/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070730.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 30, 2007, Vol. 11, No. 178 Headlines ALASKA COMMS: June 30 Balance Sheet Upside-Down by $22.5 Million ALLIED DEFENSE: Completes Second Phase of Financing ALION SCIENCE: Moody’s Downgrades Corporate Family Rating to B3 AMERCABLE: Moody’s Rates Proposed $15 Mil. Secured Revolver at B1 AMERISOURCEBERGEN CORP: Earns $129.9 Mil. in Qtr. Ended June 30 AMP'D MOBILE: Court Okays Proposed Asset Sale Procedures AIRTRAN HOLDINGS: Comments on Midwest Air Second Quarter Earnings AIRTRAN HOLDINGS: Earns $41.5 Million in Second Quarter of 2007 ASC INC: Creditors Given 20 Days to Respond to Case Conversion ACXIOM(R) CORP: Posts Net Loss of $11.5 Million for Q1 2008 ASPEN INSURANCE: P. Melwani and K. Salame Leaves the Board ATLANTIC MEDICAL: Case Summary & 37 Largest Unsecured Creditors BALLY TOTAL: Receives Requisite Votes for Pre-Packaged Ch. 11 Plan BALLY TOTAL: Unable to Make Pact w/ Shareholders on Alternate Plan BANC OF AMERICA: Fitch Assigns Low-B Ratings on Six Cert. Classes BATALLION CLO: Moody’s Rates $22.5 Million Class E Notes at Ba2 BAY CHEVROLET: Voluntary Chapter 11 Case Summary BEAR STEARNS: S&P Junks Ratings on Class M-9A and M-9B Debentures BEAZER HOMES: Posts Net Loss of $123 Million in Qtr. Ended June 30 BLUEGREEN CORPORATION: Earns $4.1 Million in 2007 Second Quarter BLOCKBUSTER INC: Reports 2.8% Revenue Decrease in 2nd Qtr. 2007 BRANDYWINE REALTY: Posts $164.3 Million Revenue in Second Qtr 2007 CD 2005-CD1: Moody’s Affirms Low-B Ratings on Five Cert. Classes CDC MORTGAGE: S&P Lowers Ratings on Five Certificate Classes CELESTICA INC: 2nd Qtr. 2007 Revenue Decreases to $1.9 Billion CHENIERE ENERGY: Buys Back Shares from Credit Suisse for $325 Mil. CHILDREN'S TRUST: Fitch Expects to Lift Rating on S. 2005B Bonds CHIQUITA BRANDS: S&P Holds Ratings Under Negative CreditWatch CITICORP MORTGAGE: Fitch Rates $707,000 Class B-5 Certs. at B CLAREGOLD TRUST: Moody’s Places Low-B Ratings on Six Cert. Classes CLEVELAND-CLIFFS: Earns $86.9 Million in Second Quarter 2007 COMCAST CORP: Earns $588 Million in Second Quarter Ended June 30 COMMERCIAL REALTY: Disclosure Statement Hearing Moved to Sept. 10 COMM 2007-C9: S&P Puts Prelim B- Rating on $7.245MM Class Q Certs. COMMUNITY HEALTH: $6.8 Bil. Triad Deal Cues S&P to Lower Ratings CONEXANT SYSTEMS: Posts $20.5 Mil. Core Net Loss in 3rd Qtr. 2007 CURRIE TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors DAIMLERCHRYSLER: Seeks to Trim Down Dealer Ranks to Stem Losses DIAMOND ENT: Shifts to Health Care Business, Sells Media Assets DELTA ENTERTAINMENT: Voluntary Chapter 11 Case Summary DENALI CAPITAL: Moody’s Rates $18 Million Class B-2L Notes at Ba2 ELAN CORP: Incurs Second Quarter 2007 Net Loss of $141.1 Million FHC HEALTH: Crestview Equity Stake Cues Moody’s Ratings Review FORD MOTOR: Bidders for Units to Begin Due Diligence in August FORD MOTOR: Posts $750 Million Net Profit in Second Quarter FORD MOTOR: Moody’s Holds B3 CFR with Negative Outlook GENERAL MOTORS: Will Cut Jobs and Reduce Production in September GENERATION MINISTRIES: Case Summary & 5 Largest Unsec. Creditors GOODYEAR TIRE: Earns $56 Million in Second Quarter of 2007 GOLDMAN SACHS: Moody’s Rates $16 Million Class E Notes at Ba2 GOLUB CAPITAL: Moody’s Puts Ba2 Rating on $20.3 Mil. Class E Notes HCA INC: S&P Affirms 'BB-' Rating on Second-Lien Debt HEXCEL CORP: Net Sales Up 5.8% in Second Quarter 2007 HOST HOTELS: Net Income Decreases to $149 Mil. in 2nd Qtr. 2007 ISLE OF CAPRI: Delays Filing of 10K for 2007 Due to Restatement INDYMAC MBS: Fitch Rates $1.8MM Class B-5 Certificates at B INVISTA B.V.: S&P Revises Outlook to Positive from Stable J.P. MORGAN: Moody’s Affirms Low-B Ratings on Eight Cert. Classes J.P. MORGAN: Moody’s Holds Low-B Ratings on Five Cert. Classes J.P. MORGAN: Moody’s Lowers Ratings on Three Certificate Classes JARDEN CORP: Moody’s Holds B1 Corporate Family Rating JUSTIN MORGAN: Case Summary & 18 Largest Unsecured Creditors KARA HOMES: Seeks 60-Day Extension to File a Final Plan KIMBALL HILL: Moody’s Downgrades Corporate Family Rating to B2 KLINGER ADVANCED: Case Summary & 20 Largest Unsecured Creditors KOGER MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors KYPHON INC: Inks $3.9 Billion Merger Deal with Medtronics LANDRY'S RESTAURANT: Financial Needs Cue S&P's Junk Rating LE-NATURE'S INC: Trustee Drops Request to Sell Latrobe Plant LEVEL 3: Posts $202 Million Net Loss in Second Quarter of 2007 LIONEL LLC: Disclosure Statement Hearing Moved to Aug. 27 LIVE NATION: Moody’s Lifts B1 Term Loan & Credit Facility Ratings MADISON SQUARE: Fitch Lifts Rating on Class S Notes to BB+ MADRID RANCH: Voluntary Chapter 11 Case Summary MAGNACHIP SEMICON: July 1 Balance Sheet Upside-down by $408 Mil. MAJESCO ENTERTAINMENT: J. Gross and J. Sutton Adopt Trading Plans MANAGED HEALTH: Narrow Operating Focus Cues S&P's 'B' Rating MARSULEX INC: S&P Withdraws Ratings at Company's Request MARCAL PAPER: To Pay $3 Million in Pre-Petition Claim to EPA MASSEY ENERGY: Earns $34.9 Million in Second Quarter 2007 MCKESSON CORP: Quarter Ended June 30 Net Income Ups to $235 Mil. MERRILL LYNCH: Moody’s Puts Low-B Ratings on Three Cert. Classes MERRILL LYNCH: Moody’s Affirms Low-B Ratings on Six Cert. Classes MEZZ CAP: S&P Assigns BB Rating on $1.76MM Class F Certificates MORGAN STANLEY: Fitch Affirms $2MM Class N-SDF Certs. at BB+ MOTION PICTURE: High Financial Risk Cues S&P's B Credit Rating NBTY INC: Earns $51 Million in Third Quarter Ended June 30 NEW CENTURY: Wants Exclusive Plan Filing Date Moved to Nov. 28 NEW CENTURY: First Meeting of Creditors to Resume on Aug. 8 NOE FULINARA: Case Summary & 19 Largest Unsecured Creditors OGLEBAY NORTON: Harbinger Offer Cues Moody’s Ratings Review OMNICARE INC: Moody’s Holds Ba3 CFR with Negative Outlook ORBITZ WORLDWIDE: Moody’s Affirms B2 Corporate Family Rating PARKER HUGHES: Court Approves Bankruptcy Plan PILGRIM’S PRIDE: Board Elects Lonnie Ken Pilgrim as Chairman POTLATCH CORP: Earns $34 Million in Quarter Ended June 30 PRIDE INTERNATIONAL: Moody’s Affirms Ba1 Corporate Family Rating PRIMUS CLO: Moody’s Rates $15.5 Million Class E Notes at Ba2 PROSPECT MEDICAL: Signs Pact to Buy Alta Healthcare for $104 Mil. PSS WORLD: Sales Up 6.2% in Three Months Ended June 29 PSS W0RLD: Earns $50 Million in Year Ended March 30 PSYCHIATRIC SOLUTIONS: 2nd Qtr. 2007 Net Income Lowers to $14.6MM QUAKER FABRIC: Inks Pact with GB Merchant for $2 Mil. Overadvance QUALITY HOME: Moody’s Affirms B2 Corporate Family Rating QUALITY HOME: $138.6MM Loan Increase Cues S&P's Negative Outlook R.H. DONNELLEY: To Acquire Business.com for $345 Million in Cash R.H. DONNELLEY: Earns $25 Million in Second Quarter 2007 ROCKFORD PRODUCTS: Case Summary & 20 Largest Unsecured Creditors SACO I: Poor Collateral Performance Cues S&P to Lower Ratings SCHUFF INT'L: S&P Withdraws Rating at Company's Request SAGERYDER INC: Case Summary & 19 Largest Unsecured Creditors SAINT VINCENTS: Court Confirms First Amended Chapter 11 Plan SAN GABRIEL: Moody’s Rates $16.5 Million Class B-2L Notes at Ba2 SHAMUS HOLDINGS: Voluntary Chapter 11 Case Summary SOLUTIA INC: Wants Exclusive Plan Filing Date Moved to Dec. 31 SOUTHEAST POST NO. 5179: Case Summary & 18 Largest Creditors STANFIELD MCLAREN: Moody’s Rates $20 Mil. Class B-2L Notes at Ba2 SYMBOLLON PHARMA: Posts $1.3 Mil. Net Loss in Qtr. Ended March 31 TAYLOR CAPITAL: Earns $7.2 Million in 2nd Quarter Ended June 30 THE MERIDIAN: Case Summary & Three Largest Unsecured Creditors TOWER HILL: Moody’s Rates $53 Million Class E Notes at Ba2 TRIAD HOSPITALS: Debt Repayment Cues S&P to Withdraw Ratings WACHOVIA BANK: S&P Puts BB Prelim Rating on $100MM Class M Certs. WENDY'S INTERNATIONAL: Earns $29.2 Mil. in Qtr. Ended June 30 WILD WEST: Files Schedules of Assets and Liabilities WILD WEST: Bank Wants to Seize Rides Worth $1 Million XEROX CORP: Revenues Up 6% in Second Quarter 2007 XM SATELLITE: 2007 Second Qtr. Net Loss Narrows to $176 Million YARUSHALMI & ASSOCIATES: Voluntary Chapter 11 Case Summary * Focus Management Names Peter Dominici as Managing Director * S&P Takes Rating Actions on Various Transactions * BOND PRICING: For the Week of July 23 - July 27, 2007 ********* ALASKA COMMS: June 30 Balance Sheet Upside-Down by $22.5 Million ---------------------------------------------------------------- Alaska Communications Systems Group Inc. posted $561.6 million total assets, $584.1 million total liabilities, and $22.5 million total stockholders’ deficit at June 30, 2007. The company reported revenues of $93.2 million for the second quarter ended June 30, 2007, a 9.6% increase over second quarter 2006 revenues of $85.1 million. Operating income increased 18.6% to $14.4 million, compared to the second quarter 2006 operating income of $12.2 million. The company posted net income of $7.1 million during the second quarter 2006, compared to the second quarter 2006 net income of $13.5 million. Second quarter 2006 earnings are inclusive of non- recurring gains of $6.7 million from the liquidation of Rural Telephone Bank class C stock that settled in April 2006 and $2 million from the Crest terrestrial asset purchase. Net cash provided by operating activities decreased to $18.8 million, or 17.1%, compared to $22.7 million of net cash in the same period a year ago. "Our second quarter results continue to demonstrate the strength of our business strategy and execution," said Liane Pelletier, ACS president and chief executive officer. "The ACS strategy maximizes cash flow by capturing profitable growth in the strategic telecom segments, and enhances margins overall even as certain areas of the telecom market face structural decline. The strategy drives towards a wireless-centric consumer base and a data-centric business base. As of Q2 2007, nearly half of the company's EBITDA was derived from wireless -- driven primarily by the consumer segment -- and Internet revenues were up 27% -- driven primarily by the enterprise segment." "With this strategy, our sales focus increasingly targets segments and accounts that will deliver meaningful long-term value for the company. Since Q1, we won a number of key high-end enterprise accounts, we delivered strong wireless growth and we more selectively approached the wireline mass market, capitalizing on lessons learned about the tenure and profitability of certain consumer segments. This kind of operational and market focus underpins the steady increase in EBITDA," Mr. Pelletier continued. Six Months Financial Review For the six months ended June 30, 2007, total revenues were $183.8 million, which represented a 9.6% increase over revenues of $167.7 million for the same period last year. Net income for the six months ended June 30, 2007, was $14.6 million, compared to net income of $5.1 million, in the same period in 2006. Net cash provided by operating activities for the first half of 2007 was $46.6 million, as compared to $37.9 million in the same period in 2006. David Wilson, ACS senior vice president and chief financial officer, said, "Wireless revenues continue to ramp, growing 24% from a year ago to $33.3 million, driven by a 15% increase in average subscribers and a 9% increase in average revenue per user, or ARPU. Wireline revenues grew by 3% from a year ago to $59.9 million, driven primarily by Internet and long distance. Revenues earned from retail local access lines remains a key component of wireline revenue and while the number of retail local access lines declined by 2.7% over the prior year, this decline was offset by a corresponding 2.7% increase in ARPU driven by upselling activities and improved subscriber mix." "Our liquidity position continued to improve in the quarter with cash, restricted cash and investment balances increasing $3.1 million sequentially to $40.8 million. Major investments and uses of cash in the quarter included capital expenditures of $13.5 million, comprising $10 million in maintenance capital and $3.5 million in growth capital expenditures, and $9.2 million in dividend payments," concluded Mr. Wilson. 2007 Business Outlook Reaffirming guidance for the full-year 2007, revenues are expected to be in the range of $360 million to $370 million. For the year 2007, net cash interest expense is expected to be approximately $27 million. ACS has also reaffirmed 2006 capital expenditure guidance to be about $46 million, comprised of maintenance capital expenditures of about $37 million and growth capital expenditures of about $9 million. The guidance presented is exclusive of ACS' strategic investment. Strategic Investment "Our work continues on the strategic investment in fiber between Alaska and the Pacific Northwest, positioning ACS to more effectively compete for carrier, enterprise and government demand; to satisfy growing bandwidth needs; and to position ACS to capture favorable macroeconomic trends in Alaska," said Mr. Pelletier. "Our project plans have met with tremendous market enthusiasm for a diverse route and an additional supplier, and the business case has clearly been reinforced. As a result, the project options have expanded and we will screen them to select the one that delivers the best long-term value for the company, consistent with our dividend policy and target capital structure objectives." About Alaska Communications Alaska Communications Systems Group Inc. (Nasdaq: ALSK) -- http://www.alsk.com/-- is an integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. In its financial statements for the quarter ended March 31, 2007, Alaska Communications Systems Group Inc. reported total assets of $551,033,000, total liabilities of $579,979,000, and a total stockholders' deficit of $28,946,000 as of March 31, 2007, compared to $562,321,000 in total assets, $587,010,000 in total liabilities, and a stockholders' deficit of $24,689,000 at Dec. 31, 2006. ALLIED DEFENSE: Completes Second Phase of Financing --------------------------------------------------- The Allied Defense Group Inc. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on July 19, 2007, it closed the second phase of the financing. Pursuant to the terms of the Amended and Restated Securities Purchase Agreement dated June 19, 2007, the company has sold an aggregate principal amount of $10 million of additional senior secured convertible notes. Proceeds from the transaction will be used to fund the company's working capital needs. Financing As reported in the Troubled Company Reporter on June 26, 2007, the company entered into definitive agreements with all investors of the company's $30 million convertible notes for recapitalization and resolution of all outstanding disputes of default between the company and its debt holders. Under the terms of the agreement, the convertible note investors have agreed to amend certain terms of the existing notes, provide up to $15 million in new funding, and release the company of all alleged defaults and penalties under the convertible note agreement. The transaction is subject to various closing conditions, including approval of the American Stock Exchange, and is expected to close within five business days. Under the terms of the agreement, the company will exchange the existing $30 million convertible debt issue for new approximately $27.1 million senior secured notes carrying an 8.95% coupon, payable quarterly and convertible into shares of The Allied Defense Group's common stock at a price of $9.35 per share, equal to the closing bid price of the common stock on the day of signing, and 1.288 million shares of common stock. The company will also receive an incremental $15 million cash of new funding, subject to similar interest and conversion provisions as the approximately $27.1 million notes. Of the $15 million in new funding, $5 million will be available immediately upon closing. The remaining $10 million will be available once a large anticipated ammunition contract award is received by the company's wholly-owned MECAR S.A. subsidiary. Allied's expectations with respect to the order have not changed and the company is currently working to establish a performance bond guarantee, which is a final requirement before the client can issue the contract award to MECAR. About Allied Defense Headquartered in Vienna, Virginia, The Allied Defense Group Inc. -- (AMEX: ADG) -- http://www.allieddefensegroup.com/-- is a diversified International defense and security firm which develops and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated electronic and microwave security systems principally for European and North American markets; manufactures battlefield effects simulators and other training devices for the military; and designs and produces state-of-the-art weather and navigation software, data, and systems for commercial and military customers. Going Concern Doubt As reported in the Troubled Company Reporter on May 18, 2007, BDO Seidman LLP, in Bethesda, Maryland, expressed substantial doubt about The Allied Defense Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's losses from operations in 2006 and 2005. The auditing firm also cited that the company has received default notices from certain convertible debt holders in 2007. The auditing firm further disclosed that if the company fails to register the underlying shares related to the company's $30 million convertible debt facility by March 29, 2007, the debt will be in default and the face value of the notes along with redemption premiums and all accrued interest will become due. ALION SCIENCE: Moody’s Downgrades Corporate Family Rating to B3 --------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Alion Science and Technology Corporation to B3, withdrew the Ba2 rating on the term B senior credit facility due 2009 due to a maturity extension, assigned a Ba3 rating to the term B senior credit facility due 2013 and downgraded the rating on the $250 million 10.25% senior unsecured notes due 2015 to Caa1. The rating outlook was changed to stable from negative. In February 2007, Alion extended the maturity date of their term B senior credit facility to Feb. 6, 2013 and completed a recapitalization which included the higher than expected sale of $250 million of its 10.25% senior unsecured notes due Feb. 1, 2015, to repay its $170 million bridge loan and $72 million under the Term B facility. Moody's took these rating actions: -- Withdrew $50 million senior secured revolving credit facility due 2009, Ba2 (LGD2, 19%) -- Withdrew $260 million senior secured term loan B due 2009, Ba2 (LGD2, 19%) -- Assigned $50 million senior secured revolving credit facility due 2013, Ba3 (LGD2, 16%) -- Assigned $222 million senior secured term loan B due 2013, Ba3 (LGD2, 16%) -- Downgraded $250 million 10.25% senior unsecured notes due 2015 to Caa1 (LGD4, 68%) from B3 (LGD5, 71%) -- Downgraded corporate family rating to B3 from B2 -- Downgraded probability of default rating to B3 from B2 -- Affirmed the speculative grade liquidity rating of SGL-3 The ratings outlook was changed to stable from negative. The downgrade of the corporate family rating to B3 reflects the expectation that leverage and interest coverage will remain above the stated rating triggers in the credit opinion dated December 2006. The downgrade also reflects an expectation that free cash flow will be lower than projected and substantial near term refinancing needs could further reduce free cash flow. Operating performance is expected to be slightly weaker than originally anticipated while cash payments to purchase shares from the ESOP and phantom stock payments higher. Near term debt obligations remain substantial and Moody's is concerned that projected cash flow and interest coverage may further deteriorate upon refinancing as the previous non cash pay instruments may be refinanced as cash pay instruments. Alion is also expected to continue to be acquisitive. Alion, headquartered in McLean, Virginia, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Revenues for the twelve months ended March 31, 2007 were $665 million. AMERCABLE: Moody’s Rates Proposed $15 Mil. Secured Revolver at B1 ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $15 million senior secured revolver and a B1 rating to the proposed $100 million senior secured first lien term loan. Additionally, Moody's affirmed the B2 Corporate Family Rating and upgraded the Probability of Default Rating to B2 from B3. The rating outlook is stable. Concurrently, Moody's will withdraw the ratings previously assigned on June 27, 2007. Moody's assigned these proposed ratings: -- $15 million senior secured revolver due 2012, rated B1 (LGD3, 39%) -- $100 million senior secured term loan due 2014, rated B1 (LGD3, 39%) Moody's withdrew these ratings: -- $15 million senior secured revolver due 2012, rated Ba2 (LGD1, 1%) -- $135 million senior secured term loan due 2014, rated B2 (LGD3, 38%) On June 8, 2007 AmerCable entered 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 also brings 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. 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 affirmation of the B2 Corporate Family rating primarily reflects these factors: i. moderate leverage; ii. modest free cash flow; and iii. 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. Moody’s 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 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. For the twelve months ended March 31, 2007, the company recognized revenues of $165 million. AMERISOURCEBERGEN CORP: Earns $129.9 Mil. in Qtr. Ended June 30 --------------------------------------------------------------- AmerisourceBergen Corporation reported net income of $129.9 million for the third quarter ended June 30, 2007, as compared with $119.5 million for the third quarter ended June 30, 2006. Total revenue was $16.4 billion for the third quarter ended June 30, 2007, as compared with $15.7 billion for the third quarter ended June 30, 2006. Operating revenue was $15.4 billion in the third quarter of fiscal 2007, compared to $14.4 billion for the same period last year, a 7% increase. Bulk deliveries in the quarter decreased 15% to $1.1 billion from $1.2 billion in last year’s fiscal third quarter. Consolidated operating income in the quarter increased 11% to $209.6 million, primarily due to increased operating income in the Pharmaceutical Distribution segment. The other loss of $3.5 million for the third quarter of fiscal 2007 was primarily related to the write down of an equity investment. "Our fiscal third quarter produced solid results, as we remain on track to exceed the performance targets we set at the beginning of the 2007 fiscal year," said R. David Yost, AmerisourceBergen’s chief executive officer. "Our 7% operating revenue growth was led by continued strong performance in our specialty drug distribution business. That revenue growth, our strong generic performance in our broad-line drug distribution business, and our disciplined use of cash, were the primary drivers of our diluted earnings per share performance. With our strong cash position, we repurchased more than $500 million of our shares in the June quarter and $872 million in the first nine months of fiscal 2007, and we continue to have significant financial flexibility." For the first nine months of fiscal 2007, AmerisourceBergen’s total revenue was $49.7 billion, compared to $45.6 billion a year ago. Operating revenue was $46.4 billion compared to $42 billion for the same period last year, a 10% increase. Bulk deliveries in the first nine months of the fiscal year decreased 6% to $3.3 billion. Consolidated operating income in the first nine months of the fiscal year increased 16% to $639.3 million due to operating income growth in the Pharmaceutical Distribution segment. Net income for the nine months ended June 30, 2007, was $381.6 million, compared to $345.7 million a year ago. "For the fiscal 2007 third quarter, excellent operating performance in the Pharmaceutical Distribution segment, more than offset the lower than expected performance in the PharMerica segment," said Kurt J. Hilzinger, AmerisourceBergen’s president and chief operating officer. "In our Drug Corporation, which provides pharmaceutical distribution and related services to pharmacies, operating income benefited from an above market sales increase in our proprietary generic drug program which offset in part the impact of fewer drug price increases in the June quarter. Benefits from our Optimiz(R) program, which enhanced the efficiency of our distribution center network, continued to improve our cost structure in the quarter. "With operating revenue growth significantly above market again, our Specialty Group, which focuses on the distribution of specialty pharmaceuticals to physicians and the services that support that market, continued its strong growth, despite slower growth in the anemia drug market. Its market-leading oncology businesses as well as other distribution businesses to physicians continue to drive growth faster than the overall pharmaceutical market. "Our Packaging Group continued to perform well. In the quarter, Anderson Packaging began packaging six new products for branded manufacturers, while American Health Packaging launched 14 new proprietary unit-dose offerings for various end-use markets. The pipeline of new products and initiatives remains solid. "Our PharMerica segment performance did not meet our expectations in the June quarter. The institutional pharmacy business is expected to be spun off, tax free, on July 31, 2007, and then be merged on a 50-50 basis with Kindred Healthcare Inc.’s institutional pharmacy business to form PharMerica Corporation, an independent, public company. PMSI, our market-leading workers’ compensation business, is in active turnaround where we have added new management and are investing in the business." At June 30, 2007, the company's balance sheet had total assets of $12.9 billion, total liabilities of $9.2 billion, and total stockholders' equity of $3.7 billion. Looking Ahead "With one quarter remaining in the fiscal year, we are increasing and narrowing our GAAP diluted earnings per share expectations for fiscal 2007 to a range of $2.60 to $2.68, from the previous range of $2.50 to $2.65," said Mr. Yost. "The new range includes a net $0.05 benefit for the year in special items, including an expected $0.01 charge in the September quarter, and continues to reflect expected earnings of $0.09 to $0.11 from the PharMerica institutional pharmacy business for the entire fiscal year 2007. We expect to spin off the PharMerica institutional pharmacy business on a tax-free basis on July 31, 2007. After the expected spinoff of our institutional pharmacy business, the historical results of that business, including the current fiscal year, will be reclassified to discontinued operations. At that time, our fiscal 2007 expectations for diluted earnings per share from continuing operations will be reduced approximately $0.10 to a range of $2.50 to $2.58, implying a fiscal 2007 fourth quarter diluted earnings per share from continuing operations in the range of $0.58 to $0.66 without the institutional pharmacy business and including the $0.01 special charge. "For fiscal year 2007, our diluted earnings per share guidance, with or without the institutional pharmacy business, assumes operating revenue growth of 9% to 10%, excluding the pending acquisition of Bellco Health, and continues to reflect operating margin expansion in the high single-digit basis point range for the Pharmaceutical Distribution segment. "With our operating cash generation coming in ahead of expectations at the end of nine months, we are raising our expectation for free cash flow in fiscal year 2007 by $175 million to a range of $750 million to $825 million from the previous range of $575 million to $650 million. Capital expenditures, which are included in the free cash flow expectation, remain unchanged in the $100 million to $125 million range." About AmerisourceBergen Headquartered in Valley Forge, Pennsylvania, AmerisourceBergen Corporation (NYSE:ABC) -- http://www.amerisourcebergen.com/-- is one of the pharmaceutical services companies serving the United States, Canada and selected global markets. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. AmerisourceBergen employs more than 14,000 people. * * * Moody's Investor Services placed Ba1 rating on AmerisourceBergen Corporation's long term corporate family and probability of default as of September 2006. The outlook is positive. AMP'D MOBILE: Court Okays Proposed Asset Sale Procedures -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the bidding procedures proposed by Amp'd Mobile for the sale of substantially all of its assets. The Court gave interested parties until Friday last week to submit written bids. King's Road Investment Ltd, as the Secured Lender, is authorized and entitled to credit bid up to the full amount of its prepetition indebtedness, the Court rules. Any objections to Kings Road's right to credit bid are overruled. Kings Road is a qualified bidder and reserves all rights under Section 363, including the right to credit bid all or part of its Prepetition Indebtedness at the Auction. Kings Road is not required to submit its bid by the Bid Deadline. To the extent the alleged secured claim of Brightpoint is not subject to an adversary proceeding challenging the validity of its asserted liens, the Court authorizes Brightpoint to credit bid its claim under Section 363. Brightpoint is not required to submit its bid by the Bid Deadline and is not required to submit a deposit, the Court rules. Any bids for the Assets will include an allocation for the inventory currently held by Brightpoint that is the subject of the alleged Brightpoint secured claim, the Court clarifies. The Debtor may, at its discretion, grant a Stalking Horse Bidder the right to receive a Break-Up Fee up to a maximum of 3% of the guaranteed cash purchase price offered by that Stalking Horse Bidder if a sale transaction is ultimately consummated with another prevailing bidder. Any payment of a Break-up Fee is conditioned upon the consent of Kings Road and will be subject, in all circumstances, to Court approval at the Sale Hearing. In no event will the Break-up Fee be payable if the Stalking Horse Agreement contains a "due diligence" or financing contingency, Judge Shannon orders. All proceeds of the Sale will be used to satisfy the prepetition claim, including interest, of Kings Road. The Court will conduct the Sale Hearing on the contemplated sale transactions on August 1, 2007, at 1:00 p.m., Eastern time. All subscriber contracts not assumed at the Sale Hearing will be deemed terminated for cause. The Official Committee of Unsecured Creditors and Verizon Wireless reserve their right to object to the Sale at the Sale Hearing. Nothing in the Bidding Procedures Order will prejudice any right or remedy of Asurion Insurance Services, Inc., or any of its affiliates up to the aggregate amount of Asurion's claims in Asurion's Adversary Proceeding against the Debtor, including a determination whether the insurance premiums collected by the Debtor are or are not property of the Debtor's Estate. Any purchaser of the Assets seeking to acquire personally identifiable information of the subscribers must comply with the Debtor's privacy policy. If that purchaser indicates it does not intend to follow the existing policy, then the Debtor will seek the appointment of a consumer privacy ombudsman in accordance with Sections 363(b) and 332. Any purchaser, who objects to the cure amount, segregate an amount satisfactory to the Contract party and attempt to resolve the disputed cure amount. If unresolved, the parties reserve the right to litigate the cure amount after the Sale Hearing. Any claim for rejection damages for the rejection of a Contract will be filed by the later of 30 days after notice of rejection or any applicable claims bar date set by the Court. 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. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expires on Sept. 29, 2007. (Amp'd Mobile Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AIRTRAN HOLDINGS: Comments on Midwest Air Second Quarter Earnings ----------------------------------------------------------------- AirTran Holdings, Inc., the parent of AirTran Airways, issued these comments in response to Midwest Air Group's performance for the second quarter of 2007. "Midwest lowered the bar in June when it said it would fail to meet already modest earnings projections," Joe Leonard, AirTran Airways chairman and chief executive, said. "The company's actual results fail to meet even those diminished expectations. Midwest blames its troubles on a weak industry- wide pricing environment, yet AirTran Airways and other airlines have improved profitability in the same challenging conditions. "Midwest management refuses to recognize that its business plan is fundamentally flawed," Mr. Leonard said. "Midwest's core operating profitability is deteriorating, and they irresponsibly ignore the expressed will of their shareholders. The owners of most Midwest shares support AirTran Airways' plan to combine two proud airlines into a single, national, low-cost carrier with the ability to thrive in a fiercely competitive marketplace." Midwest's declining performance in the second quarter: -- Net Income down 45 percent to $4.9 million; -- Earnings per Share down 51 percent to 19 cents; -- Passenger Revenue per Available Seat Mile down 3%; and -- Rising Non-Fuel Unit Costs. AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its ratings on AirTran Holdings Inc. and its primary operating subsidiary, AirTran Airways Inc., including the 'B-' corporate credit rating on AirTran Holdings. As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service confirmed its B3 Corporate Family Rating for AirTran Holdings Inc. and its Caa1 rating on the company's 7% Guaranteed Convertible Notes Due July 1, 2023, in connection with its implementation of its Probability-of-Default and Loss- Given-Default rating methodology for the Transportation sector. Moody's also assigned an LGD6 rating to those loans, suggesting noteholders will experience a 91% loss in the event of a default. AIRTRAN HOLDINGS: Earns $41.5 Million in Second Quarter of 2007 --------------------------------------------------------------- AirTran Holdings, Inc., the parent company of AirTran Airways, Inc., reported net income of $41.5 million for the second quarter of 2007. During the second quarter AirTran Airways served a record 6.3 million passengers and achieved an all-time record load factor of 78.8%. Included in the second-quarter results is a $4.5 million after-tax gain on the sale of two 737-700 aircraft. "I am extremely proud of our second-quarter performance,” Joe Leonard, AirTran's chairman and chief executive officer, said. “AirTran Airways served a record number of passengers, and we also set a new operating profit record of $69.7 million. Clearly, the customers appreciate the quality and value of our product as demonstrated by these results." Revenue for the quarter was a record $614.1 million. Capacity, as measured in available seat miles, increased 21.3% over the same period last year and reflects the addition of 18 new Boeing 737- 700s. Traffic, or revenue passenger miles, increased 22.3% resulting in the record 78.8% load factor, up 0.7 percentage points compared to second quarter 2006. "AirTran Airways' Crew Members continued to deliver great customer service which resulted in the airline serving a record number of passengers this quarter," Bob Fornaro, AirTran's president and chief operating officer, said. "I want to acknowledge the hard work and dedication of our Crew Members and thank them for their industry-leading operating performance." AirTran Airways ranked first among major carriers for baggage delivery and on-time performance of 85.5% and had the second lowest rate of involuntary denied boardings and complaints, according to the most recent DOT Air Travel Consumer Report. "Looking forward, passenger demand appears strong," Mr. Fornaro said. "With the delivery on July 16th of our last Boeing 737-700 for 2007, we expect to see improving trends in unit revenue and costs during the second half." AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its ratings on AirTran Holdings Inc. and its primary operating subsidiary, AirTran Airways Inc., including the 'B-' corporate credit rating on AirTran Holdings. As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service confirmed its B3 Corporate Family Rating for AirTran Holdings Inc. and its Caa1 rating on the company's 7% Guaranteed Convertible Notes Due July 1, 2023, in connection with its implementation of its Probability-of-Default and Loss- Given-Default rating methodology for the Transportation sector. Moody's also assigned an LGD6 rating to those loans, suggesting noteholders will experience a 91% loss in the event of a default. ASC INC: Creditors Given 20 Days to Respond to Case Conversion -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan gave ASC Inc.'s creditors 20 days to respond to the Debtor's request to have its chapter 11 case converted into a chapter 7 proceeding, Bill Rochelle of Bloomberg News reports. According to Bloomberg, ASC sought the conversion after the the Court denied its request for new financing to continue operating its last remaining plant in Lansing, Michigan. The report relates that the Court's order followed objections from the Official Committee of Unsecured Creditors and the U.S. Trustee which stated that the financing would only benefit the customers and ASC's owner. In its request, the Debtor said it needs the financing because its proposed use of excess funds was not agreed to by a secured lender. The Creditors Committee sought the case conversion before the Debtor did but withdrew the motion later. In its motion for conversion, the Committee told the Court that cause exists to shift the Debtor's case to a Chapter 7 proceeding because: a) the filing of the postpetition financing motion is a proof that the case is being controlled and managed by the Debtor's alleged subordinated secured creditor, American Specialty, the parent of the Debtor, and not by the Debtor; b) notwithstanding the significant amount of cash the Debtor has sitting in its bank account from which to fund the two remaining case wrap-up tasks, the Debtor has filed the postpetition financing motion wherein the Debtor proposes to give away estate assets to its parents in exchange for unnecessary discretionary lending. Headquartered in Southgate, Michigan, ASC Incorporated -- http://www.ascglobal.com/-- is a supplier of highly engineered roof systems and of design services for the world's automakers. The company filed for Chapter 11 protection on May 2, 2007, (Bankr. E.D. Mich. Case No. 07-48680) Gary H. Cunningham, Esq. and Sean M. Walsh, Esq. at Giarmarco, Mullins & Horton P.C. represent the Debtor in its restructuring efforts. Christopher Grosman, Esq., at Carson Fischer, P.L.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets and debts from $1 million to $100 million. ACXIOM(R) CORP: Posts Net Loss of $11.5 Million for Q1 2008 ----------------------------------------------------------- Acxiom(R) Corporation reported financial results for the first quarter of fiscal 2008 ended June 30, 2007. Details of Acxiom’s first-quarter performance include: Revenue of $338.2 million, up 0.4% from $336.7 million in the first quarter a year ago. Income from operations of $4.1 million, an 88.6% decrease compared to $36.3 million in the first quarter last year. Net loss of $11.5 million, compared to net earnings of $17.8 million in the first quarter of fiscal 2007. Unusual items that added $20.6 million in expenses in the quarter. Included were costs related to the pending transaction with Silver Lake and ValueAct Capital of $15.1 million, which are non- deductible for tax purposes, and $5.5 million predominantly related to the write-off of certain long-term assets related to an amended contract with an information technology outsourcing client. Operating cash flow of $39.1 million and negative free cash flow available to equity of $9.8 million. New Organizational Alignment Acxiom in fiscal 2008 implemented a new organizational alignment with three operating divisions. First-quarter revenue by division was: Services Division: Revenue for the quarter was $181 million, up 4 percent compared to the first quarter a year ago. Information Products Division: Revenue for the quarter was $96.7 million, a 2% increase over the same quarter last year. Infrastructure Management Division: Revenue for the quarter was $113.5 million, down 6% from the same quarter last year. First Quarter Recognition Computerworld magazine again named Acxiom one of the 100 Best Places to Work in Information Technology, the fourth time in the last six years the company has received the honor. Wells Fargo & Company named Acxiom the winner of the "First Choice" award as part of its Vendor Recognition Program. Acxiom was one of four business partners that Wells Fargo's Technology Information Group recognized during its annual vendor summit in April. Charles D. Morgan, Acxiom’s company leader and chairman of the board stated, “We remain focused on operating results while we advance the acquisition process with Silver Lake and ValueAct Capital. We continue to believe that successfully completing this deal is in the best interests of Acxiom and its constituents.” About Acxiom Based in Little Rock, Arkansas, Acxiom(R) Corporation (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. * * * Acxiom Corp. carries Moody's Investor Services' 'Ba2' long-term corporate family rating and 'Ba3' probability of default rating. The company's long-term foreign and local credit is rated 'BB' by Standard and Poor's. ASPEN INSURANCE: P. Melwani and K. Salame Leaves the Board ---------------------------------------------------------- Aspen Insurance Holdings Limited reported that Prakash Melwani and Kamil Salame will be stepping down from the Board. Mr. Melwani is a Senior Managing Director of Blackstone’s Private Equity Group and Mr. Salame is a partner of DLJ Merchant Banking Partners. Blackstone and DLJ Merchant Banking Partners no longer own stakes in the company after selling their remaining interests on July 3, 2007. Richard Bucknall and Matthew B. Botein will be joining the Board as Non-Executive Directors. Mr. Bucknall brings an exceptional background in insurance broking to Aspen. He recently retired from the Willis Group where he was Vice Chairman and earlier held roles as Group Chief Operating Officer and Chairman/Chief Executive Officer of Willis Limited. He was responsible for leading the development of Willis’ international network and played a crucial role in various strategic acquisitions. He is currently a Non-Executive Director of FIM Services Limited. He is a Fellow of the Chartered Insurance Institute. Mr. Bucknall will chair the company’s Compensation Committee and will also sit on the company’s Audit Committee. Mr. Botein is a Managing Director and member of the Management Committee at Highfields Capital Management, a Boston-based investment management firm with in excess of $10 billion under management. At Highfields, he is responsible for the firm’s investments in the financial services industry. Prior to joining Highfields, he was a Principal in the private equity department of The Blackstone Group. He currently serves on the boards of Cyrus Reinsurance Holdings Limited, a ‘‘sidecar’’ Highfields formed with XL Capital, and Integro Limited, an insurance broker, and previously was a member of the board of Aspen from its formation until 2003. He is a graduate of Harvard College and Harvard Business School. Mr. Botein will be a member of the company’s Compensation Committee, Corporate Governance and Nominating Committee and Investment Committee. Chris O’Kane, Chief Executive Officer of Aspen commented: ‘‘Both Prakash Melwani and Kamil Salame are excellent examples of how private equity can contribute to a company’s vision and maturity, and I want to thank them for their time and personal commitment during their tenure on the Board. I am also delighted that Matt Botein is rejoining the Board. He knows Aspen well and I welcome the opportunity to work with him again. The addition of Richard Bucknall, an experienced and knowledgeable insurance broker provides a fresh perspective as we continue to develop and evolve.’’ Glyn Jones, Chairman of Aspen commented, ‘‘Prakash Melwani and Kamil Salame have been instrumental in helping to shape and position Aspen since our formation five years ago and I would like to thank them both for their contribution. It has been a pleasure to work with them. Both Matt Botein and Richard Bucknall bring a wealth of business experience in the insurance industry to our Board which I believe will be invaluable as we continue to grow our business globally.’’ About Aspen Insurance Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings Limited (NYSE: AHL) -- http://www.aspen.bm/-- is a global reinsurance and insurance company. Aspen's operations are conducted through its wholly-owned subsidiaries Aspen Insurance UK Limited, Aspen Insurance Limited and Aspen Specialty Insurance Company. Aspen's principal existing founding shareholders include The Blackstone Group, Candover Partners Limited and Credit Suisse First Boston Private Equity. * * * To date, Moody's Investors Service assigned a Ba1 rating to the proposed $200 million Perpetual Non-Cumulative Preference Shares to be issued by Aspen Insurance Holdings Limited, the existing perpetual "PIERS" of which are rated Ba1 by Moody's. ATLANTIC MEDICAL: Case Summary & 37 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atlantic Medical Management Services, Inc. 100 Deerfield Lane, Suite 100 Malvern, PA 1935 Bankruptcy Case No.: 07-14283 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Atlantic Skin and Cosmetic Surgery 07-14284 Group, P.C. Type of business: The Debtor provides medical management & business administration services. Chapter 11 Petition Date: July 26, 2007 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Gerald J. McConomy, Esq. Knapp, McConomy, Merlie, L.L.P. 1216 Route 113, P.O. BOx 487 Chester Springs, PA 19425 Tel: (610) 827-2044 Estimated Assets Estimated Debts ---------------- --------------- Atlantic Medical Less than $1 Million to Management Services, Inc. $10,000 $100 Million Atlantic Skin and $100,000 to $100,000 to Cosmetic Surgery Group, P.C. $100 Million $100 Million A. Atlantic Medical Management Services, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Liberty Malvern, L.P. real estate lease $96,424 P.O. Box 822144 Philadelphia, PA 19182-2144 McKesson Specialty business debt $23,941 Distribution, L.L.C. P.O. Box 841838 Dallas, TX 75284-1838 Allergan-134696 business debt $18,180 12975 Collections Center Drive Chicago, IL 60693 Keystone Health Plan East business debt $10,479 PhotoMedex, Inc. business debt $8,200 National City Healthcare- business debt $6,420 0004 Independence Blue Cross business debt $6,204 Healthcare Capital business debt $4,990 Services Glassgow Medical Center, business debt $4,411 L.L.C. Sentry-140992 business debt $3,599 Main Line Clinical business debt $2,730 Laboratories Department of Pathology Wachovia 5-9 business debt $2,260 A.T.X. Communications business debt $2,177 Staples Business Advantage business debt $1,865 Allergan-89512 business debt $1,837 Sentry-141003 business debt $1,779 National Healthcare business debt $1,754 Nextgen business debt $1,684 Main Line Today business debt $1,050 Lewes Physician Time Share business debt $800 B. Atlantic Skin and Cosmetic Surgery Group, PC's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michael Saruk, M.D. wages $350,000 895 Bainbridge Drive West Chester, PA 19382 Jonathan Pontell, M.D. wages $170,000 1340 Fenimore Lane Gladwyne, PA 19035 Sherry Shi Li, M.D. wages $70,000 122 Hockessin Drive Hockessin, DE 19707 Minh P. Thieu, M.D. wages $31,000 Anthony Santoro, M.D. wages $30,000 Jules R. Fleischner wages $13,000 Aron D. Wahrman, M.D. wages $7,500 A.I.C.C.O., Inc.- business debt $6,691 15-008-014938 A.M.A. Insurance Agency, business debt $2,036 Inc. Amica Mutual Insurance Co. business debt $1,040 Jefferson Leasing business debt $904 P.A. Department of business debt $430 Revenue The Society for business debt $220 Investigative Dermatology Philadelphia business debt $200 Dermatological Society A.A.A.-Mid-Atlantic business debt $149 P.O. Box 820884 Philadelphia, PA 19182-0884 Bryn Mawr Rehabilitation business debt $125 Medical Staff Cingular Wireless business debt $67 BALLY TOTAL: Receives Requisite Votes for Pre-Packaged Ch. 11 Plan ------------------------------------------------------------------ Bally Total Fitness Holding Corp. disclosed Friday that it received the requisite number of votes in favor of its pre- packaged chapter 11 plan, Reuters reports. With the receipt of the required votes, the company is expected to file its pre-packaged chapter 11 plan with the U.S. Bankruptcy Court for the Southern District of New York. Treatment of Claims As reported in the Troubled Company Reporter on June 29, 2007, under the company's pre-packaged chapter 11 plan, these 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 Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates 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. BALLY TOTAL: Unable to Make Pact w/ Shareholders on Alternate Plan ------------------------------------------------------------------ Bally Total Fitness Holding Corp. was unable to reach an agreement on an alternative restructuring plan proposed by a group of shareholders, Reuters reports. As reported in the Troubled Company Reporter on July 9, 2007, the company received a letter from current shareholders Liberation Investments, L.P., Liberation Investments, Ltd., Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund L.P., which proposes an alternate chapter 11 plan of reorganization for the company. The company further said that it was in discussions with these shareholders and, subject to the execution of confidentiality agreements, will provide due diligence access to these shareholders for the purposes of their proposal being further refined and proposed definitive documentation being provided to the Board for review and consideration. The shareholders agreed to complete their due diligence by July 20, 2007. The company has already received the required number of votes favoring its pre-packaged chapter 11 plan. Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates 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. BANC OF AMERICA: Fitch Assigns Low-B Ratings on Six Cert. Classes ----------------------------------------------------------------- Banc of America Commercial Mortgage Inc., Series 2007-3, commercial mortgage pass-through certificates are rated by Fitch Ratings as: -- $50,000,000 class A-1 'AAA'; -- $334,000,000 class A-2 'AAA'; -- $133,000,000 class A-3 'AAA'; -- $78,944,000 class A-AB 'AAA'; -- $1,017,000,000 class A-4 'AAA'; -- $50,000,000 class A-5 'AAA'; -- $648,014,000 class A-1A 'AAA'; -- $3,515,654,613 class XW 'AAA' (notional amount); -- $116,565,000 class A-M 'AAA'; -- $100,000,000 class A-MF 'AAA'; -- $241,701,000 class A-J 'AAA'; -- $35,157,000 class B 'AA+'; -- $48,340,000 class C 'AA'; -- $26,368,000 class D 'AA-'; -- $150,000,000 class A-2FL 'AAA'; -- $135,000,000 class A-MFL 'AAA'; -- $26,367,000 class E ' A+'; -- $35,157,000 class F 'A'; -- $30,762,000 class G 'A-'; -- $48,340,000 class H 'BBB+'; -- $35,156,000 class J 'BBB'; -- $43,946,000 class K 'BBB-'; -- $26,367,000 class L 'BB+'; -- $4,395,000 class M 'BB'; -- $17,578,000 class N 'BB-'; -- $4,395,000 class O 'B+'; -- $8,789,000 class P 'B'; -- $13,184,000 class Q 'B-'. The $57,129,613 class S is not rated by Fitch. Classes A-1, A-2, A-3, A-AB, A-4, A-5, A-1A, XW, A-M, A-MF, A-J, B, C, and D are offered publicly, while classes A-2FL, A-MFL, E, F, G, H, J, K, L, M, N, O, P, and Q 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 151 fixed-rate loans having an aggregate principal balance of approximately $3,515,654,613, as of the cutoff date. BATALLION CLO: Moody’s Rates $22.5 Million Class E Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Batallion CLO 2007-1 Ltd: -- Aaa to the $343,500,000 Class A Senior Secured Floating Rate Notes, Due 2022; -- Aa2 to the $31,500,000 Class B Senior Secured Floating Rate Notes, Due 2022; -- A2 to the $32,500,000 Class C Senior Secured Deferrable Floating Rate Notes, Due 2022; -- Baa2 to the $27,500,000 Class D Secured Deferrable Floating Rate Notes, Due 2022; and -- Ba2 to the $22,500,000 Class E Secured Deferrable Floating Rate Notes, Due 2022. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio - consisting of senior secured loans and high-yield debt securities - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Brigade Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. BAY CHEVROLET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Bay Chevrolet Corp. 240-02 Northern Boulevard Little Neck, NY 11363 Bankruptcy Case No.: 07-43949 Chapter 11 Petition Date: July 25, 2007 Court: Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Craig M. Johnson, Esq. Jaspan Schlesinger Hoffman, LLP 300 Garden City Plaza Garden City, NY 11530 Tel: (516) 746-8000 Fax: (516) 393-8282 Total Assets: $2,790,000 Total Debts: $646,279 The Debtor did not file a list of its 20 largest unsecured creditors. BEAR STEARNS: S&P Junks Ratings on Class M-9A and M-9B Debentures ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on classes M-6, M-7, M-8, M-9A, and M-9B from Bear Stearns Asset Backed Securities I Trust 2004-BO1. Concurrently, S&P removed the ratings on classes M-7, M-8, M-9A and M-9B from CreditWatch with negative implications. At the same time, S&P affirmed its ratings on the remaining classes from the same transaction. The lowered ratings reflect continuing deterioration in the performance of the collateral pool. Credit support for series 2004-BO1 is derived from a combination of subordination, excess interest, and overcollateralization. Over the lifetime of this deal, cumulative losses have amounted to $70.02 million, or 5.21% of the original pool balance. As of the June 2007 remittance period, O/C for classes M-9A and M-9B had been reduced to $11.20 million, well below its target of $39.02 million. Severe delinquencies (90-plus days, foreclosures, and REOs) and total delinquencies constituted 9.16% and 19.86% of the current pool balance, respectively. S&P removed the ratings on classes M-9A and M-9B from CreditWatch because they were lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. This transaction was initially backed by a pool of fixed- and adjustable-rate mortgage loans secured by first, second, or third liens on one- to four-family residential properties. Ratings Lowered and Removed from Creditwatch Negative Bear Stearns Asset Backed Securities I Trust 2004-BO1 Rating ------ Class To From ----- -- ---- M-7 B AA/Watch Neg M-8 B- BBB/Watch Neg M-9A, M-9B CCC B/Watch Neg Rating Lowered Bear Stearns Asset Backed Securities I Trust 2004-BO1 Rating ------ Class To From ----- -- ---- M-6 BB AA Ratings Affirmed Bear Stearns Asset Backed Securities I Trust 2004-BO1 Class Rating ----- ------ I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA M-1, M-2, M-3 AAA M-4, M-5 AA+ BEAZER HOMES: Posts Net Loss of $123 Million in Qtr. Ended June 30 ------------------------------------------------------------------ Beazer Homes USA, Inc. disclosed on Thursday its financial results for the third fiscal quarter ended June 30, 2007. Summary results of the quarter are as follows: Quarter Ended June 30, 2007 -- Reported net loss of $123.0 million, including pre-tax charges related to inventory impairments, abandonment of land option contracts and goodwill impairments totaling $188.5 million. For the third quarter of the prior fiscal year, net income was $102.6 million. -- Home closings: 2,666 homes, compared to 4,156 in the third quarter of the prior year. -- Total revenues: $761.0 million, compared to $1.20 billion in the third quarter of the prior year. -- New orders: 3,055 homes, compared to 4,378 in the third quarter of the prior year. -- Lots under control totaled 71,801 at 6/30/07, a 31% and 10% decline from the third quarter of the prior fiscal year and the second quarter of fiscal 2007, respectively. -- Unsold finished homes declined 38% compared to the second quarter of this fiscal year. -- Net debt to capitalization was 52.6% as of 6/30/07. -- Backlog at 6/30/07: 5,952 homes with a sales value of $1.69 billion compared to 9,449 homes with a sales value of $2.85 billion in the third quarter of the prior year and 5,563 homes with a sales value of $1.67 billion in the second quarter of this fiscal year. "Operating conditions in the housing industry deteriorated further in the fiscal third quarter and remain very challenging," said president and chief executive officer, Ian J. McCarthy. "Most housing markets across the country continue to be characterized by an oversupply of both new and resale home inventory, reduced levels of consumer demand for new homes and aggressive price competition among home builders. These factors, together with a pronounced credit tightening in the mortgage markets, particularly for credit challenged home buyers, are likely to lead to continued difficult market conditions for Beazer Homes and other home builders. Although we cannot predict when market conditions will improve, we continue to believe that longer-term industry fundamentals remain compelling due to demographic changes, employment trends and new home supply constraints." Total home closings of 2,666 during the third quarter of fiscal 2007 were 36% below the same period a year ago. Net new home orders totaled 3,055 homes for the quarter, a decline of 30% from the third quarter of the prior fiscal year. The cancellation rate for the third quarter was 36%, compared to 34% in the prior year's third quarter, and 29% in the second quarter of this fiscal year. "We have remained disciplined in our operating approach and continue to focus on initiatives aimed at positioning us well for what we believe will continue to be a challenging environment. These initiatives include reductions in our direct construction costs, overhead expenses and land and land development spending. At the same time, we are intensely focused on enhancing our sales and marketing efforts, including the use of integrated, national promotion efforts to reduce unsold home inventories," McCarthy continued. The company reported that during the third quarter, margins continued to be negatively impacted by both higher levels of discounting and reduced revenue volume as compared to the same period a year ago. In addition, the company incurred pre-tax charges to abandon land option contracts, and to recognize inventory impairments and goodwill impairments of $44.8 million, $113.9 million, and $29.8 million, respectively. The charges for goodwill impairment relate to goodwill allocated to operations in Northern California, Nevada and Florida. The results for the third fiscal quarter also included a $6.0 million reduction of the warranty accrual for the remediation of homes in connection with the Trinity Homes class action settlement in October 2004, based on a reduction in the estimated remaining remediation costs. The company has proactively reduced its controlled lot count by 31% compared to June of the prior year and by 10% compared to the March quarter of this fiscal year. The company remains committed to aligning its land supply and inventory levels to current expectations for home closings, and continues to exercise caution and discipline with regard to land and land development spending. Revolving Credit Facility The company also announced that it has entered into a new, four year $500 million revolving credit facility. The new agreement, which matures in July 2011, replaces the company's existing $1.0 billion revolving credit facility which was scheduled to mature in August 2009. The new facility contains an accordion feature which permits the aggregate commitment to increase up to $1 billion, subject to the availability of additional commitments. "We are focused on maintaining a strong balance sheet and significant liquidity during this challenging business environment," said Allan P. Merrill, executive vice president and chief financial officer. "While we have no near-term plans for borrowing under the new credit agreement, its terms provide us with increased flexibility to manage successfully through the current downturn and at the same time to take a long-term view of the business." As of June 30, 2007, the company had no borrowings on its revolving credit facility and a cash balance of $128.8 million. United States Attorney and SEC Inquiries and Outstanding Litigation On March 29, 2007, Beazer Homes received a subpoena from the United States Attorney's office in the Western District of North Carolina, seeking the production of documents focusing on the company's mortgage origination services. On May 1, 2007, the company received notice that the Securities and Exchange Commission had commenced an informal inquiry to determine whether any person or entity related to Beazer Homes had violated federal securities laws. On July 20, 2007, the ompany received a formal order of private investigation issued by the SEC in this matter. The company intends to continue to fully cooperate with all related inquiries. Together with certain of its subsidiaries and current and former officers and directors, the company has also been named as a defendant in several purported class action lawsuits. In response to these matters, the Audit Committee of the Beazer Homes Board of Directors and its independent legal counsel and financial consultant launched an internal review of Beazer Homes' mortgage origination business and related matters. The results of the ongoing review by the Audit Committee, the governmental investigations, or the pending lawsuits could result in the payment of criminal or civil fines, the imposition of an injunction on future conduct, the imposition of other penalties, or other consequences, including the company adjusting the conduct of certain of its business operations and the timing and content of its existing and future public disclosures, any of which could have a material adverse effect on the business, financial condition or results of operations of the company. The company also included selected balance sheet data as of June 30, 2007 in its financial press release. The company reported $4.04 billion in total assets of $4.04 billion, $1.77 billion in total debt, and $1.48 billion in total stockholders' equity at June 30, 2007. Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Moody's Investors Service lowered Beazer Homes USA Inc.'s corporate family rating to Ba2 from Ba1 and the ratings on the company's senior notes to Ba2 from Ba1. The ratings outlook is negative. BLUEGREEN CORPORATION: Earns $4.1 Million in 2007 Second Quarter ---------------------------------------------------------------- Bluegreen Corporation generated total sales in the second quarter ended June 30, 2007, of $143.3 million, compared to total sales of $141.9 million in the second quarter of 2006, reflecting record Vacation Ownership sales which offset a decline in Homesite sales. Net income in the second quarter of 2007 was $4.1 million, as compared to net income of $6.6 million, in the same period last year. Bluegreen Resorts sales increased 15.2% to a second quarter record $105.2 million from $91.4 million in the second quarter of 2006. Higher Resorts sales were primarily attributable to an increase in sales to existing Bluegreen Vacation Club(R) owners. These sales rose 36% during the second quarter of 2007 from the same period last year, and comprised 40% of Resorts sales for the second quarter of 2007, as compared to 32% of Resorts sales during the second quarter of 2006. Bluegreen expects to commence construction during the fourth quarter of 2007 at "Odyssey Dells," its newest vacation ownership resort to be located in Wisconsin Dells, Wisconsin. Wisconsin Dells is one of the Midwest's most popular vacation destinations and a region of the country referred to as "The Waterpark Capital of the World!(R)." John M. Maloney Jr., president and chief executive officer of Bluegreen, commented, "We remain very pleased with the strong growth at our Resorts segment, which is being driven by growing consumer acceptance, increasing industry demand, and rising brand recognition of the Bluegreen Vacation Club(R). We continue to focus on providing new destination choices that meet the lifestyle demands of our owners, and in that regard are very pleased that we have expanded our presence in Wisconsin Dells. In addition, we expect to begin accepting guests at our two newest Bluegreen Resorts in Las Vegas, Nevada and Williamsburg, Virginia during 2008." Sales at Bluegreen Communities declined to $38.0 million from $50.6 million during the same period last year. The decrease reflects the substantial sell-out of several communities that were in active sales during the second quarter of 2006 and the impact of the percentage-of-completion method of accounting, partially offset by the commencement of sales at four new Bluegreen Communities subsequent to the second quarter of 2006. Mr. Maloney commented, "Despite lower sales, Bluegreen Communities operated profitably in the second quarter of 2007 and for the first six months of the year, yielding field operating profit of 17.2% and 21%, respectively. We believe our ability to operate profitably reflects the quality of our product, an intimate knowledge of the markets we serve, and an adherence to a strict economic discipline in connection with land purchases. This approach has positioned Bluegreen Communities to maintain profitability and, unlike others engaged in various aspects of the real estate industry, reduce our exposure to undesirable inventory. We have made notable progress in addressing our inventory issue, and are continuing to pursue acquisitions of additional attractive properties. However, our ability to return to favorable quarterly sales comparisons during 2007 will be dependent on the volume of acquisitions that we close in the near term, and whether such new properties can be made available for sale in the short term. While we are optimistic in our ability to acquire additional properties during 2007, any such purchases are likely not to begin to generate meaningful sales and operating results until 2008." Six-Month Financial Results Total sales for the six months ended June 30, 2007 increased to $265.3 million from total sales of $263.7 million in the second quarter of 2006. Resorts sales increased 16.2% to $192.4 million from $165.5 million in the comparable period one year ago. Bluegreen Communities sales were $72.9 million, a decrease from sales of $98.2 million in the six-month period ended June 30, 2006. Bluegreen Communities sales in the first half of 2006 included $7.0 million of revenue related to the bulk sale of land in California on a non-retail basis; there was no such sale in 2007. Net income for the first half of 2007 rose 54.1% to $9.4 million, or $0.30 per diluted share, from net income of $6.1 million, or $0.20 per diluted share, in the same period last year. Net income for the first half of 2006 included a cumulative effect of change in accounting principle charge, net of income taxes and minority interest, totaling $4.5 million, or $0.14 per diluted share; there was no such charge in 2007. Balance Sheet Data The company had total assets of $978.9 million, total liabilities of $598.5 million, minority interest of $18 million, and total stockholders’ equity of $ 362.4 million. During the three months ended June 30, 2007, the company transferred $61.1 million of vacation ownership notes receivable to BB&T in legal sale transactions under an existing receivables purchase facility, accounted for as on-balance sheet financing transactions. As of June 30, 2007, $51.4 million of the corresponding liability related to these transactions was outstanding and is included in Receivable-Backed Notes Payable on the balance sheet. Bluegreen's balance sheet at June 30, 2007, reflected unrestricted cash of $59.3 million, a book value of $11.70 per share, and a debt-to-equity ratio of 1.06:1. About Bluegreen Bluegreen Corporation (NYSE: BXG) – http://www.bluegreencorp.com/ -- provides Colorful Places to Live and Play(R) through two principal operating divisions. With over 170,000 owners, Bluegreen Resorts markets a flexible, real estate-based vacation ownership plan that provides access to over 40 resorts and an exchange network of over 3,700 resorts and other vacation experiences such as cruises and hotel stays. Bluegreen Communities has sold over 55,000 planned residential and golf community homesites in 32 states since 1985. Founded in 1966, Bluegreen is headquartered in Boca Raton, Fla., and employs over 6,200 associates. In 2005, Bluegreen ranked No. 57 on Forbes' list of The 200 Best Small Companies and No. 48 on FORTUNE'S list of America's 100 Fastest Growing Companies. * * * As reported in the Troubled Company Reporter on Jan. 9, 2007, Standard & Poor's Ratings Services revised its outlook on Bluegreen Corp. to stable from positive. At the same time, Standard & Poor's affirmed its 'B' corporate credit rating on the Boca Raton, Florida-based timeshare developer. BLOCKBUSTER INC: Reports 2.8% Revenue Decrease in 2nd Qtr. 2007 --------------------------------------------------------------- Blockbuster Inc. reported that its total revenue decreased 2.8% to $1.26 billion for the second quarter ended July 1, 2007, from $1.3 billion for the second quarter last year. The company said due to a reduction in rental revenues from the closure of stores, an unfavorable home video release schedule and the sale of 217 GAMESTATION stores on May 2, 2007, caused the decrease in total revenue. These decreases were partially offset by an increase in revenues from Blockbuster Inc. “Our results this quarter clearly reflect continued investment in our online subscriber growth. Although BLOCKBUSTER Total Access™ allowed us to increase our subscriber base by 600,000 to a total of 3.6 million subscribers, the costs associated with the program affected our profitability,” said Jim Keyes, Blockbuster Chairman and CEO. “While we remain committed to capturing market share in the overall video rental market, we are absolutely focused on striking an appropriate balance between growth and enhanced profitability going forward.” The company said that for the second quarter of 2007, net loss was $35.3 million, compared with net income of $68.4 million for the second quarter of 2006. The net loss for the second quarter of 2007 included a $77.7 million gain related to the sale of 217 of the Company’s UK-based GAMESTATION stores and net income for the second quarter of 2006 was affected by the impact of $91.2 million in favorable tax audit settlements. “To this end, the Company is undergoing a comprehensive review of its business aimed at identifying and implementing initiatives designed to revitalize the Company, enhance the organizational structure and improve profitability” Mr. Keyes said. “Our goal is to transform Blockbuster into a company that quickly responds to customers’ changing needs for convenient access to media entertainment. We look forward to communicating our strategic roadmap later in the year.” A full-text copy of Blockbuster's Second Quarter 2007 Earnings is available for free at: http://ResearchArchives.com/t/s?21db About Blockbuster Inc. Headquartered in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- provides in-home movie and game entertainment, with more than 9,000 stores throughout the Americas, Europe, Asia and Australia. The company also operates in Taiwan, Thailand, and New Zealand. * * * Blockbuster Inc.'s 9% Senior Subordinated Notes due 2012 holds Moody's Investors Service's Caa2 rating, Standard & Poor's Ratings Services' CCC+ rating, and Fitch Ratings' CC rating. BRANDYWINE REALTY: Posts $164.3 Million Revenue in Second Qtr 2007 ------------------------------------------------------------------ Brandywine Realty Trust's total revenues for the second quarter of 2007 was $164.3 million, as compared with $150.4 million in the same period last year. The company incurred a $800,000 loss in the second quarter of 2007, compared to a $13.6 million loss in the second quarter of 2006. These losses are primarily attributable to non-cash real estate amortization and depreciation charges which are added back in the calculation of FFO. Funds from operations totaling $59 million in the second quarter ended June 30, 2007, compared to $57 million in the second quarter of 2006. The second quarter of 2007 included a $3.8 million gain on the dissolution of a real estate partnership. The company’s FFO payout ratio for the second quarter of 2007 was 67.7%. Net income totaled $16.6 million for the six months ended June 30, 2007, compared to an $18.2 million loss for the six months ended June 30, 2006. Total revenues for the six months ended June 30, 2007, was $327.4 million, as compared with $294.3 million. Funds from operations totaled $117.6 million for the six months ended June 30, 2007, compared to $112.2 million or for the six months ended June 30, 2006. The company’s FFO payout ratio for the first six months of 2007 was 68.8%. At June 30, 2007, the company’s balance sheet showed total assets of $5.3 billion, total liabilities of $3.4 billon, minority interest of $85.8 million, and total stockholders’ equity of $1.8 billion. Portfolio Highlights At June 30, 2007, the company’s core portfolio was 93.9% occupied and 95% leased versus 91.6% and 93.1%, respectively, at June 30, 2006. It owned 281 properties at June 30, 2007, encompassing 265 properties in our core portfolio and 16 properties under development or redevelopment. For the second quarter of 2007, our core portfolio retention rate was 85.5% with positive net absorption of 181,656 square feet. In the second quarter of 2007, the company’s achieved a 7.2% increase on the company’s new lease rental rates and a 1.4% increase on the company’s renewal rental rates. Year to date, the company has achieved positive net absorption of 326,766 square feet in its core portfolio. Investment Highlights During the second quarter of 2007, the company acquired 155 Grand Avenue, a 97.9% occupied, 204,278 square foot office building in Oakland, CA, for $72 million. Subsequent to quarter end, the company acquired a package of five buildings in the Boulders office park in Richmond, VA aggregating 508,607 square feet and 94% occupied, for $96.5 million. During the second quarter of 2007, the company sold its Cityplace office building in Dallas, TX for $115 million and incurred a $600,000 loss on the sale attributable to certain closing adjustments. At June 30, 2007, the company was actively proceeding on six ground-up office developments and eight office redevelopments with a total identified cost of $514.6 million of which $130.2 million remained to be funded. In addition, the company is in the planning and design phase on two office redevelopments, nine land development projects and several other projects with a total, current investment of $113.3 million; held $60.6 million of other land for future development and are completing a series of tenant and building improvement projects aggregating $55.1 million. Capital Markets Highlights On April 30, 2007, the company closed the sale of $300 million of 5.7% senior unsecured notes due May 1, 2017, with a yield of 5.72%, representing a spread of 1.1% to the yield on the underlying 2017 Treasury note on the day of the pricing. The company used the net proceeds of the notes to reduce outstanding indebtedness under its unsecured credit facility. On June 29, 2007, the company amended and restated its $600 million unsecured credit facility achieving a reduction in the base pricing, a change in various covenants, a reduced capitalization rate for valuation calculations and an extension of the maturity to June 29, 2011. Subsequent to quarter end, the company repaid $136 million of fixed-rate mortgage loans without incurring any prepayment penalty. The company used its unsecured credit facility to fund the repayment. "We are extremely pleased with our second quarter performance," stated Gerard H. Sweeney, president and chief executive officer of Brandywine Realty Trust. "We experienced improving operating and leasing metrics evidenced by robust absorption, meaningful occupancy gains and improving rental rates. Our construction activities remain on schedule and our development pipeline continues to experience strong activity. Our sales and investment activities have reinforced our market strategies and will maintain our competitive advantage. We are pleased to have completed the dissolution of our Invesco partnership and the realization of $3.8 million in incremental revenue from that process. Lastly, we executed a series of capital market transactions to enhance our balance sheet and provide greater flexibility and capacity for future investment opportunities." Distributions On June 12, 2007, the company’s board of trustees declared a quarterly dividend distribution of $0.44 per common share that was paid on July 19, 2007, to shareholders of record as of July 5, 2007. The board also declared quarterly dividend distributions of $0.46875 per 7.5% Series C Cumulative Redeemable Preferred Share and $0.460938 per 7.375% series D cumulative redeemable preferred share that were paid on July 16, 2007, to holders of record as of June 30, 2007, of the series C and series D preferred shares, respectively. Share Repurchase Program Year to date, the company had purchased a total of 1,780,600 common shares at an average price of $33.37 per common share under its board-approved share repurchase program. The company is authorized to purchase an additional 539,200 common shares. 2007 FFO Guidance Based on current plans and assumptions and subject to the risks and uncertainties more fully described in Brandywine's reports filed with the Securities and Exchange Commission, the company is maintaining its previously announced guidance for full year 2007 FFO per diluted share to be in a range of $2.57 to $2.65. About Brandywine Realty Trust Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust (NYSE: BDN), http://www.brandywinerealty.com/-- is one of the full-service, integrated real estate companies in the United States and is focused primarily on the ownership, management and development of class A, suburban and urban office buildings in selected markets aggregating approximately 42 million square feet. * * * Fitch assigned a 'BB+' rating on Brandywine Realty Trust's Preferred Stock. The outlook is Positive. CD 2005-CD1: Moody’s Affirms Low-B Ratings on Five Cert. Classes ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 26 classes of CD 2005-CD1 Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-CD1 as: -- Class A-1, $68,890,663, affirmed at Aaa -- Class A-1A, $395,751,249, affirmed at Aaa -- Class A-1D, $77,291,964, affirmed at Aaa -- Class A-2FL, $200,000,000, affirmed at Aaa -- Class A-2FX, $70,000,000, affirmed at Aaa -- Class A-3, $112,000,000, affirmed at Aaa -- Class A-4, $1,563,032,000, affirmed at Aaa -- Class A-J, $305,412,000, affirmed at Aaa -- Class A-M, $387,824,000, affirmed at Aaa -- Class A-SB, $198,275,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $29,087,000, affirmed at Aa1 -- Class C, $43,630,000, affirmed at Aa2 -- Class D, $43,630,000, affirmed at Aa3 -- Class E, $58,174,000, affirmed at A2 -- Class F, $38,783,000, affirmed at A3 -- Class G, $43,630,000, affirmed at Baa1 -- Class H, $43,630,000, affirmed at Baa2 -- Class J, $48,478,000, affirmed at Baa3 -- Class K, $29,087,000, affirmed at Ba1 -- Class L, $9,696,000, affirmed at Ba2 -- Class M, $14,543,000, affirmed at Ba3 -- Class N, $9,696,000, affirmed at B1 -- Class O, $9,695,000, affirmed at B2 -- Class P, $9,696,000, affirmed at B3 -- Class OCS, $25,000,000, affirmed at Baa3 As of the July 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 0.8% to $3.87 billion from $3.90 billion at securitization. The Certificates are collateralized by 225 loans, ranging in size from less than 1% to 7.5% of the pool, with the top 10 loans representing 31.4% of the pool. The pool includes seven investment grade shadow rated loans, representing 23% of the pool. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Twenty loans, representing 13.7% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 75.1% of the pool. Moody's weighted average loan to value ratio for the conduit component is 102.2%, compared to 104.9% at securitization, resulting in an affirmation of all classes. The largest shadow rated loan is the One Court Square Loan ($290 million -- 7.5%), which is secured by a 1.4 million square foot Class A office building located in Long Island City, New York. The property is also encumbered by a $25 million B Note which secures non-pooled Class OCS. The property is 100% occupied by Citibank through May 2020. Moody's current shadow ratings of the pooled loan and B Note are Baa2 and Baa3, respectively, the same as at securitization. The second shadow rated loan is the Yahoo! Center Loan ($250 million -- 6.5%), which is secured by a 1.1 million square foot office campus located in Santa Monica, California. The property was 99% occupied as of December 2006, essentially the same as at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The third shadow rated loan is the Main Mall Loan ($146.4 million -- 3.8%), which is secured by the borrower's interest in a 1 million square foot regional mall located in Portland, Maine. The mall is anchored by Macy's, J.C. Penney and Sears. The center originally also had two Filene's stores which have both vacated since securitization. The center's performance has declined since securitization, largely due to increased expenses. Moody's current shadow rating is Ba1, compared to Baa2 at securitization. The remaining four shadow rated loans comprise 5.3% of the pool. The current shadow ratings, which are the same as at securitization: i. the 100 East Pratt Loan ($105 million -- 2.7%) -- Baa3; ii. Lowes Universal Hotel Portfolio ($55 million -- 1.4%) – Baa3; iii. the Chico Mall Loan ($40.9 million -- 1.1%) -- Baa3; iv. the 220 East 67th Street Loan ($2.5 million -- 0.1%) -- Aaa. The top three conduit loans represent 7.6% of the pool. The largest conduit loan is the TPMC Portfolio Loan ($105 million -- 2.7%), which is secured by several properties located in suburban Houston, Texas. The properties include a 699,000 square foot office building, a theater/commercial building and a parking garage. The portfolio was 95.4% occupied as of September 2006, compared to 92.3% at securitization. The portfolio's performance has declined due to increased expenses. Moody's LTV is 105.3%, compared to 101.6% at securitization. The second largest conduit loan is the Florence Mall Loan ($99.4 million -- 2.6%), which is secured by the borrower's interest in a 929,000 square foot regional mall located in suburban Cincinnati, Ohio. The center is anchored by Sears, Macy's, J.C. Penney and Macy's Home Store. The in-line space was 92.2% occupied as of December 2006, compared to 87.1% at securitization. Moody's LTV is 86.5%, compared to 87.3% at securitization. The third largest conduit loan is the Private Mini Storage Portfolio ($86.3 million -- 2.2%), which is secured by 22 self storage facilities totaling 13,600 units. The facilities are located in six states with the largest concentration in Texas (9) and Florida (7). Moody's LTV is 95.9%, the same as at securitization. CDC MORTGAGE: S&P Lowers Ratings on Five Certificate Classes ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on five classes of mortgage pass-through certificates from CDC Mortgage Capital Trust's series 2002-HE1, 2002-HE2, and 2003-HE3. One of the lowered ratings, on the class B-2 certificates from series 2003-HE3, remains on CreditWatch with negative implications, where it was placed on May 29, 2007. Concurrently, S&P removed three of the lowered ratings from CreditWatch negative. Finally, S&P affirmed its ratings on the remaining classes from the same transactions. The lowered ratings reflect the continuing deterioration of collateral performance. Credit support for these transactions is derived from a combination of subordination, excess interest, and overcollateralization. Realized losses have consistently outpaced excess spread and have eroded O/C to the extent that credit support for these classes is no longer sufficient to support the prior ratings. As of the June 2007 remittance period, the O/C for the pool backing series 2002-HE1 had been reduced to $0.63 million, or 0.11% of the original pool balance, well below its target of 0.50%. Cumulative realized losses reached $14.78 million, or 2.91% of the original pool balance. Total delinquencies and severe delinquencies (90-plus-days, foreclosure, and REO) constitute 36.60% and 25.17% of the current pool balance, respectively. For the same time period, the O/C for the pool backing series 2002-HE2 was completely depleted. S&P lowered its rating on class B-2 to 'D' from 'CCC' due to $186,242 in principal write-downs during the June 2007 remittance period. Cumulative realized losses reached $12.60 million, or 3.11% of the original pool balance. Total and severe delinquencies constitute 45.72% and 31.71% of the current pool balance, respectively. As of the June 2007 remittance period, the O/C for the pool backing series 2003-HE3 had been reduced to $1.51 million, or 0.19% of the original pool balance. Cumulative realized losses reached $12.46 million, or 1.75% of the original pool balance. Total and severe delinquencies constitute 32.81% and 22.93% of the current pool balance, respectively. Standard & Poor's will continue to closely monitor the performance of class B-2 from series 2003-HE3. If the delinquent loans cure to a point at which monthly excess interest begins to outpace monthly net losses, thereby allowing O/C to build and provide sufficient credit enhancement, S&P will affirm the rating and remove it from CreditWatch. Conversely, if delinquencies cause substantial realized losses in the coming months and continue to erode credit enhancement, S&P will take further negative rating actions on this class. S&P removed the rating on class B from series 2002-HE1, class B-1 from series 2002-HE2, and class B-3 from series 2003-HE3 from CreditWatch because they were lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. The collateral backing these transactions consists of pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Rating Lowered and Remaining on Creditwatch Negative CDC Mortgage Capital Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-HE3 B-2 B/Watch Neg BBB/Watch Neg Rating Lowered CDC Mortgage Capital Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-HE2 B-2 D CCC Ratings Lowered and Removed from Creditwatch Negative CDC Mortgage Capital Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-HE1 B CCC B/Watch Neg 2002-HE2 B-1 CCC B/Watch Neg 2003-HE3 B-3 CCC B/Watch Neg Ratings Affirmed CDC Mortgage Capital Trust Series Class Rating ------ ----- ------ 2002-HE1 A AAA 2002-HE1 M A 2002-HE2 M-1 AA 2002-HE2 M-2 A 2003-HE3 M-1 AA+ 2003-HE3 M-2 A 2003-HE3 M-3 A- 2003-HE3 B-1 BBB+ CELESTICA INC: 2nd Qtr. 2007 Revenue Decreases to $1.9 Billion -------------------------------------------------------------- Celestica Inc. reported revenue of $1.9 billion, down 13% from $2.2 billion in the second quarter of 2006. Net earnings for the second quarter were $24.9 million, compared to net loss of $30.3 million for the same period last year. Included in net earnings for the quarter are the impacts of a $32 million net deferred tax recovery related primarily to the tax benefit of previous years' write-down of restructured Canadian operations and restructuring charges of $2.5 million. For the same period in 2006, restructuring charges were $20 million. Adjusted net earnings for the quarter were $4.9 million, compared to adjusted net earnings of $29.1 million for the same period last year. These results compare with the company's guidance for the second quarter, announced on April 25, 2007, of revenue in the range of $1.85 billion to $2.05 billion. For the six months ended June 30, 2007, revenue was $3.8 billion, compared to $4.2 billion for the same period in 2006. Net loss was $9.4 million, compared to net loss of $47.7 million last year. Adjusted net loss for the first half of 2007 were $4.2 million, compared to adjusted net earnings of $46.5 million for the same period in 2006. The company’s balance sheet as of June 30, 2007, showed $4.7 billion total assets, $2.6 billion total liabilities, and $2.6 billion total stockholders’ equity. "Our second quarter results demonstrate the steady progress we are making as a result of the turnaround plans implemented earlier this year," said Craig Muhlhauser, president and chief executive officer, Celestica. "Revenue is trending upwards, working capital performance is improving and we continue to make operational improvements in North America and Europe. Our operating profit is still at the early stages of recovery and we expect to continue to build on the improvements made to date." Outlook For the third quarter ending Sept. 30, 2007, the company expects revenue will be in the range of $2 billion to $2.2 billion. About Celestica Celestica Inc. (NYSE:CLS) -- http://www.celestica.com/-- provides innovative electronics manufacturing services. Through its global manufacturing and supply chain network, the company delivers competitive advantage to companies in the computing, communications, consumer, industrial, and aerospace and defense end markets. Celestica operates a highly sophisticated global manufacturing network with operations in Brazil, China, Ireland, Italy, Japan, Malaysia, Philippines, Puerto Rico, and the United Kingdom, among others. * * * As reported in the Troubled Company Reporter on May 4, 2007, Moody's Investors Service downgraded Celestica Inc.'s corporate family rating to B1 from Ba3 and the senior subordinated note ratings to B3 from B2. Simultaneously, Moody's lowered the company's speculative grade liquidity rating to SGL-2 from SGL-1. CHENIERE ENERGY: Buys Back Shares from Credit Suisse for $325 Mil. ------------------------------------------------------------------ Cheniere Energy Inc. completed the purchase of 9,175,595 shares of its common stock under an option agreement with Credit Suisse International at a cash price of $35.42 per share, for an aggregate purchase price of about $325 million. Cheniere's option to purchase the shares was part of an issuer call spread entered into in July 2005 by Cheniere and Credit Suisse in connection with Cheniere's issuance of $325 million of 2.25% convertible senior notes due 2012. Cheniere elected physical settlement of the option thereby requiring Credit Suisse to deliver 9,175,595 shares to Cheniere, which has reduced Cheniere's issued and outstanding common stock to 47,274,148 shares as of July 26, 2007. Based in Houston, Texas, Cheniere Energy, Inc. (AMEX: LNG) -- http://www.cheniere.com/-- operates a network of three, 100-percent owned, onshore LNG receiving terminals, and related natural gas pipelines, along the Gulf Coast of the U.S. The company is in the early stages of developing a business to market LNG and natural gas. To a limited extent, it is also engaged in oil and natural gas exploration and development activities in the Gulf of Mexico. The company operates four business segments, LNG receiving terminal; natural gas pipeline; LNG and natural gas marketing; and oil and gas exploration and development. * * * Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Cheniere Energy, Inc. and affirmed its 'BB' rating on the $600 million term B bank loan at Cheniere LNG Holdings LLC, an indirectly owned, 100% subsidiary of Cheniere Energy. The outlook is stable. CHILDREN'S TRUST: Fitch Expects to Lift Rating on S. 2005B Bonds ---------------------------------------------------------------- Fitch expects to upgrade the Children's Trust tobacco settlement asset-backed bonds, series 2005B, as: -- $33,686,015.70 series 2005B, due May 15, 2055 to 'BBB-' from 'BB'. Over the past year, the tobacco industry's litigation environment has improved with favorable rulings for the leading tobacco manufacturers. In light of the tobacco industry's improved litigation environment, Fitch has reevaluated its cash flow stresses with respect to rating tobacco settlement bonds and has eased some of the stresses to account for the decreased likelihood of tobacco litigation to significantly affect the leading tobacco manufacturers over the next few years. This upgrade reflects the Children's Trusts series 2005B bonds ability to pay by their final maturity of May 15, 2055 under Fitch's 'BBB-' revised cash flow stresses which are published in Fitch's presale report, dated July 26, 2007, for Children's Trust (Commonwealth of Puerto Rico) with respect to its issuance of tobacco settlement asset-backed bonds, series 2007. The series 2005B bonds maturing May 15, 2055 represent one series in a larger trust. The bonds are capital appreciation bonds which are subordinated to the senior series 2002 bonds, rated 'BBB', and series 2005A bonds, rated 'BBB-'. The series 2005B bonds may not receive any payments until the series 2002 and series 2005A bonds have been paid in full. Fitch's rating of tobacco settlement bonds is linked to Fitch's corporate rating of the tobacco industry, which it currently rates 'BBB-', with a Stable Outlook. Fitch's ratings on tobacco settlement bonds are limited to a rating of 'BBB', one notch above Fitch's rating of the tobacco industry. Because Fitch views the Master Settlement Agreement as an executory contract in the event of bankruptcy, it is seen as a positive credit feature that enables tobacco settlement bonds to receive ratings one notch higher than the rating it places on the tobacco industry. Other Fitch-rated tobacco settlement bonds are currently being reviewed to determine if their revised cash flow stresses warrant upgrades of those bonds. This review is expected to be completed over the next few weeks. CHIQUITA BRANDS: S&P Holds Ratings Under Negative CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services said that the ratings on Cincinnati, Ohio-based Chiquita Brands International Inc. remain on CreditWatch with negative implications following reports that the company, in addition to other banana import companies, received a Statement of Objections from the European Commission. The document concerns an ongoing EC investigation regarding potential violations of European competition laws in the banana industry. Based on Chiquita's voluntary notification and cooperation with the investigation, the EC granted the company conditional immunity from any fines related to the conduct, subject to customary conditions. The ratings were initially placed on CreditWatch with negative implications on May 2, 2007, following weak first-quarter operating results due to high purchased fruit and other industry costs and lower local banana prices in Europe. "We will review Chiquita's operating and financial plans with management before resolving the CreditWatch listing, as well as developments in this EC investigation, and assess the potential for regulatory sanctions and/or financial penalties as part of our review," said Standard & Poor's credit analyst Alison Sullivan. CITICORP MORTGAGE: Fitch Rates $707,000 Class B-5 Certs. at B ------------------------------------------------------------- Fitch rates the Citicorp Mortgage Securities, Inc.'s REMIC pass- through certificates, series 2007-6 as: -- $457,042,234.00 classes IA-1 through IA-14, IA-IO, IIA 1, IIA-IO, IIIA-1, IIIA-IO and A-PO (senior certificates) 'AAA'; -- $7,296,000 class B-1 'AA'; -- $2,589,000 class B-2 'A'; -- $1,412,000 class B-3 'BBB'; -- $941,000 class B-4 'BB'; -- $707,000 class B-5 'B'. The $706,046 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 2.90% subordination provided by the 1.55% class B-1, the 0.55% class B- 2, the 0.30% class B-3, the 0.20% privately offered class B-4, the 0.15% privately offered class B-5, and the 0.15% 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 (July 1, 2007), the mortgage pool consists of 756 conventional, fully amortizing, 10-30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $470,693,280 located primarily in California (39.74%), New York (16.92%), and Florida (5.89%). The weighted average original loan to value ratio of the mortgage loans is 67.74%. Approximately 21.45% of the loans were originated under a reduced documentation program. Condo properties account for 17.29% of the total pool. Cash-out refinance loans represent 17.88% of the pool. The average balance of the mortgage loans in the pool is approximately $622,610. The weighted average coupon of the loans is 6.308% and the weighted average remaining term is 350 months. CLAREGOLD TRUST: Moody’s Places Low-B Ratings on Six Cert. Classes ------------------------------------------------------------------ Moody's Investors Service assigned definitive ratings to securities issued by ClareGold Trust, 2007-2. The provisional ratings issued on July 13, 2007 have been replaced with these definitive ratings: -- Class A-1, $248,580,000, rated Aaa -- Class A-2, $177,835,000, rated Aaa -- Class X, $475,378,737*, rated Aaa -- Class B, $9,745,000, rated Aa2 -- Class C, $8,913,000, rated A2 -- Class D, $11,884,000, rated Baa2 -- Class E, $2,377,000, rated Baa3 -- Class F, $4,160,000, rated Ba1 -- Class G, $1,783,000, rated Ba2 -- Class H, $1,188,000, rated Ba3 -- Class J, $1,188,000, rated B1 -- Class K, $594,000, rated B2 -- Class L, $2,139,000, rated B3 *Approximate notional amount CLEVELAND-CLIFFS: Earns $86.9 Million in Second Quarter 2007 ------------------------------------------------------------ Cleveland-Cliffs Inc. reported total revenues of $547.6 million for the quarter ended June 30, 2007, compared with $486.2 million for the quarter ended June 30, 2006. Second-quarter revenues from iron ore product sales and services were a record $547.6 million, an increase of 13%, compared with $486.2 million in the same quarter last year. The increase was driven by higher sales volumes in both North America and Asia- Pacific, combined with higher sales price realizations in Asia- Pacific. Second-quarter net income was $86.9 million, compared with $83.1 million, last year. The increase in net income primarily reflects lower income taxes due to a larger income contribution from North American operations, which benefit from lower tax rates when compared to Asia-Pacific operations. First-Half Consolidated Results Total revenues for the first-half of 2007 were $873.1 million, compared to $792.6 million for the first-half of 2006. Revenues from iron ore product sales and services in the first six months of 2007 were a record $873.1 million, an increase of 10%, compared with $792.6 million in the same period last year. Operating income decreased 1% to $160.8 million, from $162.6 million in the first six months of 2006. Net income was $119.4 million, compared with $121 million, last year. At June 30, 2007, the company listed $2.2 billion total assets, $1 billion total liabilities, $120.5 million minority interest, $172.3 million preferred stock, and $900.1 million total stockholders’ equity. Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer, commented: "In addition to delivering solid results in the quarter, we continued to increase our presence as a global mining company with a definitive agreement to acquire PinnOak Resources LLC, including its three metallurgical coal mines, as well as an agreement with QCoal for a 45 percent economic interest in the Sonoma Coal Project in Australia. We also further strengthened our management team in the quarter with key additions that will support the Company's growth. Our North American franchise remains a strong core for the business as we continue to execute our strategy to diversify products and Cliffs' geographic reach." Liquidity At second-quarter end, Cliffs had $137.8 million of cash and cash equivalents, including $95.7 million at Portman, and $125 million in borrowings under the company's $500 million revolving credit facility. At Dec. 31, 2006, Cliffs had $351.7 million of cash and cash equivalents and no borrowings under its credit facility. Year-to-date uses of cash include $159 million for increased product inventories, as well as investments including Cliffs' $160 million total investment in Amapa, $57 million investment in Sonoma and other capital expenditures totaling $46 million. Outlook Cliffs-managed 2007 North American pellet production is expected to approximate 35 million tons, with the company's share representing about 22 million tons. This expectation includes production at Wabush under the terms of Cliffs' off-take agreement with Consolidated Thompson. As previously disclosed, the company expects North American sales for 2007 to be about 22 million tons. North American revenue per ton for pellets is expected to increase about 3% for the full year 2007 from 2006 levels. For the year, Cliffs expects to generate cash from operations of about $270 million. The company anticipates using its operating cash flow, revolving credit facility and a new one-year, $150 million term loan to finance the PinnOak acquisition, its Sonoma and Amapa investments and other capital expenditures. "Through the first half of the year, demand has remained strong in each of our current markets and Cliffs continued to position itself with strategic investments to capitalize on worldwide demand," added Mr. Carrabba. "In North America, consolidation in the steel sector continues and our customers are capitalizing on their improved economies of scale, resulting in a healthier industry overall. We expect this will continue to be favorable for Cliffs as they look to our company for raw materials. Internationally, Asian steel producers continue record rates of production and growth and we believe this will be sustained through year-end and beyond." About Cleveland-Cliffs Inc. Based in Cleveland, Ohio, Cleveland-Cliffs Inc. (NYSE: CLF) -- http://www.cleveland-cliffs.com/-- produces iron ore pellets in North America, and sells the majority of its pellets to integrated steel companies in North America and Canada. The company operates six iron ore mines located in Michigan, Minnesota and Eastern Canada. The company is a majority owner of Portman Limited, an iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. * * * Cleveland-Cliffs, Inc.'s preferred stocks carry Moody's Investor Service's 'B3' rating. COMCAST CORP: Earns $588 Million in Second Quarter Ended June 30 ---------------------------------------------------------------- Comcast Corporation disclosed on Thursday its results for the quarter ended June 30, 2007. The company reported net income of $588 million on revenue of $7.7 billion for the second quarter ended June 30, 2007, compared with net income of $460 million on revenue of $5.9 billion for the same period ended June 30, 2006. In addition to strong operating results at Comcast Cable, the current quarter also includes $126 million of investment income driven by an increase in the fair market value of the company's investment portfolio and income related to the sale of certain investments. Net income increased 54% to $1.4 billion in the six months ended June 30, 2007, compared to net income of $926 million in the prior year. Brian L. Roberts, chairman and chief executive officer of Comcast Corporation, said, “We are again reporting double-digit growth in cable revenue, our 28th consecutive quarter of double-digit Operating Cash Flow (OCF) growth and our fourth consecutive quarter of record-breaking Revenue Generating Unit (RGU) additions. Demonstrating the appeal of our superior products and our Triple Play package, our cable division delivered 1.6 million RGU additions, 94% above last year’s second quarter additions. To achieve this record-breaking performance, we added more than 670,000 Comcast Digital Voice customers and, in just 2 years, have surpassed 3 million digital voice customers. We also successfully completed the immense operational task of deploying an unprecedented 2.1 million digital set-top boxes in the second quarter in advance of a July 1 regulatory deadline. We are on track for another outstanding year as we continue to execute on our time-to-market advantage. We see cable growth accelerating in the second half of 2007 as we remain focused on delivering superior products and services to our customers.” Cable Segment Results Revenue increased 12% to $7.3 billion for the second quarter of 2007 reflecting continued strong consumer demand for Comcast’s services and the success of the Comcast Triple Play. Cable revenue increased 12% to $14.3 billion for the six months ended June 30, 2007. RGU additions increased 94% to a second quarter record of 1.6 million in 2007 from the 830,000 RGUs added in the second quarter of 2006. The company ended the quarter with 54.2 million RGUs, an increase of 6.5 million units from one year ago. Year to date through June 30, 2007, Comcast added 3.4 million RGUs, a 77% increase from the same period last year. Operating Cash Flow, defined as operating income before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on sale of asset, grew 13% to $3.0 billion in the second quarter of 2007 resulting in an Operating Cash Flow margin of 41.3%, an increase from the 40.9% reported in the second quarter of 2006. The margin improvement reflects strong revenue growth and our continuing success in controlling the growth of operating costs, even as we experience an extraordinary level of activity from the growth in RGUs, led by growth in digital cable services and the continuing acceleration in Comcast Digital Voice additions. Comcast installed 2.1 million digital set-top boxes during the second quarter of 2007 as the company accelerated digital cable deployment in advance of a July 1 regulatory deadline. This represents a four-fold increase in the number of set-top boxes deployed compared to one year ago. Year to date through June 30, 2007, Operating Cash Flow increased 14% to $5.8 billion from the $5.1 billion reported in the same period last year. Operating Cash Flow margin increased to 40.6% for the six months ended June 30, 2007 from 40.0% in the prior year period. Capital expenditures increased 52% to $1.6 billion in the second quarter of 2007, reflecting a 94% increase in RGU additions and a 50% increase in the number of digital customers added with advanced services. Year-to-date cable capital expenditures totaled approximately $3.0 billion and are expected to decline in the second half of 2007 due to a lower number of set-top box purchases. Set-top box inventory levels as of June 30, 2007, are sufficient to satisfy expected demand in the second half of 2007. In addition, network improvements and integration of the acquired systems from Adelphia and Time Warner were substantially completed by the end of the second quarter of 2007. Consistent with historical trends, approximately 75% of cable capital expenditures in the second quarter of 2007 were variable and directly associated with demand for new products and deliver over a 30% incremental return on the investment. Programming Segment Results The Programming segment reported second quarter 2007 revenue of $334 million, a 22% increase from the second quarter of 2006 and Operating Cash Flow of $75 million, or a 27% increase, reflecting higher viewership and higher advertising and distribution revenue. Year to date through June 30, 2007, Programming segment revenue increased 24% to $636 million from the same period one year ago. During the same period, Operating Cash Flow increased 28% to $140 million in 2007. Corporate and Other For the second quarter of 2007, Corporate and Other revenue increased to $48 million from $37 million in the second quarter of 2006 primarily due to acquisitions at Comcast Interactive Media. The Operating Cash Flow loss for the second quarter of 2007 was $94 million compared to a loss of $74 million for the same period in 2006. Year to date through June 30, 2007, Corporate and Other revenue increased 10% to $136 million from $124 million in the same period of 2006. Operating Cash Flow loss for Corporate and Other increased to $189 million for the six months ended June 30, 2007 compared to $130 million in 2006. Consolidated Operating Income Operating Income increased 25% to $1.5 billion in the second quarter of 2007 reflecting strong results at Comcast Cable and the impact of cable system acquisitions. Similarly, consolidated operating income increased 25% to $2.7 billion for the six months ended June 30, 2007. Net Cash Provided by Operating Activities increased to $4.4 billion for the six months ended June 30, 2007, from $3.2 billion in 2006 due primarily to strong year-to-date operating results and $483 million related to the proceeds from sales of trading securities in the second quarter of 2007. Share Repurchase Program Comcast repurchased $752 million of its Class A Special Common Stock, or 27.9 million shares, during the second quarter of 2007. Year to date through June 30, 2007, Comcast repurchased $1.25 billion of its common stock or 46.6 million shares. Remaining availability, as of June 30, 2007, under the company’s stock repurchase program is $1.8 billion. Since the inception of the repurchase program in December 2003, the company has invested $8.6 billion in its common stock and related securities, reducing the number of shares outstanding by 12%. These investments include repurchasing $7.2 billion or 350.0 million shares of its common stock and paying $1.4 billion to redeem several debt issues exchangeable into 70.9 million shares of Comcast common stock. At June 30, 2007, the company's consolidated balance sheet showed $110.7 billion in total assets, $68.6 billion in total liabilities, 278 million in minority interest, and $41.8 billion in total stockholders' equity. About Comcast Corporation Headquartered in Philadelphia, Comcast Corp.(Nasdaq: CMCSA, CMCSK) -- http://www.comcast.com/-- provides cable, entertainment and communications products and services. With 24.1 million cable customers, 12.4 million high-speed Internet customers, and 3.5 million voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content. Comcast’s content networks and investments include E! Entertainment Television, Style Network, The Golf Channel, VERSUS, G4, AZN Television, PBS KIDS Sprout, TV One, Comcast SportsNet and Comcast Interactive Media, which develops and operates Comcast's Internet business. Comcast also has a majority ownership in Comcast Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia. * * * Moody's Investors Service assigned a Ba1 rating to Comcast Corporation's preferred stock in April 2005. COMMERCIAL REALTY: Disclosure Statement Hearing Moved to Sept. 10 ----------------------------------------------------------------- The Honorable Warren W. Bentz of the U.S. Bankruptcy Court for the Western District of Pennsylvania moved to Sept. 10, 2007, the hearing to consider the adequacy of the disclosure statement describing Commercial Realty and Development Company and its debtor-affiliates' Joint Chapter 11 Plan of Reorganization. The Court originally scheduled the Disclosure Statement hearing on July 26, 2007. As reported in the Troubled Company Reporter on June 19, 2007, the Debtors' Plan provides distribution to creditors from proceeds of any property sale. Additionally, the Debtors will continue to lease some properties and the gross amounts of rents will be used to pay: a. operating expenses of the leasing business, including maintenance and repairs, real estate taxes, and management fees; and b. expenses from the operation of the hotel, restaurant and lounge. Treatment of Claims Under the Plan, Administrative Claims will be paid in full, in cash, at closing from the confirmation deposit fund. Allowed Secured Claim of CSB Bank will be paid in full. CSB Bank's claim will be amortized over a period of 20 years with a balloon payment due in 10 years, and with a fixed annual interest rate of 6%. CSB Bank has a secured claim of $1,500,000 as of the effective date of the Plan. Deficiency, if any, on the claim of CSB Bank will be paid from the proceeds of sale of the properties. Real Estate Taxes Claims will receive quarterly payment over 72 months following the Plan's effective date. Priority Taxes, and Priority Wages and Commission Claims will be paid in full in the ordinary course of business and in quarterly payments over 72 months following the Plan's effective date, plus future interest at federal treasury rate. Executory Contracts and Leases Claims will be paid in full at closing, or as otherwise agreed by the holder. Holders of General Claims will paid after current expenses are paid. The Debtors estimated distribution at 5% in quarterly payments over 5 years beginning on the first anniversary of the effective date. Each holder of Equity Security Interests will retain their percentage ownership of the Debtors after the Plan is confirmed. About Commercial Realty Headquartered in St. Marys, Pa., Commercial Realty and Development Company operates a 59-room hotel and inn, complete with Executive and VIP Suites. Its Towne House Inn Dining Room is open to the public and offers a full country breakfast, luncheon menu and dinner menu. The company and two affiliates -- Towne House Inn Inc. and Towne House Enterprises Inc. -- sought chapter 11 protection on November 8, 2006 (Bankr. W.D. Pa. Lead Case No. 06-11436). Guy C. Fustine, Esq., at Knox McLaughlin Gornall & Sennett, P.C. represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case. When Commercial Realty sought protection from its creditors, it listed assets and debts between $1 million and $100 million. COMM 2007-C9: S&P Puts Prelim B- Rating on $7.245MM Class Q Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to COMM 2007-C9's $2.9 billion commercial mortgage pass- through certificates series 2007-C9. The preliminary ratings are based on information as of July 26, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A-3, A-AB, A-4, A-1A, A-FX, A-J, B, C, D, E, and F are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.29x, a beginning LTV of 110.5%, and an ending LTV of 106.0%. Preliminary Ratings Assigned COMM 2007-C9 Class Rating Amount Recommended credit Support ----- ------ ------ ---------------- A 1 AAA $26,500,000 30.000% A 2 AAA $172,300,000 30.000% A 3 AAA $55,700,000 30.000% A AB AAA $63,549,000 30.000% A 4 AAA $1,433,365,000 30.000% A 1A AAA $277,153,000 30.000% AM FX AAA $189,796,000 20.000% A J AAA $195,613,000 13.250% B AA+ $32,602,000 12.125% C AA $28,980,000 11.125% D AA- $32,602,000 10.000% E A+ $25,357,000 9.125% F A $21,735,000 8.375% X* AAA $2,897,955,917 N/A AM-FL AAA $100,000,000 20.000% G A- $25,357,000 7.500% H BBB+ $36,224,000 6.250% J BBB $36,225,000 5.000% K BBB- $32,602,000 3.875% L BB+ $21,734,000 3.125% M BB $14,490,000 2.625% N BB- $10,867,000 2.250% O B+ $7,245,000 2.000% P B $10,868,000 1.625% Q B- $7,245,000 1.375% S NR $39,846,917 0.000% E57-1** A- $4,767,000 N/A E57-2** BBB $2,374,000 N/A E57-3** BB+ $8,359,000 N/A * Interest-only class with a notional amount. ** The class E57 certificates will only receive distributions from and will only incur losses with respect to the non-pooled trust component of the 135 East 57th Street loan. NR -- Not rated. N/A -- Not applicable. COMMUNITY HEALTH: $6.8 Bil. Triad Deal Cues S&P to Lower Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Brentwood, Tennessee-based Community Health Systems Inc. The corporate credit rating was lowered to 'B+' from 'BB-'. The ratings were removed from CreditWatch, where they were placed with negative implications on March 20, 2007, following the announcement that the company had entered into a definitive agreement to acquire Triad Hospitals Inc.; the transaction is valued at about $6.8 billion. The rating outlook is stable. "The downgrade reflects our lower rating opinion of Community considering its weakened financial risk profile due to the financing of the recently completed acquisition of Triad," said Standard & Poor's credit analyst David Peknay. Also, Standard & Poor's assigned its bank loan and recovery ratings to Community's $7.2 billion senior secured credit facilities, consisting of a $750 million revolver due 2013, a $6.065 billion senior secured term loan B due 2014, and a $400 million delayed-draw term loan due 2014. The borrower is CHS/Community Health Systems Inc., a wholly owned subsidiary of Community Health. The credit facilities are rated 'BB' with a recovery rating of '1', indicating an expectation for very high (90%-100%) recovery in the event of a payment default. In addition, Standard & Poor's assigned its 'B-' rating to Community's $3 billion senior unsecured notes. The rating on the unsecured notes is two notches below the 'B+' corporate credit rating, in line with Standard & Poor's criteria. Although the notes are considered senior, the company will have a sizable amount of priority debt. The speculative-grade rating on Community reflects the company's significant debt leverage as a result of its debt-financed acquisition of Triad Hospitals Inc., and industry challenges that the company faces, such as uncertain third-party reimbursement, increasing bad debt, and relatively weak patient volume trends. The company also faces the risk of integrating a large hospital operation into its existing operation. These factors are mitigated somewhat by the company's diversified hospital portfolio and management's experience operating a large number of hospitals. CONEXANT SYSTEMS: Posts $20.5 Mil. Core Net Loss in 3rd Qtr. 2007 ----------------------------------------------------------------- Conexant Systems Inc. reported third quarter fiscal 2007 revenues of $179.5 million. Third quarter fiscal 2006 revenues were $199.9 million. Core gross margins were 43.5% of revenues. Core operating expenses were $89.2 million. The core operating loss was $11 million. The core net loss was $20.5 million. Gross margins for the third fiscal quarter of 2007 were 43.5% of revenues. Operating expenses were $105 million, operating loss was $27 million and net loss was $35.2 million for the third quarter fiscal 2007. The company had operating expenses of $ 137.3 million, operating loss of $5.7 million, and net loss of $67.1 million for the third quarter fiscal 2006. The company ended the quarter with $224 million in cash, cash equivalents, and marketable securities. At June 29, 2007, the company had total assets of $1.2 billion, total liabilities of $813 million, and $385 million. Business Perspective "Conexant possesses the global talent, the intellectual property, and the customer relationships required to rebuild a successful enterprise," said Daniel A. Artusi, Conexant's newly appointed president and chief executive officer. "We also face significant challenges. Moving forward, we need to clearly understand our core competencies and be disciplined enough to focus our resources in the areas where we have the best chance to create profitable growth. "We also have to dramatically improve our financial performance as quickly as possible. "In the next few weeks, I plan to continue deepening my understanding of Conexant's business and operations," Artusi said. "We will be making significant changes in the near future, and we will communicate those changes at the appropriate time." Business Outlook For the fourth quarter of fiscal 2007, the company expects flat revenues on a sequential basis. About Conexant Systems Headquartered in Newport Beach, Calif., Conexant Systems Inc. (NASDA: CNXT) -- http://www.conexant.com/-- designs, develops and sells semiconductor system solutions that connect personal access products such as set-top boxes, residential gateways, PCs and game consoles to voice, video and data processing services over broadband and dial-up connections. Key semiconductor products include digital subscriber line and cable modem solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and the company's foundation dial-up modem business. * * * As of July 10, 2007, the company carries Moody's B1 senior secured debt rating. Moody's also rates the company's long-term corporate family rating and probability of default rating at Caa1. The outlook is stable. Standard & Poor's rates the company's long-term foreign and local issuer credits at B. The outlook is stable. CURRIE TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Currie Technologies Inc. 9453 Ownesmouth Avenue Chatsworth, CA 913111 Bankruptcy Case No.: 07-12609 Type of Business: The Debtor manufactures the Electro-Drive(TM) and US Pro Drive(TM) propulsion systems which serve as the backbone of the company's scooters and bicycles, powering these vehicles with efficient and environmentally friendly, high performance drive systems for sport or transportation. See http://www.currietech.com/ Chapter 11 Petition Date: July 26, 2007 Court: Central District Of California (San Fernando Valley) Debtor's Counsel: Philip A. Gasteier, Esq. Robinson Diamant & Wolkowitz APC 1888 Century Parkway, East Suite 1500 Los Angeles, CA 90067 Tel: (310) 277-7400 Fax: (310) 277-7584 Debtor's financial condition as of May 31, 2007: Total Assets: $10,181,969 Total Debts: $18,033,518 Debtor's List of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ CSW $3,000,000 c/o Patrick A. Long, Esq. 1 Riverside Plaza Columbus, OH 43215-2372 Tel: (714) 668-1400 Fax: (714) 668-1411 China Buyang Group Co., Ltd. $1,218,804 88 Tangdianshan Industrial Zone Yongkang, Zhejiang, China Tel: 86/579-271762 Fax: 86/579-7271796 Shangai Phoenix Import & Export $441,928 168 Gao Yang Road Shangai, China 200080 TISCO Logistics, Inc. $55,310 Bewley, Lassleben & Miller LLP $44,571 United Pawrcel Services $39,386 Evanston Insurance Company $16,600 The Hartford $12,710 Resch Polster, Albert & Berger $10,179 Loeb & Loeb LLP $8,610 Eichberg Associates $7,857 Troy & Gould P.C. $6,537 Rob Kaplan $6,368 Jimmy CH Wan $6,049 Correa Pallet Inc. $3,168 ACE Paper Company $2,993 Hanan Consulting Group $2,437 Gumbiner Savett Finkel Engleson Rose Inc. $2,365 Streamline Shippers Assoc. Inc. $2,264 Advanstar Communication, Inc. $2,100 DAIMLERCHRYSLER: Seeks to Trim Down Dealer Ranks to Stem Losses --------------------------------------------------------------- Chrysler Group has warned some of its weakest dealers that it may try to shut them down if they can't generate more sales in the next six months, a sign that the auto maker is stepping up efforts to cull its network of retail outlets, Neal E. Boudette writes for The Wall Street Journal. Cerberus Capital Management LP, which is completing its deal to buy a controlling stake in Chrysler from DaimlerChrysler AG, had previously held talks with Chrysler executives and some of Chrysler's top dealers to discuss the need to slash dealer ranks in order to stem the unit's losses in North America, WSJ states. Auto makers seldom get their way when trying to terminate dealers' franchise agreements for poor sales performance as they often wind up in court, where state laws guarantee franchisees many protections against manufacturers, Mr. Boudette observes. Chrysler, General Motors Corp. and Ford Motor Co. has been slowly reducing the number of stores in its sales network in a bid to be more competitive. GM has about 6,900 dealers, Ford has 4,200 and Chrysler 3,700. Holding U.S. market shares of about 23%, 16% and 14%, respectively, that amounts to about 300 dealers per one point of U.S. market share held by GM, about 280 a point for Ford and 270 for Chrysler, WSJ relates. By comparison, Toyota Motor Corp. has about 1,400 dealers, and its 16% market share gives it about 90 for each market-share point, the report says. 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. DIAMOND ENT: Shifts to Health Care Business, Sells Media Assets --------------------------------------------------------------- Diamond Entertainment Corporation, in accordance with its change in business direction pursuant to its merger with RX for Africa, Inc., sold its inventory of Electronic Media and certain other related assets. "We are in position to focus all our attention to searching for innovative solutions to the critical challenge of meeting the healthcare needs of those living in Africa," commented Dr. Mulugetta Bezzabeh, the new chief executive officer of Diamond Entertainment Corporation and continuing CEO of Rx Africa (Ethiopia) PLC. About Rx for Africa Rx for Africa Inc. is a holding company headquartered in New York City which was recently acquired by a newly formed subsidiary of Diamond Entertainment Corporation, a publicly traded company (DMON). At present, the primary asset of Rx for Africa Inc. is its 100% ownership interest in Rx Africa (Ethiopia) PLC. About Rx Africa (Ethiopia) Rx Africa (Ethiopia) PLC is a pharmaceutical company, formerly known as Sunshine Pharmaceutical, which owns and operates a pharmaceutical manufacturing facility in Addis Ababa, Ethiopia. The plant was established to manufacture AIDS/HIV, malaria, tuberculosis and other generic drugs in Ethiopia. Rx Africa (Ethiopia) PLC is currently producing six generic products for distribution in Ethiopia, with plans to increase its product line by a minimum of 30 new generic medicines over the next six months for sale throughout Ethiopia and the rest of Africa. About Diamond Entertainment Based in Walnut, California, Diamond Entertainment Corporation (OTC BB: DMEC.OB) dba e-DMEC, markets and sells a variety of DVD and videocassette titles to the budget home video and DVD market. Through a newly formed, special purpose subsidiary, Diamond Entertainment Corporation recently completed the acquisition of Rx for Africa Inc., a holding company based in New York City which is the parent company of Rx Africa (Ethiopia) PLC, a pharmaceutical company based in Addis Ababa, Ethiopia. Prior to its acquisition of Rx for Africa, Inc., Diamond Entertainment was principally in the business of distributing and selling videocassette/DVD programs through normal distribution channels throughout the United States. Going Concern Doubt Pohl, McNabola, Berg and Company, LLP, raised substantial doubt about Diamond Entertainment's ability to continue as a going concern after auditing the company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the company's substantial losses and negative cash flows from operations for the year ended March 31, 2006. DELTA ENTERTAINMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Delta Entertainment Corporation 1663 Sawtelle Boulevard, 3rd Floor Los Angeles, CA 90025-319 Bankruptcy Case No.: 07-16302 Type of Business: The Debtor is an independent music & video label. See http://www.deltamusic.com/ Chapter 11 Petition Date: July 25, 2007 Court: Central District Of California (Los Angeles) Debtor's Counsel: Samuel R. Maizel, Esq. Pachulski Stang Ziehl Young Jones & Weintraub LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: (310) 201-0760 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its 20 largest unsecured creditors. DENALI CAPITAL: Moody’s Rates $18 Million Class B-2L Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Denali Capital CLO VII, Ltd: -- Aaa to the $150,000,000 Class A-1LR Variable Funding Notes Due January 2022; -- Aaa to the $482,000,000 Class A-1L Floating Rate Notes Due January 2022; -- Aa2 to the 42,000,000 Class A-2L Floating Rate Notes Due January 2022; -- A2 to the 41,000,000 Class A-3L Floating Rate Notes Due January 2022; -- Baa2 to the $22,500,000 Class B-1L Floating Rate Notes Due January 2022 and -- Ba2 to the $18,000,000 Class B-2L Floating Rate Notes Due January 2022. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. DC Funding Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ELAN CORP: Incurs Second Quarter 2007 Net Loss of $141.1 Million ---------------------------------------------------------------- Elan Corporation plc posted net loss for the second quarter ended June 30, 2007, of $141.1 million over $90.5 million in the second quarter of 2006 after including a non-cash charge of $52.2 million relating to Maxipime(R) and Azactam(R) intangible assets. This charge resulted from the approval by the United States Food and Drug Administration of a generic form of Maxipime in June 2007, which was earlier than expected. Total revenue for the second quarter of 2007 increased 38% to $188.5 million from $136.4 million in the same period of 2006. Revenue is analyzed below between product revenue and contract revenue. Management's Comments Commenting on Elan’s business, Kelly Martin, Elan’s president and chief executive officer, said, "We continue to make progress in our pipeline and focus on moving our science towards the patients. Business discipline and growth in both Tysabri and EDT should provide a solid platform for continued advancement throughout the balance of the year." Commenting on Elan’s second quarter financial results, Shane Cooke, Elan’s executive vice president and chief financial officer, said, "We are very pleased with the progress we have made in the second quarter of the year with revenue growth of 38% and a reduction of two-thirds in Adjusted EBITDA losses as we continue to carefully manage our cost base. The net loss increased to $141.1 million, mainly due to a non-cash charge of $52.2 million related to the write down of intangible assets as a result of the approval of a generic competitor to Maxipime. Tysabri had a solid quarter with approximately 14,000 patients on therapy as of mid- July 2007, an increase of over 40% from when we reported last quarter. We expect Tysabri to continue to drive revenue growth." Mr. Cooke added, "With the earlier than expected entry of generic competition to Maxipime, we will immediately adjust our commercial infrastructure, reducing related selling and administration costs, and we are targeting to contain Adjusted EBITDA losses for 2007 at the previously guided $50 million level." Guidance Elan had previously guided revenues, excluding Tysabri, for 2007 to exceed $500 million and Adjusted EBITDA losses to be less than $50 million. While the impact of a generic competitor to Maxipime, and the timing of approval for a potential generic form of Azactam, remains unclear, Elan expects revenues for 2007, excluding Tysabri, will approach, if not exceed, $500 million. Elan is also taking steps to reduce costs in order to try and contain Adjusted EBITDA losses at about $50 million for 2007. SG&A and R&D costs, which were previously guided to be in the range of $600 million to $650 million, are now expected to be below $600 million for 2007. About Elan Headquartered in Ireland, Elan Corporation plc (NYSE: ELN) -- http://www.elan.com/-- is a neuroscience-based biotechnology company. Elan shares trade on the New York, London and Dublin Stock Exchanges. * * * As reported in the Troubled Company Reporter on Apr. 11, 2007, Moody's Investors Service confirmed its B3 Corporate Family Rating for Elan Corporation plc and assigned a B2 probability-of-default rating to the company. FHC HEALTH: Crestview Equity Stake Cues Moody’s Ratings Review -------------------------------------------------------------- Moody's Investors Service placed the ratings of FHC Health Systems, Inc. under review with an uncertain direction following the announcement that Crestview Partners, L.P., will take an equity stake in the company, accompanied by a new governance structure. Terms of the deal were not disclosed and the transaction is expected to close by the end of the year. Moody's notes that a few weeks ago, the company announced that its major contract with the state of Arizona, covering Maricopa County, will not be renewed. While the contract accounted for over 20% of revenues, the cash flow and earnings contribution was not proportional due to declining profitability under the contract as well as other state requirements, which resulted in higher costs. Moody's' also commented that the contract required a significant investment in capital, including restricted cash, a surety bond, a letter of credit, and other items. In general, Moody's believes that this state contract was atypical relative to FHC's other contracts due to the staffing requirements and higher utilization. This contract also received significant external scrutiny and publicity. Moody's believes that FHC is experiencing growth in its New Mexico, Pennsylvania, and Kansas contracts. Moody’s also believes that the company has the opportunity to add additional contracts in new states. In reviewing FHC's ratings, Moody's will examine any changes in the company's capital structure, especially changes in leverage. Moody’s will also focus on the company's pro-forma cash flow and earnings power excluding the Arizona contracts, but incorporating any growth in its existing contracts and any new business development opportunities. These ratings of FHC Health Systems were placed under review: -- Corporate Family Rating: B2 -- Probability of Default Rating: B2 -- Senior Secured Second Lien Term Loan, due 2009, rated Ba3, LGD 25 -- Senior Secured Third Lien Term Loan, due 2010, rated B3, LGD 75 FHC Health Systems, Inc., headquartered in Norfolk, Virginia, is one of the leading behavioral managed care providers in the U.S., covering about 23 million lives. The company's remaining subsidiary, Value Options, provides services to the public sector, employer groups, health plans and federal agencies. FORD MOTOR: Bidders for Units to Begin Due Diligence in August -------------------------------------------------------------- Ford Motor Company plans to let prospective bidders begin due diligence on its Jaguar and Land Rover brands next month, adding that it was pleased with the expressions of interest it had received in the brands, and in the “strength and quality” of the interested parties, as its efforts to sell the two brands continue to progress, The Financial Times reports. Ford CEO Alan Mulally told the Financial Times that the company remains "open to different options," including retaining a minority stake in both operations. He stressed, however, that he prefers a joint sale as both brands were so highly integrated. Mr. Mulally also confirmed that Ford was "conducting a strategic review of Volvo," the Swedish carmaker, which could be sold separately to the other luxury brands. The chief executive said Volvo had generated "significant" interest among potential bidders but Ford has not yet appointed financial advisers, although he expects that the company will reach a decision by year-end, FT notes. According to the report, bidders that include private equity groups Ripplewood Holdings, One Equity Partners, TPG Capital, and Cerberus Capital Management, as well as India's Tata Motors and Mahindra & Mahindra submitted indicative offers for Land Rover and Jaguar last week. Ford has hired Goldman Sachs, HSBC and Morgan Stanley to act as advisors. The carmaker's advisors have contacted at least six buyout groups that expressed preliminary interest in Ford's UK luxury marques. They are expected to get access to financial and operational data, FT states, citing people close to the sale as its source. Ford is expected to ask for binding offers by September, with the aim of completing the sale by the end of the year, FT suggests. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. FORD MOTOR: Posts $750 Million Net Profit in Second Quarter ----------------------------------------------------------- Ford Motor Company reported a net profit of $750 million for the second quarter of 2007. This compares with a net loss of $317 million in the second quarter of 2006. Ford's second-quarter revenue was $44.2 billion, up from $41.9 billion a year ago. The increase primarily reflected currency exchange, mix and net pricing improvements, partially offset by lower volume. Ford's second-quarter profit from continuing operations, excluding special items was $258 million, compared with a loss of $118 million in the same period a year ago. Special items -- which primarily reflected the sale of Aston Martin and the recognition of previously deferred gains on certain hedges at Jaguar and Land Rover -- increased pre-tax results by $443 million in the second quarter. With regard to Jaguar and Land Rover, the company confirmed it is currently exploring in greater detail the potential sale of the combined business and is in discussions with selected parties who have expressed interest. The company also is conducting a strategic review of Volvo that likely will conclude prior to year- end. "We continue to focus on the four priorities of our plan -- restructuring the business to operate profitably, accelerating the development of new products that our customers want and value, funding our plan and improving our balance sheet, and working even more effectively together as one global Ford team, leveraging our assets," said Ford President and CEO Alan Mulally. "Our team is very encouraged by the significant progress we are making. We recognize the challenges that lie ahead and remain fully committed to delivering our plan." AUTOMOTIVE SECTOR On a pre-tax basis, worldwide Automotive sector profits in the second quarter were $378 million. This compares with a pre-tax loss of $716 million during the same period a year ago. The improvements were more than explained by favorable net pricing and cost reductions, partially offset by unfavorable currency exchange. Vehicle wholesales in the second quarter were 1,773,000, down from 1,806,000 a year ago. Worldwide Automotive revenue for the second quarter was $40.1 billion, up from $37.8 billion in the same period last year. The increase primarily reflected currency exchange, mix and net pricing improvements, partially offset by lower volume. Automotive gross cash, which includes cash and cash equivalents, net marketable securities, loaned securities and short-term VEBA assets, was $37.4 billion at June 30, 2007, up from $35.2 billion at the end of the first quarter. Ford North America: In the second quarter, Ford North America reported a pre-tax loss of $279 million, compared with a pre-tax loss of $789 million a year ago. The improvement primarily reflected favorable net pricing and cost reductions, partially offset by lower volume net of mix. Revenue was $18.8 billion, down from $19.1 billion for the same period a year ago. Ford South America: Ford South America reported a second-quarter pre-tax profit of $255 million, compared with a pre-tax profit of $99 million a year ago. The improvement was primarily explained by favorable net pricing and volume. Second quarter revenue improved to $1.8 billion from $1.3 billion in 2006. Ford Europe: Ford Europe's second-quarter pre-tax profit was $262 million, compared with a pre-tax profit of $185 million during the same period in 2006. The improvement was more than explained by favorable net pricing and higher volumes, partially offset by higher manufacturing costs, primarily to support increased volumes. During the second quarter of 2007, Ford Europe's revenue was $9.2 billion, compared with $7.5 billion during the second quarter of 2006. Premier Automotive Group: PAG reported a pre-tax profit of $140 million for the second quarter, compared with a pre-tax loss of $162 million for the same period in 2006. All PAG brands improved compared with the same period in 2006. The improvement was more than explained by favorable cost performance across all brands, including the non-recurrence of adverse 2006 adjustments to warranty accruals. Favorable net pricing was more than offset by the effect of the continued weakening of the U.S. dollar against key European currencies. Second-quarter 2007 revenue was $8.4 billion, compared with $7.8 billion a year ago. Ford Asia Pacific and Africa: For the second quarter, Ford Asia Pacific and Africa reported a pre-tax profit of $26 million, compared with a pre-tax profit of $4 million a year ago. The improvement reflected strong cost performance, including restructuring savings, and improved results in China. These factors were partially offset by lower volume and adverse mix, more than explained by Australia and Taiwan, and unfavorable currency exchange. Revenue was $1.7 billion for the second quarter of 2007, compared with $1.8 billion in 2006. Mazda: For the second quarter, Ford earned $81 million from its investment in Mazda and associated operations, compared with $32 million during the same period a year ago. Other Automotive: Second-quarter results included a pre-tax loss of $107 million, compared with a loss of $85 million a year ago. The year-over-year decline was more than explained by higher interest expense associated with financing actions taken in the fourth quarter of 2006. This was partially offset by increased interest income. FINANCIAL SERVICES SECTOR For the second quarter, the Financial Services sector earned a pre-tax profit of $105 million, compared with a pre-tax profit of $425 million a year ago. Ford Motor Credit Company: Ford Motor Credit Company reported net income of $62 million in the second quarter of 2007, down $242 million from earnings of $304 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $112 million in the second quarter compared with $435 million in the previous year. The decrease in earnings primarily reflected higher borrowing costs, lower credit loss reserve reductions, higher depreciation expense for leased vehicles and higher net losses related to market valuation adjustments from derivatives. Lower expenses, primarily reflecting improved operating costs, were a partial offset. In the second quarters of 2007 and 2006, pre-tax earnings were $428 million and $667 million, excluding the net losses related to market valuation adjustments from derivatives, which were $316 million and $232 million, respectively. Ford expects Ford Motor Credit to earn on a pre-tax basis $1.3 billion to $1.4 billion this year, excluding the impact of gains and losses related to market valuation adjustments from derivatives, up from the previous estimate of $1.2 billion. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. FORD MOTOR: Moody’s Holds B3 CFR with Negative Outlook ------------------------------------------------------ Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules. The most daunting long-term challenge facing Ford will be building the profitability of its car and crossover models, and reducing its overdependence on trucks and SUVs to generate earnings. Although lowering its cost structure, including healthcare costs, is an important element of this profit rebuilding initiative, the most critical and most difficult challenge for both Ford and the other domestic OEMs, will be convincing consumers that they will receive adequate value if they pay higher prices for their cars and crossover vehicles. "Domestic OEM's have a cost disadvantage of about $1,000 per vehicle relative to Japanese transplants due to health care costs. However, the differential between what consumers are willing to pay for a US car or crossover compared with a similarly equipped Japanese vehicle is significantly greater," said Bruce Clark, senior vice president with Moody's. Ford and the other domestic OEMs may be able to reach a health care buy-down agreement with the UAW that is structurally similar to that reached by Goodyear, and thereby narrow the $1,000 per vehicle health care cost disadvantage. Moody's believes that Ford may have the resources necessary to fund a material health care buy-down, and thereafter maintain the liquidity necessary to cover the $15 to $16 billion operating cash consumption that the company expects will occur through 2008. This liquidity includes $37 billion in cash and short-term VEBA balances, $13 billion in availability under a committed credit facility, and any proceeds that would be raised by the potential sale of the Jaguar, Land Rover and Volvo operations. However, if a constructive health care agreement were reached by Ford and the other domestic OEMs, the company will still have to contend with a significant pricing differential versus its Japanese competitors. Mr. Clark said, "In terms of overall quality, performance, and safety, the Ford Fusion is pretty competitive with vehicles like the Camry, Accord and Altima. However, after taking all incentives and rebates into consideration, consumers are willing to pay in the neighborhood of $4,000 more for one of these vehicles that for a Fusion. Put another way, Ford has to charge $4,000 less than the competition to get consumers to buy one of its best vehicles, and the differential is much wider for other cars in the Ford line up." In contrast, Ford does not face the same type of endemic pricing disadvantage in the truck and SUV segments. In these vehicle categories, consumers perceive Ford as being able to deliver good value for which they are willing to pay. But, as Clark pointed out, "The problem is that consumers are moving away from these vehicle segments." Moody's believes that Ford continues to make solid progress in improving the quality and value proposition of its cars and crossovers relative to those of Japanese manufacturers. However, Mr. Clark said that, "Not only does Ford have to continue delivering better quality vehicles, it has to convince consumers to pay up for them. Convincing consumers to do this will take time and it will also require the design of vehicles that make a strong and appealing visual statement." According to Mr. Clark, "GM and Chrysler face similar challenges." Until the profitability base of vehicles other than trucks and SUVs becomes more substantive, Ford's intermediate-term cash flow will remain negative and the company will have to maintain the liquidity necessary to cover this outflow. Ford Motor Company, a leading global automotive manufacturer, is headquartered in Dearborn, Michigan. GENERAL MOTORS: Will Cut Jobs and Reduce Production in September ---------------------------------------------------------------- General Motors Corp. plans to cut production at its Pontiac, Michigan, assembly plant from 54.5 vehicles per hour to 45 and lay off an undisclosed number of workers beginning September, The Associated Press reports. The Pontiac plant, which makes mostly heavy-duty GMC Sierra and Chevrolet Silverado pickups, employs about 2,800 hourly workers, including 300 temporary employees hired to replace those who accepted buyout and early retirement offers, AP states. "There's been a decline in the full-sized pickup market. We've seen a decline in the heavy duty side, which prompted the action we took," AP quotes GM spokesman Tom Wickham as saying. GM would lay off temporary workers first and they would receive no benefits, Mr. Wickham said, AP notes. If it's necessary to lay off full-time workers, they would receive benefits or would have the chance to go to other GM plants nearby if there are openings. Other plants will not be affected by the changes, he added. 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, including Brazil and India. 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, according to Moody's. GENERATION MINISTRIES: Case Summary & 5 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Generation Ministries, Inc. 8540 Hamburg Road Brighton, MI 48116 Bankruptcy Case No.: 07-32396 Type of Business: The Debtor is a religious organization. Chapter 11 Petition Date: July 25, 2007 Court: Eastern District of Michigan (Flint) Judge: Daniel S. Opperman Debtor's Counsel: Thomas R. Morris, Esq. Silverman & Morris, PLLC 7115 Orchard Lake Road, Suite 500 West Bloomfield, MI 48322 Tel: (248) 539-1330 Fax: (248) 539-1355 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Interest & Penalties $187,000 P.O. Box 145566 on Employment Taxes Cincinnati, OH 45214 Hamburg Township Treasurer Sewer Assessment $70,000 10405 Merrill Road P.O. Box 157 Hamburg, MI 48139 Strobl & Sharp P.C. Legal Services $3,000 300 East Long Lake Road Suite 200 Bloomfield Hills, MI 48304 Raymond & Prokop, P.C. Legal Services $1,047 State of Michigan $1 GOODYEAR TIRE: Earns $56 Million in Second Quarter of 2007 ---------------------------------------------------------- The Goodyear Tire & Rubber Company reported second quarter net income of $56 million, compared to $2 million last year. The company’s record second quarter tire business sales of $4.9 billion, up 4% from last year offsetting softer conditions in several key markets with a richer product mix. The sales improvement reflects the strength of Goodyear's new product engine as well as the performance of the company's three emerging markets tire businesses, which increased sales 15% over 2006. Each of these three businesses achieved record quarterly sales. This growth, along with currency-driven sales gains in the European Union Tire business, offset a 3% decline in North American Tire sales, primarily due to the company's exit from certain segments of the private label tire business along with softer original equipment and commercial replacement markets. "Our strong second quarter performance demonstrates successful execution against our strategies to improve our business and product mix as well as the early stage benefits of a lower cost structure," Robert J. Keegan, chairman and chief executive officer, said. "With the actions we have taken the past four and a half years, we have created strong platforms for growth going forward. Likewise, our improving balance sheet gives us the flexibility to increase investments aimed at growing our core consumer and commercial tire businesses." Total segment operating income from continuing operations was $309 million, up 32% from the year-ago period, driven by significant improvement in North American Tire. All five of the company's regional tire businesses achieved higher segment operating income compared to the second quarter of 2006, with three setting records. Improved pricing and product mix of approximately $155 million in the second quarter of 2007 more than offset increased raw material costs of approximately $55 million. Second quarter income from continuing operations was $29 million compared to a 2006 loss from continuing operations of $33 million. All per share amounts are diluted. The 2007 quarter was also impacted by after-tax debt retirement expenses of $47 million, rationalization and accelerated depreciation costs of $15 million and a tax benefit to correct deferred taxes in Colombia of $11 million. The second quarter of 2006 included $63 million in after-tax rationalization and accelerated depreciation costs. Business Segments Asia Pacific Tire, Latin American Tire, European Union Tire and Eastern Europe, Middle East and Africa Tire reported higher year- over-year sales, with each setting a second quarter record. Additionally, record sales for any quarter were achieved by Asia Pacific Tire, Latin American Tire and Eastern Europe, Middle East and Africa Tire. All five businesses had higher segment operating income compared to last year, with Asia Pacific Tire, Latin American Tire and Eastern Europe, Middle East and Africa Tire setting second quarter records. Segment operating income for Asia Pacific Tire was a record for any quarter. North American Tire Second Quarter Six Months (in millions) 2007 2006 2007 2006 ------------- -------------- -------------- Tire Units 20.8 23.3 40.1 46.9 Sales $2,276 $2,340 $4,293 $4,579 Segment Operating Income 53 6 33 49 Segment Operating Margin 2.3% 0.3% 0.8% 1.1% North American Tire sales were down 3% compared to the 2006 period, primarily due to lower volume resulting from the company's action to exit certain segments of the private label tire business as well as weak commercial and original equipment markets. This was partially offset by market share gains in higher-value branded tires, improved pricing and product mix and higher sales in chemical and other tire related businesses. Second quarter segment operating income increased 783% compared to the 2006 period due to improved pricing and product mix of $69 million that more than offset increased raw material costs of approximately $25 million. European Union Tire sales increased 6% over the 2006 period as a result of improved pricing and product mix and a favorable impact from currency translation of approximately $80 million, which more than offset lower volume. Segment operating income increased 7% compared to the 2006 quarter as pricing and product mix improvements of $34 million more than offset $6 million in higher raw material costs, as well as increased selling, administrative and general expenses and lower unit volume. Eastern Europe, Middle East and Africa Tire sales were up 14% compared to the 2006 period. The increase resulted from improved pricing and product mix and a favorable impact from currency translation of approximately $14 million that more than offset lower unit volume. Segment operating income improved 7% due to improved pricing and product mix of $27 million that more than offset $2 million in higher raw material costs. Higher manufacturing and SAG costs as well as lower volume also impacted the quarter. Latin American Tire sales increased 18% from the second quarter of 2006 due to higher unit volume, improved pricing and product mix and a favorable impact from currency translation of approximately $23 million. Segment operating income increased 8% from 2006 due to higher unit volume and a favorable impact from currency translation of approximately $17 million, which offset higher manufacturing costs. Improved pricing and product mix of $6 million partially offset higher raw material costs of approximately $18 million. Asia Pacific Tire sales were 14% higher than the 2006 period primarily due to improved pricing and product mix and a favorable impact from currency translation of approximately $37 million. Segment operating income increased 46% in the 2007 quarter, primarily due to improved pricing and product mix of $19 million, which more than offset raw material cost increases of approximately $4 million. Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear Tire has marketing operations in almost every country around the world including Chile, Colombia, Guatemala, Jamaica and Peru in Latin America. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services raised its ratings on Goodyear Tire & Rubber Co., including its corporate credit rating to 'BB-' from 'B+'. In addition, the ratings were removed from CreditWatch where they were placed with positive implications on May 10, 2007. Recovery ratings were not on CreditWatch. GOLDMAN SACHS: Moody’s Rates $16 Million Class E Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by Goldman Sachs Asset Management CLO, P.L.C., a collateral loan obligation: -- Aaa to the $257,400,000 Class A-1 Floating Rate Notes, Due 2022 -- Aa1 to the $28,600,000 Class A-2 Floating Rate Notes, Due 2022 -- Aa2 to the $27,000,000 Class B Floating Rate Notes, Due 2022 -- A2 to the $21,000,000 Class C Deferrable Floating Rate Notes, Due 2022 -- Baa2 to the $18,000,000 Class D Deferrable Floating Rate Notes, Due 2022 -- Ba2 to the $16,000,000 Class E Deferrable Floating Rate Notes, Due 2022 Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Goldman Sachs Asset Management, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GOLUB CAPITAL: Moody’s Puts Ba2 Rating on $20.3 Mil. Class E Notes ------------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Golub Capital Management CLO 2007-1, Ltd: -- Aaa to the $369,000,000 Class A Senior Notes Due 2021, -- Aa2 to the $28,000,000 Class B Senior Notes Due 2021; -- A2 to the $32,000,000 Class C Deferrable Mezzanine Notes Due 2021; -- Baa2 to the $19,750,000 Class D Deferrable Mezzanine Notes Due 2021; and -- Ba2 to the $20,250,000 Class E Deferrable Mezzanine Notes Due 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio - consisting of senior secured loans and second lien loans - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Golub Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. HCA INC: S&P Affirms 'BB-' Rating on Second-Lien Debt ----------------------------------------------------- Standard & Poor's Ratings Services affirmed its issue-level ratings on HCA Inc.'s $22.5 billion secured financing, while revising its recovery rating on the company's second-lien debt. The loan rating on the second-lien debt was affirmed at 'BB-' and the recovery rating was revised to '2', indicating that lenders can expect substantial (70%-90%) recovery in the event of a payment default, from '1'. The loan rating on the first-lien debt was affirmed at 'BB', and the recovery rating on this debt remains at '1', indicating that lenders can expect very high recovery (90%-100%) in the event of a payment default. The likelihood of default for the issues is reflected in the issuer corporate credit rating of B+/Negative/--, which has not changed. However, with the introduction of S&P's new recovery rating scale and issue rating framework that became effective as of June 7, 2007, and now incorporates recoveries in all secured issue-level ratings, as well as the inclusion of six months pre- petition interest, the recovery rating on the second-lien debt has been revised accordingly to reflect this debt's substantial recovery prospects. Ratings List Ratings Affirmed HCA Inc. Corporate Credit Rating B+/Negative/-- $16.8B First-Lien BB Recovery Rating 1 Issue-Level Rating Affirmed; Recovery Rating Revised To From -- ---- $5.7B Second-Lien BB- BB- Recovery Rating 2 1 HEXCEL CORP: Net Sales Up 5.8% in Second Quarter 2007 ----------------------------------------------------- Hexcel Corporation reported results for the second quarter of 2007. Net sales from continuing operations in the current quarter were $289.8 million, 5.8% higher than the $274 million reported for the second quarter of 2006. Related operating income for the second quarter was $34 million compared to $33.9 million for the same period last year. Net income from continuing operations for the second quarter of 2007 was $17.5 million, or $0.18 per diluted share, compared to $18 million in 2006. Net loss from discontinued operations was $8.7 million, or $0.09 per diluted share including an after-tax charge of $9.7 million for previously disclosed legal matters. Discontinued operations consist of the assets of the U.S. electronics, ballistics and general industrial reinforcement product lines, which we have entered into a definitive agreement to sell to JPS Industries. Operation Highlights Aerospace qualification processes are underway in a number of locations including our new carbon fiber precursor line in Decatur, AL; a new prepreg facility in Stade, Germany; the new carbon fiber line in Salt Lake City, UT; and for prepreg products transferred as part of the Livermore, CA closure. Gross margins declined slightly to 24.3% in the quarter compared to 24.6% in the second quarter of 2006. SG&A expenditures in the quarter of $27.4 million were $1.5 million higher than the second quarter of 2006. R&T spending increased $1.1 million in the quarter compared to the second quarter of 2006 reflecting expenditures related to new product development and qualification efforts for new aircraft programs. Operating income for the quarter, excluding business consolidation and restructuring expense, was $34.5 million or 11.9% of sales, in line with our guidance for the year. Guidance Our prior guidance for 2007 was issued in December 2006 and included the EBGI business. As a result of the expected divestiture of the business in the third quarter, we have updated our guidance for the year. We had expected total sales to increase 5 - 10% for the year assuming comparable exchange rates to 2006. We now expect we will be in the upper end of that range as stronger than expected commercial aerospace growth will be partially offset by lower than expected growth in recreation and other industrial sales. We still expect gross margins for the year of 23 - 24% and operating margin before restructuring expense of 11 - 12% despite increased spending for new program development and qualifications, as well as start up costs for new production capacity. Chief Executive Officer Comments Mr. Berges commented, "The second quarter saw a continuation of the first quarter sales pattern for the commercial aerospace market. Because of the A380 delay, Airbus sales were again down significantly from a year ago, but strong demand from all other major customers resulted in the almost 9% overall growth in our commercial aerospace sales. Start-up, training and qualification efforts combined with some unplanned maintenance outages put some pressure on our margins but we still met our guidance targets and expect better year-on-year margin expansion for the remainder of 2007." "The ramp up of new B787 and A380 programs layered on top of increasing aircraft build rates should provide opportunity for good volume leverage next year. Longer term we are encouraged by the continued strength in wind turbine and aircraft orders, especially the new composite intensive A350 XWB. With the divestiture of non-core assets nearly completed, our sharper focus should allow us to capitalize on these market trends as well as emerging applications for advanced composite materials." The company reported total assets of $1.1 billion, total liabilities of $717 million, and total stockholders’ equity of $350.5 million as of June 30, 2007. About Hexcel Corporation Headquartered in Stamford, Connecticut, Hexcel Corporation (NYSE: HXL) -- http://www.hexcel.com/-- is an advanced structural materials company. It develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, used in commercial aerospace, space and defense and industrial applications. * * * As reported in the Troubled Company Reporter on June 25, 2007, Moody's Investors Service raised Hexcel Corporation's Corporate Family Rating to Ba3 from B1. The ratings on Hexcel's senior secured credit facility were upgraded to Ba1 from Ba2, while the subordinated notes ratings were upgraded to B1 from B3. The ratings outlook is Stable. HOST HOTELS: Net Income Decreases to $149 Mil. in 2nd Qtr. 2007 --------------------------------------------------------------- Host Hotels & Resorts Inc. disclosed last week its results of operations for the second quarter ended June 15, 2007. Total revenue increased $210 million, or 17.8%, to $1.39 billion for the second quarter and $422 million, or 21.0%, to $2.43 billion for year-to-date 2007. Excluding the revenues for the Starwood portfolio, which was purchased in April 2006, revenues increased 8.4% and 7.9% for the second quarter and year- to-date 2007, respectively. Net income decreased $181 million to $149 million for the second quarter and $166 million to $336 million for year-to-date 2007. Net income in 2007 included a net loss of approximately $46 million for the second quarter, and a net gain of $90 million for year-to-date 2007 associated with the refinancing of debt and gains (losses) on hotel dispositions. By comparison, net income in 2006 included a net gain of approximately $199 million, and $345 million in the second quarter and year-to-date 2006, respectively, associated with similar transactions, as well as preferred stock redemptions and non- recurring costs associated with the Starwood acquisition. The company also announced the following second quarter results for Host Hotels & Resorts L.P., through which it conducts all of its operations and holds approximately 97% of the partnership interests: Net income decreased $189 million to $154 million for the second quarter and $176 million to $348 million for year-to-date 2007. Adjusted EBITDA, which is Earnings before Interest Expense, Income Taxes, Depreciation, Amortization and other items, increased 19.3% to $414 million for the second quarter and 21.1% to $677 million for year-to-date 2007. Financing Activities and Balance Sheet During the second quarter, the company continued to reduce interest costs, as well as manage its capital structure to provide financial flexibility. On May 2, 2007, the company paid approximately $547 million in connection with the defeasance of $514 million of mortgage debt with a 7.61% interest rate, primarily utilizing proceeds from its March issuance of $600 million of 25/8% Exchangeable Senior Debentures. The payment included approximately $33 million in prepayment/defeasance and other costs. On May 25, 2007, the company successfully amended its credit facility to increase the size of the facility to $600 million, extend the maturity from 2008 to 2011 and modify the terms of the facility, including lowering the rate of interest on borrowings from a spread of 200 to 375 basis points over LIBOR to 65 to 150 basis points over LIBOR, depending on the company's leverage ratio. The amended facility also has an accordion feature that allows for total borrowing capacity of up to $1 billion. There are currently no amounts outstanding under the facility. Since Dec. 31, 2006, the company has decreased its weighted average interest rate from 6.8% to 6.1% as a result of its 2007 refinancings. As of June 15, 2007, the company had approximately of cash and cash equivalents. Excluding amounts necessary for working capital, the company intends to use its remaining available funds to further invest in its portfolio, acquire new properties or make further debt repayments. At June 15, 2007, the company's consolidated balance sheet showed $11.81 billion in total assets, $6.2 billion in total liabilities, $214 million of interest of minority partners of Host Hotels & Resorts LP and other consolidated partnerships, and $5.3 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 15, 2007, are available for free at http://researcharchives.com/t/s?21d7 Host Hotels & Resorts, Inc. -- http://www.hosthotels.com/-- (NYSE:HST) is a lodging real estate investment trust and owns luxury and upper upscale hotels. The company currently owns 121 properties with approximately 64,000 rooms, and also holds a minority interest in a joint venture that owns seven hotels in Europe with approximately 2,700 rooms. Guided by a disciplined approach to capital allocation and aggressive asset management, the company partners with premium brands such as Marriott(R), Ritz-Carlton(R), Westin(R), Sheraton(R), W(R), St. Regis(R), The Luxury Collection(R), Hyatt(R), Fairmont(R), Four Seasons(R), Hilton(R) and Swissotel(R)* in the operation of properties in over 50 major markets worldwide. * * * As reported in the Troubled Company Reporter on May 7, 2007, Standard & Poor's Ratings Services revised its rating outlook on Host Hotels to positive from stable. All ratings on the company, including the 'BB' corporate credit rating, were affirmed. ISLE OF CAPRI: Delays Filing of 10K for 2007 Due to Restatement --------------------------------------------------------------- Isle of Capri Casinos Inc. last week that it will delay filing financial results for the fiscal quarter and fiscal year ended April 29, 2007, due to completion of its on-going restatement of its financial statements through its fiscal year ended April 30, 2006, and through its third fiscal quarter ended Jan. 28, 2007. The company expects to file its 10-Q/A for the 2007 fiscal third quarter and its 10-K for the fiscal forth quarter and year ended April 29, 2007, before the end of July 2007. The company disclosed to the SEC that it expects to report a loss from continuing operations before income taxes and minority interest for fiscal 2007 of approximately $15.3 million on revenues of approximately $1.0 billion, as compared to income from continuing operations before income taxes and minority interest for fiscal 2006 (as expected to be restated) of $20.7 million on revenues of $987.4 million. 2007 has been a transitional year for the company, as the company has sold two of its casino operations, developed three new casino operations and moved its corporate head quarters. Additionally, the company’s operating results have been negatively impacted compared to fiscal year 2006 by increased competition and severe weather in certain of the company’s markets, as well as the normalization of operating results along the gulf coast markets in the post hurricane recovery period. Fiscal year 2007 includes significant pre-opening expenses of approximately $13.5 million, primarily incurred in the fourth fiscal quarter, related to the openings of three casino properties in recent months and the company will record a valuation charge on its Lula, Mississippi property of approximately $8.0 million in the fourth fiscal quarter. The impact of the restatement on the fiscal year 2006 operating results, includes adjustments of approximately $3.5 million decreasing income from continuing operations before income taxes and minority interest relating to the application of EITF 97-10 to the company’s Coventry Casino Lease, adjustments of approximately $1.0 million decreasing income from continuing operations before income taxes and minority interest relating to the amortization of certain intangible items, and other various adjustments related to operations decreasing income from continuing operations before income taxes approximately $3.3 million. The expected impact of all restatement adjustments on the fiscal year 2006 net income, including the tax effect on the items mentioned above and the restatement adjustments to income taxes, is expected to be a decrease in net income of approximately $0.1 million. While the company does not expect the results of operations to differ materially from those reported above, since the audit of the fiscal 2007 results and the restatement of the fiscal 2006 results have not been completed, the audited results ultimately reported in the company’s Annual Report on Form 10-K for the fiscal year ended April 29, 2007, may differ from those reported above. About Isle of Capri Casinos Based in Biloxi, Missippi and founded in 1992, Isle of Capri Casinos Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport and Marquette, Iowa; Kansas City and Boonville, Missouri and a casino and harness track in Pompano Beach, Florida. The company also operates and has a 57 percent ownership interest in two casinos in Black Hawk, Colorado. Isle of Capri Casinos' international gaming interests include a casino that it operates in Freeport, Grand Bahama and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. * * * As reported in the Troubled Company Reporter on June 21, 2007, Standard & Poor's Ratings Services revised its rating outlook on Isle of Capri Casinos Inc. to negative from stable. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. INDYMAC MBS: Fitch Rates $1.8MM Class B-5 Certificates at B ----------------------------------------------------------- Fitch rates IndyMac MBS, Inc., Residential Asset Securitization Trust 2007-A9, residential mortgage pass-through certificates, as: -- $284.7 million classes A-1 through A-8, A-X, PO and A-R (senior certificates) 'AAA'; -- $8.9 million class B-1 'AA'; -- $4.5 million class B-2 'A'; -- $3.4 million class B-3 'BBB'; -- $2.2 million privately offered class B-4 'BB'; -- $1.8 million privately offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 7.25% subordination provided by the 2.90% class B-1, the 1.45% class B- 2, the 1.10% class B-3, the 0.70% privately offered class B-4, the 0.60% privately offered class B-5 and the 0.50% non-offered and non-rated class B-6. 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 IndyMac Bank, FSB as a servicer (rated 'RPS2+' by Fitch). The mortgage pool will consist primarily of 30 year conventional, fixed rate mortgage loans secured by first liens on one to four family residential properties. As of the cut-off date (July 1, 2007), the pool had an aggregate principal balance of approximately $306,993,672.94. The average loan balance is $590,372.45, and the weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 72.10%. The weighted average FICO credit score for the pool is approximately 696. Cash-out and rate/term refinance loans represent 48.78% and 22.71% of the pool, respectively. Second and investor-occupied homes account for 3.68% and 12.38% of the pool, respectively. The states that represent the largest geographic concentration are California (38.14%), New York (20.67%), and Florida (6.57%). INVISTA B.V.: S&P Revises Outlook to Positive from Stable --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on INVISTA B.V. to positive from stable and raised its senior unsecured debt rating on the company to 'BB-' from 'B+'. At the same time, S&P affirmed its 'BB' corporate credit rating, 'BBB-' senior secured bank loan rating and '1' recovery rating. "The outlook revision reflects the ongoing strength of INVISTA's global fibers and chemical intermediates franchise, successful and very significant cost reduction since the 2004 acquisition of the former DuPont Textiles & Interiors business of E.I. DuPont de Nemours & Co., and financial policies that could support a slightly higher rating," said Standard & Poor's credit analyst Cynthia Werneth. Ms. Werneth added, "The one-notch upgrade of the senior unsecured debt to one notch below the corporate credit rating was warranted because the ratio of priority liabilities to adjusted total debt has improved and is expected to remain at a level consistent with the revised senior unsecured ratings." At March 31, 2007, total debt was about $3.1 billion, adjusted to include capitalized operating leases, asset retirement obligations, and unfunded postretirement obligations totaling roughly $500 million. "We believe INVISTA's solid business risk profile could support a slightly higher rating if financial policies remain unchanged," Ms. Werneth said. "Therefore, we could raise the ratings by one notch during the next few quarters if overall earnings remain relatively stable in the face of weakness in the polyethylene terephthalate packaging resins and U.S. housing markets and still- volatile raw material costs, if management maintains its disciplined approach to growth, and if debt leverage does not increase materially. On the contrary, S&P could revise the outlook to stable or negative or lower the ratings in the event of greater-than-expected earnings volatility or unforeseen business challenges; a large, debt-financed acquisition; or unexpectedly large shareholder rewards." J.P. MORGAN: Moody’s Affirms Low-B Ratings on Eight Cert. Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 21 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-LN1 ass: -- Class A-1, $183,932,868, affirmed at Aaa -- Class A-1A, $341,821,005, affirmed at Aaa -- Class A-2, $381,494,000, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $34,547,000, affirmed at Aaa -- Class C, $13,518,000, upgraded to Aaa from Aa2 -- Class D, $30,040,000, upgraded to Aa3 from A1 -- Class E, $15,020,000, upgraded to A2 from A3 -- Class F, $16,522,000, upgraded to A3 from Baa1 -- Class G, $13,519,000, affirmed at Baa2 -- Class H, $16,522,000, affirmed at Baa3 -- Class J, $6,008,000, affirmed at Ba1 -- Class K, $12,016,000, affirmed at Ba2 -- Class L, $6,008,000, affirmed at Ba3 -- Class M, $10,514,000, affirmed at B1 -- Class N, $3,004,000, affirmed at B2 -- Class P, $3,004,000, affirmed at B3 -- Class PS-1, $10,857,078, affirmed at A2 -- Class PS-2, $5,281,822, affirmed at A3 -- Class PS-3, $5,184,010, affirmed at Baa1 -- Class PS-4, $6,357,748, affirmed at Baa2 -- Class PS-5, $6,357,748, affirmed at Baa3 -- Class PS-6, $10,563,644, affirmed at Ba1 -- Class PS-7, $9,194,282, affirmed at Ba2 As of the July 16, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 7.6% to $1.16 billion from $1.26 billion at securitization. The Certificates are collateralized by 186 mortgage loans. The loans range in size from less than 1% to 5.3% of the pool, with the top 10 loans representing 27% of the pool. The pool consists of one shadow rated loan, representing 5.3% of the pool. Eighteen loans, representing 14.5% of the pool, have defeased and have been replaced with U.S. Government securities. There have been no loans liquidated from the trust. One loan, representing 0.8% of the pool, is in special servicing. Moody's is estimating $2.7 million of losses from the specially serviced loan. Seventeen loans, representing 7.6% of the pool, are on the master servicer's watchlist. There is also a $53.8 million non- pooled subordinate note collateralized by the One Post Office Square Loan that is included in the trust and supports non-pooled Classes PS-1 through PS-7. Moody's was provided with partial- or full-year 2005 and partial- year 2006 operating results for 99% of the pool. Moody's loan to value ratio for the conduit component is 85.1%, compared to 89.7% at last review and compared to 89.8% at securitization. Moody's is upgrading Classes C, D, E and F due to defeasance, increased credit support and stable overall pool performance. The shadow rated loan is the One Post Office Square Loan ($58.7 million --5.3%), which represents a 50% participation interest in a $117.5 million first mortgage loan secured by a 766,000 square foot Class A office building located in Boston, Massachusetts. Moody's current shadow rating is Aa3, the same as at last review. There is also a $53.8 million non-pooled subordinate note that is included in the trust that supports non- pooled Classes PS-1 through PS-7. The top three conduit loans represent 9.6% of the outstanding pool balance. The largest conduit loan is the IAC International Cargo Port Loan ($48.5 million -- 4.4%), which is secured by a 376,000 square foot industrial/office property located in the former South Boston Army Base in Boston, Massachusetts. Moody's LTV is 96.7%, compared to 99.1% at last review and compared to 94.8% at securitization. The second largest conduit loan is the Sheraton Inner Harbor Hotel Loan ($33.7 million -- 3%), which is secured by a 337-room full service hotel located in the Inner Harbor of Baltimore, Maryland. Occupancy and RevPAR for calendar year 2005 were 76% and $139.08, respectively, compared to 73% and $109 at last review and compared to 71% and $105 at securitization. Moody's LTV is 83.5% compared to 86.6% at last review and compared to 89.2% at securitization. The third largest conduit loan is the Chasewood Office Portfolio Loan ($24.5 million - 2.2%), which is secured by two suburban office buildings totaling 250,778 square feet located in Houston, Texas. Moody's LTV is 89.7% compared to 92% at last review and compared to 97.9% at securitization. J.P. MORGAN: Moody’s Holds Low-B Ratings on Five Cert. Classes -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 25 classes of J.P. Morgan Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-LDP5 as: -- Class A-1, $229,756,854, affirmed at Aaa -- Class A-2, $297,502,000, affirmed at Aaa -- Class A-2FL, $200,000,000, affirmed at Aaa -- Class A-3, $171,451,000, affirmed at Aaa -- Class A-4, $1,395,870,000, affirmed at Aaa -- Class A-SB, $169,455,000, affirmed at Aaa -- Class A-1A, $450,441,257, affirmed at Aaa -- Class A-M, $419,702,000, affirmed at Aaa -- Class A-J, $299,038,000, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $26,231,000, affirmed at Aa1 -- Class C, $73,448,000, affirmed at Aa2 -- Class D, $41,970,000, affirmed at Aa3 -- Class E, $20,985,000, affirmed at A1 -- Class F, $52,463,000, affirmed at A2 -- Class G, $36,724,000, affirmed at A3 -- Class H, $52,463,000, affirmed at Baa1 -- Class J, $41,970,000, affirmed at Baa2 -- Class K, $62,955,000, affirmed at Baa3 -- Class HG-1, $27,000,000, affirmed at Ba3 -- Class HG-2, $24,000,000, affirmed at B1 -- Class HG-3, $40,800,000, affirmed at B2 -- Class HG-4, $32,400,000, affirmed at B3 -- Class HG-X, $130,000,000, affirmed at Ba3 As of the June 15, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 0.6% to $4.10 billion from $4.13 billion at securitization. The Certificates are collateralized by 196 loans, ranging in size from less than 1% to 8% of the pool, with the top 10 loans representing 45.2% of the pool. The pool includes two shadow rated loans, representing 11% of the pool. No loans have defeased. The pool has not realized any losses since securitization. One loan, representing 0.4% of the pool, is in special servicing. Moody's is estimating about $2.5 million of losses from the specially serviced loan. Eighteen loans, representing 7.1% of the pool, are on the master servicer's watchlist. Moody's was provided with full- and partial-year 2006 operating results for 82.5% and 88.6%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 100.5%, compared to 100.3% at securitization, resulting in an affirmation of all classes. The largest shadow rated loan is the Houston Galleria Loan ($290 million -- 7%), which is secured by the borrower's interest in a 1.5 million square foot, regional mall (1.2 million square feet of collateral) located in Houston, Texas. The loan represents a 50% pari-passu interest in a $580 million loan. There is also a $130 million non-pooled trust junior component and a $110 million junior component held outside the trust. Performance has declined due to higher expenses. The loan is interest only for its entire term. Moody's current shadow rating is Baa2, the same as at securitization. Non-pooled Classes HG-1, HG-2, HG-3, HG-4 and HG-X are secured solely by this asset. The second shadow rated loan is the Jordan Creek Loan ($170.5 million -- 4.1%), which is secured by the borrower's interest in a 1.5 million square foot, regional mall (939,085 square feet of collateral) located in West Des Moines, Iowa. Moody's current shadow rating is Baa3, the same as at securitization. The top three conduit loans represent 18.4% of the pool. The largest conduit loan is the Brookdale Office Portfolio Loan ($335 million -- 8%), which is secured by the fee interests in 18 office buildings and leasehold interests in three office buildings containing a total of 3.1 million square feet. The properties are located across six states including Florida (65.2% of the allocated loan amount), Georgia (23.4%), Texas (5.2%), North Carolina (3.6%) and Kentucky (1.5%). There is also a junior non-pooled loan component of $81million. This loan is interest only for the first five years of the term, amortizing on a 360-month schedule thereafter. Moody's LTV is 76.5%, compared to 77.5% at securitization. The second largest conduit loan is the Selig Office Portfolio Loan ($242.0 million -- 5.8%), which is secured by a portfolio of seven cross-collateralized and cross-defaulted office properties containing a total of 1.5 million square feet located in Seattle, Washington. The loan is interest only for its entire term. Moody's LTV is in excess of 100%, the same as at securitization. The third largest conduit loan is the 2 Grand Central Tower Loan ($190 million -- 4.6%), which is secured by a 636,242 square foot office building located in New York City. The loan is interest only for its entire term. Moody's LTV is in excess of 100%, the same as at securitization. J.P. MORGAN: Moody’s Lowers Ratings on Three Certificate Classes ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes, downgraded the ratings of three classes and affirmed the ratings of 12 classes of J.P. Morgan Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2002-C2 as: -- Class A-1, $158,198,924, affirmed at Aaa -- Class A-2, $606,587,000, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $41,256,000, upgraded to Aaa from Aa1 -- Class C, $10,314,000, upgraded to Aaa from Aa2 -- Class D, $28,363,000, upgraded to Aa3 from A2 -- Class E, $14,182,000, upgraded to A2 from A3 -- Class F, $19,339,000, affirmed at Baa2 -- Class G, $12,892,000, affirmed at Baa3 -- Class H, $15,471,000, affirmed at Ba1 -- Class J, $11,603,000, affirmed at Ba2 -- Class K, $3,868,000, affirmed at Ba3 -- Class L, $7,736,000, affirmed at B1 -- Class M, $3,867,000, affirmed at B2 -- Class N, $5,157,000, affirmed at B3 -- Class SP-1, $5,194,272, downgraded to Ba3 from Ba1 -- Class SP-2, $7,921,547, downgraded to B1 from Ba2 -- Class SP-3, $5,335,484, downgraded to B2 from Ba3 As of the July 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 7.4% to $973.6 million from $1.1 billion at securitization. The Certificates are collateralized by 106 mortgage loans ranging in size from less than 1% to 11.8% of the pool. The pool includes three shadow rated loans which comprise 13.7% of the pool. Thirty-one loans, representing 36.4% of the pool, have defeased and are collateralized by U.S. Government securities. One loan has been liquidated from the pool resulting in a realized loss of about $775,000. Currently there is one loan in special servicing. Moody's is not estimating a loss on this specially serviced loan. Twenty loans, representing 11.9% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 operating results for 78.8% of the pool. Moody's loan to value ratio for the conduit component is 88%, compared to 87.1% at Moody's last full review in August 2005 and compared to 89.8% at securitization. Although the overall performance of the pool has been relatively stable, LTV dispersion has increased significantly since last review. Based on Moody's analysis, 16.9% of the conduit pool has a LTV greater than 100% compared to 3.6% at last review and 0.0% at securitization. Moody's is upgrading Classes B, C, D and E due to defeasance, stable overall pool performance and increased subordination levels. Moody's is downgrading non- pooled Classes SP-1, SP-2 and SP-3 due to a decline in the performance of the Simon Portfolio II Loan. The largest shadow rated loan is the Simon Portfolio II Loan ($112.4 million - 11.8%), which is secured by the borrower's interest in two regional malls totaling 1.9 million square feet and a 494,000 square foot power center. The collateral securing the loan totals 1 million square feet. The portfolio includes Century III Mall (Pittsburg, Pennsylvania; 64% allocated balance), Longview Mall (Longview, Texas; 24.1%) and Highland Lakes Shopping Center (Orlando, Florida; 11.9%). The portfolio was 75% occupied as of March 2007, compared to 79.6% at last review and compared to 86% at securitization. Sales of in-line tenants have declined since Moody's last review for two of the three centers. The portfolio is also encumbered by three subordinate loans totaling $18.4 million, which secure non-pooled Classes SP-1, SP-2 and SP- 3. Moody's current shadow rating on the senior loan is Ba2, compared to Baa3 at last review. The second shadow rated loan is the 600 Fifth Avenue Loan ($23.3 million - 2.4%), which is secured by a leased fee interest in a land parcel located in New York City. The parcel is improved with a 354,000 square foot office building that is part of the Rockefeller Center Complex. Moody's current shadow rating is Aaa, the same as at last review. The third shadow rated loan is the U-Haul Portfolio Loan ($14.4 million - 1.5%), which is secured by five self storage facilities located in California (2), Florida (2) and South Dakota. Moody's current shadow rating is Baa1, the same as at last review. The top three non defeased conduit loans represent 8.1% of the outstanding pool balance. The largest conduit loan is the ARC Portfolio A Loan ($36 million - 3.8%), which is secured by 10 manufactured housing communities containing 1,965 pads. The communities are located in Texas (5), Colorado (3), California, Kansas and Illinois. The portfolio was 85.5% occupied as of March 31, 2007, compared to 82.8% at last review. The portfolio's financial performance has been impacted by increased expenses. Moody's LTV is 90.9%, compared to 85.6% at last review. The second largest conduit loan is the Power Plant Live Loan ($20.8 million -- 2.2%), which is secured by a 249,000 square foot mixed use/office property located in Baltimore, Maryland. The property was 87.1% occupied as of March 2007, compared to 93% at securitization. Moody's LTV is 84.7%, essentially the same as at last review. The third largest conduit loan is the Circuit City Distribution Center Loan ($20.8 million -- 2.2%), which is secured by a 1.1 million square foot industrial building located in Marion, Illinois. The property is 100% leased to Circuit City through 2021. Moody's LTV is 77.7%, compared to 80.4% at last review. JARDEN CORP: Moody’s Holds B1 Corporate Family Rating ----------------------------------------------------- Moody's Investors Service affirmed Jarden's B1 Corporate Family Rating and Probability of Default Ratings as well as the Ba3 rating for the company's senior secured term loan and the B3 rating for the company's senior subordinated debt. The rating outlook remains positive. At the same time Moody's downgraded the rating on the company's existing senior secured revolving credit facility to Ba3 from Ba2. These actions result from the proposed change in Jarden's financing plans for its acquisition of K2 Inc. from those initially outlined in the press release dated July 19, 2007. Specifically, Jarden announced that it will no longer proceed with the proposed $400 million Inventory Only Asset Based Revolver, not rated by Moody's. In lieu thereof the company will: i. increase its existing secured term loan by $700 million (was to be increased by $500 million) under the 'accordion' option and ii. it will retain the existing $200m secured revolving credit facility (previously, this facility was to be cancelled). This change in the transaction structure does not impact the Ba3 rating previously assigned to the secured term loan facility or the B3 rating of the company's subordinated debt.With respect to the existing $200 million secured revolver, Moody's stated on July 19, 2007 that as Jarden anticipated canceling this facility, Moody's anticipated withdrawing the Ba2 rating on this facility upon termination. The company now expects to retain this facility following the closing of the transaction and as a result the rating for this facility has been lowered to Ba3 from Ba2 reflecting the change in relative capital structure mix. Moody's continues to expect to withdraw all K2 Inc. ratings upon closing and successful tender for outstanding rated debt of K2. This rating has been affirmed: -- Corporate Family Rating and Probability of Default Rating at B1 These ratings have been lowered, and assessments amended -- $200m senior secured revolving credit facility -- to Ba3 (LGD 3 33%) from Ba2 (LGD 2 29%) These ratings have been affirmed and assessments amended: -- $1.675 Billion (increased from $1.475 billion) senior secured term loan at Ba3 (LGD 3 33% was LGD 3 36%) -- $650 million senior subordinated notes at B3 (LGD 5 83% was LGD 5 80%) Jarden Corporation is a leading manufacturer and distributor of niche consumer products used in and around the home. The company's primary segments include Consumer Solutions, Branded Consumables, and Outdoor. Headquartered in Rye, NY the company reported consolidated net sales of about $3.85 billion for the 12 month period ended Dec. 31, 2006. JUSTIN MORGAN: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Justin R. Morgan fdba The Morgan Law Firm fdba Hamilton, Morgan, Sexton, & Berry fdba Hamilton & Morgan 3901 Rapid Run Drive, Apartment 412 Lexington, KY 40515 Bankruptcy Case No.: 07-51404 Type of business: The Debtor is a law firm that specializes, among others, in auto accidents, defective products and medical malpractice. Chapter 11 Petition Date: July 25, 2007 Court: Eastern District of Kentucky (Lexington) Judge: William S. Howard Debtor's Counsel: Michael L. Baker, Esq. Ziegler & Schneider, P.S.C. 541 Buttermilk Park, Suite 500 P.O. Box 175710 Covington, KY 41017-5710 Tel: (859) 426-1300 Total Assets: $1,004,700 Total Debts: $2,276,177 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service income taxes; $223,349 Centralized Insolvency payroll taxes Operations P.O. Box 21126 Philadelphia, PA 19114 real estate; $112,771 value of security: $80,000 $180,000 Joseph DiNardo, Esq. co-counsel $500,000 90 Bryant Woods South, agreement Suite 100 Amherst, NY 14228 Patrice P. Morgan property settlement $336,604 300 Irvine Road Lexington, KY 40502 O. Lee Hamilton, III $250,000 8244 Old Federal Road Montgomery, AL 36117 National City Bank judgment; office $130,000 equipment Key Bank student loan $100,460 Transwestern Publishing trade debt $96,183 Patrice P. Perlman support and $75,000 maintenance Gess Mattingly & Atchison, attorney fees $50,000 P.S.C. Verizon Directories Corp. trade debt $50,000 Central Bank & Trust Co. vehicle $22,100 F. Jerry Anderson $20,000 Wise DelCotto, P.L.L.C. legal fees $17,530 Jeremy R. Morgan personal loans $16,100 John Robert Morgan personal loans $12,500 American Founders Bank $10,120 Cheryl Shropshire trade debt $9,000 Cobalt Publishing trade debt $7,851 KARA HOMES: Seeks 60-Day Extension to File a Final Plan ------------------------------------------------------- Kara Homes Inc. and its debtor-affiliates expect the U.S. Bankruptcy Court for the District of New Jersey to approve the Disclosure Statement explaining their Amended Chapter 11 Plan of Reorganization today, Bill Rochelle of Bloomberg News reports. However, Bloomberg says, to give way to unforeseen problems that might delay the approval, the Debtors also asked the Court for a 60-day extension of their exclusive period to file a plan, which expires on Aug. 10, 2007. The Debtors had been amending their Plan, the latest of which was Wednesday last week, after resolution of some objections to the Plan at a July 19 hearing. Citing the Debtors' lawyers, Bloomberg relates that only “fine tuning” remains before creditors can vote on the Plan. As reported in the Troubled Company Reporter on July 5, 2007, the Debtors filed with the Court an Amended Plan which provides that Holders of Municipal Tax and Municipal Utility Authorities Claims will be paid in full. Upon full payment of these claims, any lien securing the claim will be cancelled. Holder of Senior Secured Mortgage Claims against Kara Homes Inc., Bergen Mills Estates, LLC, and Horizons at Woods Landing, LLC., termed as the Operating Debtors, will either: i. receive title to and surrender of their collateral in exchange for release of any lien, security interest, or other encumbrance securing repayment of any and all claim held by the holders against the Operating Debtors; or ii. be paid by the applicable Operating Debtor under the terms of the applicable agreement under which the claim arose, provided that the applicable Operating Debtor will cure any arrearages under the agreement. At the option of Galloway Woods, LLC, Hartley Estates by Kara, LLC, Horizons at Birch Hill, LLC, and Horizons at Shrewsbury Commons, LLC, the Liquidating Debtors, Holders of Senior Secured Mortgage will either: i. receive the collateral of the their claims; or ii. schedule a sale pursuant to Section 363 of the Bankruptcy Code. Any and all of the applicable liens in favor of the Holders of Secured Claim, if any, against any of the Operating and Liquidating Debtors will attach to, and be satisfied from, the value realized from its collateral in the order of their priority. In the event that the value realized from a secured creditor's collateral is less than the amount of its allowed Secured Claim, the holder will have a deficiency claim. General Unsecured Claims against the Operating and Liquidating Debtors will receive a pro rata share of: i. cash payment; and ii. proceeds, if any, of any causes of action commenced by the litigation trust. Under the Plan, each holder of Equity Interest against the Operating and Liquidating Debtors will be expunged, extinguished and all outstanding stock and membership interest will be cancelled. About Kara Homes Headquartered in East Brunswick, New Jersey, Kara Homes Inc. aka Kara Homes Development LLC, builds single-family homes, condominiums, town homes, and active-adult communities. The company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed separate chapter 11 petitions in the same Bankruptcy Court. On Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions. On June 8, 2007, 20 more affiliates filed separate chapter 11 petitions. David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al., represents the Debtors. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard represents the Official Committee of Unsecured Creditors. Traxi LLC serves as the Debtors' crisis manager. The Debtors engaged Perry M. Mandarino as chief restructuring officer, and Anthony Pacchia as chief financial officer. When Kara Homes filed for protection from its creditors, it listed total assets of $350,179,841 and total debts of $296,840,591. KIMBALL HILL: Moody’s Downgrades Corporate Family Rating to B2 -------------------------------------------------------------- Moody's Investors Service lowered all of the ratings of Kimball Hill, Inc, including the company's corporate family rating to B2 from B1 and senior subordinated notes rating to Caa1 from B3. The ratings outlook was changed to negative from stable. The downgrades and negative outlook reflect Moody's expectation that: i. cash flow generation in fiscal 2007 and 2008 will be insufficient to permit significant debt pay-down; ii. the company's earnings for 2007 and 2008 will likely be negative; iii. the compliance with the relaxed interest coverage covenant will be challenging in fiscal 2007 and 2008; iv. the company will need to rely on its $500 million credit facility all through fiscal 2007 and 2008; and v. the company's debt leverage is not projected to decline. Going forward, the company's outlook could stabilize if Moody's were to project Kimball Hill to generate strongly positive cash flow from operations and use the cash flow to pay down debt, thus reducing its interest burden and widening the headroom under its interest coverage covenant. The ratings could decline further if Moody's were to project these: i. the company to have difficulty in complying with the covenants governing its credit facility; ii. leverage to increase above 60% in fiscal 2008; or iii. cash flow generation on a trailing twelve month basis to turn negative. These ratings were lowered: -- Corporate family rating, lowered to B2 from B1; -- Probability of Default rating, lowered to B2 from B1; -- $203 million of senior subordinated notes due December 2012, lowered to Caa1 (LGD-6, 90%) from B3 (LGD-5, 89%). Founded in Chicago in 1969, Kimball Hill, Inc. is one of the largest private homebuilders in the U.S. Homebuilding revenues and consolidated net income for the trailing twelve months ended March 31, 2007 were about $1.1 billion and $(19) million, respectively. KLINGER ADVANCED: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Klinger Advanced Aesthetics, LLC The Mall at Short Hills Suite A-139 1200 Morris Turnpike Short Hills, NJ 07078 Bankruptcy Case No.: 07-20459 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Anushka PBG Acquisition Sub, LLC 07-20460 Anushka Boca Acquisition Sub, LLC 07-20461 Wild Hare Acquisition Sub, LLC 07-20462 Dischino Corporation 07-20463 GK Acquisition LLC 07-20464 Georgette Klinger LLC 07-20465 Type of Business: The company emphasizes the integration of treatments, services (ranging from salon and spa treatments to light medical) and products administered simultaneously. See http://www.aai.com/ Chapter 11 Petition Date: July 25, 2007 Court: District of New Jersey (Newark) Debtors' Counsel: John K. Sherwood, Esq. Lowenstein Sandler P.C. 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' Consolidated List of their 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ CIGNA HealthCare $370,237 900 Cottage Grove Road Hartford, CT 06152 Raspberry Red $223,872 1200 Wall Street West Lyndhurst, NJ 07071 Janoff & Olshan, Inc. $206,099 654 Madison Avenue 12th Floor New York, NY 10021 NorthPark Partners, L.P. $199,951 AICCO, Inc. $172,270 The Chevy Chase Land Company $144,075 Allergan $127,747 South Coast Plaza $107,684 Water Tower LLC $74,371 Keratase Paris $66,340 Innovative Skincare $65,735 Straitshot Communications $61,494 Steiner Product Support US, LLC $57,872 UT Southwestern $47,020 Sypriya Tomar, M.D. $45,707 The Pyle Group, LLC $44,600 PGA Commons LLC $36,230 Short Hills Associates LLC $35,239 Washingtonian $32,010 Worth Avenue Associates $31,357 KOGER MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Koger Management Group, Inc. dba Tri-State Management 4105 Rust Road Fairfax, VA 22030 Bankruptcy Case No.: 07-11947 Type of business: The Debtor is a community association management firm. See http://www.kogermanagement.com Chapter 11 Petition Date: July 26, 2007 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Thomas P. Gorman, Esq. Tyler, Bartl, Gorman & Ramsdell, P.L.C. 700 South Washington Street, Suite 216 Alexandria, VA 22314 Tel: (703) 549-5010 Fax: (703) 549-5011 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 ------ --------------- ------------ River Place South $437,473 Whiteford Taylor Preston 1025 Connecticut Avenue, Suite 400 Washington, D.C. 20036 Watergate of Alex $340,417 K.P.A. Management 6400 Arlington Boulevard, Suite 700 Falls Church, VA 22042 Pitney Bowes $93,587 100 Shockhoe Slip Richmond, VA 23219 G.E. Capital $34,008 Naperville, IL G.E. Capital $34,008 Pittsburgh, PA Ramsey, Bruce $12,537 Tara Wood H.O.A. $12,448 Stoneridge Knoll Condo $12,231 I.O.S. Capital $12,218 Countrywalk Cluster $8,269 Churchill Square H.O.A. $7,837 W.C.C. Cable $7,621 Barrister Keepe H.O.A. $6,700 Brookland Heights H.O.A. $5,872 Mustang Crossing H.O.A. $5,435 Village Park H.O.A. $5,404 Fairfax Landing H.O.A. $5,359 Springfield Glen, H.O.A. $5,320 Ashburton Manor $5,000 Sycamore Ridge Condo $3,795 KYPHON INC: Inks $3.9 Billion Merger Deal with Medtronics --------------------------------------------------------- Kyphon Inc. disclosed that it has signed a definitive merger agreement with Medtronic, Inc., under which Medtronic will acquire all of the outstanding shares of Kyphon for $71 per share in cash. The transaction, which was unanimously approved by the boards of directors of both companies, is valued at approximately $3.9 billion. This excludes $320 million in payments associated with the St. Francis Medical Technologies, Inc. and Disc-O-Tech Medical Technologies, Ltd. transactions. The acquisition price represents a 32% premium over Kyphon's closing stock price on July 26, 2007 of $53.68 and a 35% premium over Kyphon's 30-day average trading price of $52.76 per share. The transaction, which is anticipated to close in the first calendar quarter of 2008, is expected to be neutral to Medtronic earnings in the first full fiscal year after closing and accretive thereafter. Medtronic expects the merger to yield significant revenue, cost and tax synergies. "We expect our combination with Kyphon to help accelerate the growth of Medtronic's existing spinal business by extending our product offerings into some of the fastest growing product segments and enabling us to provide physicians with a broader range of therapies for use at all stages of the care continuum," said Art Collins, chairman and chief executive officer of Medtronic. "Importantly, the combination will also enable more patients of all ages to receive the benefits of modern, minimally invasive spinal treatments earlier in their care, with life-style friendly options that are simpler, faster and less invasive than many traditional surgical treatments. "We have great respect for Rich Mott and his team and look forward to Kyphon's employees joining Medtronic at the close of the transaction. Kyphon's world-class, global sales force will play a central role in the continued development of our spinal business," Mr. Collins concluded. "We are very enthusiastic about the opportunity to deliver outstanding value for our shareholders that fully reflects Kyphon's innovation and growth potential. This merger also combines two recognized industry leaders in spinal treatments," said Richard Mott, president and chief executive officer of Kyphon. "By merging our complementary strengths and collective resources into one organization, we will meaningfully increase our ability to ensure we meet the needs of our clinician customers around the world and the patients they serve. This combination also offers our employees the opportunity to become part of an organization with a shared vision and the depth of resources that are increasingly beneficial for sustained success in our industry. We look forward to working with Medtronic to complete the transaction quickly and seamlessly. Our board of directors believes that this acquisition is in the best interests of our shareholders, employees and other stakeholders and has unanimously voted to recommend that Kyphon shareholders vote in favor of it." The two companies' product lines and geographic presence are highly complementary. While both companies have expertise in minimally invasive, highly effective treatments, Medtronic's spinal surgery focus has been on providing treatment options for younger patients who are suffering from scoliosis and degenerative disc disease in the cervical and lumbar spine. Kyphon's focus has been on treating older patients suffering from vertebral compression fractures and spinal stenosis. Together, the combined entity will be able to leverage its knowledge of modern fusion, dynamic stabilization, artificial disc replacement, biologics, vertebral augmentation, interspinous process decompression, disc disease diagnosis, navigation and minimally invasive techniques to serve patients with a broader variety of spinal disorders in order to alleviate pain and restore health for more patients. The combined entity will also have a larger and expanded base of customers than Medtronic serves alone. Medtronic primarily serves orthopaedic and neurological surgeons who specialize in spinal surgery. Kyphon serves these same physicians and also has a significant customer base with interventional radiologists and interventional neuroradiologists. The transaction will be financed by a combination of cash on the balance sheet and debt. The transaction is subject to customary closing conditions, including approval by antitrust regulators as well as Kyphon shareholders. Cleary Gottlieb Steen & Hamilton LLP is acting as legal advisor to Medtronic and Goldman, Sachs & Co. and Piper Jaffray are acting as financial advisors. Latham & Watkins LLP is acting as legal advisor to Kyphon and JPMorgan is acting as financial advisor. About Medtronic Headquartered in Minneapolis, Medtronic, Inc. (NYSE: MDT) -- http://www.medtronic.com/-- is the global leader in medical technology — alleviating pain, restoring health, and extending life for millions of people around the world. About Kyphon Kyphon Inc. (NASDAQ: KYPH) -- http://www.kyphon.com/-- and -- http://www.spinalfracture.com/-- develops and markets medical devices designed to restore and preserve spinal function and diagnose the source of low back pain using minimally invasive technologies. The company's products are used in balloon kyphoplasty for the treatment of spinal compression fractures caused by osteoporosis or cancer, in the Functional Anaesthetic Discography(TM) (F.A.D.(TM)) procedure for diagnosing the source of low back pain, and in the Interspinous Process Decompression (IPD(r)) procedure for treating the symptoms of lumbar spinal stenosis. LANDRY'S RESTAURANT: Financial Needs Cue S&P's Junk Rating ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Houston, Texas-based Landry's Restaurant Inc. and its Las Vegas-based subsidiary Golden Nugget Inc., including the corporate credit ratings, to 'CCC' from 'B+'. The ratings remain on CreditWatch with negative implications, where they had been placed with negative implications on March 16, 2007, because of its failure to file its 10-K for fiscal 2006 and its 10-Q for the first-quarter 2007. However, the CreditWatch listing has been changed to Developing. "The downgrade reflects the company's need to seek new financing to fund the accelerated redemption of the unpaid principal and accrued interest on its $400 million 7.50% senior unsecured notes due 2014," explained Standard & Poor's credit analyst Charles Pinson-Rose. The downgrade also follows the recent announcement that holders of notes at Landry's are accelerating payment as a result of Landry's financial reporting delay. Standard & Poor's will review the ratings once the company's financing plans are announced. "We could lower ratings if the company is unable to obtain new financing to fund the redemption," added Mr. Pinson- Rose. LE-NATURE'S INC: Trustee Drops Request to Sell Latrobe Plant ------------------------------------------------------------ R. Todd Neilson, the Chapter 11 Trustee appointed in Le Nature's Inc. and its debtor-affiliates' bankruptcy cases, has withdrawn his request to sell the Debtors' Latrobe, Penn. bottling plant for $20 million to Giant Eagle Inc., Bill Rochelle of Bloomberg News reports. According to the report, court records did not explain why Mr. Neilson is not going forward with the sale. Neither his counsel, nor attorneys for the Official Committee of Unsecured Creditors would return phone calls inquiring about the status of the sale, Bloomberg says. Late June 2007, the Trustee asked the U.S. United States Bankruptcy Court for the Western District of Pennsylvania regarding an asset purchase agreement he entered with Giant Eagle for the sale of the Debtors' assets. Under that agreement, $18 million of the purchase price will be paid to Giant Eagle on the closing date, with a $2 million indemnification holdback deposited into an interest bearing escrow account for a 12 month period. Gordon Brothers Industrial LLC and Harry Davis & Company, the Trustee's exclusive sale agent, were expected to assist in the market and sale of the Debtors' assets. 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. LEVEL 3: Posts $202 Million Net Loss in Second Quarter of 2007 -------------------------------------------------------------- Level 3 Communications Inc. reported net loss for the second quarter 2007 was $202 million, compared to a net loss of $647 million for the previous quarter. Included in the net loss for the first quarter 2007 was a $427 million loss on the extinguishment or refinancing of long-term debt. Consolidated revenue was $1.052 billion for the second quarter 2007, compared to consolidated revenue of $1.056 billion for the first quarter 2007. “While we have a great deal of work remaining, we made good progress on our overall integration of acquired companies,” James Q. Crowe, CEO of Level 3, said. “We are pleased with the continued positive operating environment in terms of demand and importantly, our efforts from integration and continued cost savings resulted in improved profitability and growth in Consolidated Adjusted EBITDA.” Consolidated Cash Flow and Liquidity During the second quarter 2007, Unlevered Cash Flow was negative $64 million, versus negative $69 million for the previous quarter. Consolidated Free Cash Flow for the second quarter 2007 was negative $141 million, versus negative $248 million for the previous quarter, resulting primarily from a decrease in net cash interest expense partially offset by higher capital expenditures. Net cash interest expense for the second quarter 2007 was $77 million. Working capital was a use of cash in the quarter, primarily from a reduction in accounts payable and an increase in accounts receivable as days sales outstanding increased during the quarter. As of June 30, 2007, the company had cash and marketable securities of approximately $807 million. About Level 3 Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is an international communications company. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * Level 3 Communications Inc. and wholly owned subsidiary, Level 3 Financing Inc., holds Standard & Poor's Rating Services' 'B-' corporate credit rating. The outlook is stable. The company's new $1 billion term loan carries Moody's Investors Service's B1 rating and the company's $1 billion fixed and floating rate notes at its Financing subsidiary carry Moody's B3 rating. It also bears Moody's Caa1 corporate family rating with a stable outlook. LIONEL LLC: Disclosure Statement Hearing Moved to Aug. 27 --------------------------------------------------------- Lionel LLC and its debtor-affiliate, Liontech Company, pushed back the hearing for approval of the Disclosure Statement explaining their Chapter 11 Plan of Reorganization from Aug. 2 to Aug. 27, 2007, Bill Rochelle of Bloomberg News reports. The Debtors' Plan, delivered in May 2007 to the U.S. Bankruptcy Court for the Southern District of New York, proposed that claims that will be paid in full with cash, plus post-bankruptcy filing interest on the distribution date, include: * Debtor-in-Possession facility claims; * administrative claims; * professional fee claims; * priority tax claims; * secured claims; and * general unsecured claims. The Debtors stated in their Plan that holders of intercompany claims will be reinstated on the effective date. Holders of Existing Lionel Membership Interest will be also be retained, but, subject to potential dilution resulting from the exercise of the management options, if issued, and issuance of new Lionel membership interest to the new equity investor. All existing Liontech Common Stock Interest will be retained by the reorganized Lionel. Headquartered in Chesterfield, Michigan, Lionel LLC -- http://www.lionel.com/-- markets model train products, including steam and die engines, rolling stock, operating and non-operating accessories, track, transformers and electronic control devices. The Company filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case No. 04-17324). Abbey Walsh, Esq., at O'Melveny & Myers LLP; and Adam Craig Harris, Esq., and Adam L. Hirsch, Esq., at Schulte Roth & Zabel LLP represent the Debtor in its restructuring efforts. David M. LeMay, Esq., and Francisco Vazquez, Esq., at Chadbourne & Parke, LLP, represent the Official Committee of Unsecured Creditors. When the Company filed for bankruptcy, it listed assets between $10 million and $50 million and debts of more than $50 million. LIVE NATION: Moody’s Lifts B1 Term Loan & Credit Facility Ratings ----------------------------------------------------------------- Moody's Investors Service upgraded Live Nation Worldwide Inc.'s Senior Secured Term Loan and Revolving Credit Facility to Ba3 from B1 and affirmed the company's SGL-3 speculative grade liquidity rating following the company's $220 million Convertible Notes offering. Moody's also affirmed all other ratings for Live Nation, including the company's B1 corporate family rating. The outlook remains stable. The ratings upgrade for Live Nation's Senior Secured Term Loan and Revolving Credit Facility is based on Moody's loss given default methodology and results solely from Live Nation's $220 million Convertible Notes offering which provides additional debt cushion to the secured credit facility and enhances liquidity. Proceeds from the offering will be used to repay $90 million of the company's term loan and outstanding balances under the revolving credit facility. The remainder will be used for general corporate purposes. The B1 corporate family rating continues to reflect the financial risk posed by the inherent volatility of live entertainment, high adjusted debt to EBITDA leverage and lack of free cash flow. Live Nation's rating is supported by its leading market position in the live entertainment industry, significant geographic diversification and the strong ties the company has with first- tier concert and theater performers and their producers. Ratings/Assessments Upgraded: Live Nation Worldwide, Inc. -- $285 million Senior Secured Revolver Ba3 (LGD3, 33%) -- $325 million Term Loan Ba3 (LGD3, 33%) -- $225 million Term Loan Ba3 (LGD3, 33%) Ratings affirmed: -- Corporate family rating B1; -- Probability-of-default rating B1 -- SGL-3 speculative grade liquidity The rating outlook is stable. Live Nation Worldwide, Inc., headquartered in Beverly Hills, California, owns, operates and/or exclusively books live entertainment venues in the U.S. and Europe. MADISON SQUARE: Fitch Lifts Rating on Class S Notes to BB+ ---------------------------------------------------------- Fitch upgrades Madison Square 2004-1 Ltd.'s and Madison Square 2004-1 Corp.'s CMBS backed notes, series 2004-1 as: -- $18.5 million class M to 'AA+' from 'AA'; -- $29.0 million class N to 'A+' from 'A'; -- $29.0 million class O to 'A-' from 'BBB+'; -- $28.0 million class P to 'BBB' from 'BBB-'; -- $14.8 million class Q to 'BBB-' from 'BB+'; -- $11.5 million class S to 'BB+' from'BB'. These classes are affirmed by Fitch: -- $11.1 million class J at 'AAA'. -- $28.1 million class K at 'AAA'; -- $122.7 million class L at 'AAA'. Fitch does not rate class IO or T and classes A through H have paid in full. The upgrades are the result of paydown and subsequent increased credit enhancement. As of the July 2007 distribution date, the transaction has paid down 44%, to $590.8 million from $1.1 billion at issuance. The trust has incurred $160.2 million in losses to date, which have been absorbed by the non-rated class T. The certificates are collateralized by all or a portion of 32 classes of fixed rated commercial mortgage backed securities in eight transactions, and one class of floating rated CMBS transaction in one transaction. The weighted average rating factor of the underlying bonds is 35.6, corresponding to an average rating of 'B-/CCC+', which is stable since issuance. The classes' ratings are based on Fitch's actual rating, or on Fitch's internal credit assessment for those classes not rated by Fitch. Additional credit enhancement is provided by an interest shortfall reserve of $15 million and the paydown of additional principal with interest collections otherwise paid to classes P through T, as principal paydowns to classes J and K. Delinquencies in the underlying transaction are as follows: 30 days: 0.0%; 60 days: 0.07%; 90+ days: 0.11%; Foreclosure: 0.22%; and real estate owned (REO): 1.18%. Of the underlying transactions, the largest loan in special servicing is the Holiday Inn SunSpree Resort Hotel, an REO asset that is the sole asset of CSFB 1998-FL1. Representing 7.5% of Madison Square 2004-1, the asset carries an appraisal reduction amount of 82% of the scheduled balance of the asset. Fitch remodeled the pool incorporating hypothetical losses for loans currently in special servicing and VECTOR default and recovery hurdles. The credit enhancement levels are sufficient to warrant the upgrades. The ratings on the class J through O notes address the timely payment of interest and ultimate repayment of principal. The ratings on the class P through S notes address the ultimate payment of interest and ultimate repayment of principal. MADRID RANCH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Madrid Ranch Estates X, LLC 6473 Jonel Way Bonita, CA 91902 Bankruptcy Case No.: 07-03912 Chapter 11 Petition Date: July 24, 2007 Court: Southern District of California (San Diego) Judge: John J. Hargrove Debtor's Counsel: Michael Lusby, Esq. 2182 El Camino Real, Suite 205 Oceanside, CA 92054 Tel: (619) 967-5989 Total Assets: $6,000,000 Total Debts: $4,100,000 The Debtor does not have any creditors who are not insiders. MAGNACHIP SEMICON: July 1 Balance Sheet Upside-down by $408 Mil. ---------------------------------------------------------------- MagnaChip Semiconductor LLC reported on Thursday its results for the second quarter ended July 1, 2007. The company's consolidated balance sheet at July 1, 2007, showed $721.8 million in total assets, $1.01 billion in total liabilities, and $408.6 million in total unitholders' deficit. The company reported a net loss of $45.3 million for the second quarter ended July 1, 2007, compared with a net loss of $132.1 million for the same period ended July 2, 2006. Excluding special charges, the loss was $31.9 million, compared to a net loss of $38.4 million excluding special charges in the prior year second quarter. Sang Park, chairman and chief executive officer of MagnaChip Semiconductor, commented, "The second quarter came in better than our guidance, with revenues rising 28% from the first quarter. This improvement is the result of design wins, enhanced new product development, and strong operational execution, all of which contributed to achievement of share gains at current and new customer accounts. We remain focused on growth and making 2007 the year of MagnaChip's recovery, as we focus on bringing high- quality display solutions, imaging solutions, and foundry services to the market faster." Revenue for the three months ended July 1, 2007, was $194.1 million, compared to $197.6 million in the second quarter of 2006. Gross margin was $27.8 million or 14.3% of revenue for the quarter ended July 1, 2007, compared to $ 20.3 million or 10.3% of revenue for the second quarter of 2006. Operating expenses were $70.1 million in the current quarter. This included $13.4 million in special charges, which were composed of $12.1 million in restructuring and impairment charges for the company's oldest wafer fabrication facility and a $1.3 million legal settlement. Excluding special charges, operating expenses for the second quarter of 2007 were $56.8 million or 29.3% of revenue, compared to $56.0 million or 28.3% of revenue for the second quarter of 2006. Operating loss was $42.4 million during the quarter. Excluding the special charges, the operating loss for the second quarter of 2007 was $29.0 million compared to $35.7 million before special charges in the prior year's second quarter. Net interest expense for the second quarter of 2007 was $15.0 million, compared to $14.4 million in the second quarter of 2006. Robert Krakauer, president and chief financial officer of MagnaChip Semiconductor, said, "Our new product development and operational execution continue to improve. All three of our business segments showed significant growth quarter over quarter. As we drive for profitability, we are continuing our efforts to increase our productivity, including both rationalization of older facilities and upgrade of our 8 inch wafer capacity and process technology to support new customer design wins." Outlook The company expects revenue for the third quarter ending Sept. 30, 2007, to be flat compared to the second quarter of 2007. Revenue is expected to rise again significantly in the fourth quarter of 2007, as design wins hit large scale production volume and seasonal holiday demand increases. About MagnaChip Semiconductor MagnaChip Semiconductor -- http://www.magnachip.com/-- designs, develops, and manufactures mixed-signal and digital multimedia semiconductors addressing the convergence of consumer electronics and communications devices. MagnaChip also provides wafer foundry services utilizing CMOS high voltage, embedded memory, and analog and power process technologies for the manufacture of IC's for customer-owned designs. MagnaChip has world-class manufacturing capabilities and an extensive portfolio of approximately 8,500 registered and pending patents. As a result, MagnaChip is a valued partner in providing leading technology solutions to its customers worldwide. * * * Moody's Investors Service, on April 20, 2007, downgraded MagnaChip Semiconductor LLC's corporate family rating to B2 from B1. On Feb. 13, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on MagnaChip to 'B' from 'B+'. At the same time, S&P lowered the rating on MagnaChip's senior unsecured debt to 'B' from 'B+' and rating on its senior subordinated notes due 2014 to 'CCC+' from 'B-'. MAJESCO ENTERTAINMENT: J. Gross and J. Sutton Adopt Trading Plans ----------------------------------------------------------------- John Gross, Majesco Entertainment Co.’s Executive Vice President and Chief Financial Officer, and Joseph Sutton, the company’s Executive Vice President of Research and Development, each adopted prearranged trading plans in accordance with the guidelines specified by Rule 10b5-1 under the Securities and Exchange Act of 1934. Mr. Gross’ plan provides for the sale of a maximum of 37,825 shares, subject to certain parameters, about 17,000 of which will be used as a means of funding his tax liability relating to the vesting of restricted stock occurring Aug. 3, 2007. The plan expires on Feb. 3, 2008. Mr. Sutton’s plan provides for the sale of approximately 12,000 shares to be sold as a means of funding his tax liability relating to the vesting of restricted stock occurring Aug. 3, 2007. The plan expires on Aug. 3, 2008. Any sales under the 10b5-1 plans will be disclosed publicly through appropriate filings with the Securities and Exchange Commission. Jesse Sutton, the company’s Interim Chief Executive Officer, amended his Rule 10b5-1 prearranged trading plan to increase the aggregate number of shares that may be sold under the plan in the amount of 150,000 and to extend the expiration of the plan from Sept. 30, 2007 to March 30, 2008. The total number of shares remaining eligible for sale under the plan is 460,000, subject to the parameters of the plan. Any sales under the 10b5-1 plan will be disclosed publicly through appropriate filings with the Securities and Exchange Commission. About Majesco Entertainment Headquartered in Edison, NJ, Majesco Entertainment Co. (NASDAQ: COOL) -- http://www.majescoentertainment.com/-- provides digital entertainment products and content, with a focus on publishing video games for leading portable systems and the Wii(TM) console. Current product line highlights include Cooking Mama for the Nintendo DS(TM), Bust-A-Move Bash! for the Wii(TM) console and JAWS(TM) Unleashed, as well as digital entertainment products like Strawberry Shortcake(TM) Dance Dance Revolution(R). * * * As reported in the Troubled Company Reporter on June 20, 2007, Goldstein Golub Kessler LLP in New York expressed substantial doubt about Majesco Entertainment Co.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Oct. 31, 2006, and 2005. The auditing firm pointed to the company's net losses. MANAGED HEALTH: Narrow Operating Focus Cues S&P's 'B' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Florham Park, New Jersey-based group purchasing organization Managed Health Care Associates Inc. The outlook is stable. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to the company's proposed senior secured financing, consisting of a $15 million first-lien revolving credit facility due 2013, a $155 million senior secured first-lien term loan due 2014, and a $95 million second-lien term loan due 2015. The first-lien debt is rated 'B+' with a recovery rating of '2', indicating the expectation of substantial (70%-90%) recovery in the event of a payment default. The second-lien debt is rated 'CCC+' with a recovery rating of '6', indicating the expectation of negligible (0%-10%) recovery in the event of a payment default. The term loans are being used along with management and sponsor equity to finance the purchase of the company by Diamond Castle Holdings. After the transaction, management will have an 8% stake in the company, with the sponsor owning the balance. The ratings on MHA reflect the company's narrow operating focus as an alternate-site GPO, its dependence on contracts and continued demand for certain pharmaceuticals, and its high leverage. These factors are partially offset by the company's leading market position, its record of contract retention, and long-term trends that currently favor growth in spending on the products purchased under MHA's contracts by its members. MARSULEX INC: S&P Withdraws Ratings at Company's Request -------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' long-term corporate credit rating on Toronto-based Marsulex Inc. The withdrawal comes at the request of the company. MARCAL PAPER: To Pay $3 Million in Pre-Petition Claim to EPA ------------------------------------------------------------ Marcal Paper Mills Inc. filed a motion to approve the settlement - without admitting any wrongdoing - reached with the United States on behalf of the Environmental Protection Agency, the Department of the Interior and the Department of Commerce on all of the elements of its claim. "We are pleased that we could work together to quickly settle this claim for the benefit of all parties and cut short an otherwise protracted and costly legal battle with the EPA to prove the company's innocence. This settlement not only is a very positive development in Marcal Paper's emergence from Chapter 11, but also confirms Marcal Paper's outstanding reputation as an environmentally responsible company," said company chairman and chief executive officer Nicholas Marcalus. "This settlement recognizes that Marcal Paper, the largest recycler of paper in New Jersey, takes its responsibility to the community and the environment seriously. It also recognizes that the company is in compliance with all required state and federal permits to operate the facility in Elmwood Park. With this matter behind us, we can focus our full attention on the company's restructuring," added Mr. Marcalus. Under the terms of the agreement, Marcal Paper has agreed to a settlement of the claim at $3 million. This settlement will be classified as an unsecured pre-petition claim, subject to the terms of the Plan of Reorganization already developed by the company with the support of its major creditors. The hearing on the adequacy of the company's Disclosure Statement, which explains the details of the company's proposed Plan of Reorganization, is scheduled by the Bankruptcy Court for July 27, 2007. About Marcal Paper Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MASSEY ENERGY: Earns $34.9 Million in Second Quarter 2007 --------------------------------------------------------- Massey Energy Company reported second quarter 2007 net income of $34.9 million. These results compared favorably to the second quarter 2006 net income of $3.2 million. The strong second quarter earnings were generated on produced coal revenue of $516.2 million which increased 5% compared to the same period last year as a result of higher prices on new supply contracts that took effect in 2007 and improvement in the overall product mix. The company reported net income for the six months ended June 30, 2007, of $67.5 million, compared with $8.8 million for the six months ended June 30, 2006. Massey's total revenues were $617.8 million for the second quarter of 2007, compared with $556.1 million for the second quarter of 2006. Total revenues for the six months ended June 30, 2007, were $1.2 billion, compared with $1.1 billion for the six months ended June 30, 2006. The company’s balance sheet as of June 30, 2007, showed $2.8 billion total assets, $2 billion total liabilities, and $771.6 million total stockholders’ equity. "With metallurgical coal accounting for nearly 31% of our revenue, the increasing global demand for high quality metallurgical coal represents a tremendous opportunity for us," said Don L. Blankenship, Massey's chairman and chief executive officer. "Our 2007 operating performance has increased the Company's cash balance by $83 million during the first half of the year. We believe our strong cash flow will provide us with significant opportunities going forward including acquisitions and additional investments in our current operations; investments that will reduce costs and increase production as the market improves." Liquidity and Capital Resources Massey ended the month of June 2007 with available liquidity of $435.6 million, an increase of $51.7 million over March 31, 2007, available liquidity. Available liquidity at June 30, 2007, included $113.7 million available on its asset-based revolving credit facility and $321.9 million in cash. Total debt at June 30, 2007, was $1,104.2 million, compared to $1,104.9 million at Dec. 31, 2006. Massey's total debt-to-book capitalization ratio was 58.9% at June 30, 2007, compared to 61.3% at Dec. 31, 2006. After deducting available cash of $321.9 million and restricted cash of $105 million, which supports letters of credit, net debt totaled $677.3 million. Total net debt-to-book capitalization was 46.7% at June 30, 2007, compared to 52.2% at Dec. 31, 2006. Capital expenditures totaled $76.8 million in the second quarter of 2007, compared to $85.3 million in the second quarter of 2006 and $136.7 million in the first half of 2007, compared to $161.6 million in the first half of 2006. Total capital expenditures are expected to approximate $220 million in 2007. Guidance and Commitments The company projects 2007 produced coal shipments will be between 40 million and 41.5 million tons, with average produced coal realization between $51.00 and $52.00 per ton. Average cash cost per ton for 2007 is projected to be between $41.50 and $42.50. Other income is expected to be between $70 and $110 million. Sales commitments for 2008 currently total 39 million tons, with an average realization on priced tons of approximately $49.50 per ton. Commitments include 30.8 million tons of priced utility and industrial steam coal and 5 million tons of priced metallurgical coal. A total of 3.2 million committed tons remains unpriced. Sales commitments for 2009 currently total 32.5 million tons, with an average realization on 30.8 million priced tons of about $46.50 per ton. Commitments include 29.1 million tons of priced utility and industrial steam coal and 1.7 million tons of priced metallurgical coal. A total of 1.8 million committed tons remains unpriced. Sales commitments for 2010 currently total 10.6 million tons, with an average realization on priced tons of about $46.00 per ton. Commitments include 8.5 million tons of priced utility and industrial steam coal and 300,000 tons of priced metallurgical coal. A total of 1.8 million committed tons remains unpriced. Litigation Update Massey reiterated its intent to appeal the jury decision and award in the Wheeling Pittsburgh Steel contract lawsuit. The company believes it has multiple strong legal bases for appeal. As a result, the company believes its previously recorded reserve of $16 million remains appropriate. The company also continues to believe that it can favorably resolve the lawsuit filed against it in May 2007 by the Environmental Protection Agency alleging violations of the Clean Water Act. An objective analysis of the relevant data conducted by a recognized expert on penalty calculation in Clean Water Act cases estimated Massey's potential liability in this case to be in the range of $1.5 million to $7 million. Based on the outcome of this study, the company does not expect the actual liability in this case to have a material adverse impact on its operations. About Massey Energy Headquartered in Richmond, Virginia, Massey Energy Company (NYSE: MEE) -- http://www.masseyenergyco.com/-- is a coal producer with operations in West Virginia, Kentucky and Virginia. * * * As reported in the Troubled Company Reporter on June 25, 2007, Standard & Poor's Ratings Services revised its outlook on Massey Energy Co. to stable from developing and affirmed its 'B+' corporate credit and other ratings on the company. As reported in the Troubled Company Reporter on Feb. 19, 2007, Dominion Bond Rating Service downgraded the Senior Unsecured Debt rating of Massey Energy Company to BB (low) from BB. The trend is Stable. MCKESSON CORP: Quarter Ended June 30 Net Income Ups to $235 Mil. ---------------------------------------------------------------- McKesson Corporation reported that revenues for the first fiscal quarter ended June 30, 2007, were $24.5 billion compared to $23.3 billion a year ago. Net income for the first fiscal quarter ended June 30, 2007, was $235 million, compared to $184 million a year ago. The company listed total assets of $24.3 billion, total liabilities of $17.9 billion, and total stockholders’ equity of $6.4 billion. Segment Results Distribution Solutions revenues were up 4% for the quarter. U.S. Healthcare direct distribution revenues grew 6% for the quarter despite the mid-May 2006 termination of a customer contract with annual sales of approximately $3.3 billion. Warehouse sales increased 2% in the quarter. Canadian revenues increased 1% for the quarter, including a favorable currency impact of 2%, and medical-surgical distribution revenues were up 3% for the quarter. Both of these businesses had one less week of sales in this year's first quarter. Distribution Solutions gross profit of $822 million was up 7% from $770 million in the first quarter a year ago. The increase in gross profit for the quarter was due to an improved mix of higher- margin products and services, including sales of OneStop generics, which were up 34% in the quarter; the impact of our agreements with branded pharmaceutical manufacturers; and two anti-trust settlements totaling $14 million. The first quarter a year ago included a LIFO credit of $10 million. Distribution Solutions operating profit was up 9% in the quarter. Positive results in our U.S. pharmaceutical distribution business more than offset weaker operating results in retail pharmacy systems and automation and medical-surgical distribution. Operating margin rate for the quarter was 1.43% compared to 1.37% a year ago. In Technology Solutions, revenues were up 49% for the quarter, reflecting the impact of Per-Se revenues, growth in payor revenues, including recognition of $21 million of previously deferred revenue for a disease management contract, and continued growth in sales and implementations of software and imaging solutions for hospitals, clinics and physician offices. Services revenues were up 67% and software and software systems revenues were up 16%. Technology Solutions operating expenses were up 34% for the quarter, reflecting the integration of Per-Se functions and continued investment in new product development. Technology Solutions operating profit in the quarter was $100 million, up 178% from $36 million a year ago, driven in part by the impact of the Per-Se acquisition and the $21 million of disease management revenues recognized under a contract, for which related expenses were previously recognized as incurred. Operating margin rate was 13.70% for the quarter compared to 7.33% a year ago. Management’s Comments "McKesson is off to another solid start for Fiscal 2008, continuing our positive momentum of the prior two years, with an especially strong performance in our Technology Solutions segment," said John H. Hammergren, chairman and chief executive officer. "In our Distribution Solutions segment, our U.S. pharmaceutical distribution business grew solidly and achieved operating margin expansion. In Technology Solutions, revenues and operating profit were both up strongly due to continued progress across our healthcare information solutions business, including the first full quarter of contribution from our acquisition of Per-Se Technologies Inc., and the timing of revenue recognition in our expanding disease management business." "Across McKesson, we continue to focus on growing operating profit by leveraging our revenue growth through a combination of operating efficiencies, acquisitions, increased sales of value- adding products and services to our customers and capital deployed for share repurchases." For the quarter, McKesson had cash flow from operations of $432 million. The company continues to execute a balanced capital deployment strategy designed to create additional shareholder value. During the first quarter, McKesson repurchased $257 million of common stock, leaving $743 million remaining on its current $1 billion share repurchase authorization. "Based on our positive momentum, we are affirming our previous outlook that McKesson expects to earn between $3.15 and $3.30 per diluted share for the fiscal year ending March 31, 2008," Mr. Hammergren concluded. About McKesson Corp. Headquartered in San Francisco, California, McKesson Corp. (NYSE: MCK) -- http://www.mckesson.com/-- provides pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. * * * Moody's Investors Service rated McKesson Corp.'s junior subordinated debt at Ba1. MERRILL LYNCH: Moody’s Puts Low-B Ratings on Three Cert. Classes ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 21 classes of Merrill Lynch Mortgage Trust 2005-LC1, Commercial Mortgage Pass- Through Certificates, Series 2005-LC1 as: -- Class A-1, $9,663,828, affirmed at Aaa -- Class A-2, $104,847,000, affirmed at Aaa -- Class A-3, $43,000,000, affirmed at Aaa -- Class A-3FL, $119,667,000, affirmed at Aaa -- Class A-1A, $223,542,506, affirmed at Aaa -- Class A-SB, $88,067,000, affirmed at Aaa -- Class A-4, $425,698,000, affirmed at Aaa -- Class A-4FC, $25,000,000, affirmed at Aaa -- Class AM, $154,625,000, affirmed at Aaa -- Class AJ, $94,708,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $32,858,000, affirmed at Aa2 -- Class C, $15,463,000, affirmed at Aa3 -- Class D, $28,992,000, affirmed at A2 -- Class E, $15,463,000, affirmed at A3 -- Class F, $25,126,000, affirmed at Baa1 -- Class G, $19,329,000, affirmed at Baa2 -- Class H, $21,261,000, affirmed at Baa3 -- Class J, $7,731,000, affirmed at Ba1 -- Class K, $5,798,000, affirmed at Ba2 -- Class L, $5,799,000, affirmed at Ba3 As of the June 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 2.8% to $1.50 billion from $1.55 billion at securitization. The Certificates are collateralized by 141 loans, ranging in size from less than 1% to 8.2% of the pool, with the top 10 loans representing 37.5% of the pool. The pool includes one shadow rated loan, representing 8.2% of the pool. No loans have defeased. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Nineteen loans, representing 6.4% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 94.7% and 84.5%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 102.9%, compared to 103.8% at securitization, resulting in an affirmation of all classes. The shadow rated loan is the Glendale Galleria Loan ($122.9 million -- 8.2%), which is secured by the borrower's interest in a 1.3 million square foot, regional mall (661,000 square feet of retail and office collateral) located in Glendale, California. The loan represents a 44% pari-passu interest in a $279.3 million loan. There is also an $87.8 million non-pooled junior component and about $30 million of mezzanine debt held outside the trust. As of March 2007, the mall's in-line retail space and office space were 92% and 90% occupied, compared to 90% and 78% at securitization. Moody's current shadow rating is A3, compared to Baa2 at securitization. The top three conduit loans represent 16% of the pool. The largest conduit loan is the Colonial Mall Bel Air Loan ($122.4 million -- 8.1%), which is secured by the borrower's interest in a 1.3 million square foot, regional mall (1 million square feet of collateral) located in Mobile, Alabama. Moody's LTV is in excess of 100%, the same as at securitization. The second largest conduit loan is the Four Forest Plaza and Lakeside Square Loan ($60.7 million -- 4.0%), which is secured by two office buildings totaling 792,000 square feet located in Dallas, Texas. Moody's LTV is in excess of 100%, the same as at securitization. The third largest conduit loan is the CNL-Cirrus MOB Portfolio Loan ($57.8 million -- 3.8%), which is secured by seven medical office buildings and one surgical center totaling 338,000 square feet located in Dallas (6) and Oklahoma City (2). Moody's LTV is in excess of 100%, the same as at securitization. MERRILL LYNCH: Moody’s Affirms Low-B Ratings on Six Cert. Classes ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 17 classes of Merrill Lynch Financial Assets, Inc., Commercial Mortgage Pass- Through Certificates 2005-Canada 16 as: -- Class A-1, $210,817,580, affirmed at Aaa -- Class A-2, $183,800,000, affirmed at Aaa -- Class XP-1, Notional, affirmed at Aaa -- Class XP-2, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class B, $8,000,000, affirmed at Aa2 -- Class C, $10,400,000, affirmed at A2 -- Class D-1, $9,759,000, affirmed at Baa2 -- Class D-2, $1,000, affirmed at Baa2 -- Class E-1, $2,293,000, affirmed at Baa3 -- Class E-2, $1,000, affirmed at Baa3 -- Class F, $3,442,000, affirmed at Ba1 -- Class G, $1,720,000, affirmed at Ba2 -- Class H, $1,147,000, affirmed at Ba3 -- Class J, $1,720,000, affirmed at B1 -- Class K, $1,720,000, affirmed at B2 -- Class L, $1,147,000, affirmed at B3 As of the July 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 40% to 440.6 million from $458.7 million at securitization. The Certificates are collateralized by 48 loans, ranging in size from less than 1% to 10.1% of the pool, with the top 10 loans representing 63% of the pool. The pool includes four investment grade shadow rated loans, representing 27% of the pool. One loan, the City Place Loan ($34.4 million -- 7.8%), has defeased and is secured by Canadian securities. The pool has not realized any losses since securitization and currently there are no loans in special servicing. One loan, representing 2.1% of the pool, is on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 64.6% of the pool. Moody's weighted average loan to value ratio for the conduit component is 82.7%, compared to 83.1% at securitization. Moody's is affirming all classes due to overall stable pool performance. The largest shadow rated loan is the EPR Loan ($44.1 million -- 10.1%), which represents a pari passu interest in a $88.2 first mortgage loan secured by four retail centers totaling 985,000 square feet. Each center is anchored by a multiplex cinema operated by AMC Cinemas. The portfolio was 96% occupied as of December 2006, the same as at securitization. The loan is structured with a 20-year amortization schedule and has amortized by about 5.5% since securitization. Moody's current shadow rating is Aaa, the same as at securitization. The second largest shadow rated loan is the Riocan Mega Centre Notre Dame Loan ($33.9 million -- 7.7%), which is secured by an 182,000 square foot anchored retail center located in Montreal, Quebec. The center was 100% occupied as of December 2006, the same as at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The third largest shadow rated loan is the Calloway St. Catharines Loan ($29.3 million -- 6.7%), which is secured by a 358,000 square foot power center located in suburban Toronto, Ontario. The center is 92% occupied, the same as at securitization. Moody's current shadow rating is A2, the same as at securitization. The fourth largest shadow rated loan is the U-Haul Canada Portfolio ($11 million -- 2.5%), which is secured by a portfolio of five self-storage facilities totaling 188,700 units. The portfolio was 94.3% leased as of March 2007, compared to 87.9% at securitization. The loan is structured with a 25-year amortization schedule and has amortized by about 3.7% since securitization. Moody's current shadow rating is A3, compared to Baa3 at securitization. The top three non-defeased conduit loans represent 19.2% of the pool. The largest conduit loan is the Grant Park Shopping Center Loan ($32.7 million -- 7.4%), which is secured by a 368,000 square foot enclosed community retail center located in Winnipeg, Manitoba. The center was 97.8% leased as of December 2006, compared to 96% at securitization. Moody's LTV is 75.8%, compared to 77.7% at securitization. The second largest conduit loan is the Kitchener Food Basics Loan ($28 million -- 6.4%), which is secured by a 169,000 square foot retail center located in Kitchener, Ontario. The center has maintained 100% occupancy since securitization. Moody's LTV is 94.6%, compared to 96% at securitization. The third largest conduit loan is the Rono Distribution Centre Loan ($23.9 million -- 5.4%), which is secured by a 790,000 square foot industrial building located in suburban Montreal, Quebec. The property is 100% leased to Rona Inc. through August 2019. Moody's LTV is 71.5%, compared to 73.3% at securitization. MEZZ CAP: S&P Assigns BB Rating on $1.76MM Class F Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Mezz Cap Commercial Mortgage Trust 2007-C5's $56.599 million commercial mortgage pass-through certificates series 2007-C5. The preliminary ratings are based on information as of July 26, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the servicer, the economics of the mortgage loans, and the geographic and property type diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the pool has debt service coverage of 1.09x, a beginning LTV of 116.5%, and an ending LTV of 104.4%. All of the B notes are subordinate to A notes that are not included in the trust. The DSCs and LTVs reflect the combined economics of the A and B notes. Preliminary Ratings Assigned Mezz Cap Commercial Mortgage Trust 2007-C5 Class Rating Amount Recommended credit Support ----- ------ ------ ---------------- A AAA $39,902,000 29.501% X* AAA $56,599,228 N/A B AA $1,203,000 27.375% C A $1,627,000 24.501% D BBB $2,335,000 20.375% E BBB- $1,061,000 18.501% F BB $1,769,000 15.375% G NR $4,386,000 N/A H NR $495,000 N/A J NR $3,821,228 N/A R-I N/A N/A N/A R-II N/A N/A N/A *Interest-only class with a notional amount. N/A -- Not applicable. NR -- Not rated. MORGAN STANLEY: Fitch Affirms $2MM Class N-SDF Certs. at BB+ ------------------------------------------------------------ Fitch Ratings affirms all classes of Morgan Stanley Capital I Inc., series 2006-XLF, commercial mortgage pass-through certificates as: -- $229.2 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $34.2 million class B at 'AAA'; -- $53.3 million class C at 'AAA'; -- $38 million class D at 'AAA'; -- $69 million class E at 'AAA'; -- $23.7 million class F at 'AAA' ; -- $23.7 million class G at 'AA+'; -- $23.7 million class H at 'AA'; -- $23.3 million class J at 'A'; -- $6.8 million class K at 'BBB+'; -- $18.5 million class L at 'BBB'; -- $27.8 million class M at 'BBB-'; -- $11 million class N-LAF at 'A-'; -- $9.2 million class N-RQK at 'BBB-'; -- $8 million class O-LAF at 'BBB-'; -- $2 million class N-SDF at 'BB+'. Class A-1 has been paid in full. Fitch does not rate class N - W40. Although 12% of the transaction has paid down since Fitch's previous rating action, affirmations are warranted due to several remaining loans having collateral that has not yet stabilized. As of the July 2007 remittance date, the transaction's principal balance had decreased 61.3% to $601.7 million from $1.6 billion at issuance. Of the original 14 loans, ten remain in the transaction. Those include the MSPA Hotel Portfolio (28.3%), One Wilshire (24.2%), and Lafayette Estates (10.1%). When complete financial information becomes available for all the remaining loans, Fitch will analyze the results and may review the transaction again. MOTION PICTURE: High Financial Risk Cues S&P's B Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Toronto-based Motion Picture Distribution FinCo, a company formed to enable sponsors GS Capital Partners VI LP, a private equity affiliate of New York-based Goldman, Sachs & Co. and Toronto-based EdgeStone Capital Partners, to acquire the Movie Distribution Income Fund for about CDN $475 million. The outlook is negative. At the same time, Standard & Poor's assigned bank loan and recovery ratings to MPD's planned CDN $410 million senior secured bank facility. The company's first-lien facilities, including the CDN $50 million revolving credit facility and a CDN $260 million term loan B, were assigned a 'B' senior secured bank loan rating, with a recovery rating of '3'. The '3' recovery rating indicates an expectation of meaningful (50%-70%) recovery of principal in the event of a payment default. In addition, S&P assigned a 'CCC+' senior secured bank loan rating, with a recovery rating of '6', to the company's planned C$100 million second-lien term loan, indicating an expectation of negligible (0%-10%) recovery of principal in the event of a payment default. The second-lien term loan is rated two notches below the corporate credit rating because of the significant amount of first-lien priority debt in the capital structure. "The ratings on MPD reflect its high financial risk profile resulting from the proposed leveraged acquisition, weak operating performance in the past couple of years, lack of business diversity, and customer concentration," said Standard & Poor's credit analyst Lori Harris. "In addition, the company has poor earnings visibility because of the uncertainty surrounding the success of the motion picture slate in any given year," Ms Harris added. These factors are only slightly offset by the company's solid market position in the distribution of motion pictures and television programs in Canada. The corporate credit rating assignment follows Standard & Poor's analysis of GSCP's and EdgeStone's proposed acquisition of the Movie Distribution Income Fund in a going-private transaction. Proceeds from the bank facilities and C$175 million in common equity from the sponsors will fund the purchase. S&P expect the deal to close in August 2007. The negative outlook reflects S&P's concerns that MPD's financial and business risk profiles could weaken because of lower revenues and EBITDA resulting from the loss of an important contract, technological shifts that decrease the viability or margins of the current distribution business model, the departure of a key senior manager, or a weak motion picture slate. Should the company's credit metrics and liquidity position weaken as a result, S&P could lower the ratings. Alternatively, S&P could revise the outlook to stable if MPD demonstrates solid operating performance and improved credit measures. NBTY INC: Earns $51 Million in Third Quarter Ended June 30 ---------------------------------------------------------- NBTY Inc. generated net sales of $503 million for the fiscal third quarter ended June 30, 2007, compared to net sales of $475 million for the fiscal third quarter ended June 30, 2006, an increase of $28 million, or 6%. Net income for the fiscal third quarter ended June 30, 2007, was $51 million, compared to net income of $30 million for the fiscal third quarter ended June 30, 2006. For the nine months ended June 30, 2007, net sales were $1.5 billion, compared to net sales of $1.4 billion for the prior like period, an increase of $106 million, or 7%. Net income for the nine months ended June 30, 2007 was $159 million, compared to $74 million for the prior like period. Net income for the nine months ended June 30, 2006, included non-cash charges of $14 million primarily related to a trademark impairment charge. At June 30, 2007, NBTY had working capital of $552 million and total assets of $1.5 billion. Included in working capital is $204 million of cash and short term investments, which gives the company flexibility to respond to opportunities. Total assets were valued at $1.5 billion, total liabilities at $512.4 million, and total stockholders’ equity at $1 billion during the end of the third quarter 2007. Third Quarter Operations Net sales for the Wholesale/US Nutrition division, which markets Nature's Bounty, Solgar, Osteo Bi-Flex, Rexall and other brands, increased $21 million, or 9%, to $248 million from $227 million for the prior like quarter. Gross profit for the Wholesale operation increased to 42%, compared to 31% for the prior like quarter. Sales for the North American Retail division decreased $2 million, or 4%, to $56 million from $58 million for the fiscal third quarter ended June 30, 2006. At the end of the fiscal third quarter, the North American Retail division operated a total of 545 stores, with 460 in the US and 85 in Canada. European Retail sales for the fiscal third quarter ended June 30, 2007 increased 9% to $153 million from $140 million for the fiscal third quarter ended June 30, 2006. As of June 30, 2007, the European Retail business operated a total of 623 stores, comprised of 504 Holland & Barrett stores and 31 GNC stores in the UK, 19 Nature's Way stores in Ireland, and 69 DeTuinen stores in the Netherlands. During the fiscal third quarter ended June 30, 2007, the European Retail division opened 3 stores. Net sales from Direct Response/E-Commerce operations for the fiscal third quarter of 2007 decreased 5% to $47 million from $49 million for the fiscal third quarter of 2006. Online sales grew to represent 38% of total Direct Response/E- Commerce sales for this fiscal quarter. NBTY chairman and chief executive officer, Scott Rudolph, said: "We are pleased to report another quarter of increased revenue and profitability. These increases reflect ongoing initiatives to drive sales, increase market share and expand our premier position as the leading nutritional supplement company in the world. We remain confident in our long-term outlook for NBTY and are firmly committed to generating future growth and increasing long-term shareholder value." About NBTY Inc. Headquartered in Bohemia, New York, NBTY Inc. (NYSE: NTY) -- http://www.NBTY.com/-- manufactures, markets and distributes nutritional supplements in the United States and throughout the world. As of Sept. 30, 2005, it operated 542 Vitamin World and Nutrition Warehouse retail stores in the United States, Guam, Puerto Rico, and the Virgin Islands. * * * NBTY Inc.'s 7-1/8% senior subordinated notes due 2015 carry Moody's Investors Service's Ba3 rating and Standard & Poo's B+ rating. NEW CENTURY: Wants Exclusive Plan Filing Date Moved to Nov. 28 -------------------------------------------------------------- New Century Financial Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the period during which they have the exclusive right to: (i) file a Chapter 11 plan by approximately 120 days, through and including November 28, 2007; and (ii) solicit acceptances of that plan through and including January 28, 2008, or approximately 60 days after expiration of the Exclusive Filing Period. The Debtors state that they will pursue filing a plan and disclosure statement as soon as practicable after the August 31, 2007 claims bar date, but in light of the complexity of their Chapter 11 cases are seeking to extend exclusivity by 80 days after that date. The Debtors believe that the proposed dates are consistent with the plan process timeline they have discussed with the Official Committee of Unsecured Creditors. Pursuant to Section 1121(b), a debtor has the exclusive right to file a plan of reorganization during the first 120 days after the commencement of a Chapter 11 case. If a debtor files a plan during that period, an additional 60-day period is automatically granted during which the debtor may exclusively solicit acceptance of the plan. However, Section 1121(d) provides that the Court may extend those exclusive periods for "cause." Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., relates that immediately before the Petition Date, the Debtors had more than 6,000 employees in 300 locations across the country. He notes that the size and complexity of the Debtors' cases have required them to devote a substantial amount of time to negotiating and securing court approval of the sale of the Debtors' assets. Despite the difficulties arising from operating in Chapter 11, Mr. Collins says, the Debtors have made substantial progress in achieving results beyond those available outside of bankruptcy. In addition, the Debtors have focused their efforts on stabilizing, winding down remaining operations and implementing the transition services related to those sales. Notwithstanding the progress that has been made, Mr. Collins avers, the Debtors still have a number of tasks to complete before they will be in a position to develop a Chapter 11 plan. "Although the Debtors are committed to confirming a chapter 11 plan as quickly as possible, they also recognize that this process will require a substantial amount of additional time and effort to complete and that it will require the involvement and participation of other constituents," Mr. Collins tells Judge Carey. The Debtors assure Judge Carey that the extension of the Exclusive Periods will not harm creditors or other parties-in- interest. The Court will convene a hearing on July 31, 2007, at 1:30 p.m., to consider the Debtors' request. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: First Meeting of Creditors to Resume on Aug. 8 ----------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, notified the U.S. Bankruptcy Court for the District of Delaware that the first meeting of creditors in New Century Financial Corporation and its debtor-affiliates' Chapter 11 cases, initially convened on May 8, 2007, will resume on August 8, 10:00 a.m., at Room 2112, J. Caleb Boggs Federal Building, 844 King Street, in Wilmington, Delaware. The meeting of creditors is required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NOE FULINARA: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Noe Fulinara Merilyn Fulinara 2819 McAndrew Court San Jose, CA 95121 Bankruptcy Case No.: 07-52218 Chapter 11 Petition Date: July 24, 2007 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Lars T. Fuller, Esq. 60 North Keeble Avenue San Jose, CA 95126 Tel: (408) 295-5595 Total Assets: $4,735,068 Total Debts: $4,478,106 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Regional Medical Center $163,961 of San Jose P.O. Box 538620 Atlanta, GA 30353-8620 Wells Fargo Bank value of collateral: $115,652 P.O. Box 54180 $50,472 Los Angeles, CA 90054-0180 American Express $78,585 P.O. Box 0001 Los Angeles, CA 90096-0001 I.R.S. Centralized $57,658 Insolvency Operation Navy Federal Credit $21,748 Bank of America $18,104 Franchised Tax Board $11,306 Special Procedures San Jose Medical Group $10,309 Marshal Rosario, M.D. $4,680 Gentiva Health Services $4,074 South Bay Patholog $3,533 Medical Association Regional Medical Center J.C. Penney $3,121 Bright Now Dental, Inc. $3,038 G.E. Money Bank value of collateral: $3,038 $500 Dell Preferred Account value of collateral: $2,329 Payment Processing Center $500 Central Valley Imaging $2,515 Sears Credit Cards $1,988 Galen Inpt. Phys., Inc. $1,557 BrightNow Dental, Inc. $1,500 OGLEBAY NORTON: Harbinger Offer Cues Moody’s Ratings Review ----------------------------------------------------------- Moody's Investors Service placed the ratings for Oglebay Norton Company (B1 corporate family rating) under review for possible downgrade. The review was prompted by Harbinger Capital Partners’ announcement that it has commenced a tender offer for Oglebay's shares for $31 per share in cash. Harbinger already owns about 18% of Oglebay's shares and has been pressing the company to explore strategic alternatives in order to maximize shareholder value. On July 24, 2007, Oglebay formed a Special Committee of independent directors to explore strategic alternatives to maximize shareholder value and hired JP Morgan as its financial advisor. However, Harbinger's tender offer, which represents a significant premium over the trading price of the shares over the last 30 days, raises the probability that Oglebay will be sold, with potentially adverse consequences for pro forma leverage. Moody's does not believe that Oglebay's B1 corporate family rating, reflecting its commodity-like business profile, can tolerate a material increase in leverage. Therefore, its ratings were placed under review for possible downgrade. Moody's review will focus on the outcome of Oglebay's strategic review, the progress of Harbinger's tender offer or any other competing acquisition bid, the pro forma leverage and credit metrics that result from any of the above actions, and Oglebay's business fundamentals and liquidity. These ratings have been placed under review for downgrade: -- B1 -- Corporate family rating -- B1 -- Probability of default rating -- B1 -- $55 million guaranteed senior secured revolving credit facility -- B1 -- $140 million guaranteed senior secured term loan B -- SGL-2 -- speculative grade liquidity rating Oglebay Norton Company, headquartered in Cleveland, mines, processes, transports and markets industrial sands, limestone and lime, and serves customers in four major categories: building materials, energy, environmental and industrial. OMNICARE INC: Moody’s Holds Ba3 CFR with Negative Outlook --------------------------------------------------------- Moody's Investors Service lowered the Speculative Grade Liquidity rating of Omnicare, Inc to SGL-2 from SGL-1. Moody’s believes that as a result of lower than expected cash flow and the potential need for Omnicare to draw on external facilities to fund extraordinary items, the company's liquidity is more weakly positioned than before. Nevertheless, the SGL-2 rating assumes that Omnicare will maintain good liquidity over the near-term. Moody's anticipates that the company's cash flow - though lower than expected - should, along with cash balances, be sufficient to fund all but extraordinary cash requirements over the next twelve months ending March 31, 2008. The SGL-2 rating further assumes that the conversion of the company's Trust Preferred Income Equity Redeemable Securities (PIERS) and particularly its senior convertible notes is not likely at current stock prices. As of March 31, 2007, Omnicare had no borrowings under its $800 million revolver and Moody's believes that the company should remain comfortably above the minimum fixed charge coverage ratio and minimum net worth covenants over the next twelve months. Omnicare's assets are unencumbered but about 60% consists of goodwill and intangible assets as of March 31, 2007. Moody's believes that the value of proceeds from any asset sales might be diminished if there is a need to liquidate rapidly. Omnicare's Corporate Family Rating is Ba3 with a negative outlook. Omnicare, Inc, headquartered in Covington, Kentucky, is the leading provider of institutional pharmacy services to the long term care sector. ORBITZ WORLDWIDE: Moody’s Affirms B2 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the recently assigned B2 corporate family rating to Orbitz Worldwide, Inc. Other ratings affirmed include B1 ratings for the proposed first lien term loan facility due 2014 and $85 million revolver due 2013, which has been upsized from the initially rated $75 million. Concurrently, Moody's withdrew the B1 rating for the proposed $125 million synthetic letter of credit facility, which the company has eliminated from the revised structure as it will continue to have access to a similar facility at the Travelport Limited level. While no ratings changed as a result of the increased revolver, the LGD point estimate on the revolver and term loam were revised to LGD 2, 27% from LGD 3, 40%. The outlook remains stable. Ratings/assessments affirmed: -- Corporate family rating of B2; -- Probability-of-default rating of B3; -- $600 million secured term loan facility due 2014 of B1 (LGD 2, 27%); -- $85 million secured revolving credit facility due 2013 of B1 (LGD 2, 27%); -- Speculative grade liquidity rating of SGL-2. Ratings/assessments being withdrawn: -- $125 million secured synthetic letter of credit facility due 2013 B1 (LGD 3, 40%); Orbitz Worldwide, Inc. is the global online travel division of Travelport, which operates a portfolio of consumer and corporate travel brands, including Orbitz, CheapTickets and ebookers. PARKER HUGHES: Court Approves Bankruptcy Plan --------------------------------------------- The Parker Hughes Cancer Center emerged from Chapter 11 bankruptcy on July 25, 2007 after the U.S. Bankruptcy Court for the District of Minnesota approved the Debtor’s plan ending several leases and repaying debts, the Associated Press reports. As reported in the Troubled Company Reporter on Jan. 25, 2007, the Debtor filed for chapter 11 protection owe to financial problems resulting from an investigation by the Minnesota Board of Medical Practice. The clinic however remained opened throughout its bankruptcy proceedings. Parker Hughes Institute, dba Parker Hughes Cancer Center -- http://www.ih.org/-- and Parker Hughes Clinics -- http://www.parkerhughes.org/-- are non-profit research organizations in the United States devoted to the development of new drugs for the treatment of chronic and life-threatening illnesses. The drug discovery program at Parker Hughes Institute has been awarded numerous patents for multiple anti-cancer and anti-HIV drugs that are at various stages of development. The company and its affiliate filed for chapter 11 protection on Jan. 23, 2007 (Bankr. D. Minn. Case Nos. 07-30237 & 07-30238). Kenneth Corey-Edstrom, Esq., at Larkin Hoffman Daly and Lingren Ltd., represented the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets of less than $10,000 and debts between $100,000 to $100 million. PILGRIM’S PRIDE: Board Elects Lonnie Ken Pilgrim as Chairman ------------------------------------------------------------ Pilgrim's Pride Corporation’s board of directors has elected Lonnie Ken Pilgrim to succeed his father, co-founder Lonnie "Bo" Pilgrim, as chairman of the company. The elder Mr. Pilgrim has been named senior chairman and remains on the board. Ken Pilgrim, 49, has been employed by the company since 1977 and has been Executive Vice President, Assistant to Chairman since November 2004. He served as Senior Vice President, Transportation from August 1997 to November 2004. Prior to that he served the Company as its Vice President, Director of Transportation. He has been a member of the board of directors since March 1985. "The appointment of Ken to chairman is part of an orderly succession plan by the board that should be largely seamless and invisible to our employees, customers and shareholders," Bo Pilgrim said. "Ken has literally grown up in the chicken industry, learning every aspect of the business from the ground up. He has great instincts and a keen understanding of what it takes to grow this company. Our focus has always been on delivering the best possible service, selection and value to our customers, and treating our employees and customers with respect, honesty and integrity. These have been our governing principles for more than 60 years, and will continue to guide Pilgrim's Pride in the future." "My father is a remarkable leader who has served as an inspiration to everyone around him, and I am proud to carry on his legacy of innovation and customer service," Ken Pilgrim said. "Thanks to his bold vision and determination, Pilgrim's Pride today is well positioned for continued growth and success. I am confident that we have the right strategy, resources and team in place to be an even stronger, tougher competitor in the years ahead." About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Pilgrim's Pride Corp. carries Moody's Investors Service's B1 senior unsecured credit rating, B2 senior subordinated notes, and Ba3 corporate family ratings. PPC's planned new $250 million senior unsecured notes also bears Moody's B1 rating and its new $200 million senior subordinated notes bears Moody's B2 rating. The outlook on all ratings is stable. Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a 'BB-' corporate credit rating. POTLATCH CORP: Earns $34 Million in Quarter Ended June 30 --------------------------------------------------------- Potlatch Corporation reported on Thursday its financial results for the second quarter ended June 30, 2007. The company reported net earnings of $34.0 million on revenues of $414.7 million for the second quarter ended June 30, 2007, compared with net earnings of $2.4 million on revenues of $413.3 million for the same period ended June 30, 2006. The company also reported net earnings of $4.2 million on revenues of $800.9 million for the first half of 2007, compared with net earnings of $68.1 million on revenues of $814.5 million for the same period last year. Cash provided by operating activities from continuing operations for the first half of 2007 was $73.1 million, compared to $108.6 million for the same period in 2006. "Log pricing during the second quarter remained strong despite a persistent weakness in lumber pricing caused by the continued slump in U.S. housing starts," said Michael J. Covey, chairman, president and chief executive officer. "During the second quarter, Potlatch made significant progress toward achieving its 2007 goal of selling 15,000-20,000 acres of non-strategic land. The company sold nearly 7,500 acres of non- core lands with revenue of $8.6 million. Although timing of real estate closings is difficult to forecast, the market for rural recreation property remains strong. "In addition, second quarter results were augmented by exceptional results in the Pulp and Paperboard division, where we had record production and strong pricing. Market prices for pulp are as strong as they have been in the past 12 years. "Finally, sales for all of Potlatch's Forest Stewardship Council (FSC) certified solid wood and paperboard products showed continued growth during the quarter." Q2 2007 Financial Summary Earnings from continuing operations were $35.4 million, compared to $8.2 million for the second quarter 2006. Second quarter 2007 results included a one-time payment of $1.4 million for retroactive pay associated with the settlement of the union contracts for the company's pulp and paperboard and consumer products operations in Lewiston. Net earnings for the second quarter 2007 were $34.0 million, compared to $2.4 million for the second quarter 2006. During the second quarter 2007, the company completed the sale of its hybrid poplar tree farm in Boardman, Oregon, to a private-equity tree farm investment fund for approximately $65 million in cash. Results for the hybrid poplar tree farm, which are included in net earnings and are classified as discontinued operations in the Statements of Operations and Comprehensive Income, were a net loss of $1.4 million for the second quarter 2007, compared to a net loss of $5.8 million in the second quarter 2006. First Half 2007 Financial Summary Earnings from continuing operations were $40.8 million, compared to $77.6 million for the first half of last year. Results from continuing operations for the first half of 2006 included a net tax benefit of $51.2 million related to the company's conversion to a real estate investment trust. Net earnings were $4.2 million, compared to net earnings of $68.1 million for the first half of 2006. First half results included an after-tax loss on disposal of $33.0 million for the sale of the company's hybrid poplar tree farm in 2007 and after- tax operating losses for the tree farm of $3.7 million and $9.4 million for 2007 and 2006, respectively. At June 30, 2007, the company's consolidated financial statements showed $1.41 billion in total assets and $856.9 million in total liabilities, and $552.0 million in total stockholders' equity. About Potlatch Corp. Headquartered in Spokane, Washington, Potlatch Corporation (NYSE:PCH) - http://www.potlatchcorp.com/-- is a Real Estate Investment Trust (REIT) with 1.5 million acres of forestland in Arkansas, Idaho, Minnesota and Wisconsin. Through its taxable REIT subsidiary, the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue. The company also conducts a real estate sales and development business through its taxable REIT subsidiary. Potlatch is committed to providing superior returns to stockholders through long-term stewardship of its resources. * * * As reported in the Troubled Company Reporter on Jan. 17, 2007, Fitch has affirmed the Potlatch Corporation's senior unsecured public and bank credit facility and Issuer Default Ratings of 'BB+' and revised its Rating Outlook to Positive. PRIDE INTERNATIONAL: Moody’s Affirms Ba1 Corporate Family Rating ---------------------------------------------------------------- Moody's affirmed Pride International, Inc.'s credit ratings following the company's announcement of the acquisition of a newbuild drillship to be delivered in 2010. The ratings affirmed include the Ba1 corporate family rating, the Ba2 rating on Pride's $500 million senior notes due 2014, the Baa2 rating on its $500 million senior secured credit facility and speculative grade liquidity rating of SGL-2. The outlook is stable. "Pride's recent drillship construction commitments reflect management's strategy of increasing the ultradeepwater capacity of its fleet," commented Pete Speer, Moody's Vice-President/Senior Analyst. "Although the $1.4 billion cost and lack of customer contracts for these drillships are substantial risks, Pride's contract backlog, along with a favorable near term outlook for the deepwater drilling sector, appears to provide sufficient free cash flows to fund the construction progress payments without significant additional debt. These investments will raise the overall quality of the company's fleet while addressing shareholders' desires for growth or return of capital. Moody's considers these drillships to be a full claim on Pride's free cash flow over the next few years." The stable outlook is supported by Pride's $5.7 billion contract backlog and Moody's expectation that market conditions will remain supportive for the remainder of 2007 and into 2008, particularly for the deepwater markets. The stable outlook also reflects Moody's expectation that the company will not add any additional newbuild commitments or rig acquisitions without i. substantial equity funding or proceeds from the divestiture of its Latin American onshore business or other asset sales and ii. a customer contract on the additional rig or at least one of the new drillships. If the drillships remain without customer contracts for a prolonged period the outlook could come under negative pressure. There is limited upside to the rating in the near-to-medium term due to the substantial funding commitments for the drillships and little likelihood of further debt reduction. Further expansion of Pride's speculative newbuild program, debt-funded rig or corporate acquisitions that do not include meaningful equity funding, and/or debt-funded share repurchases could result in a negative outlook or rating downgrade. In July, Pride announced that it entered into a contract with Samsung Heavy Industries Co., Ltd to construct a dual activity, ultra-deepwater drillship for a cost of $680 million, excluding capitalized interest. The drillship will be capable of drilling in depths up to 12,000 feet, with total vertical drilling depth of up to 40,000 feet, and is expected to be delivered in the third quarter of 2010. Pride subsequently announced that it had acquired a second speculative newbuild for about $675 million that is currently under construction with Samsung. The drillship will be capable of drilling in depths up to 10,000 feet, with total vertical drilling depth of up to 40,000 feet, and is expected to be delivered in the first quarter of 2010. Pride does not have customer contracts for either drillship and there are many newbuild ultra-deepwater drillships and semisubmersibles scheduled for delivery in 2008 through 2010. Both construction contracts have been described as fixed-price, but there are still risks of construction delays and cost overruns due to modifications of equipment and design specifications. While deepwater demand is currently very strong and there are indications that this strength will continue, there is still significant uncertainty in predicting market conditions three years out. In addition to the speculative nature of these newbuilds and the funding of the combined $1.4 billion cost, the company's ratings are constrained by the overall size and quality of Pride's fleet in comparison to its investment grade competitors. Although the company owns 60 rigs, including the two newbuilds, 38 are vintage shallow water jackups, mat, barge and other rigs. Excluding these rigs, the company's 22 remaining rigs are much smaller than the comparable fleet of Transocean/GlobalSantaFe (142 rigs), Diamond Offshore Drilling (43), Noble Drilling (57) and Ensco (48). The company's smaller number and proportion of premium rigs could pressure earnings in the next cyclical downturn because premium equipment tends to keep working, albeit at lower dayrates, compared to less capable older generation rigs which often ends up being stacked. Pride's shallow water jackups, mat and barge rigs are particularly vulnerable to rapid declines in utilization and dayrates. Also, while long-term contracts are beneficial to earnings stability, there is still a risk that drilling contracts could be amended or cancelled during industry downturns because of construction delays, unsatisfactory rig performance or other competitive considerations. Additionally, in this high utilization environment, escalating labor, raw material and construction costs will continue to pose a challenge for Pride as well as the rest of the industry in the near-to-medium term. The ratings are supported by Pride's deepwater assets, which are comparable in number with several offshore drilling peers and represent the second largest fleet of dynamically positioned deepwater rigs. The company has also steadily reduced its leverage (Debt/Capitalization of 37% at March 31, 2007 compared to 55% at Dec. 31, 2004), strengthened the depth and experience of its management team, and appears to have resolved its previously persistent internal control issues. Pride Ratings Affirmed: -- Ba1 CFR and Probability of Default Rating -- $500 million Senior Notes due 2014 rated Ba2 (LGD 5, 71%) -- $500 million Senior Secured Credit Facility rated Baa2 (LGD 2, 13%) -- Speculative Grade Liquidity Rating -- SGL - 2 -- Senior Unsecured Shelf rated (P) Ba2 (LGD 5, 71%) -- Subordinated Shelf rated (P) Ba2 (LGD 6, 97%) -- Preferred Shelf rated Ba2 (LGD 6, 97%) Pride International, Inc. is headquartered in Houston, TX. PRIMUS CLO: Moody’s Rates $15.5 Million Class E Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Primus CLO II, Ltd: -- Aaa to the $302,500,000 Class A Senior Secured Floating Rate Notes due 2021; -- Aa2 to the $8,500,000 Class B Second Priority Floating Rate Notes due 2021; -- A2 to the $31,500,000 Class C Third Priority Deferrable Floating Rate Notes due 2021; -- Baa2 to the $10,500,000 Class D Fourth Priority Deferrable Floating Rate Notes due 2021; and -- Ba2 to the $15,500,000 Class E Fifth Priority Deferrable Floating Rate Notes due 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of U.S. dollar-denominated senior secured loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Primus Asset Management, Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. PROSPECT MEDICAL: Signs Pact to Buy Alta Healthcare for $104 Mil. ----------------------------------------------------------------- Prospect Medical Holdings Inc. entered into a definitive agreement to acquire Alta Healthcare System Inc. for total consideration of about $104 million. Alta has achieved outstanding financial performance without any significant managed care contribution and the combined companies are expected to benefit from leveraging Prospect’s 13 Independent Physician Associations, a network of more than 9,000 specialist and primary care physicians. For its fiscal year ended Dec. 31, 2006, Alta generated audited revenues and operating income of $107 million and $16.9 million, respectively. Closing will occur as soon as practicable, but is contingent upon obtaining necessary financing and third party consents, and satisfying other closing conditions. Subject to final documentation, Prospect has received a commitment in financing from Bank of America N.A. Dr. Jack Terner, chairman and chief executive officer of Prospect, commented, "The anticipated acquisition of Alta is a logical step in Prospect’s evolution. This acquisition will transform the Company into a vertically-integrated healthcare provider that we believe will improve the delivery of patient care, and satisfy the increasing demand by HMOs to contract with managed care partners that offer an integrated physician/hospital solution. Prospect has established IPA networks. Alta has earned an outstanding reputation for patient care and as a physician-driven institution. Alta will operate as a standalone entity, allowing its hospitals to retain their local identities." Dr. Terner continued, "In addition to the potential synergies that this combination offers, we were also attracted to Alta because it is led by an outstanding management team who enjoy strong relationships with physicians and employees. As a condition of the acquisition, the key executives will remain with Alta. Prospect will enter into multi-year employment agreements with Sam Lee and David Topper, the driving forces behind Alta’s success. Mr. Lee will join Prospect’s Board of Directors at closing. In addition, Alta has the right to name one independent director, increasing Prospect’s Board from seven members to nine." About Alta Healthcare Alta Healthcare System Inc. is a private, for-profit hospital management company that owns and operates four community-based hospitals -- Van Nuys Community Hospital, Hollywood Community Hospital, Los Angeles Community Hospital, and Norwalk Community Hospital. These hospitals provide a comprehensive range of medical, surgical, and psychiatric services, and have a combined 339 licensed beds served by 351 on-staff physicians. About Prospect Medical Prospect Medical Holdings Inc. (AMEX: PZZ) -- http://www.prospectmedicalholdings.com/-- manages the medical care of individuals enrolled in HMO plans in Southern California. The company, through its Independent Physician Associations, contracts with health care professionals to provide a full range of services to HMO enrollees. Services provided by Prospect include contract negotiations, physician recruiting and credentialing, HR, claims administration, financial services, provider relations, case management, quality assurance, data collection and MIS. * * * As reported in the Troubled Company Reporter on July 25, 2007, Moody's Investors Service has affirmed the B3 corporate family rating of Prospect Medical Holdings Inc. and assigned a B2 rating to the proposed $115 million first lien senior secured credit facility ($100 million term loan and $15 million revolving credit facility) and a Caa2 rating to the proposed $45 million second lien senior secured credit facility. Prospect and Prospect Medical Group Inc., an affiliated physician organization controlled by Prospect, will be co-borrowers under the credit facility. The proceeds will be used to finance the acquisition of Alta Healthcare System Inc., and retire existing debt at Prospect. The outlook on the ratings is stable. PSS WORLD: Sales Up 6.2% in Three Months Ended June 29 ------------------------------------------------------ PSS World Medical, Inc. reported its results for the fiscal 2008 first quarter ended June 29, 2007. Net sales for the three months ended June 29, 2007, were $438.9 million, an increase of 6.2%, compared with net sales of $413.1 million for the three months ended June 30, 2006. Net sales for the three months ended June 29, 2007, for the Physician Business increased by 7.7%, while net sales for the Elder Care Business increased by 3.1%. Income from operations for the three months ended June 29, 2007 was $14.5 million compared with income from operations for the three months ended June 30, 2006, of $18.7 million. Net income for the three months ended June 29, 2007 was $8.7 million, or $0.13 per diluted share, compared with net income for the three months ended June 30, 2006, of $11 million, or $0.16 per diluted share. The company noted that the first quarter operating income was negatively impacted by these: i. costs associated with new state pedigree laws, particularly within the state of Florida, for the sale and distribution of pharmaceutical products ($2.7 million); ii. costs associated with integration of a recently acquired company ($0.7 million); iii. sales training and marketing program costs to launch a new product category in its Physician Business ($1.2 million); iv. lower than expected equipment sales in its Physician Business, primarily resulting from lost selling time used for program launch and training ($0.5 million). The company’s revised goal for fiscal year 2008 consolidated GAAP diluted earnings per share is a range of $0.81 to $0.85. David A. Smith, Chairman and Chief Executive Officer, commented, “This first quarter set back has challenged and energized the determination of our officer team to execute our plans for the next three quarters of the year. Our field teams are very pleased and excited by the new programs and products we have invested in for their future growth. We have good momentum in the business, a solid plan, and are attractively positioned for future strategic growth.” David M. Bronson, Executive Vice President and Chief Financial Officer, commented, “The costs we recognized in this first quarter tended to mask some otherwise very good performance. Other than the shortfall in equipment revenue, traction in our key marketing strategies was very strong with good revenue growth in Select(TM), pharmaceuticals, and home care. Continued focus on working capital generated operating cash flow that exceeded our expectations. Our operating and shared service teams are focused on building on that momentum to meet our earnings targets for the remainder of the fiscal year.” About PSS World Based in Jacksonville, Florida, PSS World Medical Inc. (NASDAQ: PSSI) -- http://www.pssworldmedical.com/-- is a national distributor of medical products to physicians and elder care providers through its two business units. Since its inception in 1983, PSS operated in two market segments focused on customer services, a consultative sales force, strategic acquisitions, strong arrangements with product manufacturers and a unique culture of performance. * * * To date, PSS World Medical Inc. carries Standard & Poor's Ratings Services' BB long-term foreign and local issuer credit ratings. The rating outlook remains stable. PSS W0RLD: Earns $50 Million in Year Ended March 30 --------------------------------------------------- PSS World Medical Inc. reported net income of $50.5 million for the year ended March 30, 2007, compared with net income of $44.3 million for the year ended March 31, 2006. Net sales for the year ended March 30, 2007, were $1.7 billion, an increase of 7.5%, compared with net sales of $1.6 billion for the year ended March 31, 2006. Net sales for the year ended March 30, 2007, for the Physician Business increased by 12.9%, while net sales for the Elder Care Business decreased by 3.5%. Income from operations for the year ended March 30, 2007, increased by 14.0% to $82.5 million compared with income from operations for the year ended March 31, 2006, of $72.4 million. Net sales for the three months ended March 30, 2007, were $443.0 million, an increase of 4.8%, compared with net sales of $422.7 million for the three months ended March 31, 2006. Net sales for the three months ended March 30, 2007, for the Physician Business increased by 7.7%, while net sales for the Elder Care Business decreased by 1.5%. Income from operations for the three months ended March 30, 2007, increased by 17.4% to $24.3 million compared with income from operations for the three months ended March 31, 2006, of $20.7 million. Net income for the three months ended March 30, 2007, increased by 21% to $15.6 million, compared with net income for the three months ended March 31, 2006, of $12.9 million. David A. Smith, chairman and chief executive officer, commented, “Fiscal year 2007 was a great year for the people we care most about – our customers, employees and shareholders. Our customers’ satisfaction with our services drove revenue twice as fast as the market’s growth. We achieved the best employee retention and job satisfaction in our history, and earnings growth continued to reward shareholders with appreciation and value.” Results for the fiscal year 2007 included a write-down of unsold influenza vaccine inventory in the third quarter resulting from cancellation of customer orders due to an oversupply of vaccine in the market and a mild flu season. David M. Bronson, executive vice president and chief financial officer, commented, "In fiscal year 2007, our Elder Care business was successfully repositioned for profitable growth in regional and independent nursing homes and home health. Operating income grew by 36%, despite a revenue decline of 3.5%, validating our decision to exit the less profitable national chain business. The Physician business continued to leverage growth in revenue and improve operational efficiency, delivering 21% growth in operating income when excluding the impact from the write-down of influenza vaccine inventory. Both businesses are benefiting from traction in our global sourcing efforts. Our Select(TM) brand of products achieved all of the growth and profitability goals we established for fiscal year 2007." Mr. Smith concluded, "We have already set sail for the fiscal year 2008 goals. Our focus is on execution of a balance of growth and efficiency through services and innovation. Fiscal year 2007 achievements continued to build on our strong foundation and confidence for our future continued success." At March 30, 2007, the company's consolidated financial statements showed $775.0 million in total assets, $394.1 million in total liabilities, and $380.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended March 31, 2007, are available for free at http://researcharchives.com/t/s?21d9 About PSS World Based in Jacksonville, Florida, PSS World Medical Inc. (NASDAQ: PSSI) -- http://www.pssworldmedical.com/-- is a national distributor of medical products to physicians and elder care providers through its two business units. Since its inception in 1983, PSS operated in two market segments focused on customer services, a consultative sales force, strategic acquisitions, strong arrangements with product manufacturers and a unique culture of performance. * * * To date, PSS World Medical Inc. carries Standard & Poor's Ratings Services' BB long-term foreign and local issuer credit ratings. The rating outlook remains stable. PSYCHIATRIC SOLUTIONS: 2nd Qtr. 2007 Net Income Lowers to $14.6MM ----------------------------------------------------------------- Psychiatric Solutions Inc. reported that revenue increased 43.2% to a record $354,126,000 for the second quarter ended June 30, 2007, from $247,237,000 for the second quarter of 2006. Net income for the second quarter 2007 was $14.6 million, compared to $15.4 million a year ago. Income from continuing operations was $15,266,000 for the second quarter of 2007, which included a loss on refinancing of debt of $8,179,000 primarily related to the company’s tender of its 10.625% senior subordinated notes. Excluding that loss, adjusted income from continuing operations was $20,269,000 for the second quarter of 2007. For the second quarter of 2006, income from continuing operations was $15,974,000. For the six months ended June 30, 2007, the company's revenues were $676.6 million, compared to $488.8 million a year ago. Net income was $32.7 million for the six months ended June 30, 2007, compare with $27.6 million a year ago. Balance sheet showed total assets of $2.1 billion, total liabilities of $1.4 billion, and total stockholders' equity of $687.9 million at June 30, 2007. "PSI completed another strong quarter of profitable growth for the second quarter of 2007," said Joey Jacobs, Chairman, president and chief executive officer of PSI. "We set new records for revenue and adjusted income from continuing operations, expanded our same- facility EBITDA margin and completed the acquisition of Horizon Health Corporation, bringing, among other assets, 15 new inpatient facilities with approximately 1,600 beds to PSI. As a result of this acquisition, we had approximately 10,000 beds in 89 facilities at the end of the second quarter, up from approximately 6,500 beds in 58 facilities at the same time last year. "Our results for the second quarter were consistent with our long- term record of profitable growth. Our revenue growth for the quarter was driven by the performance of the facilities acquired in the last year in combination with an increase in same-facility revenue of 7%. Contributing to our same-facility revenue growth, PSI’s same-facility patient days rose 2.3% for the quarter and same-facility revenue per patient day increased 4.4%. "The substantial growth in our revenue for the second quarter enabled us to achieve further gains in operating leverage, complementing our continuing initiatives to improve the operating efficiency of each of our facilities. As a result, our same- facility EBITDA increased as a percentage of same-facility revenue to 21.3% for the second quarter of 2007, compared with 19.8% for the second quarter of 2006. We are also pleased to have maintained our EBITDA margin of 19.7% for all facilities for the latest quarter, the same as the second quarter last year, which is indicative of our progress in integrating acquired facilities with lower margins and improving their results of operations. PSI’s consolidated adjusted EBITDA for the second quarter increased 45.6% to $60.9 million, or 17.2% of revenue, from $41.9 million, or 16.9% of revenue, for the second quarter of 2006." Based primarily on the company’s operating and financial results for the second quarter and first half of 2007 and its outlook for the remainder of the year, PSI increased its guidance for adjusted earnings from continuing operations per diluted share for 2007 to a range of $1.47 to $1.49, representing an annual growth rate in a range of 29% to 31% compared to 2006. PSI also affirmed its previously established guidance for the third and fourth quarters of 2007. The company’s guidance excludes the one-time loss on refinancing of debt and does not include the impact from any future acquisitions. Mr. Jacobs concluded, "PSI’s significant prospects for profitable growth for the second half of 2007 and beyond reflect compelling industry dynamics, including growing demand in a capacity constrained market; our successful business model, which is based on proven growth and operating strategies; and the compassionate and high quality care our skilled facility teams provide our often desperately ill patients and their families. As the nation’s leading provider of inpatient psychiatric care, we are well positioned to leverage these strengths to expand our capability to serve the growing needs of our industry and, thereby, to create additional stockholder value." About Psychiatric Solutions Inc. Psychiatric Solutions Inc. -- http://www.psysolutions.com/-- (NASDAQ: PSYS) offers inpatient behavioral health care services for children, adolescents, and adults through acute inpatient behavioral health care facilities and residential treatment centers in the U.S. Its headquarter is located in Franklin, Tenn. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service affirmed the existing ratings of Psychiatric Solutions Inc., despite the increase in leverage to finance the proposed acquisition of Horizon Health Corporation for $426 million, including the assumption of Horizon's debt. Moody's expects PSI to add an additional $225 million to its existing term loan, draw an additional $50 million on its existing revolver ($300 million capacity) and use $200 million in senior subordinated debt. Moody's expects PSI to use the proceeds to finance the acquisition of Horizon and repay the remaining balance on its 10-5/8% senior subordinated notes. The ratings outlook is stable. QUAKER FABRIC: Inks Pact with GB Merchant for $2 Mil. Overadvance ----------------------------------------------------------------- Quaker Fabric Corporation disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on July 18, 2007, with the consent of Bank of America, N.A., entered into a letter agreement with GB Merchant Partners, LLC, providing for a $2.0 million Overadvance to the company under one or both of the Term Loans under the 2006 Term Loan Agreement. The Letter Agreement further provides for the payment of interest at the Default Rate under the 2006 Term Loan Agreement and a Forbearance and Funding Fee equal to 20% of any amounts funded under the GB Overadvance, with the proceeds of each such GB Overadvance to be used solely to fund wind-down expenses and other costs and expenses set forth in a wind-down budget prepared under the direction of and approved by RAS and further approved by the Bank and GB. Credit Agreement On Nov. 9, 2006, the company’s wholly-owned subsidiary, Quaker Fabric Corporation of Fall River, entered into a $25.0 million amended and restated senior secured revolving credit agreement with Bank of America and two other lenders. Quaker Fall River's obligations to the revolving credit lenders are secured by all of the company's assets, with a junior interest in Quaker Fall River's real estate and machinery and equipment. Simultaneously, Quaker Fall River entered into two senior secured term loans in the aggregate amount of $24.6 million, with GB Merchant Partners, LLC as Agent for the term loan lenders. The two term loans consist of a $12.5 million real estate loan and a $12.1 million equipment loan. The Term Loans are secured by all of the company's assets, with a first priority security interest in the company's machinery and equipment and real estate. Likely Liquidation As previously reported in the Troubled Company Reporter, the company disclosed that it is likely to commence an orderly liquidation of its business and a sale of its assets after it failed to meet the requirements for committed borrowings under its existing lending facilities. The company however said it continues to talk with each of its existing lenders about the financing needed to conduct an orderly liquidation and sale. On July 9, 2007, the company retained RAS Management Advisors, Inc. to (i) manage, in consultation with management, the liquidation of the assets of the company outside the normal course of business in a manner intended to yield the greatest return to the company's creditors and (ii) to advise the company with respect to budgeting matters related to the liquidation process. Notice of Default On July 3, 2007, both Bank o America and GB provided the company with "Notice of Defaults and Exercise of Remedies; Reservation of Rights" letters alleging that events of default had arisen under the 2006 Loan Agreements because various representations and warranties made by the company were not true at the time certain Loans were made. The Lenders further said that its disclosure o likely liquidation constituted an admission of the company's inability to pay its debts when due. The effect of these Default Notices includes an increase in the interest rates on the 2006 Loan Agreements to the Default Rate, as defined in the 2006 Loan Agreements, which is 2% higher than the otherwise applicable interest rates in the Agreements. In addition, the Default Notice provided to the company by the Bank includes a provision notifying the company that the Lenders "have no further obligation or commitment to make additional Loans to the Borrower (Quaker Fall River). The decision to make any further Loans will be made in the sole discretion of the Lenders. The Administrative Agent expressly reserves the full extent of its rights and remedies under the Credit Agreement and applicable law.” The Default Notice from GB includes an identical Reservation of Rights Clause. Each of the Bank and GB have the right to demand immediate repayment of all amounts outstanding under the Loans upon the occurrence of the events of default described in the Default Notices. To date, neither the Bank nor GB has made any such demand. As of July 20, 2007, there were $34.2 million of loans outstanding under the 2006 Loan Agreements, including $19.5 million of loans outstanding under the 2006 Term Loan and $14.7 million of loans outstanding under the 2006 Revolving Credit Agreement, including approximately $4.0 million of letters of credit outstanding. Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- engages in the design, manufacture, and marketing of woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of home furnishings and other products. Quaker Fabric Corporation sells its products through sales representatives and independent commissioned sales agents in the United States, Canada, Mexico, and internationally. QUALITY HOME: Moody’s Affirms B2 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service affirmed the ratings of Quality Home Brands, but revised the rating outlook to negative, following a predominantly debt financed acquisition of Troy/Hudson Lighting by Quality Home Brands, the merged company will do business as Generation Brands following the acquisition. At the same time, Moody's downgraded the company's amended first lien credit facility, revolver and term loan, to B1 from Ba3 and affirmed the amended second lien facility at Caa1. The assigned ratings are subject to the receipt of final documentation, with no material changes to the terms as originally reviewed by Moody's. Quality Home Brands is acquiring both Troy-CSL Lighting and Hudson Lighting with a $98 million add-on to existing first lien term loan and a $40 million add-on to its second lien term loan and equity. "Although the acquisition will be funded principally with debt, the company's proforma leverage of about 6.5x, will only slightly increase" said Kevin Cassidy, Vice President/Sr. Credit Officer at Moody's Investors Service. "The negative outlook reflects Moody's concern that the combination of the company's high exposure to the softening housing/home refurnishing markets and high leverage will constrain its financial flexibility to withstand any unforeseen shocks to its business," noted Mr. Cassidy. He further noted that "the negative outlook reflects Moody's view that the company may not be able to delever as quickly as anticipated because of the soft housing market and that leverage may remain around 6.5x by the end of the year." The B2 corporate family rating reflects the company's high leverage but also the company's portfolio of strong brand names, history of cash flow generation and debt reduction, strong double digit operating margins and strong market share in the electric lighting industry. Mr. Cassidy said that "we believe that these factors provide somewhat of a buffer against the uncertainty in the housing market and consumer spending and will result in the company maintaining key ratios consistent with a B2 consumer durables company, although it is weakly positioned as indicated by the negative outlook." "The downgrade in the first lien term loan and revolver reflects the change in the capital structure whereby there is now relatively less junior capital, second lien, supporting the more senior first lien" said Mr. Cassidy. These ratings were affirmed: -- Corporate family rating at B2; -- Probability of default rating at B2; -- 2nd lien term loan at Caa1; These ratings were downgraded: -- 1st lien term loan to B1 (LGD 3, 34%) from Ba3 (LGD 3, 32%); and -- 1st lien revolver to B1 (LGD 3, 34%) from Ba3 (LGD 3, 32%). Quality Home Brands Holdings, L.L.C. is a designer, manufacturer, importer, and marketer of lighting fixtures headquartered in North Carolina. Proforma net sales for the LTM ended June 2007 were less than $500 million. QUALITY HOME: $138.6MM Loan Increase Cues S&P's Negative Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cary, North Carolina-based Quality Home Brands Holdings LLC to negative from stable. At the same time, S&P affirmed all ratings, including the 'B' corporate credit rating and the senior secured ratings, on the company. The recovery rating remains unchanged at '2', indicating the expectation for substantial (70%-90%) recovery in the event of a payment default. The outlook action follows the announcement that Quality Home Brands will increase its existing term loans by $138.6 million. The add-ons will consist of $98.6 million to the first-lien term loan and $40 million to the second-lien term loan, bringing the total of the credit facility to $555 million. "The outlook revision reflects our concern about the company's increased leverage and more aggressive financial policy," said Standard & Poor's credit analyst Bea Chiem. "Furthermore, we are concerned with the effect that the slowing domestic housing market will have on Quality Home Brands' financial performance in the near-to-intermediate term." Net proceeds from the add-ons to the term loans will finance the acquisition of Troy/Hudson, a designer and supplier of decorative interior and exterior lighting products for the home-remodeling market. Pro forma for the transaction, S&P expect the company to have about $593 million in debt outstanding. The ratings on Quality Home Brands reflect the company's high debt leverage, narrow product focus, and participation in the highly fragmented and competitive lighting industry. Quality Home Brands designs, supplies, manufactures, and markets residential lighting fixtures. R.H. DONNELLEY: To Acquire Business.com for $345 Million in Cash ---------------------------------------------------------------- R.H. Donnelley Corporation has signed a definitive agreement to acquire Business.com, a business search engine and directory and pay-per-click advertising network, for $345 million in cash and deferred purchase consideration. Through this transaction, R.H. Donnelley will add to its existing interactive portfolio a rapidly growing and profitable business- to-business company, with online properties that include Business.com, Work.com and the Business.com Advertising Network. These online brands attract an audience of highly qualified and motivated business decision makers. Business.com optimizes the revenues from these properties through the use of its Performance Based Advertising platform, which is considered to be one of the most advanced systems in the marketplace. In addition, R.H. Donnelley's Triple Play(TM) business-to-consumer integrated marketing solutions will also benefit from a significant infusion of leading-edge search and directory technology and interactive thought leadership from Business.com, particularly in the areas of performance based advertising technologies and corresponding ad network capabilities. Business.com employs approximately 100 highly-skilled technologists, strategists and businesspeople and serves more than 6,000 business-to-business advertisers and their agencies. The company is profitable and is expected to generate revenues of greater than $50 million in 2007. It is widely recognized as a leader in the online business-to-business commercial search space and has been named to the "Inc. 500" and BtoB magazine's "Media Power 50". "With this transaction R.H. Donnelley takes another significant step forward in the online local commercial search marketplace," David C. Swanson, chairman and CEO of R.H. Donnelley Corporation, said. "Upon closing, we will immediately gain a profitable business-to-business vertical that is widely recognized as one of the leaders in the market. We also gain technology and talent that will accelerate our capabilities with DexKnows.com and other aspects of our digital strategy." The deal is expected to close in the third quarter of 2007 and is subject to customary terms and closing conditions, including compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Appointment of Interactive Unit President Business.com is led by Founder and CEO Jake Winebaum, a highly- regarded, successful leader of Internet and media companies. Upon closing of the transaction, Mr. Winebaum will be appointed as President of R.H. Donnelley's interactive unit, which will now include DexKnows.com(TM), LocalLaunch! search engine marketing company, Business.com, Work.com and the Business.com Advertising Network. Winebaum will lead RHDi from Santa Monica, California, and will report directly to Mr. Swanson. Prior to starting Business.com, Mr. Winebaum led the Internet activities of The Walt Disney Company, serving as the Chairman of Buena Vista Internet Group, which managed high-profile brands such as Disney.com and ESPN.com. His leadership and contributions to the Internet industry have been acknowledge by Time magazine, which included him as one of the Top 50 Cyber Elite and Wired magazine, who placed him on the Wired 25. "We are very excited about joining the R.H. Donnelley organization," Mr. Winebaum said. "Business.com and the platform we built over the past seven years are a perfect complement to R.H. Donnelley's interactive strategy. The solutions that we have created for business decision makers and advertisers are directly applicable to what is required to service the local search and directory needs of consumers and local merchants. It is exciting to become part of an organization with such substantial reach, capabilities and resources. Business.com is already a profitable and growing enterprise, but together we will accelerate this growth and ensure our combined leadership position in the business and local markets." Mr. Swanson added, "We are very pleased to welcome Jake and the Business.com team to R.H. Donnelley. Jake's track record of success and significant experience in building and running successful interactive organizations make him the perfect choice to lead RHDi's fast-growing interactive business." About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., formerly The Dun & Bradstreet Corp., (NYSE: RHD) -- http://www.rhdonnelley.com/ -- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * R.H. Donnelley Corp.’s 6-7/8% Senior Unsecured Notes due 2013 holds Moody’s Investors Service’s B3 rating, Standard & Poor’s B rating and Fitch Ratings’ CCC+ rating. R.H. DONNELLEY: Earns $25 Million in Second Quarter 2007 -------------------------------------------------------- R.H. Donnelley Corporation reported net income for second quarter 2007 of $25 million. Second quarter 2007 free cash flow was $146 million based on cash flow from operations of approximately $171 million and $24 million of capital expenditures. Advertising sales during the second quarter were $729 million, up 0.2% from the same period in the prior year. Net revenue for the quarter was $667 million. EBITDA, including $8 million of FAS 123 R expense and approximately $8 million of purchase accounting entries, during the second quarter was $348 million. As of June 30, 2007, RHD's net debt outstanding, including the purchase accounting fair value adjustment of $181 million, was $9.98 billion. "The highlight of the quarter was the growth in our AT&T markets in Illinois," David C. Swanson, chairman and CEO of R.H. Donnelley, said. "Second quarter is that region's largest ad sales period and includes the highly competitive Chicago market. We've worked hard over the last two years to make improvements there and it's rewarding to see the results of those efforts. Our robust suite of Internet solutions in addition to our print yellow pages are proving to be a very effective combination in larger markets. Our progress in Illinois was partially offset by the impact of the soft real estate sector and the challenges in major metro markets in our EMBARQ and Qwest markets." Outlook The company is affirming the annual guidance last provided on April 26, 2007. The guidance summarized does not reflect the impact of the pending acquisition of Business.com. -- Positive advertising sales growth; -- Net revenue of approximately $2.67 billion; -- EBITDA, excluding FAS 123 R expense and purchase accounting impacts, of approximately $1.44 billion. -- Free cash flow of approximately $615 million; -- Net debt, excluding fair value adjustment, at year end of approximately $9.5 billion; -- Weighted average fully diluted shares outstanding during 2007 of up to 72.5 million. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., formerly The Dun & Bradstreet Corp., (NYSE: RHD) -- http://www.rhdonnelley.com/ -- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * R.H. Donnelley Corp.’s 6-7/8% Senior Unsecured Notes due 2013 holds Moody’s Investors Service’s B3 rating, Standard & Poor’s B rating and Fitch Ratings’ CCC+ rating. ROCKFORD PRODUCTS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Rockford Products Corporation 707 Harrison Avenue Rockford, IL 61104 Tel: (815) 229-4342 Bankruptcy Case No.: 07-71768 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Rockford Products Global Services, Inc. 07-71769 Type of Business: The Debtor group is a customer driven supplier of standard fasteners, cold-formed components, and related products and services from worldwide sources. It has been operating since 1929. See http://www.rockfordproducts.com/and http://www.rockfordinternational.com/ Chapter 11 Petition Date: July 25, 2007 Court: Northern District of Illinois (Rockford) Debtor's Counsel: Thomas J. Augspurger, Esq. LeBoeuf, Lamb, Greene & MacRae LLP Two Prudential Plaza 180 North Stetson Avenue, Suite 3700 Chicago, IL 60601-6710 Tel: (312) 794-8054 Fax: (312) 729-6554 Estimated Assets Estimated Debts ---------------- --------------- Rockford Products $1 Million to $1 Million to Corporation $100 Million $100 Million Rockford Products Less than $1 Million to Global Services, Inc. $10,000 $100 Million Rockford Products Corporation's List of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yensen Trade Vendor Claim $1,628,887 c/o Nelson Hsu No. 11-8, Hsin Chuang Road Kangshan, Kaohsiung Hsien Taiwan, R.O.C. Tel: 07-6242307 Fax: 07-6242309 Charter Steel Trade Vendor Claim $1,522,579 c/o John Couper 1212 West Glen Oaks Lane P.O. Box 217 Mequon, WI 53092-0217 Tel: (262) 243-4720 Fax: (262) 243-4720 Chun Men Trade Vendor Claim $1,049,056 No. 92 Chia Hsin-Tung Road Chu Wei-Lii, Kangshan Kaoshiung Hsien Taiwan, R.O.C. Tel: 886-7-6213825 Fax: 886-7-6230562 BCS Cuyahoga LLC Trade Vendor Claim $701,186 c/o Tom McCormick 1175 Harbor Avenue P.O. Box 13191 Memphis, TN 38113 Tel: (901) 946-1005 Fax: (901) 948-6266 Porteous Fastener Co. Trade Vendor Claim $676,516 c/o Dick Kleppe 1040 Watson Center Road Carson, CA 90745 Tel: (310) 847-6721 Fax: (310) 835-0415 Industrial Energy Trade Vendor Claim $668,810 Applications c/o Diane Lund 203 3rd Avenue Southeast Suite 300 Cedar Rapids, IA 52401 Tel: (319) 786-2708 Fax: (319) 786-2765 Jinn Her Trade Vendor Claim $528,479 c/o Y.Y. Tsai No. 107 Shin-Lo Street Kangshan, Kaohsiung 82001 Taiwan, R.O.C. Tel: 6229801-189 Fax: 6223750 Americo Chemical Products Trade Vendor Claim $511,558 c/o Chris Bozin 1515 East Woodfield Road Suite 740 Schaumburg, IL 60173 Tel: (847) 805-0830 Fax: (847) 805-0836 Engman-Taylor Trade Vendor Claim $470,701 c/o Fred Johnson 7980 Burden Road Machesney Park, IL 61115 Tel: (815) 282-0124 ext. 113 Fax: (815) 282-0472 Soung Luder Fastener Trade Vendor Claim $466,611 c/o Jin Fu Lin 1F, No. 33, Mingde Street Gangshan Township Kaohwiun county 820 Taiwan, R.O.C. Tel: 07-628-1127 Fax: 07-628-1740 Soung Fu Trade Vendor Claim $409,577 c/o Jin Fu Lin No. 45-80 Char Faq Road Kang Sang Kaohsiung Hsien, 820 Taiwan, R.O.C. Tel: 07-628-1127 Fax: 07-628-1740 Tru-Cut Production Inc. Trade Vendor Claim $403,244 c/o Phil Whitehead 102 North Elida Winnebago, IL 61088 Tel: (815) 335-2215 Fax: (815) 335-1015 Carpenter Technology Trade Vendor Claim $352,793 c/o Stefanie O'Brien 101 West Bern Street Reading, PA 19601 Tel:(866) 709-9948 ABC Trade Vendor Claim $307,990 c/o Manfred Hofschneider ABC Umformtechnik Kolner Strasse 64 D-58285 Gevelsberg Germany Tel: 49-233-3799320 Fax: 49-233-3799299 Distribution Data Inc. Trade Vendor Claim $300,000 c/o Mike Noll 16101 Snow Road, Suite 200 Cleveland, OH 44142 Tel: (216) 362-3025 Fax: (216) 362-3029 UPS Supply Chain Solutions Trade Vendor Claim $288,037 c/o Nicholas Fariello 500 Busse Road Elk Grove Village, IL 60007 Tel: (630) 274-1503 Cornwall Enterprises Trade Vendor Claim $276,603 c/o Roger Chen 32 chia hsin East Road Kangshan Chen Kachsiung Hsien Taiwan, R.O.C. Tel: 07-622-2811 Fax: 07-622-4437 Custom Metal Products Trade Vendor Claim $267,576 c/o Joe Klink 1827 Broadway Rockford, IL 61104 Tel: (815) 397-2677 Fax: (815) 397-0324 Hi-Tech International Trade Vendor Claim $259,299 c/o Jittendra Bavishi B-6, Brindavan Co-Op Society L.J. Gupta Marg Deonar, Mumbai 400 088 India Tel: 22-557-5473 Fax: 22-557-1399 Induction Heat Treating Trade Vendor Claim $223,195 c/o R.E. Haimbaugh 775 Tek Drive Crystal lake, IL 60014 Tel: (815) 477-7788 Fax: (815) 477-7784 SACO I: Poor Collateral Performance Cues S&P to Lower Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes from SACO I Trust's series 2006-1 and 2006-8. Of the four lowered ratings, S&P removed two from CreditWatch with negative implications and one remains on CreditWatch negative. At the same time, S&P affirmed its ratings on the remaining classes from both SACO I Trust transactions. The downgrades reflect the continuing deterioration of collateral performance. Both of these deals contain primarily second-lien mortgage loans as collateral, which usually incur losses when the loans become more than 180 days delinquent and are subsequently charged off. Realized losses have been outpacing excess interest spread, which has reduced credit enhancement to levels that are not sufficient to support the previous ratings on the downgraded classes. For series 2006-1, as of the June 2007 remittance period, overcollateralization had been reduced to $3.98 million, or 1.28% of the original pool balance. Cumulative realized losses reached $10.34 million, or 3.33% of the original pool balance. Total delinquencies and severe delinquencies (90-plus-days, foreclosures, and REOs) constituted 7.31% and 3.62% of the current pool balance, respectively. For the same time period, the O/C for the pool backing series 2006-8 was completely depleted. S&P lowered the rating on class B to 'D' due to a $0.54 million principal write-down during the June remittance period. Cumulative realized losses reached $6.06 million, or 1.68% of the original pool balance. Total and severe delinquencies constituted 7.72% and 3.02% of the current pool balance, respectively. Standard & Poor's will continue to closely monitor the performance of class M-3 from series 2006-1. If the delinquent loans cure to a point at which monthly excess interest begins to outpace monthly net losses, thereby allowing O/C to build and provide sufficient credit enhancement, S&P will affirm the rating and remove it from CreditWatch. Conversely, if delinquencies cause substantial realized losses in the coming months and continue to erode credit enhancement, S&P will take further negative rating actions on this class. The rating on class M-4 from series 2006-1 was removed from CreditWatch because it was lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. Credit support for these deals is derived from a combination of subordination, excess interest, and O/C. Series 2006-8 also benefits from a bond insurance policy from Ambac Assurance Corp. ('AAA'). These transactions were initially backed by either subprime or Alt-A home equity lines of credit. The guidelines used in the origination process generally employed standards intended to assess the credit risk of borrowers with imperfect credit histories or relatively high ratios of monthly mortgage payments to income. Rating Lowered SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-2 BB A- Rating Lowered and Remaining on Creditwatch Negative SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-3 B/Watch Neg BBB+/Watch Neg Ratings Lowered and Removed from Creditwatch Negative SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-4 CCC BB/Watch Neg 2006-8 B D B/Watch Neg Ratings Affirmed SACO I Trust Series Class Rating ------ ----- ------ 2006-1 A AAA 2006-1 M-1 A 2006-8 A, A-IO AAA SCHUFF INT'L: S&P Withdraws Rating at Company's Request -------------------------------------------------------- Standard & Poor's Rating Services withdrew its corporate credit rating on Phoenix-based Schuff International Inc., at the company's request. The company recently retired the remainder of its $100 million senior notes. SAGERYDER INC: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: SageRyder, Inc. fdba RTI Micro, Inc. dba Projector Lamp Center dba Big Screen Center dba Mount Center 4060 Peachtree Road, Suite D334 Atlanta, GA 30319 Tel: (678) 325-6520 Bankruptcy Case No.: 07-71667 Type of Business: The Debtor, through its division, Big Screen Center, provides quality audio visual products and services to the business and consumers. Chapter 11 Petition Date: July 25, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Todd E. Hennings, Esq. Macey Wilensky Kessler Howick & Westfall Marquis Two Tower, Suite 600 285 Peachtree Center Avenue, Northeast Atlanta, GA 30303-1229 Tel: (404) 584-1222 Fax: (404) 681-4355 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million Debtor's List of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Google, Inc. Trade Debt $690,524 Department #33181 P.O. Box 39000 San Francisco, CA 94139-3181 Da-Lite Screen Company, Inc. Trade Debt $574,453 P.O. Box 37 Warsaw, IN 46581 American Express Trade Debt $504,693 P.O. Box 650448 Dallas, TX 75265-0448 Elki International Trade Debt $499,953 P.O. Box 514650 Los Angeles, CA 90051-4650 Stampede Trade Debt $482,162 P.O. Box 2907 Buffalo, NY 14240-2907 Draper, Inc. Trade Debt $437,129 411 South Pearl Street P.O. Box 425 Spiceland, IN 47385 Peerless Industries Trade Debt $287,065 3215 West North Avenue Melrose Park, IL 60160 Andrews Electronics Trade Debt $165,135 Ingram Micro Trade Debt $106,658 Ushio Trade Debt $101,838 OmniMount Systems Trade Debt $65,972 Chief Manufacturing Trade Debt $61,962 FedEx - U.S. collections Trade Debt $59,372 Wynit Trade Debt $44,909 Lutz Real Estate Investment Trade Debt $44,428 Randstad Trade Debt $38,375 Venture Direct Worldwide, Inc. Trade Debt $35,000 Tech Data Corporation Trade Debt $31,973 Elite Screens Trade Debt $31,913 Specialty Marketing, Inc. $31,446 SAINT VINCENTS: Court Confirms First Amended Chapter 11 Plan ------------------------------------------------------------ The Honorable Adlai Hardin of the U.S. Bankruptcy Court for the Southern District of New York confirmed Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates First Amended Chapter 11 Plan on July 27, 2007. As reported in the Troubled Company Reporter on June 8, 2007, Guy Sansone, chief executive officer and chief restructuring officer of SVCMC, declared that the First Amended Plan is actually six distinct Chapter 11 plans. However, in light of the fact that each Debtor has the same procedural provisions of the Plan, the Debtors are submitting a single Plan and Disclosure Statement. The Amended Plan provides for the reorganization of SVCMC and the liquidation of the five other debtors. Statutory Requirements for Plan Confirmation The Debtors stepped Judge Hardin through the 16 statutory requirements under Section 1129(a) of the Bankruptcy Code necessary to confirm their First Amended Chapter 11 Plan: A. The First Amended Plan complies with and satisfies all applicable provisions of the Bankruptcy Code as required by Section 1129(a)(1), including, without limitation, Sections 1122 and 1123 of the Bankruptcy Code, and Rule 3016 of the Federal Rules of Bankruptcy Procedure: * As required by Section 1122(a), the Claims and Equity Interests placed in each Class of the First Amended Plan are substantially similar to the other Claims and Equity Interests within that Class. * The Plan designates each Class of Claims and Equity Interests, as required by Section 1123(a)(1). * The Plan specifies the Unimpaired Classes of Claims and the treatment of each Class of Claims and Equity Interests that is Impaired, in accordance with Sections 1123(a)(2) and 1123(a)(3). * In accordance with Section 1123(a)(4), the Plan provides for the same treatment by the Debtors of each Claim or Equity Interest within a particular Class unless the claim or interest holder has agreed to a less favorable treatment of that Claim or Equity Interest. * Pursuant to Section 1123(a)(5), the Plan and the Plan Supplement provides adequate and proper means for its implementation, including: -- the terms of the Secured Obligation, -- the terms of the Unsecured Obligation, -- the terms associated with the creation, mechanics, oversight and tax consequences of the Litigation Trust and the MedMal Trusts, -- Reorganized Articles of Incorporation and Reorganized By-laws for Reorganized SVCMC, -- the names of the members of the initial Board of Directors and officers of Reorganized SVCMC, -- a schedule of certain restructuring transactions which, in Reorganized SVCMC's discretion, may be effectuated on or after the Effective Date, -- that certain Supplemental Agreement with Pension Benefit Guaranty Corporation in connection with the First Amended Plan dated July 5, 2007, -- the MedMal Trust Agreements, -- the Litigation Trust Agreement, and -- the commitment letter setting forth the terms and conditions upon which Reorganized SVCMC will enter into the Exit Facility on or before the Effective Date. * As Reorganized SVCMC will remain a non-profit organization, it does not issue equity securities and accordingly will have no non-voting equity securities, as required under Section 1123(a)(6). * The Debtors have included in the Plan Supplement the names of the members of the initial Board of Directors and Officers of Reorganized SVCMC. The selection of those individuals is consistent with the interest of creditors, equity security holders, and public policy in accordance with Section 1123(a)(7). * The provisions of the Plan are appropriate and not inconsistent in any respect with the applicable provisions of the Bankruptcy Code, thereby satisfying Section 1123(b). B. The Debtors have complied with all applicable provisions of the Bankruptcy Code, as required by Section 1129(a)(2), including, without limitation, Sections 1123, 1125 and 1126 and Bankruptcy Rules 3017, 3018 and 3019. C. Pursuant to Section 1129(a)(3), the Debtors have proposed the Plan in good faith and not by any means forbidden by law. The Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors' estates and to effectuate a successful reorganization of SVCMC and an orderly liquidation of the Other Debtors, consistent with SVCMC's charitable and non-for profit mission. D. Pursuant to Section 1129(a)(4), any payment made or promised by the Debtors for services, cost, and expenses in connection with the Chapter 11 cases have been approved by the Court as reasonable. E. Pursuant to Section 1129(a)(5), the Debtors have disclosed the identity and affiliations of the persons proposed to serve as initial directors and officers of the Reorganized Debtors, and the appointment to, or continuance in, those offices by those persons is consistent with the interests of the Debtors' creditors and with public policy. The Debtors have also disclosed the identity and affiliations of insiders who will be employed or retained by the Reorganized Debtors and the nature of compensation of those insiders from and after the Effective Date. F. Section 1129(a)(6) is satisfied because the Plan does not provide for any change in the rates over which a governmental regulatory commission has jurisdiction. G. The Plan satisfies Section 1129(a)(7) of the Bankruptcy Code as the liquidation analyses, the Plan Supplement and other evidence proffered at or prior to the Confirmation Hearing: (a) are persuasive and credible; (b) have not been controverted by other evidence; and (c) establish that each holder of an impaired Claim or Equity Interest against SVCMC has voted on the Plan, and will receive, on account of that Claim or Interest, property of a value that is not less than the amount that holder would receive if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. H. Pursuant to Section 1129(a)(8), each of Class 2-2 Aptium Secured Claim, Class 3 General Unsecured Claims against SVCMC, Class 4 MedMal-BQ Claims, Class 5 MedMal-MW Claims, Class 6 MedMail-SI Claims, Class 8 Intercompany Claims, Class A3 General Unsecured Claims against MS-SVH, Class A4 Equity Interest in MS-SVH, and Class E4 Equity Interest in CMC-RS is impaired and has voted to accept the Plan. I. The Plan provides for the treatment of Administrative Expense Claims, Priority Non-Claims, and Priority Tax Claims, and thus complies with Section 1129(a)(9). J. At least one Impaired Class of Claims has accepted the Plan, excluding the votes cast by insiders. Accordingly, Section 1129(a)(10) has been satisfied. K. The Plan is feasible as the evidence proffered or adduced at the Confirmation Hearing (i) is persuasive and credible, (ii) has not been controverted by other evidence, and (iii) establishes that the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization of the Debtors. Accordingly, the requirements of Section 1129(a)(11) are satisfied in all respects. L. The Plan provides for the payment of all fees payable pursuant to Section 1930(a)(6) of the Judiciary and Judicial Procedure Code with respect to each of the Chapter 11 Cases. The Plan therefore satisfies the requirements of Section 1129(a)(12). M. In accordance with Section 1129(a)(13), the Plan provides for the continuation, after the Effective Date, of all retiree benefits, if any, as that term is defined in Section 1114 of the Bankruptcy Code, at the levels established pursuant to Sections 1114(e)(1) or 1114(g) at any time prior to the Confirmation Date, for the duration of the period that the Debtors are obligated to provide those benefits. N. SVCMC is not required by a judicial or administrative order, or by statute, to pay a domestic support obligation. Section 1129(a)(14) is, therefore, inapplicable. 0. SVCMC is not an individual, and accordingly, Section 1129(a)(15) is inapplicable. P. Section 1129(a)(16) is inapplicable as it provides that all property transfers pursuant to a plan must be made in accordance with applicable non-bankruptcy law that governs the transfer of property by a corporation or trust that is "not a moneyed, business or commercial corporation or trust. The Debtors made some unsubstantial amendments to the Plan as reflected on the record at the Confirmation Hearing. Those amendments do not adversely change the treatment of the Claims and Equity Interests of the Debtors' creditors, and thus no further solicitation of votes is required, the Court finds. The treatment of the DASNY Subordinated Claims has been modified consistent with the terms of the agreement between the Debtors and DASNY as reported on the record of the Confirmation Hearing. 450 Partners LLC, as landlord for a lease agreement for a non- residential real property located at 450 West 33rd Street, in New York, opposed the Plan to the extent it extends the time by which the Debtors may assume, assume or assign or reject an unexpired lease of real property beyond the Confirmation Date. The Court rules that in the event the 33rd Street Lease is assigned or sold, the proceeds of which will be distributed as: (i) 5% of the Net Proceeds to 450 Partners LLC, and (ii) the balance of the Net Proceeds divided equally among the Reorganized SVCMC, the MedMal Trusts, and the Secured Obligation to the extent if has not previously been paid. In light of the Court's order, 450 Partners' objection is deemed withdrawn. All objections to confirmation of the Plan that have not been otherwise withdrawn, waived, or settled are overruled. Judge Hardin also authorizes the Debtors to enter into the Exit Facility with General Electric Capital Corporation on or before the Effective Date. A full-text copy of the SVCMC Confirmation Order is available for free at http://ResearchArchives.com/t/s?21e5 A full-text copy of the Court's Findings and Conclusions at the Confirmation Hearing is available for free at http://ResearchArchives.com/t/s?21e6 About Saint Vincents Based in New York City, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the healthcare provider in New York State, operates hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 60 Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) SAN GABRIEL: Moody’s Rates $16.5 Million Class B-2L Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by San Gabriel CLO I Ltd: -- Aaa to the $273,000,000 Class A-1L Floating Rate Notes Due September 2021; -- Aaa to the Up to $40,000,000 Class A-1LV Floating Rate Revolving Notes Due September 2021; -- Aa2 to the $25,000,000 Class A-2L Floating Rate Notes Due September 2021; -- A2 to the $29,000,000 Class A-3L Floating Rate Notes Due September 2021; -- Baa2 to the $15,000,000 Class B-1L Floating Rate Notes Due September 2021; and -- Ba2 to the $16,500,000 Class B-2L Floating Rate Notes Due September 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio - consisting of commercial loans and high yield corporate or other debt obligations - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Churchill Pacific Asset Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SHAMUS HOLDINGS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Shamus Holdings, LLC 376 Boylston Street Boston, MA 02116 Bankruptcy Case No.: 07-14572 Chapter 11 Petition Date: July 25, 2007 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Charles A. Dale, III, Esq. McCarter & Engllish, LLP 265 Franklin Street Boston, MA 02110 Tel: (617) 449-6564 Fax: (617) 326-3082 Estimated Assets: $1 Million to $100 Million Estimated Debts: Less than $50,000 The Debtor did not file a list of its 20 largest unsecured creditors. SOLUTIA INC: Wants Exclusive Plan Filing Date Moved to Dec. 31 -------------------------------------------------------------- Solutia Inc. and its debtor-affiliates' current exclusive period to file a plan of reorganization ends on July 30, 2007, and the period of time to solicit acceptances of that plan ends on Sept. 28, 2007. The Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to further extend their Exclusive Filing Period up to and including Dec. 31, 2007, and Exclusive Solicitation Period up to and including Feb. 29, 2008. The Debtors filed their First Amended Plan and related disclosure statement, as it has been or may be amended, on May 16, 2007. The modified Plan enjoys the support of many of Solutia Inc.'s significant stakeholders, including the Official Committee of Unsecured Creditors, Official Committee of Solutia's retirees, Monsanto Company, and the Ad Hoc Committee of Trade Claims Creditors. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, relates that the Plan is premised on two settlements –- a settlement between Solutia and Monsanto, and a settlement between Solutia and the Retirees Committee, Monsanto and the Creditors Committee. The Settlements achieve a reallocation of legacy liabilities and are the cornerstones of Solutia's Plan, therefore, they must be approved before or in conjunction with the confirmation of Solutia's Plan. The Settlements will be heard on Sept. 5, 2007. Solutia is revising its Disclosure Statement and drafting the necessary additional disclosures to comply with the Court's directions. In addition, Solutia is preparing for the Sept. 5, 2007 hearing on the Settlements . Solutia believes that the Settlements readily meet the standards for approval under Bankruptcy Rule 9019. Mr. Henes says that extension of the Exclusive Periods is necessary to ensure that the Debtors will not be placed in a position where it is prosecuting the Plan, but due to the termination of the Exclusive Filing Period, the confirmation process is disrupted by a recalcitrant stakeholder filing a competing plan. That situation could have a material, adverse impact on the Solutia, its operation and all parties-in-interest, he tells the Court. Solutia has acted as the honest broker throughout the Chapter 11 cases in an effort to resolve the differences among its stakeholder groups and has made significant strides towards a consensual plan, Mr. Henes relates. If, however, Solutia cannot preserve its exclusive right to prosecute the Plan, he points out that the balance that has permitted the relevant parties-in- interest to work together towards a consensual plan will be upset and further progress will be jeopardized. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOUTHEAST POST NO. 5179: Case Summary & 18 Largest Creditors ------------------------------------------------------------ Debtor: SOUTHEAST POST NO. 5179 VETERANS OF FOREIGN WARS OF THE UNITED STATES CORPORATION dba Veterans of Foreign Wars Post. No. 5179 1116 South 43rd Street San Diego, CA 92113 Bankruptcy Case No.: 07-03933 Chapter 11 Petition Date: July 25, 2007 Court: Southern District of California (San Diego) Debtor's Counsel: Michael T. O'Halloran 1010 Second Avenue, Suite 1727 San Diego, CA 92101 Tel: (619) 233-1727 Fax: (619) 233-6526 Estimated Assets: $1,014,600 Estimated Debts: $283,527 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service payroll taxes $26,300 A.C.S. Support-Stop 813G P.O. Box 145566 Cincinnati, OH 45250 State Board of taxes $14,661 Equalization 1350 Front Street, Suite 5047 San Diego, CA 92101 E.D.D. payroll taxes $12,061 Bankruptcy Unit-M.I.C. 92E P.O. Box 826880 Sacramento, CA 94280 Wells Fargo bank charges $2,180 William Phyfer loan for realty $1,800 appraisal Allied Waste Industries services $1,704 A.T.&T. utility services $1,141 A.D.T. Security Services alarm services $1,063 John Wade wages and benefits $877 San Diego Gas & Electric utility services $243 PayChex services $211 Sammie Shaw Chapter 11 filing $200 fee loan Art Harris Chapter 11 filing $200 fee loan City of San Diego Inspection fees $189 Treasurer Charles McAdory Chapter 11 filing $180 fee loan Maurice Hunter wages $139 Cox Communications utility services $137 Christopher Corchado Chapter 11 filing $100 fee loan STANFIELD MCLAREN: Moody’s Rates $20 Mil. Class B-2L Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Stanfield McLaren CLO, Ltd: -- Aaa to the $7,500,000 Class X Floating Rate Notes Due August 2013; -- Aaa to the Up To $60,000,000 Class A-1LV Floating Rate Revolving Notes Due February 2021; -- Aaa to the $333,000,000 Class A-1L Floating Rate Notes Due February 2021; -- Aa2 to the $40,000,000 Class A-2L Floating Rate Notes Due February 2021; -- A2 to the $28,000,000 Class A-3L Floating Rate Notes Due February 2021; -- Baa2 to the $22,000,000 Class B-1L Floating Rate Notes Due February 2021; and -- Ba2 to the $20,000,000 Class B-2L Floating Rate Notes Due February 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of senior secured loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stanfield Capital Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SYMBOLLON PHARMA: Posts $1.3 Mil. Net Loss in Qtr. Ended March 31 ----------------------------------------------------------------- Symbollon Pharmaceuticals Inc. reported a net loss of $1.3 million for the first quarter ended March 31, 2007, compared with a net loss of $548,771 for the same period ended March 31, 2006. The company reported zero revenues in both periods. The increased net loss for the current quarter period resulted primarily from increased clinical development expenses related to the ongoing clinical trials of IoGen and investor relations expenses. We expect to continue to incur operating losses for the foreseeable future. At March 31, 2007, the company's consolidated balance sheet showed $1.9 million in total assets, $463,119 in total liabilities, and $1.4 million in total stockholders' equity. 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?21d8 Going Concern Doubt Vitale, Caturano & Company Ltd., in Boston, expressed substantial doubt about Symbollon Corp.'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 and accumulated deficit. About Symbollon Pharmaceuticals About Symbollon Pharmaceuticals, Inc. (OTC: SYMBA) -- http://www.symbollon.com/-- is a specialty pharmaceutical company focused on the development and commercialization of proprietary drugs based on its molecular iodine technology. Symbollon is conducting a Phase III clinical trial evaluating IoGen as a potential treatment for moderate to severe periodic pain and tenderness (clinical mastalgia) associated with fibrocystic breast disease (FBD). TAYLOR CAPITAL: Earns $7.2 Million in 2nd Quarter Ended June 30 --------------------------------------------------------------- Taylor Capital Group, Inc, the holding company for Cole Taylor Bank, reported net income for the quarter ended June 30, 2007 of $7.2 million, or $0.65 per diluted common share, an increase of $1.8 million, or 34.4%, compared with the first quarter of 2007. The increase in earnings reflected a $1.7 million decrease in the provision for loan losses, higher noninterest income and lower noninterest expenses. Net interest income was basically unchanged. Noninterest income increased $742,000, primarily from the recognition of $400,000 in loan syndication fees during the second quarter. Net income for the six months ended June 30, 2007 totaled $12.5 million, or $1.12 per diluted common share, a decrease of $2.7 million, or 17.7%, compared with the first six months of 2006. The decline in earnings reflected a $2.6 million decrease in net interest income and a $2.5 million increase in the provision for loan losses. During the second quarter of 2007, the company repurchased 334,761 shares of its common stock under its stock repurchase program at a cost of $9.9 million. Total shares outstanding at the end of the quarter were 10,821,975 compared with 11,126,642 at the end of the first quarter. Total loans on June 30, 2007 increased $61.3 million, or 2.5%, compared with Dec. 31, 2006, and increased $94.0 million, or 3.8%, compared with June 30, 2006. Total commercial and industrial (C&I) loans on June 30, 2007 increased $93.4 million, or 12.1%, from December 31, 2006, and $132.5 million, or 18.1%, compared with June 30, 2006. Loan Quality and the Allowance for Loan Losses Nonperforming assets were $37.1 million, or 1.13% of total assets on June 30, 2007, compared with $27.6 million, or 0.85% of total assets on March 31, 2007, $33.6 million, or 0.99% of total assets on Dec. 31, 2006, and $29.6 million, or 0.88% of total assets on June 30, 2006. Funding Liabilities Average total deposits for the second quarter decreased $24.1 million compared with the first quarter of 2007. Average in-market deposits decreased $72.4 million in the second quarter as a result of declines in money market accounts and certificates of deposit. Total deposits were $2.51 billion on June 30, 2007, a decrease of $127.7 million from Dec. 31, 2006, and a decrease of $155.6 million from June 30, 2006. In-market deposits on June 30, 2007 were $149.3 million lower than on Dec. 31, 2006. Noninterest-bearing deposits were $64.4 million lower and money market deposits were $32.9 million lower on June 30, 2007 compared with Dec. 31, 2006. The decrease in noninterest-bearing deposits included a $39.9 million decline in deposits relating to corporate trust services which reflected routine seasonal characteristics. The company reported total assets of $3.3 billion, total liabilities of $3 billion, and total stockholders’ equity of $268 million as of June 30, 2007. About Taylor Capital Headquartered in Illinois, Chicago, Taylor Capital Group Inc. (Nasdaq: TAYC) -- http://www.taylorcapitalgroup.com/-- is a bank- holding company. The company derives virtually all of its revenue from its subsidiary, Cole Taylor Bank, which presently operates 11 banking centers throughout the Chicago metropolitan area. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, Fitch Ratings has upgraded these ratings with a Stable Outlook: (i) Long-term IDR to 'BBB-' from 'BB+'; (ii) Short-term Issuer to 'F3' from 'B'; and, (iii) Individual to 'B/C' from 'C'. THE MERIDIAN: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Meridian On Bainbridge Island, L.L.C. 360 Knechtel Way, Suite 111 Bainbridge Island, WA 98110 Bankruptcy Case No.: 07-13408 Type of business: The Debtor owns a four-story complex with sixteen single-level residential suites, as well as executive offices and guest accommodations. It also features a resort-style lobby with concierge services, underground parking, Club Meridian's private fitness center with steam room, sauna, entertainment lounge, and outdoor swim spa and terrace for sunbathing and barbequing. See http://www.themeridian.net/ Chapter 11 Petition Date: July 25, 2007 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Lawrence K. Engel, Esq. 106 West Roy Street P.O. Box 9598 Seattle, WA 98109 Tel: (206) 352-6000 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Meridian Homeowners $7,300 Association 360 Knetchel Way Box 111 Bainbridge Island, WA 98110 Roger's Landscaping $2,699 2075 Seabeck Highway Northwest Bremerton, WA 98312 Ano'mino, Inc. $2,000 520 North 5th Avenue, Suite 526 P.O. Box 2949 Sequim, WA 98282 TOWER HILL: Moody’s Rates $53 Million Class E Notes at Ba2 ---------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Tower Hill CDO II, Ltd: -- Aaa to the $0 Class A-1 Senior Secured Funded Notes Due 2023; -- Aaa to the $300,000,000 Class A-1 Senior Secured Unfunded Notes Due 2023; -- Aaa to the $9,415,000 Class A-X Notes Due 2023; -- Aaa to the $0 Class A-2 Senior Secured Funded Notes Due 2023; -- Aaa to the $45,000,000 Class A-2 Senior Secured Unfunded Notes Due 2023; -- Aa2 to the $11,000,000 Class B Type 1 Senior Secured Funded Notes Due 2023; -- Aa2 to the $0 Class B Type 2 Senior Secured Funded Notes Due 2023; -- Aa2 to the $20,000,000 Class B Type 2 Senior Secured Unfunded Notes Due 2023; -- A2 to the $50,000,000 Class C Type 1 Secured Funded Deferrable Notes Due 2023; -- A2 to the $0 Class C Type 2 Secured Funded Deferrable Notes Due 2023; -- A2 to the $25,000,000 Class C Type 2 Secured Unfunded Deferrable Notes Due 2023; -- Baa2 to the $53,000,000 Class D Secured Floating Rate Deferrable Notes Due 2023; and -- Ba2 to the $53,000,000 Class E Secured Floating Rate Deferrable Notes Due 2023. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of CDS Transactions and Cash Assets due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Zais Group, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TRIAD HOSPITALS: Debt Repayment Cues S&P to Withdraw Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew all of its ratings on Triad Hospitals Inc., including its B+/Watch Neg/B-2 corporate credit rating. Community Health Systems, Inc. has acquired the company. Triad's debt obligations have been repaid. Ratings List Triad Hospitals Inc. Ratings Withdrawn To From -- ---- Corporate credit rating NR B+/Watch Neg/B-2 WACHOVIA BANK: S&P Puts BB Prelim Rating on $100MM Class M Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Wachovia Bank Commercial Mortgage Trust's $4.1 billion commercial mortgage pass-through certificates series 2007-ESH. The preliminary ratings are based on information as of July 26, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the historical and projected performance of the underlying collateral, the experience and financial strength of the sponsors and management company, the liquidity provided by the trustee, the terms of the loan, and the transaction structure. Standard & Poor's determined that the loan has a debt service coverage of 1.33x on an assumed 10.50% refinance constant, and a beginning and ending LTV of 85.0%. These statistics are based on the first mortgage loan and do not reflect the impact of the mezzanine financing. Preliminary Ratings Assigned Wachovia Bank Commercial Mortgage Trust Class Rating Amount ----- ------ ------ A-1 AAA $600,000,000 A-2 AAA $1,975,000,000 B AA+ $125,360,0000 C AA $177,840,000 D AA- $107,640,000 E A+ $114,160,000 F A $124,520,000 G A- $131,040,000 H BBB+ $130,440,000 J BBB $100,000,000 K BBB- $214,000,000 L BB+ $200,000,000 M BB $100,000,000 X-1* AAA $2,500,000,000 X-2* AAA $700,000,000 *Interest-only class with a notional amount. WENDY'S INTERNATIONAL: Earns $29.2 Mil. in Qtr. Ended June 30 ------------------------------------------------------------- Wendy's International Inc. reported net income of $29.2 million in the second quarter of 2007, compared to a net loss of $29.1 million in the second quarter of 2006. Total revenues were $632.9 million in the second quarter of 2007, down 0.2%, compared to $634.1 million in the second quarter of 2006. Sales were 558.3 million in the second quarter of 2007, compared to $557.8 million in the second quarter of 2006. Sales are up slightly due to positive same-store sales, but Wendy's had 31 fewer company-operated restaurants open at the end of the second quarter of 2007 compared to the same quarter a year ago. Franchise revenues were $74.6 million in the second quarter of 2007, compared to $76.3 million in the second quarter of 2006. The year-over-year decrease is due primarily to fewer open franchise restaurants compared to 2006. Average same-store sales were up 0.7% for U.S. company-operated restaurants and 0.4% for U.S. franchise restaurants. Wendy's(R) has now produced 13 consecutive months of positive same-store sales. The company and its franchisees opened a total of 39 new Wendy's restaurants during the second quarter of 2007. The total number of systemwide Wendy's restaurants at the end of the second quarter in 2007 was lower at 6,661, compared to 6,673 at year-end 2006 and 6,743 at the end of the second quarter in 2006, reflecting closures of underperforming restaurants. As of June 30, 2007, total assets were $1.8 billion, total liabilities were $1 billion, and total stockholders’ equity was $766.4 million. Management’s Comments "We delivered significantly improved results versus a year ago," said chief executive officer and president Kerrii Anderson. "Our income and EBITDA results are encouraging and store operating margins continue to expand as we execute our strategic plan." "We are revitalizing the Wendy's brand with innovative product introductions, a new advertising campaign and improving operations," said Mr. Anderson. "Our U.S. company-operated restaurant EBITDA margin improvement was the result of strategic initiatives we began implementing this year - an effective menu management strategy and more efficient operations. We believe that price increases, which are impacting transactions in the short term, will position us to produce profit expansion in the longer term. We have good momentum in the business as we focus on improving profits in every restaurant in the Wendy's system." "We are very encouraged by the positive consumer reaction to our new 'That's Right' advertising campaign, and we're stepping up the creative use of our 'Red Wig' icon in our marketing efforts - TV advertising, on-line, in-store and more," said Wendy's chief marketing officer Ian Rowden. "After only six weeks, national consumer research shows more than half of the respondents can play back the 'I deserve a hot, juicy burger' line from our advertising campaign and immediately associate the 'Red Wig' with Wendy's. This is a key reason our core hamburger business is growing." Other Highlights Wendy's completed its spinoff of Tim Hortons(R) in the third quarter of 2006 and completed the sale of Baja Fresh(R) Mexican Grill during the fourth quarter of 2006. As a result of its 2006 spinoff of Tim Hortons, the company, now accounts for its 50% share of the restaurant real estate joint venture with Tim Hortons, Wendy's and Tim Hortons' combination units, under the equity method of accounting, rather than consolidating the results of the joint venture in the company's financial statements. This change in accounting for the Company's joint venture with Tim Hortons resulted in an overall reduction to second-quarter 2007 operating income of $2.2 million compared to the second quarter 2006. During the second quarter of 2007, the company also entered into a definitive agreement to sell Cafe Express. 118th Consecutive Dividend The Board of Directors approved a quarterly dividend of 12.5 cents per share, payable August 20 to shareholders of record as of August 6. The dividend payment will represent the company's 118th consecutive dividend. About Wendy's Headquartered in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the Americas, Asia, the Pacific Rim, Europe and the Middle East. * * * As reported in the Troubled Company Reporter on June 21, 2007, Moody's Investors Service lowered all ratings of Wendy's International, Inc. and placed all ratings on review for further possible downgrade. Affected ratings include the company's Ba2 corporate family rating which was lowered to Ba3 and its (P)B1 preferred stock shelf rating which was lowered to (P)B2. Additionally, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Wendy's International Inc. to 'BB-' from 'BB+'. All ratings remain on CreditWatch with negative implications, where they were placed on April 26, 2007. WILD WEST: Files Schedules of Assets and Liabilities ---------------------------------------------------- Wild West World LLC delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of Kansas, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $11,600,000 B. Personal Property $11,379,898 C. Property Claimed as Exempt D. Creditors Holding $14,992,863 Secured Claims E. Creditors Holding $906,374 Unsecured Priority Claims F. Creditors Holding $9,701,940 Unsecured Nonpriority Claims ----------- ----------- Total $22,979,898 $25,601,177 Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. No Official Committe of Unsecured Creditors has been appointed to date to this case. WILD WEST: Bank Wants to Seize Rides Worth $1 Million ----------------------------------------------------- Bank of Blue Valley asks the U.S. Bankruptcy Court for the District of Kansas for permission to seize around $1 million worth of rides leased to Wild West World LLC, the Associated Press reports. According the report, Bank of Blue Valley contends that the insurance of the rides have already lapsed. The Debtor however argues that the park should instead be sold in pieces. If the Court grants the request, AP relates, the Bank will take hold of these rides: * a log flume; * a flipping action arm ride; * a Ferris wheel; and * a pirate ship. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. No Official Committe of Unsecured Creditors has been appointed to date to this case. XEROX CORP: Revenues Up 6% in Second Quarter 2007 ------------------------------------------------- Xerox Corporation reported second-quarter 2007 earnings per share of 28 cents. Total revenue of $4.2 billion grew 6% in the quarter. Post-sale and financing revenue – Xerox’s annuity streams that represent more than 70% of total revenue – increased 7%. Both total revenue and post-sale revenue included a currency benefit of 2 percentage points as well as the benefit from Xerox’s acquisition of Global Imaging Systems, which was completed in early May. Since the beginning of the year, Xerox has introduced 28 new products, 10 of which are color devices, doubling the 14 total product launches in 2006. More than two-thirds of Xerox’s equipment sales revenue comes from products launched in the past two years. The company’s acquisition of Global Imaging Systems gives Xerox access to about 200,000 new customers and adds 1,400 sales people to expand Xerox’s footprint in the SMB market. Sales from Global Imaging supported second-quarter growth in Xerox’s office business, which provides document technology and services for businesses of any size. Total office revenue was up 5% in the second quarter including a 2 point benefit from currency. Installs of the company’s office black-and-white systems increased 7% primarily due to a 9 percent increase in activity for Xerox’s mid-range line of multifunction devices. Installs for office color multifunction devices grew 54% in the quarter. Gross margins were 40.3%, a less than one point decline from second quarter of 2006. Selling, administrative and general expenses were 25.7% of revenue, about the same as the prior year. Xerox generated operating cash flow of $388 million in the second quarter and closed the quarter with $870 million in cash and short-term investments. Since launching its stock buyback program in October 2005, the company to date has repurchased about 117 million shares, totaling $1.8 billion of its $2.5 billion program. Xerox expects third-quarter 2007 earnings in the range of 24-26 cents per share. The company increased its range of earnings expectations for full-year 2007 to $1.16-$1.18. “Our results in the second quarter reflect the strategic importance of annuity and acquisitions flowing through to boost revenue and strengthen our position in the marketplace,” said Anne M. Mulcahy, Xerox chairman and chief executive officer. “With the Global Imaging team now on board, we’ve increased our reach to U.S. small and mid-size businesses by 50%. At the same time, our investment in delivering the industry’s broadest portfolio of color technology is paying off with the annuity from our color business increasing 16%. And, Xerox’s global relationships with large customers are contributing to annuity growth from our consulting and managed services business. “We are consistent in managing the business effectively – generating steady operational cash flow and containing costs while competing aggressively and expanding earnings to deliver value for shareholders. As a result, we delivered solid results in the first half of the year and are raising earnings expectations for the full year,” she added. The company reported total assets of $23 billion, total liabilities of $15.5 billion, and total stockholders’ equity of $7.5 billion as of June 30, 2007. About Xerox Corp. Headquartered in Stamford, Connecticut, Xerox Corp. -- http://www.xerox.com/-- develops, manufactures, markets, services and finances a range of document equipment, software, solutions and services. Xerox operates in over 160 countries worldwide and distributes products in the Western Hemisphere through divisions, wholly owned subsidiaries and third-party distributors. The company maintains operations in France, Japan, Italy, Nicaragua, among others. * * * As reported in the Troubled Company Reporter on May 23, 2007, Standard & Poor's Ratings Services revised its rating outlook on Stamford, Connecticut-based Xerox Corp. to positive from stable. Ratings on the company, including the 'BB+' long-term and 'B-1' short-term corporate credit ratings, were affirmed. As reported in the Troubled Company Reporter on Apr. 4, 2007, Xerox and Global Imaging Systems Inc. entered into a definitive agreement for Xerox to acquire Global Imaging for $29 per share in cash. The total purchase price is expected to be about $1.5 billion. The move prompted Standard & Poor's Ratings Services to place its ratings on Xerox Corp., including the 'BB+' corporate credit rating, on CreditWatch with positive implications. According to S&P credit analyst Molly Toll Reed, the CreditWatch placement reflects S&P's expectation that Xerox has the ability to fund the acquisition with a combination of existing cash and short-term debt, with negligible impact on Xerox's financial profile by the end of fiscal 2007. Following completion of the acquisition, which is expected to occur in the second quarter of fiscal 2007, the corporate credit rating would be raised to 'BBB-' with a stable outlook, the rating agency said. XM SATELLITE: 2007 Second Qtr. Net Loss Narrows to $176 Million --------------------------------------------------------------- XM Satellite Radio Holdings Inc. reported revenue for the three- month period ended June 30, 2007, increased 22% year over year to $277 million compared to $228 million in the 2006 second quarter. The company's 2007 second quarter net loss narrowed to $176 million, representing a 23% improvement compared to the 2006 second quarter net loss of $229 million. The company said that it ended the 2007 second quarter with more than 8.25 million subscribers compared to 6.90 million subscribers in the prior year period. As of June 30, 2007, the company had $275 million in cash compared to $218 million at the end of Dec. 31, 2006. As of June 30, 2007, the company had full availability of its $400 million credit facilities resulting in total available liquidity of $675 million. “During the second quarter, XM’s revenue grew and losses narrowed. XM added more automotive gross subscriber additions than during any quarter in the company’s history,” said Hugh Panero, chief executive officer, XM Satellite Radio. “XM’s partners include the nation’s largest and fastest-growing automakers and XM is well positioned for this segment to provide sustained subscriber growth as production of XM-equipped vehicles ramps up for the 2008 model year and beyond.” “The regulatory review process for our merger with Sirius Satellite Radio continues to move ahead. We look forward to continuing to work with the Federal Communications Commission and with the Department of Justice to further demonstrate that this merger is in the public interest and should be approved. We anticipate the merger will close in late 2007.” Panero continued, “XM announced earlier this week that I will step down as chief executive officer in August after nearly a decade with the company. XM will be in great hands with Nate Davis as President and Interim CEO. Nate has been an outstanding addition to the senior management team and I am confident he will carry XM to the next level of success.” The 2007 second quarter adjusted operating loss of $47 million includes $4 million in expenses related to the company’s pending merger with Sirius Satellite Radio. A full-text copy of XM Satellite's 2007 Second Quarter Results is available for free at: http://ResearchArchives.com/t/s?21da About XM Satellite Headquartered in Washington, D.C., XM Satellite Radio Holdings Inc. -- http://www.xmradio.com/-- parent of XM Satellite Radio Inc. (Nasdaq:XMSR), is a satellite radio broadcaster. * * * As reported in the Troubled Company Reporter on Feb. 22, 2007, Standard & Poor's Ratings Services placed all its ratings, including the 'CCC+' corporate credit rating, on XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc., which are analyzed on a consolidated basis, on CreditWatch with positive implications, following the company's definitive agreement to an all-stock "merger of equals" with Sirius Satellite Radio Inc. Moody's Investors Service affirmed these existing debt ratings of XM Satellite Radio Holdings, Inc.: Caa1 corporate family rating and Caa1 probability-of-default rating; and XM Satellite Radio, Inc.: B1 secured revolver rating and Caa1 senior floating rate notes rating. YARUSHALMI & ASSOCIATES: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: Yerushalmi & Associates LLP 17 Barstow Road Great Neck, NY 11021 Bankruptcy Case No.: 07-72817 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Joseph Yerushalmi 07-72816 Type of Business: The Debtor is a law firm. Chapter 11 Petition Date: July 25, 2007 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Douglas J. Pick, Esq. Pick & Zabicki LLP 369 Lexington Avenue, 12th Floor New York, NY 10017 Tel: (212) 695-6000 Fax: (212) 695-6007 Estimated Assets Estimated Debts ---------------- --------------- Yerushalmi and Less than $1 Million to Associates LLP $10,000 $100 Million Joseph Yerushalmi $1 Million to $1 Million to $100 Million $100 Million The Debtors did not file a list of their 20 largest unsecured creditors. * Focus Management Names Peter Dominici as Managing Director ------------------------------------------------------------ Focus Management Group's president, J. Tim Pruban, said that Peter Dominici has been appointed as managing director to lead the employment consulting practice services. “We are excited to have Pete lead the staffing services practice of Focus Management Group,” said Pruban. “[Mr. Dominici's] financial and accounting expertise, coupled with his deep knowledge and extensive background in the staffing industry, will be important additions to our expanding capabilities in this sector.” Mr. Dominici, a CPA, brings with him wide-ranging financial and accounting expertise to provide creative solutions for staffing and employment services companies in turnaround situations. He previously served publicly-traded staffing firm Kforce, Inc. in various executive roles, including Chief Financial Officer, Treasurer, Secretary, Operational Vice President and as a member of its Board of Directors. During his tenure, Mr. Dominici was instrumental in facilitating Kforce’s business model change from a franchised location business model to one focused on rapid growth and expansion of corporate- owned and operated locations. As a result, the company grew from five corporate-owned and operated locations in 1986 to over 90. During this same time period, Mr. Dominici was instrumental in guiding the business through its initial and secondary public offerings. Mr. Dominici can be reached at: Peter Dominici, CPA FOCUS Management Group 5001 W. Lemon Street Tampa, FL 33609-1103 (813) 281-0062 (813) 281-0063 fax http://www.focusmg.com/ About Focus Management Focus Management Group offers nationwide capabilities in turnaround management, business restructuring and asset recovery. Headquartered in Tampa, FL, with offices in Atlanta, Chicago, Greenwich, Los Angeles and Nashville, Focus Management Group provides turn-key support to stakeholders including secured lenders and equity sponsors. The Company provides a comprehensive array of services including turnaround management, interim management, operational analysis and process improvement, case management services, bank and creditor negotiation, asset recovery, recapitalization services and special situation investment banking for distressed companies. Focus Management Group has significant expertise in the insolvency arena. FOCUS Professionals have served debtors, creditors, and unsecured stakeholders in their efforts to accomplish the best outcome. Over the past decade, Focus Management Group has successfully assisted hundreds of clients operating in diverse industries, guiding them to maximize performance or asset recovery. Adverse situations are Focus Management Group's forte - finding winning compromises in a timely manner when faced with the most discouraging of circumstances is what separates Focus Management Group from the competition. * S&P Takes Rating Actions on Various Transactions -------------------------------------------------- Standard & Poor's Ratings Services took these rating actions on various U.S. synthetic CDO transactions: four ratings were raised and removed from CreditWatch with positive implications; 22 ratings were lowered and removed from CreditWatch negative; nine ratings were lowered and remain on CreditWatch negative; and six ratings were lowered. At the same time, S&P placed seven ratings on CreditWatch with negative implications. S&P had previously placed all but two of the ratings mentioned in this release on CreditWatch negative or positive and reviewed them to determine the appropriate rating action. If the synthetic rated overcollateralization ratio was above 100% at the next higher rating level, S&P raised the rating on the tranche. If the SROC ratio was lower than 100% at the current date and at a 90- day-forward projected date, S&P lowered the rating on the tranche. S&P affirmed ratings on classes that had SROC ratios above 100% at the current rating levels. The CreditWatch negative placements reflect negative rating migration in the respective portfolios and SROC ratios below 100%. Ratings List Bishopsgate CDO Ltd. Rating ------ Class To From ----- -- ---- A-2005-6 AA+ AA-/Watch Pos Credit and Repackaged Securities Ltd. Series 2006-1 Rating ------ Class To From ----- -- ---- Notes BBB- BBB/Watch Neg ELM B.V. Series 89 Rating ------ Class To From ----- -- ---- SecdCrL BBB+ AA-/Watch Neg Infiniti SPC Ltd. CPORTS 2006-2 Rating ------ Class To From ----- -- ---- Class B-1 A/Watch Neg A+/Watch Neg Class B-2 A/Watch Neg A+/Watch Neg Ixion PLC Series 12 and 15 Rating ------ Class To From ----- -- ---- Series 12 BBB A+ Series 15 BBB A+ Ixion PLC Matrix 2007-1 Series 20 Rating ------ Class To From ----- -- ---- B AA/Watch Neg AA C A+/Watch Neg A+ D A+/Watch Neg A+ E A-/Watch Neg A- F A-/Watch Neg A- G BBB+/Watch Neg BBB+ I AA/Watch Neg AA Ixion PLC Syrah 2007-2 Series 19 Rating ------ Class To From ----- -- ---- Series 19 BBB A+ Jefferson Valley CDO SPC Series 2006-1 Rating ------ Class To From ----- -- ---- A A A+/Watch Neg Morgan Stanley ACES SPC Series 2005-23 Rating ------ Class To From ----- -- ---- Fltg Rt Nt A+/Watch Neg AA-/Watch Neg Morgan Stanley ACES SPC Series 2006-12 Rating ------ Class To From ----- -- ---- I A- A/Watch Neg Morgan Stanley ACES SPC Series 2006-13 Rating ------ Class To From ----- -- ---- II BBB BBB+/Watch Neg Morgan Stanley ACES SPC Series 2006-16 Rating ------ Class To From ----- -- ---- I AA AA+/Watch Neg IIA A+ AA-/Watch Neg Morgan Stanley ACES SPC Series 2006-21 Rating ------ Class To From ----- -- ---- IA AA AA+/Watch Neg IIA A+ AA-/Watch Neg Morgan Stanley ACES SPC Series 2006-37 Rating ------ Class To From ----- -- ---- IIIA BB+ BBB-/Watch Neg IIIB BB+ BBB-/Watch Neg Morgan Stanley ACES SPC Series 2007-8 Rating ------ Class To From ----- -- ---- A1 AA- AA A2 AA- AA IA A- A+/Watch Neg IB A- A+/Watch Neg IIA A-/Watch Neg A+/Watch Neg Oban Trust Series 2005-2 Rating ------ Class To From ----- -- ---- A A- A/Watch Neg PARCS Master Trust Series 2007-16 Emory Units Rating ------ Class To From ----- -- ---- Units A- AA/Watch Neg REPACS Trust Series Triple M Rating ------ Class To From ----- -- ---- A1 A A-/Watch Pos A2 A A-/Watch Pos REPACS Trust Series Triple M2 Rating ------ Class To From ----- -- ---- Debt Units AAA AA/Watch Pos Rutland Rated Investments Series Delancey 2006-1 (25) Rating ------ Class To From ----- -- ---- A1-L AA- AA/Watch Neg Rutland Rated Investments Series Delancey 2006-3 (29) Rating ------ Class To From ----- -- ---- A1-L AA+ AAA/Watch Neg Rutland Rated Investments Series Bedford 2006-1 (30) Rating ------ Class To From ----- -- ---- A1-L AA+ AAA/Watch Neg A2-F AA/Watch Neg AA+/Watch Neg A3-L A+/Watch Neg AA/Watch Neg A3-F A+/Watch Neg AA/Watch Neg Series 2006-1 Segregated Portfolio of Stowe CDO SPC Rating ------ Class To From ----- -- ---- A A+ AA- B-1 BBB+ A-/Watch Neg B-2 BBB+ A-/Watch Neg C BBB BBB+/Watch Neg Terra CDO SPC Ltd. Series 2007-1 SEGREGATED PORT Rating ------ Class To From ----- -- ---- A1 AA/Watch Neg AA+/Watch Neg B1 A/Watch Neg AA-/Watch Neg TIERS Montana Floating Rate Credit Linked Trust Series 2007-3 Rating ------ Class To From ----- -- ---- Certificate AA AA+/Watch Neg * BOND PRICING: For the Week of July 23 - July 27, 2007 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 12.500% 08/01/02 0 AHI-DFLT07/05 8.625% 10/01/07 71 Aladdin Gaming 13.500% 03/01/10 0 Allegiance Tel 12.875% 05/15/08 16 Alltell Corp. 6.800% 05/01/29 75 Amer & Forgn Pwr 5.000% 03/01/30 66 Atherogenics Inc 1.500% 02/01/12 47 Atlantic Coast 6.000% 02/15/34 6 Bank New England 8.750% 04/01/99 8 Bank New England 9.500% 02/15/96 14 Bank New England 9.875% 09/15/99 9 Budget Group Inc 9.125% 04/01/06 0 Builders Transport 6.500% 05/01/11 0 Burlington North 3.200% 01/01/45 54 Calpine Gener Co 11.500% 04/01/11 36 Cell Therapeutic 5.750% 06/15/08 72 Collins & Aikman 10.750% 12/31/11 2 Comed in III 6.350% 03/15/33 75 Complete Mgmt 5.000% 08/15/03 0 Comprehensive Care 7.500% 04/15/10 60 Decode Genetics 3.500% 04/15/11 73 Delta Mills Inc 9.625% 09/01/07 16 Desa Intl Inc 9.875% 12/15/07 0 Dura Operating 8.625% 04/15/12 62 Dura Operating 9.000% 05/01/09 7 Dura Operating 9.000% 05/01/09 4 Dvi Inc 9.875 02/01/04 10 Encysive Pharma 2.500% 03/15/12 74 Exodus Comm Inc 5.250% 02/15/08 0 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North Am 9.875% 03/01/14 29 Finova Group 7.500% 11/15/09 21 Florsheim Group 12.750 09/01/02 0 Ford Motor Co 6.375% 02/01/29 69 Ford Motor Co 6.625% 02/15/28 71 Ford Motor Co 6.625% 10/01/28 71 Ford Motor Co 7.125% 11/15/25 73 Ford Motor Co 7.400% 11/01/46 72 Ford Motor Co 7.450% 07/16/31 75 Ford Motor Co 7.500% 08/01/26 75 Ford Motor Co 7.700% 05/15/97 73 Ford Motor Co 7.750% 06/15/43 73 GMAC 5.900% 01/15/19 75 GMAC 6.000% 03/15/19 75 Gulf States STL 13.500% 04/15/03 0 Harrahs Oper Co. 5.625% 06/01/15 73 Harrahs Oper Co. 5.750% 10/01/17 73 Insight Health 9.875% 11/01/11 33 Iridium LLC/CAP 10.875% 07/15/05 15 Iridium LLC/CAP 11.250% 07/15/05 15 Iridium LLC/CAP 13.000% 07/15/05 16 Iridium LLC/CAP 14.000% 07/15/05 14 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 21 Kaiser Aluminum 12.750% 02/01/03 6 Kellstrom Inds 5.500% 06/15/03 0 Kmart Corp 9.350% 01/02/20 12 Kmart Corp 9.780% 01/05/20 8 Lehman Bros Holding 10.000% 10/30/13 69 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 67 Lifecare Holding 9.250% 08/15/13 61 Motorola Inc 5.220% 10/01/97 71 Movie Gallery 11.000% 05/01/12 26 Natl Steel Corp 9.875% 03/01/09 0 New Orl Grt N RR 5.000% 07/01/32 65 Northern Pacific RY 3.000% 01/01/47 52 Northern Pacific RY 3.000% 01/01/47 52 Northwest Steel & Wire 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 66 Nutritional Src 1.125% 08/01/09 66 O'Sullivan Ind 10.630% 10/01/08 0 Oakwood Homes 7.875% 03/01/04 11 Oscient Pharma 3.500% 04/15/11 74 Outboard Marine 9.125% 04/15/17 0 Pac-West Telecom 13.500% 02/01/09 2 Pac-West Telecom 13.500% 02/01/09 9 PCA LLC/PCA FIN 11.875 08/01/09 5 Pegasus Satellite 9.625% 10/15/49 0 Pegasus Satellite 12.375% 08/01/08 0 Piedmont Aviat 10.250% 01/15/49 0 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 70 Primus Telecom 8.000% 01/15/14 70 Radnor Holdings 11.000% 03/15/10 0 Reliance Grp Hld 9.000% 11/15/00 0 Rite Aid Corp. 6.875% 12/15/28 74 RJ Tower Corp. 12.000% 06/01/13 4 SLM Corp 5.000% 06/15/28 70 SLM Corp 5.400% 03/15/28 73 SLM Corp 5.400% 03/15/30 74 SLM Corp 5.400% 06/15/30 73 SLM Corp 5.450% 06/15/28 74 SLM Corp 5.500% 06/15/29 72 SLM Corp 5.500% 03/15/30 73 SLM Corp 5.500% 06/15/30 74 SLM Corp 5.500% 12/15/30 71 SLM Corp 5.650% 12/15/29 73 SLM Corp 5.650% 06/15/30 75 SLM Corp 5.750% 03/15/30 75 Spacehab Inc 5.500% 10/15/10 50 Spectrum Brands 7.375% 02/01/15 69 Tenet Healthcare 6.875% 11/15/31 74 Times Mirror Co 6.610% 09/15/27 71 Tom's Foods Inc 10.500% 11/01/04 2 Tousa Inc 7.500% 03/15/11 59 Tousa Inc 7.500% 01/15/15 56 Tousa Inc 10.375% 07/01/12 66 TransTexas Gas 15.000% 03/15/05 0 Tribune Co 5.250% 08/15/15 73 United Air Lines 9.200% 03/22/08 52 United Air Lines 10.125% 03/22/15 52 United Homes Inc. 11.000% 03/15/05 0 US Air Inc. 10.550% 01/15/49 0 US Air Inc. 10.680% 06/27/08 0 US Air Inc. 10.700% 01/01/49 0 US Air Inc. 10.700% 01/15/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.900% 01/01/49 0 USAutos Trust 2.212% 03/03/11 7 Werner Holdings 10.000% 11/15/07 3 Westpoint Steven 7.875% 06/15/05 0 Winstar Comm Inc 10.000% 03/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 ********* 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, Sheena Jusay, John Paul C. Canonigo, 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 ***