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/raid1/www/Hosts/bankrupt/TCR_Public/070807.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 7, 2007, Vol. 11, No. 185 Headlines 1031 TAX GROUP: Court Okays Mesirow as Panel's Financial Advisor AIRGAS INC: Moody's Holds Ba1 Corporate Family Rating ALLEGHENY ENERGY: Affiliate to Redeem Series of Preferred Stock AMERICAN CAPITAL: Syndicates Over $1 Bil. Credit Facilites in 2007 AMERICAN CAPITAL: Earns $788 Million in Second Qtr. Ended June 30 AMERICAN HOME: Files for Chapter 11 Bankruptcy AQUILA INC: Posts $14.7 Mil. Net Loss in Quarter Ended June 30 ASAT HOLDINGS: New Asat Begins Consents Solicitation to Indenture ASAT HOLDINGS: Delay in Interest Payment Cues S&P to Put D Rating ASAT HOLDINGS: April 30 Balance Sheet Upside-Down by $88.3 Million B/E AEROSPACE: Earns $28.4 Million in Second Quarter 2007 B&G FOODS: Earns $3.7 Million in Second Quarter Ended June 30 BALLY TOTAL: Gets Interim OK to Hire Latham & Watkins as Counsel BALLY TOTAL: Gets Interim OK to Hire Latham & Watkins as Counsel BLOCKBUSTER INC: Weak Quarter Results Cue Moody's to Lower Ratings BOSTON SCIENTIFIC: Retains Endosurgery Group, IPO Called BOSTON SCIENTIFIC: S&P Pares Corporate Credit Rating to BB+ BROADHOLLOW FUNDING: Moody's Lowers $138 Mil. Notes Rating to Ba1 BUCKEYE TECHNOLOGIES: Earns $15.9 Million in Quarter Ended June 30 CA INC: Earns $129 Million in First Quarter Ended June 30 CHESAPEAKE ENERGY: Earns $518.1 Million in 2007 Second Quarter CHIQUITA BRANDS: Earns $8.6 Million in 2007 Second Quarter CHIQUITA BRANDS: S&P Lowers Corporate Credit Rating to B- from B CHRYSLER AUTOMOTIVE: Moody's Affirms B3 Corporate Family Rating COMPLIANCE CORP: Case Summary & Eight Largest Unsecured Creditors CPI INTERNATIONAL: Inks New $160 Million Credit Facility CRESCENT REAL: Shareholders Approve Morgan Stanley Merger Deal CSFB HOME: Moody's Downgrades Ratings of 33 Tranches CWALT INC: Fitch Rates Classes B-3 and B-4 Certs. at Low-B DELUXE CORPORATION: Earns $36 Million in Second Quarter 2007 DOMINO'S PIZZA: June 17 Balance Sheet Upside-Down by $1.4 Billion DYNEGY INC: Closes Sale of CoGen Lyondell to EnergyCo for $470MM EMPIRE RESORTS: June 30 Balance Sheet Upside-Down by $11.9 Million ENDOCARE INC: Posts $2.3 Million Net Loss in Quarter Ended June 30 FAIRFAX FINANCIAL: Earns $168.1 Million in 2007 Second Quarter FIRE PROTECTION: Case Summary & 19 Largest Unsecured Creditors FLEETWOOD PRICE: Voluntary Chapter 11 Case Summary FRASER PAPERS: Incurs $37.6 Million Net Loss in Qtr. Ended June 30 FRENCH QUARTER: Case Summary & 20 Largest Unsecured Creditors FRIENDLY ICE: July 1 Balance Sheet Upside-Down by $132.7 Million GILLESPIE CLO: Moody's Rates GBP 15 Mil. Class E Notes at Ba3 GMAC COMMERCIAL: S&P Holds Low-B Ratings on Classes J to O Certs. GRAHAM PACKAGING: June 30 Balance Sheet Upside-Down by $612.6 Mil. HEALTHCARE ACQUISITION: Stockholders Selling 2.8 Million Shares HERTZ GLOBAL: Earns $83.7 Million in Second Quarter 2007 INDYMAC IMSC: Moody's Rates Class B-5 Notes at B2 JABIL CIRCUIT: To Set Up Two New Divisions, Appoints Officers K&F INDUSTRIES: Prices Cash Tender Offer for 7-3/4% Sr. Sub. Notes LANDRY'S RESTAURANTS: Court Grants TRO on $400 Mil. Senior Notes LNR CDO: Fitch Puts Low-B Ratings on Classes J to L Notes & Shares MANITOWOC COMPANY: Redeems 10.5% Senior Sub. Notes for $129 Mil. MORGAN STANLEY: S&P Lifts Rating on $3MM Class A-11 Notes to BB- NATIONAL SPORTS: Voluntary Chapter 11 Case Summary NATIONAL STAFFING: Case Summary & 20 Largest Unsecured Creditors NEW CENTURY: Case Summary & Four Largest Unsecured Creditors NEWFIELD EXPLORATION: Inks Pact Selling Cherokee Assets for $128MM NEWMARKET CORPORATION: Earns $30.9 Million in Second Quarter 2007 NEXSTAR BROADCASTING: Board Cancels Talks With Would Be Acquirers NUTRITIONAL SOURCING: Voluntary Chapter 11 Case Summary PENNSYLVANIA REIT: Completes Redemption of 11% Senior Pref. Shares PRG SCHULTZ: June 30 Balance Sheet Upside-Down by $71.3 Million PRIMEDIA INC: Completes $1 Billion Sale of Enthusiast Media PRIMEDIA INC: Inks $350 Million Loan Pact with Various Lenders S-TRAN HOLDINGS: Court Moves Exclusive Plan Filing Date to Sept. 4 SAFEWAY PROPERTY: A.M. Best Lifts B- Financial Strength Rating SALTON INC: Receives APN Holding's Notice to Terminate Merger SERVICEMASTER CO: S&P Places B+ Bank Loan Rating on CreditWatch SYLVEST FARMS: Exclusive Plan Filing Extended Until August 11 TANGER FACTORY: Earns $6.4 Million in Quarter Ended June 30 TARGA RESOURCES: Sets Payments for Repurchase of 8-1/2% Sr. Notes TECH DATA: Fitch Holds 'BB+' Issuer Default Rating TODD MCFARLANE: Plan Confirmation Hearing Scheduled on Sept. 9 TOUSA INC: Obtains $500 Mil. Funds for Transeastern JV Settlement TURNER MEDIA: Case Summary & 20 Largest Unsecured Creditors UNISYS CORP: June 30 Balance Sheet Upside-Down by $2.2 Million UNISYS CORP: Fitch Affirms BB+ Rating on $275 Mil. Credit Facility VALENTIS INC: Earns $80,000 in Third Quarter Ended March 31 VANGUARD CAR: Enterprise Deal Prompts S&P to Withdraw Ratings VERTRUE INC: Earns $16.7 Million in Fourth Quarter Ended June 30 WACHOVIA BANK: S&P Assigns Low-B Ratings on Classes L to Q Certs. XELR8 HOLDINGS: Posts $881,000 Net Loss in Quarter Ended June 30 ZIFF DAVIS: Jason Young Succeeds Callahan as Chief Exec. Officer *C-BASS: Remains Confident Despite Liquidity Challenges *S&P Lowers Ratings on 25 Tranches and Removes Negative Watch *Large Companies with Insolvent Balance Sheets ********* 1031 TAX GROUP: Court Okays Mesirow as Panel's Financial Advisor ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors in 1031 Tax Group LLC and its debtor-affiliates' bankruptcy cases permission to retain Mesirow Financial Consulting LLC as its financial advisor. The firm is expected to: a. provide financial consulting to various solvency, valuation and financial issues in connection with the case and, to the extend possbile, provide export testimony on that issues; and b. advise the Committee with respect to reorganization, liquidation and transcational issues including advising on financial information provided by the Debtors in connection with these Chapter 11 cases. The Committee disclosed the firm's professionals compensation rates: Professionals Designation Hourly Rate ------------- ----------- ----------- James S. Feltman Senior Managing Director $690 Sheon Karol Managing Director $650 Patrick Cheng Senior Vice President $580 Thomas Jones Senior Vice President $580 Lindsay Faiella Associate $240 Kris Iizuka Paraprofessional $150 David Neziroski Paraprofessional $150 Designation Hourly Rate ----------- ----------- Senior Managing Director $650-$690 Managing Director $650-$690 Director $650-$690 Senior Vice-President $550-$620 Vice President $450-$520 Senior Associate $350-$420 Associate $190-$290 Paraprofessional $150 James S. Feltman, a senior managing director of the firm, assures the Court that his firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Feltman can be reached at: James S. Feltman Senior Managing Director Mesirow Financial Consulting LLC 350 N. Clark St. Chicago, IL 60610 Tel: (800) 453-0600 http://www.mesirowfinancial.com/ Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier, LLP, represents the Debtors in their restructuring efforts. David Y. Wolnerman, Esq., at Greenberg Traurig, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of over $100 million. AIRGAS INC: Moody's Holds Ba1 Corporate Family Rating ----------------------------------------------------- Moody's affirmed Airgas' Ba1 Corporate Family Rating and Ba2 subordinated notes rating and revised the ratings outlook to stable from negative due to the company's stronger than anticipated results for the first and second calendar quarters of 2007, which indicated that the integration of recent acquisitions was well on track with expected performance. Additionally, based on recent results, Moody's expects the company to generate financial metrics that fully support the Ba1 CFR over the next 12 months despite the additional increase in debt in the last quarter. On July 26, 2007, Airgas held a conference call to discuss first quarter earnings. Sales growth of 18%, was driven by acquisitions (11%) and organic growth (7%). Higher operating margins of 12.5% generated $156 million in EBITDA, which is moderately above Moody's prior expectation of an annual run rate below $600 million and does not include Linde's US packaged gas business (purchased on June 30, 2007). In Moody's April 3, 2007 report, it noted that the outlook could be moved back to stable should the company's credit metrics strengthen relative to projections, its EBITDA rise to a run-rate of about $600 million, and there be no additional acquisitions that would materially increase debt. Airgas' Ba1 CFR rating had been stressed by the significant increase in debt (>$700 million, or 86% increase) over the past year, elevated capex that was expected to reduce free cash flow available for debt reduction and the potential for additional transactions. In the current quarter, Moody's expects Airgas' EBITDA run rate to rise toward the $650 million level due to the inclusion earnings from the recently acquired packaged gas business of Linde and continued strong growth in its existing operations. Although construction of two new air separation units in Carrollton, Kentucky and Carlisle, Indiana will limit free cash flow, Moody's still expects the company to generate upwards of $100 million of free cash flow and strengthen other financial metrics to levels that fully support the Ba1 CFR over the next four quarters. Airgas Inc., headquartered in Radnor, PA, is the largest independent distributor of industrial, medical and specialty gases and related equipment in North America. Airgas reported $3.35 billion in sales for the LTM ending June 30, 2007. ALLEGHENY ENERGY: Affiliate to Redeem Series of Preferred Stock --------------------------------------------------------------- Monongahela Power Company, subsidiary of Allegheny Energy Inc., will redeem all outstanding shares of the series of its Cumulative Preferred $100 Par Value Stock effective as of Sept. 4, 2007, the "Redemption Date": a) Preferred Series: 4.40% Redemption Price: $106.50 CUSIP: 610202202 Stock Listing: AMEX:MPN.PR.A b) Preferred Series: 4.80% Series B Redemption Price: $105.25 CUSIP: 610202301 Stock Listing: n/a c) Preferred Series: 4.50% Series C Redemption Price: $103.50 CUSIP: 610202400 Stock Listing: AMEX:MPN.PR.C d) Preferred Series: $6.28 Series D Redemption Price: $102.86 CUSIP: 610202509 Stock Listing: N/A In addition to the redemption price, accrued and unpaid dividends up to and including the Redemption Date will be paid to the holders of the Preferred Stock. After the Redemption Date, the Preferred Stock will cease to accrue dividends and will no longer be deemed outstanding. All rights of the holders of the Preferred Stock will cease. The notice of redemption will be mailed to holders of record as of Aug. 3, 2007. For further information, holders of the Preferred Stock should contact Mellon Investor Services LLC, the redemption agent at 1- 800-777-3674, or their respective banks or brokers. Copies of the documents necessary to complete the tender of Preferred Stock for redemption may be obtained without charge from the redemption agent. About Allegheny Energy Based in Greensburg, Pennsylvania, Allegheny Energy, Inc., (NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor- owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland and Virginia. * * * As reported in the Troubled Company Reporter on May 8, 2007, Standard & Poor's Ratings Services raised its corporate credit rating on diversified energy company Allegheny Energy Inc., its utility subsidiaries, Monongahela Power Co., West Penn Power Co., and Potomac Edison Co., and its unregulated generation company, Allegheny Energy Supply Co. LLC, to 'BBB-' from 'BB+'. The outlook is stable. The rating action affects nearly $3.3 billion of debt, excluding securitized debt. The upgrade reflects the company's successful operations and maintenance cost reductions and significant credit metric improvement. AMERICAN CAPITAL: Syndicates Over $1 Bil. Credit Facilites in 2007 ------------------------------------------------------------------ American Capital Strategies Ltd. disclosed that since the beginning of 2007 it syndicated over $1 billion in credit facilities for 10 portfolio companies. These credit facilities were syndicated to about 120 institutions and included transactions such as SMG, Appleseed's Brands, WIS International and TestAmerica-STL. SMG On July 31, 2007, American Capital completed the syndication of $277.5 million in first lien credit facilities consisting of revolving credit and first lien term loan facilities for its portfolio company SMG, the leading provider of entertainment and conference venue management services worldwide. On June 14, 2007, American Capital and an affiliate invested $631 million in the One Stop Buyout(TM) of SMG. American Capital's investment took the form of a revolving credit facility, first lien term loan, senior subordinated debt, holding company PIK notes and convertible preferred and common equity. American Capital Equity Fund I LLC, a fund managed by American Capital, provided 30% of the American Capital equity investment. Founded in 1977, SMG currently manages about 200 venues, including arenas, stadiums, convention centers, exhibition halls, trade centers, theaters and performing arts centers. The company's facilities are primarily located throughout the U.S., with international facilities in the U.K., Germany, Ireland, Canada, Puerto Rico, Mexico, Norway and the U.A.E. SMG managed venues include Oracle Arena in Oakland, CA , Reliant Stadium in Houston, TX, the Moscone Center in San Francisco, CA, the Long Beach Convention Center in Long Beach, CA, the Manchester Evening News Arena in Manchester, U.K., and the Konig-Pilsener Arena in Oberhausen, Germany. SMG is headquartered in Philadelphia and has over 34,000 employees worldwide. Appleseed's Brands On July 13, 2007, American Capital and UBS Securities LLC closed the syndication of the $460 million first lien credit facility consisting of a revolving credit facility and first lien term loan for American Capital portfolio company Appleseed's Brands, the largest direct marketer of private label apparel for men and women aged 55 and over in the U.S. On April 30, 2007 American Capital and UBS Securities together underwrote a $710 million committed financing package to support Appleseed's recent acquisitions and the refinancing of existing debt. American Capital served as Joint Lead Arranger and Administrative Agent for the facilities and closed on $480 million of debt consisting of revolving credit and first lien term loan facilities as well as a second lien term loan and junior notes. UBS served as Joint Lead Arranger and closed on $230 million of first lien credit facilities. Golden Gate Capital is the equity sponsor. Appleseed's Brands, the largest direct marketer of private label apparel for men and women aged 55 and over in the U.S., was formed in 2005 when Golden Gate Capital bought Johnny Appleseed's and The TOG Shop. During 2005, the company also purchased Draper's and Damon's and then acquired Norm Thompson Outfitters and Haband the following year. Appleseed's manages eight catalogs, each targeting a distinct profile of mature women and together providing merchandise across the entire price-point spectrum. Appleseed's uses a combination of catalogues, letter mailings and the Internet for direct marketing. The company is headquartered in Beverly, MA. WIS International On May 18, 2007, American Capital completed the syndication of $164 million in first lien credit facilities consisting of revolving credit and first lien term loan facilities for its portfolio company WIS International, a leading global provider of outsourced inventory management services. On Jan. 18, 2007, American Capital and ACE invested $411 million in the One Stop Buyout(TM) of WIS International. American Capital's investment took the form of revolving credit and first lien term loan facilities, senior subordinated debt, holding company PIK notes and common and redeemable preferred equity. ACE provided 30% of the American Capital equity investment. WIS International was founded in 1967. The company's core business is to provide the systems, technology and staff for third-party inventory verification services. WIS has U.S. headquarters in San Diego, CA and Canadian headquarters in Toronto, Ontario. The company has over 200 offices across the U.S., Canada and internationally with operations based in the U.K., China, Japan, Mexico, Brazil and Argentina. Annually WIS provides over 135,000 counts or about 370 counts per day for retail clients such as Wal-Mart, Home Depot, Rite Aid, Lowe's, Walgreen's and Dollar General. TestAmerica-STL On March 19, 2007, American Capital completed the syndication of $155 million in first lien credit facilities consisting of revolving credit and first lien term loan facilities for its portfolio company TestAmerica-STL, the second largest operator of environmental testing laboratories in the United States. On Dec. 29, 2006, American Capital and ACE invested $255 million in TestAmerica Holdings Inc., supporting TestAmerica's combination with Severn Trent Laboratories, a division of Severn Trent plc and the largest operator of environmental testing laboratories in the United States. American Capital's one stop financing took the form of revolving credit and first lien term loan facilities, senior subordinated debt and preferred equity. ACE provided 30% of the American Capital equity investment. H.I.G. Capital LLC is the majority owner of TestAmerica-STL. TestAmerica-STL provides a full spectrum of environmental testing services, including the complete range of analyses of soil, water waste and air samples for trace levels of organic, inorganic and metal contaminants; and air quality and emissions testing, including analyses of mold, food microbiology and allergens. The company also develops and supplies sampling and remediation pumping systems for landfills and ground water contamination sites and other environmental testing products. TestAmerica-STL serves its customer base of over 12,000 clients, including major industrial companies, engineering and consulting firms and government entities, through over 100 laboratories and service centers in the United States. About American Capital American Capital Strategies Ltd. (Nasdaq: ACAS) -- http://www.americancapital.com/-- is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital can invest up to $300 million per transaction. * * * As reported in the Troubled Company Reporter on July 11, 2007, Moody's Investors Service assigned a Baa2 rating to American Capital Strategies, Ltd. $500 million combined debt offering. In addition, Moody's assigned a (P)Baa2 senior, unsecured and a (P)Ba1 preferred stock rating to ACAS's $5 billion shelf registration. The ratings outlook is stable. AMERICAN CAPITAL: Earns $788 Million in Second Qtr. Ended June 30 ----------------------------------------------------------------- American Capital Strategies Ltd. reported earnings for the second quarter 2007 that increased 172% to $788 million, compared to $290 million for the second quarter of 2006. For the quarter, net portfolio appreciation and realized gains totaled $584 million compared to $165 million for the second quarter of 2006. Around $493 million of the second quarter 2007 earnings of American Capital are from the appreciation of its asset management portfolio company, American Capital LLC, driven substantially from the deconsolidation of the European Capital management company. In the second quarter of 2007, American Capital received $32 million of revenue related to its wholly-owned asset management portfolio company, American Capital LLC. This is a 256% increase in third-party fund management revenues over the second quarter of 2006. As of June 30, 2007, the company listed $12.2 billion in total assets, $5.7 billion in total liabilities, and $6.5 billion in total stockholders' equity. "This is a great time to be one of the best capitalized financial institutions in the world," said Malon Wilkus, American Capital chairman, president and chief executive officer, "With less than one-to-one debt to equity, American Capital has huge competitive advantages in this new credit environment. With our One Stop Buyout(TM) and one stop financing, we fund transactions that are impossible for some of our competitors to close. With demonstrated access to capital in these market conditions, we are taking advantage of lower multiples, wider spreads and better terms to generate outstanding risk adjusted returns for our shareholders." On July 6, 2007, American Capital was the first alternative asset manager and the only private equity firm to be included in the S&P 500 Index. American Capital was added to the S&P 500 in the category of Financials, Asset Management and Custody Banks. As of its inclusion, American Capital was the 355th largest firm in the index based on market capitalization. "We have outperformed the S&P 500 in each of the ten calendar years since our IPO, including the last recession, with the exception of our first full year as a public company," said Malon Wilkus. "We've done this by growing our dividend at a 13% compound annual growth rate and providing a 22% total return to our shareholders over the past ten years. The current credit and economic environment is ideal for us to continue this exceptional performance. In the past few weeks, American Capital's stock price has declined along with most financial stocks. However, American Capital has a much better capitalized balance sheet than many financial institutions, CLOs and hedge funds; some of which are levered above 4:1 debt to equity. We are levered less than one-to- one debt to equity and are in good shape to handle continued uncertainty in the capital markets." "The advantage of our business model becomes more evident in a widening spread environment like today," said chief financial officer John Erickson. "As spreads widen, our interest income and our spread income generally grows, which allows us to increase our NOI and our dividends. During widening spread environments, we may experience slower growth in our equity portfolio as more expensive credit reduces valuation multiples, but our growing spread income should allow us to continue to generate excellent returns on equity, just when other companies find it difficult to produce similar results. We believe this is why during the last recession and recovery, we materially out performed the S&P 500, when the index declined three years in a row." "Our portfolio continues to perform very well," said Ira Wagner, chief operating officer, "with our delinquencies and non-accruals remaining at 4% over the last four quarters. We believe the current environment, whereby many investors have lost access to capital despite very low commercial loan default rates, will result in a significant increase in our investment opportunities over and above our already industry-leading deal flow. We continue to focus on having the largest middle market deal flow in our industry so that we can continue to be extraordinarily selective as to which companies we invest in. We also continue to have the significant advantage of not being reliant on commercial or investment banks for financing for our One Stop Buyouts(TM) and one-stop-financings because we are able to fund the entire transaction. In addition, when we conclude that it is time to sell a portfolio company, we may choose to provide the buyer with the appropriate debt financing to supplement their equity to fund the transaction; a capability most of our competitors lack. Therefore, we continue to believe that our capital flexibility and our very large deal flow will provide us with excellent investment and exit opportunities going forward." "Our low levered balance sheet and capital markets creditability have allowed us to execute a CRE CDO transaction for our CMBS portfolio, issue our first unsecured public debt, issue our ninth term debt securitization and raise $1 billion of equity, during a time when access to capital was closed to many institutions," said Tom McHale, senior vice president of finance. "We have no investments in sub prime residential mortgages. Only 3% of our portfolio today is in CMBS investments and there have been no losses on commercial real estate loans underlying those investments. [About t]hree percent of our portfolio assets are in CDOs, which have produced a 17% IRR. We have few covenant-light loans. And, our equity investments, excluding our investment in American Capital LLC, have produced a 31% IRR over the past year. We are very well capitalized and have a portfolio that is performing in a market where opportunities have just become far more profitable." Declaration of Third Quarter Dividend American Capital's board of directors declared a third quarter 2007 regular dividend of $0.92 per share to record holders as of Sept. 7, 2007, payable on Oct. 1, 2007. This is an 11% increase over the third quarter 2006 dividend of $0.83 per share. American Capital has paid a total of $1.7 billion in dividends and paid or declared dividends of $25.16 per share since its August 1997 IPO at $15.00 per share. Second quarter 2007 dividends were $0.91 per share, an 11% growth over the second quarter 2006 dividends of $0.82 per share. For the quarter, American Capital's dividend payout ratio was 63% of Realized Earnings of $1.45 per basic share. 2007 Dividend Guidance American Capital is reiterating its forecast of total 2007 dividends of $3.68 per share to be paid from ordinary taxable income earned in 2007. This would represent an 11% growth over the total 2006 dividends of $3.33 per share. American Capital anticipates that its 2007 ordinary taxable income will exceed its dividends paid and it will elect to pay a 4% excise tax and retain its excess ordinary taxable income. The estimated remaining 2007 dividend per share is $0.96 per share for the fourth quarter of 2007. 2007 Other Guidance American Capital is forecasting 14% to 27% growth from Dec. 31, 2006, in net asset value per share, totaling $4.08 to $8.08 growth, to a value in the range of $33.50 to $37.50 per share by Dec. 31, 2007. American Capital is forecasting that it will have between $17 billion and $22 billion of alternative assets under management by year end, of which $6 billion to $8 billion will be in funds managed by American Capital; the balance will be on American Capital's balance sheet. In addition, American Capital is forecasting $0.79 to $0.83 in net operating income per basic share in the third quarter of 2007. About American Capital American Capital Strategies Ltd. (Nasdaq: ACAS) -- http://www.americancapital.com/-- is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital can invest up to $300 million per transaction. * * * As reported in the Troubled Company Reporter on July 11, 2007, Moody's Investors Service assigned a Baa2 rating to American Capital Strategies, Ltd. $500 million combined debt offering. In addition, Moody's assigned a (P)Baa2 senior, unsecured and a (P)Ba1 preferred stock rating to ACAS's $5 billion shelf registration. The ratings outlook is stable. AMERICAN HOME: Files for Chapter 11 Bankruptcy ---------------------------------------------- American Home Mortgage Investment Corp.’s Board of Directors, after carefully assessing the sudden adverse impact on the company's liquidity and business from the extraordinary disruptions now occurring in the secondary mortgage and real estate markets, has authorized management to seek protection for the company through the bankruptcy process in order to best preserve the value of the company's assets. Accordingly, American Home Mortgage Investment Corp., together with certain of its subsidiaries, has today filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Under the protection of Chapter 11, American Home will have the time and opportunity to achieve the best possible value for the creditors of its mortgage based assets and related operations, as well as an orderly wind down of the company. American Home ceased taking mortgage applications on Aug. 1, 2007, and separated all production employees on Aug. 3, 2007. The company is currently maintaining its thrift and servicing businesses. In conjunction with the filing, WL Ross & Co. LLC through its fund, WLR Recovery Fund III, L.P., has agreed to provide American Home up to $50 million in debtor-in-possession financing, subject to court approval. The DIP financing is expected to provide American Home with funding to facilitate the Chapter 11 process. American Home further disclosed that its Board has approved and the company has retained the services of Kroll Zolfo Cooper, and specifically its Chairman, Stephen Cooper, a highly experienced specialist in troubled business situations, to lead the Chapter 11 process. "It is unfortunate that American Home Mortgage, a company which we built into a highly successful business, experienced this sudden reversal of its fortunes due to the unanticipated and rather sudden deteriorations in the secondary and national real estate markets," Michael Strauss, American Home's Chief Executive Officer, stated. "The Chapter 11 process provides American Home the protection and the opportunity to have the time to make the most prudent decisions to realize the highest value of our assets for creditors. We now shift our focus to this objective." American Home further stated that, since the company terminated its mortgage originations business and, while the Chapter 11 process is intended to help preserve and protect the value of the company's assets, it is highly unlikely that these values will be sufficient to pay its creditors in full, and that it is realistic to conclude that ultimately there will be no shareholder equity value remaining. The company anticipates that the New York Stock Exchange will commence delisting proceedings with respect to its common and preferred stock. Milestone Advisors, LLC are acting as advisors to American Home and Young Conaway Stargatt & Taylor, LLP is acting as legal counsel to the company with respect to the bankruptcy. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) – http://www.americanhm.com/-- is a mortgage real estate investment trust focused on earning net interest income from self-originated loans and mortgage-backed securities, and, through its taxable subsidiaries, from originating and selling mortgage loans and servicing mortgage loans for institutional investors. AQUILA INC: Posts $14.7 Mil. Net Loss in Quarter Ended June 30 -------------------------------------------------------------- Aquila Inc. reported net loss of $14.7 million for the quarter ended June 30, 2007, compared to a net loss of $155 million in 2006. Repositioning activities in the second quarter of 2006, including the exit from the Elwood tolling agreements, and the 2006 debt tender offer, and rate relief at the utility operations were the primary reasons for the improvement in current quarter earnings. Sales for the quarter were $298.6 million in 2007 versus $283 million in 2006. "We are pleased to report continued progress in our utilities. It is attributable to the dedication of our entire Aquila team that earnings have improved while we simultaneously find ways to deliver safe, reliable energy more efficiently," said Richard C. Green, Aquila chairman and chief executive officer. Results for the six-month period ending June 30, 2007, were a net loss of $39 million, compared to a 2006 year-to-date net loss of $156.1 million. The repositioning activities that occurred in the second quarter of 2006 were also the primary reasons for the change in six month earnings. Year-to-date sales increased to $742.8 million, or $28.8 million higher than 2006 sales of $714 million. As of June 30, 2007, the company had total assets of $2.9 billion, total liabilities of $1.6 billion, and total stockholders' equity of $1.3 billion. The company held $96.6 million in cash and cash equivalents at June 30, 2007, as compared with $232.8 million at Dec. 31, 2007. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221a About Aquila Inc. Headquartered in Kansas City, Missouri, Aquila Inc. -- http://www.aquila.com/-- is an integrated electric and natural gas utility. Aquila began as Missouri Public Service Company in 1917 and reincorporated in Delaware as UtiliCorp United Inc. in 1985. In March 2002, UtiliCorp United Inc. changed its name to Aquila, Inc. Aquila's business is organized into three business segments: Electric Utilities, Gas Utilities and Merchant Services. Substantially all of Aquila's revenues are generated by Aquila's Electric and Gas Utilities. * * * As reported in the Troubled Company Reporter on June 26, 2007, Moody's Investors Service upgraded Aquila Inc.'s corporate family rating to Ba2 from B1 and its probability-of-default rating to Ba3 from B2. At the same time Moody's upgraded Aquila's senior unsecured rating to Ba3 from B2. ASAT HOLDINGS: New Asat Begins Consents Solicitation to Indenture ----------------------------------------------------------------- ASAT Holdings Limited announced Tuesday last week that its wholly owned subsidiary, New ASAT (Finance) Limited, commenced the solicitation of consents from the holders of the $150 million aggregate principal amount of outstanding 9.25% Senior Notes due 2011 to the amendment of certain provisions of the indenture, dated as of Jan. 26, 2004, pursuant to which the Senior Notes were issued. ASAT is seeking consents for amendment or waiver of certain defaults and events of default that may have occurred or may occur. The proposed amendments, if adopted, will among other things: (i) eliminate restrictions on the value of the assets that may be held by ASAT Semiconductor (Dongguan) Limited ("ASDL"), ASAT Holdings' Chinese subsidiary; (ii) expand the ability of ASAT Holdings and its subsidiaries to secure financing from additional sources; and (iii) extend the deadline for ASAT Holdings to fulfill its reporting obligations under the indenture. Holders of the Senior Notes are referred to New Asat's Consent Solicitation Statement and materials, which will be mailed to each record holder, for the detailed terms and conditions of the consent solicitation. The consent solicitation will expire at 5:00 p.m., New York City time, on Aug. 20, 2007, unless extended by the New Asat. Only holders of record as of 5:00 p.m., New York City time, on July 25, 2007, are eligible to deliver consents to the proposed amendments in the consent solicitation. ASAT Holdings has retained Piper Jaffray & Co. to serve as Solicitation Agent for the consent solicitation. Questions concerning the terms of the consent solicitation should be directed to Michael Hsieh of Piper Jaffray & Co. at (212) 284- 9589. ASAT Holdings has also retained The Bank of New York to serve as its Information Agent and Tabulation Agent for the consent solicitation. Requests for assistance in delivering consents should be directed to Fernando Hutapea of The Bank of New York in Singapore at +65-6432-0346. Requests for copies of the Consent Solicitation Statement can be directed to either Piper Jaffray & Co. or The Bank of New York. About ASAT Holdings ASAT Holdings Limited (Nasdaq: ASTT) -- http://www.asat.com/-- is a global provider of semiconductor package design, assembly and test services. With 18 years of experience, the company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in- package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. Today the company has operations in the United States, Asia and Europe. * * * ASAT Holdings Limited's consolidated balance sheet at April 30, 2007, showed $135.1 million in total assets, $217.7 million in total liabilities, and $5.7 million in series A redeemable convertible preferred shares, resulting in a $88.3 million total stockholders' deficit. ASAT HOLDINGS: Delay in Interest Payment Cues S&P to Put D Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services had lowered its long-term corporate credit rating on ASAT Holdings Ltd. to 'D' from 'CCC'. At the same time, it lowered the issue rating on $150 million 9.25% senior notes due 2011 to 'D' from 'CCC'. The notes were issued by New Asat (Finance) Ltd. and guaranteed by ASAT. The downgrades are based on ASAT's announcement on Aug. 1, 2007 that it did not make the semi-annual interest payment on its 9.25% senior notes. "Given its extremely tight liquidity, we believe there is a low likelihood that ASAT will make the interest payment within the 30- day grace period that starts from the Aug. 1, 2007 due date," Standard & Poor's credit analyst Michael Petit said. Standard & Poor's has very limited access to the company's management and financial information. The rating is based on publicly available information. Although ASAT has indicated that it has available funds to make the interest payment, doing so would make it difficult to support its ongoing business requirements over the near term. ASAT has asked the bond holders to amend or waive certain conditions that constitute defaults and events of defaults that may have occurred or may occur. Based on the company's fiscal 2007 results, announced on Aug. 1, 2007, ASAT had a shareholders' deficit of $88.3 million at the end of April 2007. The company had about $7.3 million in unrestricted cash, inadequate to cover its semi-annual interest due Aug. 1, 2007 of US$6.9 million for the bond and short-term debt due within one year of $3.8 million. Standard & Poor's assigns a 'D' rating when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. ASAT is a small operator in the highly fragmented and competitive semiconductor sector. ASAT HOLDINGS: April 30 Balance Sheet Upside-Down by $88.3 Million ------------------------------------------------------------------ ASAT Holdings Limited announced Tuesday last week its financial results for the fourth quarter and fiscal 2007, ended April 30, 2007. ASAT Holdings Limited's consolidated balance sheet at April 30, 2007, showed $135.1 million in total assets, $217.7 million in total liabilities, and $5.7 million in series A redeemable convertible preferred shares, resulting in a $88.3 million total stockholders' deficit. The company's consolidated balance sheet at April 30, 2007, also showed strained liquidity with $44.3 million in total current assets available to pay $58.6 million in total current liabilities. Net loss was $11.0 million, which includes charges of approximately $682,000 in reorganization costs for follow-on expenses related to completing the move of the company's manufacturing operations to China, a $1.4 million non-cash inventory write-off and a $1.3 million income tax provision. Net sales in the fourth quarter were $36.0 million, compared with net sales of $41.5 million in the previous quarter. Fourth quarter net loss compares with a net loss of $7.6 million in the third quarter, which included charges of approximately $405,000 for relocation and facilities expenses and $763,000 in reorganization charges related to the relocation to China. Additional Fourth Quarter Results -- Net sales for assembly were $34.5 million -- Net sales for test were $1.5 million -- Capital expenditures were $3.5 million -- Cash and cash equivalents at the end of the quarter were $7.3 million Fiscal 2007 Financial Results Net loss for fiscal 2007 was $35.0 million. This compares with a net loss of $42.4 million in fiscal 2006. Net sales for fiscal 2007 were $164.9 million, compared with net sales of $182.1 million in fiscal 2006. "Fiscal 2007 marked the successful completion of the move of our manufacturing operations to China,” said Tung Lok Li, acting chief executive officer of ASAT Holdings Limited. “While our revenue declined year-over-year, the lower cost structure and better operating environment contributed to an improvement in our gross margin and a reduction in our net loss. "With the majority of our cost reduction strategy now implemented, in fiscal 2008 we will focus on driving top line growth through a combination of increasing business with our current customers and capitalizing on our core strengths to add new customers. I am confident we have the strategy and management team in place to grow revenue next fiscal year. Also, when combining revenue growth with the new lower cost structure, we expect to see an overall improvement in our financial results in fiscal 2008,” said Mr. Li. First Quarter Fiscal 2008 Outlook "We are seeing positive signs in the overall market environment and believe the seasonal trends and inventory issues that impacted our customers for the last two quarters are now behind us," said Mr. Li. "As a result, based on preliminary figures, we expect our net sales for the quarter ended July 31, 2007, increased to approximately $37.7 million. Also, while we are just beginning our October quarter, we expect our positive momentum to continue and believe revenue will increase 3 percent to 8 percent above the July quarter results." ASAT Commences Consent Solicitation In a separate release, ASAT announced it is soliciting consent from the holders of its 9.25% Senior Notes due 2011. ASAT is seeking consents for amendment or waiver of certain defaults and events of default that may have occurred or may occur. The proposed amendments, if adopted, will among other things: (i) eliminate restrictions on the value of the assets that may be held by ASAT Semiconductor (Dongguan) Limited ("ASDL"), ASAT Holdings' Chinese subsidiary; (ii) expand the ability of ASAT Holdings and its subsidiaries to secure financing from additional sources; and (iii) extend the deadline for ASAT Holdings to fulfill its reporting obligations under the indenture for the Senior Notes. The consent solicitation will expire at 5:00 p.m., New York City time, on Aug. 20, 2007, unless extended by New ASAT (Finance) Limited. Only holders of record as of 5:00 p.m., New York City time, on July 25, 2007, are eligible to deliver consents to the proposed amendments in the consent solicitation. Interest Payment The company also announced it will delay making the semi-annual interest payment on its 9.25% Senior Notes. ASAT has 30 days from the Aug. 1, 2007, due date to meet its interest payment obligation. "We believe it is prudent to utilize the 30 day grace period while we attempt to complete the consent solicitation process and closure of potential new financing, which we are trying to complete prior to the end of the grace period," said Kei Hong Chua, chief financial officer of ASAT Holdings Limited. "While we have the funds available now to make the payment, doing so would leave us in a challenging position to support our ongoing business requirements in the near term. We are working with several banks and financing firms to obtain financing and are optimistic that we will reach a successful outcome with both the consent solicitation and financing package." About ASAT Holdings ASAT Holdings Limited (Nasdaq: ASTT) -- http://www.asat.com/-- is a global provider of semiconductor package design, assembly and test services. With 18 years of experience, the company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in- package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. Today the company has operations in the United States, Asia and Europe. B/E AEROSPACE: Earns $28.4 Million in Second Quarter 2007 --------------------------------------------------------- B/E Aerospace Inc. reported net earnings for the second quarter ended June 30, 2007, of $28.4 million that included one-time debt prepayment costs of $11 million, versus net earnings of $18.7 million in the second quarter of 2006. Revenues for the second quarter of 2007 of $398.2 million reflect 46.7% year-over-year growth, over revenues of $271.5 million for the second quarter of 2006. Net earnings for the six months ended June 30, 2007 were $60.5 million, as compared with net earnings of $32.5 million for the six months ended June 30, 2006. The company had revenues of $786 million for the six months ended June 30, 2007, as compared with revenues of $518.7 million for the six months ended June 30, 2006. Liquidity And Balance Sheet Metrics Cash at June 30, 2007, was $31 million. During the second quarter, the company reduced long-term debt by $350 million; as a result of the redemption of its $250 million 8-7/8% senior subordinated notes due 2011 and prepayment of $100 million of bank term debt. Cash decreased in the first half of 2007 due to the $350 million prepayment of debt, a significant expansion in the company's distribution segment product line and the over 50% year- over-year increase in revenues. Working capital at June 30, 2007 was $588.3 million. This compares with working capital of about $456 million at Dec. 31, 2006. The increase in working capital of $132.3 million is primarily due to planned investments in inventories in the distribution segment and due to the higher levels of accounts receivable and inventories required to support the business at the substantially higher revenue levels. Depreciation and amortization for the six months ended June 30, 2007, was $16.9 million as compared to $14 million in the same period in the prior year. The company's balance sheet listed $1.6 billion in total assets, $455.8 million in total liabilities, and $1.2 billion in total stockholders' equity. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221b Management's Comments Commenting on the recent performance of B/E Aerospace, Amin J. Khoury, chairman and chief executive officer of B/E Aerospace said, "The second quarter of 2007 was another record quarter for B/E Aerospace as each of our business segments contributed to the strong overall results. As expected, our operating margin increased by 190 basis points versus the same period in the prior year. This solid margin expansion is primarily due to the high quality of our record backlog, the operating leverage inherent in our business and productivity initiatives." Mr. Khoury continued, "In addition, the second quarter was a strong bookings quarter. Programs awarded during the current quarter reflect a mix of follow-on awards from existing customers for both additional retrofit business as well as orders for interior equipment for new aircraft. Importantly, we are now beginning to see initial orders from the U.S. airlines, a process that is expected to extend for a number of years to come. As worldwide air travel continues to grow, many airlines are planning to expand their fleets and upgrade their existing aircraft. We believe these activities are now driving demand for cabin interior products in programs that will begin to deliver in 2009 and beyond. Our long-term visibility arising from current backlog and associated expected follow-on orders, together with a nascent domestic market awakening serve as the foundation for our expectation of continued strong revenue and earnings growth for the next several years." Financial Guidance The company has previously raised 2007 financial guidance three times during 2007 and is raising it an additional $0.02 per share today. The company's current 2007 full year earnings per diluted share guidance is now about $1.57 per share. The company is raising its 2008 financial guidance: full year 2008 revenues are expected to grow by about 25% to about $2 billion and full year 2008 earnings per diluted share are expected to grow by about 4% , based on the expected 25% revenue growth, to about $2.25 per share. Mr. Khoury commented, "Industry experts expect air traffic growth to outpace capacity growth for some time to come. All indications are that the current commercial aircraft new-build delivery cycle both for wide-body and narrow-body aircraft will remain very strong well into the next decade, driven by the escalating need for more fuel-efficient aircraft and the growing importance of emerging countries. In addition, market conditions are requiring airlines to refurbish and upgrade their current fleets of wide- body aircraft in order to remain competitive. These factors and our ongoing dialogues with our airline customers underscore our expectation that the demand for our products will remain robust for a number of years. As a result, we are also forecasting continued backlog growth. We plan to update our 2008 - 2010 outlook when we report our third quarter financial results in late October." About B/E Aerospace Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV) -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and is an aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. B/E sells and supports its products through its own global direct sales and product support organization. * * * As reported in the Troubled Company Reporter on May 9, 2007, Moody's Investors Service has raised the ratings of B/E Aerospace, Inc., Corporate Family Rating to Ba2 from B1. The ratings on B/E's senior secured credit facility have been upgraded to Ba1 from Ba3, while the senior unsecured notes' rating was upgraded to B1 from B2. In addition, the Speculative Grade Liquidity Rating was raised to SGL-1 from SGL-2. The ratings outlook is stable. The action concluded the review for upgrade commenced on March 19, 2007. B&G FOODS: Earns $3.7 Million in Second Quarter Ended June 30 ------------------------------------------------------------- B&G Foods Inc. reported net income of $3.7 million for the second quarter ended June 30, 2007, compared to $2.3 million for the second quarter of 2006. Net sales for the second quarter of 2007 increased 12.3% to $118.2 million from $105.3 million for the thirteen weeks ended July 1, 2006. Excluding the impact of the Cream of Wheat acquisition and the termination of a temporary co-packing arrangement, net sales increased $1.6 million or 1.5% relating to increases in sales price and unit volume. The Cream of Wheat acquisition accounted for $12.4 million of the net sales increase offset by a decrease in net sales of $1.1 million relating to the termination of the temporary co-packing arrangement. First Two Quarters of 2007 Net income was $7.8 million for the first two quarters of 2007, compared to $5.3 million for the comparable period of fiscal 2006. Net sales for the first two quarters of 2007 increased 12% to $221.9 million from $198.2 million in the comparable period of fiscal 2006. Excluding the impact of Cream of Wheat acquisition and the termination of a temporary co-packing arrangement, net sales increased $6.2 million or 3.2% relating to increases in sales price and unit volume. The Cream of Wheat acquisition accounted for $18.8 million of the net sales increase offset by a decrease in net sales of $1.3 million relating to the termination of the temporary co-packing arrangement. As of June 30, 2006, the company had total assets of $839.6 million, total liabilities of $656.2 million, and total stockholders' equity of $183.4 million. David L. Wenner, chief executive officer of B&G Foods, stated, "The company's second quarter performance reflects successful pricing initiatives and ongoing effective cost management, as well as positive contributions from our recently-acquired Cream of Wheat business. During the quarter we were delighted to complete the initial public offering of our Class A common stock as a separately traded security. We believe that our new capital structure and reduced leverage leave us exceptionally well- positioned to continue to execute our growth strategies and to pursue attractive acquisition opportunities." Class A Common Stock Offering As previously reported, during the second quarter of 2007, B&G Foods closed its initial public offering of 15,985,000 shares of its Class A common stock as a separately traded security, which includes 2,085,000 shares issued pursuant to the fully exercised underwriters' option to purchase additional shares, at $13.00 per share. The separately traded Class A common stock trades on the New York Stock Exchange under the trading symbol "BGS" and trades separately from B&G Foods' Enhanced Income Securities, each of which represents one share of Class A common stock and $7.15 principal amount of 12% senior subordinated notes due 2016 and trade on the New York Stock Exchange under the trading symbol "BGF." The proceeds of the offering, after deducting underwriting discounts and commissions and other fees and expenses, were $193.2 million. In connection with the offering, B&G Foods repurchased 6,762,455 outstanding shares of its Class B common stock for $82.4 million, and the remaining 793,988 shares of its outstanding Class B common stock were exchanged for an equal number of shares of Class A common stock. B&G Foods also prepaid $100 million of its term loan borrowings under its senior secured credit facility. B&G Foods expects to use the remaining net proceeds of the offering for general corporate purposes. As of July 25, 2007, B&G Foods had 36,778,988 shares of Class A common stock issued and outstanding, 17,290,567 of which were held in the form of EISs and 19,488,421 of which were held separate from EISs. As of July 25, 2007, the registrant had no shares of Class B common stock issued or outstanding. About B&G Foods B&G Foods Inc. (AMEX: BGF) -- http://www.bgfoods.com/-- and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico. B&G Foods' products include jams, jellies and fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles and peppers and other specialty food products. B&G Foods competes in the retail grocery, food service, specialty store, private label, club and mass merchandiser channels of distribution. Based in Parsippany, New Jersey, B&G Foods' products are marketed under many recognized brands, including Ac'cent, B&G, B&M, Brer Rabbit, Emeril's, Grandma's Molasses, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina, San Del, Ac'cent Sa-Son, Trappey's, Underwood, Vermont Maid and Wright's. Preliminary revenues for the fiscal year ended Dec. 30, 2006, were US$411.3 million. * * * As reported in the Troubled Company Reporter on May 21, 2007, Moody's Investors Service placed the B3 senior unsecured notes of B&G Foods, Inc. on review for possible upgrade following the announcement that the company plans to reduce debt that is more senior with a portion of the proceeds of a proposed common stock issuance. LGD assessments for both this debt instrument and others are also subject to change after the equity issuance. Moody's affirmed B&G's other ratings, including the B2 corporate family rating, and maintained a stable rating outlook. BALLY TOTAL: Gets Interim OK to Hire Latham & Watkins as Counsel ---------------------------------------------------------------- Bally Total Fitness Holding Corporation and its debtor- affiliates obtained from the U.S. Bankruptcy Court for the Southern District of New York in Manhattan authority, on an interim basis, to employ Latham & Watkins LLP as their attorneys, effective as of July 31, 2007. Marc D. Bassewitz, senior vice president, secretary and general counsel of Bally Total Fitness Holding Corporation, relates that Latham & Watkins has been counsel to the Debtors on a number of matters for more than 10 years, including the preparation of the Chapter 11 filings, and, therefore, will be able to quickly respond to any and all issues that may arise during the Chapter 11 Cases. The firm is intimately familiar with the Debtors' businesses and affairs and many of the potential legal issues that may arise in the context of the Chapter 11 Cases, Mr. Bassewitz says. As counsel for the Debtors, Latham & Watkins will render legal services relating to the day-to-day administration of the Chapter 11 cases and the several issues that may arise, including: -- advising the Debtors with respect to their powers and duties in the continued management and operation of their business and properties; -- attending meetings and negotiating with representatives of creditors; -- taking all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf; -- preparing all motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; -- taking necessary action on behalf of the Debtors to obtain approval of their Disclosure Statement and confirmation of their Plan of Reorganization; -- advising the Debtors in connection with any potential sale of assets; -- appearing before the Bankruptcy Court, appellate courts, and the U.S. Trustee, and protect the interest of the Debtors' estates; -- performing all other necessary legal services in connection with the Debtors' Chapter 11 Cases, including analyzing leases and executory contracts and any assumptions; analyzing the validity of liens against the Debtors; and advising on corporate, litigation, environmental, and other legal matters. Latham & Watkins will be paid based on its hourly rates: Partners $595 to $975 Of Counsel $525 to $850 Associates $275 to $645 Paraprofessionals $90 to $320 The firm will also be reimbursed for it's reasonable out-of- pocket expenses. These professionals are presently expected to have primary responsibility for providing services to the Debtors: * David S. Heller, * Richard A. Levy, * Josef S. Athanas, * Keith A. Simon, and * Caroline A. Reckler Mr. Bassewitz notes that on February 20, 2007, the Debtors advanced $1,250,000 to Latham & Watkins as a retainer. On each of March 23, April 5, May 4, and June 5, the Debtors advanced a further $250,000 to the firm as a retainer. On July 30, the Debtors advanced an additional $100,000. Much of the retainer has been applied prior to the Petition Date to prepetition fees and expenses, and as of the Petition Date, the amount of Latham & Watkins' retainer was approximately $6,200. As of bankruptcy filing, Mr. Bassewitz continues, the Debtors do not owe the firm any amounts for legal services rendered before the Petition Date. During the one year prior to the Petition Date, the firm received a total of $5,755,181 in compensation from the Debtors. Mr. Heller, Esq., a partner at the firm, assures the Court that Latham & Watkins is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Mr. Heller adds that Latham & Watkins has in the past represented or currently represents certain of the Debtors' creditors, equity security holders, or other parties-in-interest in matters unrelated to the Debtors or the Chapter 11 cases. None of the representations are materially adverse to the interests of the Debtors' estates, he says. 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 Total and its affiliates filed for chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre-packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins, L.L.P. represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had $408,546,205 in total assets and $1,825,941,54627 in total liabilities. (Bally Total Fitness Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). BALLY TOTAL: Gets Interim OK to Hire Latham & Watkins as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York in Manhattan gave Bally Total Fitness Holding Corporation and its debtor-affiliates authority, on an interim basis, to employ Deloitte Financial Advisory Services LLP as their financial advisors, effective as of July 31, 2007. Deloitte FAS has provided services to the Debtors on a number of matters for approximately eight months prior to their bankruptcy filing, including providing financial advisory services in preparation for the commencement of the Chapter 11 cases, Marc D. Bassewitz, senior vice president, secretary and general counsel of Bally Total Fitness Holding Corporation, tells the Court. Deloitte FAS is, thus, familiar with the Debtors' businesses and affairs and many of the potential issues that may arise in the context of the Chapter 11 cases, Mr. Bassewitz says. The Debtors expect the firm to: -- assist the Debtors in the accumulation of information associated with a Chapter 11 filing; -- assist the Debtors in the preparation of, and provide recommendations regarding, cash management and invoice cut-off procedures; -- assist the Debtors in the creation of reporting processes, including Schedules of Assets and Liabilities, Statements of Financial Affairs, Monthly Operating Reports, a creditor matrix, and other ancillary reporting; -- assist the Debtors in assembling, compiling, and formatting the information necessary to prepare first day motions, a plan of reorganization and disclosure statement; -- assist the Debtors in gathering leases, contracts, and other agreements; -- assist the Debtors in the development of potential Chapter 11 execution strategies for operational functions, including customer management, purchasing, vendor management and other logistical issues; -- assist the Debtors in the review and reconciliation of the claims of their creditors and response to their creditors; -- assist the Debtors with the assessment of their actual and projected membership revenues; -- assist the Debtors with the assessment of the financial data and forecasting models utilized in preparing the Debtors' membership revenue projections; -- assist the Debtors with the assessment of profitability by membership types and on a club-by-club basis; -- assist the Debtors in connection with the identification, development and implementation of restructuring alternatives; -- attend and participate in court hearings and meetings on matters within the scope of the services to be performed and as mutually agreed upon; and -- provide other services as may be agreed to by the Debtors and Deloitte FAS. According to Mr. Bassewitz, Bally seeks to retain Deloitte FAS because of its extensive experience and knowledge in the field of financial advisory services, including financial advisory services in cases before bankruptcy courts. In exchange for its services, Deloitte will be paid based on its hourly rates: Partner, Principal or Director $500 to $575 Senior Manager $425 to $475 Manager $350 to $400 Senior Associate $275 to $300 Associate $225 to $250 Deloitte's Walton Brown, Carl S. Lane, and Roberto Cortez are the professionals expected to have primary responsibility for providing services to the Debtors. As a result of Deloitte FAS' and its affiliate, Deloitte Tax LLP's prepetition services to the Debtors, both parties received retainers from the Debtors in the 90 days prior to the Petition Date: Amount ------ Deloitte FAS $1,681,004 Deloitte Tax 645,863 About $50,562 in Deloitte FAS' retainers remained as of the Petition Date, while $91,370 remained in Deloitte Tax's retainers. No amounts were due and owing from the Debtors to both advisors prior to that Date. The Debtors will indemnify and hold harmless Deloitte FAS, its subcontractors and their personnel from all claims, liabilities and expenses relating to the engagement, except to the extent finally judicially determined to have resulted primarily from Deloitte FAS' bad faith, intentional misconduct or recklessness. Mr. Lane, a principal at Deloitte FAS, assures Judge Lifland that Deloitte FAS is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). 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 Total and its affiliates filed for chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre-packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins, L.L.P. represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had $408,546,205 in total assets and $1,825,941,54627 in total liabilities. (Bally Total Fitness Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). BLOCKBUSTER INC: Weak Quarter Results Cue Moody's to Lower Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded Blockbuster Inc.'s corporate family rating to Caa1, its senior secured credit facilities to B3, and speculative grade liquidity rating to SGL-4. In addition, Moody's affirmed the senior subordinated notes rating at Caa2. The rating outlook remains negative. The downgrade is prompted by Blockbuster's very weak first and second quarter results which were significantly below Moody's expectations and resulted in the company needing to attain an amendment to the financial covenants contained in its senior secured bank credit facilities. The downgrade also reflects the significant challenge that the management team of Blockbuster faces as it seeks to quickly turn its dramatic year-over-year operating declines in order to avoid any further potential covenant violations. These ratings are downgraded: -- Corporate family rating to Caa1 from B3; -- Senior secured bank credit facilities to B3 (LGD3-42%) from B1 (LGD2-25%); -- Speculative grade liquidity rating to SGL-4 from SGL-3. These ratings are affirmed: -- Probability of default rating at B3; -- Senior subordinated notes at Caa2 (LGD6-92%). The Caa1 rating reflects Blockbuster's history of highly volatile and unpredictable operating performance as a result of the mismanagement of the launch of strategic initiatives, particularly Total Access and the No Late Fees programs. In addition to the need to address its poor execution, Blockbuster faces the ongoing challenge of all players in the video store industry of identifying ways of dealing with intense competition, price deflation and evolving technology. The corporate family rating reflects Moody's expectation that EBIT will likely be negative for the fiscal year 2007 even if the company is able to significantly turn around its operating declines during the third quarter. Moody's acknowledges that the new senior leadership of Blockbuster is in the early stages of implementing better execution of Total Access and creating an overall business strategy which will make the most of Blockbuster's clear leadership in the area of video and game rentals and preserve its high brand value. However, the better execution and cost saving initiatives need to come to fruition quickly as there is a high potential for further covenant violations unless the company significantly turns around its operating performance during the third quarter of 2007. As a result, the company faces the risk that its bank lenders may become unwilling to provide additional covenant relief, particularly if currently difficult market conditions persist. In Moody's opinion, the management team not only faces the challenge of stabilizing the business but also the likely need to find ways to most cost-effectively rationalize its leased store base. The downgrade to SGL-4 reflects Moody's expectation that Blockbuster's liquidity will be weak over the next four quarters. Moody's expects that the company will likely generate negative free cash flow over the next twelve months. The company should have sufficient availability under its $450 million revolver to be able to fund this deficit. However, Moody's believes that Blockbuster is at risk for further potential covenant violations as the management team of Blockbuster faces a significant challenge to quickly turn its dramatic year over year operating declines in order to avoid any further potential covenant violations. The company has very limited alternate sources of liquidity as the majority of the company's tangible and intangible assets are pledged to the senior secured credit facilities. In addition, the company recently monetized two of its assets, GameStation and Rhino Video, the proceeds of which were used to repay its term loan facilities, which leaves it with fewer assets to sell off. The negative outlook reflects the challenge management faces of dramatically turning the operating performance quickly to avoid any further potential covenant violations. Ratings could be further downgraded should the risk of a potential covenant violation come to fruition, should liquidity become constrained, or should the decline in operating performance not begin to show signs of improvement. Blockbuster Inc., headquartered in Dallas, Texas, is a leading global provider of in-home movie and game entertainment with about 8,000 stores throughout the Americas, Europe, Asia, and Australia. Total revenues for the fiscal year ended Dec. 31, 2006 were nearly $5.5 billion. BOSTON SCIENTIFIC: Retains Endosurgery Group, IPO Called -------------------------------------------------------- Boston Scientific Corporation provided an update on its plans to strengthen operating and financial performance as part of its overall strategy of restoring growth, increasing sustainable short- and long-term shareholder value, and continuing to build a broad, diversified medical device company. The company said it has completed its exploration of an initial public offering of a minority interest in its Endosurgery group and that the group will remain wholly owned by the company. On March 12, the company had announced it intended to explore the benefits that may be gained from operating the Endosurgery group as a separately traded public company that would become a majority-owned subsidiary of Boston Scientific. The company also said it plans a number of announcements in the coming weeks and months that will advance its previously disclosed objectives of selling non-strategic assets, divesting elements of its investment portfolio, and reducing expenses and headcount to be more in line with the company's revenue base. An expense and headcount restructuring plan is in development and will be communicated next quarter. The plan will be one of many critical actions designed to begin enhancing shareholder value. The company also reiterated its plans to be more selective in its business development activities. "Our decision to retain the Endosurgery group is the first in a series of steps we plan to take to advance our strategy of restoring growth, increasing shareholder value and continuing to build a broad, diversified company," said Jim Tobin, Boston Scientific President and Chief Executive Officer. "We believe we can create more shareholder value with the Endosurgery group remaining wholly owned by Boston Scientific, and we have concluded that an IPO would have reduced -- rather than enhanced -- Boston Scientific's shareholder value. The benefits of retaining the Endosurgery group clearly outweigh those offered by the sale of a minority interest." "The exploration process has increased visibility to the historic strengths and future potential of the Endosurgery group," added Mr. Tobin. "Endosurgery is a market leader that has delivered consistent double-digit growth and impressive performance year after year, and it is expected to generate more than $1.4 billion in revenue this year. It represents great value, and it provides important balance within our portfolio of businesses. We believe these considerable contributions are best maintained by keeping Endosurgery as a strategic asset of Boston Scientific." Mr. Tobin said the retention of the Endosurgery group should serve to strengthen the company's financial position going forward, particularly Endosurgery's strong gross profit margins and robust operating cash flows. Lower Ratings Expected The Wall Street Journal said on its Web site Friday that Boston Scientific's moved raised questions about whether the company's credit rating will face further downgrades. According to WSJ, credit analysts had regarded the IPO as critical to the company's ability to pay down the $9 billion in debt it took on to buy Guidant Corp. last year. About Boston Scientific Headquartered in Natick, Massachusetts, Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. The company has offices in Argentina, Chile, France, Germany, and Japan, among others. BOSTON SCIENTIFIC: S&P Pares Corporate Credit Rating to BB+ ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Boston Scientific Corp. to 'BB+' from 'BBB-' and placed the ratings on the company on CreditWatch with negative implications. S&P has withdrawn the commercial paper rating at the company's request. "The downgrade reflects the company's decision to retain full ownership of its endosurgery group," Standard & Poor's credit analyst Cheryl Richer explained. Although Boston Scientific still plans to sell nonstrategic assets, divest elements of its investment portfolio, and reduce expenses and headcount, debt reduction will proceed at a slower pace than previously anticipated. The rating will remain on CreditWatch while we review the implications of Boston Scientific's revised strategy on its business and financial risk. BROADHOLLOW FUNDING: Moody's Lowers $138 Mil. Notes Rating to Ba1 ----------------------------------------------------------------- Moody's downgraded the $138 million Variable Rate Subordinated Notes issued by Broadhollow to Ba1 from Baa2. The Notes are also on watch for possible further downgrade. Moody's also placed the secured liquidity notes, a form of extendible asset-backed commercial paper, issued by Broadhollow Funding LLC currently rated Prime-1 on watch for possible downgrade. The rating action follows public reports that the program sponsor, American Home Mortgage Investment Corp. has filed for bankruptcy under Chapter 11. The rating action is based primarily on uncertainty with respect to servicing or the disruptive effect of a transfer of servicing, the risk that the number of delinquent mortgages may increase, and uncertainty with respect to the price delinquent mortgages will receive upon sale. On Aug. 6, 2007, American Home Mortgage Investment Corp. filed for bankruptcy protection under Chapter 11. The program was unable to roll maturing commercial paper and has extended about $150 million of ABCP that came due on August 6, and will likely continue to extend ABCP as it reaches its expected maturity. Extended ABCP has a legal final maturity 120 days after the date of the extension. Extension in this case is to provide liquidity to the program and time to sell the mortgage collateral. All mortgage loans must be sold during this period to provide cash to repay ABCP by legal final maturity. As of Aug. 6, 2007, Broadhollow had about $1.536 billion of extendible commercial paper referred to as "SLNs" and $138 million of subordinated notes outstanding. This program was backed by about $1.7 billion of mortgage loans (at acquisition cost). About $45 million of these loans are 30 or more days delinquent. There is also a funded cash reserve account of $26 million. The available enhancement covers current delinquencies about five times, and provides a cushion against further deterioration in the portfolio. The SLNs have been placed on watch due to the uncertainty of the length of the liquidation period and the quality of the servicing during that time. Swaps provided by ABN AMRO (Aa2/P-1/B-), Bank of America (Aaa/P- 1/A), Calyon (Aa1/P-1/C+) and Citibank (Aaa/P-1/A) cover interest rate and non-credit related market value risk on the mortgage loans. They cover a notional amount up to the principal value of the SLNs and subordinated notes. There is full coverage of market value risk on performing loans, but only the non-credit portion of market value risk on loans more than 30 days delinquent. The subordinated notes have been downgraded to reflect the fact that their repayment in full depends on the amount of delinquent collateral and the value obtained for it on sale. In addition to the concerns over the portion of the portfolio that may become delinquent, market prices are currently quite volatile and likely below prior expectations. The collateral in the Broadhollow portfolio consists of Agency conforming, jumbo and Alt-A mortgage loans of recent origination. The collateral is performing well within expectations with respect to repayment status. The program's current difficulties are largely driven by liquidity and market price volatility issues rather than the fundamental quality of the mortgage loans. Moody's will continue to review Broadhollow as more information becomes available. Complete rating action: -- Series 2004-1 Secured Liquidity Notes, Prime-1 on watch for possible downgrade -- Series 2004-A and Series 2005-A Variable Rate Subordinated Notes to Ba1 on watch for possible further downgrade from Baa2 BUCKEYE TECHNOLOGIES: Earns $15.9 Million in Quarter Ended June 30 ------------------------------------------------------------------ Buckeye Technologies Inc. earned $15.9 million after tax in the quarter ended June 30, 2007. The company's results included a $2 million pre-tax benefit from a water conservation partnership payment, a $2.1 million pre-tax benefit from reversal of accrued interest related to cancellation of a contingent note owed to Stac-Pac Technologies Inc., and a $3.3 million tax benefit from adjustments relating to federal and state valuation allowances and credits. During the same quarter of the prior year the company earned $1.2 million after tax, which included a $800,000 tax benefit related to a reduction in Canadian federal and provincial tax rates and restructuring and impairment expenses of $0.5 million after tax primarily associated with equipment sales at the closed operations in Lumberton, North Carolina and Glueckstadt, Germany. During the 2007 fiscal year, the company earned $30.1 million after tax, which included the benefit of the $5.7 million after tax and restructuring charges of $800,000 after tax. This compares to fiscal year 2006 earnings of $2 million after tax, including restructuring and impairment expenses of $3.6 million after tax. Net sales for the April-June quarter were $200 million, 3.5% above the $193 million achieved in the same quarter of the prior year. Net sales for fiscal year 2007 were $769 million, 5.6% above the $728 million achieved in the prior year. Chairman and chief executive officer John B. Crowe said, "We are pleased with the improved results, both for the quarter and fiscal year. We credit the improved earnings to strong demand across all of our businesses and to the combination of higher prices, better mix and cost reductions. Reduced costs and higher volumes at our Americana plant also contributed to improved earnings, both for the quarter and total year. Our Nonwoven materials segment sales and earnings were strong for the total year, but even though sales were higher, operating income for the quarter was down compared to the January - March quarter due to higher corporate SRA allocations and special maintenance items. We continue to generate strong cash flow and we lowered our debt during the year by $76 million (from $521 million to $445 million), which includes the cancellation of the $5.0 million Stac-Pac note." Mr. Crowe went on to say, "With the anticipated improved fourth quarter results, we provided an earnings alert on July 25. [On Aug. 1, 2007], we [released] our results ahead of schedule and we will discuss fourth quarter and annual results at our conference call scheduled for 10:30 a.m. Eastern, Wednesday, Aug. 8, 2007, following a review of our results with the Board of Directors at the previously scheduled August 7 meeting. We appreciate your understanding for the delay between today's announcement and our conference call." About Buckeye Technologies Headquartered in Memphis, Tennessee, Buckeye Technologies Inc. (NYSE:BKI) -- http://www.bkitech.com/-- manufactures and markets specialty fibers and nonwoven materials. The company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. * * * As reported in the Troubled Company Reporter on June 19, 2007, Moody's upgraded Buckeye Technologies Inc.'s corporate family rating to B1 from B2 and maintained a stable outlook. All other ratings were upgraded by one notch while the unsecured notes were affirmed at B2. CA INC: Earns $129 Million in First Quarter Ended June 30 --------------------------------------------------------- CA Inc. recorded net income of $129 million for the first quarter ended June 30, 2007, compared to $35 million in the prior year period. Total revenue for the first quarter was $1 billion, an increase of 8%,compared to the $949 million reported in the comparable prior year period. Aside from the gains attributed to currency, the increase in revenue primarily came from growth in subscription revenue and professional services. The increase was partially offset by decreases in software fees and other revenue, and revenue from maintenance and financing fees as CA continues to transition from its prior business model. Liquidity and Capital Resources The company's cash balances, including cash equivalents and marketable securities, are held in numerous locations throughout the world, with about 70% residing outside the United States at June 30, 2007. Cash and cash equivalents totaled $1.73 billion at June 30, 2007, representing a decline of $546 million from the March 31, 2007 balance of $2.28 billion. The primary reason for the decline was the $500 million Accelerated Share Repurchase program executed in June 2007. For the first quarter of fiscal year 2008, CA reported negative cash flow from operations of $13 million, compared to negative $46 million in cash flow from operations in the first quarter of fiscal year 2007. As of June 30, 2007, the company had total assets of $10.1 billion, total liabilities of $6.7 billion, and total stockholders' equity of $3.3 billion. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221c Accelerated Share Repurchase Program The company has repurchased about 16.9 million common shares, or 3% of its outstanding common shares, at a cost of about $435 million. The repurchase was executed under an accelerated share repurchase agreement with a third-party financial institution and was funded with existing cash. The company is authorized to repurchase up to $500 million in common shares under the ASR agreement. The ASR is part of the company's previously announced $2 billion share repurchase plan. The ASR provides CA with immediate delivery of the common shares. The third-party financial institution is expected to purchase an equivalent number of common shares in the open market during the term of agreement. The initial price of the accelerated share repurchase is subject to an adjustment based on the volume weighted average price of CA's common shares during this period. As a result, the company may receive additional common shares at the termination of the program. The program is expected to terminate on or before Dec. 6, 2007. The company does not plan to make additional share repurchases during this period. Outlook for Fiscal Year 2008 The company updated its fiscal 2008 annual outlook: -- total revenue in the range of $4 billion to $4.1 billion or 3% to 4% growth in constant currency, as previously stated; -- an increase in the high end of the range for earnings per share from continuing operations from $0.75 to $0.79 to $0.75 to $0.81 per share; and -- full-year cash flow from operations in the range of $1 billion to $1.1 billion, as previously stated. The company anticipates about 514 million actual shares outstanding at fiscal year-end and a weighted average diluted share count of about 543 million shares for the fiscal year. About CA Inc. Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management ofenterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries. In Asia-Pacific, the company has operations in Indonesia, Australia, China, Japan, Hong Kong, India, Philippines and Thailand. * * * As reported in the Troubled Company Reporter on June 6, 2007, Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc. At the same time, S&P revised the outlook to stable from negative. CHESAPEAKE ENERGY: Earns $518.1 Million in 2007 Second Quarter -------------------------------------------------------------- Chesapeake Energy Corporation generated net income of $518.1 million, operating cash flow of $1.1 billion, and total revenue of $2.1 billion and production of 170 billion cubic feet of natural gas equivalent for the second quarter ended June 30, 2007. The company had net income of $359.9 million and total revenue of $1.6 billion for the second quarter ended June 30, 2006. For the first half of 2007, the company generated net income of $776.1 million on total revenue of $3.7 billion, as compared with net income of $983.6 million on total revenue of $3.5 billion for the first half of 2006. As of June 30, 2007, the company posted $27.7 billion in total assets, $16.1 billion in total liabilities, and $11.6 billion in total stockholders' equity. The company's June 30 balance sheet showed strained liquidity with total current assets of $1.3 billion available to pay total current liabilities of $2.2 billion. Management's Comments Aubrey K. McClendon, Chesapeake's chief executive officer, commented, "We are pleased to report outstanding financial and operational results for the 2007 second quarter. We are particularly proud of our success through the drillbit that has allowed the company to exceed its mid-year production and reserve growth expectations and become the nation's largest independent producer of natural gas and third largest overall. Our sequential quarter and year-over-year production growth levels of 161 mmcfe and 300 mmcfe per day are at the top of the U.S. exploration and production industry. Notably, these increases equal or exceed the total production of many small-cap high-growth companies that trade at significant valuation premiums and have enterprise values ranging from $5 to 10 billion. "The benefits of Chesapeake's strategic shift from resource capture to resource conversion are beginning to accelerate and we look forward to generating further strong growth in the second half of 2007 and in 2008. Through the industry's most active drilling program, we plan to increase our average daily production rate 18-22% in 2007 and 14-18% in 2008 and we expect to exceed 10.5 tcfe of proved reserves by year-end 2007 and approach 12 tcfe by year-end 2008. "The Fort Worth Barnett Shale play has been the largest contributor to the company's recent success and we are excited about the substantial competitive advantages we have created in the 'sweet spot' of Tarrant, Johnson and western Dallas counties. In these areas, our leasehold position, surface drilling locations, land services agreements and gathering and water handling infrastructure are benefiting from rapidly developing economies of scale. We are also pleased to have recently expanded our position in the increasingly significant Deep Haley play in West Texas where the combined expertise of Chesapeake and Anadarko, two of the best deep gas explorers in the industry, should help further develop the play. "Also in the 2007 second quarter, the company delivered attractive profit margins that were enhanced by the company's well-executed hedging strategy and we look forward to delivering strong risk- adjusted returns for many quarters to come. Our focused business strategy, value-added growth, tremendous inventory of undrilled locations and valuable hedge positions continue to clearly differentiate Chesapeake in the industry." About Chesapeake Energy Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation (NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas in the U.S. The company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the U.S. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service assigned a Ba2 rating to Chesapeake Energy's pending $1 billion of 30-year contingent convertible senior notes and affirmed its existing Ba2 corporate family, Ba2 probability of default, Ba2 senior unsecured note rate, SGL-2 speculative grade liquidity, and Baa3 secured hedging facility ratings. Net note proceeds would retire a like amount of CHK's roughly $1.6 billion of existing secured bank debt. The Ba2 note rating is assigned under Moody's Loss Given Default notching methodology. The rating outlook is stable. CHIQUITA BRANDS: Earns $8.6 Million in 2007 Second Quarter ---------------------------------------------------------- Chiquita Brands International Inc. released financial and operating results for the second quarter 2007. Second quarter net sales increased by 2 percent year-over-year to $1.3 billion, and the company reported net income of $8.6 million including a charge of $3 million related to a settlement of U.S. antitrust litigation. The company reported net income of $23 million in the year-ago period. Chiquita's balance sheet as of June 30, 2007, showed total assets of $2,712,229,000, total liabilities of $1,829,518,000, and total shareholders' equity of $882,711,000. "We were not satisfied with our second quarter results," said Fernando Aguirre, chairman and chief executive officer. "We are taking aggressive actions to address continuing challenging market conditions and expect to reverse the recent trend and begin delivering modest year-over-year improvements in operating results starting in the third quarter." Mr. Aguirre continued, "We remain confident in our strategy to generate sustainable, profitable growth by delivering innovative higher-margin products and building a high-performance organization. We were pleased to complete the previously announced strategic shipping agreement, during the quarter and use a significant portion of the proceeds from that transaction to pay down debt. We will continue to take actions to strengthen our balance sheet, improve our risk profile, focus our efforts on market activities, and diversify our company by product, channel and geography." Chiquita repaid more than $200 million of debt during the second quarter, primarily from proceeds from the sale of its 12 refrigerated cargo vessels. As a result, the company's total debt at June 30, 2007, was $857 million, compared to $1.061 billion at March 31, 2007. The company expects to continue paying down debt until it reaches its target debt-to-capital ratio of 40 percent, compared to 49 percent at June 30, 2007. About Chiquita Brands Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Colombia, Panama and the Philippines. CHIQUITA BRANDS: S&P Lowers Corporate Credit Rating to B- from B ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Cincinnati, Ohio-based Chiquita Brands International Inc., to 'B-' from 'B', and removed the rating from CreditWatch with negative implications where it was placed 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. "The downgrade follows Chiquita's recent second-quarter earnings release and reflects continued deterioration in operating performance and credit measures, and weak covenant cushion," Standard & Poor's credit analyst Alison Sullivan said. At the same time, Standard & Poor's raised the ratings on Chiquita's $200 million revolving credit facility to 'B+', two notches above the corporate credit rating, removed the ratings from CreditWatch negative, and revised the recovery rating to '1', indicating expectations of very high recovery in the event of a payment default, from '2'. The improved recovery on the revolver reflects repayment of the term loan B ($24 million outstanding as of March 31, 2007), and $90 million of mortgage debt related to shipping assets that were recently sold. Also, Standard & Poor's lowered the ratings on Chiquita's $368 million term loan C to 'B', one notch above the corporate credit rating, removed the ratings from CreditWatch negative, and revised the recovery rating to '2', indicating expectations of substantial recovery in the event of a payment default, from '1'. In addition, Standard & Poor's lowered the ratings on the senior unsecured notes to 'CCC', two notches below the corporate credit rating, and removed those ratings from CreditWatch negative. The outlook is negative. Total debt outstanding at the company was about $857 million as of June 30, 2007. CHRYSLER AUTOMOTIVE: Moody's Affirms B3 Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 (LGD4, 66) rating of the company's $2 billion senior secured, second lien term loan in connection with the closing of Daimler Chrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. In addition, as a result of a revision to Chrysler's $10 billion senior secured, first-lien term loan, the rating agency withdrew the B1 (LGD3, 33%) rating that had been assigned to this facility. The revised $10 billion senior secured term loan currently consists of a $5 billion, senior secured, first lien/first-out term loan, and a $5 billion, senior secured, first lien/second-out term loan. Moody's assigned a Ba3 (LGD2,19) to the first-out tranche and a B3 (LGD3, 47) to the second-out tranche. Chrysler's Probability of Default Rating remains B3, and the rating outlook for all ratings remains Stable. The revision to Chrysler's $10 billion term loan does not change the total amount of debt in the company's capital structure, but it does afford a structural priority to the first-out tranch due to the first-loss position of the second-out tranche. As a result, the first-out tranche is rated three notches higher than the second-out tranche. Chrysler's B3 CFR reflects the company's vulnerability to the broad challenges confronting the entire domestic OEM sector. These challenges include high health care costs, restrictive union work rules, declining market share, the shift in consumer preference away from large trucks and SUVs, and the need to establish better net pricing and profitability in car and crossover vehicle segments. In addition, based on comparisons with other domestic OEMs and the application of the rating factors in Moody's Global Automotive Methodology, the rating agency expects that Chrysler Automotive's operating performance, return measures, cash generation and other key credit metrics will be broadly consistent with a B3 CFR. Chrysler Automotive LLC, is headquartered in Auburn Hills, Michigan. COMPLIANCE CORP: Case Summary & Eight Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Compliance Corporation dba Gresham Corner 2510 Gresham Road Atlanta, GA 30316 Bankruptcy Case No.: 07-72239 Chapter 11 Petition Date: August 3, 2007 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Paul Reece Marr, Esq. 300 Galleria Parkway Northwest, Suite 960 Atlanta, GA 30339 Tel:(770) 984-2255 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ B.P. Products North America, loan $104,870 Inc. U.S. Convenience Operations 1323 Bond Street, Suite 179 Naperville, IL 60563 Bank of America credit line $99,050 P.O. Box 21848 Greensboro, NC 27420-1848 Michael E. Keller, Esq. claim under $24,118 for Cardtronics, L.P. A.T.M. Services P.O. Box 15184 Agreement Wilmington, DE 19850-5148 Bank of America credit card account $23,557 Wilmington, DE Sam's Club credit card account $21,808 DeKalb County Tax real estate ad $7,542 Commissioner valorem tax personal property $2,218 tax Eleni Tesfaye workers' $6,000 compensation claim Alonzo and Rhonda property damage $1,142 McAlpine claim CPI INTERNATIONAL: Inks New $160 Million Credit Facility -------------------------------------------------------- CPI International Inc. and its subsidiary Communications & Power Industries Inc. entered into a new senior credit facility in the aggregate principal amount of $160 million, consisting of a term loan facility in the amount of $100 million and a revolving credit facility in the amount of $60 million. The initial $100 million borrowing under the credit facility is being used principally to satisfy outstanding amounts under CPI's prior senior credit facility and to repurchase and redeem $58 million aggregate principal amount of CPI International's floating rate senior notes due 2015. CPI International has previously disclosed extension of the period of its cash tender offer for the senior notes, until 8:00 a.m., New York City time, Wednesday, Aug. 1, 2007. An aggregate of $38,175,000 principal amount of notes were tendered prior to the expiration of the tender offer. With the entry into the new senior credit facility, the conditions to the tender offer have been satisfied, and CPI International plans to complete the purchase of the tendered notes on Aug. 2, 2007. Tendering holders will be paid an aggregate of about $39.4 million, representing $1,032.50 per $1,000.00 principal amount of notes tendered, plus accrued interest up to, but not including, the date of purchase. In addition, CPI International has instructed the trustee for the notes to issue a notice of redemption for $19,825,000 in aggregate principal amount of notes at a price of $1,030.00 per $1,000.00 principal amount, plus accrued and unpaid interest through the Sept. 5, 2007, redemption date. After giving effect to the purchase and redemption of notes, CPI International will have $22 million aggregate principal amount of notes outstanding. CPI International estimates that the new credit facility and the repurchase and redemption of the notes will result in annual interest savings of about $2 million for the twelve months following the Sept. 5, 2007, redemption of the notes. In addition, CPI International expects to incur about $5 million in one-time, non-cash costs associated with the write-off of deferred debt issue costs and about $2 million in redemption premiums and other expenses associated with retiring and repurchasing the $58 million of notes. About CPI International Inc. CPI International Inc. (Nasdaq: CPII) -- http://www.cpii.com/-- headquartered in Palo Alto, California, is the parent company of Communications & Power Industries Inc., provides microwave, radio frequency, power and control solutions for critical defense, communications, medical, scientific and other applications. Its wholly-owned subsidiary, Communications & Power Industries, Inc. develops, manufactures and distributes products used to generate, amplify and transmit high-power/high-frequency microwave and radio frequency signals and/or provide power and control for various applications. * * * As reported in the Troubled Company Reporter on July 26, 2007, Moody's Investors Service upgraded the Corporate Family Rating for CPI International, Inc. and its principal operating subsidiary, Communications & Power Industries Inc. CRESCENT REAL: Shareholders Approve Morgan Stanley Merger Deal -------------------------------------------------------------- Crescent Real Estate Equities Company disclosed the completion of the proposed acquisition of the company by the affiliates of Morgan Stanley Real Estate. The transaction was approved at a special meeting of the shareholders on Aug. 1, 2007. Under the terms of the transaction, Crescent shareholders will receive $22.80 in cash for each CEI share held. “We are pleased to have completed our transaction with Morgan Stanley Real Estate, a transaction that was embraced by our board and management well as our shareholders, John C. Goff, Crescent's vice-chairman and chief executive officer, said. “We are confident that the transition process will be seamless for our customers, employees, partners and vendors.” Under the terms of the merger agreement, Crescent was merged into an affiliate of Morgan Stanley Real Estate, the separate legal existence of Crescent ceased, and the affiliate of Morgan Stanley Real Estate continues as the surviving entity. Morgan Stanley Deal Crescent Real entered into a definitive agreement in which funds managed by Morgan Stanley Real Estate will acquire Crescent in an all cash transaction for $22.80 per share, and the assumption of liabilities for total consideration of approximately $6.5 billion. The transaction was unanimously approved by the company's board of trust managers, which will recommend that the common shareholders approve the transaction. Mr. Richard E. Rainwater has entered into a voting agreement whereby he has agreed to vote in favor of the transaction. Completion of the transaction, which is expected to occur by the end of the third quarter of 2007, is subject to approval by the company's common shareholders, well as to certain other customary closing conditions. The exact timing of the closing of the transaction is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission and other governmental authorities. Greenhill & Co., LLC acted as the financial advisor to Crescent with Pillsbury Winthrop Shaw Pittman LLP acting as legal counsel. Morgan Stanley acted as financial advisor to Morgan Stanley Real Estate with Goodwin Procter LLP and Jones Day acting as legal counsel. About Crescent Real Headquartered in Fort Worth, Texas, Crescent Real Estate Equities Company (NYSE: CEI) -- http://www.crescent.com/-- is a real estate investment trust. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 68 premier office buildings totaling 27 million square feet located in select markets across the United States with major concentrations in Dallas, Houston, Denver, Miami, and Las Vegas. Crescent also holds investments in resort residential developments in locations such as Scottsdale, Arizona, Vail Valley, Colorado, and Lake Tahoe, California; and in the wellness lifestyle leader, Canyon Ranch(R). * * * As reported in the Troubled Company Reporter on May 31, 2007, Standard & Poor's Ratings Services placed its ratings on Crescent Real Estate Equities Co. and Crescent Real Estate Equities L.P. on CreditWatch with negative implications. These ratings were placed on Creditwatch: corporate credit from BB- (Stable) to BB- (Watch Negative); senior unsecured from B to B (Watch Negative); and preferred stock from B- to B- (Watch Negative). CSFB HOME: Moody's Downgrades Ratings of 33 Tranches ---------------------------------------------------- Moody's Investors Service downgraded the ratings of 33 tranches issued by CSFB Home Equity Asset Trust in 2002 or 2003. The collateral backing each downgraded tranche consists primarily of first-lien, subprime, fixed- and adjustable-rate mortgage loans. Each deal being downgrade has experienced an increasing proportion of severely delinquent loans while the amount of available credit enhancement has continuously reduced from losses. The timing of losses coupled with passing of performance triggers has caused the protection available to the subordinate bonds to be severely diminished. Complete rating actions are: Issuer: Credit Suisse First Boston Mortgage Acceptance Corp. Series 2002-5 -- Cl. B-1, Downgraded to Caa1 from B1 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-1 -- Cl. M-2, Downgraded to Baa2 from A2 -- Cl. B-1, Downgraded to Caa3 from B3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-2 -- Cl. M-2, Downgraded to Baa1 from A2 -- Cl. B-1, Downgraded to Caa2 from B2 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-3 -- Cl. M-2, Downgraded to Ba1 from A2 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-4 -- Cl. B-1, Downgraded to Caa1 from Ba3 -- Cl. M-2, Downgraded to Baa1 from A2 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-1 -- Cl. B-1, Downgraded to Ba3 from Ba1 -- Cl. B-2, Downgraded to Caa1 from B2 -- Cl. B-3, Downgraded to C from Caa3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-2 -- Cl. M-3, Downgraded to Baa3 from A2 -- Cl. B-1, Downgraded to Caa1 from B2 -- Cl. B-2, Downgraded to C from Caa3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-3 -- Cl. M-3, Downgraded to Baa3 from A2 -- Cl. B-1, Downgraded to B3 from Ba2 -- Cl. B-2, Downgraded to Ca from Caa2 -- Cl. B-3, Downgraded to C from Caa3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-4 -- Cl. B-2, Downgraded to Ba3 from Ba1 -- Cl. B-3, Downgraded to B3 from B1 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-5 -- Cl. M-3, Downgraded to Baa1 from A3 -- Cl. B-1, Downgraded to B3 from Ba2 -- Cl. B-2, Downgraded to Caa2 from B2 -- Cl. B-3, Downgraded to C from Caa3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-6 -- Cl. M-3, Downgraded to Baa2 from A3 -- Cl. B-1, Downgraded to B1 from Baa2 -- Cl. B-2, Downgraded to Caa1 from B1 -- Cl. B-3, Downgraded to Ca from Caa2 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-7 -- Cl. B-1, Downgraded to Ba1 from Baa1 -- Cl. B-2, Downgraded to B3 from Ba2 -- Cl. B-3, Downgraded to Caa3 from B3 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-8 -- Cl. B-2, Downgraded to Ba1 from Baa2 -- Cl. B-3, Downgraded to B3 from Ba3 CWALT INC: Fitch Rates Classes B-3 and B-4 Certs. at Low-B ---------------------------------------------------------- Fitch Ratings has affirmed four classes and placed two classes on Rating Watch Negative (RWN) from CWALT, Inc.'s (CWALT) alternative loan trust series 2006-18CB mortgage pass-through certificates: -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 rated 'BB', placed on Rating Watch Negative; -- Class B-4 rated 'B', placed on Rating Watch Negative. The certificates are collateralized primarily by conventional, fully amortizing, 15- to 30-year fixed-rate, mortgage loans either originated under Countrywide Home Loans, Inc. (CHL)'s Standard Underwriting Guidelines extended to Prime borrowers or Expanded Underwriting Guidelines extended to Alt-A borrowers secured by first liens on one-to four-family residential properties. Mortgage loans underwritten pursuant to the Expanded Underwriting Guidelines may have higher loan-to-value ratios, higher loan amounts, higher debt-to-income ratios and different documentation requirements than those associated with the Standard Underwriting Guidelines. These affirmations, representing approximately $901.2 million of outstanding principal, reflect adequate relationships of credit enhancement to future loss expectations. The designations of Rating Watch Negative on the B-3 and B-4 classes were due to early trends in the relationship between serious delinquency and CE and affect approximately $7.3 million in outstanding certificates. The trust currently has 60+ delinquency (inclusive of foreclosure and REO) percentage of 1.75%. The CE of the most subordinate class (the non-rated B5) is 0.28%. There has been $25,361 of losses to date, as many of the non-performing loans have not yet begun to liquidate. CWALT purchased these mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The loans are being serviced by Countrywide Home Loans Servicing LP, a direct wholly owned subsidiary of CHL. Countrywide Servicing is currently rated 'RPS1' for primary servicing and 'RMS1-' for master servicing by Fitch. DELUXE CORPORATION: Earns $36 Million in Second Quarter 2007 ------------------------------------------------------------ Deluxe Corporation reported second quarter 2007 net income of $36 million. The company had a net loss of $2.4 million for the second quarter of 2006. Net income improvement of $38.4 million due to last year's impairment charge and improved operating performance. Revenue for the quarter was $399.9 million, compared to $403 million during the second quarter of 2006. Small Business Services revenue was $3.1 million lower due to the first quarter sale of the industrial packaging product line, which accounted for $51 million in annual revenue in 2006. Financial Services revenue increased $600,000 while Direct Checks revenue decreased $600,000. Gross margin improved to 64.3% of revenue compared to 62.4% in 2006. Reductions in manufacturing costs, 2006 facility closing costs and lower material costs related to product mix contributed to the increase. SG&A expense decreased $7.2 million compared to the second quarter of 2006. The decrease resulted from cost saving initiatives, primarily in sales, marketing and information technology, and from lower amortization. These benefits were partly offset by higher accruals for performance-based employee compensation. As a percent of revenue, SG&A decreased to 47.4% from 48.8% in 2006. Operating income was $67.5 million, compared to $9.8 million in the second quarter of 2006. Operating margin was 16.9% of revenue compared to 2.4% in the prior year. Last year's results included the previously mentioned asset impairment loss. Additionally, the operating margin increase was driven by improved gross margin and lower SG&A expenses. The company listed total assets of $1.4 billion, total liabilities of $1.4 billion, and total stockholders' deficit of $400,000 at June 30, 2007. "We are excited to report another quarter of strong financial performance as we maintain momentum with our transformation,” said Lee Schram, chief executive officer of Deluxe. "Revenue in Small Business Services continued to grow, after adjusting for the sale of the industrial packaging business in January, and our personal check businesses were encouragingly flat year over year. On the cost side, we made good progress with our initiatives, especially in manufacturing and information technology, and are on track to achieve the upper end of our cost reduction target for the year.” Business Outlook The company stated that for the third quarter of 2007, revenue is expected to be between $386 million and $394 million. For the full year, revenue is expected to be about $1.6 billion. The company also stated that it expects operating cash flows to be between $235 million and $250 million in 2007. "We are well on our way executing against our transformational plan," Mr. Schram stated. "We completed a successful note offering during the second quarter which positions us well to repay our October note maturity. We still have a lot of work to do, but our objective is to continue to execute each day while delivering on our improved commitments." About Deluxe Corporation Headquartered in St. Paul, Minnesota, Deluxe Corporation (NYSE: DLX) -- http://www.deluxe.com/-- through its industry-leading businesses and brands, helps financial institutions and small businesses better manage, promote, and grow their businesses. The company uses direct marketing, distributors, and a North American sales force to provide a wide range of customized products and services: personalized printed items (checks, forms, business cards, stationery, greeting cards, labels, and retail packaging supplies), promotional products and merchandising materials, fraud prevention services, and customer retention programs. The company also sells personalized checks and accessories directly to consumers. * * * As reported in the Troubled Company Reporter on Aug. 1, 2007, Standard & Poor's Ratings Services revised its rating outlook on Deluxe Corp. to stable from negative. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. The outlook revision reflects stabilizing operating trends within Deluxe's small business service and check printing segments, and adequate flexibility in the company's financial profile to sustain credit measures in line with the current rating over the intermediate term. "Deluxe's recent operating performance is reflective of management's ability to execute its cost-saving initiatives in a context of declining industry trends," said credit analyst Ariel Silverberg. DOMINO'S PIZZA: June 17 Balance Sheet Upside-Down by $1.4 Billion ----------------------------------------------------------------- Domino's Pizza Inc.'s balance sheet as of June 17, 2007, showed total assets of $474.1 million, total liabilities of $1.9 billion, and total stockholders' deficit of $1.4 billion. The company had working capital of $86.5 million and cash and cash equivalents of $93.3 million at June 17, 2007. As of June 17, 2007, the company had $1.7 billion of debt, of which $300,000 was classified as a current liability. Additionally, as of June 17, 2007, the company had borrowings of $114.3 million available under its $150 million revolving credit facility, net of letters of credit issued of $30.7 million and $5 million of borrowings on the variable funding notes. The letters of credit are primarily related to the company's casualty insurance programs and distribution center leases. Second Quarter Results Revenues were $340.3 million, up 3.8% for the second quarter of 2007, due primarily to an increase in domestic distribution revenues, driven by higher food prices, primarily cheese, and to a lesser extent, higher domestic company-owned store and domestic franchise revenues, driven by increases in same store sales. The company had revenues of $327.7 million for the second quarter of 2006. Net income was $2.3 million, down 90.5% for the second quarter, driven primarily by the impact of the company's recapitalization, offset in part by domestic same store sales growth and continued strong performance in international operations. The company had net income of $24.5 million for the second quarter of 2006. A full-text copy of the company's report is available for free at: http://researcharchives.com/t/s?2226 David A. Brandon, Domino's chairman and chief executive officer, said: "We are pleased to report the sales momentum we created in our domestic system during the first quarter continued into the second quarter. The marketing and operational initiatives we implemented in our Team USA stores have been duplicated by many of our franchised stores over the past few quarters, and have helped drive the sales gains we are reporting today. And, we continue to benefit from the strong store growth and same store sales growth we have come to expect from our International division." Mr. Brandon continued: "Our positive sales momentum is particularly important at this time, as we are currently experiencing a challenging cost environment with labor, commodity and energy prices all rising in unison, putting a short-term strain on store margins. Although we have nearly 47-years of experience successfully managing through commodity pricing cycles and fluctuating cost pressures, the current situation is unique due to the number of significant cost increases we are incurring at one time. We believe these conditions will lead to a material price increase in the pizza category." About Domino's Pizza Headquartered in Ann Arbor, Michigan, Domino's Pizza Inc. (NYSE: DPZ) -- http://www.dominos.com/-- through its primarily franchised system, operates a network of 8,190 franchised and company-owned stores in the U.S. and more than 50 countries. Founded in 1960, the company has more than 500 stores in Mexico. The Domino's Pizza(R) brand, named a Megabrand by Advertising Age magazine, had global retail sales of nearly $5 billion in 2005, comprised of $3.3 billion domestically and $1.7 billion internationally. DYNEGY INC: Closes Sale of CoGen Lyondell to EnergyCo for $470MM ---------------------------------------------------------------- Dynegy Inc. completed the sale of the CoGen Lyondell Power Generation Facility in Channelview, Texas, to EnergyCo, a joint venture between PNM Resources and a subsidiary of Cascade Investment L.L.C., for about $470 million in cash. In addition, Dynegy's sale of the facility is expected to result in a collateral reduction of about $20 million in letters of credit and a return of working capital. Dynegy expects to record a gain on the sale of CoGen Lyondell in the third quarter 2007. The CoGen Lyondell facility, 534-megawatt summer capacity rating, is a natural gas-fired, combined-cycle plant that began commercial operation in 1985. The purchase price equates to approximately $880 per kilowatt-hour based on the plant's summer capacity rating. In anticipation of the sale of CoGen Lyondell to EnergyCo, the name of the facility has been changed to Altura Cogen LLC. EnergyCo will operate the facility under that name. The transaction received the requisite regulatory approvals, as well as meeting the conditions required by the Hart-Scott-Rodino Antitrust Improvements Act. J.P. Morgan Securities Inc. acted as Dynegy's financial advisor on the transaction. About EnergyCo EnergyCo is a joint venture between PNM Resources (NYSE: PNM) -- http://www.pnmresources.com/-- and a subsidiary of Cascade Investment L.L.C. -- http://www.cascadeinvestment.com/ PNM Resources was temporarily called EnergyCo. About Dynegy Inc. Headquartered in Houston, Texas, Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The company's power generation portfolio consists of more than 12,800 megawatts of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. * * * As reported in the Troubled Company Reporter on May 18, 2007, Moody's Investors Service affirmed the ratings of Dynegy Holdings, Inc., including the company's Corporate Family Rating at B1, its senior unsecured rating at B2, its Bank Loan Rating at Ba1, and its Speculative Grade Liquidity Rating at SGL-3. Moody's also assigned a B2 rating to the company's planned issuance of $1.1 billion in senior unsecured notes, and upgraded DHI's second lien notes to Ba1 from Ba2. EMPIRE RESORTS: June 30 Balance Sheet Upside-Down by $11.9 Million ------------------------------------------------------------------ Empire Resorts Inc. had total assets of $70.8 million, total liabilities of $82.7 million, and total stockholders' deficit of $11.9 million at June 30, 2007. For the three months ended June 30, 2007, the company had net loss of $3.3 million on total revenues of $20.5 million, as compared with net loss of $386,000 on total revenues of $26.6 million for the three months ended June 30, 2006. For the six months ended June 30, 2007, the company had net loss of $7.5 million on total revenues of $39.5 million, as compared with net loss of $2.2 million on total revenues of $49.8 million for the six months ended June 30, 2006. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?2221 Headquartered in Monticello, New York, Empire Resorts Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the 0Monticello Gaming & Raceway and is involved in the development of other legal gaming venues. Empire's facility now features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills and beyond. ENDOCARE INC: Posts $2.3 Million Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ Endocare Inc. reported Tuesday last week its financial results for the quarter ended June 30, 2007. Net loss for the second quarter of 2007 was $2.3 million, compared to a net loss of $708,000 in the second quarter of 2006 and a net loss of $3.3 million in the first quarter of 2007. The 2006 second quarter included the $870,000 payroll tax expense reversal as well as a $1.9 million reduction of interest expense related to the change in the fair market value of common stock warrants issued in connection with the company's March 2005 private placement. The company reported increased quarterly revenues due primarily to the continuing increase in the number of domestic cryoablation procedures, and higher gross margin in the second quarter ended June 30, 2007. The estimated number of domestic cryoablation procedures performed in the second quarter of 2007 grew 26 percent to 2,435 from 1,938 in the second quarter of 2006. Total revenues for the second quarter of 2007 were $7.9 million, compared to $6.9 million in the second quarter of 2006 and $7.5 million in the first quarter of 2007. Endocare chief executive officer Craig T. Davenport commented, "In the second quarter we continued to improve our operating performance as demonstrated through our financial metrics. Namely, total revenues increased 14.4 percent over the second quarter of 2006, gross margin as a percent of total revenues increased for the tenth consecutive quarter to 65.7 percent and total operating expenses decreased by $643,000 from the first quarter of 2007. The benefits of our advanced cryoablation technologies are being recognized by a growing number of physicians, and the minimally invasive nature of cryoablation continues to attract patient interest in the procedure. As a result, cryoablation is gaining increasing acceptance as an effective treatment not only for prostate cancer but also as a treatment for renal and other cancers." Gross margin as a percent of total revenues in the second quarter of 2007 increased to 65.7% compared to 52.9% in the second quarter of 2006. Operating expenses in the second quarter of 2007 were $7.6 million, compared to $6.5 million in the second quarter of 2006, a period that included an $870,000 expense reversal to operating expenses that resulted from reducing a payroll tax liability for which the company determined it no longer bore responsibility. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), which excludes non-cash stock compensation expense of $824,000, was a loss of $1.1 million for the second quarter of 2007, compared to a loss of $1.3 million for the second quarter of 2006 and a loss of $2.1 million in the 2007 first quarter. Chief financial officer Michael Rodriguez reported cash and cash equivalents of $7.2 million, including $7.0 million from a private placement of newly issued common shares with Frazier Healthcare Ventures, total assets of $21.9 million, and total stockholders' equity of $10.9 million as of June 30, 2007. The company also had approximately $14.4 million in additional capital available under its Common Stock Purchase Agreement with Fusion Capital Fund II LLC as well as amounts available on its credit facility with Silicon Valley Bank. At June 30, 2007, the company's consolidated balance sheet showed $21.9 million in total assets, $11.0 million in total liabilities, and $10.9 million in total stockholders' equity. Going Concern Doubt As reported in the Troubled Company Reporter on March 27, 2007, Ernst & Young LLP, in Los Angeles, expressed substantial doubt about Endocare Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses, cash flow deficits, and working capital deficiency. About Endocare Inc. Endocare Inc. (OTCBB: ENDO) -- http://www.endocare.com/-- is an innovative medical device company focused on the development of minimally invasive technologies for tissue and tumor ablation. Endocare has initially concentrated on developing technologies for the treatment of prostate cancer and believes that its proprietary technologies have broad applications across a number of markets, including the ablation of tumors in the kidney, lung and liver and palliative intervention. FAIRFAX FINANCIAL: Earns $168.1 Million in 2007 Second Quarter -------------------------------------------------------------- Fairfax Financial Holdings Limited reported net earnings of $168.1 million for the second quarter ended June 30, 2007, as compared with net earnings of $229.2 million for the second quarter ended June 30, 2006. Revenues during the second quarter of 2007 were $1.7 billion, as compared with revenues during the second quarter of 2006 of $1.9 billion. For the first half of 2007, the company had net earnings of $279 million on revenues of $3.2 billion, as compared with net earnings of $427.6 million on revenues of $3.6 billion for the first half of 2006. Capital Structure and Liquidity Cash, short term investments and marketable securities held at the holding company at June 30, 2007 totaled $712.2 million. During the second quarter, Fairfax completed an exchange offer wherein $282.6 million principal amount of 7-3/4% notes due 2012 were exchanged by note holders for $282.6 million principal amount of 7-3/4% notes due 2017. Fairfax paid $11.2 million in cash early participation payments to tendering note holders and incurred expenses of $2.9 million which were deferred as a reduction of the balance sheet carrying value of the related debt and will be amortized into earnings over the term of the new notes. As of June 30, 2007, the company had $26.8 billion in total assets, $23.7 billion in total liabilities, and $3.1 billion in total stockholders' equity. About Fairfax Financial Based in Toronto, Canada, Fairfax Financial Holdings Limited (TSX: FFH) (NYSE: FFH) -- http://www.fairfax.ca/-- is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, investment management and insurance claims management. * * * Fairfax Financial Holdings Ltd.'s 7-3/4% Senior Notes due 2012 carry Moody's Investors Service's 'Ba3' rating and Standard & Poor's 'BB' rating. Fitch Ratings assigned a 'B+' rating to Fairfax Financial Holdings Limited's $464 million issue of unsecured senior notes due 2022. Fitch has also affirmed Fairfax's 'BB-' Issuer Default Rating and 'B+' senior unsecured debt rating. The Rating Outlook is Stable. FIRE PROTECTION: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Fire Protection Specialists of Carolina, L.L.C. 18 Interchange Boulevard, Suite C Greenville, SC 29607 Bankruptcy Case No.: 07-04182 Type of business: The Debtor provides fire equipment and services. See http://www.fpsoc.com/ Chapter 11 Petition Date: August 4, 2007 Court: District of South Carolina (Spartanburg) Debtor's Counsel: Curtis W. Stodghill, Esq. Stodghill Law Firm Chartered 201 East McBee Avenue, Suite 300A Greenville, SC 29601 Tel: (864) 271-0966 Total Assets: $1,368,503 Total Debts: $2,848,059 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ W. Francis affiliate loan $832,352 2 Crown Gate Court Simpsonville, SC 29681 Insurance Premium Financing business insurance $98,805 The Hartford P.O. Box 2907 Hartford, CT 06104 Priority Services affiliate loan $35,217 18 Interchange Boulevard, Suite C Greenville, SC 29607 trade debt $6,867 Saad & Manios, L.L.C. business expense $40,000 John Brady affiliate loan $39,897 Central Pipe & Supply trade debt $38,235 Carolina First #8345 vehicle loan; value $19,440 of security: $8,435 Precision Fab & Supply trade debt $17,526 Accident Fund Insurance business insurance $16,597 Shell Fleet Plus trade debt $14,702 Carolina First VISA credit card debt $14,361 South Carolina Uninsured business insurance $14,000 Employer's Fund Southern Utility Supply trade debt $11,177 Sunstates Industries, Inc. trade debt $11,164 Leco, Inc. trade debt $7,426 Flambo Design Company trade debt $6,265 United Rentals trade debt $5,829 N.E.F.F. Rental, Inc. business expense $3,242 Greenville Office Supply business expense $3,122 FLEETWOOD PRICE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Fleetwood Price Enterprises, Inc. 2857 Alden Green Trail East Point, Ga 30344-3804 Bankruptcy Case No.: 07-72437 Chapter 11 Petition Date: August 5, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Dorna Jenkins Taylor, Esq. Taylor & Associates, LLC Suite 500 1401 Peachtree Street Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. FRASER PAPERS: Incurs $37.6 Million Net Loss in Qtr. Ended June 30 ------------------------------------------------------------------ Fraser Papers Inc. generated a net loss of $37.6 million during the second quarter, as compared to a loss of $18.3 million in the second quarter of 2006. The results included a one time restructuring charge of $12.8 million, after tax related to the announced closure of two paper machines and one coating line and $10 million related to maintenance and market-related downtime at the company's paper operations. Net sales for the second quarter of 2007 were $181.7 million, as compared to $207.7 million in the second quarter of 2006. The decrease was mainly attributable to the poor lumber markets and the associated lower revenues and market downtime. As of June 30, 2007, the company's balance sheet showed total assets of $528.4 million, total liabilities of $242.6 million, and total stockholders' equity of $285.8 million. Liquidity and Capital Resources During the quarter, cash flow from operations after changes in working capital was an inflow of $18.6 million as compared to an outflow of $2.6 million during the same quarter of 2006. During the second quarter, Fraser Papers reduced working capital by $44.6 million primarily in the form of log inventory after the seasonal spring build-up in the first quarter, lower paper inventories and a reduction in trade receivables. Long term debt of $78.3 million includes $68.5 million of senior, unsecured notes, which bear interest at 8.75% and are due in 2015, net of transaction costs of $1.7 million. The remaining $11.5 million in long term debt consists of borrowings under the company's committed, revolving credit facility. Borrowings under the $90 million facility are at market rates. At quarter end, an additional $42.7 million of this facility was utilized in support of letters of credit. For the quarter, capital investments totaled $9.6 million compared to $4 million in the second quarter of 2006. Repayment of Senior Notes Pursuant to a tender offer made on June 1, 2007, to all holders of 8.75% senior notes due in March 2015, 99.93% of senior notes were tendered to the trustee. On July 31, 2007, the company funded the purchase of these senior notes, at par, for $70.7 million, including accrued interest of $2.2 million. The purchase is expected to settle on August 3. In addition, the company is submitting $15.5 million of senior notes it owned to the trustee for cancellation. The purchase was financed through a $50 million increase in the company's revolving credit facility with its current lender. The $50 million increase is available to the company for 120 days on substantially the same terms as the corporation's existing facility. The company is reviewing a number of options to repay these borrowings including the sale of all or part of its interest in Acadian Timber Income Fund. During the second quarter of 2007, Fraser Papers disclosed these strategic initiatives: - The permanent closure of two higher cost, uncoated freesheet paper machines representing a 70,000 ton capacity reduction, and the exit from coated groundwood paper markets with the closure of one off-machine coater at the East Papers operations. Anticipated cost reductions are about $10 million per year. - The closure of an oil-fired boiler, effective October 31, which will result in a 35% reduction in greenhouse gas emissions and $4 million in annual energy cost savings at the company's pulp mill in Edmundston, New Brunswick. - The completion of a $10 million capital rebuild of the recovery boiler at the pulp mill in Edmundston, New Brunswick, which is expected to increase throughput by 18,000 tons per year of pulp or 8%. Additional internal production will displace market purchases of higher cost pulp resulting in $3 million savings from lower cost fibre for the company's paper manufacturing operations. "Our second quarter results reflect the activities involved with a significant reinvestment in our core specialty paper operations and the impact of market-related downtime at a number of our mills, higher costs for purchased fibre, chemicals and energy and continued weakness in the lumber markets. The rebuild at our pulp facility and announced closures of the paper machines and high cost, oil-fired boiler will contribute to lower fibre and energy costs in the second half of 2007. In addition, the announced exit from coated groundwood markets continues to narrow our focus on specialty packaging and printing paper segments where we can compete successfully. Improved productivity and cost reduction are continuing," said Peter Gordon, president and chief executive officer of Fraser Papers. Outlook Fraser Papers' strategic decision to exit the lightweight coated groundwood paper markets and permanently close 70,000 tons of uncoated freesheet paper capacity will lead to improved product mix and a targeted focus on specialty packaging and printing papers. The impact of these initiatives, combined with the rebuild of the recovery boiler and permanent closure of an oil- fired boiler in Edmundston, New Brunswick, is expected to reduce the overall cost of production at the company's East Papers operations by a total of $17 million annually. The company will continue to reduce costs and improve operating performance at all of its operations. About Fraser Papers Fraser Papers Inc. (TSE: FPS) -- http://www.fraserpapers.com/-- is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec. * * * Troubled Company Reporter , Jul 11, 2007 ( Source: TCR) Standard & Poor's Ratings Services lowered its ratings on Toronto- based Fraser Papers Inc., including its long-term corporate credit rating, to 'CCC-' from 'CCC+'. The outlook is negative. FRENCH QUARTER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: French Quarter, Inc. 3500 West Naples Street Las Vegas, NV 89103 Bankruptcy Case No.: 07-14813 Type of business: Doing business as Men's Club, the Debtor owns and operates a bar. See http://www.mensclublv.com/index.html Chapter 11 Petition Date: August 3, 2007 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Jeffrey R. Sylvester, Esq. Sylvester & Polednak, Ltd. 7371 Prairie Falcon Road, Suite 120 Las Vegas, NV 89128 Tel: (702) 952-5200 Fax: (702) 952-5205 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 ------ --------------- ------------ Oscar Renteria trade debt $1,595,000 1106 Napa Court Napa, CA 94559 Canepa Construction & mechanic lien $1,500,000 Development 240 East Plaza Street Reno, NV 89501 D.&B. Properties trade debt $1,440,000 690 East Plumb Lane, Suite 100 Reno, NV 89502 Ennis Jordan trade debt $950,000 2941 Augusta Drive Las Vegas, NV 89109 P.M.C. Global Financial lease $668,000 Group, L.L.C. 1720 East Wilshire Avenue Santa Ana, CA 92705 F.Q. Men's Club of Reno trade debt $495,000 270 Lake Street Reno, NV 89501 Richard Schields trade debt $440,000 690 East Plumb Lane Reno, NV 89502 Schield Family Trust note $290,000 Richard A. Schield, Trustee 690 East Plumb Lane Reno, NV 89502 N.E.C. Financial Services, lease $275,342 Inc. Glenpointe Center East, 7th Floor 300 Frank W. Burr Boulevard Teaneck, NJ 07666-6782 Helix Electric trade debt $245,181 Bergelectric Corp. trade debt $230,296 Fabian Villa trade debt $200,000 Val Peterson trade debt $154,000 Stetson-Beemer Insurance note $150,000 Scott Canepa trade debt $110,000 Southern Wine & Spirits trade debt $104,301 DeLuca Liquour trade debt $102,845 Las Vegas Wrought Iron, Inc. trade debt $90,910 Desert File Protection trade debt $60,093 F. Rodgers Specialty trade debt $56,610 Contractor, Inc. FRIENDLY ICE: July 1 Balance Sheet Upside-Down by $132.7 Million ---------------------------------------------------------------- In its July 1, 2007 balance sheet, Friendly Ice Cream Corporation reported total assets of $213.7 million and total liabilities of $346.4 million resulting in a total stockholders' deficit of $132.7 million. The company's net revenues increased by $700,000, or 0.5%, to $142.2 million for the three months ended July 1, 2007. The net loss for the second quarter of 2007 was $288,000, compared to net income of $4.7 million reported for the second quarter of 2006. At the end of the quarter, cash and cash equivalents were $21.9 million and during the quarter, there were no borrowings against the revolving credit facility. The net loss for the first six months of 2007 was $6.2 million, compared to net income of $2.8 million reported for the first six months of 2006. Total revenues in the first six months of 2007 were $264.5 million compared to total revenues of $267.2 million for the first six months of 2006. Year-to-date, comparable restaurant sales decreased 2.1% for company-operated restaurants and 3.7% for franchised restaurants. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221f George M. Condos, president and chief executive officer, said, "The second quarter remained challenging for Friendly's. However, we continue to be optimistic about the impact of our key initiatives. For example, company-operated restaurant comparable sales trends improved in the second quarter of 2007 compared to the first quarter of 2007 and appear to be responding to our modified and more contemporary marketing messages. We have also begun to introduce new products in our restaurants, such as our new line of cold beverages, that we believe are more exciting and core to the Friendly's brand. We recently introduced a branded Ghirardelli chocolate ice cream that is only available in our restaurants. In September, we are planning to upgrade our hamburger products to Black Angus beef. The completion of the sqround packaging conversion was also an important milestone in our retail and manufacturing businesses." About Friendly Ice Cream Friendly Ice Cream Corporation -- http://www.friendlys.com/-- (AMEX: FRN) is a vertically integrated restaurant company serving signature sandwiches, entrees and ice cream desserts in a friendly, family environment in 515 company and franchised restaurants throughout the Northeast United States. The company also manufactures ice cream, which is distributed through more than 4,000 supermarkets and other retail locations. With a 72- year operating history, Friendly's enjoys strong brand recognition and is currently remodeling its restaurants and introducing new products to grow its customer base. * * * As reported in the Troubled Company Reporter on June 20, 2007, Standard & Poor's Ratings Services said that its ratings, including the 'B-' corporate credit rating, Friendly Ice Cream Corp. remain on CreditWatch with developing implications. GILLESPIE CLO: Moody's Rates GBP 15 Mil. Class E Notes at Ba3 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Gillespie CLO PLC: -- Aaa to the GBP 97,500,000 Class A-1 Senior Secured Floating Rate Notes due 2023l -- Aaa to the GBP 65,000,000 Class A-2 Senior Secured Floating Rate Variable Funding Multi-Currency Notes due 2023; -- Aaa to the GBP 40,000,000 Class A-3 Senior Secured Floating Rate Notes due 2023; -- Aa2 to the GBP 26,700,000 Class B Senior Secured Floating Rate Notes due 2023; -- A2 to the GBP 20,700,000 Class C Secured Deferrable Floating Rate Notes due 2023; -- Baa3 to the GBP 18,000,000 Class D Secured Deferrable Floating Rate Notes due 2023; and -- Ba3 to the GBP 15,000,000 Class E Secured Deferrable Floating Rate 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 Senior Loans, Mezzanine Obligations, High Yield Bonds, Structured Finance Obligations, Second Lien Loans and related Synthetic Securities - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Deerfield Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GMAC COMMERCIAL: S&P Holds Low-B Ratings on Classes J to O Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on two classes of mortgage pass-through certificates from GMAC Commercial Mortgage Securities Inc.'s series 2004-C2. Concurrently, S&P affirmed the ratings on 18 other classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades also reflect the defeasance of the collateral securing 12% ($104.9 million) of the pool. As of the July 10, 2007 remittance report, the trust collateral consisted of 74 mortgage loans with an outstanding principal balance of $900.3 million, compared with the same number of loans and a balance of $933.7 million at issuance. The master servicer, Capmark Finance Inc., reported primarily year-end 2006 financial information for 93% of the pool, which excludes the aforementioned defeasance. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.63x, up from 1.49x at issuance. All of the loans in the pool are current, but two loans ($14.8 million, 2%) are with the special servicer, Midland Loan Services Inc. The trust has experienced no losses to date. The top 10 exposures secured by real estate have an aggregate outstanding balance of $447.4 million (50%) and a weighted average DSC of 1.79x, up from 1.63x at issuance. However, two of the top 10 exposures are on the master servicer's watchlist. Standard & Poor's reviewed the property inspection reports provided by the master servicer for the assets underlying the top 10 exposures, and all were reported to be in "good" condition. Three of the top 10 exposures exhibited credit characteristics consistent with investment-grade obligations at issuance and continue to do so. Details of these exposures are: -- The largest exposure in the pool, 111 Eighth Avenue, has a trust balance of $84.2 million (9%) and a whole-loan balance of $493 million. The whole loan consists of a $442 million A note, which was split into four pari passu pieces, and one $50 million B note split into two pari passu pieces. One of the subordinate B note pieces secures the OEA-B1 and OEA-B2 nonpooled certificates in Greenwich Capital Commercial Funding Corp.'s series 2004-GG1, the ratings on which S&P affirmed on July 27, 2007. The whole loan is secured by the fee interest in a 2.9 million-sq.-ft. office property in Manhattan. As of year-end 2006, the DSC was 2.07x and occupancy was 99%. Standard & Poor's adjusted net cash flow is comparable to its level at issuance. -- Jersey Gardens is the second-largest exposure in the pool, with a trust balance of $81 million (9%) and a whole-loan balance of $157.2 million. The whole loan consists of an A note that is split into two pari passu pieces. The loan is secured by a 1.3 million-sq.-ft. value-oriented regional mall in Elizabeth, New Jersey. Standard & Poor's underwritten NCF is up slightly from its level at issuance. The borrower reported a DSC of 2.14x for the three months ended March 31, 2007, and occupancy of 99% as of May 2007, compared with a DSC of 1.87x and occupancy of 92% at issuance. -- The fifth-largest exposure in the pool, 731 Lexington Avenue-Bloomberg Headquarters, is secured by a 694,600-sq.- ft. class A office condominium interest in a 1.4 million- sq.-ft. property in Manhattan. The property is encumbered by a $301.7 million A note that is split into four pari passu pieces. One of the pari passu pieces ($48 million, 5%) is the trust's collateral. In addition, there is an $86 million B note held outside the trust. Reported DSC was 2.79x as of year-end 2006, and occupancy was 100% as of April 2007. The master servicer reported a 75% improvement in the NCF since issuance due to significantly higher revenue. The largest exposure with the special servicer, 100 North Citrus Avenue, is a 79,000-sq.-ft. office property in West Covina, California. The $7.9 million loan, which was reported to be 30- plus-days delinquent, was transferred to Midland in January 2006 due to a payment default. The special servicer has since applied funds held in suspense to cover outstanding debt service and advances, bringing the loan current. The borrower reported a DSC of 1.14x and occupancy of 72% as of June 30, 2007. Code compliance upgrades and fire and water damage repairs affected occupancy at the property. All the repairs and upgrades have been completed, with the exception of a remaining code compliance issue. Once this issue is resolved, Midland will transfer the loan back to the master servicer. Shalamar Apartments, the remaining exposure with the special servicer, is a $6.9 million loan that is current. The 161-unit multifamily apartment complex in San Marcos, Texas, secures this loan, which was transferred to Midland in March 2006 after a monetary default. The borrower is still struggling to make timely payments and has yet to sign a reinstatement agreement. Midland will continue to monitor the loan for timely payments before returning it to the master servicer. The master servicer reported 14 loans ($128.1 million, 14%) on its watchlist. The seventh-largest exposure ($23.6 million, 3%), Providence Biltmore Hotel, is secured by a 290-room full-service hotel in Providence, Rhode Island. The property is also encumbered by a $7.4 million B note held outside of the trust. The loan was placed on the watchlist due to a low DSC of 0.95x for the three months ended March 31, 2007, attributable to a low occupancy of 62% for the same time period. The ninth-largest exposure, Turnbury Park Apartments ($16.2 million, 2%), is on the watchlist due to a low DSC of 0.79x for the three months ended March 31, 2007. The loan is secured by a 161-unit multifamily property in Canton, Michigan. The borrower indicated that the poor performance is attributable to rental concessions offered to keep the property competitive. Occupancy was 80% as of April 2007. The eighth-largest exposure, Escondido Village Shopping Center ($18.4 million, 2%), is secured by a 191,600-sq.-ft. grocery- anchored neighborhood shopping center in Escondido, California. While the loan is not on the master servicer's watchlist, the borrower has indicated that the anchor tenant occupying 24% of the gross leasable area will vacate the space when its lease expires at year-end 2007. The borrower is marketing the space. The reported DSC was 1.66x as of year-end 2006, and occupancy was 97% as of March 2007. Standard & Poor's stressed various assets in the mortgage pool as part of its analysis, including those with the special servicer, on the watchlist, or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised GMAC Commercial Mortgage Securities Inc. Mortgage Pass-Through Certificates Series 2004-C2 Rating ------ Class To From Credit Enhancement ----- -- ---- ------------------ B AA+ AA 13.35% C AA AA- 12.19% Ratings Affirmed GMAC Commercial Mortgage Securities Inc. Mortgage Pass-Through Certificates Series 2004-C2 Class Rating Credit Enhancement ----- ------ ------------------ A-1 AAA 16.20% A-1A AAA 16.20% A-2 AAA 16.20% A-3 AAA 16.20% A-4 AAA 16.20% D A 10.11% E A- 8.69% F BBB+ 7.52% G BBB 5.83% H BBB- 4.28% J BB+ 3.63% K BB 2.98% L BB- 2.46% M B+ 2.20% N B 1.81% O B- 1.43% X-1 AAA N/A X-2 AAA N/A N/A - Not applicable. GRAHAM PACKAGING: June 30 Balance Sheet Upside-Down by $612.6 Mil. ------------------------------------------------------------------ As of June 30, 2007, Graham Packaging Holdings Company's balance sheet showed $2.5 billion in total assets, $1.9 billion in total liabilities, and $612.6 million in total stockholders' deficit. For the three months ended June 30, 2007, the company had net income of $5.1 million as compared with net loss of $15.3 million for the three months ended June 30, 2006. Net sales for the three months ended June 30, 2007, were $651 million, as compared with net sales of $653.3 million for the three months ended June 30, 2006. For the six months ended June 30, 2007, the company had net loss of $10.5 million on net sales of $1.3 billion. The company had net loss of $25.3 million on net sales of $1.3 billion for the six months ended June 30, 2006. In the six months ended June 30, 2007, the company funded, through its operating activities, $66.8 million of investing activities and $20.5 million of financing activities. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221d About Graham Packaging Graham Packaging Holdings Company also known as Graham Packaging Co, Inc., is the parent company of Graham Packaging Company, LP, formerly known as Graham Packaging Holdings I LP, -- http://www.grahampackaging.com/-- designs and manufactures customized blow-molded plastic containers for branded food and beverages, household and personal care products, and automotive lubricants. The company has manufacturing facilities in Argentina, Belgium, Brazil, Canada, Ecuador, England, Finland, France, Hungary, Mexico, the Netherlands, Poland, Spain, Turkey, the U.S. and Venezuela. The company has no assets, liabilities or operations other than its direct and indirect investments in the Operating Company and its ownership of GPC Capital Corp. II, its wholly owned subsidiary. HEALTHCARE ACQUISITION: Stockholders Selling 2.8 Million Shares --------------------------------------------------------------- Healthcare Acquisition Corp. was informed that the principal stockholders, and certain stockholders of PharmAthene Inc., have reached a tentative agreement with certain third party investors who have agreed to purchase up to 2,800,000 shares of the company's common stock. Certain investors, one of which is Millenium Partners LP Group, have indicated that they would be interested in making purchases of the company's common stock in privately negotiated transactions with existing stockholders of the company, in connection with the purchases, the New Investors receive additional shares of HAQ's common stock from the founding stockholders of HAQ and from certain stockholders of PHA who will be receiving shares as a result of the Merger. HAQ's principal stockholders and certain stockholders of PHA, acting as individual stockholders, have agreed to all of the material terms of the proposed agreements that have been negotiated among the parties, and definitive agreements by and among the parties: 1. The New Investors would agree to purchase, in the aggregate, up to 2,800,000 shares of the company's common stock in privately negotiated transactions with HAQ stockholders who were stockholders of HAQ as of the Record Date and who have either delivered proxy cards indicating a vote against the Merger Proposal or have advised HAQ and its advisors that they intend to vote against the Merger Proposal with Millenium Partners LP purchasing a minimum of 1.2 million shares; 2. The Opposing Shares would be purchased at a price to be negotiated between the sellers and the New Investors, although it is expected that the per share price would be equal to or at a premium over the amount held in trust for the shares of common stock, which amount in trust is currently estimated at $7.60 per share; 3. The New Investors would obtain from the sellers of the Opposing Shares either a new proxy card changing any "no" votes against the Proposals to votes in favor of the Proposals or an agreement to vote any such Opposing Shares in favor of the Proposals. Pursuant to contemplated purchase option agreements John Pappajohn, Derace L. Schaffer M.D. Edward B. Berger, Wayne A. Schellhammer and Matthew Kinley, the founders of HAQ and its executive officers and directors prior to the merger would enter into agreements with the New Investors granting them options to acquire up to 1,266,752 shares of HAQ common stock in the aggregate, which amount may be reduced pro rata to the extent that less that 2,800,000 shares are purchased by the New Investors. The option would be purchased for an aggregate purchase price of $100 and the exercise price per share would be $.0001. The options would not be exercisable until the underlying shares are released from the escrow arrangement with Continental Stock Transfer & Trust Company to which the HAQ Insiders are subject which will expire on July 28, 2008, assuming the Merger is approved. The HAQ Insiders entered into the escrow arrangement for all of their pre IPO shares in connection with the initial public offering by HAQ which was completed on July 28, 2005. The HAQ Insiders own a total aggregate of 2,250,000 shares being held in escrow and had recently purchased 250,000 shares pursuant to Rule 10b5-1 plans which are not included in the escrow and are not being sold to the New Investors. No option will be exercisable unless the Merger is approved. Pursuant to an assignment agreement which is currently being negotiated, certain stockholders of PHA would agree to assign to the New Investors an aggregate of up to 479,272 shares that would otherwise be received by them as part of the Merger, assuming the Merger is consummated. Under the terms of the Merger Agreement, the number of shares issuable to the PHA stockholders could be adjusted upward by up to 337,500 shares of HAQ common stock in the event that stockholders of HAQ holding in excess of 5% of the IPO shares of HAQ vote against the Merger and seek to convert their shares. These stockholders of PHA would assign their pro rata portion of these additional shares to the New Investors, as well as an additional 267,455 shares issuable to them in the aggregate under the Merger Agreement. The New Investors would be entitled, as assignees of the PHA stockholders, to the registration rights being granted to the stockholders of PHA under the terms of the Merger Agreement as described in the Proxy Statement. The effectiveness of the assignment would be contingent upon the Merger Proposal being approved. The New Investors would agree to enter into the lock up agreement being signed by all other PHA stockholders in connection with the Merger. About PharmAthene Inc. PharmAthene Inc. – http://www.PharmAthene.com/-- was formed as a result of a merger with Healthcare Acquisition Corp. PharmAthene is a biodefense company developing and commercializing medical countermeasures against biological and chemical threats. PharmAthene's lead programs include Valortim™ for the prevention and treatment of anthrax infection and Protexia(R) for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents. About Healthcare Acquisition Corp. Healthcare Acquisition Corp. (AMEX:HAQ; HAQ.W) was incorporated in Delaware on April 25, 2005, as a blank check company whose objective is to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, an operating business. Primarily all activity through Dec. 31, 2006, relates to the company's formation and the public offering identifying and evaluating prospective target businesses. On Jan. 19, 2007, the company signed an agreement and plan of merger with PharmAthene, Inc. The company has until Aug. 3, 2007 to complete the business combination or it must be liquidated. * * * As reported in the Troubled Company Reporter on June 15, 2007, LWBJ, LLP, at West Des Moines, Iowa, raised substantial about Healthcare Acquisition Corp.'s ability to continue as a going concern, after reviewing the company's quarterly financial statements for the three months ended March 31, 2007. The auditor related that the company will face a mandatory liquidation by Aug. 3, 2007, if a business combination is not consummated. At March 31, 2007, the company had total assets of $72,375,242, total liabilities of $14,920,515, and a stockholders' equity of $57,454,727, compared to $71,738,744 in total assets, $$14,625,002 in total liabilities, and a stockholders' equity of $57,113,742 at Dec. 31, 2006. HERTZ GLOBAL: Earns $83.7 Million in Second Quarter 2007 -------------------------------------------------------- Hertz Global Holdings Inc. reported record second quarter 2007 revenues of $2.2 billion, an increase of 6.6% over the same period in 2006. Worldwide car rental revenues for the quarter were a record $1.7 billion, an increase of 7.5%, while revenues from worldwide equipment rental were a record $433 million, up 3% over the prior year period. Net income for the current quarter is $83.7 million, compared with net income of $17.8 million in the same period last year. Adjusted net income was $97.4 million, an increase of 35.7% compared with the second quarter of 2006, resulting in adjusted earnings per share for the quarter of $0.30, based on the pro forma post-IPO diluted number of shares outstanding, compared with adjusted earnings per share of $0.22 in the prior year period. For the six months ended June 30, 2007, the company realized total revenues of $4.1 billion, compared with total revenues of $3.8 billion for the six months ended June 30, 2006. The company had an adjusted net income of $103.7 million for the first half of 2007, compared with an adjusted net income of $61 million for the first half of 2006. The company anticipates annualized savings of about $165 million from previously announced job reductions, and incurred a $16.7 million restructuring charge in the second quarter of 2007 related to these reductions. There will be additional restructuring actions taken during 2007 which will be announced when plans are finalized. The company generated strong cash flows during the second quarter of 2007, with net corporate debt decreasing from $4.4 billion as of March 31, 2007, to $4.4 billion as of June 30, 2007, and compared with $5.28 billion as of June 30, 2006. Levered after- tax cash flows after fleet growth for the second quarter of 2007 were $46.1 million, compared with a use of funds of $403 million in the prior year period. The improvement is due primarily to better working capital management, lower investments in worldwide equipment rental fleet, lower net investment in car rental fleet assets, and higher earnings. Levered after-tax cash flows after fleet growth were $169 million for the first six months of 2007, a $627.1 million year-over-year improvement in six month cash flows. The change in cash flows for the first six months of the year is attributable to the same factors that affected cash flows during the second quarter. As of June 30, 2007, the company listed total assets of $19.8 billion, total liabilities of $17.2 billion, and total stockholders' equity of $2.6 billion. Cash and cash equivalents were $401.6 million and total debt was $12.4 billion at June 30, 2007. Mark P. Frissora, the company's chairman and chief executive officer, said, "Hertz achieved strong second quarter operating results due to a combination of revenue growth, particularly off airport in the United States, and strong cost management, with direct operating expenses decreasing by almost two percentage points of revenue compared with the second quarter of 2006. Equipment rental volume in the second quarter was affected by slower growth in some segments of the U.S. non-residential construction market, but HERC nevertheless generated record revenues, profits and improved margins in the second quarter, and we see evidence of demand improvement in the current quarter." Outlook The company re-affirms its revenue, adjusted pre-tax income, corporate EBITDA, adjusted net income and adjusted net income per share guidance provided in its earnings announcement dated April 26, 2007. The company forecasts worldwide revenue of between $8.5 billion to $8.6 billion, an increase of between 5% to 7%. The company affirms earlier guidance for adjusted pre-tax income in the range of $600 million to $630 million, an increase of between 23% and 29%, corporate EBITDA in the range of $1.54 billion to $1.57 billion, an increase of between 12% to 14%, and adjusted net income of $372 million to $395 million, an increase of between 24% to 32%, or $1.15 to $1.22 per share, based on the pro forma post-IPO diluted number of shares outstanding of 324.8 million. About Hertz Global Hertz Global Holdings Inc. in Park Ridge, New Jersey, (NYSE: HTZ) -- https://www.hertz.com/ -- through its subsidiaries, rents and leases cars and trucks primarily in the U.S. and Europe. It operates in two segments, Car Rental and Equipment Rental. The Car Rental segment engages in the ownership and lease of cars. The Equipment Rental segment rents earthmoving equipment, material handling equipment, aerial and electrical equipment, air compressors, generators, pumps, small tools, compaction equipment, and construction-related trucks in North America and Europe. The company's products and services include Hertz #1 Club Gold; NeverLost customized, onboard navigation systems; SIRIUS Satellite Radio; and unique cars and SUVs offered through Hertz's Prestige, Fun and Green collections. Hertz also operates an equipment rental companies with corporate locations in France and Spain. It is the corporate parent of Hertz Corporation. * * * Hertz Global Holdings Inc. carries Moody's Investors Service's Ba3 corporate family rating with a stable outlook. INDYMAC IMSC: Moody's Rates Class B-5 Notes at B2 ------------------------------------------------- Moody's Investors Service assigned Aaa ratings to the senior certificates issued by IndyMac IMSC Mortgage Loan Trust 2007-AR2 and ratings ranging from Aa2 to B2 to the subordinate certificates in the deal. The securitization is backed by first lien, adjustable-rate Alt-A residential mortgage loans originated by IndyMac Bank, F.S.B. The ratings are based primarily on the credit quality of the loans and on the protection from subordination. Moody's expects collateral losses to range from 1.1% to 1.3%. IndyMac Bank, F.S.B. will service the mortgage loans. Moody's assigned IndyMac Bank, F.S.B. a servicer quality rating of SQ2 as a primary servicer of prime residential mortgage loans. The complete rating actions are: IndyMac IMSC Mortgage Loan Trust 2007-AR2 Mortgage Pass-Through Certificates, Series 2007-AR2 -- Cl. A-1, Assigned Aaa -- Cl. A-2, Assigned Aaa -- Cl. A-3, Assigned Aaa -- Cl. A-4, Assigned Aaa -- Cl. A-X, Assigned Aaa -- Cl. A-R, Assigned Aaa -- Cl. B-1, Assigned Aa2 -- Cl. B-2, Assigned A2 -- Cl. B-3, Assigned A3 -- Cl. B-4, Assigned Ba2 -- Cl. B-5, Assigned B2 JABIL CIRCUIT: To Set Up Two New Divisions, Appoints Officers ------------------------------------------------------------- Jabil Circuit Inc.'s board of directors has approved a plan to establish a Consumer Electronics division and an EMS division. The Consumer division will be formed to meet the distinct needs of the consumer marketplace. The EMS division will continue to provide world class end to end supply chain solutions for customers in a broad range of industry sectors. The change is effective Sept. 1, 2007. "We believe that we will unleash even more creative and cost- effective solutions for our customers by grouping business units with similar needs together into divisions, each with full ownership and accountability for design, operations, supply chain and delivery," said Timothy L. Main, Jabil's president and chief executive officer. "Our business has grown to a size and scale that we believe provides the critical mass to make this free standing division approach successful." Consumer Division Jabil will establish the Consumer Electronics division with dedicated resources designed to meet the unique needs of the consumer products industry. The division will address the marketplace needs of mobility, connected displays, set-top boxes and peripheral products. Dedicated design resources combined with vertically integrated supply chain solutions and certain existing and planned manufacturing operations, will provide a full complement of assets to provide low cost solutions for consumer electronics customers. Seventeen year Jabil veteran John P. Lovato was named executive vice president and chief executive officer, consumer division, effective Sept. 1, 2007. "The consumer electronics sector represents an enormous market opportunity for Jabil as major consumer product companies around the world are adopting outsourcing as their go-to-market strategy. These customers tend to be very product focused and prefer suppliers with deep product knowledge and expertise. They also favor vertical integration of certain technologies and capabilities. Jabil's new divisional focus and the complementary services of Green Point will allow us to address both of these needs," said Mr. Lovato. EMS Division The EMS Division will focus on the traditional and emerging electronic manufacturing services business sectors. Traditional sectors, characterized by a longer-term experience in utilizing the electronics outsourcing model, include networking, computing, storage and telecommunications businesses. Emerging sectors are newer to the outsourcing model and include areas such as automotive, medical, industrial, instrumentation, defense and aerospace. Both traditional and emerging sector customers primarily sell directly to business or organizations and utilize outsourcing as a means of reducing internal design and manufacturing costs while focusing on the core of their business. The EMS Division will be chartered with continuing to grow traditional market business and nurturing the blossoming emerging sectors with cost-effective design, manufacturing and delivery of products to these customers. The EMS Division will be headed by 15-year Jabil executive William D. Muir, who was named Executive vice president and chief executive officer of the division, effective Sept. 1, 2007. "The new approach will allow enhanced focus on the specific needs of our traditional and emerging market customers," said Bill Muir, senior vice president. "We believe this model will add to the agility and responsiveness in delivering sector-specific design, manufacturing, fulfillment and supply chain solutions." "For over 30 years we have empowered our customer-centric business units to develop customized solutions for our customers. The continued use of our customer-centric model with this divisional approach will more narrowly focus our best people on the unique needs of specific customers and sectors. Our customers and shareholders will benefit as we strive for higher levels of performance with strong diversification and full exposure to the secular trend to an outsourcing model," said Mr. Main. About Jabil Circuit Jabil Circuit Inc., headquartered in St. Petersburg, Florida -- http://www.jabil.com/-- provides electronics design, manufacturing and product management services to global electronics and technology companies. Jabil Circuit has more than 75,000 employees and facilities in 20 countries, including Brazil, Mexico, United Kingdom and Japan. Revenues for the 12 months ended Feb. 28, 2007 were $11.7 billion. * * * As reported in the Troubled Company Reporter on June 4, 2007, Moody's Investors Service confirmed Jabil Circuit Inc.'s Ba1 corporate family rating and revised the outlook to negative following the recent filing of its fiscal 2006 (August year-end) 10-K and fiscal 2007 first and second quarter tenth-quarters. Simultaneously, Moody's upgraded the rating on the existing $300 million senior unsecured notes to Ba1 from Ba2. K&F INDUSTRIES: Prices Cash Tender Offer for 7-3/4% Sr. Sub. Notes ------------------------------------------------------------------ K&F Industries Inc., a wholly owned subsidiary of Meggitt-USA Inc., has priced its outstanding 7-3/4% Senior Subordinated Notes due 2014 (CUSIP Nos: 482238AB8, U4865PAA5, 482238AA0 and 482240AM0), in connection with its cash tender offer and consent solicitation for any and all of the Notes. Holders who validly tendered Notes and delivered consents at or prior to the Consent Time, and did not validly withdraw such Notes and whose Notes are acquired pursuant to the Offer will be paid a purchase price of $1,086.32 per $1,000 principal amount of Notes. Holders who validly tender Notes after the Consent Time at/or prior to the Expiration Time will receive $1,056.32 per $1,000 principal amount of Notes which is equal to the Total Consideration, minus a consent payment of $30 per $1,000 principal amount. Holders that have validly tendered and have not validly withdrawn such Notes and related consents and whose Notes are accepted for purchase will receive accrued and unpaid interest from the last interest payment date to, the Settlement Date. The Settlement Date is expected to be the third business day after the Expiration Time. Barclays Capital Inc. was appointed as Dealer Manager for the Offer. Persons with questions regarding the Offer should contact Barclays Capital toll-free at 866-307-8991 or collect at 212-412-4072 (attention: Liability Management). Requests for documents should be directed to Georgeson Inc., the Information Agent for the Offer, toll-free at 888-605-7549 or collect at 212- 440-9800. About K&F Industries Headquartered in White Plains, New York, K&F Industries Inc. (NYSE: KFI) -- http://www.kandfindustries.com/-- manufactures wheels, brakes and brake control systems for commercial transport, general aviation and military aircraft and produces aircraft fuel tanks, de-icing equipment and specialty coated fabrics used for storage, shipping, environmental and rescue applications for commercial and military use. * * * As reported in the Troubled Company Reporter on June 27, 2007, Standard & Poor's Ratings Services withdrew its ratings, including the 'B+' corporate credit rating, on K&F Industries Inc. All ratings were removed from CreditWatch, where they were placed with positive implications on March 7, 2007. About $700 million of debt is affected. LANDRY'S RESTAURANTS: Court Grants TRO on $400 Mil. Senior Notes ---------------------------------------------------------------- Landry's Restaurants Inc. has obtained a temporary restraining order from the Honorable Samuel B. Kent of the United States District Court for the Southern District of Texas, Galveston Division, which immediately orders: -- that the Indenture Trustee of the company's $400 million 7.5% Senior Notes to immediately withdraw the Notice of Acceleration; -- that all holders of the Senior Notes are temporarily enjoined and restrained from taking any direct or indirect action predicated on the basis that the Senior Notes have been accelerated; and -- that all holders of the Senior Notes are temporarily enjoined and restrained from directly or indirectly communicating to any third party person or entity that the Senior Notes have been accelerated or that the company is not paying its debts as they come due. A temporary injunction hearing is scheduled for Aug. 16, 2007, in the U.S. District Court for the Southern District of Texas to determine whether the injunction should continue as requested by the company. The company is represented in the litigation by The Buzbee Law Firm, Andrews Kurth, LLP, Haynes and Boone LLP and Mills Shirley, L.L.P. The company has filed a lawsuit against the Bond holders and requested for the acceleration of the Notes and reinstating the Notes. About Landry's Restaurants Inc. Headquartered in Houston, Texas, Landry's Restaurants Inc. (NYSE: LNY) - http://www.landrysrestaurants.com/-- owns and operates more than 300 restaurants, including Landry's Seafood House, Joe's Crab Shack, The Crab House, Rainforest Cafe, Charley's Crab, Willie G's Seafood & Steak House, The Chart House, and Saltgrass Steak House. Landry's also owns several icon developments, including Downtown Aquariums in Houston and Denver. The company employs approximately 36,000 workers in 36 states. * * * As reported in the Troubled Company Reporter on Aug. 1, 2007, Moody's Investors Service revised the probability of default rating for Landry's Restaurants Inc. to B2/LD from B2. LNR CDO: Fitch Puts Low-B Ratings on Classes J to L Notes & Shares ------------------------------------------------------------------ Fitch has assigned these ratings to LNR CDO VI, Series 2007-2, Ltd./LLC (all due December 2051): -- $142,084,000 class A-1 floating rate notes 'AAA'; -- $100,000,000 class A-2 floating-rate delayed draw notes 'AAA'; -- $132,558,000 class B floating-rate notes 'AA'; -- $149,951,000 class C floating-rate deferrable interest notes 'A+'; -- $25,995,000 class D floating-rate deferrable interest notes 'A'; -- $21,476,000 class E floating-rate notes 'A-'; -- $44,195,000 class F floating-rate notes 'BBB+'; -- $28,825,000 class G floating-rate notes 'BBB'; -- $24,631,000 class H floating-rate notes 'BBB-'; -- $55,280,000 class J fixed-rate notes 'BB+'; -- $39,459,000 class K preferred shares 'BB'; -- $15,456,000 class L preferred shares 'BB-'. MANITOWOC COMPANY: Redeems 10.5% Senior Sub. Notes for $129 Mil. ---------------------------------------------------------------- The Manitowoc Company completed a previously announced redemption of its 10.5% senior subordinated notes due 2012. The call premium paid to note holders was 105.25% of the principal amount of the notes. The total cash paid was $129 million which included the call price, accrued and unpaid interest and other related costs at the time of redemption. The Bank of New York, trustee for the issue, redeemed the notes through its New York office. Manitowoc generated proceeds for the redemption of the notes from its multi-currency revolving credit facility, its accounts receivable securitization facility and cash on hand. As a result of the redemption, the related indenture dated Aug. 8, 2002, by and among The Manitowoc Company, the guarantor subsidiaries and The Bank of New York, as trustee, terminated automatically as of Aug. 1, 2007. Headquartered in Maniwotoc, Wisconsin, The Manitowoc Company Inc. (NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a leading provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. * * * As reported in the Troubled Company Reporter on June 14, 2007, Moody's Investors Service upgraded The Manitowoc Company's corporate family rating to Ba2 from Ba3 and its probability of default to Ba2 from Ba3 reflecting the company's continued strong operating performance and its recent announcement that it will redeem all of its senior subordinate notes. The rating of Manitowoc's senior unsecured notes remain at Ba3, but its loss given default assessment is changed to LGD4 (66%) from LGD3 (49%). The rating outlook is stable. MORGAN STANLEY: S&P Lifts Rating on $3MM Class A-11 Notes to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the $3 million class A-11 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'BB-' from 'B+' and removed it from CreditWatch, where it was placed with negative implications on June 19, 2007. The rating action reflects the Aug. 1, 2007 raising of the rating on the referenced obligations for the class A-11 notes, the 8.2% senior notes due Aug. 15, 2011, issued by Rock-Tenn Co., and its removal from CreditWatch negative. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a credit-linked note transaction that is weak- linked to the lowest of: (i) the ratings on the respective reference obligations for each class; (ii) the long-term rating on the credit default swap's, interest rate swap's, and contingent forward counterparty's guarantor, Morgan Stanley ('A+'); and (iii) the credit quality of the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). NATIONAL SPORTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: National Sports Collectors Convention, Inc. P.O. Box 1031 Edison, NJ 08818 Bankruptcy Case No.: 07-21048 Type of Business: The Debtor hosts sports collectibles conventions. See http://www.nsccshow.com/ Chapter 11 Petition Date: August 3, 2007 Court: District of New Jersey (Trenton) Judge: Raymond T. Lyons Jr. Debtor's Counsel: David Kasen, Esq. Kasen & Kasen 1874 East Route 70, Suite 3 Cherry Hill, NJ 08003 Tel: (856) 424-4144 Fax: (856) 424-7565 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. NATIONAL STAFFING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: National Staffing, L.L.C. 200 New Stine Road, Suite 110 Bakersfield, CA 93309 Bankruptcy Case No.: 07-12308 Type of business: The Debtor provides payroll services. Chapter 11 Petition Date: July 31, 2007 Court: Eastern District of California (Fresno) Judge: W. Richard Lee Debtor's Counsel: Riley C. Walter, Esq. 7110 North Fresno Street, Suite 400 Fresno, CA 93720 Tel: (559) 435-9800 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 ------ --------------- ------------ Internal Revenue Service $1,671,150 Centralized Insolvency Operations P.O. Box 21126 Philadelphia, PA 19114-0326 A.I.C.C.O. workers compensation $87,522 Department 7615 insurance premiums Los Angeles, CA 90084-7615 Canawill, Inc. $45,915 100 North Milwaukee Avenue, 5th Floor Glenview, IL 60025 Stutman, Treister & Glatt $28,132 New York State Workers' $26,750 Compensation State of Iowa $21,699 State of New York judgment $18,545 State of Kansas $17,861 Liberty Mutual Insurance audit/workers $12,303 compensation Bank of America $10,435 Hartford Insurance Co. $10,000 Broadway Premium Funding liability insurance $8,245 Corp. premium George Miller, Chapter 11 $7,500 Trustee of Total Containment, Inc. State of Washington payroll taxes $6,735 Blue Cross of California $6,592 State of Alabama state tax lien $6,155 State of Kansas state tax lien $5,907 Herbert P. Sears Co., Inc. civil judgment $5,847 State of South Dakota $5,809 State of Oregon $4,276 NEW CENTURY: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------ Debtor: New Century Warehouse Corporation dba Access Lending 18400 Von Karman Avenue, Suite 1000 Irvine, CA 92612 Bankruptcy Case No.: 07-11043 Type of business: The Debtor, a wholly-owned subsidiary of New Century Financial Corp., is a specialty finance company providing warehouse financing to the middle market segment of the residential mortgage origination industry. See http://www.accesslending.com Chapter 11 Petition Date: August 3, 2007 Court: District of Delaware (Delaware) Debtor's Counsel: Christopher M. Samis, Esq. Mark D. Collins, Esq. Richards, Layton & Finger, P.A. 920 North King Street One Rodney Square Wilmington, DE 19801 & 19899 Tel: (302) 651-7845, (302) 651-7531 Fax: (302) 651-7701 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Century Mortgage Corp. intercompany undetermined 18400 Von Karman, Suite 1000 Irvine, CA 92612 Goldman Sachs Mortgage Co. warehouse unknown c/o Marc Flamino obligation 85 Broad Street New York, NY 10004 Vinson & Elkins, L.L.P. acquisition unknown T. Mark Kelly agreement First City Bankruptcy 1001 Fannin Street, Suite 2300 Houston, TX 77002-6760 Ixis Real Estate Capital, warehouse unknown Inc. obligation Tony Malanga 9 West 57th Street, 36 Floor New York, NY 10019 NEWFIELD EXPLORATION: Inks Pact Selling Cherokee Assets for $128MM ------------------------------------------------------------------ Newfield Exploration Company signed a purchase and sale agreement to sell all of its coal bed methane assets in the Cherokee Basin of northeastern Oklahoma to Constellation Energy Partners LLC for $128 million. The sale is expected to close in the third quarter of 2007. Current net production is about 10 MMcf/d. The transaction includes the sale of more than 650 producing wells, Newfield's interests in approximately 80,000 net acres and a gas gathering system. Newfield entered this region in 2004 through the purchase of assets from two private companies. Newfield's production guidance, issued July 25, accounted for this and other anticipated divestitures and remains 240 - 253 Bcfe in 2007 and 215 - 230 Bcfe in 2008. The company's previously announced divestiture packages include its Gulf of Mexico shelf assets, expected to close in early August, its assets in the U.K. North Sea and Bohai Bay, China, and other select properties in Texas and the Mid-Continent. Proceeds from these sales will be used to pay down debt and fund capital expenditures. Natural Gas Hedging Update Taking advantage of the recent moves in natural gas futures, Newfield has added additional hedges since the Company's last update on July 25. Newfield added fixed positions for April 2008 - October 2008 of 60 MMcf/d at an average of $8.22 per Mcf. Approximately 45% of the company's expected production for this period is now hedged. Simmons & Company International and Griffis & Associates LLC acted as financial advisors in connection with Newfield's Cherokee Basin asset sale. About Constellation Energy Constellation Energy Partners LLC (NYSE: CEP) acquires, develops, and produces oil and natural gas properties, as well as related midstream assets in the United States. It owns working interests in Robinson's Bend Field located in western Tuscaloosa County and Pickens County, Alabama. The company also has interest in oil and natural gas properties located in the Cherokee Basin of Kansas and Oklahoma. About Newfield Exploration Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/ -- explores, develops, and acquires crude oil and natural gas properties primarily in the United States. As of Dec. 31, 2006, the company had proved reserves of 2.3 trillion cubic feet equivalent. The company was founded in 1988 and is based in Houston, Texas. Newfield's domestic areas of operation include the onshore Gulf Coast, the Anadarko and Arkoma Basins of the Mid-Continent, the Rocky Mountains and the Gulf of Mexico. The company has international operations in Malaysia, the U.K. North Sea and China. * * * As of June 25, 2007, Newfield Exploration Company continues to carry Fitch's BB+ long term issuer default rating. Fitch rates the company's bank loan debt and senior unsecured debt at BB+ while its senior subordinate rating is at BB-. The outlook remains stable. At the same time, the company also bears Moody's Investor Services' Ba2 long term corporate family rating and probability of default rating, Ba1 senior unsecured debt, Ba3 senior subordinate rating, and B1 preferred stock rating. The outlook is stable. The company also continues to carry Standard & Poor's BB+ long term foreign and local issuer debt ratings. The outlook remains stable. NEWMARKET CORPORATION: Earns $30.9 Million in Second Quarter 2007 ----------------------------------------------------------------- NewMarket Corporation's net income for the second quarter ended June 30, 2007, was $30.9 million, compared with net income for the second quarter of 2006 of $20.4 million. Net income for the first six months of 2007 was $47.2 million, compared with net income for the first six months of 2006 of $34.1 million. Net sales for the second quarter 2007 were $344 million, compared wit net sales for the second quarter 2006 of $330.1 million. Net sales for the first six months of 2007 were $653.8 million, compared with net sales for the first six months of 2006 of $632 million. At June 30, 2007, the company had $786.8 million total assets, $438.5 million total liabilities, and $348.3 million total stockholders' equity. "Net income for the second quarter and first half of both 2007 and 2006 include significant special items. These special items are reflected separately for clarification in the summary of earnings at the end of this press release. The special item this year includes the gain associated with the termination of the tetraethyl lead marketing agreements. Last year's items were due to the sale of an asset and the gain on a settlement with the IRS," reported president and chief executive officer, Thomas E. Gottwald. "Petroleum additives results improved significantly in the second quarter of this year with operating profit of $36.5 million, an increase of 35% over operating profit of $27.1 million in the second quarter of 2006. Net sales improved to $338.8 million compared to net sales in the second quarter of 2006 of $325 million. Petroleum additives volumes shipped in the second quarter of this year also improved over first quarter shipments this year. For the first six months of this year, petroleum additives profits also reflect improved results with operating profit increasing to $65.5 million, an improvement of 24% over operating profit of $52.8 million for the same period last year. The improvement in our petroleum additives operating profit comes from a variety of the company's product lines. The results continue to reflect the benefit of our progress in restoring margins through the introduction of new products including products utilizing more cost effective solutions for our customers. The results also benefit from price increases implemented in 2006; however, upward pricing pressure on several of our key raw materials continues." "The second quarter and first half of 2007 also continued to benefit from our debt restructuring in December of 2006. The benefit of lower debt cost was approximately $1.1 million before tax for the second quarter and $2 million before tax for the first half of this year." "Foundry Park I LLC, a wholly owned subsidiary of the company, began the construction phase of the office building for MeadWestvaco during this second quarter. The project will be primarily funded through borrowing of approximately 85 percent of the cost of construction with project completion anticipated by the end of 2009. Following completion, we expect this project to make a positive contribution to our earnings." "We have made good progress in many areas during the first half of this year. Our petroleum additives business continues to deliver improved results. Our financial position continues to grow stronger enhancing our capability for future growth and improving shareholder value as we continue to assess the best use of our cash flow," added Mr. Gottwald. About NewMarket Richmond, Virginia-based NewMarket Corporation, (NYSE: NEU) – http://www.newmarket.com/-- through its subsidiaries, Afton Chemical Corporation and Ethyl Corporation, develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated chemical blends to market-general additive components, the NewMarket family of companies provides the world with the technology to make fuels burn cleaner, engines run smoother and machines last longer. * * * NewMarket Corp. carries Moody's Ba3 long-term corporate family probability-of-default ratings. The outlook remains stable. The company also carries Standard & Poor's 'BB' long-term foreign and local issuer credit ratings. The outlook remains stable. NEXSTAR BROADCASTING: Board Cancels Talks With Would Be Acquirers ----------------------------------------------------------------- Group Inc.'s board of directors, in light with the difficult conditions in the financing markets, has decided to suspend discussions with prospective acquirers of the company, after consulting with its financial advisor Goldman Sachs & Co. The company said it does not intend to comment further publicly with respect to the review process. Headquartered in Irving, Texas, Nexstar Broadcasting Group Inc. (NasdaqGM: NXST) -- http://www.nexstar.tv/-- currently owns, operates, programs or provides sales and other services to 49 television stations in 29 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 8.25% of all U.S. television households. * * * At March 31, 2007, the company's balance sheet showed total assets of $708.9 million, total liabilities of $789.2 million, resulting to a total shereholders' deficit of $80.3 million. NUTRITIONAL SOURCING: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Lead Debtor: Nutritional Sourcing Corporation fdba Pueblo Xtra International, Inc. 1300 NorthWest 22nd Street Pompano, FL 33069 Bankruptcy Case No.: 07-11038 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Pueblo International, L.L.C. 07-11039 F.L.B.N., L.L.C. 07-11040 Type of business: The Debtor owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. See http://www.puebloxtra.com/ Chapter 11 Petition Date: July 3, 2007 Court: District of Delaware (Delaware) Judge: Peter J. Walsh Debtors' Counsel: David M. Fournier, Esq. David B. Stratton, Esq. James C. Carignan, Esq. Pepper Hamilton, L.L.P. Hercules Plaza, Suite 5100 1313 Market Street Wilmington, DE 19899-1709 Tel: (302) 777-6500 Fax: (302) 421-8390 Estimated Assets Estimated Debts ---------------- --------------- Nutritional Sourcing Less than $1 Million to Corporation $10,000 $100 Million Pueblo International, More than More than L.L.C. $100 Million $100 Million F.L.B.N., L.L.C. $1 Million to More than $100 Million $100 Million The Debtors did not sumbit a list of their largest unsecured creditors. PENNSYLVANIA REIT: Completes Redemption of 11% Senior Pref. Shares ------------------------------------------------------------------ Pennsylvania Real Estate Investment Trust completed a previously announced redemption of all of its 2.475 million outstanding 11% non-convertible senior preferred shares. The per share redemption price of $53.2486 includes $52.50 for each share plus accrued dividends of $0.7486 per share to the redemption date. The aggregate redemption price of approximately $131.8 million was funded using the company's credit facility. Pennsylvania Real Estate Investment Trust, (NYSE: PEI) -- http://www.preit.com/-- headquartered in Philadelphia, is a $3.1 billion owner, manager, and developer of regional malls and strip and power centers located predominantly throughout the Mid- Atlantic United States. The portfolio consists of 57 properties containing about 34 million square feet, including 38 shopping malls, 11 strip and power centers, and eight properties under development. * * * As reported in the Troubled Company Reporter on Feb. 28, 2007, Fitch affirmed the preferred stock rating of 'B+' on Pennsylvania Real Estate Investment Trust. Fitch has also affirmed the Issuer Default Rating of 'BB' for PREIT and maintains its Positive Outlook. PRG SCHULTZ: June 30 Balance Sheet Upside-Down by $71.3 Million --------------------------------------------------------------- PRG Shultz International Inc.'s balance sheet at June 30, 2007, showed $114.4 million in total assets, $177.5 million in total liabilities, and $8.3 million in mandatory redeemable participating preferred stock, resulting in $71.3 million stockholders' deficit. PRG-Schultz had net earnings for the 2007 second quarter of $18.6 million, compared to a net loss of $3.6 million for the same period in 2006. The second quarter 2007 net earnings included a gain on the sale of the Company's Meridian business unit of about $19.5 million, earnings from discontinued operations of $200,000 and a $2.7 million charge for stock-based compensation. The second quarter 2006 net loss included a charge of $400,000 for stock-based compensation and an operational restructuring charge of $1.6 million. Consolidated revenue for the second quarter of 2007 was $53.3 million, a decrease of 3.3% compared to $55.1 million for the same period in 2006. Cost of Revenue and SG&A expenses combined were $49.4 million for the 2007 second quarter, down 6.3% compared to the same period in 2006. Net earnings for the first six months of 2007 were $20.1 million, which included the gain on the sale of the Meridian business of $19.5 million, earnings from discontinued operations of $300,000, and $5.4 million of stock-based compensation expense. This compares to a net loss of $13.9 million for the same period in 2006, which included earnings from discontinued operations of $1.2 million, a $10.1 million non-cash charge related to the company's financial restructuring, a charge of $700,000 related to stock-based compensation, and $2 million of restructuring charges. Consolidated revenue in the first six months of 2007 was $110.3 million compared to $110.9 million for the same period in 2006. Cost of Revenue and SG&A expenses combined were $100.3 million for the first six months of 2007, down 5.9% compared to the same period in 2006. Liquidity At June 30, 2007, the company had cash and cash equivalents of $29.6 million and had no borrowings against its revolving credit facility. Total principal amount of debt outstanding at quarter- end was $108.9 million, a reduction of $21.4 million compared to the debt outstanding at the beginning of the quarter. The reduction in debt during the quarter was the result of the company's paying off the remaining $15.4 million balance on its term loan and the conversion of $5.9 million principal amount of outstanding senior convertible notes due 2011 into about 903,000 shares of common stock. Debt outstanding at the end of the second quarter included $51.5 million in principal amount of 11% senior notes due 2011, $56.1 million in principal amount of 10% senior convertible notes due 2011, and $1.3 million of capital lease obligations. In addition, the company had 9% Series A preferred stock outstanding at quarter-end with an aggregate liquidation preference of $8.3 million, which is mandatorily redeemable in 2011. The aggregate liquidation preference on the Series A preferred stock decreased by $600,000 during the quarter, the net result of an increase of $200,000 from the accretion of unpaid dividends and the conversion of Series A preferred shares representing $800,000 in liquidation preference into about 296,000 shares of common stock. "We continued our forward momentum during the second quarter, registering our sixth successive quarter of year-over-year increase in adjusted EBITDA," said James B. McCurry, chairman, president and chief executive officer. "During the quarter we reduced our total debt outstanding while increasing our cash on hand, and we sharpened our strategic focus by successfully divesting our Meridian business unit. We also made significant progress in our initiative to pioneer recovery audit in Medicare, with proceeds from our contract to audit Medicare spending in California making an important contribution to our revenue for the quarter." About PRG Schultz Headquartered in Atlanta, PRG Schultz International Inc. (NasdaqGM: PRGX) -- http://www.prgx.com/-- is the world's leading recovery audit firm, providing clients throughout the world with insightful value to optimize and expertly manage their business transactions. Using proprietary software and expert audit methodologies, PRG industry specialists review client purchases and payment information to identify and recover overpayments. The company has operations in Brazil, Mexico, and Puerto Rico. PRIMEDIA INC: Completes $1 Billion Sale of Enthusiast Media ----------------------------------------------------------- PRIMEDIA Inc. completed a previously announced sale of its Enthusiast Media division to Source Interlink Companies Inc. for $1,177,900,000 in cash, subject to certain post-closing adjustments. PRIMEDIA continues to operate its operating subsidiary, Consumer Source Inc. New Set of Officers In connection with the closing of the sale, PRIMEDIA has appointed Robert Metz as president and chief executive officer, effective Sept. 1, 2007. Mr. Metz is currently Executive Vice President of Primedia and CEO of Consumer Source Inc. Mr. Metz began his career with Consumer Source Inc. in 1975, and in the last 25 years, has served in various positions ranging from publisher to chief financial officer, chief operating officer, president, and chairman of the board. Also in connection with the closing of the sale, Kim Payne, the current Chief Financial Officer of Consumer Source Inc., has been appointed chief financial officer of PRIMEDIA, effective Aug. 1, 2007, replacing Kevin Neary. Effective Sept. 1, 2007, Keith Belknap, the current general counsel of Consumer Source Inc. will assume the title of general counsel of PRIMEDIA, replacing Jason Thaler. Following Mr. Metz's transition to president and CEO of PRIMEDIA, Dean Nelson, currently chairman, president, and CEO, will remain in his capacity as chairman. "We are very pleased with the end result of this transaction and believe that we have the right team and strategies in place to enhance a business that is already the market leader in a high growth industry," said Dean B. Nelson, Chairman, President, and CEO of PRIMEDIA Inc. "Through the leadership and direction of this experienced management team, as well as our work over the past several months to recapitalize the Company, PRIMEDIA is well positioned as a low-leverage, high margin business that will generate cash and deliver strong returns to shareholders." About Source Interlink Source Interlink Companies Inc. -- http://www.sourceinterlink.com -- markets, entertainment products, including DVDs, music CDs, magazines, books and related items. Source Interlink serves about 110,000 retail store locations throughout North America. Supply chain relationships include consumer goods advertisers, subscribers, movie studios, record labels, magazine and newspaper publishers, confectionary companies and manufacturers of general merchandise. About PRIMEDIA Inc. Headquartered in New York City, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- is the parent company of Consumer Source Inc., a publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide, and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 60,000 locations. Consumer Source owns and operates leading websites including ApartmentGuide.com, AutoGuide.com, NewHomeGuide.com; and America's largest online single unit rental property business, comprised of RentClicks.com, RentalHouses.com, HomeRentalAds.com, and Rentals.com. * * * As reported in the Troubled Company Reporter on July 3, 2007, Standard & Poor's Ratings Services revised to positive from negative its CreditWatch implications on ratings for PRIMEDIA including the 'B' corporate credit rating. PRIMEDIA INC: Inks $350 Million Loan Pact with Various Lenders -------------------------------------------------------------- PRIMEDIA Inc. entered into a credit agreement with various lenders, The Bank of New York, as Syndication Agent, Lehman Brothers Inc. and Citicorp North America Inc. as co-documentation agents, and Credit Suisse, Cayman Islands Branch N.A., as administrative agent. The credit agreement provides for two loan facilities including a revolving credit facility with aggregate commitments of about $100 million, which matures on Aug. 1, 2013, and a Term Loan B credit facility in an aggregate principal amount of $250 million, which matures on Aug. 1, 2014. Amends Certificate of Incorporation The company also filed on Aug. 1, 2007, an amendment to its certificate of incorporation to effect a 1-for-6 reverse stock split of its common stock. PRIMEDIA previously announced on June 22, 2007, that the board of directors of PRIMEDIA and a majority of stockholders of PRIMEDIA had adopted the amendment to PRIMEDIA's certificate of incorporation. Stockholders who hold shares of PRIMEDIA common stock electronically in book-entry form will not have to take any action to receive post-reverse stock split shares and cash in lieu of any fractional share interests. For book-entry shares, a transaction statement indicating the new number of shares held will be automatically sent to stockholders by their broker or the transfer agent. Stockholders who hold certificates representing pre-reverse stock split shares will receive a letter of transmittal and related instructions from The Bank of New York, PRIMEDIA's transfer agent, which explains how to exchange these existing certificates for certificates representing post-reverse stock split shares and cash in lieu of any fractional share interests. Shares of common stock of PRIMEDIA began trading on a split-adjusted basis on Aug. 2, 2007. About PRIMEDIA Inc. Headquartered in New York City, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- is the parent company of Consumer Source Inc., a publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide, and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 60,000 locations. Consumer Source owns and operates leading websites including ApartmentGuide.com, AutoGuide.com, NewHomeGuide.com; and America's largest online single unit rental property business, comprised of RentClicks.com, RentalHouses.com, HomeRentalAds.com, and Rentals.com. * * * As reported in the Troubled Company Reporter on July 3, 2007, Standard & Poor's Ratings Services revised to positive from negative its CreditWatch implications on ratings for PRIMEDIA including the 'B' corporate credit rating. S-TRAN HOLDINGS: Court Moves Exclusive Plan Filing Date to Sept. 4 ------------------------------------------------------------------ The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extended S-Tran Holdings Inc. and its debtor-affiliates' exclusive periods to: a. file a Chapter 11 plan until Sept. 4, 2007; and b. solicit acceptances of that Plan until Nov. 5. 2007. As reported in the Troubled Company Reporter on June 14, 2007, the Debtors told the Court that they are actively analyzing information relevant to potential assets recoveries, including the recovery of additional accounts receivables. The Debtors disclosed to the Court that they have reached approximately 70 settlements of preference claims and expect to recover up to $600,000. Laura D. Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., said that the Debtors' request to further extend their exclusive period will not prejudice their creditors. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. Donald A. Workman, Esq., at Foley & Lardner LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. SAFEWAY PROPERTY: A.M. Best Lifts B- Financial Strength Rating -------------------------------------------------------------- A.M. Best Co. upgraded the financial strength rating to B (Fair) from B- (Fair) and assigned an issuer credit rating of "bb+" to Safeway Property Insurance Company. Concurrently, A.M. Best affirmed the FSR of A (Excellent) and assigned ICRs of "a" to Safeway Insurance Group and its members. The outlook for the FSRs is stable, and the outlook assigned to the ICRs is stable. The FSR upgrade reflects Safeway Property's improved risk-adjusted capitalization, which is attributable to the reduction in its underwriting leverage, favorable loss reserve development trend and conservative investment portfolio. The rating also reflects the continued financial support afforded by its parent, Safeway Insurance Company. Partially offsetting these positive rating factors is Safeway Property's limited business scope as a property writer in Florida and its subsequent exposure to severe weather-related losses. The affirmation of SIG's FSR recognizes its excellent capitalization, improved underwriting leverage and sustained operating profitability. The FSR of A (Excellent) has been affirmed and the ICRs of "a" have been assigned to Safeway Insurance Group and its members: -- Safeway Insurance Company -- Safeway Insurance Company of Louisiana -- Safeway Insurance Company of Georgia -- Safeway Insurance Company of Alabama -- Safeway Direct Insurance Company -- Oak Brook County Mutual Insurance Company The FSR has been upgraded to B (Fair) from B- (Fair) and an ICR of "bb+" has been assigned to Safeway Property Insurance Company. SALTON INC: Receives APN Holding's Notice to Terminate Merger ------------------------------------------------------------- Salton Inc. received from APN Holding Company Inc. a written notice of termination of the merger agreement dated Feb. 7, 2007, between Salton and APN Holdco. Salton argues that the termination confirms Salton's belief that APN Holdco has, for some time, not acted in good faith and that the company intends to vigorously pursue its claims and remedies against APN Holdco, its affiliates and representatives. William Lutz, Salton's chief executive officer and chief financial officer, said "While we are disappointed with APN Holdco's actions, our management and board is actively pursuing a number of operational and strategic options to improve our liquidity position and our financial performance. "In this regard, we have entered into an interim amendment to our senior credit facility which extends the repayment date on all of our outstanding overadvances to Aug. 6, 2007, while we are actively engaged in discussions with our senior lender to secure a further extension and additional support. In addition, with the assistance of Leon Dreimann, our former chief executive officer, we continue to work closely with our suppliers to ensure that we can continue to provide our customers with high quality and innovative products." Mr. Lutz concluded that "we believe that our strong relationships with our customers and suppliers will allow us to implement our current business initiatives as we continue to explore strategic alternatives, which may include discussions with APN Holdco and other third parties." About Salton Inc. Headquartered in Lake Forest, Illinois, Salton Inc. (NYSE:SFP) -- http://www.saltoninc.com/-- designs, markets and distributes branded, high-quality small appliances, home decor and personal care products. Its product mix includes a range of small kitchen and home appliances, electronics for the home, time products, lighting products, picture frames and personal care and wellness products. * * * Moody's Investors Service assigned its Ca rating to Salton Inc.'s 12-1/4% senior subordinated notes due April 15, 2008. SERVICEMASTER CO: S&P Places B+ Bank Loan Rating on CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' bank loan rating on Memphis, Tennessee-based The ServiceMaster Co. on CreditWatch with developing implications. ServiceMaster's other ratings, including its 'B' corporate credit rating, have been affirmed. The outlook remains negative. "The CreditWatch listing follows the company's execution of an amendment to its new senior secured credit agreement," Standard & Poor's credit analyst Jean Stout said. The amendment provides the holders of the bank loan the right to parcel the existing $2.65 billion term loan into two tranches, Tranche B-1 Term Loan and Tranche B-2 Term Loan, up to 90 days from the closing date. These loans shall have the same terms and be pari passu in all respects, except that proceeds from collateral in connection with the exercise of secured creditor remedies will be allocated to repay Tranche B-1 Term Loan in full prior to any allocation of such proceeds to repay Tranche B-2 Term Loan. Tranche B-1 Term loan holders would enjoy added protection provided by their enhanced position in the recovery process relative to the holders of the Tranche B-2 Term Loan. The corporate credit rating is unaffected by this amendment as overall leverage will not change following a potential split of the term loan into two tranches. To resolve the CreditWatch listing for the bank loan rating, Standard & Poor's will monitor developments, including the ultimate allocation between the term loan tranches, and assess the recovery prospects of each loan tranche. If the existing term loan is split into two tranches, it is possible that both the bank loan and recovery ratings would differ for each tranche. SYLVEST FARMS: Exclusive Plan Filing Extended Until August 11 ------------------------------------------------------------- The Honorable Thomas Bennett of the United States Bankruptcy Court for the Northern District of Alabama extended Sylvest Farms Inc. and its debtor-affiliates' exclusive periods to: a) file a Chapter 11 plan until Aug. 11, 2007; and b) solicit acceptances of that plan until Oct. 10, 2007. As reported in the Troubled Company Reporter on March 23, 2007, the Debtors told the Court that they are engaged in discussions and negotiations with the Official Committee of Unsecured Creditors and other interested parties regarding the appropriate means to conclude these Chapter 11 cases. The Debtors have sold substantially all of their assets, and are in the process of winding down their business affairs. The Debtors related that they will be in a better position to examine their alternatives once they have concluded their negotiation with the Committee and other parties. According to the Debtors, the filing of a competing plan before they filed one would be to the detriment of their creditors. Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). Richard A. Robinson, Esq., and Eric S. Golden, Esq., at Baker & Hostetler LLP represent the Debtors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker LLC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. TANGER FACTORY: Earns $6.4 Million in Quarter Ended June 30 ----------------------------------------------------------- Tanger Factory Outlet Centers Inc. had net income of $6.4 million for the three months ended June 30, 2007, as compared with net income of $6.3 million for the three months ended June 30, 2006. The company reported funds from operations available to common for the three months ended June 30, 2007, increased 12.1% to $22.1 million, as compared to FFO of $19.8 million for the three months ended June 30, 2006. For the six months ended June 30, 2007, FFO increased 12.5% to $43.5 million, as compared to FFO of $38.6 million, for the six months ended June 30, 2006. For the three months ended June 30, 2007, net income available to common shareholders increased 2.8% to $5 million, as compared to $4.9 million for the second quarter of 2006. During the first quarter of the previous year, Tanger recognized a net gain on the sale of real estate of $13.8 million. As a result, the company reported net income available to common shareholders of $18.5 million for the six months ended June 30, 2006, compared to $6.9 million for the first six months of 2007. Balance Sheet Data As of June 30, 2007, the company posted $1 billion in total assets, $738 million in total liabilities, $37.2 million in minority interest, and $266.9 million in total stockholders' equity. As of June 30, 2007, Tanger had $683.5 million of debt outstanding, equating to a 31.7% debt-to-total market capitalization ratio. As of June 30, 2007, 98.8% of Tanger's debt was at fixed interest rates and the company had $7.9 million outstanding on its $200 million in available unsecured lines of credit. A full-text copy of the company's quarter report is available for free at http://ResearchArchives.com/t/s?221e Comments Stanley K. Tanger, chairman of the board and chief executive officer, commented, "Our second quarter results were outstanding. Our funds from operations per share increased 11.3%, while average tenant sales increased 3% during the second quarter of 2007. Construction continues to proceed at our two newest locations, one south of Pittsburgh, Pennsylvania and the other in Deer Park, Long Island, New York. Both projects are expected to open next year, providing future earnings growth for our company." Headquartered in Greensboro, North Carolina, Tanger Factory Outlet Centers, Inc. (NYSE: SKT) -- http://www.tangeroutlet.com/-- is an integrated, self-administered and self-managed publicly traded REIT. At Dec. 31, 2006, the company had 30 wholly owned centers in 21 states totaling 8.4 million square feet of total gross leasable area, as compared with 31 centers in 22 states totaling 8.3 million square feet of GLA as of Dec. 31, 2005. * * * Tanger Factory Outlet Centers Inc. carries Moody's Ba1 preferred stock rating. TARGA RESOURCES: Sets Payments for Repurchase of 8-1/2% Sr. Notes ----------------------------------------------------------------- Targa Resources Inc. and Targa Resources Finance Corporation disclosed the consideration to be paid in connection with their pending cash tender offer to purchase any and all of their outstanding 8-1/2% senior notes due 2013 (CUSIP No. 87611UAB7 and U87566AB8). Both companies also received the requisite consents from the registered holders of the notes to certain proposed amendments to the indenture governing the notes and to the waiver of the issuers' and their subsidiary guarantors' obligations under a related registration rights agreement. The tender offer and consent solicitation are described in detail in an offer to purchase and consent solicitation statement dated July 19, 2007. Holders who validly tendered notes in the tender offer and validly delivered their corresponding consents in the consent solicitation at or prior to 5:00 p.m., New York City time, on Aug. 1, 2007, will receive $1,108.71 per $1,000 principal amount of notes tendered, which is referred to in the statement as the "total consideration," plus any accrued and unpaid interest from the last interest payment date for the notes to, but not including, the initial settlement date, which the issuers expect will occur promptly following the satisfactions of the conditions to the tender offer set forth in the statement. Conditions include, but are not limited to, the consummation by Targa of a new bank credit facility providing financing for the purchase of the notes. Holders who validly tender notes in the tender offer after 5:00 p.m., New York City time, on Aug. 1, 2007, and at or prior to 12:00 midnight, New York City time, on Aug. 15, 2007 will receive the total consideration set forth above minus the consent payment of $30.00 per $1,000 principal amount, which is referred to in the Statement as the "purchase price," plus any accrued and unpaid interest from the last interest payment date for the notes to, but not including, the final settlement date, which the issuers expect will occur on Aug. 16, 2007. The consideration to be paid in connection with the tender offer was determined by Credit Suisse Securities (USA) LLC, the dealer manager for the tender offer, as of 2:00 p.m., New York City time, on Aug. 1, 2007, as set forth in the Statement. As of 5:00 p.m., New York City time, on Aug. 1, 2007, $250,000,000 principal amount of notes had been validly tendered together with related consents validly delivered. The consents delivered and not validly revoked as of such time constitute the consent of holders of 100% of the outstanding notes, a percentage sufficient to amend the indenture and grant the waiver as described in the statement. The supplemental indenture incorporating the proposed amendments will become effective upon execution by the issuers and Wells Fargo Bank, National Association, as trustee, but will not become operative until the time that the issuers accept for purchase notes representing the requisite consents, which the Issuers expect to occur on the initial settlement date. The issuers have retained Credit Suisse Securities (USA) LLC to serve as dealer manager for the tender offer and solicitation agent for the consent solicitation and have retained D.F. King & Co., Inc. to serve as the depositary and information agent for the tender offer and consent solicitation. Requests for documents may be directed to D.F. King & Co., Inc. by telephone at (800) 735-3107 or (212) 269-5550 or in writing at 48 Wall Street, New York, NY, 10005. Questions regarding the tender offer or consent solicitation may be directed to Credit Suisse Securities (USA) LLC at (212) 325-4951 or (212) 325-7596. About Targa Resources Partners Headquartered in Houston, Texas, Targa Resources, Inc. (Nasdaq: NGLS) -- http://www.targaresources.com/-- is an independent midstream energy company formed in 2003 by management and Warburg Pincus, the global private equity firm and a leading energy investor, to pursue gas gathering, processing and pipeline asset acquisition opportunities. * * * As reported in the Troubled Company Reporter on July 23, 2007, Moody's Investors Service affirmed Targa Resources, Inc.'s B1 corporate family rating and assigned Ba3 ratings (LGD 3, 40%) to its proposed first lien credit facilities comprised of a $1.525 billion term loan, a $300 million revolving credit facility, and a $300 million synthetic letter of credit facility. Moody's also assigned a B3 rating (LGD 5, 88%) to Targa's proposed $350 million second lien term loan. Proceeds from the proposed credit facilities will be used to refinance Targa's existing indebtedness, including funding a tender offer for its 8.5% senior unsecured notes due 2013, and to fund a $414 million distribution to shareholders. The rating outlook remains negative. TECH DATA: Fitch Holds 'BB+' Issuer Default Rating -------------------------------------------------- Fitch Ratings has affirmed Tech Data Corp.: -- Issuer Default Rating (IDR) at 'BB+'; -- Senior unsecured credit facility at 'BB+'; -- 2.75% senior unsecured convertible debentures at 'BB+'. The Rating Outlook is Stable. Tech Data's ratings and Stable Rating Outlook reflect these considerations: -- Tech Data's strong market position in each of its operating regions; -- A competitive advantage in scale as one of the largest global wholesale distributor; -- Significant customer and geographic diversification; -- Fitch's view that the wholesale distribution model has solidified its value proposition in the information technology market, particularly for resellers serving the small to medium business market which is one of the fastest growing end-market segments for IT equipment; -- Fitch's expectation that Tech Data's operating performance will improve modestly over the next one to two years as the company recovers from prior operating issues which have negatively affected profitability in Europe; and -- The ability of wholesale distributors to utilize working capital as a source of liquidity during market downturns. Rating concerns include: -- Tech Data's significant execution issues for its European business (54% of fiscal year-2007 revenue) which has negatively impacted EBIT margin and revenue growth over the past year, although the company has undertaken several initiatives to improve the performance of this segment which Fitch believes has started to positively impact results in the most recent two quarters; -- Significant exposure to the cyclicality of IT demand and general global economic conditions; -- The low margin and high working capital nature of the wholesale distribution model which can lead to significant volatility in free cash flow; -- An increase in long-term debt in recent quarters, the proceeds of which were partially used to pay down short term financing, which has resulted in increased leverage although Debt to operating EBITDA remains below 2 times (x) or 4.0x when adjusted for operating leases and off-balance sheet accounts receivable financing; -- Tech Data's decision not to establish a presence in the fastest growing geographic market segment, Asia Pacific, although this could result in future acquisition activity as the company's largest competitor, Ingram Micro, has a well established presence in that region; and -- Significant exposure to Hewlett Packard (HP, IDR rated 'A+' by Fitch) as a supplier, representing approximately 28% of revenue in recent years, although vendor concentration excluding HP is low with no other vendor representing greater than 10% of sales. Liquidity was solid as of April 30, 2007 and consisted primarily of $454 million in cash and cash equivalents, an undrawn $250 million senior unsecured revolving credit facility expiring March 2012 and a $400 million accounts receivable securitization program that is on-balance sheet and undrawn which matures in August 2007, which Fitch expects to be renewed with similar terms. Tech Data has additional, mostly uncommitted, lines of credit which totaled $679 million in available capacity at quarter end, which the company uses as additional sources of liquidity. In addition, the company has off-balance sheet trade receivables purchase facility agreements which may hold up to $364 million in outstanding receivables, of which, $227 million remained outstanding. Fitch expects quarterly free cash flow to remain volatile in the foreseeable future due to changes in working capital requirements but should range from zero to $100 million on an annualized basis given current mid- to high-single digit annual revenue growth expectations. Fitch expects Tech Data to focus on lowering its CCC days going forward, which have averaged in the high 20-day range over the past year, several days higher than main competitor Ingram Micro. Fitch believes a reduction in CCC days should have a significant positive impact on Tech Data's FCF if the company is successful in this effort. Total debt was $411 million as of April 30, 2007 and consisted primarily of $350 million in 2.75% senior convertible debentures due 2026 and $45 million outstanding under various credit facilities. In addition, Tech Data has off-balance sheet debt including $227 million outstanding under its trade receivables purchase facility agreements and $118 million in residual value under a synthetic lease. TODD MCFARLANE: Plan Confirmation Hearing Scheduled on Sept. 9 -------------------------------------------------------------- The Honorable Charles G. Case II of the U.S. Bankruptcy Court for the District of Arizona will convene a hearing on Sept. 9, 2007, 2:00 p.m., at 230 N. First Ave., 6th floor, in Courtroom 601, to consider confirmation of Todd McFarlane Productions Inc.'s Third Amended Chapter 11 Plan of Reorganization. On June 26, 2007, the Court entered an order approving the Debtor's Disclosure Statement. Objections to the Debtor's Plan confirmation are due Aug. 27, 2007. Plan Funding The Debtor's Plan will be funded by cash from: (i) Debtor's operations on and after the Plan effective date; (ii) travelers settlement proceeds after the Plan effective date; and (iii) Gaiman Insurance Proceeds and Gaiman Litigation Bond. The Debtor tells the Court that only the Gaiman Claim will be paid from the Gaiman Insurance Proceeds and Gaiman Litigation Bond. Twist Settlement On Feb. 15, 2007, the Court approved the settlement agreement that Hanover Insurance Company, Citizens Insurance Company of America, and General Star Indemnity Company will pay Toni Twist $5 million in exchange for the release of all liens and claims concerning any obligations the insurance companies might have to indemnify the Debtor or Todd MacFarlane for the $15 million Twist Settlement Agreement. Under the agreement, Mr. Twist will file a satisfaction of judgment and a dismissal with prejudice of all remaining claims. Treatment of Claims Under the Third Amended Plan, Administrative Claims and Priority Claims will be paid in full. Holders of General Unsecured and Affiliate Claims will also be paid in full. Secured Lender Claim holders, totaling $500,000, will be paid in full in cash and will retain the liens securing its claims until all valid claims have been paid. Each holder of Other Priority Claims will be paid in full equal to the unpaid portion of its claims. Neil Gaiman will be paid in full equal to the unpaid portion of his claim, plus interest. Holders of Indemnity Claims will be paid in full. Equity Interest holders will remain in full force and effect. Tony Twist will not receive any distribution and have waived the right to seek any recovery from the Debtor under the Plan. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Josefina F. McEvoy, Esq., and Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TOUSA INC: Obtains $500 Mil. Funds for Transeastern JV Settlement ----------------------------------------------------------------- TOUSA Inc. completed a previously announced $500 million term loans credit facility underwritten by Citigroup Global Markets Inc., together with certain of its affiliates. The company used the funds to finalize and close the global consensual settlement with all participants in the Transeastern JV including the JV's senior lenders, its mezzanine lenders, the JV partner and its land bankers. "With the completion of our financing and the global settlement, we can put the Transeastern JV issues behind us. Having eliminated the cost, management distraction, and potential adverse outcome of protracted lender litigation, we can now focus all of our efforts on operating in this difficult housing market, strengthening our balance sheet and enhancing value for TOUSA stakeholders," said Antonio B. Mon, president and chief executive officer of TOUSA. "Much hard work remains for us to execute our plan to de-leverage our balance sheet and actively manage our assets during one of the most challenging housing markets in many years," Mr. Mon said. "Our associates understand our objectives and are experienced and capable of meeting the challenges posed by the current difficult market conditions while preparing for an eventual housing recovery." The global settlement, which will end all litigation with the Transeastern JV lenders, was financed by TOUSA's issuance of new equity and debt securities including a $500 million senior secured credit facility, made up of (i) a new $200 million aggregate principal amount first lien term loan facility and (ii) a new $300 million aggregate principal amount second lien term loan facility. The first and second lien term loans will be used to fund the settlement in these manner: * $335 million repayment of the Transeastern JV senior term debt; * $65 million repayment of the Transeastern JV revolver debt; * $51 million to purchase certain Transeastern JV land bank assets; * $36 million of interest, financing fees and expenses; and * $13 million as cash on the balance sheet. The company also issued to Transeastern JV's senior mezzanine lenders $20 million in aggregate principal amount of 14.75% senior subordinated PIK election notes due 2015 and 8% Series A convertible preferred PIK Preferred Stock with an initial aggregate liquidation preference of $117.5 million. The preferred stock is convertible into common stock at a conversion price which shall initially equal the average closing common stock price for a 20 trading day period commencing Oct. 1, 2007, multiplied by 1.40, subject to numerous terms. Additionally the company issued warrants to Transeastern JV's junior mezzanine lenders to purchase shares of its common stock. The warrants have an estimated fair value of $16.25 million at issuance, subject to certain previously described terms. The company's existing $800 million revolving loan facility has been amended and restated to reduce the revolving commitments by $100 million and permit the incurrence of the Facilities. The revolving loan facility establishes new financial performance covenants with TOUSA that differ from prior covenants. The new covenants establish minimum tangible net worth requirements, maximum total leverage ratios, minimum interest coverage ratios, total land to adjusted tangible net worth ratios, maximum unsold units to units closed ratios, and maximum land supply ratios. The company will file an 8-K with the SEC which contains the final terms of the new debt and equity securities, as well as the amended credit terms and covenant descriptions. As previously announced, the company's certificate of incorporation has been amended to increase the authorized number of common shares from 97 million shares to 975 million shares. Of the new total shares authorized, 891 million reflect the maximum amount of shares that may be deliverable upon conversion of the Preferred Stock in 2015 using broad-based "worst case" assumptions described in the 8-K and the company's June 29 press release. The company expects to issue a significantly lesser portion of the newly authorized shares. By way of example, if the average trading price of the common stock during the measurement period equals the closing price of the company's common stock on the New York Stock Exchange on July 31, 2007, which was $2.86 per share, the conversion price of the preferred stock would be $4.00, which would result in a maximum number of 55.6 million shares of common stock deliverable upon conversion of the preferred stock, assuming that all dividends are paid in additional shares of preferred stock, and that none of the shares of preferred stock issued is converted prior to 2015. The company cannot predict what the trading price of its common stock will be during the measurement period or what the impact of the global settlement will be on the trading price of its common stock. As of March 31, 2007, the company's common stock had a book value of $11.89 per share. Mr. Mon said, "We truly appreciate the support of Citi and all of our lenders and the confidence they have shown in our ability to manage the business and execute our de-leveraging strategy. Completing this new financing in the face of current market conditions is testimony both to the long-term fundamental strength of TOUSA and the hard and effective work of our lenders." As previously announced, the Transeastern JV has been merged into one of the Company's subsidiaries and has become a guarantor on the Company's credit facilities and note indentures. TOUSA is acquiring control of about 5,000 additional homesites in Florida, of which 4,000 are owned and about 1,000 homesites are under option. The Transeastern JV business will be fully integrated into the company's Florida business and will market homes under the Engle Homes brand, one of the most recognized and respected homebuilding brands in the nation. The company also said that it continues to cooperate with the previously announced informal inquiry by the Miami Regional Office of the SEC, relating primarily to corporate and financial information and communications related to the Transeastern JV. The SEC has advised the company that this informal inquiry should not be construed as an indication that any violations of law have occurred, nor should it be considered a reflection upon any person, entity, or security. The company plans to release its quarterly earnings after the close of the market on Aug. 8, 2007. At that time, the company will discuss the financial implications of the recently completed transactions, as well as its plan to de-leverage the company and strengthen its balance sheet. About TOUSA Inc. TOUSA Inc. (NYSE: TOA) -- http://www.tousa.com/-- is a homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. * * * As reported in the Troubled Company Reporter on JulY 16, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on TOUSA Inc. to 'CCC+' from 'B' and removed it from CreditWatch, where S&P had placed it with negative implications on April 9, 2007, following the announcement of a pending settlement with creditors of the company's EH/Transeastern LLC joint venture. In addition, S&P lowered the senior unsecured debt rating to 'CCC- ' from 'B-' and the subordinated debt rating to 'CCC-' from 'CCC+'. At the same time, S&P assigned a 'B-' rating with a '2' recovery rating to a proposed $200 million first-lien term loan and a 'CCC-' rating with a '6' recovery rating to a proposed $300 million second-lien term loan. Proceeds from the secured term loans will be used, in part, to repay Transeastern creditors and acquire Transeastern's land holdings. The downgrades affect roughly $1.1 billion of unsecured notes. The outlook is developing. TURNER MEDIA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Turner Media Group, Inc. nka The Media Group 4100 East Mississippi Avenue Suite 1700 Denver, CO 80246 Bankruptcy Case No.: 07-18546 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Turner Advertising Group, LLC 07-18547 The Networks Group LLC 07-18548 Type of Business: The Debtor provides interactive T.V. advertising, direct response programming and transactional TV. See http://www.themediagroup.com/ Chapter 11 Petition Date: August 5, 2007 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtors' Counsel: Peter W. Ito, Esq. Baker & Hostetler LLP 303 East 17th Avenue Suite 1100 Denver, CO 80203 Tel: (303) 764-4010 Fax: (303) 861-7805 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' Consolidated List of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EchoStar Satellite, LLC and Trade Debt $24,000,000 EchoStar Satellite Operating Corporation 9601 South Meridian Boulevard Englewood, CO 80112 Time Warner Cable Direct Trade Debt $1,290,230 One Time Warner Center 9th Floor New York, NY 10019 DIRECTV, Inc. Trade Debt $965,041 1211 Avenue of the Americas 6th Floor New York, NY 10036 Comcast Spotlight Trade Debt $543,746 1601 Mile High Stadium Circle Denver, CO 80204 Comcase Media Center Trade Debt $158,414 Janicek Entertainment, Inc. Trade Debt $60,000 Videofashion Network Trade Debt $33,333 Mountain Towers Properties LLC Trade Debt $30,815 Equity Office Trade Debt $29,396 Bookhardt & O'Toole Trade Debt $21,763 SPK Media, LLC Trade Debt $18,900 Ensequence, Inc. Trade Debt $15,000 Akamai Systems Consulting Trade Debt $14,199 Saul Ewing Trade Debt $10,586 Brock & Company Trade Debt $10,251 Intermountain Communications Trade Debt $9,307 Greenhouse Partners Trade Debt $5,804 Reallinx, Inc. Trade Debt $5,243 Taylor, Jacobsen & Associates Trade Debt $3,437 JDJ Investments Trade Debt $3,307 UNISYS CORP: June 30 Balance Sheet Upside-Down by $2.2 Million -------------------------------------------------------------- Unisys Corporation posted total assets of $3,832,300,000 total liabilities of $3,834,500,000 and total stockholders' deficit of $2,200,000 as of June 30, 2007. Cash Flow and Balance Sheet Highlights Unisys generated $23,000,000 of cash from operations in the second quarter of 2007. In the year-ago quarter, the company used $193,000,000 of cash from operations. The company used about $37,000,000 of cash in the second quarter of 2007 for restructuring payments compared to about $34,000,000 in the year- ago period. Capital expenditures in the second quarter of 2007 increased to $84,000,000, compared to $65,000,000 in the year-ago quarter due to increased investments in outsourcing assets related to new outsourcing engagements. After deducting for capital expenditures, Unisys used $61,000,000 of free cash in the quarter compared with free cash usage of $258,000,000 in the second quarter of 2006. During the second quarter, the company received about $58,000,000 in cash related to a previously announced income tax audit settlement in the Netherlands. The company ended the quarter with $521,000,000 of cash on hand. Operating Results Revenue for the second quarter of 2007 declined 2% to $1,400,000,000 from revenue in the year-ago quarter, principally driven by a decline in the company's systems integration and consulting business. Foreign currency exchange rates had an about three percentage-point positive impact on revenue in the quarter. Revenue for the six months ended June 30, 2007, were $2,700,000,000, compared with revenue of $2,800,000,000 for the comparable period a year ago. The company recorded a net loss of $65,500,000 for the second quarter ended June 30, 2007, as compared with a net loss of $194,600,000 for the second quarter of 2006. The company recorded a net loss of $61,900,000 for the first half of 2007, compared with net loss of $222,500,000 for the first half of 2006. As expected, the company took a net $24,000,000 pre-tax restructuring charge in the quarter related to facility consolidations and workforce reductions. Second-quarter 2006 net loss included a net pre-tax restructuring charge of $141,000,000 and a tax benefit of $8,900,000. Pre-tax retirement- related expense in the second quarter of 2007 was $24,500,000 compared with $45,200,000 a year ago. Cost-Reduction Program During the second quarter Unisys completed about 550 personnel reductions related to current and previously announced headcount actions. Overall since announcing its repositioning effort at the end of 2005, the company has announced about 7,100 headcount reductions, of which about 80% are now complete. As it streamlines its operations, Unisys continues to invest in its strategic growth programs and in global sourcing. Net of these reinvestments, the company expects its announced 2006 and first-half 2007 cost restructuring actions to yield, on a run-rate basis, annualized cost savings of more than $340,000,000 by the second half of 2007 and more than $365,000,000 by the first half of 2008. Management's Comments "Our second-quarter results demonstrate continued steady progress toward our financial goals," said Joseph W. McGrath, Unisys president and chief executive officer. "Our operating profit improved significantly in the quarter. We saw particularly strong margin improvement in our services business. We continue to take actions to streamline our operations and drive toward our financial goal of an 8-10% operating profit margin, excluding retirement-related expense, in 2008. "As we focus on transforming our profitability, we also continue to build our sales pipeline and lay the foundation for future revenue growth," Mr. McGrath said. "Our services orders showed strong double-digit growth in the quarter, reflecting good client interest in our strategic growth programs. The order growth was broad-based across most service lines and geographies. We were particularly encouraged by strong order growth in systems integration and consulting." About Unisys Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides technology services and solutions to commercial businesses and governments worldwide. It operates in two segments, Services and Technology. Services segment provides end-to-end services and solutions that comprise systems integration and consulting; outsourcing; and infrastructure services. Technology segment develops servers and related products that operate in transaction-intensive, mission-critical environments. UNISYS CORP: Fitch Affirms BB+ Rating on $275 Mil. Credit Facility ------------------------------------------------------------------ Fitch Ratings has affirmed Unisys Corp.: -- Issuer Default Rating at 'BB-'; -- Secured credit facility at 'BB+'; -- Senior unsecured debt at 'BB-'. The Rating Outlook remains Negative. Approximately $1.3 billion of debt securities, including Unisys' undrawn $275 million secured credit facility, are affected by Fitch's action. The ratings and Negative Rating Outlook reflect: -- Liquidity risks associated with Unisys' obligation to refinance $200 million of 7.875% senior notes due April 2008 or obtain a bank waiver prior to Jan. 1, 2008 to prevent the termination of its $275 million secured credit facility; -- Weak revenue performance primarily due to restructuring- related disruptions to the consulting and systems integration business and continued declines in ClearPath revenue and associated maintenance revenue; -- Challenges associated with improving/ obtaining operating profit margin target of 8%-10% by 2008 and revenue growth in a very competitive information technology services marketplace; -- Improving, but weak earnings and continued negative free cash flow; -- Significant ongoing restructuring; and -- Pressured sales for high-margin ClearPath mainframes due to server mix shift to lower margin, industry-standard servers; The ratings continue to be supported by Unisys': -- Gradually improving credit protection measures driven by operating profit margin expansion; -- Long-term services contracts with recurring revenue base; -- Established expertise in targeted vertical end-markets; and -- Geographic and industry diversity of revenue base. Rating stabilization or positive rating actions could occur if Unisys': -- Multi-year restructuring and repositioning efforts are successfully executed, leading to sustainable free cash flow generation; -- Operating profit margins continue to expand, particularly for the Services segment (2.9% excluding retirement-related expense for the year ended June 30, 2007), which accounts for 86% of total revenue; -- Services business contributes the vast majority of total Segment operating profit, including pension expense, due to profit margin expansion, given the continued secular decline of high margin ClearPath mainframes. -- Successful market refinancing and continuation of solid liquidity position. Fitch may downgrade the rating if Unisys': -- Liquidity declines materially due to the termination of the company's $275 million secured revolving credit facility; -- Announces further material restructuring actions that require significant cash restructuring payments similar in scope to the current restructuring program. Fitch believes additional relatively minor restructuring charges are possible for facility consolidations and/or minor headcount reductions that will be funded with operating cash flow; or -- Financial performance, especially free cash flow, fails to improve as expected or deteriorates. Fitch believes Unisys continues to have adequate liquidity to satisfy operating requirements and remaining cash severance obligations. As of June 30, 2007, total liquidity was approximately $746 million, consisting of $521 million of cash and approximately $225 million of availability under its $275 million credit facility, net of $50 million of outstanding letters of credit. Additional liquidity is provided by a $300 million accounts receivable securitization facility with remaining availability of $175 million as of June 30, 2007, assuming the availability of sufficient eligible receivables. The A/R securitization program is renewable annually at the purchasers' option until November 2008 and is terminable by the purchasers if Unisys' debt rating declines below 'B'. Fitch remains concerned with Unisys' lack of free cash flow, which has been negative since 2004 on a rolling trailing 12-month basis. Although free cash flow remains negative, Fitch estimates the amount of negative free cash flow has moderated to ($172) million in the latest 12 months (LTM) ended June 30, 2007 from ($285) million in the year-ago period, despite a $182 million year-over- year increase in cash restructuring payments. Lastly, Fitch expects free cash flow to improve year-over-year for the second half of 2007 and potentially turn positive in 2008 due primarily to operating margin expansion and a significant decline in cash restructuring payments. As of June 30, 2007, total debt was $1.1 billion, consisting primarily of $400 million of senior unsecured notes due October 2012, $300 million due March 2010, $200 million due April 2008 and $150 million due October 2015. As of June 30, 2007, Unisys' leverage (total adjusted debt, including A/R securitizations/ operating EBITDAR) decreased to approximately 3.8 times (x) from 4.5x in 2006 and 7.1x in 2005. Interest coverage (operating EBITDA/gross interest expense) increased to 6.2x for the LTM ended June 30, 2007 from 4.6x in 2006 and 2.7x in 2005. VALENTIS INC: Earns $80,000 in Third Quarter Ended March 31 ----------------------------------------------------------- Valentis reported a net income of $80,000 on revenue of $231,000 for the third quarter ended March 31, 2007, compared to a net loss of $4.9 million on revenue of $114,000 for the corresponding period of the prior year. Revenue reported in the three months ended March 31, 2007 and 2006, primarily reflected license fees received during the periods under agreements related to Valentis' technologies. The net income of $80,000 for the quarter ended March 31, 2007, primarily reflects the increase in revenue, a decrease in total operating expenses, and $790,000 of other income from the sale of most of the company's remaining potential products, technologies and other assets. Following Valentis' July 2006 announcement regarding negative results in its Phase IIb clinical trial of VLTS 934 in patients with peripheral artery disease, or PAD, Valentis ceased all research and development activities on all of its potential products and technologies, including activities relating to its clinical trials and has been focusing on the licensing and sale of its technologies and the assertion of its intellectual properties. Valentis did not record any research and development expenses during the quarter ended March 31, 2007. General and administrative expenses decreased approximately $400,000 to approximately $921,000 for the quarter ended March 31, 2007, compared to approximately $1.3 million for the corresponding period in 2006. On March 31, 2007, Valentis had $1.1 million in cash and cash equivalents compared to $4.3 million in cash, cash equivalents and short-term investments on June 30, 2006. The decreases of $3.2 million in cash, cash equivalents and short-term investments balances primarily reflected spending related to severance payments and Valentis' efforts to pursue its strategic opportunities, which include consummating Valentis announced potential merger with Urigen and selling certain assets. At March 31, 2007, the company's consolidated balance sheet showed $1.8 million in total assets, $522,000 in total liabilities, and $1.3 million in total stockholders' equity. Going Concern Doubt Ernst & Young LLP, in Palo Alto, Calif., expressed substantial doubt about Valentis Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended June 30, 2006, and 2005. The auditing firm pointed to the company's losses since inception, including a net loss of $15.3 million for the year ended June 30, 2006, and company's accumulated deficit of $240 million at June 30, 2006. About Valentis Headquartered in Burlingame California, Valentis, Inc. (Nasdaq: VLTS) -- http://www.valentis.com/-- is a biotechnology company that was engaged in the development of innovative products for peripheral artery disease (PAD). On July 11, 2006, Valentis announced that no statistically significant difference was seen in the primary endpoint or any of the secondary endpoints in its Phase IIb clinical trial of VLTS 934 in PAD. Valentis is assessing strategic opportunities that may be available to it, including the sale or merger of its business and the sale or licensing of certain of its assets. VANGUARD CAR: Enterprise Deal Prompts S&P to Withdraw Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all ratings on Vanguard Car Rental USA Holdings Inc., including the 'B+' corporate credit rating. The rating action follows the company's acquisition by Enterprise Rent-A-Car Co. (BBB/Stable/A-2) on Aug. 1, 2007. "Ratings were withdrawn due to refinancing of Vanguard's outstanding rated debt in conjunction with its acquisition," Standard & Poor's credit analyst Betsy Snyder said. VERTRUE INC: Earns $16.7 Million in Fourth Quarter Ended June 30 ---------------------------------------------------------------- Vertrue Incorporated reported on Thursday its financial results for the fourth quarter and fiscal year ended June 30, 2007. The company's net income increased 36% to $16.7 million in the fourth quarter of fiscal 2007 compared to $12.3 million in the prior year quarter. Revenues increased 15% to $204.6 million in the fourth quarter of fiscal 2007 compared to $177.4 million in the prior year quarter due to a 16% increase in Marketing Services revenues, a 24% increase in Management Services revenues and a 9% increase in Personals revenues. Of the 9% increase in Personals revenues, 16% was due to the acquisition of certain assets of Mobile Lifestyles Inc., which was acquired in the first quarter of fiscal 2007. Excluding the revenue from Mobile Lifestyles Inc., Personals revenues decreased 6% year over year. In total, on a consolidated basis, revenues grew 8% organically from the fourth quarter of fiscal 2006 to the fourth quarter of fiscal 2007. EBITDA increased 55% to $39.4 million in the fourth quarter of fiscal 2007 compared to $25.4 million reported in the prior year quarter. Adjusted EBITDA increased 70% to $31.4 million in the fourth quarter of fiscal 2007 compared to $18.4 million in the prior year quarter. EBITDA and Adjusted EBITDA for the fourth quarter of fiscal 2007 include $2.6 million related to Neverblue Media Inc., which was acquired in February 2007. The fiscal 2007 fourth quarter results include $700,000 ($800,000 million after tax) in expenses related to the proposed merger, a $1.4 million ($800,000 after tax) benefit from the reversal of a restructuring reserve and a tax charge of $1.0 million to adjust certain prior period tax amounts. Fiscal 2006 fourth quarter included a $2.0 million tax benefit primarily related to the reversal of an accrual due to the completion of a tax audit. Free cash flow was positive $4.2 million for the fourth quarter of fiscal 2007 compared to a negative $2.8 million in the prior year quarter. This increase was primarily due to an increase in Adjusted EBITDA in the current period offset by the payment of expenses incurred related to the proposed merger. Full Year Results Net income increased 12% to $36.5 million in fiscal 2007 compared to $32.7 million in the same period last year. Revenues increased 15% to $754.9 million in the fiscal year ended June 30, 2007, compared to $658.9 million in the prior year due to a 12% increase in Marketing Services revenues, a 43% increase in Management Services revenues and a 22% increase in Personals revenues. Of the 22% increase in Personals revenues, 21% was due to the acquisition of certain assets of Mobile Lifestyles Inc. The organic growth in consolidated revenues from fiscal 2006 to fiscal 2007 was 10%. EBITDA increased 15% to $102.9 million in fiscal 2007 compared to $89.8 million reported in the prior year. Adjusted EBITDA increased 11% to $88.1 million in fiscal 2007 compared to $79.2 million in the prior year. EBITDA and Adjusted EBITDA for fiscal 2007 include $3.5 million related to Neverblue Media Inc., which was acquired in February 2007. The fiscal 2007 year results included $6.0 million ($5.2 million after tax) in expenses related to the proposed merger, a $1.4 million ($800,000 after tax) benefit from the reversal of a restructuring reserve and a tax charge of $1.5 million to adjust certain prior period tax amounts. Fiscal 2006 included a $2.0 million tax benefit primarily related to the reversal of an accrual due to the completion of a tax audit. Free cash flow increased to $29.4 million in fiscal 2007 compared to $20.1 million in the prior year period primarily due to lower capital expenditures. At June 30, 2007, the company's consolidated balance sheet showed $482.6 million in total assets, $454.1 million in total liabilities, and $28.5 million in total stockholders' equity. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $116.2 million in total current assets available to pay $203.7 million in total current liabilities. Proposed Merger As reported in the Troubled Company Reporter on March 27, 2007, Vertrue Incorporated entered on March 22, 2007, into a definitive agreement to be acquired by Vertrue's management and an investor group consisting of One Equity Partners, Oak Investment Partners and Rho Ventures in a transaction valued at approximately $800 million. On July 18, 2007, Vertrue Incorporated entered into an amendment to the merger agreement with Velo Holdings Inc. and Velo Acquisition Inc. Under the terms of the amended merger agreement, Velo Acquisition Inc. will be merged with and into the company with the company continuing as the surviving corporation and becoming a wholly owned subsidiary of Velo Holdings Inc. The terms of the amendment increase the merger consideration payable to Vertrue's stockholders to $50 per share in cash, without interest, from $48.50 per share in cash, without interest. In connection with the amendment to the Merger Agreement, Velo Holdings entered into an agreement with Brencourt Advisors LLC, a beneficial owner of approximately 28.1% of Vertrue's common stock, pursuant to which Brencourt agreed to vote all of its shares of Vertrue's common stock in favor of the adoption of the amended merger agreement and was granted an option to acquire an interest in equity securities of Velo Holdings in an amount of not less than $10 million and not more than $25 million. On July 26, 2007, Brencourt gave irrevocable notice to Velo Holdings that it was exercising, on behalf of Brencourt Credit Opportunities Master Ltd. and Brencourt BD LLC, to invest in equity securities of Velo Holdings Inc. in an amount of $25 million. As a result, Velo Holdings is currently owned and/or backed by the equity commitments of an investor group consisting of One Equity Partners II L.P., Rho Ventures V L.P., Rho Ventures V, Affiliates L.L.C., Brencourt Credit Opportunities Master Ltd. and Brencourt BD LLC. The transaction, including the assumption of debt, is valued at approximately $850 million. Oak Investment Partners, which was originally part of the investor group formed to acquire Vertrue, determined not to participate in the merger transaction at the increased $50 per share merger consideration. The transaction is expected to be completed in the first quarter of fiscal year 2008, which ends on Sept. 30, 2007, and is subject to receipt of stockholder approvals as well as satisfaction of additional customary closing conditions. About Vertrue Incorporated Headquartered in Norwalk, Connecticut, Vertrue Incorporated (Nasdaq: VTRU) -- http://www.vertrue.com/-- is an internet direct marketing services company. Vertrue operates a diverse group of marketing businesses that share a unified mission: to provide every consumer with access to direct-to-consumer savings across its five vertical markets of healthcare, personal property, security/insurance, discounts and personals, which are all offered online through a set of diverse internet marketing channels. * * * As reported in the Troubled Company Reporter on July 2, 2007, Standard & Poor's Ratings Services assigned bank loan and recovery ratings to the proposed $660 million senior secured credit facilities of membership marketing company Vertrue Inc. (B+/Watch Negative/--). WACHOVIA BANK: S&P Assigns Low-B Ratings on Classes L to Q Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Wachovia Bank Commercial Mortgage Trust's $3.602 billion commercial mortgage pass-through certificates series 2007-C33. The preliminary ratings are based on information as of Aug. 3, 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-PB, A-4, A-5, A-1A, IO, A-M, 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 1.22x, a beginning LTV of 115.5%, and an ending LTV of 112.6%. The rated final maturity date for these certificates is February 2051. Preliminary Ratings Assigned Wachovia Bank Commercial Mortgage Trust Recommended Class Rating Amount Credit Support ----- ------ ------ -------------- A-1 AAA $14,392,000 30.000% A-2 AAA $392,072,000 30.000% A-3 AAA $327,795,000 30.000% A-PB AAA $67,641,000 30.000% A-4 AAA $998,844,000 30.000% A-5 AAA $156,000,000 30.000% A-1A AAA $564,743,000 30.000% IO* AAA $3,602,123,586 N/A A-M AAA $360,212,000 20.000% A-J AAA $247,646,000 13.125% B AA+ $36,022,000 12.125% C AA $40,523,000 11.000% D AA- $36,022,000 10.000% E A+ $31,518,000 9.125% F A $27,016,000 8.375% A-2FL** AAA TBD 30.000% A-5FL** AAA TBD 30.000% A-MFL** AAA TBD 20.000% G A- $36,021,000 7.375% H BBB+ $40,524,000 6.250% J BBB $49,530,000 4.875% K BBB- $36,021,000 3.875% L BB+ $27,016,000 3.125% M BB $13,508,000 2.750% N BB- $9,005,000 2.500% O B+ $13,508,000 2.125% P B $9,005,000 1.875% Q B- $9,006,000 1.625% S NR $58,533,586 0.000% * Interest-only class with a notional amount. ** Floating rate class. N/A - Not applicable. TBD - To be determined. NR - Not rated. XELR8 HOLDINGS: Posts $881,000 Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- XELR8 Holdings Inc. announced last week its financial results for the three and six months ended June 30, 2007. Financial and operational highlights for the second quarter ended June 30, 2007, compared to the three months ended June 30, 2006: -- Net loss declined to $881,000, compared to $1.01 million. -- Revenues climbed 140% to $1.39 million, up from $577,000. -- Gross profit margin improved to 73.5% from 71.2%. -- During the second quarter period of 2007, 2,079 people enrolled in the XELR8 network, representing a 64% increased over 1,268 that enrolled during the first three months of this year. Financial and operational highlights for the six months ended June 30, 2007, compared to the six months ended June 30, 2006: -- Net loss dropped 12% to $2.25 million, compared to $2.56 million. -- Revenues were $2.26 million, representing a 102% increase over $1.12 million. -- Gross profit margins rose to 70.2%, up from 63.1%. -- Net cash used in operations declined 76% to $463,000 from $1.9 million. -- For the first six months of 2007, there were 3,347 enrollments in XELR8's national direct selling network, bringing total network participation to more than 6100 at the end of June. As of June 30, 2007, XELR8 had approximately $3 million in cash and cash equivalents; $2.8 million in working capital; and total shareholders' equity of $2.9 million. Commenting on the results, John Pougnet, the company's chief executive officer and chief financial officer, stated, "XELR8 enjoyed another outstanding quarter of revenue growth and decreased losses from operation, marked by triple digit percentage top line growth in both the three and six month reporting periods; not to mention a new all-time high record for net sales in a single quarter. Although the summer months and end of year holidays are historically 'slow' or 'sluggish' periods of growth for most in the direct selling industry, I'm pleased to share that sales in July appear to be outpacing our internal expectations, helping to fuel optimism that we will remain on track to deliver equally strong results in the second half of the year." "To promote ongoing and accelerated growth of our overall national direct selling network, we have implemented several fun and exciting incentive programs featuring trips, cars, cash bonuses, and other prizes, as well as scheduled a series of company- sponsored rallies around the country - all leading up to our highly anticipated annual conference to be held in Las Vegas in February 2008. With attendance at the conference expected to be more than five times greater than any prior year, we have a great deal of work ahead of us to properly prepare for acknowledging and celebrating the hundreds of individuals who are collectively helping XELR8 achieve its ambitious goals and objectives." At June 30, 2007, the company's consolidated balance sheet showed $3.7 million in total assets, $866,197 in total liabilities, and $2.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2219 Going Concern Doubt As reported in the Troubled Company Reporter on April 12, 2007, , Gordon, Hughes & Banks LLP, in Greenwood Village, Colorado, expressed substantial doubt about XELR8 Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has incurred a net loss of $4,669,449 for the year ended Dec. 31, 2006. About XELR8 Holdings XELR8 Holdings Inc. (AMEX: BZI) -- http://www.xelr8.com/-- develops, sells, markets and distributes nutritional supplement products primarily through a direct sales or network marketing system in which independent distributors sell the company's products, as well as purchase them for their own personal use. The company also sells products directly to professional and Olympic athletes and to professional sports teams. ZIFF DAVIS: Jason Young Succeeds Callahan as Chief Exec. Officer ---------------------------------------------------------------- Ziff Davis Media's Consumer/Small Business Group's Jason Young, current president, will assume the CEO role at Ziff Davis Media. Robert F. Callahan, CEO since 2001, will continue his role as chairman of Ziff Davis Media. The shift was made in concert with the sale of the Ziff Davis Enterprise Group to Insight Venture Partners, which closed on July 31, 2007. ZDE was sold for approximately $150 million cash, subject to certain adjustments in accordance with the purchase and sale agreement, plus an earn-out payment of up to $10 million in cash based on 2007 full-year results of ZDE. “Jason's ready to take the helm,” Mr. Callahan said. “He's a dynamic executive who has played the lead role in driving our digital growth, which will remain his number one priority. Ziff Davis has transformed swiftly into a digital, event, and print company fueled by its leading heritage magazine brands in the technology and video games arena. Our teams are second to none driving customer value. We wish all our talented Enterprise Group executives nothing but the best in their new venture with Insight Partners.” "I'm honored and thrilled to be selected for the CEO position at Ziff Davis Media, which under Bob's leadership has transformed into a new media firm delivering strong results for our customers," Mr. Young said. "The technology and video gaming markets we serve are powerful and growing. Ziff Davis has always led the market as an innovator in content creation, audience development, and marketing solutions. At the core of our continued growth is a loyal audience of 23 million monthly unique users of our internet properties complemented by millions of readers of our specialized publications. I look forward to working with Bob, our board, and our outstanding teams in continuing to drive the Ziff Davis Media business forward.” Mr. Young has spent the majority of his career at Ziff Davis, originally joining the company in 1990. Since 2004, Mr. Young has been president of the consumer/small business Division, overseeing market-leading brands PC Magazine, PCMag.com, ExtremeTech.com and DL.TV, well as the development of the DigitalLife show. After a brief tenure as vice president of sales & marketing at TheStreet.com, Mr. Young rejoined Ziff Davis where, from 2001 to 2005, as senior vice president and general manager of Ziff Davis Internet (2002-2005) and vice president of sales of Ziff Davis Internet (2001), he led the team that re-established Ziff Davis' digital footprint, growing the business significantly by scale and profitability. Previously, at Ziff Davis, Mr. Young held positions including National Advertising Director for Windows Sources, Publisher of Windows Pro, Corporate Sales Director of ZDNet and Advertising Director of ZDNet. About Ziff Davis Holdings Inc. Headquartered in New York City, Ziff Davis Holdings Inc. -- http://www.ziffdavis.com/-- is the parent company of Ziff Davis Media Inc. is an integrated media company serving the technology and videogame markets. Ziff Davis currently reaches over 26 million people a month through its portfolio of 15 websites, three award-winning magazines, consumer events and direct marketing services. The company is headquartered in New York and also has offices and labs in San Francisco and Boston. Ziff Davis exports its brands internationally in 45 countries and 13 languages. Going Concern Doubt Grant Thornton LLP, in New York, expressed substantial doubt about Ziff Davis Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has incurred a net loss of approximately $133.8 million during the year ended Dec. 31, 2006, and as of said date, working capital deficit and accumulated deficit of approximately $21 million and $1.2 billion. In addition, as of March 31, 2007, the company had long-term debt and redeemable preferred stock, which has been classified as debt, totaling $390 million and $1.02 billion respectively, and a working capital deficit of approximately $12.7 million. Commencing August 2006, the company's Compounding Notes due 2009 accrue interest on a cash basis. The first cash interest payment for the Compounding Notes was made in February 2007. *C-BASS: Remains Confident Despite Liquidity Challenges ------------------------------------------------------- C-BASS LLC, an affiliate of MGIC Investment Corporation and Radian Group Inc., issued a statement in response to the announcements made on July 30, 2007, by MGIC and Radian regarding the liquidity challenges faced by C-BASS. The company states that while nothing fundamentally has changed at C-BASS, like many other firms in the industry, the current severe state of disruption in the credit markets has caused C-BASS to be subject to an unprecedented amount of margin calls from our lenders. The frequency and magnitude of these calls have adversely affected its liquidity. To address this, C-BASS is in advanced discussions with a number of investors to provide increased liquidity and is exploring all options to mitigate the liquidity risk in this difficult market. At the beginning of 2007, the company had $302 million of liquidity, representing greater than 30% of its capital of $926 million. During the first six months of 2007, a very tumultuous time in the subprime mortgage market, C-BASS' disciplined liquidity strategy enabled the company to meet $290 million in lender margin calls. During the first 24 days of July alone, C-BASS met an additional $260 million of margin calls, representing greater than a 20% decline in the lender's value. The company believes that nothing justifies this substantial amount of margin calls received in such a short period of time, particularly as there has been no change in the underlying fundamentals of the company's portfolio. C-BASS remains confident in the overall credit quality of its portfolio and the performance of its highly rated servicing subsidiary Litton Loan Servicing. This confidence has been supported by C-BASS' results relative to the recent widespread downgrades from the rating agencies. Out of a total of 487 subprime bonds downgraded by Standard & Poor's, only 4 C-BASS bonds were downgraded. Moody's downgraded a total of 399 subprime bonds, only 5 of which were C-BASS issued. In addition, Moody's downgraded 184 bonds from 91 CDOs, none of which were C-BASS issued. Even while the company's liquidity has been under attack, C-BASS has been one of the most prolific issuers in this highly disrupted market, as the company managed to price and issue 2 CBOs and 11 RMBS deals from Jan. 1, 2007 to-date. The company deals all priced among the tightest spreads in the market, and it expects deals to continue to be well received by Wall Street and the investor community. The C-BASS and Litton businesses remain sound and the fundamentals remain strong. C-BASS has been profitable 41 out of the 42 quarters it has been in business, including the second quarter of 2007. Finally, the company says the margin calls have had no impact on the loan servicing activities of Litton, and Litton continues to provide innovative, industry leading solutions for customers as we enter an unprecedented period of subprime defaults. About MGIC Investment MGIC Investment Corporation, (NYSE: MTG) -- http://www.mgic.com/ -- through its subsidiary, provides private mortgage insurance to the home mortgage lending industry in the United States. Based in Milwaukee, Wisconsin, MGIC Investment the parent of Mortgage Guaranty Insurance Corporation. About Radian Group Radian Group Inc., (NYSE: RDN) -- http://www.radiangroupinc.com/ -- through its subsidiaries and affiliates, operates as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. Radian Group, based in Philadelphia, Pennsylvania, is the parent of Radian Guaranty Inc. About Litton Loan Servicing Houston-based Litton Loan Servicing, -- http://www.littonloan.com/ -- a wholly owned subsidiary of C-BASS, is a mortgage servicing company specializing in loss mitigation and default management for residential loans. Since its inception in 1988, Litton has grown from a handful of employees servicing customers exclusively in Texas to more than 1,000 employees servicing more than 400,000 customers nationwide. Throughout its substantial growth, Litton has maintained its primary objective of preserving homeownership and keeps thousands of customers facing foreclosure in their homes each year. About C-BASS C-BASS LLC -- http://www.c-bass.com/-- is a New York-based company, long regarded as a leading issuer, servicer and investor in credit-sensitive residential mortgage assets. C-BASS is a limited liability company capitalized by MGIC Investment Corporation, Radian Group Inc., and C-BASS management. *S&P Lowers Ratings on 25 Tranches and Removes Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 25 tranches from six U.S. cash flow and hybrid CDO of ABS transactions and removed them from CreditWatch with negative implications, where they were placed July 16, 2007. At the same time, S&P affirmed its ratings on five tranches from two of the same six transactions and removed them from CreditWatch with negative implications, where they were also placed July 16, 2007. All of the affected CDO transactions are collateralized substantially by mezzanine tranches of U.S. residential mortgage-backed securities backed by first-lien subprime mortgage collateral. The 25 downgraded CDO of ABS tranches have a total issuance amount of $973 million; the five with ratings that S&P affirmed and removed from CreditWatch have a total issuance amount of $307 million. On July 12, 2007, Standard & Poor's lowered its ratings on more than 600 U.S. RMBS classes collateralized by U.S. first-lien subprime mortgages. Subsequently, on July 19, 2007, we lowered our ratings on more than 400 U.S. RMBS classes backed by U.S. closed-end second-lien mortgages. In light of these actions, S&P have reviewed the exposure of its globally rated CDO transactions to the downgraded securities and are assessing the impact on its CDO ratings. Currently, 117 tranche ratings from 38 cash flow and hybrid CDO transactions remain on CreditWatch negative because of exposure to RMBS classes that have been downgraded; these 117 tranches have an issuance amount of $4.433 billion. Aside from these actions on cash and hybrid CDOs, on July 19, 2007, Standard & Poor's lowered its ratings on 93 tranches from publicly rated synthetic CDO transactions representing $1.948 billion in issuance. S&P subsequently lowered its ratings on three tranches from two publicly rated synthetic CDO transactions, representing $152.5 million, and placed its ratings on seven tranches from one actively managed transaction on CreditWatch with negative implications, representing $140.8 million. Ratings Lowered and Removed from Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- ACA ABS 2003-1 Ltd. C BBB+ A+/Watch Neg ACA ABS 2003-1 Ltd. D BB- BBB/Watch Neg Arca Funding 2006-1 Ltd. II AA AAA/Watch Neg Arca Funding 2006-1 Ltd. III A AA/Watch Neg Arca Funding 2006-1 Ltd. IV A- AA-/Watch Neg Arca Funding 2006-1 Ltd. V BBB A/Watch Neg Arca Funding 2006-1 Ltd. VI BB BBB/Watch Neg Arca Funding 2006-1 Ltd. VII BB- BBB-/Watch Neg Arca Funding 2006-1 Ltd. VIII B BB+/Watch Neg Northlake CDO I Ltd. III B+ BBB-/Watch Neg STATIC Residential CDO 2006-B A-2 AA+ AAA/Watch Neg STATIC Residential CDO 2006-B B-1 AA AA+/Watch Neg STATIC Residential CDO 2006-B B-2 A AA-/Watch Neg STATIC Residential CDO 2006-B C BBB A/Watch Neg STATIC Residential CDO 2006-B D BB BBB/Watch Neg STATIC Residential CDO 2006-C A-2 AA+ AAA/Watch Neg STATIC Residential CDO 2006-C B-1 AA- AA+/Watch Neg STATIC Residential CDO 2006-C B-2 A+ AA-/Watch Neg STATIC Residential CDO 2006-C C BBB A/Watch Neg STATIC Residential CDO 2006-C D-1a BB+ BBB+/Watch Neg STATIC Residential CDO 2006-C D-1b BB+ BBB+/Watch Neg STATIC Residential CDO 2006-C D-2 B BBB-/Watch Neg TABS 2006-6 Ltd. B2 BBB- BBB/Watch Neg TABS 2006-6 Ltd. B3 BB BBB-/Watch Neg TABS 2006-6 Ltd. C B+ BB/Watch Neg Ratings Affirmed and Removed from Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- Northlake CDO I Ltd. II A A/Watch Neg TABS 2006-6 Ltd. A2 AA AA/Watch Neg TABS 2006-6 Ltd. A3 A A/Watch Neg TABS 2006-6 Ltd. B1 BBB+ BBB+/Watch Neg TABS 2006-6 Ltd. ISub Nts BBB- BBB-/Watch Neg *Large Companies with Insolvent Balance Sheets ---------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (22) 118 (4) AFC Enterprises AFCE (25) 162 4 Alaska Comm Sys ALSK (22) 562 22 Alliance Imaging AIQ (4) 678 50 Authentic Inc. AUTH (6) 26 0 Bare Escentuals BARE (189) 184 91 Bearingpoint Inc. BE (177) 1,939 166 Blount International BLT (98) 448 135 CableVision System CVC (5,349) 9,654 (638) Carrols Restaurant TAST (24) 453 (28) Cell Therapeutic CTIC (101) 94 24 Centennial Comm CYCL (1,090) 1,393 92 Charter Comm CHTR (6,345) 15,177 (1,015) Cheniere Energy CQP (168) 2,104 108 Choice Hotels CHH (71) 332 (40) Cincinnati Bell CBB (773) 1,951 27 Claymont Stell PLTE (50) 150 67 Compass Minerals CMP (46) 691 157 Corel Corp. CRE (16) 261 (31) Crown Holdings CCK (388) 6,793 428 Crown Media HL CRWN (519) 759 64 CV Therapeutics CVTX (90) 356 263 Cyberonics CYBX (16) 137 (28) Dayton Superior DSUP (99) 336 95 Deluxe Corp DLX (0) 1,410 (164) Denny's Corporation DENN (221) 444 (67) Domino's Pizza DPZ (1,434) 474 86 Dun & Bradstreet DNB (458) 1,392 (238) Echostar Comm DISH (30) 9,066 1,150 Eisntein Noah Re BAGL (131) 135 (9) Emeritus Corp. ESC (112) 953 (55) Enzon Pharmaceutical ENZN (55) 369 180 Extendicare Real EXE-U (20) 1,316 29 Foamex Intl FMXI (272) 579 150 Ford Motor Co F (3,447) 281,491 (8,138) Gencorp Inc. GY (50) 1,033 52 General Motors GM (3,202) 185,198 (5,059) Graftech International GTI (86) 772 241 Healthsouth Corp. HLS (1,602) 3,238 (398) I2 Technologies ITWO (15) 185 32 IDEARC Inc IAR (8,755) 1,508 171 IMAX Corp IMX (33) 243 84 Incyte Corp. INCY (120) 325 261 Indevus Pharma IDEV (144) 76 36 Intermune Inc ITMN (55) 249 195 Ista Pharmaceuticals ISTA (15) 48 18 ITC Deltacom Inc. ITCD (33) 421 18 Jazz Pharmaceuticals JAZZ (195) 201 47 Koppers Holdings KOP (70) 671 177 Life Sciences LSR (1) 237 25 Linear Tech Corp. LLTC (708) 1,215 681 Lodgenet Entertainment LNET (54) 274 8 McMoran Exploration MMR (50) 446 (1) Mediacom Comm MCCC (110) 3,620 (269) National Cinemed NCMI (585) 401 43 Neurochem Inc NRM (34) 61 20 New River Pharma NRPH (110) 152 (19) Nexstar Broadcasting NXST (80) 709 23 NPS Pharm Inc. NPSP (213) 180 (219) ON Semiconductor ONNN (138) 1,441 309 PRG-Schultz Intl. PRGX (91) 157 3 Protection One PONN (85) 441 (1) Qwest Communication Q (1,534) 20,701 (1,440) Radnet Inc. RDNT (48) 396 31 Ram Energy Resources RAME (2) 184 (6) Regal Entertainment RGC (130) 3,085 (131) Resverlogix Corp. RVX (2) 17 10 Riviera Holdings RIV (28) 221 13 RSC Holdings Inc RRR (129) 3,430 (2,949) Rural Cellular RCCC (587) 1,362 183 Sealy Corp. ZZ (144) 1,017 49 Senorx Inc SENO (4) 16 2 Sipex Corp SIPX (12) 53 7 St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (178) 3,694 (46) Stelco Inc STE (108) 2,734 726 Sun-Times Media SVN (369) 929 (265) Suncom Wire-CL SCWH (433) 1,639 209 TechTarget TTGT (66) 94 31 Town Sports Int. CLUB (20) 436 (52) Unisys Corp. UIS (2) 3,832 40 Weight Watchers WTW (1,053) 1,019 (82) Western Union WU (86) 5,328 945 Westmoreland Coal WLB (108) 759 (55) Worldspace Inc. WRSP (1,641) 527 85 WR Grace & Co. GRA (390) 3,706 794 XM Satellite XMSR (445) 1943 (76) ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena Jusay, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***