Key Market for Chrysler ---------------------------------------------------------------- DaimlerChrysler AG's Chrysler Group, which the company recently sold to Cerberus Capital Management LP, plans to strengthen its presence in Russian car sales and production, a top Chrysler executive told Automotive News Europe in an interview, Reuters notes. "If you look at our worldwide presence, then Russia is a key market for us," said Michael Manley, Chrysler's executive vice president of international sales and marketing. Chrysler is currently exploring possible partnerships with Russian companies, the report said. Mr. Manley projects Chrysler's international sales could double to 400,000 vehicles by 2012. The U.S. automaker said it doubled its Russian car sales to 4,021 in 2006 compared with 2005 and had seen early 2007 sales up by 93% year-on-year. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER AG: MAN and Freightliner Settle ERF Case -------------------------------------------------------- MAN AG has reached an agreement with DaimlerChrysler AG's Freightliner division, in the litigation with the group in USA and Canada, that settles MAN's claims for damages in connection with the financial fraud committed at ERF, a British truck maker taken over by MAN. The settlement provides that Freightliner shortly pay an indemnity of GBP250 million (EUR370 million) to MAN. Back in 2000, MAN had taken over ERF from Canada's Western Star, a company shortly afterwards acquired by Freightliner. After the ERF acquisition, it emerged that ERF's financial statements and thus its value had been severely and fraudulently manipulated and misrepresented. In 2002, MAN sued Freightliner as Western Star's legal successor for damages of around GBP300 million. While MAN had been successful in the actions brought before British and US courts, time-consuming and costly actions before higher-instance courts in Britain and the US nonetheless awaited MAN, and these are now avoided by the settlement. About MAN AG Based in Munich, Germany, the MAN Group -- http://www.man.de/-- is one of Europe's leading manufacturers of commercial vehicles, engines and mechanical engineering equipment with annual sales of approximately EUR13 billion and circa 50,000 employees worldwide. MAN supplies trucks, buses, diesel engines, turbomachinery, as well as industrial services and holds leading market positions in all its business areas. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DANKA BUSINESS: March 31 Balance Sheet Upside-Down by $316.4 Mil. ----------------------------------------------------------------- Danka Business Systems PLC reported that as of March 31, 2007, it had total assets of $417.1 million, total liabilities of $389 million, and 6.5% senior convertible participating shares of $344.5 million, resulting in a total shareholders' deficit of $316.4 million. The company held restricted cash at March 31, 2007, of $169 million, of which $5 million is classified as long-term, primarily related to the restrictions placed on the proceeds from the sale of the company's European operations. Full Year 2007 The company had narrowed its net loss to $29.2 million for the fiscal year ended March 21, 2007, compared to a loss of $85.2 million in fiscal 2006. Revenues were $450.2 million in 2007, versus $522.4 million a year ago. As previously reported, on Jan. 31, 2007, the company completed the sale of its European operations to Ricoh Europe B.V. For the fiscal year and fourth quarter ending March 31, 2007, European operations are included in the results from discontinued operations. On June 25, 2007, the company completed a new financing arrangement for $145 million in term and revolver debt that, together with the proceeds from the sale to Ricoh of the European operations, will be used to repay existing debt and enhance working capital. The company also successfully remediated its last material weakness under Section 404 of the Sarbanes Oxley Act and will be disclosing that it does not have any material weaknesses. Fourth quarter 2007 Total revenue was $113.5 million, 11.2% lower than the prior year quarter, but up 7.5% sequentially. Retail equipment, supplies and related sales were $52.7 million for the quarter, down 15.2% from the prior year, but up 16.4% sequentially. Service revenue was $57.7 million, down 7.8% from the prior year, but up 0.4% sequentially. For the fourth quarter ended March 31, 2007, the company had a net loss of $17.1 million, as compared with a net loss of $23.3 million for the fourth quarter ended March 31, 2006. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2140 Comments "From a financial perspective, fiscal 2007 was about fixing the company's liquidity and capital structure," commented Edward K. Quibell, Danka chief financial officer. "While there is still work to be done, the progress achieved to date goes a long way toward completing the successful turnaround of the company." Mr. Quibell also noted that adjusted operating earnings from continuing operations improved by $19 million -- on reduced revenue of $72 million. This was accomplished by removing unprofitable businesses and controlling costs. "While these results are important," said A.D. Frazier, Danka chairman and chief executive officer, "it is imperative to recognize that the Danka enterprise of today is significantly changed from the company I joined a little more than a year ago. Fiscal 2007 is a watershed year in which the company rationalized its business structure, strengthened its balance sheet, and enhanced its competitive position. "Danka is now leaner, far more flexible and primed to grow," Mr. Frazier continued. "Our prospects for the future are dramatically better now than they have been in a very long time. In particular, I am encouraged by the traction we have gained in equipment sales. [Fourth quarter] was the highest quarter of the year. This is not surprising; we have increased the number of sales representatives and invested in extensive training to support our consultative selling approach." Mr. Frazier added that service revenue remains stable. "We have a few more changes to make in our cost structure and our capital structure, yet I am confident that our customers will see a continually improving Danka," he concluded. About Danka Danka Business Systems PLC -- http://www.danka.com/-- provides enterprise imaging systems and services. DELTATECH CONTROLS: S&P Rates Proposed $166 Million Loan at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Hong Kong-based DeltaTech Controls Inc., the legal entity formed to acquire ITT Corporation's switch business, which designs and manufactures electromechanical switches, interface controls and dome arrays. The outlook is stable. "At the same time, we assigned our 'B+' bank loan rating and '2' recovery rating to the company's proposed $166 million first priority senior secured bank facility, which will consist of a $141 million term loan due 2014 and a $25 million revolving credit facility due 2013, indicating that lenders can expect substantial (70%-90%) recovery in the event of a payment default," said Standard & Poor's credit analyst David Tsui. S&P assigned its 'B' bank loan rating, with a recovery rating of '4' to the proposed $54 million second priority term loan due 2015, indicating that lenders can expect an modest (30%-50%) recovery in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the first- and second-lien term loan, totaling $195 million, along with $41 million of equity from the sponsor, will be used to fund the purchase of the switches business from ITT. As part of the transaction, DeltaTech will also provide a $15 million loan to ITT's Keypads business acquired by Littlejohn & Co. LLC, the sponsor. The ratings on DeltaTech reflect the company's highly fragmented and competitive markets in the switches segment, volatile revenue generation in the dome arrays segment, and lack of track record as an independent company. These factors partly are offset by the company's diverse end markets and a broad customer base, low cost manufacturing locations and high conversion costs for customers. DEREK FARRINGTON: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Derek S. Farrington 11200 Southwest Powell Butte Highway Powell Butte, OR 97753 Tel: (541) 548-1199 Bankruptcy Case No.: 07-32420 Chapter 11 Petition Date: June 19, 2007 Court: District of Oregon Judge: Elizabeth L. Perris Debtor's Counsel: Keith Y. Boyd, Esq. Muhlheim Boyd 88 East Broadway Eugene, OR 97401-2933 Tel: (541) 868-8005 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Vick, Jim lawsuit $55,000 689 12th Street Southeast, Suite 200 Salem, OR 97301 Seven Peaks Electric electrical work $15,000 Attention: Marden H. Madison 62979 Plateau Drive 2 Bend, OR 97701 Washington Mutual loan $13,760 Attention: Linda Nivison 600 Northeast Greenwood Avenue Bend, OR 97701 Harney Rock Paving driveway $11,902 Tile Outlet tile $10,500 Reil & Sons General concrete work $9,000 Contractors, Inc. Sego Insulation, Inc. insulation $10,000 Pockett, Jim hay $8,500 Greenshield, Buddy loan $8,400 Stephens Heating & Cooling furnace $8,000 Jeld-Wen Windows & Doors doors $7,500 Beneficial loan $6,819 Columbia Paints paint materials $6,000 Night, Gary supplies & $5,000 labor Bryant, Steven attorney fees $4,925 Saxons Fine Jewelers jewelry $3,500 Strategic Stone Works labor $3,500 Gary's Vacuflo vacuum systems $3,500 Blankenship Garage garage doors $2,500 Creative Outdoor landscaping $2,000 Landscape DYNCORP INTERNATIONAL: Awarded LOGCAP IV Contract by US Army ------------------------------------------------------------ DynCorp International was one of three companies awarded a contract by the U.S. Army to feed, house and provide other services to U.S. troops in Iraq, the Washington Post reports. The contract, which is worth up to $150 billion, was also awarded to Fluor Intercontinental and KBR, Inc. According to the report, the three companies were chosen from around six competitors based on their management, past performance, price and technical abilities. The contract, known as the Logistics Civil Augmentation Program or LOGCAP IV, is considered as one of the biggest deals in the contracting service industry, the report adds. The Post relates that DynCorp had previously won a LOGCAP contract in 1997 or work in the Philippines and East Timor. The Post discloses that the Army decided to award the contract to more than one company on concerns of lack of competition. DynCorp International Inc. -- http://www.dyn-intl.com/-- (NYSE: DCP) through its operating company DynCorp International LLC, is a provider of specialized mission-critical technical services, mostly to civilian and military government agencies. It operates major programs in law enforcement training and support, security services, base operations, aviation services and operations, and logistics support worldwide. Headquartered in Falls Church, Virginia, DynCorp International LLC has approximately 14,600 employees worldwide. * * * DynCorp still carries Standard and Poor's BB- rating assigned on June 15, 2006. The outlook is stable. ENCYSIVE PHARMACEUTICALS: Cuts 70% of US Work Force --------------------------------------------------- Encysive Pharmaceuticals Inc. will reduce its U.S. work force by about 70%, to about 65 people in an effort to focus its resources on most promising assets. The company disclosed that its board of directors had authorized a strategic restructuring following the company's receipt of a third "approvable letter" from the U.S. Food and Drug Administration for Thelin(TM), which is under review for the treatment of pulmonary arterial hypertension. As a result, about 150 company employees, including the U.S. sales force, will be terminated immediately, with a smaller group leaving in the coming months. The company also eliminated the position of chief operating officer. The company is providing cash severance payments to employees directly affected by the workforce reduction. The company estimates that it will record about $15 million in restructuring and severance costs in 2007. About Encysive Pharmaceuticals Headquartered in Houston, Texas, Encysive Pharmaceuticals Inc. (Nasdaq: ENCY) -- http://www.encysive.com/-- is a biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. The company has successfully developed one FDA approved drug, Argatroban, for the treatment of heparin-induced thrombocytopenia, which is licensed to and marketed by GSK. The company's lead drug candidate, Thelin(TM) is an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension. Going Concern Doubt As reported in the Troubled Company Reporter on April 30, 2007, KPMG LLP, in Houston, expressed substantial doubt about Encysive Pharmaceuticals 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 pointed to the company's recurring losses from operations and net capital deficiency. ENCYSIVE PHARMACEUTICALS: George Cole Named as President and CEO ---------------------------------------------------------------- Encysive Pharmaceuticals Inc. appointed George W. Cole, the company's chief operating officer, as its president and chief executive officer. Mr. Cole was also elected to the company's board of directors. Mr. Cole had served the company as COO since November 2005. From 1992 to 2005, he served as president of Altana Pharma U.S. Mr. Cole received his B.S. in Pharmacy from the University of Louisiana and his M.B.A. from the University of Evansville. In connection with the appointment and election, the termination agreement dated Oct. 25, 2005, between the company and Mr. Cole was amended to reflect the changes in Mr. Cole's duties, responsibilities and position and to increase Mr. Cole's annual base salary to $490,000. In addition, the amendment to the Cole Agreement provides for the grant by the company to Mr. Cole of options to purchase 500,000 shares of the company's common stock with an exercise price of $1.89 per share. The options, which will be granted pursuant to and governed by the terms of the company's incentive plans, will vest as to one-half of the shares covered thereby on each of May 31, 2009 and May 31, 2010. The amendment to the Cole Agreement is qualified by reference to the letter agreement dated June 24, 2007, between the company and Mr. Cole. Effective June 24, 2007, the company's employment of Bruce D. Given, M.D., the company's former president and CEO, was terminated. Subject to certain conditions including the execution of release in favor of the company and its affiliates, the company will provide Dr. Given with the benefits contained in a termination agreement dated March 21, 2003, as amended, between the company and Dr. Given. ENVIRONAMICS: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Environamics Corp. 19 Executive Drive Hudson, NH 03051 Bankruptcy Case No.: 07-11338 Type of business: The Debtor is engaged in the metal stampings business. See http://www.environamics.com/ Chapter 11 Petition Date: June 27, 2007 Court: District of New Hampshire (Manchester) Debtor's Counsel: Grenville Clark, Esq. Gray, Wendell & Clark, P.C. The Center of N.H. 650 Elm Street Manchester, NH 03101 Tel: (603) 625-4100 Fax: (603) 625-4154 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nash-Clegg $568,680 40 Temple Street Nashua, NH 03060 Perkins, Thompson, $41,451 Hinckley & Keddy One Canal Plaza Portland, ME 04112 Leone, McDonnell & $20,000 Roberts 645 South Main Street Wolfboro, NH 03894 Webb Pump $11,789 Accro Seal $9,842 Wolf, Greenfield & $8,949 Sacks, P.C. Baldor Electric Co. $5,733 Keyspan Energy Delivery $5,513 All Seals $3,689 Applied Plastics $3,368 Technology All Stainless, Inc. $3,101 Ace Welding $2,641 Public Service of New $2,568 Hampshire Peerless Pump Co. $713 Alliant Specialty Metals $709 C.I. Hoist $240 Tri-Flo $169 EPD INC: Moody's Affirms B2 Corporate Family Rating --------------------------------------------------- Moody's Investors Service assigned B1 to the increased senior secured first lien debt of EPD Inc. It also affirmed EPD's B2 corporate family rating and Caa1 senior secured second lien debt rating. The rating action follows the change to the company's liability structure as a result of the reallocation of $50 million of the company's second lien term loan to the first lien term loan in the proposed financing package. The corporate family rating is unaffected by this change, which is neutral to total leverage, and the outlook remains stable. Ratings affirmed: -- B2 Corporate Family Rating -- B2 Probability of Default Rating -- Caa1 $360 million Second Lien Term Loan due 2015 (LGD 5/82%) New Ratings assigned: -- B1 $700 million First Lien Term Loan due 2014 (LGD 3/33%) -- B1 $100 million Senior Secured Revolver due 2013 (LGD 3/33%) -- B1 $100 million First Lien Delayed Draw Term loan due 2014 (LGD 3/33%) Ratings withdrawn: -- Ba3 $650 million First Lien Term Loan due 2014 (LGD 3/31%) -- Ba3 $100 million Senior Secured Revolver due 2013 (LGD 3/31%) -- Ba3 $100 million First Lien Delayed Draw Term loan due 2014 (LGD 3/31%) The revised B1 first lien debt rating reflects Moody's view that following the $50 million reallocation, the first lien instruments could potentially have less debt cushion beneath them absorbing loss at default. The Caa1 rating of the second lien term loan continues to reflect its effective subordination to all first lien creditors. Based in Akron, Ohio, EPD Inc. is an entity established by the Carlyle Group to acquire the Engineered Products Division of The Goodyear Tire and Rubber Company, a leading manufacturer of engineered rubber products for industrial, military, consumer and transportation end users with revenues of about $1,541 million for the twelve months period ending March 31, 2007. FIDELITY NATIONAL: eFunds Acquisition Cues Fitch's Negative Watch ----------------------------------------------------------------- Fitch Ratings has placed these Fidelity National Information Services' ratings on Rating Watch Negative: -- Issuer Default Rating 'BB+'; -- $3 billion senior unsecured credit facilities 'BB+', consisting of a $2.1 billion term loan and a $900 million revolving credit facility; -- Senior unsecured notes 'BB+'. Approximately $3.2 billion of debt is affected by Fitch's actions, including the credit facilities. Fitch's action follows FIS's announced acquisition of eFunds Corp. in a $1.8 billion all-cash transaction in a move to expand its presence in banking markets in the U.S. and abroad. FIS plans to fund the purchase with a combination of cash on hand and recently secured long-term debt commitments. The transaction is expected to be completed by the end of the third quarter of 2007, subject to certain regulatory approvals, approval by eFunds shareholders and customary closing conditions. Fitch expects to meet with management to discuss the funding of this transaction, future capital strategy, and integration of the acquisition. Fitch believes that resolution of the rating watch status would be limited to a one-notch downgrade of FIS's IDR. However, ratings for each tranche of debt will be subject to the final capital structure post-financing. Fitch expects to resolve the Rating Watch status over the next several weeks. The ratings for FIS have historically centered on the company's ability to generate strong free cash flow, its strong market position in core businesses, diversified product offering, solid client retention, counter-cyclical revenue streams, and recurring revenue base from long-term processing agreements. The ratings have also recognized the operating strength and business diversification realized by FIS from its acquisition of Certegy Inc. in early 2006. Credit concerns include FIS's history of debt-financed acquisitions, better-capitalized significant industry competitors, the ongoing consolidation of its financial institution customer base, and event risk associated with two private equity firms that have a combined equity stake of approximately 15%. Liquidity was adequate and supported by cash balances of $222 million as of March 31, 2007 as well as approximately $300 million of availability under its $900 million revolving credit facilities. Total debt as of March 31, 2007 was $3 billion consisting of approximately a $2.1 billion senior unsecured term loan, $600 million outstanding on its senior unsecured revolving credit facility, $196 million of unsecured 4.75% notes due 2008 and $146 million in other promissory notes. Although FIS has a $200 million share repurchase program, Fitch believes the aforementioned acquisition reduces the likelihood of the company pursuing stock buybacks over the intermediate term. On Jan. 18, 2007 the company replaced its secured bank facilities with a new $2.1 billion unsecured term loan and a new $900 million senior unsecured revolver expiring in 2012. The new unsecured bank facility contains financial covenants of 3.5 times maximum leverage through fiscal 2008 with step downs thereafter; 3.5x minimum EBITDA to interest coverage through fiscal 2008 and 4.0x interest coverage beginning in 2009; and cross-default on principal greater than $150 million. The facilities do not contain any default provisions related to credit ratings or covenants specifically relating to a material adverse change in the company's financial condition. FIDELITY NATIONAL: eFunds Buy Cues Moody's to Review Ratings ------------------------------------------------------------ Moody's Investors Service placed the Ba1 corporate family rating for Fidelity National Information Services, Inc. on review for possible downgrade following FIS's plan to acquire EFD/eFunds Corporation, a leading provider of electronic funds transfer and prepaid card processing services, in an all-cash transaction valued at about $1.8 billion. Under the terms of the agreement, EFD shareholders will receive $36.50 in cash for each share of common stock. FIS plans to fund the $1.8 billion purchase price with a combination of cash on hand and recently secured long- term debt commitments. The transaction is expected to be completed by the end of the third quarter of 2007, subject to regulatory approvals and approval by EFD shareholders. Pro forma for the acquisition, FIS's financial leverage, adjusted for leases, initially increase to about 3.9 times debt to EBITDA, adjusted for leases and incorporating about $65 million in annual cost savings that FIS expects to realize. The review will focus on FIS's prospects for debt reduction over the intermediate term and its acquisition appetite as well as the strategic benefits associated with the merger in terms of potential synergies and cost savings. Headquartered in Jacksonville, Florida, Fidelity National Information Services, Inc. provides card issuing, core bank processing, and mortgage loan processing services to financial institutions. FIDELITY NATIONAL: eFunds Acquisition Cues S&P's Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' corporate credit and senior unsecured ratings for Jacksonville, Florida- based Fidelity National Information Services Inc. on CreditWatch with negative implications. The CreditWatch listing follows the announced merger agreement, in which FIS will acquire Scottsdale, Arizona-based EFD/eFunds Corporation in an all-cash transaction valued at approximately $1.8 billion. The transaction is expected to be completed by the end of the third quarter of 2007, subject to certain regulatory approvals, approval by EFD shareholders and customary closing conditions. "The acquisition of eFunds provides FIS with greater scale, extends its presence in the U.S. and international banking markets, and expands the distribution channel for its core processing and risk analytic services," said Standard & Poor's credit analyst Philip Schrank. Additionally, FIS expects to realize significant cost synergies of approximately $65 million in annual savings. However, pro forma debt to EBITDA could rise to the high 3x times area from current levels of under 3x. Any potential downgrade will likely be limited to one notch, if any. S&P will meet with management to review the capital structure of the combined company, integration and restructuring plans, future financial policy, and growth strategy. FIRST CONSUMERS: S&P Puts Default Rating on Class B Notes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B asset-backed notes issued by First Consumers Credit Card Master Note Trust's series 2001-A to 'D' from 'CCC-'. The default of the class B notes reflects a $10,228 interest shortfall on the May 15, 2007, payment date. Standard & Poor's expects that interest shortfalls on the class B notes will continue on each subsequent payment date until maturity since class B noteholders no longer have access to the remaining receivables. Furthermore, since there is no collateral remaining to support the notes, the outstanding class B principal balance of $13,226,453 will not be repaid on or before the legal final maturity date of Sept. 15, 2008. FORD CREDIT: Fitch Rates $39.839 Million Class D Notes at BB ------------------------------------------------------------ Fitch rates the Ford Credit Auto Owner Trust 2007-A asset-backed notes as: -- $466,000,000 class A-1 5.34852% 'F1+'; -- $300,000,000 class A-2a 5.42% 'AAA'; -- $287,596,000 class A-2b floating-rate 'AAA'; -- $255,444,000 class A-3a 5.40% 'AAA'; -- $294,000,000 class A-3b floating-rate 'AAA'; -- $144,330,000 class A-4a 5.47% 'AAA'; -- $145,000,000 class A-4b floating-rate 'AAA'; -- $59,759,000 class B 5.60% 'A'; -- $39,840,000 class C 5.80% 'BBB'; -- $39,839,000 class D 7.05% 'BB'. The ratings on the notes are based upon their respective levels of subordination, the specified credit enhancement amount, and the yield supplement overcollateralization amount. All ratings reflect the transaction's sound legal structure, the high quality of the retail auto receivables originated by Ford Motor Credit Company and the strength of Ford Credit as servicer. The weighted average APR in the 2007-A transaction is 4.39%. As with previous deals, the 2007-A transaction incorporates a YSOC feature to compensate for receivables with interest rates below 9.0%. The YSOC is subtracted from the pool balance to calculate bond balances and the first priority, second priority, and regular principal distribution amounts, resulting in the creation of 'synthetic' excess spread. These amounts enhance the receivables' yield and are available to cover losses and turbo the class of securities then entitled to receive principal payments. Initial enhancement for the class A notes as a percentage of the adjusted collateral balance is 5.5% (5.0% subordination and 0.50% initial reserve deposit). Initial enhancement for the class B notes is 2.5% (2.0% subordination and 0.50% reserve). Initial enhancement for the class C notes is 0.50% provided by the reserve account. On the closing date, the aggregate principal balance of the notes will be 102% of the initial pool balance less the YSOC. The class D notes represent the undercollateralized 2%. During amortization, both excess spread and principal collections are available to reduce the bond balance. Hence, if excess spread is positive, the bonds will amortize more quickly than the collateral. It is this mechanism that ensures that the class D notes are collateralized and the specified credit enhancement level is achieved. Furthermore, the 2007-A transaction provides significant structural protection through a shifting payment priority mechanism. In each distribution period, a test will be performed to calculate the amount of desired collateralization for the notes versus the actual collateralization. If the actual level of collateralization is less than the desired level, then payments of interest to subordinate classes may be suspended and made available as principal to higher rated classes. Based on the loss statistics of Ford Credit's prior securitizations, and Ford's U.S. retail portfolio performance, Fitch expects consistent performance from the pool of receivables in the 2007-A pool. For the year ended Dec. 31, 2006, average net portfolio outstanding totaled approximately $58.1 billion, total delinquencies were 2.14%, and net losses were 0.68% of the average net portfolio outstanding. GENCORP INC: May 31 Balance Sheet Upside-Down by $96 Million ------------------------------------------------------------ GenCorp Inc. posted total assets of $1 billion in total assets and $1.1 billion in total liabilities, resulting in a $96 million in total shareholders' deficit as of May 31, 2007. Liquidity and Balance Sheet Data Total debt decreased to $444.7 million at May 31, 2007, from $464.8 million at Feb. 28, 2007. The cash balance, including restricted cash, at May 31, 2007, decreased to $82.9 million compared to $93.9 million at Feb. 28, 2007. The company used $19.8 million of restricted cash during the second quarter 2007 to repay its 5-3/4% notes. Total debt less cash decreased from $370.9 million at Feb. 28, 2007, to $361.8 million as of May 31, 2007. The $9.1 million decrease in total debt less cash is the result of improved operating performance and net working capital from the aerospace and defense segment. As of May 31, 2007, the company had $72.4 million in outstanding letters of credit issued under the $80 million letter of credit subfacility and the company's $80 million revolving credit facility was unused. Second Quarter Results Sales from continuing operations for the second quarter 2007 totaled $192.3 million, 15% above the $167.2 million for the second quarter 2006. Sales for the first half of 2007 were $343.1 million compared to $295.5 million for the first half of 2006, an increase of 16%. Sales increases in 2007 reflect growth in the company's aerospace and defense business. Net income for the second quarter 2007 was $12.5 million, compared to a net loss of $7.3 million for the second quarter 2006. The company's improved results were driven by (i) improved aerospace and defense operating performance; (ii) lower expenses in 2007 related to legal matters; and (iii) lower corporate costs. "We are pleased with the second quarter operating results of our Aerospace and Defense segment as revenue growth, margin, and cash flow performance continue on a favorable trend," said Terry Hall, president and chief executive officer. "Our Real Estate segment continues to move forward towards entitling 6,400 acres of our Sacramento land," concluded Mr. Hall. About GenCorp Inc. Headquartered in Rancho Cordova, California, GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a technology-based manufacturer of aerospace and defense products and systems with a real estate business segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the company's excess real estate assets. GENERAL MOTORS: Selling Unit to Carlyle Group & Onex for $5.6 Bil. ------------------------------------------------------------------ General Motors Corp. reached a definitive agreement for the company to sell its Allison Transmission commercial and military business to The Carlyle Group and Onex Corporation for approximately $5.6 billion. The sale agreement covers substantially all of Allison Transmission, including seven manufacturing facilities in Indianapolis, Indiana and its worldwide distribution network and sales offices. The production facility in Baltimore, Maryland is dedicated to the production of conventional and hybrid 2MODE transmissions used in GM's retail pick-up trucks and SUVs and will remain with GM. The transaction is structured to preserve GM's and Allison's competitive strengths in their respective product lines and is expected to close as early as the third quarter of this year pending union and regulatory approval. "This is another important step to strengthen our liquidity and provide resources to support our heavy investments in new products and technology," Rick Wagoner, GM chairman and CEO, said. "At the same time, this sale will position Allison for growth with strong partners in Carlyle and Onex, which have well-established track records of working effectively with their management teams, unions and employees," Wagoner went on to say. "We believe Allison is poised for excellent growth in its sector with the increasing rate of adoption of automatic transmissions in commercial vehicles both in North America and abroad," Seth Mersky, managing director of Onex said. "Allison's exceptional reputation for product quality and reliability, its strong brand and talented management team provide it with a competitive advantage that will allow the company to capture that growth." "We are excited to partner with Onex, the Allison management team and employees as we grow this iconic brand and support its transition to a stand-alone business," Carlyle managing director Greg Ledford said. Allison Transmission designs and manufactures automatic transmissions for medium and heavy duty commercial vehicles. Its products are used in on-highway, off-highway and vehicles. Headquartered in Indianapolis, Indiana, Allison Transmission employs approximately 3,400 people, has seven plants in Indianapolis and sells its transmissions through a worldwide distribution network with sales offices in North America, South America, Europe, Africa and Asia. The company generates annual revenues in excess of $2 billion. About Carlyle Group The Carlyle Group -- http://www.carlyle.com/-- is a private equity firm with $58.5 billion under management. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $28.3 billion of equity in 636 transactions for a total purchase price of $132 billion. The Carlyle Group employs more than 800 people in 18 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world. About Onex Onex Corp. makes private equity investments through the Onex Partners and ONCAP family of Funds. These companies are in a variety of industries, including electronics manufacturing services, aerostructures manufacturing, healthcare, financial services, aircraft & aftermarket, metal services, customer management services, theatre exhibition, personal care products and communications infrastructure. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908, GM employs about 280,000 people around the world. With global manufactures its cars and trucks in 33 countries. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on May 28, 2007, Standard & Poor's Ratings Services placed General Motors Corp.'s corporate credit rating at B/Negative/B-3. At the same time, Moody's Investors Service affirmed GM's B3 Corporate Family Rating and B3 Probability of Default Rating, and maintained its SGL-3 Speculative Grade Liquidity Rating. The rating outlook remains negative. GLOWPOINT INC: March 31 Balance Sheet Upside-down by $14.1 Million ------------------------------------------------------------------ Glowpoint Inc.'s consolidated balance sheet at March 31, 2007, showed $8,075,000 in total assets, $19,368,000 in total liabilities, and $2,888,000 in preferred stock, resulting in a $14,181,000 total stockholders' deficit. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $5,167,000 in total current assets available to pay $19,368,000 in total current liabilities. The company reported a net loss of $2,650,000 for the first quarter ended March 31, 2007, compared to a net loss of $6,114,000 for the same period ended March 31, 2006. Revenue increased $940,000, or 19.9%, in the 2007 quarter to $5,661,000 from $4,721,000 in the 2006 quarter. 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?213d Going Concern Doubt As reported in the Troubled Company Reporter on June 8, 2007, Amper, Politziner & Mattia PC, in Edison, N.J., expressed substantial doubt about Glowpoint Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's working capital deficiency and recurring net losses. Amper Politziner also noted that the company is in the process of seeking additional capital and that it has not yet secured sufficient capital to fund its operations. About Glowpoint Inc Headquartered in Hillside, N.J., Glowpoint Inc. -- (Other OTC: GLOW.PK) -- http://www.glowpoint.com/-- is an IP-based managed video services provider. Glowpoint offers video conferencing, bridging, technology hosting, and IP-broadcasting services to a vast array of companies, from large Fortune 100 enterprises to small and medium-sized businesses. Glowpoint is headquartered in Hillside, New Jersey. GREAT LAKES: Refinancing Cues S&P to Withdraw BB- Ratings --------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' ratings on Great Lakes Dredge & Dock Corp.'s $60 million revolving credit facility. The withdrawal follows the company's refinancing of the facility with a new unrated $155 million revolving credit facility due June 12, 2012. GUITAR CENTER: Inks $2.1 Billion Deal with Bain Capital ------------------------------------------------------- Guitar Center, Inc., disclosed Wednesday it has signed a definitive agreement to be acquired by affiliates of Bain Capital Partners, LLC. The total transaction value, including assumed debt, is approximately $2.1 billion. Under the terms of the merger agreement, stockholders will receive $63.00 in cash in exchange for each share of Guitar Center common stock they own. This represents a 26% premium over the closing price of Guitar Center's shares on June 26, 2007. This agreement represents the culmination of an auction process, led by Goldman, Sachs & Co., to solicit interest in a potential acquisition of the Company. The Board of Directors of Guitar Center, acting on the recommendation of a Special Committee of independent directors, has approved the merger agreement and recommends that Guitar Center stockholders support the transaction. The transaction is expected to close in the fourth quarter of 2007 and is subject to customary closing conditions, including the approval of Guitar Center's stockholders. Marty Albertson, Chairman and Chief Executive Officer of Guitar Center, stated, "We believe this transaction delivers outstanding value for our stockholders, and is a strong validation of the Company's accomplishments over the years as well as our future growth prospects. Following a comprehensive review process, our Board of Directors concluded this transaction is in the best interests of our Company and our stockholders and it has the full support of the management team. Bain Capital has a successful track record and significant investment experience in the retail industry and we look forward to partnering with them going forward. We are committed to maintaining our vendor relationships and ensuring our customers will continue to experience the same quality and selection of musical instrument products as well as the high level of service and professional advice through our stores and our websites." "As the leading retailer of musical instruments in the U.S., Guitar Center enjoys great brand recognition among musicians nationwide, a loyal customer base, and a track record of significant growth," said Jordan Hitch, a Managing Director at Bain Capital. "We look forward to working with the Company's experienced and capable management team to continue to build the business." Goldman, Sachs & Co. served as financial advisor to the Special Committee of the Guitar Center Board of Directors and rendered a fairness opinion in connection with the proposed merger. Peter J. Solomon Company also served as financial advisor to the Special Committee and rendered a fairness opinion in connection with the proposed merger. Latham & Watkins LLP acted as counsel to the company and Bingham McCutchen LLP acted as counsel to the Special Committee. For Bain Capital, JPMorgan and Lehman Brothers acted as financial advisors, and Kirkland & Ellis LLP served as legal counsel. About Bain Capital Partners Bain Capital -- http://www.baincapital.com/-- is a global private investment firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital and public equity with approximately $50 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 240 companies around the world, including such leading retailers and consumer companies as Toys "R" Us, Michaels Stores, Burger King, Warner Music Group, Burlington Coat Factory, Dunkin' Brands, Shopper's Drug Mart, Dollarama and Staples. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Hong Kong, Shanghai, and Tokyo. About Guitar Center Guitar Center -- http://www.guitarcenter.com/-- (Nasdaq GS: GTRC) sells guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment. Our retail store subsidiary presently operates more than 210 Guitar Center stores across the United States. In addition, our Music & Arts division operates more than 95 stores specializing in band instruments for sale and rental, serving teachers, band directors, college professors and students. The company is also the largest direct response retailer of musical instruments in the United States through its wholly owned subsidiary, Musician's Friend, Inc., and its catalogs and websites, including -- http://www.musiciansfriend.com/-- -- http://www.guitarcenter.com/-- -- http://www.wwbw.com/-- and -- http://www.music123.com/ GUITAR CENTER: Bain Capital Offer Cues Moody's to Review Ratings ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Guitar Center Inc. on review for possible downgrade following the company's announcement that it signed a definitive agreement to be acquired by affiliates of Bain Capital Partners, LLC. The transaction is valued at about $2.1 billion, including the assumption of $200 million of debt. Guitar Center shareholders will receive $63 per share in cash. Theis rating is placed on review for possible downgrade: -- Corporate family rating of Ba2. The review is prompted by the high likelihood that the transaction with be predominantly financed with debt and will result in a significant increase in the company's leverage and a corresponding weakening in credit metrics at a time when the musical instruments industry has recently faced challenges. The review will focus on: -- the company's capital structure post transaction; its financial profile pro forma for the transaction, including its liquidity; -- the company's ability to manage its expected higher debt burden, the current environment of the musical instruments industry after a challenging fourth quarter 2006; and, -- the company's operating performance. While no details have been provided on the proposed capital structure, it is likely, given the transaction value, that the company's corporate family rating could fall well into the B rating category. Guitar Center, Inc. is the largest musical instrument and recording tool retailer in the United States with over 305 retails stores and a direct response business. It operates three distinct musical instruments retail businesses; Guitar Centers, Musician's Friend (its direct response subsidiary), and Music & Arts Center. Total revenues for fiscal year ended Dec. 31, 2006 were about $2 billion. HERCULES INC: S&P Revises Outlook from Stable to Positive --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Wilmington, Delaware-based Hercules Inc. to positive from stable and affirmed the existing 'BB' corporate credit rating. The outlook revision recognizes the potential for a continuation of the steady strengthening of key cash flow protection measures. S&P also raised the rating on the company's 6.6% notes due 2027 to 'BBB-' from 'BB' and assigned a '1' recovery rating, reflecting our expectation of very high recovery (90%-100%) in the event of default and asset protection on par with the secured bank debt. "We could raise all of the ratings within the next 12 months if business conditions remain favorable and the company's leverage policies support a financial profile that exceeds expectations for the current ratings," said Standard & Poor's credit analyst Wesley E. Chinn. The ratings reflect Hercules' aggressive, albeit declining, debt balance; low-growth, very competitive pulp and paper chemicals markets; and some exposure to asbestos-related liabilities. These negatives are partially offset by Hercules' satisfactory business profile--generating annual revenues of about $2 billion--in the specialty chemical sector, a long track record of good operating margins, and improving cash flow generation. Hercules derives roughly 60% of its consolidated operating earnings from the Aqualon group, a leading producer of water- soluble polymers. Diverse end markets include water-based paints and coatings, construction materials, personal care, pharmaceutical, food, and oil and gas drilling. Another positive is a strong global presence, as more than 60% of Aqualon's sales come from outside the U.S. Aqualon's results should continue to benefit from increasing environmental awareness, regulation favoring water-soluble polymers, global-supply arrangements with customers, and the increasing use of products in emerging markets. In particular, volume growth should reflect new capacity expansions in China, and S&P expect the overall energy business to be one of the larger growth components for Aqualon. HOME DIRECTOR: Has $1.7 Million Stockholders' Deficit at March 31 ----------------------------------------------------------------- Home Director Inc.'s consolidated balance sheet at March 31, 2007, showed $4,964,467 in total assets and $6,743,177 in total liabilities, resulting in a $1,778,710 total stockholders' deficit. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $888,708 in total current assets available to pay $5,083,849 in total current liabilities. Home Director Inc. reported a net loss of $1,596,686 for the first quarter ended March 31, 2007, compared with a net loss of $558,779 for the same period ended March 31, 2006. Revenues were approximately $269,000 for the three months ended March 31, 2007 (reorganized company) compared to approximately $2,000 for the three months ended March 31, 2006 (predecessor company). Approximately $208,000 of the 2007 revenues were attributable to businesses acquired during the first quarter of 2007 and the balance is attributable to the company's emergence from bankruptcy. The increased net loss was attributable to a net increase of approximately $990,615 of research & development, sales & marketing and general & administrative expenses in 2007 as compared to 2006 primarily due to increased number of personnel and personnel related costs. Net interest expense was approximately $78,000 in 2007 as compared to approximately $16,000 in 2006. The increase in 2007 is primarily a result of the interest accrued in 2007 on the convertible notes sold in late 2006 and early 2007. Acquisitions On Dec. 28, 2006, the company acquired substantially all the assets and assumed certain liabilities of Destiny Networks Inc. and on March 7, 2007, the company acquired substantially all the assets and assumed certain liabilities of Novus Technologies Inc. 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?213c Going Concern Doubt Bedinger & Company CPAs, in Concord, Calif., expressed substantial doubt about Home Director 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 recurring losses from operations. The company has incurred losses from operations of approximately $1.6 million for the three months ended March 31, 2007, and has an accumulated deficit of approximately $4.5 million as of March 31, 2007. About Home Director Headquartered in Fremont, California, Home Director Inc. -- http://www.homedirector.com/-- provides home networking solutions to homeowners through a network of distribution and technology business partners. The company and its debtor-affiliates filed separate chapter 11 petitions on Sept. 28, 2005. (Bankr. N.D. Calif. Lead Case No.: 05-45812). Tracy Green, Esq., and Elizabeth Berke-Dreyfuss, Esq., at Wendel, Rosen, Black and Dean, represent the Debtors. The Debtors estimated their assets at $10.6 million and Debts at $4.2 million when they filed for bankruptcy. Subsequent to the Bankruptcy Court's confirmation of Debtors' Joint Plan of Reorganization on Oct 12, 2006, the company emerged from Bankruptcy on Oct. 23, 2006. INTERGEN N.V.: S&P Puts Preliminary BB- Rating on $1.9 Bil. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to InterGen N.V. At the same time, Standard & Poor's assigned its preliminary 'BB-' rating to InterGen's $1.975 billion multicurrency senior secured term notes. Preliminary 'BB-' ratings are also assigned to the company's $800 million multicurrency senior secured term loan B facility and the $750 million multicurrency senior secured liquidity credit facilities. The recovery rating on all senior secured debt is '3', indicating the expectation for meaningful recovery (50%-70%) of principal if a payment default occurs. All preliminary ratings are subject to review of final documentation. The outlook is stable. InterGen consists of an open-end portfolio of beneficial interests in nine operating electricity generation assets with 5,235 net MW of capacity in five countries. In addition, the company has two wholly owned facilities in advanced development, which would add another 1,205 MW to its portfolio by 2010. The company is owned by AIG Highstar Capital II L.P. and its affiliates, and Ontario Teachers' Pension Plan, which jointly own 50% each. InterGen will use the nearly $2.7 billion of proceeds to refinance existing debt at the parent company and to permanently repay project level debt at four of its plants. In addition, proceeds will be used to prefund a portion of capital expenditures at two of the U.K. assets, pay transaction fees, and to make a distribution to shareholders. Cash flow distributions from InterGen's operating projects will support debt at the parent level. A critical element of the evaluation of project developers is the assignment of a quality- of-cash-flow score to each distribution stream. The QCF score reflects Standard & Poor's opinion of the potential volatility of the distribution (ranges from '1' to '10', with '1' being the most certain and '10' being the most volatile). "After examining InterGen's distributions, we conclude that the overall QCF is somewhat uncertain with a weighted average score of '6'," said Standard & Poor's credit analyst Aneesh Prabhu. The outlook on InterGen is stable. S&P would revise the outlook to negative, and lower ratings could follow, if the quality of cash flow deteriorates. While improved recovery prospects or improvements in the risk profile of projects could result in an upgrade in the longer term, low coverage ratios over the next two years and a weak covenant package limit upside potential. INVENTIV HEALTH: Moody's Affirms Ba3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the company's Ba3 Corporate Family Rating, B1 Probability of Default rating, Ba2 ratings on the existing senior secured revolver due 2010 and the existing senior secured term loan due 2011, and the SGL-1 Speculative Grade Liquidity rating. Once the proposed credit facilities are executed, the existing senior secured credit facilities' ratings will be withdrawn. The outlook remains stable. Moody's also assigned a Ba3 rating to inVentiv Health, Inc.'s proposed $50 million senior secured revolver due 2013, proposed $330 million senior secured term loan due 2014 and proposed $20 million delayed draw term loan due 2014. Proceeds from the proposed credit facilities will be used to refinance existing debt, fund working capital and general corporate purposes, as well as funding the acquisition of Chandler Chicco Agency and AWAC. inVentiv entered on June 26, 2007 into definitive acquisition agreements with CCA for $65 million in cash and stock and with AWAC for $75 million in cash and stock. Both transactions also include future earn-out payments for exceeding specified financial targets. CCA is a leading healthcare public relations firm and AWAC is a leading provider of proprietary IT-driven cost containment and medical consulting solutions to third party administrators, ERISA self-funded plans, fully insured plans, employer groups, managing general underwriters and insurance carriers. Both transactions are expected to close in the third quarter of 2007. The Ba3 Corporate Family Rating considers the moderate leverage position, leading position within the clinical staffing, agency/marketing services and commercial/contract sales within the U.S. pharmaceutical market, strong free cash flow generation, and modest integration risks. Pro forma for the increased debt resulting from the new credit facility, the company's adjusted debt to EBITDA was 2.9 times for the twelve months ended March 31, 2007. Moody's expects that the company's adjusted debt to EBITDA over the intermediate term will decline to below 2.5 times which compares favorably to the Ba3 global rating category. Within the segment for outsourced sales, clinical and marketing for pharmaceutical and biotechnology companies, inVentiv is one of the leading providers with a presence in all three areas. Free cash flow to adjusted debt remains strong even with the additional debt load and increased interest expense. Moody's anticipates that free cash flow to adjusted debt will return to historical levels over the intermediate term. "Through several acquisitions, the company has proven its ability to successfully integrate acquisitions into its existing infrastructure", Sidney Matti, Analyst, stated. "Additionally, inVentiv has realized both revenue and cost synergies from these acquisitions," Mr. Matti further noted. The Corporate Family Rating acknowledges inVentiv's moderate size in terms of revenue, short term nature of client contracts and significant exposure with the global pharmaceutical companies. For the twelve months ended March 31, 2007, the company reported revenues of about $815 million. Over the intermediate term, Moody's expects the company size, in terms of revenues, to increase driven by organic growth coupled with strategic acquisitions. Although the company has diversified its revenue streams from its three business segments, Moody's anticipates that inVentiv will continue to generate over 50% of its revenues from the top 20 global pharmaceutical companies. The stable ratings outlook anticipates that the U.S. pharmaceutical outsourced contract sales market will continue to experience increase in revenues primarily driven by the growth in the number of drug applications and cost pressures at the pharmaceutical companies. The growth within the segment for outsourced clinical, sales and marketing for pharmaceutical and biotechnology companies will continue to benefit inVentiv's operating performance over the intermediate term. The outlook also considers that the company will continue to engage in acquisitions over the ratings horizon within the restrictions of the proposed credit facility. The SGL-1 rating recognizes that over the next twelve months ended March 31, 2008, Moody's expects inVentiv to generate cash flow from operations sufficient to cover the company's capital spending needs including anticipated earn-out payments connected with its recent acquisitions. Additionally, the company is expected to have full availability under the proposed $50 million revolving credit facility. These new ratings were assigned: -- Ba3 (LGD3/30%) rating on a proposed $50 million Senior Secured Revolver due 2013; -- Ba3 (LGD3/30%) rating on a proposed $330 million Senior Secured Term Loan due 2014; and -- Ba3 (LGD3/30%) rating on a proposed $20 million Delayed Draw Term Loan due 2014. These ratings were affirmed: -- Ba3 Corporate Family Rating; -- B1 Probability of Default rating; and -- SGL-1 Speculative Grade Liquidity rating. These ratings were affirmed and will be withdrawn once the proposed credit facilities have been executed: -- Ba2 (LGD2/28%) rating on the existing Senior Secured Revolver due 2010; and -- Ba2 (LGD2/28%) rating on the existing Senior Secured Term Loan due 2011. Headquartered in Somerset, New Jersey, inVentiv Health, Inc. is a leading provider of outsourced sales, clinical, marketing, and compliance solutions for the pharmaceutical, biotechnology, and life sciences industry. For the twelve months ended March 31, 2007, the company reported about $815 million in revenues. INVENTIV HEALTH: S&P Rates S&P Rates $800MM Facilities at BB- ------------------------------------------------------------- Standard & Poor's Rating Services assigned its loan and recovery ratings to inVentiv Health Inc.'s proposed $400 million senior secured facilities, consisting of a $330 million term loan, a $20 million delayed-draw term loan, and a $50 million revolving credit facility. The facilities are rated 'BB-' with a recovery rating of '3', indicating the expectation for meaningful (50%-70%) recovery in the event of a payment default. In addition, S&P affirmed all other ratings on inVentiv, including the 'BB-' corporate credit rating. The rating outlook is stable. "The debt is being used to refinance existing bank debt and to finance the acquisition of several companies that should help further broaden inVentiv's clinical, communications, and commercial offerings to the pharmaceutical industry, and also expand it into outsourced services to payors," explained Standard & Poor's credit analyst Alain Pelanne. The ratings on Somerset, New Jersey-based inVentiv continue to reflect the company's solid, but niche, position in the pharmaceutical outsourced services industry, the competitive nature of its markets, and the challenges inherent in integrating several acquisitions. The ratings also reflect the company's increasingly diverse revenue streams and moderate financial policy. INVERNESS MEDICAL: Completes Tender Offer for Biosite Shares ------------------------------------------------------------ Inverness Medical Innovations Inc. completed its tender offer for the outstanding shares of Biosite Incorporated. The initial tender period for Biosite's shares expired at midnight, New York City time, on June 25, 2007. About 15,759,794 shares representing about 87.6% of Biosite's outstanding common stock were tendered and not withdrawn prior to the expiration of the initial tender offer period, including 2,045,999 shares representing about 11.4% of Biosite's outstanding common stock which were tendered by notice of guaranteed delivery. The tendered shares, together with the 750,000 shares that Inverness currently owns represent about 91.7% of Biosite common stock. All shares that were validly tendered and not withdrawn have been accepted for purchase. Inverness financed the Biosite tender offer, and expects to finance the short-form merger, with cash and the proceeds from a $1.05 billion first lien loan facility, consisting of a $900 million term loan and a $150 million revolving credit line, and a $200 million second lien term loan, both of which were consummated on June 26, 2007. The loan facilities were syndicated by General Electric Capital Corporation and UBS Securities LLC. Inverness' subsequent offering period expired at midnight, New York City time, June 28, 2007, unless further extended. During this subsequent offering period, Biosite stockholders who did not previously tender their shares into the offer may do so and will promptly receive the same $92.50 per share cash consideration paid during the initial offering period. The guaranteed delivery procedures may not be used during the subsequent offering period and shares tendered during the subsequent offering period may not be withdrawn. After expiration of the subsequent offering period, Inverness expects to complete the acquisition of Biosite through a short- form merger under Delaware law in which shares of Biosite common stock not purchased in the tender offer will be converted into the right to receive $92.50 per share in cash, without interest. Pursuant to the merger, Biosite will become a wholly owned subsidiary of Inverness and shares of Biosite's common stock will cease to be traded on the Nasdaq Global Select Market. In order to facilitate its purchase of Biosite shares, Inverness accepted for purchase $150 million of its 8.75% senior subordinated notes due 2012 pursuant to its previously disclosed cash tender offer and consent solicitation. Inverness has scheduled to purchase the notes on June 28, 2007, for about $164.1 million, which includes accrued interest. Financial Advisors UBS Investment Bank is acting as financial advisor to Inverness as well as serving as dealer manager for the Biosite tender offer and the Bond Tender. Covington Associates is acting as financial advisor to Inverness and Goldman, Sachs & Co. is acting as financial advisor to Biosite. Goodwin Procter LLP is serving as legal counsel to Inverness in the Biosite and Bond Tenders, Foley Hoag LLP is acting as counsel to Inverness in its credit facilities and Cooley Godward Kronish LLP and Potter Anderson & Corroon LLP are serving as legal counsel to Biosite. About Biosite Biosite Incorporated (NASDAQ: BSTE) -- http://www.biosite.com/-- is a medical diagnostic company, provides immunoassay diagnostic products for the diagnosis of critical diseases and conditions. It markets immunoassay diagnostics in the areas of cardiovascular disease, drug screening, and infectious diseases. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations, Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * As reported in the Troubled Company Reporter on June 21, 2007, 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. INVESTORS BANK: Moody's Lifts Strength Rating to B+ from B ---------------------------------------------------------- Moody's Investors Service upgraded the bank financial strength rating (to B+ from B) and deposit ratings (to Aa1 from Aa3) of Investors Bank and Trust Company, a wholly owned subsidiary of Investors Financial Services Corporation. Moody's rating action reflects the acquisition of IFIN by State Street Corporation, parent company of State Street Bank & Trust Company. The transaction is scheduled to close on July 2, 2007. The rating outlook is stable. The rating action concludes a review which began on February 5, 2007. According to Moody's, upon completion of the transaction, IFIN will be merged into STT and IBTCO will be merged into State Street Bank & Trust Company, STT's lead bank subsidiary. With the upgrade, IBTCO's ratings will mirror those of State Street Bank & Trust Company. The rating agency added that State Street Bank & Trust Company's Aa1 deposit rating incorporates Moody's view of a moderate probability of systemic support for the bank if necessary. Subsequent to the closing, Moody's will withdraw IBTCO's ratings, as the bank will cease to exist as a separate legal entity. A listing of the rating actions taken by Moody's: Upgrades: Issuer: Investors Bank & Trust Company -- Bank Financial Strength Rating, Upgraded to B+ from B -- Issuer Rating, Upgraded to Aa1 from Aa3 -- OSO Senior Unsecured OSO Rating, Upgraded to Aa1 from Aa3 -- Senior Unsecured Deposit Rating, Upgraded to Aa1 from Aa3 Outlook Actions: Issuer: Investors Bank & Trust Company -- Outlook, Changed To Stable from Rating under Review Investors Bank and Trust Company, headquartered in Boston, MA, had assets of $14 billion as of March 31, 2007. J.P. MORGAN: Moody's Rates Class M10 Certificates at Ba1 -------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by J.P. Morgan Mortgage Acquisition Trust 2007-CH4, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by first lien adjustable-rate and fixed- rate, subprime residential mortgage loans originated by JP Morgan Chase Bank, National Association. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. In addition, the ratings will benefit from an interest-rate swap agreement provided by JPMorgan Chase Bank, National Association. Moody's expects collateral losses to range from 4.45% to 4.95%. JPMorgan Chase Bank, National Association will service the mortgage loans. Moody's assigned JPMorgan Chase Bank, National Association its top servicer quality rating of SQ1 as a primary servicer of subprime mortgage loans. The complete rating actions are: J.P. Morgan Mortgage Acquisition Trust 2007-CH4, Asset-Backed Pass-Through Certificates, Series 2007-CH4 -- Cl. A1, Assigned Aaa -- Cl. A2, Assigned Aaa -- Cl. A3, Assigned Aaa -- Cl. A4, Assigned Aaa -- Cl. A5, Assigned Aaa -- Cl. M1, Assigned Aa1 -- Cl. M2, Assigned Aa2 -- Cl. M3, Assigned Aa3 -- Cl. M4, Assigned A1 -- Cl. M5, Assigned A2 -- Cl. M6, Assigned A3 -- Cl. M7, Assigned Baa1 -- Cl. M8, Assigned Baa2 -- Cl. M9, Assigned Baa3 -- Cl. M10, Assigned Ba1 JACK IN THE BOX: Strong Performance Prompts S&P's Stable Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on San Diego, California-based Jack in the Box Inc. to stable from negative. "The revision follows continued strong operating performance for the quarter ended April 15, 2007, which resulted in lower leverage and better cash flow protection measures," said Standard & Poor's credit analyst Jackie Oberoi. The ratings on Jack in the Box (including the 'BB-' corporate credit rating) reflect leverage that improved to about 4.1x for the 12 months ended April 15, 2007, from a high 4.5x after the company's December 2006 $475 million term loan issuance. "The company's financial policy has become increasingly aggressive," said Ms. Oberoi, "as evidenced by this recent debt issuance, the proceeds of which, along with some cash on hand, were used to fund a $335 million Dutch tender share repurchase and to retire existing bank loans." Other rating factors include the company's participation in the intensely competitive quick-service segment of the restaurant industry. These weaknesses are partially offset by the company's strong regional presence and its generally good operating performance. JO-ANN STORES: Improved Performance Cues S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised the ratings outlook on the Hudson, Ohio-based Jo-Ann Stores Inc. to stable from negative. At the same time, S&P affirmed all the ratings, including the corporate rating of 'B-'. "The change in outlook reflects the company's improved operating performance and debt reduction, primarily as a result of the new management team's increased focus on merchandising and inventory management," said Standard & Poor's credit analyst Charles Pinson- Rose. Jo-Ann is the largest retailer of fabrics in the U.S. and one of the largest craft retailers. The ratings reflect unfavorable industry trends in the fabric industry, strong competition in the crafts retailing industry, and a highly leveraged capital structure, resulting in weak cash flow protection measures. K-SEA TRANSPORTATION: Moody's Places B1 Rating under Review ----------------------------------------------------------- Moody's Investors Service placed its B1 Corporate Family rating of K-Sea Transportation Partners L.P. on review for possible downgrade. The review was prompted by the announcement that K-Sea will be purchasing Smith Maritime, Ltd. and Sirius Maritime LLC (both, not rated) in separate transactions, for aggregate consideration of approximately $205 million, $195 million of which will be initially funded with debt. The Speculative Grade Liquidity Rating of SGL-3 is unaffected at this time. The review of K-Sea's ratings will focus on the effect the consolidation of the two targets will have on K-Sea's credit profile with emphasis on K-Sea's long-term financing plans. The expected impact of ongoing master limited partnership distributions and of the multi-year fleet modernization program on cash flow generation will be a key consideration in the review as will the long-term financing structure that K-Sea chooses to replace the initial debt financing. "Notwithstanding the potential for interest coverage and leverage measures that could indicate a higher rating under potential long- term financing options, the expectation of significantly negative cash flow generation in upcoming periods due to the prioritization of returns to shareholders under the MLP structure might result in the rating being downgraded to B2," said Jonathan Root, Moody's High Yield Shipping Analyst. An all long-term debt financing scenario could also result in a downgrade. Debt to EBITDA would likely increase and EBIT to Interest coverage would likely decline to below 1.5 times from about 2.2 times at March 31, 2007. Cash flow generation would also likely remain weak due to the related higher interest burden. On Review for Possible Downgrade: Issuer: K-Sea Transportation Partners L.P. -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Outlook Actions: Issuer: K-Sea Transportation Partners L.P. -- Outlook, changed to rating under review from negative K-Sea Transportation Partners, L.P., headquartered in East Brunswick, New Jersey, is a leading provider of refined petroleum product marine transportation, distribution and logistics services in the U.S. KEYSTONE AUTO: Poor Same-Store Sales Cues S&P's Negative Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on auto parts retailer Keystone Automotive Operations Inc. to negative from stable. "The revision reflects poor same-store sales growth, a weak operating environment and a significant increase in leverage," said Standard & Poor's credit analyst John Thieroff. All ratings on the company, including the 'B' corporate credit rating, were affirmed. The ratings on Exeter, Pennsylvania-based Keystone reflect the company's relatively small EBITDA base, high leverage, and continued acquisition activity. The company is a market leader in the competitive, highly fragmented specialty equipment segment of the automotive aftermarket industry, but this specialty equipment segment represents a relatively small part of the total automotive aftermarket industry, most of which consists of replacement parts. Specialty equipment has historically grown at rates slightly higher than those in the do-it-yourself and do-it-for-me categories of the auto parts aftermarket sector. "However, we believe sales of specialty equipment are more sensitive to decreasing disposable income levels than sales of replacement and maintenance parts, which are necessary to keep automobiles running," said Mr. Thieroff. LASALLE COMMERCIAL: Fitch Holds B- Rating on $1.2MM Class M Certs. ------------------------------------------------------------------ Fitch Ratings has affirmed LaSalle Commercial Mortgage Securities, Inc. commercial mortgage pass-through certificates, series 2006- MF3, as: -- $414.0 million class A at 'AAA'; -- Interest-only class X at 'AAA'; -- $8.0 million class B at 'AA'; -- $13.0 million class C at 'A'; -- $8.0 million class D at 'BBB+'; -- $3.7 million class E at 'BBB'; -- $4.9 million class F at 'BBB-'; -- $6.8 million class G at 'BB+'; -- $2.5 million class H at 'BB'; -- $1.9 million class J at 'BB-'; -- $1.2 million class K at 'B+'; -- $2.5 million class L at 'B'; -- $1.2 million class M at 'B-'. Fitch does not rate the $7.4 million class N certificates. The affirmations are the result of minimal paydown since issuance and minimal expected losses on the loans in special servicing. Currently there are eight loans (1.6%) in special servicing. Fitch expected losses will be absorbed by the non-rated class N certificates. As of the June 2007 distribution report, the transaction has been reduced 3.7% to $475.1 million from $493.4 million at issuance. The largest loan in special servicing (0.3%) is secured by a multifamily property in Arlington, Texas and is 90 days delinquent. The special servicer is proceeding with foreclosure. The second largest specially serviced loan (0.3%) is secured by a multifamily property in Garland, Texas and is 90 days delinquent. The special servicer is proceeding with foreclosure. The third largest specially serviced loan (0.3%) is secured by a multifamily property in Vancouver, Washington and is 60 days delinquent. The special servicer is working with the borrower to bring the loan current. LE-NATURE'S INC: Chap. 11 Trustee, et al. Want Cases Continued -------------------------------------------------------------- On May 31, 2007, the U.S. Bankruptcy Court for the Western District of Pennsylvania ordered Le-Nature's Inc., its debtor- affiliates, their counsel, the Chapter 11 Trustee, and other parties-in-interest to show cause why the Debtors' cases should not be dismissed. The Court noted that the Debtors' cases are "serving a purpose to secured creditors and has and will never serve any benefit to unsecured creditors." R. Todd Neilson, the Chapter 11 trustee appointed in the Debtors' cases, gave the Court two options in lieu of dismissal of the Debtors' cases. The Trustee states that if the Court finds that the Joint Amended Chapter 11 Plan of Liquidation filed by the Official Committee of Unsecured Creditors, the Ad Hoc Committee of Secured Lenders, and the Ad Hoc Committee of Senior Subordinated Noteholders is confirmable, the Debtors' cases should proceed. If not, the Trustee asks the Court to consider Wachovia Bank, National Association's motion to convert the Debtors' chapter 11 cases to chapter 7. The Trustee also informed the Court that an asset purchase agreement for a turnkey sale of the Debtors' Latrobe, Pa. bottling plant and off-site warehouse is nearing completion. In addition, the Trustee says he has received offer for the Debtors' more than 8,000 individually packaged model trains in their off-site warehouse. The Trustee also says that more than 475 claims filed against the Debtors have been examined to facilitate confirmation of the proposed plan. Gordon Brothers Industrial LLC and Harry Davis & Company also move for the continuance of the Debtors' cases contending that dismissal would impede the sale of the Debtors' assets and thus hinder any recovery. Gordon Brothers and Harry Davis serve as brokers for the sale of the Debtors' Latrobe facility. The brokerage firms disclose that they have been working diligently to obtain purchasers for the assets and has advanced costs they expected to be recovered from the proceeds of the sale. Because of the number of parties involved having various secured claims and the complications involved in allocating the sale proceeds, and the protections that any prospective purchaser of the assets would be seeking, the brokerage firms do not believe that a sale of the assets can be accomplished except under Section 363 of the Bankruptcy Code. For its part, the Ad Hoc Committee of Senior Subordinated Noteholders asserts that dismissal of the Debtors' cases will ruin the substantial progress made in the cases. According to the Ad Hoc Committee, the resulting disruption and dislocation of the dismissal will only benefit the potential targets of the estate causes of action. Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc. states that it shares the Court's Frustration with the progress made to date in the Debtors' cases. Notwithstanding the visible lack of progress in the Debtors' cases to date and the significant administrative expenses that have accrued, Merrill Lynch Capital does not believe that dismissal of the cases is in the best interests of creditors. Merrill Lynch Capital agrees with the brokerage firms that if the cases are dismissed, the sale process that has been under way for many months will likely halt. In February 2007, Merrill Lynch Capital sought to convert the Debtors' chapter 11 cases to chapter 7 because, among other things, it was concerned about the exorbitant cost of administering the cases in chapter 11. Although Merrill Lynch Capital does not forego with the dismissal of the cases, it does not take a position as to whether the cases should be converted to chapter 7 at this time. Merrill Lynch Capital however reserves the right to file supplemental papers regarding the conversion of the cases to chapter 7. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq. at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. LE-NATURE'S INC: Harbinger, et al. Commits $15MM Exit Facility -------------------------------------------------------------- The Official Committee of Unsecured Creditors, the Ad Hoc Committee of Secured Lenders, and the Ad Hoc Committee of Senior Subordinated Noteholders in Le-Nature's Inc. and its debtor-affiliates' chapter 11 cases tell the U.S. Bankruptcy Court for the Western District of Pennsylvania that they received a commitment letter from Harbinger Capital Partners Master Fund I, Ltd., et al. The commitment letter provides a first priority, senior secured exit facility term loan for up to $15 millions. Proposed Liquidation Plan As reported in the Troubled Company Reporter on June 22, 2007, the Committees filed with the Court their Joint Amended Chapter 11 Plan of Liquidation for the Debtors whose primary objectives are to: -- liquidate the assets of the estates and prosecute causes of action; -- maximize the value of the ultimate recovery to all creditors on a fair and equitable basis, compared to the value they would receive if the assets of the Debtor was liquidated under chapter 7 of the Bankruptcy Code; and -- settle, compromise or otherwise dispose of certain disputes and claims. Treatment of Claims Under the Plan, Administrative, Priority Non-Tax and Fee Claims will be paid in full, in cash. Holders of Priority Tax Claims will receive, either: a. cash on the effective date of the Plan; or b. deferred cash payments in equal annual installments through the fifth anniversary of the Debtors' bankruptcy filing, plus interest at 6% per annum. Lenders Secured Claims will receive, in full satisfaction, settlement, release, and discharge of and in exchange for their claims: a. tier one trust beneficial interest; b. additional tier one trust beneficial interest, as a result of the disallowance of any disputed claim; and c. all proceeds distributed under the terms of the Plan and the liquidation trust agreement. Other Secured Claims holders will receive, in full satisfaction of their claims, at the option of the Liquidation Trust: (a) payment in cash from proceeds from the sale or disposition of the collateral securing their claims, to the extent of the value of any holder's lien on the property; (b) surrender of the collateral securing their claims; or (c) other distributions as that will satisfy the requirements stated in Section 1129 of the Bankruptcy Code. Subordinated Litigation Claims are entitled to: (a) a pro-rata share of the tier three trust beneficial interests; (b) additional pro-rate share of the tier three trust beneficial interests, as a result of the disallowance of any disputed claim in this class; and (c) all proceeds distributed pursuant to the terms of the Plan and the Liquidation Trust Agreement. Interest Holders will receive: (a) Tier Four Trust Beneficial Interests; (b) additional pro-rate share of the Tier Four Trust Beneficial Interests, as a result of the disallowance of any Disputed Interest in this Class; and (c) all proceeds distributed pursuant to the terms of the Plan and the Liquidation Trust Agreement. Unsecured Claims The Plan Proponents disclose that Unsecured Claims are divided into three sub-classes: * Lenders Unsecured Claims; * General Unsecured Claims; and * Unsecured Subordinated Notes Claims. Under the Plan, Holders of Lenders Unsecured Claim will receive: (a) Tier Two Trust Beneficial Interests; (b) an additional pro-rata share of the Tier Two Trust Beneficial Interests, as a result of disallowance of any Disputed Claim under this class; (c) and additional pro-rata share of the Tier Two Trust Beneficial Interests, as a result of Turnover Enforcement of Unsecured Subordinated Notes Claims distributions; and (d) all proceeds distributed pursuant to the terms of the Plan and the Liquidation Trust Agreement. (e) a percentage of the proceeds of the TSI/Holdings Property to other holder of Unsecured Claims, subject to: i. used of the proceeds to fund the Initial Trust Funding and the Liquidation Trust Reserve; and ii. reallocation of the proceeds to holder of Unsecured Claims. Creditors holding General Unsecured Claims will receive: (a) Tier Two Trust Beneficial Interests; (b) an additional pro-rata share of the Tier Two Trust Beneficial Interests, as a result of disallowance of any Disputed Claim under this class; (c) all proceeds distributed pursuant to the terms of the Plan and the Liquidation Trust Agreement. (e) a percentage of the proceeds of the TSI/Holdings Property to other holder of Unsecured Claims, subject to: i. used of the proceeds to fund the Initial Trust Funding and the Liquidation Trust Reserve; and ii. reallocation of the proceeds to holder of Unsecured Claims. Holders of Unsecured Subordinated Notes Claims will receive: (a) Tier Two Trust Beneficial Interests; (b) an additional pro-rata share of the Tier Two Trust Beneficial Interests, as a result of disallowance of any Disputed Claim under this class; (c) all proceeds distributed pursuant to the terms of the Plan and the Liquidation Trust Agreement, provided, however, that the distributions will be deemed reallocated and distributed on account of Lenders Unsecured Claims, as a settlement of potential claims by Lenders for enforcement of contractual subordination provisions in Senior Subordinated Notes Indenture, in accordance with the "Turnover Enforcement." (d) a percentage of the proceeds of the TSI/Holdings Property to other holder of Unsecured Claims, subject to: i. used of the proceeds to fund the Initial Trust Funding and the Liquidation Trust Reserve; and ii. reallocation of the proceeds to holder of Unsecured Claims. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq. at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. LEHMAN ABS: Moody's Assigns Low-B Ratings on Two Certificates ------------------------------------------------------------- Moody's Investors Services assigned a Aaa rating to the senior certificates issued by Lehman ABS Mortgage Loan Trust 2007-1, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate subprime residential mortgage loans acquired by Lehman Brothers Holdings Inc. The collateral was originated by ResMae Mortgage Corporation. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, and excess spread. The certificates also benefit from a swap agreement and a cap agreement. Moody's expects collateral losses to range from 5.90% to 6.40%. Select Portfolio Servicing, Inc. and Aurora Loan Services LLC will service the loans. Aurora Loan Services LLC will also act as master servicer. Moody's assigned Select Portfolio Servicing, Inc. a servicer quality rating of SQ2- as a primary servicer of subprime residential mortgage loans. Moody's has assigned Aurora Loan Services LLC a servicer quality rating of SQ1- as a master servicer. The complete rating actions are: Lehman ABS Mortgage Loan Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1 -- Cl. 1-A1, Assigned Aaa -- Cl. 2-A1, Assigned Aaa -- Cl. 2-A2, Assigned Aaa -- Cl. 2-A3, Assigned Aaa -- Cl. 2-A4, Assigned Aaa -- Cl. M1, Assigned Aa1 -- Cl. M2, Assigned Aa2 -- Cl. M3, Assigned Aa3 -- Cl. M4, Assigned A1 -- Cl. M5, Assigned A2 -- Cl. M6, Assigned A3 -- Cl. M7, Assigned Baa1 -- Cl. M8, Assigned Baa2 -- Cl. M9, Assigned Baa3 -- Cl. M10, Assigned Ba1 -- Cl. M11, Assigned Ba2 LEINER HEALTH: March 31 Balance Sheet Upside-Down by 137.1 Million ------------------------------------------------------------------ Leiner Health Products Inc.'s balance sheet listed total assets of $378.6 million and total liabilities of $515.7 million, resulting in a total stockholders' deficit of $137.1 million as of March 31, 2007. Net sales for the fourth quarter 2007 were $175.2 million, compared to $173.8 million for the same period in fiscal 2006, an 0.8% increase. The company reported a net loss of $39.2 million for the fourth quarter of fiscal 2007, compared to net income of $0.4 million for the same period in fiscal 2006. The company's over-the-counter suspension and the Fort Mill consolidation had a significant negative impact to its gross margins and net income. In addition to the $27.4 million OTC non- cash inventory reserve, the company incurred a non-cash charge of $16.5 million in the fourth quarter of fiscal 2007 for impairment of assets related to the restructuring of the company's operations at its Fort Mill, South Carolina facility and increased its valuation allowance against its U.S. deferred tax assets by about $14.5 million. Fiscal 2007 Results For fiscal 2007, net sales totaled $735.2 million compared to $669.6 million in fiscal 2006, a 9.8% increase. Fiscal year 2007 included an additional week compared to the prior fiscal year. Net sales increased by about $13 million due to this additional week. For fiscal 2007, the company recorded a net loss of $22.3 million for the aforementioned reasons compared to a net loss of $3.8 million in fiscal 2006. Robert Kaminski, chief executive officer, commented, "An otherwise excellent year was negatively impacted by our OTC issues. Our fiscal 2007 sales were strong, with robust demand for our VMS products, specifically multivitamins, CoQ10 and fish oil products. The company has challenged itself to react to the OTC situation in a way that enables us to preserve our core franchise while emerging as a best-in-class, highest quality OTC and VMS supplier of store brand products. We believe our recent actions position Leiner for long-term leadership in the markets we serve." About Leiner Health Leiner Health Products Inc. -- http://www.leiner.com/-- headquartered in Carson, California, manufactures store brand vitamins, minerals, and nutritional supplements and supplies over- the-counter pharmaceuticals in the food, drug, mass merchant and warehouse club (FDMC) retail market, as measured by retail sales. Leiner provides nearly 50 FDMC retailers with over 3,000 products to help its customers create and market high quality store brands at low prices. It also is the largest supplier of vitamins, minerals and nutritional supplements to the US military. Leiner markets its own brand of vitamins under YourLifer. In 2006, Leiner distributed more than 31 billion doses that help offer consumers high quality, affordable choices to improve their health and wellness. * * * As reported in the Troubled Company Reporter on June 13, 2007, Standard & Poor's Ratings Services said that the ratings on Leiner Health Products Inc., including the 'B-' corporate credit rating, would remain on CreditWatch with negative implications. LOEHMANN'S HOLDINGS: S&P Cuts Corporate Credit Rating to B- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on New York City-based Loehmann's Holdings Inc. to 'B-' from 'B'. At the same time, S&P lowered to 'CCC' from 'CCC+' the rating on subsidiary Loehmann's Capital Corp.'s $100 million senior secured notes due 2011. "The downgrade reflects a moderate decline in operating margins and a deterioration in credit protection metrics," said Standard & Poor's credit analyst David Kuntz. The outlook is stable. The ratings on Loehmann's reflect its participation in the highly competitive off-price apparel retailing market, small cash flow base, inconsistent operating history, and high debt leverage. The company is an off-price retailer of upscale women's fashion apparel, accessories and shoes, men's apparel, and furnishings. It operates 65 stores in major metropolitan areas in 16 states and the District of Columbia. Loehmann's faces competition from a number of retailers, including traditional department stores and off-price and discount retailers. In addition, many department stores and brands have their own off-price outlets. Loehmann's continues to struggle as department stores have increased their promotional activity and lowered prices. Loehmann's performance has been in decline in the past few years. Recent results have been below expectations, and S&P expect continued near-term softness before operations begin to stabilize. Although the company is able to generate top-line sales growth, much of this has come from new stores. Same-store sales declined 7.4% in the first quarter ended May 5, 2007, from the prior year. Operating margins have declined to the mid-11% area from the mid- 13% area a year earlier due to costs associated with new-store openings. MERRILL LYNCH: Fitch Cuts Rating on 2005-HE1 Class B5 Certs. to B+ ------------------------------------------------------------------ Fitch has taken rating these rating actions on the Merrill Lynch Mortgage Investors Trust mortgage pass-through certificates: Merrill Lynch Mortgage Investors, series 2005-HE1 -- Classes A-1A, A-1B, A-2B, A-2C affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class B1 affirmed at 'BBB+'; -- Class B2 affirmed at 'BBB'; -- Class B3 affirmed at 'BBB-'; -- Class B4 affirmed at 'BB+', and removed from Rating Watch Negative; -- Class B5 downgraded to 'B+' from 'BB' and removed from Rating Watch Negative. Merrill Lynch Mortgage Investors, series 2005-HE2 -- Classes A-1A, A-1B, A-2A, A-2B, A-2C affirmed at 'AAA'; The underlying collateral for the transactions listed above consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties extended to subprime borrowers. All of the mortgage loans were originated or acquired by various originators and subsequently purchased by Merrill Lynch Mortgage Capital, Inc. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $355.3 million of outstanding certificates. The downgraded B-5 class of Series 2005-HE1 reflects the deterioration in the relationship of CE to future loss expectations and affects approximately $3.1 million of outstanding certificates. As of the June 2007 remittance period the overcollateralization of the trust is below the target amount and has experienced several months in the past year of OC deterioration. The deteriorating relationship of losses to excess spread in the trusts has put negative pressure on the subordinate B-5 bond. The servicer for the aforementioned transactions is Wilshire Credit. Corp. (rated 'RPS2' by Fitch). MERRILL LYNCH: Fitch Rates $1.6 Mil. 2007-2 Class B-2 Certs. at B ----------------------------------------------------------------- Fitch rates Merrill Lynch Mortgage Backed Securities Trust, Series 2007-2, residential mortgage pass-through certificates, as: -- $619.2 million classes I-A1, I-A2, and X-A 'AAA' (senior certificates); -- $14.2 million class M-1 'AA'; -- $4.8 million class M-2 'A'; -- $2.6 million class M-3 'BBB'; -- $1.9 million non-offered class B-1 'BB'; -- $1.6 million non-offered class B-2 'B'; The 'AAA' rating on the senior certificates reflects the 4.15% subordination provided by the 2.20% M-1, the 0.75% class M-2, the 0.40% class M-3, the 0.30% non-offered class B-1, the 0.25% non- offered class B-2, and the 0.25% non-offered and non-rated class B-3. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults, as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the capabilities of Wells Fargo Bank, N.A. as master servicer (rated 'RMS1' by Fitch). The mortgage pool consists primarily of 1,058 recently originated, adjustable rate, conventional, first lien, one - to four-family, residential mortgage loans, a substantial majority of which have original terms to maturity of 30 years. As of the cut-off date (June 1, 2007), the pool had an aggregate principal balance of approximately $647,707,211. The average loan balance is $612,200, and the weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 72.81%. The weighted average FICO credit score for the pool is approximately 741. Cash- out and rate/term refinance loans represent 19.12% and 13.89% of the pool, respectively. Second and investor-occupied homes account for 10.35% and 3.12% of the pool, respectively. The states that represent the largest geographic concentration are California (50.97%), Florida (8.01%), and Virginia (3.83%). None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. The loans were purchased by Taberna Realty Holdings Trust, which were subsequently sold to Merrill Lynch Mortgage Investors, Inc. Merrill Lynch Mortgage Investors, Inc. deposited the loans in the trust, which issued the notes. The trust fund will be characterized as one or more taxable mortgage pools for federal income tax purposes. The trust fund will be treated as a qualified REIT subsidiary, however, and accordingly will not be subject to federal income taxation as a corporation, as long as 100% of the equity securities are owned by a single REIT. HSBC Bank USA, National Association, will act as trustee. MERRILL LYNCH: Fitch Cuts Rating on 2006-SL2 Class B2 Certs. to B ----------------------------------------------------------------- Fitch has taken rating action on these classes from Merrill Lynch Mortgage Investors Trust, series 2006-SL2: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 rated 'BBB-', placed on Rating Watch Negative; -- Class B1 downgraded to 'B+' from 'BB+', placed on Rating Watch Negative; -- Class B2 downgraded to 'B' from 'BB', placed on Rating Watch Negative. The underlying collateral for the transactions listed above consists of fixed-rate, closed-end, second lien residential mortgage loans on one- to four-family residential. The mortgage loans were originated or acquired by various originators and subsequently purchased by Merrill Lynch Mortgage Capital, Inc. The affirmations affect approximately $163.6 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The classes with negative actions reflect the deterioration in the relationship of CE to future loss expectations and affect $10.86 million in outstanding certificates. The trust, seasoned 10 months, has experienced losses in the sum of approximately $6.75 million in the past three months which has depleted the OC amount. The credit support provided by the OC to the most subordinate class has decreased from 6.45% to 4.44% in three months. This has put negative pressure on the subordinate bonds affecting classes B up to M-9. If the high rate of losses continue, further rating action may be necessary. The servicer for all of the above transactions is Wilshire Credit Corporation, rated 'RPS1' by Fitch. MORGAN STANLEY: Moody's Assigns Low-B Ratings on Two Certificates ----------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 and ratings ranging from A2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by New Century Mortgage Corporation originated, adjustable-rate (79%) and fixed-rate (21%), subprime mortgage loans acquired by Morgan Stanley Mortgage Capital Holdings LLC. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination, excess spread, and overcollateralization. The Class A certificates will benefit from certificate insurance policy issued by Financial Guaranty Insurance Company. The ratings also benefit from the interest-rate swap provided by Morgan Stanley Capital Services Inc. Moody's expects collateral losses to range from 8.10% to 8.60%. Saxon Mortgage Services, Inc will service the loan pool. Wells Fargo Bank, National Association, will be the master servicer. Moody's assigned Saxon its servicer quality rating of SQ2+ as a servicer of subprime mortgage loans. Moody's assigned Wells Fargo Bank, National Association, its top servicer quality rating of SQ1 as a master servicer of residential mortgage loans. The complete rating actions are: Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 Mortgage Pass-Through Certificates, Series 2007-NC4 -- Cl. A-1, Assigned Aaa -- Cl. A-2a, Assigned Aaa -- Cl. A-2b, Assigned Aaa -- Cl. A-2c, Assigned Aaa -- Cl. A-2d, Assigned Aaa -- Cl. M-1, Assigned A2 -- Cl. M-2, Assigned A3 -- Cl. B-1, Assigned Baa1 -- Cl. B-2, Assigned Baa1 -- Cl. B-3, Assigned Baa3 -- Cl. B-4, Assigned Ba1 -- Cl. B-5, Assigned Ba2 MORTGAGE ASSET: Fitch Lowers on 2005-FRE1 Class M-10 Certs. to B ---------------------------------------------------------------- Fitch Ratings has downgraded one class, placed two classes on Rating Watch Negative and affirmed 45 classes of mortgage pass- through certificates from the Mortgage Asset Securitization Transactions Asset Back Securities Trust securitizations: Series 2004-HE1 -- Classes A-1 & A-4 affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AAA'; -- Class M-3 affirmed at 'AA+'; -- Class M-4 affirmed at 'AA+'; -- Class M-5 affirmed at 'AA'; -- Class M-6 affirmed at 'AA-'; -- Class M-7 affirmed at 'A+'; -- Class M-8 affirmed at 'A'; -- Class M-9 affirmed at 'BBB+'; -- Class M-10 affirmed at 'BBB'; -- Class M-11 affirmed at 'BBB-'. Series 2004-WMC2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'. Series 2005-FRE1 -- Classes A-1 through A-5 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 rated 'BBB', placed on Rating Watch Negative; -- Class M-9 rated 'BBB-', placed on Rating Watch Negative; -- Class M-10 downgraded to 'B' from 'BB+'. Series 2006-NC1 -- Classes A-1 through A-4 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A'; -- Class M-7 affirmed at 'A-'; -- Class M-8 affirmed at 'BBB+'; -- Class M-9 affirmed at 'BBB'; -- Class M-10 affirmed at 'BBB-'; -- Class M-11 affirmed at 'BBB-'. The affirmations, affecting approximately $1.5 billion of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. The downgrade, affecting approximately $8.4 million of the outstanding certificates, is taken as a result of deterioration in the relationship between CE and expected loss. The Rating Watch Negative affects approximately $24 million of the outstanding certificates. Series 2005-FRE1, class M-10 was originally placed on Rating Watch Negative in January 2007. Over the last five months, losses have exceeded excess spread and, as a result, eroded the OC below target. As of the June 2007 remittance date, the OC is $3.1 million below the target of $21.1 million. The OC as a percent of the current balance is 2.6% ($18 million). The cumulative loss as a percentage of the original collateral balance is 0.76% and the 60+ DQ as a percentage of the current collateral balance is 18.2%. Losses are expected to continue to exceed excess spread. The collateral of the above transactions primarily consists of conforming and non-conforming, fixed-rate and adjustable-rate subprime mortgage loans secured by first and second liens on residential properties. The mortgages collateralizing series 2004-HE1 were originated by various originators and, at issuance, over 68% of the mortgages were covered by deep mortgage insurance policies provided by Mortgage Guaranty Insurance Corp. The transaction is master serviced by Wells Fargo Home Mortgage, Inc. (rated 'RPS1' by Fitch). The mortgages collateralizing series 2004-WMC2 were originated or acquired by WMC and are serviced by HomEq Servicing Corp. (rated 'RPS1'). The mortgages collateralizing series 2005-FRE1 were originated or acquired by Fremont Investment and Loan and are serviced HomEq Servicing Corp. The mortgages collateralizing series 2006-NC1 were originated or acquired by New Century Mortgage Corp. and are also serviced by HomEq Servicing Corp. MTR GAMING: Selling Binion's Hotel to TLC Casino for $32 Mil. Cash ------------------------------------------------------------------ MTR Gaming Group Inc. has entered into a definitive agreement with TLC Casino Enterprises Inc. to sell Binion's Gambling Hall & Hotel in Las Vegas, Nevada, for $32 million in cash. TLC Casino Enterprises Inc., which is controlled by Terry Caudill, also owns the Four Queens Hotel & Casino in Downtown Las Vegas. The transaction is subject to customary conditions, including the approval of the Nevada Gaming Commission and the City of Las Vegas, and purchase price adjustments based on changes in net working capital and certain capital expenditures between execution and closing. While certain due diligence items remain outstanding, the closing is expected to take place after the receipt of all required regulatory approvals, which the buyer must obtain within six months after the execution of the agreement. The buyer intends to retain the property's employees after the closing. MTR purchased Binion's from an affiliate of Harrah's Entertainment Inc. in March 2004 for $20 million and simultaneously purchased a parcel of land for $1.8 million that was previously ground leased. MTR has disputed a claim that Harrah's is entitled to a $5 million purchase price increase. "While the company has enjoyed working with the employees, the Nevada gaming regulators, and Harrah's to reopen this legendary property, the company believes it is now in the company's best interest to concentrate its efforts and resources," Edson R. (Ted) Arneault, MTR's chairman, president and CEO, stated. "Terry Caudill has a proven track record in Downtown Las Vegas with the Four Queens, and the company believes that Binion's and its employees will benefit from his stewardship." Rock Creek Capital Advisors is acting as financial advisor to TLC Casino Enterprise, Inc. and Lazard is acting as financial advisor to MTR Gaming Group. In addition, MTR executed an employment agreement for a two-year period commencing as of Jan. 1, 2007 with Kenneth Zern, who was appointed the company's chief accounting officer effective Aug. 1, 2006. Mr. Zern joined the company in June 2004 as the financial controller of Mountaineer Park Inc., a wholly owned subsidiary of the company. About MTR Gaming Headquartered in Chester, West Virginia, MTR Gaming Group Inc. (NasdaqGS:MNTG) -- http://www.mtrgaming.com/-- owns and operates the Mountaineer Race Track & Gaming Resort in Chester, West Virginia; Scioto Downs in Columbus, Ohio; the Ramada Inn and Speedway Casino in North Las Vegas, Nevada; Binion's Gambling Hall & Hotel in Las Vegas, Nevada; and holds a license to build Presque Isle Downs, a thoroughbred racetrack with pari-mutuel wagering in Erie, Pennsylvania. The company also owns a 50% interest in the North Metro Harness Initiative LLC, which has a license to construct and operate a harness racetrack and card room outside Minneapolis, Minnesota and a 90% interest in Jackson Trotting Association LLC, which operates Jackson Harness Raceway in Jackson, Michigan. * * * Moody's Investors Service assigned B1 corporate family rating to MTR Gaming Group Inc. MYERS INDUSTRIES: S&P Junks Rating on Proposed $265 Mil. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating on Akron, Ohio-based Myers Industries Inc. At the same time, Standard & Poor's assigned its 'B+' bank loan rating and '2' recovery rating to its proposed $535 million first-lien term loan and $150 million first-lien revolving credit facility. S&P also assigned its 'CCC+' rating to the proposed $265 million Rule 144A for life senior subordinated notes maturing in 2017. The outlook is stable. "The ratings on Myers Industries reflect the company's highly leveraged financial risk profile, marked by high debt balances, which more than offset its leading positions in some niche markets, and good end-market diversity," said Standard & Poor's credit analyst Robert Wilson. Myers Industries is a public company that Goldman Sachs Capital Partners has signed a definitive agreement to acquire in an LBO. With about $1 billion in pro forma 2007 sales, Myers is a leading manufacturer of polymer products, and is North America's largest distributor of tire repair supplies and equipment. The company competes in four segments: Lawn & Garden, Material Handling, Distribution of tire repair and under vehicle repair products, and Auto & Custom. Myers has leading positions in most of its end markets, good brand recognition, and a reputation for quality. However, its overall revenue base remains cyclical, and the company has limited geographic diversity, particularly with the recent sale of its low-margin European Material Handling segment. Myers also operates in highly competitive price environments and remains exposed to commodity price increases, particularly for plastic resins. OGLEBAY NORTON: Annual Shareholders Meeting Set for Sept. 24 ------------------------------------------------------------ Oglebay Norton Company has scheduled its Annual Meeting of Shareholders for September 24, 2007. Additional details about time and place will be announced in the future. Oglebay Norton Company filed a Form 15 with the U.S. Securities and Exchange Commission and filed to deregister its stock. As a result, the company shares are not registered with the SEC and any previously filed and provided prospectus is no longer active or current and cannot be used. The company is not obligated to and will not voluntarily comply with periodic reporting requirements for registrants under the Securities Exchange Act of 1934. Based in Cleveland, Ohio, Oglebay Norton Company (OGBY.PK) -- http://www.oglebaynorton.com/-- provides essential minerals and aggregates to a broad range of markets, from building materials and environmental remediation to energy and industrial applications. * * * The company continues to carry Standard & Poor's B Credit Rating. That rating was assigned on June 28, 2006. S&P says that rating outlook is stable. OMI CORP: Moody's Withdraws Ba3 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service withdrew the Corporate Family and Senior Unsecured debt ratings of OMI Corporation. The withdrawal was due to OMI's announcement on June 27, 2007 that all of the $200 million of its 7.625% Senior Unsecured Notes due 2013 have been tendered pursuant to the tender offer for the notes initiated on June 13, 2007. OMI has no other rated debt outstanding. Outlook Actions: Issuer: OMI Corporation -- Outlook, Changed To Rating Withdrawn From Stable Withdrawals: Issuer: OMI Corporation -- Corporate Family Rating, Withdrawn, previously rated Ba3 -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated B1 OMI Corporation (formerly known as Omaha, Inc.) is a corporation organized under the laws of the Republic of The Marshall Islands and a jointly owned subsidiary of Teekay Corporation (Ba2 CFR, Negative outlook) and A/S Dampskibsselskabet TORM (not rated). Omaha, Inc. was formed for the purpose of acquiring OMI Corporation, a leading seaborne transporter of crude oil and refined petroleum products in international shipping markets. PACIFIC LUMBER: Scopac Taps Greenfield Advisors as Appraisers ------------------------------------------------------------- Scotia Pacific Company LLC seeks the authority of the United States Bankruptcy Court for the Southern District of Texas to hire Greenfield Advisors LLC as its real estate appraisers. Greenfield Advisors' team of PhDs, MBAs and MAs have experience with the most complex valuation analysis problems, and have particular expertise in the valuation of "trophy" properties including high-amenity natural resource properties such as timberlands, Scopac notes. In connection with its valuation work, Greenfield Advisors also has substantial experience providing litigation support and expert testimony as valuation experts. John A. Kilpatrick, president and managing member of Greenfield Advisors, relates that his firm appraised the value of the Marbled Murrelet Conservation Areas within Scopac's Timberlands. In connection with its prior services for Scopac, Greenfield Advisors has become familiar with and extremely knowledgeable about Scopac's current appraisal needs. As Scopac's real estate appraisers, Greenfield Advisors will update its previous appraisal work related to the MMCAs and other parcels of Scopac's Timberlands. Greenfield Advisors may issue a final appraisal report providing its expert opinion on the fair market values of Scopac's assets and the MMCAs. Scopac will pay for Greenfield Advisors' services based on the firm's hourly rates: Professional Hourly Rates ------------ ------------ Dr. John Kilpatrick, Ph.D. $600 Project Leader Dr. Bill Mundy $500 Senior Analyst $110 - $350 Research Analyst $50 - $150 Office and Field Staff $25 - $100 Dr. Kilpatrick relates that Scopac has paid Greenfield Advisors approximately $156,730 for services rendered and expenses incurred in connection with the MMCAs. Greenfield Advisors is a "disinterested person" as that term is defined in Sections 101(14) and 1107(b) of the Bankruptcy Code, Dr. Kilpatrick assures the Court. About Pacific Lumber Headquartered in Oakland, Calif., The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on Sept. 18, 2007, as extended. The Debtors' exclusive period to solicit acceptances of that plan expires on Nov. 19, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 19, http://bankrupt.com/newsstand/or 215/945-7000). PAETEC HOLDING: Prices $300 Mil. Offering of 9.5% Senior Notes -------------------------------------------------------------- PAETEC Holding Corp. has priced $300 million principal amount of its 9.5% Senior Notes due 2015 through a private offering to qualified institutional buyers as defined in Rule 144A under the Securities Act of 1933 and outside the United States in reliance on Regulation S under the Securities Act of 1933. The net proceeds from the offering will be used to repay term loans outstanding under PAETEC's existing credit facility. The closing of the offering is expected to occur on July 10, 2007, subject to the satisfaction of customary closing conditions. About Paetec Holding Headquartered in Fairport, New York, PAETEC Holding Corp. (NASDAQ: PAET) -- http://www.paetec.com/-- fka US LEC Corp. is a full service provider of Internet protocol, data and voice solutions to medium-sized and large businesses and enterprise organizations throughout 16 eastern states and the District of Columbia. The company provides a range of voice and high-speed data network services on a retail basis to its end-user business and institutional customers. In addition, PAETEC offers a range of voice and high-speed data carrier services to other telecommunications companies. Its service offerings include core voice and data services, application services, network integration services and managed services. * * * As reported in the Troubled Company Reporter on June 26, 2007, Standard & Poor's Ratings Services revised its outlook on PAETEC Holding Corp. to positive from stable. At the same time, S&P assigned a 'CCC+' rating to PAETEC's proposed $300 million senior unsecured notes due 2015. All existing ratings are affirmed, including the 'B' corporate credit rating. As reported in the Troubled Company Reporter on June 25, 2007, Moody's Investors Service assigned a Caa1 rating to the proposed $300 million senior unsecured note offering at PAETEC Holding Corp. and affirmed PAETEC's B2 corporate family rating. PAETEC will use the net proceeds of the offering and cash on hand to repay $300 million of its existing 1st lien term loan. Due to the proposed changes in the capital structure, Moody's has also upgraded PAETEC's 1st lien credit facility to Ba3. The outlook is stable. PETRA CRE: Fitch Rates $32.5 Mil. Class K Deferrable Notes at B --------------------------------------------------------------- Fitch has assigned these ratings to Petra CRE CDO 2007-1, Ltd. and Petra CRE CDO 2007-1, Corp.: -- $400,000,000 class A-1 senior secured floating-rate term notes due 2047 'AAA'; -- $133,750,000 class A-2 second priority senior secured floating-rate term notes due 2047 'AAA'; -- $76,750,000 class B third priority floating-rate term notes due 2047 'AA'; -- $57,500,000 class C fourth priority floating-rate deferrable interest term notes due 2047 'A+'; -- $25,500,000 class D fifth priority floating-rate deferrable interest term notes due 2047 'A'; -- $22,000,000 class E sixth priority floating-rate deferrable interest term notes due 2047 'A-'; -- $33,000,000 class F seventh priority floating-rate deferrable interest term notes due 2047 'BBB+'; -- $20,000,000 class G eighth priority floating-rate deferrable interest term notes due 2047 'BBB'; -- $26,500,000 class H ninth priority floating-rate deferrable interest term notes due 2047 'BBB-'; -- $42,500,000 class J tenth priority floating-rate deferrable interest term notes due 2047 'BB'; -- $32,500,000 class K eleventh priority floating-rate deferrable interest term notes due 2047 'B'; PLEASANT CARE: Court Okays Paul Delano Wolf as Special Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California gave Pleasant Care Corporation and its debtor-affiliates authority to employ the Law Offices of Paul Delano Wolf as their special regulatory counsel effective March 22, 2007. The firm is expected to represent the Debtors with respect to matters involving the Bureau of Medical Fraud & Elder Abuse and the Office of Inspector General of the Department of Health and Human Services as well as with matters relating to potential or actual criminal matters. The firm's professionals charge these rates for their services: Position Hourly Rate -------- ----------- Attorneys $350 Associates $225 - $275 Paralegals $75 Prior to their bankruptcy filing, the Debtors paid the firm $230,145 for the prepetition legal services the firm rendered to the Debtors. Mr. Paul Delano Wolf assures the Court that his firm does not hold any interest adverse to the Debtors' estate. Based in La Canada, California, Pleasant Care Corporation and its affiliates -- http://www.pleasantcare.com/-- provide nursing home care. The company and four of its affiliates filed for chapter 11 protection on March 22, 2007 (Bankr. C.D. Calif. Lead Case No. 07-12312). Ron Bender, Esq., Monica Y. Kim, Esq., and Jacqueline L. Rodriguez, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, represent the Debtors. Samuel R. Maizel, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. PRIMEDIA INC: Commences Cash Tender Offer for Three Notes --------------------------------------------------------- PRIMEDIA Inc. has commenced cash tender offers to repurchase all of its outstanding: * Senior Floating Rate Notes due 2010 (CUSIP No. 74157KAL5), * 8-7/8% Senior Notes due 2011 (CUSIP No. 74157KAF8) and * 8% Senior Notes due 2013 (CUSIP No. 74157KAJ0). In connection with the tender offers, the company is soliciting consents to amend each of the indentures governing the Notes. The tender offers and related consent solicitations were made in connection with the sale by the company of PRIMEDIA Enthusiast Media Inc. to Source Interlink Companies Inc. The tender offers and consent solicitations were made upon the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated June 27, 2007, and the related Consent and Letter of Transmittal. As of June 27, 2007, there was $122.5 million principal amount of Floating Rate Notes outstanding, $410 million principal amount of 2011 Notes outstanding and $294.8 million principal amount of 2013 Notes outstanding. Holders who validly tender their Notes and deliver their consents to the proposed amendments on or prior to 5:00 p.m., New York City time, on July 12, 2007, unless extended or earlier terminated, will be eligible to receive the applicable total consideration to the applicable series of Notes, which includes a consent payment equal to $30 per $1,000 principal amount of the tendered Notes. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Payment Deadline. The tender offers will expire at midnight, New York City time, on Aug. 2, 2007, unless extended or earlier terminated. Holders of Notes who tender their Notes after the Consent Payment Deadline and on or before the expiration date will be eligible to receive only the applicable tender offer consideration, which is the applicable total consideration minus the consent payment per $1,000 principal amount of Notes. The total consideration for each $1,000 principal amount of the Floating Rate Notes validly tendered and not withdrawn pursuant to the tender offer for such Notes is $1,030 and the total consideration for each $1,000 principal amount of the 2011 Notes validly tendered and not withdrawn pursuant to the tender offer for such Notes is $1,029.58. The total consideration for each $1,000 principal amount of the 2013 Notes validly tendered and not withdrawn pursuant to the tender offer for such Notes is the price equal to the sum of the present value, determined in accordance with standard market practice, on the scheduled initial payment date of $1,040, which is the initial redemption price for the 2013 Notes, on May 15, 2008, plus the present value on the scheduled initial payment date of any interest that would accrue from the last interest payment date prior to the scheduled initial payment date to May 15, 2008, less accrued and unpaid interest from the last interest payment date to the scheduled initial payment date. The present value of the 2013 Notes will be determined on the basis of a yield to such First Redemption Date equal to the sum of (x) the yield to maturity on the 3.75% U.S. Treasury Note due May 15, 2008, as calculated by Goldman, Sachs & Co. and Lehman Brothers Inc., in accordance with standard market practice, based on the bid-side price for such reference security as of 11:00 a.m., New York City time, on the Price Determination Date, and (y) the applicable spread of 50 basis points. The company expects that the Price Determination Date will be 11:00 a.m., New York City time, on July 20, 2007, unless extended by the company in its sole discretion. Holders of Notes that are accepted for payment will be paid accrued and unpaid interest up to, the applicable payment date for Notes purchased in the tender offer for such Notes. In connection with the tender offers, the company is soliciting consents to proposed amendments to the indentures governing Notes, which would eliminate substantially all of the restrictive covenants contained in the indentures and the Notes, eliminate certain events of default, modify covenants regarding mergers and consolidations, and modify or eliminate certain other provisions, including certain provisions relating to defeasance, contained in the indentures and the Notes. Holders may not tender their Notes without also delivering consents or deliver consents without also tendering their Notes. The company expects to pay for Notes that have been validly tendered and not withdrawn prior to the Consent Payment Deadline and that are accepted for payment, promptly following the date on which all conditions to the tender offers have been satisfied or waived. For Notes that have been validly tendered after the Consent Payment Deadline and that are accepted for payment, the company will make payment promptly after the tender offer expiration date. The tender offer and consent solicitation for each series of Notes is conditioned on the satisfaction or waiver of certain conditions including: -- the tender on or prior to the Consent Payment Deadline of Notes representing a majority of the principal amount of such Notes outstanding; -- the execution by the trustee of the supplemental indentures implementing the proposed amendments following receipt of the requisite consents; and -- all of the conditions precedent to the sale of PRIMEDIA Enthusiast Media Inc. satisfied or waived and the closing of the sale having occurred or occurring substantially concurrently with the first payment date. The company has retained Goldman, Sachs & Co. and Lehman Brothers Inc. to act as the Dealer Managers for the tender offers and Solicitation Agents for the consent solicitations. Questions regarding the tender offers and the consent solicitations should be directed to Goldman, Sachs & Co. at (877) 686-5059 (toll-free) or (212) 902-9077 (collect) or Lehman Brothers Inc. at (800) 438- 3242 (toll-free) or (212) 528-7581 (collect). Requests for documentation may be directed to Global Bondholder Services Corporation, the Information Agent, which can be contacted at (212) 430-3774 (for banks and brokers only) or (866) 924-2200 (for all others toll free). About PRIMEDIA Inc. Headquartered in New York City, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- is the parent company of Consumer Source Inc., a publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide, and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 60,000 locations. Consumer Source owns and operates leading websites including ApartmentGuide.com, AutoGuide.com, NewHomeGuide.com; and America's largest online single unit rental property business, comprised of RentClicks.com, RentalHouses.com, HomeRentalAds.com, and Rentals.com. * * * Moody's Investor Service assigned 'B2' senior secured debt and corporate family ratings to Primedia Inc. on Sept. 2005. R.J. GATORS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: R.J. Gators, Inc. 609 North Hepburn Avenue, Suite 103 Jupiter, Fl 33458 Bankruptcy Case No.: 07-14954 Type of business: The Debtors own and operates casual dining restaurants. See http://www.rjgators.com/ Debtor affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- R.J. Gators of Palm Beach Gardens, 07-14956 II, Inc. R.J. Gators of Vero Beach, Inc. 07-14957 R.J. Gators Franchise Systems, Inc. 07-14959 R.J. Gators of Okeechobee, Inc. 07-14960 R.J. Gators of Jupiter, Inc. 07-14961 R.J. Gators of Stuart, Inc. 07-14962 R.J. Gators of Boynton Beach, Inc. 07-14965 R.J. Gators of Fort Pierce, Inc. 07-14966 R.J. Gators Management, Inc. 07-14693 Chapter 11 Petition Date: June 26, 2007 Court: Southern District of Florida (West Palm Beach) Judge: Paul G Hyman, Jr. Debtors' Counsel: Bradley S. Shraiberg, Esq. Kluger, Peretz, Kaplan & Berlin, P.L. 2385 Northwest Executive Center, Drive 300 Boca Raton, FL 33431 Tel: (561) 961-1830 Estimated Assets Estimated Debts ---------------- --------------- R.J. Gators, Inc. $1 million to $1 million to $100 million $100 million R.J. Gators of Palm Beach $1 million to $1 million to Gardens, II, Inc. $100 million $100 million R.J. Gators of Vero Beach, $1 million to $1 million to Inc. $100 million $100 million R.J. Gators Franchise $1 million to $1 million to Systems, Inc. $100 million $100 million R.J. Gators of Okeechobee, $1 million to $1 million to Inc. $100 million $100 million R.J. Gators of Jupiter, $1 million to $1 million to Inc. $100 million $100 million R.J. Gators of Stuart, $1 million to $1 million to Inc. $100 million $100 million R.J. Gators of Boynton $1 million to $1 million to Beach, Inc. $100 million $100 million R.J. Gators of Fort $1 million to $1 million to Pierce, Inc. $100 million $100 million R.J. Gators Management, $1 million to $1 million to Inc. $100 million $100 million Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SYSCO trade debt $1,300,000 1999 Martin Luther King Boulevard Riviera Beach, FL 33404 Wayne Gould trade debt $275,000 527 Atanda Avenue Charlotte, NC 28206 S.V.I. Systems, Inc. trade debt $164,786 290 Florida Street Stuart, FL 34994 Florida Department of sales tax due $154,313 Revenue Jack Prickett rent due for $107,000 Stuart property Orix settlement $87,000 Herb Kahlert Boynton Beach rent $85,173 due Indian River Mall RENT trade debt $70,236 Patrick Keonig rent due for Palm $68,068 Beach Gardens property R.S.M. McGladrey trade debt $48,565 Hixson, Marin, DeSanctis trade debt $29,200 & Co., P.A. Jon Parr Vero Beach rent $24,400 due Okeechobee County Tax trade debt $22,344 Collector F.C.C.I. settlement $19,111 Fradley Law Firm, P.A. trade debt $18,533 Piper Rudnick trade debt $15,299 Hodges, Avrutis, trade debt $12,778 Pretschner & Foeller, P.A. Lyon Financial Services, settlement (Lyon $12,735 Inc. dba U.S. Bancorp versus R.J. Gators) Wynne Building Corporation trade debt $10,469 Toshiba Business Solutions trade debt $9,819 RAG SHOPS: DJM Realty Tapped to Sell All 61 Location Leases ----------------------------------------------------------- Rag Shops has sold the Designation Rights to sell all 61 national Rag Shops location leases to DJM Realty. "We are excited to offer these marquee leases ranging from 7,000 to 20,000 square feet to retailers nationally," said Andy Graiser, Co-President of DJM Realty. These leases are available for sale in freestanding, strip center and mall locations in: Connecticut, Florida, New Jersey, New York and Pennsylvania. Sun Capital Partners Inc., recently identified the need to close the Rag Shops business due to the troubled and ever changing hobby industry. The U.S. Bankruptcy Court for the Eastern District of New York has approved Rag Shops to shut the business down. "We purchased the Designation Rights because most of the leases throughout the portfolio have below market rents, are located in centers that traditionally have been very difficult to get into and are very desirable to retailers," said Michael Jerbich, Senior Managing Director of DJM Realty handling the real estate disposition of Rag Shops. DJM plans to conduct an auction to sell each lease individually in late July. "Given the value in the leases and the amount of interest that we have already received, interested parties must act immediately," said Michael Jerbich. For more information regarding the disposition of these leaseholds for Rag Shops please contact: Michael Jerbich DJM Realty Tel: (312) 928-1900 Property information can be obtained at http://www.djmrealty.com/ About DJM DJM Realty -- http://www.djmrealty.com/-- a Gordon Brothers Group company, specializes in real estate dispositions, acquisitions, capital solutions and valuations. DJM Realty services the world's most recognizable brands such as Big Lots, Borders, CVS, Pep Boys, Toys R Us, West Marine and Yum Brands. DJM Realty was founded in 1992 and is headquartered in New York with offices in Los Angeles, Boston and Chicago. About Rag Shops Rag Shops operated 60-plus stores offering value-priced crafts, fabrics, and related merchandise. Founded in 1963 Rag Shops had expanded the business by moving into markets adjacent to established operations. Rag Shops had stores in Connecticut, Florida, New Jersey, New York, and Pennsylvania. Rag Shops was acquired by an affiliate of Sun Capital for $11.5 million in late- 2004. The company and its affiliates filed for chapter 11 protection on May 2, 2007 (Bankr. E.D.N.Y. Case No. 07-42283). Christoper K. Kiplok, Esq., and James W. Giddens, Esq., at Hughes Hubbard & Reed LLP, represent the Debtors. At March 3, 2007, the company disclosed total assets of $35,301,000 and total debts of $52,532,000. RAYMOND KADALEC: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Raymond M. Kadalec Carene S. Kadalec 5 Highfield Court Cockeysville, MD 21030 Bankruptcy Case No.: 07-15606 Chapter 11 Petition Date: June 19, 2007 Court: District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: Howard M. Heneson, Esq. 810 Glen Eagles Court, Suite 301 Towson, MD 21286 Tel: (410) 494-8388 Fax: (410) 494-8389 Total Assets: $856,110 Total Debts: $1,178,126 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fremont Investment & Loan 5 Highfield $1,060,239 P.O. Box 25100 Court, Santa Ana, CA 92799 Cockeysville, MD; value of security: $800,000; value of senior lien: $846,081 Michael A. Merrill, Inc. miscellaneous $20,400 2045 York Road jewelry; value of Lutherville Timonium, MD security: $17,000 21093 G.M.A.C. 2002 Cadillac $17,315 P.O. Box 8140 Deville; value of Cockeysville, MD 21030 security: $7,400 H.F.C. credit $8,671 Juniper Bank credit $6,893 Capital One credit $5,902 Direct Merchants Bank credit $5,448 H.S.B.C. credit $5,233 Capital One credit $3,608 Baltimore County Budget & 5 Highfield $3,478 Court, Cockeysville, MD; value of security: $800,000; value of senior lien: $1,060,239 Neiman Marcus credit $2,980 Realty Title overpayment $2,513 FACTS Management Co. continuing $2,503 education United Healthcare insurance premium $2,370 Overlook Homeowners 5 Highfield $1,000 Court, Cockeysville, MD; value of security: $800,000; value of senior lien: $1,060,239 Northwest Hospital Center medical for child $725 Target credit $593 Comcast cable $474 REAL ESTATE: Moody's Assigns Low-B Ratings to Six Certificates -------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to securities issued by Real Estate Asset Liquidity Trust Series 2007-2. The provisional ratings issued on June 18, 2007 have been replaced with these definitive ratings: -- Class A-1, $144,000,000, rated Aaa -- Class A-2, $157,858,000, rated Aaa -- Class A-J, $32,544,000, rated Aaa -- Class B, $8,018,000, rated Aa2 -- Class C, $9,905,000, rated A2 -- Class D-1, $1,000, rated Baa2 -- Class D-2, $8,960,000, rated Baa2 -- Class E-1, $1,000, rated Baa3 -- Class E-2, $3,300,000, rated Baa3 -- Class F, $2,924,000, rated Ba1 -- Class G, $1,792,000, rated Ba2 -- Class H, $943,000, rated Ba3 -- Class J, $943,000, rated B1 -- Class K, $471,000, rated B2 -- Class L, $1,132,000, rated B3 -- Class XP-1, $1,000*, rated Aaa -- Class XP-2, $353,250,000*, rated Aaa -- Class XC-1, $1,000*, rated Aaa -- Class XC-2, $377,322,744*, rated Aaa * Approximate notional amount SCHOONER TRUST: Moody's Assigns Low-B Ratings to Six Certificates ----------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to securities issued by Schooner Trust Series 2007-8. The provisional ratings issued on June 18, 2007 have been replaced with these definitive ratings: -- Class A-1, $203,610,000, rated Aaa -- Class A-2, $210,900,000, rated Aaa -- Class A-J, $42,750,000, rated Aaa -- Class B, $10,363,000, rated Aa2 -- Class C, $12,954,000, rated A2 -- Class D, $13,601,305, rated Baa2 -- Class E, $3,886,087, rated Baa3 -- Class F, $4,533,768, rated Ba1 -- Class G, $2,590,725, rated Ba2 -- Class H, $1,295,362, rated Ba3 -- Class J, $1,943,044, rated B1 -- Class K, $1,295,362, rated B2 -- Class L, $2,590,725, rated B3 -- Class XP, $501,029,509*, rated Aaa -- Class XC, $518,144,935*, rated Aaa * Approximate notional amount SPINNAKER CAPITAL: Moody's Rates $200 Million Series 1 Notes at B1 ------------------------------------------------------------------ Moody's Investors Service assigned ratings to two series of notes issued by Spinnaker Capital Ltd., a special purpose Cayman Islands exempted company, for the benefit of Swiss Reinsurance Company. The ratings assigned include B1 to the $200 million of Series 1 Principal At-Risk Variable Rate Notes and Ba2 to the $130.2 million of Series 2 Principal At-Risk Variable Rate Notes. The Series 1 Notes matured on June 15, 2008, and the Series 2 Notes on June 20, 2008. Investors in the notes effectively provide one year of index-based coverage to Swiss Reinsurance Company, limited to $200 million against potential cumulative personal lines insured industry losses from U.S. hurricanes in covered areas outside of Florida and $130.2 million against potential cumulative personal lines insured industry losses linked to Florida hurricanes. Moody's ratings address the ultimate cash receipt of all required interest and principal payments as provided by the governing documents, and are based on the expected loss posed to the note holders relative to the promise of receiving the present value of such payments. The ratings derive from Moody's analysis of the probability of occurrence of qualifying events, their timing, and the severity of losses experienced by investors should those events occur during the risk period. Moody's review of the transaction has included (i) extensive review of the technical basis, methodology, and historical data used to develop the probabilistic risk model used by Risk Management Solutions, Inc. for the analysis of potential losses and (ii) sensitivity analysis of critical parameters to the model. This review, together with a detailed analysis of the transaction's legal structure and the financial strength of the various parties to the transaction, provided Moody's with sufficient comfort that the resulting ratings adequately capture the risk to investors in these securities. STOLLE MACHINERY: Loan Add-On Prompts S&P to Revise Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services revised its bank loan ratings on Stolle Machinery Company's first-lien term loan and revolving credit facility to 'BB-' from 'BB'. In addition, the recovery ratings were revised to '2' from '1'. The ratings changes follow the company's proposed $100 million add-on to its first-lien term loan amid the company's good recent operating performance. Proceeds from the upsized first-lien term loan and excess cash will be used repay the company's $50 million second-lien term loan and to pay a dividend. S&P will withdraw its ratings on Stolle's second-lien loan upon the closing of the proposed transaction. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on the Centennial, Colorado-based can-making equipment manufacturer. The outlook is stable. STRUCTURED ASSET: Moody's Junks Rating on 2002-HF1 Class B Certs. ----------------------------------------------------------------- Moody's Investors Service downgraded five certificates from two transactions issued by Structured Asset Securities Corporation, Series 2002-HF1 and 2005-AR1. The transactions consist of subprime first-lien adjustable- and fixed-rate loans. The five mezzanine and subordinate certificates from the transactions have been downgraded because existing credit enhancement levels are low given the current projected losses on the underlying pools. The pools of mortgages have built up a large delinquency pipeline and future loss could cause a significant erosion of the overcollateralization. The pools in the 2002-HF1 transaction have $636,701 of OC which is below the 50 bp floor as of the June 25, 2007 reporting date. The pools in the Series 2005-AR1 transaction have $9,177,645 of OC which is below the target of $15,747,108, as of the June 25, 2007 reporting date. Complete rating action is: Issuer: Structured Asset Securities Corporation Downgrades: -- Series 2002-HF1; Class B, downgraded to Caa2 from B1; -- Series 2005-AR1; Class M8, downgraded to Baa3 from Baa2; -- Series 2005-AR1, Class M9, downgraded to Ba1 from Baa3; -- Series 2005-AR1; Class B1, downgraded to Ba3 from Ba1; -- Series 2005-AR1, Class B2, downgraded to B3 from B1. STRUCTURED ASSET: S&P Cuts Ratings on Five Certificates to B ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on six classes of certificates from five Structured Asset Investment Loan Trust transactions. Of the six lowered ratings, five remain on CreditWatch with negative implications and one was removed from CreditWatch negative. In addition, S&P placed the ratings on three additional classes from the same transactions on CreditWatch with negative implications. Lastly, S&P affirmed its ratings on the remaining classes from the five SAIL deals. The downgrades and negative CreditWatch placements reflect continued adverse collateral performance that has caused realized losses to generally exceed monthly excess interest cash flow. This trend has compromised overcollateralization, which is now at least 45% below their targets for the downgraded transactions. As of the June 2007 remittance report, cumulative realized losses were as follows (series: percent of the original pool principal balances, amount): -- 2004-3: 1.03%, $23,302,051; -- 2004-6: 0.73%, $16,909,936; -- 2004-BNC2: 0.64%, $6,814,173; -- 2005-HE1: 1.29%, $22,208,356; and -- 2005-HE2: 1.49% $12,511,276. In addition, all five series with lowered ratings have sizable loan amounts that are severely delinquent (90-plus days, foreclosures, and REOs), which strongly indicates that the unfavorable performance trends are likely to continue. The severe delinquencies as a percent of the current pool principal balances relative to O/C are as follows: -- 2004-3: 12.87%; $45,638,120, versus $4,088,649 O/C; -- 2004-6: 12.32%; $50,045,222, versus $6,433,079 O/C; -- 2004-BNC2: 17.17%; $37,318,598, versus $2,641,282 O/C; -- 2005-HE1: 19.08%; $133,538,396, versus $4,557,601 O/C; and -- 2005-HE2: 16.38%; $67,656,171, versus $520,177 O/C. S&P will continue to closely monitor the performance of the certificates with ratings on CreditWatch. If monthly losses continue to compromise O/C, S&P will take additional negative rating actions. Conversely, if pool performance improves and credit support is not further eroded, S&P will affirm the ratings and remove them from CreditWatch. S&P removed the rating on class B3 from series 2005-HE2 from CreditWatch negative because it was lowered to 'CCC'. According to Standard & Poor's surveillance practices, classes of certificates or notes from RMBS transactions with ratings lower than 'B-' are no longer eligible to be on CreditWatch negative. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings, despite the performance trend. The collateral consists of subprime, fixed- or adjustable-rate, first- or second-lien mortgage loans secured by one- to four- family residential properties. Ratings Lowered and Remaining on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-3 B B/Watch Neg BB+/Watch Neg 2004-6 B B/Watch Neg BBB-/Watch Neg 2004-BNC2 M7 B/Watch Neg BBB+/Watch Neg 2005-HE1 B3 B/Watch Neg BB+/Watch Neg 2005-HE2 B2 B/Watch Neg BB/Watch Neg Rating Lowered and Removed from Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2005-HE2 B3 CCC B/Watch Neg Ratings Placed on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-3 M5 BBB/Watch Neg BBB 2004-3 M6 BBB-/Watch Neg BBB- 2005-HE1 B2 BBB-/Watch Neg BBB- Ratings Affirmed Structured Asset Investment Loan Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-3 A3 AAA 2004-3 M1 AA 2004-3 M2 A 2004-3 M3 A- 2004-3 M4 BBB+ 2004-6 A3, A-SIO AAA 2004-6 M1 AA 2004-6 M2 A 2004-6 M3 A- 2004-6 M4 BBB+ 2004-6 M5 BBB 2004-6 M6 BBB- 2004-BNC2 A2, A5, A6 AAA 2004-BNC2 M1 AA+ 2004-BNC2 M2 AA 2004-BNC2 M3 AA- 2004-BNC2 M4 A+ 2004-BNC2 M5 A 2004-BNC2 M6 A- 2005-HE1 A2, A4, A5, A6, A7, A8 AAA 2005-HE1 M1 AA+ 2005-HE1 M2 AA 2005-HE1 M3 AA- 2005-HE1 M4 A+ 2005-HE1 M5 A 2005-HE1 M6 A- 2005-HE1 M7 BBB+ 2005-HE1 M8, M9 BBB 2005-HE1 B1 BBB- 2005-HE2 A2, A3 AAA 2005-HE2 M1 AA+ 2005-HE2 M2 AA 2005-HE2 M3 AA- 2005-HE2 M4 A+ 2005-HE2 M5 A 2005-HE2 M6 A- 2005-HE2 M7 BBB+ 2005-HE2 M8, M9 BBB 2005-HE2 M10 BBB- 2005-HE2 B1 BB+ SYNIVERSE TECHNOLOGIES: S&P Affirms BB- Rating w/ Stable Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating, along with its stable outlook, and its 'B' senior subordinated debt rating on Tampa, Florida-based Syniverse Technologies Inc. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '2' recovery rating to Syniverse's proposed $489 million senior secured bank facility. The bank loan rating, which is one notch above the corporate credit rating, along with the '2' recovery rating, reflect our expectation for substantial (70%-90%) recovery of principal by creditors in the event of a payment default. Proceeds from the proposed bank facility will be used to fund Syniverse's acquisition of the wireless clearing and financial settlement business of Billing Services Group Ltd., and to refinance existing bank debt at both Syniverse and BSG. This transaction remains contingent upon European regulatory approval, which may delay the timing of its closing. "The ratings affirmation reflects our positive assessment of the strategic value of this acquisition, combined with Syniverse's track record of debt repayment," said Standard & Poor's credit analyst Ben Bubeck. Pro forma operating lease-adjusted total debt to EBITDA is estimated to be about 4x following the completion of this transaction, which limits Syniverse's capacity for additional debt-financed acquisitions within the current rating and outlook over the next several quarters, as integration efforts are initiated and anticipated synergies begin to be realized. The ratings on Syniverse reflect the company's presence in a niche market in which the company must remain at the forefront of new wireless protocols to maintain a competitive advantage; its reliance on growth in roaming transactions in a consolidating wireless telecommunications market; and an aggressive acquisition strategy. These factors partly are offset by Syniverse's recurring revenues and good profitability, which drive moderate free operating cash flow generation. TIMOTHY SHELTON: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Timothy D. Shelton 868 County Road 108 Rogersville, AL 35652 Bankruptcy Case No.: 07-81534 Chapter 11 Petition Date: June 19, 2007 Court: Northern District of California (Decatur) Judge: Jack Caddell Debtor's Counsel: Kevin D. Heard, Esq. Heard & Associates, L.L.C. 307 Clinton Avenue West, Suite 310 Huntsville, AL 35801 Tel: (256) 535-0817 Fax: (256) 535-0818 Total Assets: $1,754 Total Debts: $1,679,489 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lauderdale County Teachers $332,316 Credit Union 103 Magnum Street Florence, AL 35630 Fieldale Farms Corp. real estate $300,000 P.O. Box 558 Baldwin, GA 30511 Anthony Cosby payments to Anthony $157,000 P.O. Box 583 Cosby for Carey and Rogersville, AL 35652 Judy Green Note on two real estates payments to $77,951 Anthony Cosby for Bank of Frankewing Note Regions Bank equipment $167,495 Fed Land Bank real estate $167,384 Ruth Carroll one steel head $125,000 bottling machine serial number 58U250100111999 Stuart Fuller $71,963 Citizens National Bank real estate $33,830 Mary Shelton payments to Mary $23,673 Shelton for Bank Independent Note truck/trailer $18,092 Listerhill Credit Union 2003 Fort Truck $29,594 F450 Charles Kim Mitchell payments to Charles $18,275 Mitchell for Citizens Bank Note Jerry Huckaba payments to Jerry $9,305 Huckaba for CitiFinancial Note H.F.C. open account $8,998 Gerald McGee 2000 Chevrolet Van $6,309 Bank Independent equipment $5,362 American General Finance equipment $5,147 Bank of America open account $3,841 TWEETER HOME: U.S. Trustee Picks Five-Member Creditors' Panel ------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Kelly Beaudin Stapleton, the United States Trustee for Region 3, appointed five creditors to the Official Committee of Unsecured Creditors in the Chapter 11 case of Tweeter Home Entertainment Group Inc.: 1. Polk Audio, Inc. Attn: Robert A. Tryson 5601 Metro Drive Baltimore, Maryland 21215 Tel: (410)764-5247 2. Simon Property Group, Inc. Attn: Ronald M. Tucker, Vice President 225 W. Washington Street Indianapolis, Indiana 46204 Tel: (317)263-2346 Fax: (317)263-7901 3. Ryder Truck Rental, Inc. Attn: Kevin P. Sauntry 6000 Windward Parkway Alpharetta, Georgia 30005 Tel: (770)569-6511 Fax: (770)569-6712 4. The Quest Group Attn: Michael McConnell 2621 White Road Irvine, California 92614 Tel: (949)790-6033 Fax: (949)585-0444 5. OmniMount Systems, Inc. Attn: Andrew W. Prete 8201 South 48th Street Phoenix, Arizona 85044 Tel: (480)829-8000 Fax: (480)829-9000 The Committee has retained Otterbourg, Steindler, Houston & Rosen, PC, as its lead counsel; Pachulski Stang Ziehl Young Jones & Weintraub, LLP, as its Delaware counsel; and BDO Seidman LLP as its financial advisors. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case No: 07-10787 through 07-10796). Gregg M. Galardi, Esq. and Mark L. Desgrosseilliers, Esq. at Skadden, Arps, Slate, Meagher & Flom, L.L.P. represent the Debtors in their restructuring efforts. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan expires on Oct. 9, 2007. Tweeter Bankruptcy News, Issue No. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). TWEETER HOME: Court Okays Kurtzman Carson as Claims Agent --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware permitted Tweeter Home Entertainment Group Inc. and its debtor-affiliates to employ Kurtzman Carson Consultants, LLC as their claims, noticing and balloting agent, as well as its solicitation and disbursing agent. KCC has provided substantial service to several bankruptcy cases like Calpine Corp., Collins & Aikman Corp., Delphi Corp., FLYi, Inc., Interstate Bakeries Corp., DURA Auto. Sys., Inc., Amtrol Holdings, Inc., Radnor Holdings, Inc., Werner Holding Co., Inc., and ResMae Corp. Gregory W. Hunt, Tweeter's senior vice president and chief financial officer declares that KCC is well qualified to assist the Debtors' Chapter 11 case in terms of noticing, claims processing, and other administrative tasks. He further states that KCC has performed prepetition professional services to the Debtors. As claims, noticing, and balloting agent, KCC will: (a) assist the Debtors in preparing and filing Schedules of Assets and Liabilities and Statements of Financial Affairs; (b) prepare, serve, and assist in the publication of Chapter 11 notices including, notice of meeting pursuant to Section 341(a) of the Bankruptcy Code, notice of claims bar date, notice of objection to claims and notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; (c) file an affidavit of service with the office of the Clerk of the Court; (d) maintain copies of all proofs of claim and proofs of interest filed; (e) maintain official claims registers; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit a copy of the claims registers to the Clerk's Office on a weekly basis, unless otherwise requested; (h) maintain an updated mailing list for all entities that have filed proofs of claim or proofs of interest; (i) provide public access for examination of copies of the proofs of claim or proofs of interest; (j) create and maintain a public access website containing relevant case information; (k) record all claims transfers pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy; (l) assist in claims reconciliation and resolution; (m) comply with federal, state, municipal and local statutes, ordinances, rules, regulations, orders, and other requirements; (n) assign temporary employees to process claims, as needed; (o) comply with conditions and requirements prescribed by the Clerk's Office or the Court; (p) provide balloting and solicitation services, including preparing ballots, producing personalized ballots, and tabulating creditor ballots daily; and (q) provide other claims processing, noticing, balloting, and related administrative services. KCC will charge the Debtors for its services according to its fee structure, and will receive a $15,000 "evergreen" retainer. KCC's fees and expenses will be treated as an administrative expense in the Debtors' Chapter 11 estates. To the best of the Debtors' knowledge, KCC is a "disinterested person" as the term is defined in Bankruptcy Code Section 101(14). Christopher R. Schepper, vice president of restructuring for KCC, assures the Court that neither KCC nor its employees has any adverse interest to the Debtors' estates. He adds that KCC will comply with all requests of the Clerk of Court, and the guidelines promulgated by the Judicial Conference of the United States for implementation of 28 U.S.C. Section 156(c). About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case No: 07-10787 through 07-10796). Gregg M. Galardi, Esq. and Mark L. Desgrosseilliers, Esq. at Skadden, Arps, Slate, Meagher & Flom, L.L.P. represent the Debtors in their restructuring efforts. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan expires on Oct. 9, 2007. Tweeter Bankruptcy News, Issue No. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). UNIVERSAL HOSP: Engages Deloitte & Touche as New Accountant ----------------------------------------------------------- Universal Hospital Services Inc. engaged Deloitte & Touche LLP as its new independent registered public accounting firm. During the fiscal years ended Dec. 31, 2005, and 2006 and through June 19, 2007, the company has not consulted with Deloitte regarding issues of the type described in Item 304(a)(2) of Regulation S-K. About Universal Hospital Services Universal Hospital Services Inc. -- http://www.uhs.com/-- is a medical equipment lifecycle services company. UHS offers comprehensive solutions that maximize utilization, increase productivity and support optimal patient care resulting in capital and operational efficiencies. UHS currently operates through more than 75 offices, serving customers in all 50 states and the District of Columbia. For the 12 months ended Dec. 31, 2006 the company reported revenues of about $225 million. * * * As reported in the Troubled Company Reporter on May 16, 2007, Moody's Investors Service assigned ratings to UHS Merger Sub Inc. in connection with the pending leveraged buyout of Universal Hospital Services Inc. Moody's assigned a B2 Corporate Family Rating, a B3 rating to the proposed $230 million second lien floating rate notes and a B3 rating to the proposed $230 million second lien toggle notes. The proposed financing also includes a $135 million senior secured revolving credit facility that will not be rated by Moody's. The rating outlook for UHSM is stable. VARIETAL DISTRIBUTION: Reports Results of Notes Tender Offer ------------------------------------------------------------ Varietal Distribution Merger Sub Inc., formerly VWR International Inc., received tenders and consents, as of the consent payment deadline set on June 12, 2007, with respect to: -- $318,135,000 aggregate principal amount, or 99.42% of the total outstanding 8% senior subordinated notes due 2014 issued by VWR; -- $200,000,000 aggregate principal amount, or 100% of the total outstanding 6-7/8% senior notes due 2012 issued by VWR; -- $324,530,000 aggregate principal amount, or 92.72% of the total outstanding senior floating rate notes due 2011 issued by CDRV Investors Inc.; and -- $481,000,000 aggregate principal amount, or 100% of the total outstanding 9-5/8% senior discount notes due 2015 issued by CDRV Investment Holdings Corporation. Tender offers and consent solicitations in connection with its proposed acquisition of CDRV Investors expired midnight, New York City time, on June 28, 2007. Holders that validly tendered their notes and validly delivered consent prior to 5 p.m., New York City time, on June 12, 2007, will be entitled to receive the total consideration for each applicable series of notes. Holders that validly tendered their notes after the consent payment deadline and prior to the expiration time will be entitled to receive the tender offer consideration for each applicable series of notes. The table below sets the total consideration and tender offer consideration for the notes under the terms of the tender offers, assuming a June 29, 2007, payment date. Tender Offer Total Consent Tender Offer Notes CUSIP No. Yield Consideration Payment Consideration ---- --------- ----- ------------- ------- ------------- 8% Senior Sub. Notes due 2014 918437AD6 5.519% $1,077.99 $30 $1,047.99 6-7/8% Sr. Notes due 2012 918437AB0 5.56% $1,042.88 $30 $1,012.88 Sr. Fltng Rate Notes due 2011 12513BAC4 N/A $1,000.00 $30 $970.00 9-5/8% Sr. Discount Notes due 2015 12513BAB6 5.523% $914.39 $30 $884.39 The total consideration and tender offer consideration for the floating rate notes were specified in the offer to purchase and consent solicitation statement dated May 30, 2007, and remain unchanged. Additionally, holders with valid tenders will be paid accrued and unpaid interest from the last interest payment date on the notes, to, but not including, the payment date, payable on the payment date. Each issuer has executed supplemental indentures with Wells Fargo Bank, N.A., as trustee, effectuating proposed amendments to the indentures governing each series of notes, as described in the offer to purchase. The supplemental indentures will not become effective until the acceptance of the notes for purchase by the purchaser pursuant to the terms and conditions of the offer to purchase. The tender offers and consent solicitations are being made in connection with the acquisition. The purchaser expects to finance the tender offers using a portion of the net proceeds of the financing transactions related to the acquisition, including borrowings under a new senior secured credit facility and the issuance of new senior notes and senior subordinated notes. The purchaser expects the acquisition to close on June 29, 2007. The purchaser's obligation to accept for purchase, and to pay for, any series of notes validly tendered in the tender offers is subject to the satisfaction of certain conditions including: (i) there being validly tendered and not withdrawn at least a majority of the aggregate principal amount of the notes of such series, the receipt of the requisite consents necessary to amend the applicable indenture relating to such series of notes; and (ii) the substantially concurrent consummation of the acquisition and the completion of the related financing transactions, resulting in the receipt by the purchaser of proceeds in an amount sufficient to refinance indebtedness of CDRV Investors that is required to be repaid pursuant to the terms of the merger agreement, each as described in more detail in the offer to purchase. The purchaser has retained Goldman, Sachs & Co. to serve as dealer manager and solicitation agent and D.F. King & Co., Inc. to serve as information agent and depositary for the tender offers and consent solicitations. Requests for documents may be directed to: D.F. King & Co., Inc. Telephone: (800) 431- 9643 (toll free) (212) 269-5550 (collect) Questions regarding the tender offers and consent solicitations should be directed to: Goldman, Sachs & Co. Telephone: (800) 828-3182 (toll free) (212) 357-0775 (collect) This announcement is not an offer to purchase, nor a solicitation of an offer to purchase, or a solicitation of tenders or consents with respect to, any notes. The tender offer and consent solicitation are being made solely pursuant to the offer to purchase. About Varietal Distribution Headquartered in West Chester, Pennsylvania, Varietal Distribution Merger Sub, Inc. fka VWR International Inc. -- http://www.vwr.com -- is engaged in the distribution of scientific products. It serves more than 250,000 customers in the life science, industrial, governmental, health care and educational markets, and also offers production supplies and services for electronic and pharmaceutical production. The company offers more than 750,000 products, from more than 5,000 manufacturers, to over 250,000 customers throughout North America and Europe. In Europe, VWR International maintains operations in Austria, Belgium, Sweden, Ireland, Portugal, Italy, Germany and the United Kingdom. * * * As reported in the Troubled Company Reporter on June 11, 2007, Moody's Investors Service assigned a B3 corporate family rating to Varietal Distribution Merger Sub Inc., formerly VWR International Inc. Moody's will be withdrawing ratings assigned to VWR International Inc., CDRV Investors Inc. and CDRV Investment Holdings Corporation. The ratings outlook is stable. VARIETAL DISTRIBUTION: Inks Pact to Buy Bie & Berntsen in Cash --------------------------------------1----------------------- Varietal Distribution Merger Sub Inc., formerly VWR International Inc., through one of its indirect, wholly owned subsidiaries, entered into a definitive agreement to acquire Bie & Berntsen A-S. The transaction is expected to be completed in July 2007, and will be funded with available cash. The closing of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals. About Bie & Berntsen Bie & Berntsen distributes laboratory equipment, chemicals and consumables to customers in the pharmaceutical, biotech, healthcare and environmental sectors in Denmark. Bie & Berntsen also offers services, including technical training and consultancy services, product servicing, calibration and repair. Bie & Bernsten had revenues of about US$27 million for the year ended Dec. 31, 2006, and has about 90 employees, all of whom are based in Denmark. About Varietal Distribution Headquartered in West Chester, Pennsylvania, Varietal Distribution Merger Sub, Inc. fka VWR International -- http://www.vwr.com-- is engaged in the distribution of scientific products. It serves more than 250,000 customers in the life science, industrial, governmental, health care and educational markets, and also offers production supplies and services for electronic and pharmaceutical production. The company offers more than 750,000 products, from more than 5,000 manufacturers, to over 250,000 customers throughout North America and Europe. In Europe, VWR International maintains operations in Austria, Belgium, Sweden, Ireland, Portugal, Italy, Germany and the United Kingdom. * * * As reported in the Troubled Company Reporter on June 11, 2007, Moody's Investors Service assigned a B3 corporate family rating to Varietal Distribution Merger Sub Inc., formerly VWR International Inc. Moody's will be withdrawing ratings assigned to VWR International Inc., CDRV Investors Inc. and CDRV Investment Holdings Corporation. The ratings outlook is stable. VENOCO INC: Prices 6.1 Million Shares at $18.50 per Share --------------------------------------------------------- Venoco Inc. priced its public offering of 6.1 million shares of its common stock at a price to the public of $18.50 per share. The 600,000 secondary shares were withdrawn from the offering. Venoco estimates that the net proceeds from its sale of the shares in the offering will be about $108 million, after deducting underwriting discounts and commissions and estimated expenses. Venoco expects the issuance, delivery and settlement of shares to occur on July 2, 2007, subject to customary closing conditions. The underwriters will have the option to purchase up to an aggregate of 915,000 additional shares of common stock from the company 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. are acting as Joint Book-Running Managers for the offering. Copies of the prospectus may be obtained from: Credit Suisse Securities (USA) LLC Prospectus Department One Madison Avenue, New York, NY 10010 Telephone: 1-800-221-1037 or Lehman Brothers c/o Broadridge Prospectus Fulfillment 1155 Long Island Avenue Edgewood, NY 11717 Fax: (631) 254-7140) E-mail: Qiana.Smith@Broadridge.com About Venoco Inc. 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. At the same time, 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. VISTAR CORP: Moody's Places Corporate Family Rating at B2 --------------------------------------------------------- Moody's assigned first time ratings to Vistar Corporation with a stable rating outlook. The ratings are conditioned upon review of final documentation. These ratings are assigned: -- Corporate family rating at B2; -- Probability-of-default rating at B2; -- $90 million senior secured term loan at B3; (LGD5-74.93%). The ratings were assigned in connection with the proposed recapitalization of Vistar by Blackstone Group Wellspring - Capital, and existing management in a transaction in a transaction valued at $420 million including fees and expenses. The transaction will be funded with the proceeds of an unrated $350 million 6 year first secured asset based revolver - ($180million funded at close), the rated $90 million 7 year secured term loan $100 million equity contribution from Blackstone, $33 million re- (investment by Wellspring, and $17 million rollover of equity by management. The asset based revolver has a first lien on the accounts receivable, inventory, and real estate owned by the company, and a second lien on all other tangible and intangible assets. The $90 million term loan has a second lien on the asset based loan collateral and a first lien on all other assets. Blackstone will own 67% of Vistar, Wellspring will continue to own 22% of Vistar, and management will own 11%. The B2 corporate family rating of Vistar is constrained by the uneven performance over the last few years while the current management has worked to make major changes that have led to improved recent performance. The B3 rating on the $90 million senior secured term loan reflects it position relative to the asset based facility. Previous management had tried to run the two different segments of Vistar as one business under one operating management which led to poor execution and poor results. In 2005, Vistar acquired Roma , the second largest independent pizza and Italian food distributor. The company separated the operations of VSM and Roma which allowed them to focus on the operations of these different businesses. Implementing this changed business model, and the integration of Roma, are nearly complete. The rating is also constrained by the increased leverage, reduced cash coverages, and the expectations of share holder friendly financial policies given the 89% ownership of financial sponsors. Offsetting these constraint are Vistar's national foot print, its lack of seasonality, its experienced management team, and the changing mix of their business to more private label, more "street" business, and re4ducing their level of dependence on lower margin national chain accounts. The stable outlook reflects Moody's expectation that the company will maintain adequate liquidity from its $350 million asset based revolving credit facility and incorporates the expectation that operating margins will remain below industry peer group for the next eighteen to twenty four months. Vistar Corporation, headquartered in Centennial, Colorado,, is a food and food products distribution company specializing in Italian and pizza food products distribution through its Roma Foods Services division and through its Specialty Markets Division, which distributes product to the vending office coffee service, theater, concessions, fundraising, and specialty retail industries. The company operates 36 distribution centers across the United States. Revenues for the fiscal year ended February 24, 2007 were about $2.9 billion. WAMU ASSET: Moody's Rates Class B Certificates at Ba1 ----------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by WaMu Asset-Backed Certificates, WaMu Series 2007-HE4 Trust, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Long Beach originated adjustable- rate (82.02%) and fixed-rate (17.98%) subprime mortgage loans. The ratings are based primarily on the credit quality of the loans and on protection against credit losses provided by a lender paid mortgage insurance by Radian Guaranty Inc. The ratings also benefit from subordination, an interest rate swap agreement, excess interest and overcollateralization. Moody's expects collateral losses to range from 4.95% to 5.45%. Washington Mutual Bank will service the loans. Moody's has assigned Washington Mutual Bank its servicer quality rating of SQ2 as a servicer of subprime first lien mortgage loans. The complete rating actions are: Issuer: WaMu Asset-Backed Certificates, WaMu Series 2007-HE4 Trust -- Cl. I-A, Assigned Aaa -- Cl. II-A-1, Assigned Aaa -- Cl. II-A-2, Assigned Aaa -- Cl. II-A-3, Assigned Aaa -- Cl. II-A-4, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned Aa3 -- Cl. M-4, Assigned A1 -- Cl. M-5, Assigned A2 -- Cl. M-6, Assigned A3 -- Cl. M-7, Assigned Baa1 -- Cl. M-8, Assigned Baa2 -- Cl.M-9, Assigned Baa3 -- Cl. B, Assigned Ba1 WELLS FARGO: Fitch Rates $5.656 Mil. Class B-5 Certificates at B ---------------------------------------------------------------- Fitch Ratings has assigned Wells Fargo mortgage asset-backed pass- through certificates, series 2007-PA3, these ratings: -- $1,341,800,327 classes I-A-1 to I-A-4, I-A-R, II-A-1 to II-A-4, III-A-1 to III-A-7, IV-A-1 to IV-A-3, V-A-1, V-A-2, VI-A-1, VI-A-IO, A-IO and A-PO (senior certificates) 'AAA'; -- $34,641,000 class B-1 'AA'; -- $12,725,000 class B-2 'A'; -- $9,191,000 class B-3 'BBB'; -- $5,655,000 class B-4 'BB'; -- $5,656,000 class B-5 'B'. The 'AAA' ratings on the senior certificates reflect the 5.1% subordination provided by the 2.45% class B-1, the 0.9% class B-2, the 0.65% class B-3, the 0.4% privately offered class B-4, the 0.4% privately offered class B-5, and the 0.3% privately offered class B-6. The ratings on the class B-1, B-2, B-3, B-4, and B-5 certificates are based on their respective subordination. Class B-6 is not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the primary servicing capabilities of Wells Fargo Bank, N.A., currently rated 'RPS1' by Fitch. The certificates represent ownership interests in a trust fund that consists of six pools of mortgage loans. The senior certificates whose class designation begins with I, II, III, IV, V and VI, correspond to pools I, II, III, IV, V and VI, respectively. In certain limited circumstances, principal and interest collected from loan group I, II, III, IV, V or VI may be used to pay principal or interest, or both, to the senior certificates related to the other of those five loan groups. The transaction consists of 4,140 fully amortizing, fixed- interest rate, first lien mortgage loans, with remaining weighted average term to maturity of approximately 354 months. The aggregate unpaid principal balance of the pool is $1,413,910,372 as of June 1, 2007, and the average principal balance is $341,524. The weighted average original loan-to-value ratio of the loan pool is approximately 72.73%; 9.76% of the loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 6.587%, and the weighted average FICO score is 733. The states that represent the largest geographic concentration are California (35.78%), New York (11.23%), and Florida (8.4%). All other states represent less than 5% of the outstanding balance of the pool. WERNER LADDER: Creditors' Committee Files Liquidating Plan ---------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Werner Holding Co. (DE) Inc. and its debtor-affiliates delivered a Plan of Liquidation for the Debtors and an accompanying Disclosure Statement to the U.S. Bankruptcy Court for the District of Delaware. The Committee filed the Liquidating Plan and Disclosure Statement in accordance with the Court's June 19 ruling, which provides that, in the event the Debtors fail to file a Chapter 11 plan on or before May 29, the panel will be allowed to file a plan for the Debtors. No other party-in-interest, however, is allowed to file a plan. The Liquidating Plan contemplates the complete liquidation of the Debtors' assets and distribution of all proceeds, and for the creation of a Liquidation Trust and the appointment of a Liquidation Trustee to administer the Liquidation Trust and the Liquidation Trust Assets. The Liquidating Plan also provides for the appointment of (x) a Litigation Designee to prosecute certain causes of action on behalf of the Liquidation Trust, and (y) one Committee member to serve as the creditor representative under a Liquidation Trust Agreement. In addition, the claims and interests are classified into Other Priority Claims, Other Secured Claims, LLCP Second Lien Claim, General Unsecured Claims and Equity Interests. The LLCP Second Lien Claim and the General Unsecured Claims will be transferred to and treated under the Liquidation Trust. Joseph Galzerano, co-chair of the Committee, states that the Trust Funding is a critical component of the Liquidating Plan, as it will help ensure that the Liquidation Trustee and Litigation Designee may properly perform their duties under the Liquidation Trust, hence, maximizing the likelihood of recoveries for the beneficiaries. Mr. Galzerano relates that the Liquidating Plan is based on, and consistent with the terms of, the Court-approved stipulation regarding settlement of certain disputes and objections; creation of litigation trust and funding; and management and distributions with respect to the litigation trust, among: * the Creditors Committee; * BDCM Opportunity Fund II, L.P. and BDC Finance, L.L.C.; * Brencourt BD, LLC; * Levine Leichtman Capital Partners III, L.P., and Milk Street Investors LLC; * TCW Shared Opportunity Fund V, L.P., TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., TCW/Drum Special Situation Partners, LLC, and TCW Shared Opportunity Fund III, L.P.; and * Schultze Master Fund, Ltd., Schultze Offshore Fund, Ltd., Schultze Partners, L.P. and Schultze Asset Management, LLC. The Stipulation provides for the Committee's consent to approval of the sale of substantially all of the Debtors' assets to New Werner Holding Co. (DE), LLC. Under the Stipulation, the Bid Sponsors were granted an Allowed unsecured super-priority claim in the principal amount of $96,910,584, pursuant to Section 507(b) of the Bankruptcy Code, plus all accrued interest accruing until the payment date, plus all other Allowed amounts entitled to priority under Section 507(b) under the Final DIP Order which may be assigned to either or both of the LLCP Entities. Mr. Galzerano tells Judge Carey that the Liquidating Plan complies with Section 1129(a)(11) of the Bankruptcy Code because all of the Debtors' remaining assets will be distributed to creditors, and the estates will no longer exist to be subject to future reorganization or liquidation. Mr. Galzerano states that the Liquidating Plan affords creditors the potential for the greatest realization on the Debtors' assets, and is in the best interests of the estates. The Committee's Liquidating Plan is further supported by the Bid Sponsors that are parties to the Stipulation. The Committee urges all creditors and interest holders receiving a ballot, particularly all claimholders in Classes 3 and 4, to vote in favor of the Liquidating Plan. The Court will convene a hearing July 24, 2007, at 10:00 a.m. to consider approval of the Committee's Disclosure Statement. Objections, if any, to the adequacy of the Disclosure Statement must be filed and served by July 16. The Committee proposes that the Court hold the Plan confirmation hearing on August 23 at 2:00 p.m. All objections to the Plan must be filed and served by August 20. A full-text copy of the Committee's Plan of Liquidation is available at no charge at http://researcharchives.com/t/s?2146 A full-text copy of the Committee's Disclosure Statement is available at no charge at http://researcharchives.com/t/s?2147 Substantive Consolidation of Assets Under the Liquidating Plan, all of the Debtors' assets and debts will be substantively consolidated for treating the Claims, including for voting, confirmation and distribution purposes. The Committee believes that substantive consolidation is appropriate because the Debtors' assets and liabilities have become so intertwined that separating them is prohibitive and hurts all creditors. If a substantive consolidation order is not entered by the Court, the Liquidation Trustee will allocate distributions received on account of the LLCP Second Lien Claim among the various Estates, and then make pro rata distributions to holders of Allowed General Unsecured Claims. In the event the Liquidation Trustee determines that it is impossible or impractical to allocate distributions received on account of the LLCP Second Lien Claim among the various Estates on an estate-by-estate basis, any distributions will be distributed pro rata to all Allowed General Unsecured Claims Holders after 10 days notice to the U.S. Trustee and Levine Leichtman Capital Partners III, L.P., as Creditor Representative. Cancellation of Intercompany Claims The Liquidating Plan provides that if the Estates are substantively consolidated, all Intercompany Claims and Intercompany Interests will be extinguished, except as necessary to preserve the Causes of Action and other Liquidation Trust Assets. All Claims which lie or could lie against more than one Debtor will be allowed solely against the primary obligor, and any guarantee or cross-guarantee Claims against other Debtors will be extinguished, Mr. Galzerano says. Liquidation Trust On the Effective Date, the Debtors, the Liquidation Trustee and the Litigation Designee will execute the Liquidation Trust Agreement and will take all steps necessary to establish the Liquidation Trust in accordance with the Plan and the Stipulation. On the Effective Date and subsequently if additional Liquidation Trust Assets become available, the Debtors will automatically transfer to the Liquidation Trust all of their rights, title, and interests in the Liquidation Trust Assets. The Debtors will also have no interest with respect to the Liquidation Trust Assets or the Liquidation Trust. The LLCP Entities will fund the fees, costs and expenses of the Liquidation Trust, Liquidation Trustee, Litigation Designee and Creditor Representative. Specifically, the LLCP Entities will provide: (a) up to $1,900,000 to the Litigation Designee, to be used solely for the fees, costs and expenses relating to the prosecution, settlement and liquidation of the Causes of Action; (b) $100,000 to the Liquidation Trustee, to be used solely for fees, costs and expenses of the Liquidation Trustee, the Creditor Representative and the Liquidation Trust for administering the Liquidation Trust and the Liquidation Trust Assets; (c) $50,000 to the Liquidation Trustee on each of the first and second anniversaries of the Effective Date, to be used solely for the fees, costs and expenses of the Liquidation Trustee, the Creditor Representative and the Liquidation Trust for administering the Trust and the Liquidation Trust Assets; and (d) $25,000 to the Liquidation Trustee on each of the third and fourth anniversaries of the Effective Date, to be used solely for the fees, costs and expenses of the Liquidation Trustee, the Creditor Representative and the Liquidation Trust. The Liquidation Trust will terminate as soon as practicable, but in no later than the seventh anniversary of the Effective Date, provided however, that before the termination date, the Court may extend the term of the Liquidation Trust for a finite period, if the extension is necessary to liquidate the Liquidation Trust Assets or for other good cause. Executory Contracts and Unexpired Leases Mr. Galzerano states that any executory contracts or unexpired leases that have not expired by their own terms before the Effective Date, which the Debtors have not assumed and assigned or rejected with the approval of the Court, or that are not the subject of a motion to assume as of the Effective Date, will be deemed rejected by the Debtors on the Effective Date. The Court's order confirming the Liquidating Plan will also constitute approval of rejection of any executory contracts or unexpired leases pursuant to Sections 365(a) and 1123. The cure costs for all executory contracts and unexpired leases that are assumed and assigned to New Werner Holdings Co. (DE), LLC, as part of the Sale Transaction will be paid solely by the Buyer, without any reduction of the Wind-Down Amount. Moreover, the Liquidation Trustee will maintain a reserve for any distributable amounts required to be set aside on account of Disputed Claims and will distribute those amounts as provided under the Liquidation Trust Agreement. Conditions for Plan Effective Date Mr. Galzerano discloses the conditions precedent to the Effective Date that must be satisfied or waived: (a) The Sale Transaction will have closed and the Cash consideration has been paid by the Buyer to the Debtors in accordance with the Asset Purchase Agreement and the Court's Sale Order. (b) All other actions and documents necessary to implement the Liquidating Plan has been effected or executed, including the Liquidation Trust Agreement. (c) There will be sufficient cash to permit payment of all amounts required to be paid on the Effective Date. (d) The Insurance Policies will have been purchased, paid in full, and will be in place. (e) The Alternative Dispute Resolution Procedures have been approved by the Court. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000) WERNER LADDER: Treatment of Claims Under the Committee's Plan ------------------------------------------------------------- The Plan of Liquidation filed by the Official Committee of Unsecured Creditors in Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates' Chapter 11 cases classifies and treats certain Claims and Equity Interests into five classes: 1. Class 1 Other Priority Claims; 2. Class 2 Other Secured Claims; 3. Class 3 LLCP Second Lien Claims; 4. Class 4 General Unsecured Claims; and 5. Class 5 Equity Interests. Joseph Galzerano, co-chair of the Committee, states that the Administrative and Priority Tax Claims have not been classified in the Liquidating Plan. Mr. Galzerano relates that the Bankruptcy Code does not require administrative and priority claims to be classified under a Chapter 11 plan. All requests for allowance and payment of an Administrative Claim must be filed on or before the July 9, 2007 Administrative Claims Bar Date. Each Holder of an Allowed Administrative Claim will be paid on or after the Effective Date, in full and in cash. Mr. Galzerano states that if an Allowed Administrative Claim Holder agrees to have all or part of his Claim paid under the Liquidation Trust, then that Claim will be paid senior to any direct distributions made to the Allowed General Unsecured Claims Holders, and will be paid junior to any distributions made on account of the LLCP Second Lien Claim. Each Holder of an Allowed Priority Tax Claim will be paid on or after the Effective Date, in full and in cash. If an Allowed Priority Tax Claim Holder agrees to have all or part of his Claim paid under the Liquidation Trust, that Claim will be paid senior to any direct distributions made to the Allowed General Unsecured Claims Holders and will be paid junior to any distributions made on account of the LLCP Second Lien Claim. Treatment of Classified Claims and Equity Interests Class Claims Treatment/Voting ----- ------ ---------------- 1 Other Priority Claims Unimpaired; deemed to accept To be paid in cash, in full 2 Other Secured Claims Unimpaired; deemed to accept With legal, equitable and contractual rights of the holder unchanged Holders will either: * be paid from sale or disposition proceeds of the collateral securing each Allowed Class 2 Claim to the extent of the value of the Holder's interest in the property; * receive all collateral securing each Allowed Class 2 Claim without representation or warranty by or further recourse against the relevant Debtor or the Liquidation Trust; or * receive treatment in any other manner that will render the Allowed Class 2 Claim otherwise unimpaired. 3 LLCP Second Lien Impaired; entitled to vote Claim To be paid in full from the proceeds of the Liquidation Trust Assets, to be shared with Allowed General Unsecured Claims other than the LLCP Unsecured Claim 4 General Unsecured Impaired; entitled to vote Claims To be paid in full from the proceeds of the Liquidation Trust Assets, to be shared with Allowed Class 3 Claim, provided that there will be no distribution accruing or made on account of the LLCP Unsecured Claim until the LLCP Second Lien Claim is paid in full, in cash. 5 Equity Interests Impaired; deemed to reject To be cancelled on the Effective Date; holders will receive no distribution on account of their interests. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000) WERNER LADDER: Panel Wants Solicitation Procedures Approved ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the District of Delaware to approve its Disclosure Statement describing the Plan of Liquidation for the Debtors, dated June 19, 2007, as containing adequate information as required under Section 1125(a)(1). The Committee also asks the Court to establish procedures associated with the solicitation and tabulation of votes to accept or reject the Committee's Liquidating Plan. The Court will convene a hearing July 24, 2007, at 10:00 a.m. to consider approval of the Committee's Disclosure Statement. Objections, if any, to the adequacy of the Disclosure Statement must be filed and served by July 16. Solicitation Packages Upon approval of its Disclosure Statement, the Committee intends to distribute solicitation packages containing copies of: -- an order approving the Disclosure Statement; -- the Court-approved plan confirmation hearing notice and the date of the confirmation hearing; -- the deadline for voting on the Plan and the deadline and procedures for filing Plan confirmation objections; -- the Liquidating Plan and the accompanying Disclosure Statement; -- the Ballots and Master Ballot and a ballot return envelope; and -- other materials as the Court may direct or approve. The Committee proposes not to transmit the Solicitation Package to holders of Administrative Claims, Priority Tax Claims, Other Priority Claims, and Other Secured Claims who are unimpaired under the Liquidating Plan, and to Equity Interests holders who are deemed to have rejected the Plan. Victoria W. Counihan, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, relates that the Committee intends to send to the Unimpaired Creditors and the Equity Holders a Non-Voting Creditor Notice, which contains the non-voting classes and summary of the Plan; the date and time of the Confirmation Hearing; and the deadline and procedures for filing objections to the Plan. Record Date and Voting Deadline The Committee asks the Court to fix July 24, 2007, as the record date to determine the creditors entitled to receive a Solicitation Package, and who may be entitled to vote on the Liquidating Plan, subject to the disallowance of those creditors' claims or interests for voting purposes, and to determine the creditors and interest holders entitled to receive the Non-Voting Creditor Notice. The Committee also asks Judge Carey to set August 16 at 4:00 p.m. as the deadline by which all ballots for accepting or rejecting the Plan will be received at the Ballot Tabulation Center, unless extended by the Committee. Voting and Tabulation Procedures The Committee proposes that that the amount of a claim used to tabulate acceptance or rejection of the Plan should be: (a) the claim listed in a Debtor's schedule of liabilities, provided that the claim is not scheduled as contingent, unliquidated, undetermined or disputed and no proof of claim has been timely filed; (b) the non-contingent and liquidated amount specified in a proof of claim timely filed with the Court or Kurtzman Carson Consultants LLC to the extent claim is not the subject of an objection filed no later than July 27; (c) the amount temporarily allowed by the Court for voting purposes pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure, provided that a motion is brought, notice is provided and a hearing is held before the Confirmation Hearing; and (d) with respect to ballots cast by alleged creditors who have timely filed proofs of claim in unliquidated, unknown or uncertain amounts that are not the subject of an objection filed before the Confirmation Hearing, those ballots will be counted in determining whether the numerosity requirement of Section 1126(c) has been met, but will not be counted in determining whether the aggregate claim amount requirement has been met. Creditors seeking to have a claim temporarily allowed for purposes of voting on the Plan should also be required to file a claims estimation request no later than 14 days before the Voting Deadline, and that the Court schedule a hearing on that request for a date prior to the Confirmation Hearing. If a creditor casts a ballot and has timely filed a proof of claim but the creditor's claim is the subject of an objection filed no later than 20 days before the Voting Deadline, the Committee proposes that the creditor's ballot should not be counted, unless that claim is temporarily allowed by the Court for voting purposes after a Claims Estimation Motion is brought by the creditor, notice is provided and a hearing is held before the Confirmation Hearing. The Committee proposes these additional voting procedures and standard assumptions for tabulating the Ballots: (a) Separate claims held by a single creditor in a particular class will be aggregated as if that creditor held one claim against the Debtors in the class, and the votes related to those claims will be treated as a single vote to accept or reject the Liquidating Plan. (b) Creditors must vote all of their claims or interests within a particular class either to accept or reject the Plan and may not split their vote, and a ballot or multiple ballots that partially rejects and partially accepts the Plan will not be counted. (c) Ballots that fail to indicate an acceptance or rejection of the Plan or that indicate both acceptance and rejection of the Plan, but which are otherwise properly executed and received before the Voting Deadline will not be counted. (d) Only ballots that are timely received with original signatures will be counted, and unsigned ballots will not be counted. (e) Ballots postmarked before the Voting Deadline, but received after the Voting Deadline will not be counted; (f) Ballots that are illegible, or contain insufficient information to permit the identification of the creditor will not be counted; (g) If a creditor casts more than one ballot voting the same claim prior to the Voting Deadline, the last ballot received before the Voting Deadline will reflect the voter's intent and supercede any prior ballots; (h) If a creditor simultaneously casts inconsistent duplicate ballots with respect to the same claim, those ballots will not be counted. (i) Each creditor will be deemed to have voted the full amount of its claim and unless ordered by the Court, questions as to the validity, form, eligibility, acceptance, and revocation or withdrawal of Ballots will be determined by the Balloting Agent and the Committee, which will be final and binding. The Committee further asks Judge Carey to set August 20, 2007, as the deadline for filing Plan confirmation objections. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000) WGL HOLDINGS: S&P Revises Outlook to Stable from Negative --------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on WGL Holdings Inc. and its primary subsidiary, Washington Gas Light Co., to stable from negative. The outlook revision reflects S&P's expectation that Washington Gas may have more stable future cash flows due to the likely implementation of weather-normalized rate designs in Virginia. In its pending Virginia rate settlement discussions , Washington Gas has proposed rate designs that include either weather- or revenue-normalization mechanisms that should protect WGL from cash flow volatility related to changing weather patterns and to a lesser extent, declining demand related to gas conservation. Standard & Poor's considers these changes to be likely, as weather normalization has already been implemented for other gas utilities in Virginia and is already in place for Washington Gas in Maryland. The addition of weather normalization in Virginia will result in the decoupling of about 80% of Washington Gas Light's operating margin from weather- and conservation-related variability. The ratings on Washington, D.C.-based WGL reflect the consolidated credit profile of the company's regulated and unregulated operating units. These units include Washington Gas Light , a regulated natural gas distribution utility that delivers to customers in Washington, D.C., Maryland, and Virginia; Washington Gas Energy Services Inc., an unregulated retail gas and power marketer; and Washington Gas Energy Systems Inc., a provider of commercial heating, ventilating, and air-conditioning services. "The stable outlook on WGL and Washington Gas reflects our opinion that regulatory outcomes in Virginia are likely to include provisions that will protect the company from weather- and conservation-related cash flow volatility," said Standard & Poor's credit analyst Michael Messer. The outlook could be revised to negative if pending rate cases are significantly less favorable than expected, if Prince George's County remediation costs are disallowed, or if hexane cost recovery is permitted over an extended period of time. "Given the already high ratings assigned to WGL and Washington Gas, a higher rating or positive outlook is unlikely," he continued. WHITING PETROLEUM: Prices 5 Million Common Stock Public Offering ---------------------------------------------------------------- Whiting Petroleum Corporation has priced its public offering of 5 million shares of common stock at $40.50 per share to the public. Whiting expects the delivery of the shares to occur on July 3, 2007. Whiting has granted to the underwriters a 30-day option to purchase up to 750,000 additional shares of common stock at the same price per share solely to cover overallotments. Assuming no exercise of the overallotment option, Whiting expects to receive net proceeds from this offering of approximately $193.9 million after deducting underwriting discounts and commissions and estimated expenses of the offering. Whiting intends to use all of the net proceeds to initially repay a portion of the debt currently outstanding under its credit agreement and thereafter to use the increased credit availability to pay for capital expenditures related to accelerated drilling and completion of wells and construction of processing facilities primarily at its Boies Ranch and Jimmy Gulch prospect areas in the Piceance Basin and Robinson Lake prospect area in the Williston Basin. Merrill Lynch & Co. and J.P. Morgan Securities Inc. acted as joint book-running managers for the offering. The offering was made by means of a prospectus and related prospectus supplement, copies of which may be obtained from: Merrill Lynch & Co. No. 4 World Financial Center New York, NY 10080 and J.P. Morgan Securities Inc. No. 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 About Whiting Petroleum Corporation Headquartered in Denver, Colorado, Whiting Petroleum Corporation, (NYSE: WLL) -- http://www.whiting.com/-- is an independent oil and gas company that acquires, exploits, develops and explores for crude oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United States. * * * Moody's Investor Services assigned a 'Ba3' on Whiting Petroleum Corp.'s long term corporate family rating and probability of default. The outlook is stable. The company's long term foreign and local issuer credit carry Standard and Poor's 'BB-' ratings. The outlook is stable. * BOOK REVIEW: As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America ----------------------------------------------------------------- Authors: Theresa A. Sullivan, Elizabeth Warren and Jay Lawrence Westbrook Publisher: Beard Books Paperback: 280 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1893122158/internetbankrupt This book is a major contribution to the study of bankruptcy and to our understanding of debtors and creditors who end up in bankruptcy court. With the sharp increase in bankruptcies over the past decade and an increasingly wide cross-section of occupational distribution represented, the question treated by this study is both a legal and a sociological one. It does not attempt to study the internal workings of bankruptcy, but the authors look outward to the larger population of bankrupt debtors. Using a multi-disciplinary approach, the authors have drawn social and economic portraits of typical debtors against the backdrop of the law and with hard empirical data. ********* 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 ***