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/raid1/www/Hosts/bankrupt/TCR_Public/070809.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, August 9, 2007, Vol. 11, No. 187 Headlines ALCATEL-LUCENT: Court Reverses $1.5-Bln Microsoft MP3 Ruling ALLEGHENY ENERGY: Moody's Reviews Ba2 Corporate Family Rating ALT-A MORTGAGE: S&P Puts 207 Collateral Ratings Under Neg. Watch ALTERNATIVE LOAN: Moody's Rates Class M-8 Certificate at Ba1 ALTERNATIVE LOAN: Moody's Puts Low-B Ratings on Two Cert. Classes ALTRA NEBRASKA: S&P Puts B Prelim. Rating on $130MM Sr. Notes AMERICAN HOME: Inks Cash Collateral Use Agreement With BofA AMERICAN HOME: Wants $50 Million DIP Pact With WL Ross Okayed ANGIOTECH PHARMA: S&P Junks Rating on Senior Subordinated Debt ARMOR HOLDINGS: Moody's Confirms Ba3 Corporate Family Rating ARVINMERITOR INC: Sells LVA Exhaust Operations to Klarius Group BALLY TOTAL: Court Sets Sept. 17 Plan Confirmation Hearing BALLY TOTAL: Gets Interim OK to Hire Kirkland as Counsel BANC OF AMERICA: S&P Affirms B Ratings on Four Cert. Classes BANC OF AMERICA: S&P Affirms Low-B Ratings on Six Cert. Classes BUMBLE BEE: Weakened Liquidity Cues Moody's to Cut Ratings C2 GLOBAL: June 30 Balance Sheet Upside-Down by $1.4 Million CAPITAL ONE: Inks $700 Million Buyout Deal With NetSpend Holdings CARES INVESTMENTS: Case Summary & 19 Largest Unsecured Creditors CARIBOU RESOURCES: JED Oil Completes Purchase of All Shares CATHOLIC CHURCH: San Diego Has Until October 15 to File Plan CATHOLIC CHURCH: San Diego Gets Nod to Sell CSE & EWC Properties CENTER CUT: Moody’s Places Corporate Family Rating at B3 CHARLES PAASO: Case Summary & 19 Largest Unsecured Creditors CHURCH & DWIGHT: Earns $40.5 Million in Quarter Ended June 29 COMBIMATRIX CORP: Posts $3.6 Mil. Net Loss in Qtr. Ended June 30 COMM 2004-LNB2: Fitch Upgrades Ratings on Six Loan Classes CONSECO INC: Impaired Earnings Cue S&P to Lower Ratings CORRECTIONS CORP: Earns $32.6 Million in Quarter Ended June 30 CWABS ASSET: Moody's Rates Class B-1 Certificates at Ba2 CWALT 2007: Moody's Assigns Low-B Ratings on Two Cert. Classes CYBERONICS INC: Names James Reinstein as Vice Pres. & General Mgr. D&E COMMUNICATIONS: Earns $2.3 Million in Second Quarter 2007 DAVITA INC: Messrs. Berg, Brittain, and Diaz Join Board DELTA AIR: Creditors Want Reorganized Debtors to Comply with Plan E POINTE: Case Summary & 20 Largest Unsecured Creditors EUNICE ANIFOWOSE: Case Summary & Seven Largest Unsecured Creditors FAIRVIEW LOGGING: Case Summary & 16 Largest Unsecured Creditors FLINKOTE CO: Disclosure Statement Hearing Scheduled on Nov. 27 FORD MOTOR: Recalls 3.6 Million Vehicles to Fix Cruise Control FORD MOTOR: Wants Tentative Land Rover & Jaguar Deal by Sept. 30 FORD MOTOR: June 30 Balance Sheet Upside-Down by $1.9 Billion FRASER PAPERS: S&P Withdraws Ratings at Issuer's Request FIRST UNION: Stable Performance Cues S&P to Lift Ratings GLEN MEYERS: Case Summary & 16 Largest Unsecured Creditors GLIMCHER REALTY: To Acquire Merritt Square Thru $57 Million Loan GLOUCESTER SPC: S&P Puts Low-B Ratings on Three Note Classes GMAC COMMERCIAL: Fitch Assigns Distressed Rating on Class O Notes GOODYEAR TIRE: Names Mark Schmitz as Chief Financial Officer HAMLET APARTMENTS: Case Summary & 39 Largest Unsecured Creditors HEALTH CARE: Earns $31.9 Million in Second Quarter Ended June 30 HEXION SPECIALTY: Funds $100 Million of Incremental Term Loans HORIZON LINES: S&P Rates Proposed $375MM Credit Facilities at BB+ ICEWEB INC: Upgrades Fiscal 2007 Revenue Forecast to $19 Million ICEWEB INC: March 31 Balance Sheet Upside-Down by $1.3 Million INDEVUS PHARMA: Accepts $71.9MM Exchange Offer for 6.25% Sr. Notes JACK IN THE BOX: Board Authorizes Two-for-One Common Stock Split JAMES TAIT: Voluntary Chapter 11 Case Summary JED OIL: Completes Acquisition of Caribou Resources KB HOME: Completes $250 Million Redemption of 9-1/2% Senior Notes KLINGER ADVANCED: Organizational Meeting Set for August 14 LEBARON DRYWALL: Court Okays Sale of Alaskan Assets for $1 Million LNR CFL: Fitch Holds Low-B Ratings on Four Note Classes METROMEDIA INT'L: Gets $2.05/Share Proposal from Fursa Alternative MIRANT CORP: Settles 2006 Pepco Disputes, Gains $370 Million MUSICLAND HOLDING: Buena Vista Seeks to Recover $25 Million MUSICLAND HOLDING: Harris Wants Buena Vista Complaint Dismissed N-STAR REAL: Fitch Affirms BB Rating on $15.916MM Class D Notes N-STAR REAL: Fitch Affirms BB Rating on $16.2MM Class E Notes N.Y. WESTCHESTER: Exclusive Plan Filing Moved to December 14 NEPHROS INC: Unable to Pay Third Installment Under Settlement Pact NEW CENTURY: Court Moves Exclusive Plan Filing Date to Nov. 28 NORTHWEST AIRLINES: Next Periodic Distribution Date is October 1 NORTHWEST SUBURBAN: Organizational Meeting Set for August 13 NPS PHARMA: To Retire 2008 Debt with $200 Mil. from Three Deals NPS PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by $226MM NUANCE COMM: To Offer $150 Mil. Unsecured Senior Convertible Notes NUANCE COMMS: S&P Rates Proposed $150MM Convertible Notes at B- NUTRITIONAL SOURCING: Organizational Meeting Set for August 13 NUTRITIONAL SOURCING: Has Until October 2 to File Schedules NUTRITIONAL SOURCING: Wants Kay Scholer as Bankruptcy Counsel OASIS HOSPITALITY: Case Summary & Nine Largest Unsecured Creditors OGLEBAY NORTON: Harbinger Commences Offer to Buy Common Stock OGLEBAY NORTON: Urges Shareholders to Snub Harbinger's Offer ORLANDO CITYPLACE: Wants to Use SFT Parties' Cash Collateral ORLANDO CITYPLACE: Seeks to Reject Vance Marketing Contracts OUTLOOK RESOURCES: Expects to File 2nd Qtr. Financials on Friday PAN AMERICAN: Case Summary & 23 Largest Unsecured Creditors PARKWAY HOSPITAL: Court Confirms First Amended Reorganization Plan PIONEER NATURAL: Earns $36 Million in Quarter Ended June 30 POPE & TALBOT: Credit Default Cues S&P to Downgrade Ratings RASC: Fitch Lowers Ratings on Three Certificate Classes to BB+ RESIDENTIAL ASSET: Moody's Cuts Class M-II-3 Cert. Rating to B3 RESOURCE AMERICA: Earns $4.5 Million in Third Qtr. Ended June 30 SHAMROCK TOWER: Voluntary Chapter 11 Case Summary SOLUTIA INC: Judge Beatty Rejects Disclosure Statement SOLUTIA INC: Creditors' Committee Wants Settlements Approved SUN MICROSYSTEMS: Restructuring Plan Aims to Cut Jobs SUNCOM WIRELESS: Good Performance Cues S&P to Lift Rating to B- TEGRANT CORP: Narrow Operations Scope Cues S&P's B Credit Rating TOUSA INC: Negative Trends Cue Fitch to Junk Several Ratings TRUE TEMPER: Moody's Reviews B3 Corporate Family Rating TULLY'S COFFEE: July 1 Balance Sheet Upside-Down by $5.7 Million UNIFI INC: Terminates Brian Parke as Chairman, President and CEO WARNER MUSIC: June 30 Balance Sheet Upside-Down by $23 Million WCI COMMUNITIES: Generates $310 Mil. Positive Cash Flow in 2007 WORKFLOW MANAGEMENT: S&P Junks Issuer Rating on Second-Lien Loan XOMA LTD: Appoints Steven Engle as President & Chief Exec. Officer * Fitch Publishes New Report Offering on Par Rating Activity * Fried Frank Appoints Nine Partners Effective September 1 * Thomas Brennan Joins Mitchell Silberberg's Bankruptcy Practice * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ALCATEL-LUCENT: Court Reverses $1.5-Bln Microsoft MP3 Ruling ------------------------------------------------------------ The Honorable Rudi M. Brewster of the U.S. District Court for the Southern District of California overturned a February ruling by a U.S. federal jury ordering Microsoft Corp. to pay around $1.52 billion in infringement damages to Alcatel-Lucent S.A., various reports say. Judge Brewster ruled that concluded that Microsoft did not infringe one of the two disputed MP3 patents, Bloomberg News reports. Judge Brewster also ruled that the other MP3 patent was co-owned by Fraunhofer-Gesellschaft, which developed the format along with Bell Labs and French electronics group Thomson, and Microsoft had a valid license from the German group. Judge Brewster added that Alcatel-Lucent had to enjoin Fraunhofer-Gesellschaft for its infringement suit for it to be valid in court. As reported in the TCR-Europe on Feb. 28, 2007, the federal jury ordered Microsoft to pay around $1.52 billion in infringement damages to Alcatel-Lucent, ruling that the software giant infringed two MP3 patents, which cover the encoding and decoding of audio into the digital MP3 format. Lucent Technologies Inc., which merged with Alcatel in 2006 to form Alcatel-Lucent, filed 15 patent claims in 2003 against Gateway Inc. and Dell Inc. for technology developed by Bell Laboratories, its research arm, AP relates. In April 2003, Microsoft added itself to the list of defendants, saying the patents were closely tied to its Windows operating system. A judge had dismissed the claims and scheduled six separate trials for the remaining disputes. The case in question went on trial on Jan. 29. Microsoft argued in court that Alcatel-Lucent's patents govern its MP3 encoding and decoding tools, stressing that its MP3 software for Windows Media Player was licensed from Fraunhofer- Gesellschaft, which developed the format along with Bell Labs and French electronics group Thomson. The federal jury had agreed on all Alcatel-Lucent's arguments but reached an impasse on whether Microsoft had willfully infringed on the Bell Labs patents, The Associated Press reports. Brad Smith, Microsoft's general counsel, called the ruling "a victory for consumers of digital music and a triumph for common sense in the patent system," Bloomberg News relates. Mary Ward, Alcatel-Lucent spokeswoman, told Bloomberg News that the company will appeal the ruling. "The reversal of the judge's own pre-trial and post-trial rulings is shocking and disturbing," Ms. Ward told Bloomberg News. "The jury unanimously agreed with us. We believe their decision should stand." About Microsoft Corp. Headquartered in Redmond, Washington, Microsoft Corp. -- http://www.microsoft.com/-- develops, manufactures, licenses and supports a range of software products for computing devices. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and Cambodia. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * In April 2007, Fitch Ratings affirmed Alcatel-Lucent's ratings at Issuer Default 'BB' with a Stable Outlook, senior unsecured 'BB' and Short-term 'F2' and simultaneously withdrawn them. In February 2007, Moody's Investor Services placed a Ba2 rating on Alcatel's Corporate Family and Senior Debt rating. Lucent carries Moody's B1 Senior Debt rating and B2 Subordinated debt & trust preferred rating. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. ALLEGHENY ENERGY: Moody's Reviews Ba2 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service placed the long-term ratings of Allegheny Energy, Inc. (AYE: Ba2 Corporate Family Rating) and its subsidiaries Allegheny Energy Supply Company, LLC (AYE Supply: Ba2 Corporate Family Rating) and Allegheny Generating Company (AGC: Ba3 senior unsecured debt) under review for possible upgrade. AYE's Speculative Grade Liquidity Rating is affirmed at SGL-2. The rating action reflects continued demonstration of a sustained improvement in key credit fundamentals due largely to strengthened operating and financial results at its generation subsidiary, AYE Supply. Over the past few years, plant availability across the generation fleet has improved while system-wide operating and maintenance expenses have declined. These factors, when combined with better market prices for electricity under multi-year forward arrangements have resulted in substantially stronger and sustainable earnings, cash flow, and credit metrics at AYE and AYE Supply. The review will examine these factors against a projected large capital investment program primarily for environmental related capital expenditures and transmission related projects as well as the differing regulatory challenges facing the company's utilities to secure timely and adequate recovery of operating, purchased power and capital costs in each of their respective state jurisdictions. On Review for Possible Upgrade: Issuer: Allegheny Energy Supply Company, LLC -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently Ba2 -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba2 -- Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Baa3 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3 Issuer: Allegheny Energy, Inc. -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently Ba2 -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba2 -- Senior Unsecured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Ba2 Issuer: Allegheny Generating Company -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3 Outlook Actions: Issuer: Allegheny Energy Supply Company, LLC -- Outlook, Changed To Rating Under Review From Stable Issuer: Allegheny Energy, Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Allegheny Generating Company -- Outlook, Changed To Rating Under Review From Stable Headquartered in Greensburg, Pa, AYE is an integrated investor- owned electric utility with total annual revenues of over $3 billion. The company owns and operates generating facilities and delivers electricity to over 1.5 million customers in Pennsylvania, West Virginia, Maryland and Virginia. AYE Supply and AGC are wholly owned generating subsidiaries of AYE. ALT-A MORTGAGE: S&P Puts 207 Collateral Ratings Under Neg. Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 207 classes of U.S. residential mortgage-backed securities (RMBS) backed by U.S. first-lien Alternative A (Alt-A) mortgage collateral issued from the beginning of October 2005 through the end of December 2006 on CreditWatch with negative implications. These CreditWatch actions affect 207 classes that had an original total balance of approximately $913.9. million, which represents 0.20% of the approximately $455.4 billion in U.S. RMBS backed by first-lien Alt-A collateral, rated by Standard & Poor's from the beginning of October 2005 through the end of December 2006. This is in addition to the ratings on 30 classes from 27 transactions from this period that were previously placed on CreditWatch, beginning in March 2007. During the same period, the total balance of U.S. RMBS securities backed by all types of residential mortgage collateral issued in the non-agency market was more than $1.2 trillion. S&P are also conducting a review of CDO transaction ratings in which the underlying portfolios contain any of the securities affected by these rating actions. A separate press release will be published. Alt-A loans are first-lien residential mortgages that generally conform to traditional "prime" credit guidelines; however, the loan-to-value ratio, loan documentation, occupancy status, property type, or other factors cause these loans not to qualify under standard underwriting programs for prime jumbo and prime quality conforming loans. This review included payment option ARMs (adjustable-rate mortgages), which have, as a subgroup of Alt-A, exhibited lower delinquency rates and have greater credit protection than the average for the entire Alt-A sector. These actions reflect a rising level of delinquencies among the Alt-A collateral supporting these transactions, as well as S&P's expectation that losses on the collateral will exceed historical precedent and may exceed S&P's original expectations. The weak collateral performance is due to a combination of factors that include, but are not limited to, high combined LTVs; home price declines; an environment of looser underwriting standards; risk layering (the combination of several risk elements for one single borrower); and speculative borrowing behavior. The increase in the number of loans with the combination of these risk characteristics, coupled with a reversal in home price appreciation and higher interest rates, has led to deteriorating performance among the transactions that closed at the end of 2005 through 2006. Realized cumulative losses within U.S. RMBS transactions backed by Alt-A collateral issued during this period have been relatively low to date, at approximately 4 basis points (bps; 0.04%). The Alt-A transactions are evidencing lower levels of early payment defaults than transactions from the same period that are backed by first-lien subprime and closed-end second-lien collateral. However, the collateral underlying the Alt-A transactions has been experiencing high levels of severe delinquencies (90-plus days, foreclosures, REOs) that have not abated. S&P's assumptions had anticipated that the delinquency and default patterns of these transactions would revert to trends closer to historic norms. However, these transactions have now reached a sufficient level of seasoning for S&P to conclude that, based on the factors above, they will evidence delinquency and default loss trends that are indicative of poor future performance and that these trends will continue to exceed historic precedent and our original ratings assumptions. S&P are affirming the ratings on all U.S. RMBS transactions backed by Alt-A collateral issued between October 2005 and December 2006 that are not currently on CreditWatch. All of the transactions with affirmed ratings have passed S&P's stress tests. In addition, the percentage of loans with CLTVs greater than 95% was less than 12% for the affirmed transactions, compared with more than 17% for the pools backing the issues with ratings on CreditWatch. As a general matter, the strong performing Alt-A collateral within each transaction that does not contain risk layering has been performing within historical norms and within S&P's original expectations. This type of collateral closely resembles collateral found in prime jumbo transactions where borrowers had FICO scores in excess of 720 and CLTVs in the low- to-mid 70% range; and to date, performance in the prime jumbo sector is also within the bounds of historical norms. Through June 2007, the total cumulative loss experienced was approximately 0.04%, or 4 bps. Adjustments to Surveillance Assumptions S&P's review of outstanding U.S. RMBS backed by first-lien Alt-A collateral employs different assumptions than those S&P used to review U.S. RMBS backed by first-lien subprime loan collateral. Roll rate assumptions, or the number of currently delinquent loans and loans in foreclosure that will ultimately result in a loss, are lower than those S&P assumed in their review of U.S. RMBS backed by first-lien subprime collateral. The time it takes to incur losses is assumed to be longer for Alt-A loans than for subprime loans. Recovery rates are assumed to be higher than for subprime loans because of lower LTVs and lower foreclosure expenses as a percent of generally higher loan balances. S&P's revised surveillance assumptions focus on three areas: current losses to date, losses assumed on currently delinquent loans, and future losses for borrowers who are current with their loan payments. Losses incurred to date have already reduced current credit protection. The assumptions for how delinquent loans will progress through the delinquency pipeline toward liquidation are as follows: 50% of 30-day delinquencies, 50% of 60-day delinquencies, 80% of 90-day delinquencies, 80% of foreclosures, and 100% of REOs. Assumptions regarding the timing of the losses projected on loans currently in REO will be recognized evenly over the next eight months. Losses on loans currently in foreclosure will be recognized as follows: 5% evenly over the following one to eight months; 70% evenly in months nine through 15; and the remaining 25% evenly from months 16 through 21. Losses on 64% of the loans that are currently 90-days delinquent will be recognized as follows: 5% evenly in months five through 13; 70% evenly over months 14 through 20; and 25% evenly over months 21 through 24. Loans that are delinquent 60 and 30 days follow a similar pattern, shifting the 90-day assumptions out one and two months, respectively. S&P further stress future losses by taking losses at peak in month 15 and maintaining losses at this level for an additional 12 months. After this extended peak loss period, S&P expect losses to begin to revert to more normalized levels, reflecting S&P's expectation that most high-risk loans will have already moved through the stress in the default curve. For Alt-A transactions, S&P will apply a 25% loss severity in its surveillance assumptions. This is a higher level of stress than recently observed severities on Alt-A loan collateral. This is also lower than the loss severity of 40% used in S&P's subprime surveillance assumptions. On average, Alt-A loans are much larger in size, include high levels of mortgage insurance, and have considerably lower LTV ratios and weighted average coupons, all of which should lead to lower loss severities compared with subprime loans. S&P expect that the majority of the rating actions or affirmations on classes that have been placed on CreditWatch negative will be resolved within the next several weeks. For each transaction, S&P will perform a cash flow analysis that stresses prepayment speeds together with its transaction-specific loss projections. For each U.S. RMBS transaction backed by Alt-A collateral that solely relies on credit support from subordination and fails this stress within the next 36 months, consistent with other first-lien mortgage products, rating actions will typically be taken in accordance with these guidelines: -- To 'CCC' on any class that does not pass our stress test scenario (a class is expected to experience a principal write-down or, with respect to the senior classes, a principal shortfall) within 12 months, regardless of its current rating; -- To 'B' on any class that does not pass our stress test scenario within 13 to 24 months; -- To 'BB' on any class that does not pass our stress test scenario within 25 to 30 months; and -- To 'BBB' on any class that does not pass our stress test scenario within 31 to 36 months. S&P also placed its ratings on CreditWatch for those transactions in which its loss assumptions, as stated above, materially exceeded the available subordination and reserve funds, for the purpose of conducting a specific review of how these transactions will perform under various prepayment and delinquency stresses involving loan resets. Rating actions will be taken according to the guidelines listed above. In cases where the remaining loss protection on a more senior class is materially eroded by projected losses and a subordinate class is downgraded, S&P will adjust its rating lower to reflect the reduced relative protection of that class. Adjustments to Rating Assumptions for New Transactions S&P are also implementing several revisions to its assumptions for rating new transactions that close on or after Aug. 7, 2007, as described below. In July 2006, S&P adjusted its analysis of new transactions to assume increased default frequency rates, and the changes described below are further refinements to these assumptions. Recent performance data indicates that loans with layered risk and high CLTV purchase money loans are highly correlated with the increased rate of delinquencies and defaults being experienced on the transactions with ratings placed on CreditWatch negative. As a result, as highlighted below, S&P are increasing credit enhancement for purchase money mortgage loans with high CLTVs and reducing its reliance on FICO as a risk mitigant to significant levels of layered risk. In late 2005 and 2006, mortgage origination underwriting guidelines expanded rapidly, which allowed the proliferation of layered risks within the Alt-A market. This combination of multiple risk factors for a single loan is the principal driving force behind the deteriorating performance of the 2006 vintage. Historically, the presence of high FICO scores within a loan has proved an effective mitigant to increased risk factors elsewhere, such as higher CLTVs. However, the increase in recent delinquencies across all FICO bands indicates that a borrower's previous credit performance is less predictive of stronger performance for loans with increased risk layering. This emerging delinquency performance has prompted us to reduce S&P's emphasis on FICO score as an offset to layered risk. Recent delinquency data also indicates a need to adjust default expectations for certain purchase loans. These loans are underperforming S&P initial assumptions, particularly when combined with high CLTVs. The performance related to purchase loans is unprecedented in historical data. S&P will increase its default expectations for the increased risk at high CLTVs, particularly those with CLTVs that exceed 90%. S&P's default expectation for purchase loans with high CLTV ratios will increase by approximately 5%-50%, depending on the corresponding CLTV ratio. Impact on Current Ratings The CreditWatch actions on the 207 different classes are spread across the various ratings categories as follows: 54.11% are from the 'BBB' rating category; 22.22% are from the 'BB' rating category; 14.97% are from the 'B' rating category; 8.70% are from the 'A' rating category. Therefore, 91.30% of the lowered ratings affected classes that were rated 'BBB+' or lower. (It should be noted that S&P did not place any 'AAA' or 'AA' ratings on CreditWatch negative.) U.S. RMBS transactions backed by Alt-A collateral issued beginning January 2007 have not had adequate seasoning to establish a payment history that would make the outcomes of the delinquency and loss tests described above meaningful. However, since the same asset risks that are apparent in the transactions issued in 2005 and 2006 may also be present in the January 2007 through July 2007 transactions, S&P will continue to monitor the 2007 vintage securitizations and apply its revised surveillance assumptions to these transactions as they season and as delinquency and loss data become available. S&P will also review these transactions using its revised assumptions for new ratings and may take rating actions, as deemed appropriate, going forward. ALTERNATIVE LOAN: Moody's Rates Class M-8 Certificate at Ba1 ------------------------------------------------------------ Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Alternative Loan Trust 2007-HY8C, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by first-lien, Alt-A residential mortgage loans originated by Countrywide Home Loans, Inc. The ratings are based on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess spread, and an interest rate swap agreement. Moody's expects collateral losses to range from 0.65% to 0.85%. Countrywide Home Loans Servicing LP will act as master servicer of the loans in the deal. The complete rating actions are: Alternative Loan Trust 2007-HY8C Mortgage Pass-Through Certificates, Series 2007-HY8C -- Cl. A-1, Assigned Aaa -- Cl. A-2, Assigned Aaa -- Cl. X, Assigned Aaa -- Cl. A-R, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned Aa3 -- Cl. M-4, Assigned A1 -- Cl. M-5, Assigned A2 -- Cl. M-6, Assigned Baa1 -- Cl. M-7, Assigned Baa2 -- Cl. M-8, Assigned Ba1 ALTERNATIVE LOAN: Moody's Puts Low-B Ratings on Two Cert. Classes ----------------------------------------------------------------- Moody's Investors Service assigned Aaa ratings to the senior certificates issued by Alternative Loan Trust 2007-HY9. Moody's also assigned ratings ranging from Aa1 to Ba3 to the subordinate certificates in the deal. The securitization is backed by first lien, Alt-A residential mortgage loans originated by Countrywide Home Loans, Inc. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess cash flow, corridor contract and two interest rate swap agreements. Moody's expects collateral losses to range from 0.95% to 1.15%. Countrywide Home Loans Servicing LP will act as master servicer of the loans in the deal. The complete rating actions are: Alternative Loan Trust 2007-HY9 Mortgage Pass-Through Certificates, Series 2007-HY9 -- Cl. A-1, Assigned Aaa -- Cl. X, Assigned Aaa -- Cl. A-R, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned Aa3 -- Cl. M-4, Assigned A1 -- Cl. M-5, Assigned A2 -- Cl. M-6, Assigned A3 -- Cl. M-7, Assigned Baa1 -- Cl. M-8, Assigned Baa2 -- Cl. M-9, Assigned Baa3 -- Cl. M-10, Assigned Ba1 -- Cl. M-11, Assigned Ba3 ALTRA NEBRASKA: S&P Puts B Prelim. Rating on $130MM Sr. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' rating and '2' recovery rating to Altra Nebraska LLC's $130 million senior secured notes due 2018. The '2' recovery rating on the notes indicates the expectation for substantial recovery (70%-90%) of principal in payment default scenario. The outlook is stable. Altra Nebraska will use the note proceeds to fund a portion of the cost to construct a 100-million gallon-per-year nameplate capacity, dry-mill ethanol plant in Carleton, Nebraska. The plant is being constructed under a fixed-price, date-certain Engineering, Procurement, and Construction contract with Gemma Power Systems, with final completion slated for year-end 2008. The project will earn cash flow through the sale of ethanol and co-products from ethanol production. The project is wholly owned by Altra Inc., which currently owns one operating ethanol plant and two other plants under construction. The project is funded with the notes along with about $24.2 million in unsecured subordinate debt and about $75 million in equity. The outlook on Altra Nebraska is stable, based on construction progress and on financial performance under a variety of commodity price scenarios. The rating could be negatively pressured if construction is delayed further or the industrywide crush spread drops substantially. The project would also be at risk if the Volumetric Ethanol Excise Tax Credit is lowered substantially or eliminated on its pending expiration in 2010. "A rating upgrade would require substantial debt reduction as a result of the cash sweep and superior financial and operational performance," noted Standard & Poor's credit analyst Grace D. Drinker. "However, the upside to the rating is limited by the inherent risks in the ethanol industry," she continued. AMERICAN HOME: Inks Cash Collateral Use Agreement With BofA ----------------------------------------------------------- Prior to bankruptcy filing, American Home Mortgage Investment Corp. and its debtor-affiliates obtained financing, among others, under a Second Amended and Restated Credit Agreement dated August 10, 2006, arranged by Bank of America, N.A., as administrative agent and swingline lender. The Prepetition Loan Agreement includes a warehouse credit facility, a swingline credit facility, a working capital facility and a servicing rights credit facility. The Debtors' outstanding obligations under the subfacilities as of their bankruptcy filing are: Warehouse Facility $608,300,000 Swingline Credit Facility - Working Capital Facility $50,000,000 Servicing Facility $446,250,000 ---------------- TOTAL $1,104,550,000 The Prepetition Lenders assert first priority security interests and liens in all of the assets of the Debtors' servicing business and any related proceeds. The Lenders also assert interests and liens on, among others, certain mortgage loans, warehouse-related mortgage-backed securities, and broker-dealer accounts. The Debtors are seeking to sell their loan servicing business pursuant to competitive bidding and auction. The Debtors want to consummate a sale by next month. According to James L. Patton, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, the Debtors' proposed bankruptcy counsel, it is essential to the Debtors' efforts to maintain the value of their servicing business while preparing for its sale that they be allowed to use cash derived from operating the servicing business. Mr. Patton says the Debtors will use the cash collateral to pay for expenses, including employee payroll and other benefits, rent, share of corporate overhead, servicing advances and other expenses. The Debtors, with the help of their financial advisors, have a prepared a budget projecting their expenditures for the next 13 weeks, through November 2, 2007: American Home Mortgage Cash Forecast -- Servicing 13 Weeks Ending November 2, 2007 Opening Cash Balance - Sources of cash Servicing daily receipts - net $104,000,000 Investment line income/int credit 3,000,000 ----------- Total sources 107,000,000 Uses of cash Indirect and non-payroll direct costs 7,700,000 Vendor payments -- prepetition 1,500,000 Vendor deposits 2,500,000 Payroll and payroll taxes 9,500,000 Retention payments 3,800,000 Health insurance - BCBS 1,300,000 Servicing advances, net 26,000,000 B of A expenses OPEN ----------- Total uses 52,300,000 Net Cash Flow 54,700,000 ----------- Closing Balance $54,700,000 =========== The Debtors expect that cash and receipts from operating the Servicing Business will be sufficient to satisfy the disbursements reflected in the Cash Collateral Budget. A full- text of the Budget is available at no charge at: http://researcharchives.com/t/s?222e In this regard, the Debtors seek authority from the U.S. Bankruptcy Court for the District of Delaware to use the cash collateral in connection with operating their servicing business. Absent sufficient funds to support the servicing business, the value of the asset will quickly erode, Mr. Patton contends. Mr. Patton relates that the Debtors and BofA have reached an agreement regarding the Debtors' use of the Prepetition Lenders' cash collateral. As adequate protection for any diminution in value of the collateral, the Debtors will grant BofA for the ratable benefit of the Lenders, a security interest in and lien on the collateral and related proceeds as well as pay BofA all gross proceeds from any sale or disposition of the collateral. The Debtors will also pay prepetition professional fees and other expenses incurred by BofA under the Credit Agreement. The Debtors will not subordinate the security interests and liens granted to BofA with any lien or security interest under Section 364 of the Bankruptcy Code or otherwise. The Debtors also will not grant any junior liens on the cash collateral at any time, and no cash collateral will be used to pay adminstrative expenses payable under Section 328, 330 and 331 of the Bankruptcy Code. The Debtors' use of the cash collateral will terminate on the earliest to occur of: -- September 7, 2007; -- the dismissal of the Debtors' cases or the conversion of the cases to cases under Chapter 7; -- the lifting of the automatic stay to other entities with respect to the collateral, without BofA's consent; -- the appointment of a Chapter 11 trustee, examiner or any other representative with expanded powers; -- the effective date of a plan of reorganization in the Debtors' cases; -- the Debtors' failure to make any required payment, to provide pertinent information to the Lenders, or to perform any material terms under the proposed Interim Cash Collateral Order; -- Court approval of any postpetition DIP financing that creates liens with respect to the Prepetition Lenders' collateral or that allows parties to seek to enforce a claim on the collateral, unless the Debtors' indebtedness has been indefeasibly paid in full in cash; or -- the entry of a Court order modifying in any material respect the terms of the Interim Cash Collateral Order that will be signed by the Court. The Debtors agree that BofA or the Prepetition Lenders may seek additional or different adequate protection, seek to lift the automatic stay, seek the appointment of a trustee or examiner, or seek to dismiss or conver the Debtors' cases. The prepetition lending syndicate includes: * Calyon New York Branch and Deutsche Bank Securities, Inc., as co-syndication agents; * Citibank, N.A., JPMorgan Chase Bank, NA, and Merrill Lynch Bank USA, as co-documentation agents; and * Banc of America Securities LLC, as sole lead arranger and sole book manager. BofA is represented in the Debtors' cases by Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP, in New York; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware. About American Home Mortgage Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP are the proposed counsel to the Debtors. Epiq Bankruptcy Solutions LLC is the proposed claims and noticing agent. No Official Committee of Unsecured Creditors has been appointed to date. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000, and total stockholders' equity of $1,223,744,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. American Home Bankruptcy News, Issue No. 1, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Wants $50 Million DIP Pact With WL Ross Okayed ------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor- affiliates are seeking permission from the U.S. Bankruptcy Court for the District of Delaware to use their prepetition secured lenders' cash collateral. James L. Patton, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, the Debtors' proposed bankruptcy counsel, clarifies that the Debtors will only be using the cash collateral for expenses related to their loan servicing business. According to Mr. Patton, the Debtors do not have sufficient available sources of working capital and financing to operate their businesses absent additional funding. In this regard, the Debtors obtained commitment from WLR Recovery Fund III, L.P., the financing arm of WL Ross & Co. LLC, for a $50,000,000 postpetition revolving credit facility. The Debtors, except American Home Mortgage Servicing Inc., are borrowers under the DIP Loan and Security Agreement dated August 6, 2007, with WLR Recovery Fund. "The ability of the Borrowers to obtain sufficient working capital and liquidity through the incurrence of new indebtedness for borrowed money and other financial accommodations is vital to the Borrowers," Mr. Patton says. "The preservation and maintenance of the going concern value of the Borrowers is integral to the Borrowers' efforts to maximize the value of their estates through the orderly liquidation of their assets." In this regard, the Debtors seek the Court's authority to borrow up to $50,000,000 from WLR Recovery Fund. The Debtors also seek permission to use not less than $12,000,000 on an interim basis, pending final approval of their request. While the Debtors will use the money to finance working capital and for other general corporate purposes, the Debtors will keep an amount equal to 12 months of interest in a bank account subject to WLR Recovery Fund's exclusive control. The segregated funds will be used to pay interest on the loan. In addition, $10,000,000 of the available loan may not be borrowed without WLR Recovery Fund's prior consent, and $1,000,000 of the loan will be held as a fee and expense deposit against which WLR Recovery Fund's fees and expenses will be paid. The DIP loan will mature on the earlier of 12 months after the closing date and the effective date of a Chapter 11 plan in the Debtors' cases. The loan will incur interest at the Eurodollar Rate plus the applicable margin. The Eurodollar Rate will be a periodic fixed rate equal to LIBOR plus the applicable margin, which is 3%. The Eurodollar Rate will be fixed for Interest Periods of one month. The Applicable Margin will increase by 2.00% per annum in the event of default. The Borrowers' obligations will have superpriority administrative expense status and will have priority over all administrative expense and unsecured claims against the Borrowers. The DIP Lenders will also have a perfected first priority security interest in and lien on all of the Borrowers' assets. The DIP Lenders will not seek to enforce an administrative priority claim with respect to any asset that constitutes collateral of Bank of America, as administrative agent under the Debtors' August 10, 2006 secured credit facility. The DIP liens will be subject to a carve-out for allowed professional fees, fees pursuant to 28 U.S.C. Section 1930, and fees payable to the clerk of the Bankruptcy Court. Availability of the DIP Credit Facility is tied with the Borrowers' ability to use their Prepetition Lenders' cash collateral. The DIP Credit Facility is not available for use unless the Court permits them to use cash collateral. The Debtors also seek permission to pay the DIP Lenders a non- refundable facility fee at the rate of 0.50% per annum on the portion of the DIP Facility equal to $35,000,000 (whether or not then available) based on actual days in a 360-day year. The Debtors also intend to pay a commitment fee equal to 1% of the facility amount and an administrative agent fee equal to $50,000 per annum. A full-text copy of the DIP Credit Agreement is available at no charge at http://researcharchives.com/t/s?2230 WLR Recovery Fund is represented in the Debtors' cases by Erica M. Ryland, Esq., at Jones Day, in New York. About American Home Mortgage Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP are the proposed counsel to the Debtors. Epiq Bankruptcy Solutions LLC is the proposed claims and noticing agent. No Official Committee of Unsecured Creditors has been appointed to date. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000, and total stockholders' equity of $1,223,744,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. American Home Bankruptcy News, Issue No. 1, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ANGIOTECH PHARMA: S&P Junks Rating on Senior Subordinated Debt -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on Vancouver, British Colombia-based Angiotech Pharmaceuticals Inc. to 'B-' from 'B+'. At the same time, S&P lowered the senior subordinated debt rating to 'CCC' from 'B-'. The outlook is negative. "This two-notch downgrade reflects Angiotech's sharply deteriorating credit metrics caused by the declining royalty revenue stream from drug-eluting stents and the lack of visibility regarding cash flow generation," said Standard & Poor's credit analyst Maude Tremblay. Specialty pharmaceutical company Angiotech receives royalty payments under a licensing agreement with marketing partner Boston Scientific Corp. (BSX; BB+/Watch Neg/--) for paclitaxel, the drug used to coat the Taxus Express and Taxus Liberté paclitaxel- eluding stent systems. These royalty payments are Angiotech's most important revenue source and represent a significant product concentration. The drug-eluting stents market has contracted because of safety issues concerning the possibility that late-stent thrombosis might be more prevalent following DES implementation than after bare- metal stent implementation; as a result, penetration of DES has declined to about 65% from a peak of 88% in early 2006. Furthermore, overall stenting procedures have declined in reaction to the COURAGE (Clinical Outcomes Utilizing Percutaneous Coronary Revascularization and Aggressive Guideline-Driven Drug Evaluation) Study results presented at an industry conference in March 2007, which showed that medical therapy was as effective in reducing angina and mortality in stable angina patients as was a combination of medical therapy and stents. The medical products segment has performed in line with management's expectations and the product pipeline is promising; however, revenue growth remains in the single digits. Furthermore, profitability is constrained by restructuring efforts and one-off expenses, and new products will have no material impact on EBITDA generation until fiscal 2008. The negative outlook reflects the lack of visibility regarding Angiotech's ability to remain free cash flow positive due to uncertain DES demand. S&P could lower the ratings further if weakening market conditions for DES or setbacks in the product pipeline lead to further deterioration of revenues and cash flow, and the company begins to tap its cash balance for liquidity needs. Conversely, if stent royalty payments stabilize or revenue growth from medical products accelerates, S&P could revise the outlook to stable. ARMOR HOLDINGS: Moody's Confirms Ba3 Corporate Family Rating ------------------------------------------------------------ Moody's Inventors Service confirmed all ratings of Armor Holdings, Inc., with the ratings outlook changed to stable. This concludes the review for upgrade commenced on May 8, 2007 and follows the completion of the acquisition of Armor Holdings by BAE Systems plc. Concurrent with the sale to BAE, Armor announced on July 31, 2007 that it had received tenders and consents from the holders of 100% of its 8.25% Senior Subordinated notes due 2013. Therefore, Moody's will withdraw the ratings of Armor's 8.25% Senior Subordinated notes due 2013 immediately after the confirmation of ratings. Withdrawal of remaining ratings will be contingent on the outcome of the conversion of Armor's 2% Convertible Subordinated Notes due 2024. These notes are subject to an adjustment to their conversion rate in connection with a "fundamental change", in accordance with their indenture. As such, all note holders will have the option to convert these notes for cash at the deal price on an as-converted basis plus an additional consideration throughout their conversion period. It is anticipated that all notes will be converted by the end of the conversion period, in which case Moody's will withdraw their rating, as well as Armor's Corporate Family Rating and Probability of Default Rating. If any notes remain outstanding after the conversion period, it is expected that such notes will not likely be guaranteed by BAE, and absent adequate financial information about Armor's stand alone financial condition, Moody's would likewise withdraw all ratings of Armor. Ratings confirmed and to be withdrawn: Issuer: Armor Holdings Inc. -- Probability of Default Rating: Ba3 -- Corporate Family Rating: Ba3 -- Senior Subordinated Conv./Exch. Bond/Debenture: B1 -- Senior Subordinated Regular Bond/Debenture: B1 Outlook Actions: Issuer: Armor Holdings Inc. -- Outlook, Changed To Stable From Rating Under Review Armor Holdings, headquartered in Jacksonville, FL, is a major manufacturer of tactical wheeled vehicles and a leading diversified manufacturer of vehicle armoring systems and life safety and survivability products for the military, law enforcement and commercial markets. ARVINMERITOR INC: Sells LVA Exhaust Operations to Klarius Group --------------------------------------------------------------- ArvinMeritor Inc. has sold its Light Vehicle Aftermarket European exhaust operations to Klarius Group Limited, located in the United Kingdom. Terms of the sale were not disclosed. "This transaction completes the divestiture of the LVA business," Chip McClure, ArvinMeritor chairman, CEO and president, said. "Our strategy is to focus resources and capital on areas within our core businesses that produce the highest returns for our shareowners." This divestiture includes approximately 1,000 employees at LVA facilities in Blackpool, Lancaster and Stoke-on-Trent, England; Dreux and Nanterre, France; and Finale Emilia, Italy. "Completing the sale of LVA is another recent achievement toward strengthening the company and positioning ourselves for profitable future growth,” Mr. McClure added. About Klarius Group Limited Klarius Group is a privately owned U.K. group established to invest in the European automotive sector. About ArvinMeritor Inc. Based in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. The company employs approximately 19,000 people in 25 countries. * * * Moody's Investor Services rated B3 ArvinMeritor Inc.'s long term corporate family and probability of default on January 2007. The outlook is stable. BALLY TOTAL: Court Sets Sept. 17 Plan Confirmation Hearing ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York in Manhattan set the hearing to consider confirmation of Bally Total Fitness Holding Corporation and its debtor-affiliates' Prepackaged Plan of Reorganization -- at which time the Court will also consider the adequacy of the Disclosure Statement describing that Plan -- on Sept. 17, 2007, at 10:00 a.m. Objections to the Disclosure Statement or confirmation of the Plan are due Sept. 7, 2007, at 5:00 p.m. The Court approved the Debtors' proposed confirmation notice and rejection claims confirmation notice. According to Judge Lifland, the Debtors are not required to mail a copy of the Confirmation Notice to their current or former customers and members, and that notice to current and former customers or members will be provided by publication only. The Debtors will publish the Confirmation Notice twice in each of (a) the national edition of The Wall Street Journal and (b) the USA Today, with the initial publication being at least 25 days prior to the Confirmation Hearing, with the subsequent publication occurring approximately seven to 10 days after. The Debtors' Solicitation Procedures, Solicitation Package utilized in soliciting acceptances and rejections of the Plan, and Ballot forms are approved in all respects. Judge Lifland held that holders of Class 6-B-1 and Class 6-B-2 Claims are deemed to have rejected the Plan, and the Debtors were not, and will not be, required to solicit the votes of the holders of these Claims to accept or reject the Plan. The record date for determining which non-Voting Creditors and equity holders are entitled to receive the Confirmation Notice is August 1, 2007. Moreover, Judge Lifland ruled that the Debtors are not required to file or provide any periodic operating reports pursuant to the Bankruptcy Code, Bankruptcy Rules or Local Rules, except as may be provided specifically in the Plan or order confirming the Plan. This requirement will be permanently waived if the Plan is confirmed on or prior to October 16, 2007. Instead, for each month until the entry of a final decree or until the cases are converted or dismissed, the Debtors will provide to the U.S. Trustee an affidavit listing the disbursements made by each Debtor, Judge Lifland said. About Bally Total 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. No schedule has been set to date for an organizational meeting that would create an Official Committee of Unsecured Creditors. The Court recently held that the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code will not be convened, and is canceled, if the Debtors' Plan of Reorganization is confirmed on or prior to October 16, 2007. (Bally Total Fitness Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). BALLY TOTAL: Gets Interim OK to Hire Kirkland 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 Kirkland & Ellis LLP as as their special financing and conflicts counsel, and special counsel in certain insurance coverage disputes, effective as of July 31, 2007. Marc D. Bassewitz, senior vice president, secretary and general counsel of Bally Total Fitness Holding Corporation, relates that the Debtors need Kirkland & Ellis to render legal services relating to their postpetition and exit financing; use of cash collateral; certain insurance coverage disputes; and issues not appropriately handled by Latham & Watkins, LLP, the Debtors' lead counsel, because of actual or potential conflict of interest. Mr. Bassewitz relates that Kirkland & Ellis has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations, and extensive expertise practicing before bankruptcy courts. The firm also served as counsel to the Debtors on a variety of financing, insurance coverage and other discrete matters over the last several years, including the preparation for postpetition financing in the Chapter 11 Cases. Kirkland & Ellis will be paid based on its hourly rates: Partners $500 - $975 Of Counsel $380 - $870 Associates $275 - $595 Paraprofessionals $120 - $260 The firm will also be reimbursed for it's reasonable out-of- pocket expenses. These professionals will have primary responsibility for providing services to the Debtors: Billing Rate ------------ Linda K. Myers $795 James A. Stempel $775 Michael P. Foradas $705 Nader R. Boulos $570 Ross M. Kwasteniet $535 Kathy Schumacher $495 C. Michelle Mulkern $475 William T. Pruitt $395 Joshua M. Samis $375 The Debtors advanced $367,052 to Kirkland & Ellis in the 90 days prior to the Petition Date, which was either an advance payment retainer or was utilized to replenish the firm's advance payment retainer, Mr. Bassewitz says. Pursuant to the terms of the parties' engagement letter, the Retainer payments were earned upon receipt, are property of the firm, and are not held in a separate account. As of the Petition Date, the amount of Kirkland & Ellis' advance payment retainer is approximately $115,000. During the one year prior to the Petition Date, the firm received a total of $651,705 in compensation to the Debtors. Mr. Stempel, Esq., a partner at Kirkland & Ellis, assures the Court that his firm 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. No schedule has been set to date for an organizational meeting that would create an Official Committee of Unsecured Creditors. The Court recently held that the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code will not be convened, and is canceled, if the Debtors' Plan of Reorganization is confirmed on or prior to October 16, 2007. (Bally Total Fitness Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). BANC OF AMERICA: S&P Affirms B Ratings on Four Cert. Classes ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 100 classes of mortgage pass-through certificates from five Banc of America Funding Trust transactions. The affirmed ratings reflect adequate actual and projected credit enhancement that is sufficient to support the certificates at the current rating levels. Series 2006-R2 is a re-REMIC deal with 22 underlying certificates from 10 transactions. Actual and projected credit support for these 22 certificates is adequate to support the current ratings of the classes from series 2006-R2. As of the July 2007 remittance period, total delinquencies for the series 2004-D, series 2005-D, series 2006-5, and series 2006-6 prime jumbo transactions ranged from 0.00% (loan groups 1 and 2 from series 2004-D and loan group 3 from series 2006-6) to 8.19% (loan group 4 from series 2004-D) of the current pool balances, while severe delinquencies (90-plus days, foreclosures, and REOs) ranged from 0.00% (loan groups 1-3 from series 2004-D, loan groups 2 and 4 from series 2006-5, and loan groups 1 and 3 from series 2006-6) to 4.79% (loan group 4 from series 2004-D). Cumulative realized losses, as a percentage of the original pool balances, ranged from 0.00% (loan groups 1-4 from series 2004-D, series 2005-D, loan groups 1-4 from series 2006-5, and loan groups 1-3 from series 2006-6) to 0.03% (loan group 5 from series 2004-D). Subordination provides credit support for these transactions. The underlying collateral backing the certificates primarily consists of 15- to 30-year fixed- or adjustable-rate, fully amortizing prime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Affirmed Banc of America Funding Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-D 1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 5-A-2 AAA 2004-D B-1 AA 2004-D B-2 A 2004-D B-3 BBB 2004-D B-4 BB 2004-D B-5 B 2005-D A-1, A-2 AAA 2005-D B-1 AA 2005-D B-2 A 2005-D B-3 BBB 2005-D B-4 BB 2005-D B-5 B 2006-5 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA 2006-5 1-A-7, 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2006-5 1-A-13, 1-A-14, 2-A-1, 2-A-2, 2-A-3, 2-A-4 AAA 2006-5 2-A-5, 2-A-6, 2-A-7, 2-A-8, 2-A-9, 2-A-10 AAA 2006-5 2-A-11, 2-A-12, 2-A-13, 3-A-1, 3-A-2, 3-A-3 AAA 2006-5 3-A-4, 4-A-1, 4-A-2, 4-A-3, 4-A-4, 4-A-5 AAA 2006-5 4-A-6, 4-A-7, 4-A-8, 30-IO, 30-PO AAA 2006-5 B-5 B 2006-6 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA 2006-6 1-A-7, 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2006-6 1-A-13, 1-A-14, 1-A-15, 1-A-16, 1-A-17, 1-A-18 AAA 2006-6 1-A-19, 1-A-20, 1-A-21, 1-A-22, 1-A-23, 1-A-24 AAA 2006-6 2-A-1, 2-A-2, 2-A-3, 2-A-4, 3-A-1, 3-A-2 AAA 2006-6 3-A-3, 3-A-4, 30-IO, 30-PO AAA 2006-6 M AA 2006-6 B5 B 2006-R2 A-1, A-2 AAA 2006-R2 B-1 BBB 2006-R2 B-2 BBB- BANC OF AMERICA: S&P Affirms Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on six classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Inc.'s series 2004-2. Concurrently, S&P affirmed the ratings on all remaining classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $170.2 million (17%) of the pool's collateral since issuance. As of the July 10, 2007, remittance report, the collateral pool consisted of 69 loans with an aggregate trust balance of $966 million, compared with 152 loans with a $1.14 billion balance at issuance. The master servicer, Bank of America, reported primarily full-year 2006 financial information for 98% of the pool, which excludes the defeased collateral. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.74x, up slightly from 1.72x at issuance. All of the loans in the pool are current, and there are no loans with the special servicer. To date, the trust has not experienced any losses. The top 10 loans secured by real estate have an aggregate outstanding balance of $439.9 million (46%) and a weighted average DSC of 1.70x, compared with 1.74x at issuance. The third-largest loan is on the watchlist and is discussed below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans, and all of the collateral was characterized as "good." Credit characteristics for two of the top 10 loans, PPG Place and Prince Kuhio Plaza, and one non-top-10 loan remain consistent with those of investment-grade obligations. Details are as: -- PPG Place, the largest loan in the pool, has a trust and whole-loan balance of $111.4 million (12%). In addition, $59 million in mezzanine financing is in place and is secured by a pledge in the borrower's partnership interest. The loan is secured by a class A office complex consisting of one 40-story office tower and five buildings totaling 1.5 million sq. ft. in the central business district of Pittsburgh, Pennsylvania. The complex also includes an ice-skating rink, a food court, and a 673-space parking garage. Occupancy as of March 31, 2007, was 85%, and the year-end DSC was 1.81x. Standard & Poor's adjusted net cash flow is similar to its level at issuance. -- Prince Kuhio Plaza, the fourth-largest loan in the pool, has a trust balance and whole-loan balance of $39.3 million (4%). The loan is secured by the leasehold interest in 355,630 sq. ft. of a 504,628-sq.-ft. regional mall in Hilo, Hawaii. The property is subject to ground leases from the Department of Hawaii Home Land, which expire in 2042. Occupancy as of March 31, 2007, was 95%, and the year-end 2006 DSC was 1.92x. Standard & Poor's adjusted NCF is similar to its level at issuance. -- Inland TX-CT Portfolio, a non-top-10 loan ($19.8 million, 2%), had credit characteristics consistent with those of investment-grade obligations at issuance and continues to do so. The loan is secured by two retail centers. Shops at Park Place consists of a 112,479-sq.-ft. retail center built in 2001 in Plano, Texas. Shaw's New Britain consists of a 65,658-sq.-ft. supermarket retail center in New Britain, Connecticut. Shaw's has vacated the premises, but it continues to pay the obligations of its lease (which expires April 30, 2016). Shaw's Supermarket is a unit of SuperValu Inc. (BB-/Stable/NR). BofA reported a watchlist of three loans with an aggregate outstanding balance of $55.9 million (6%), which includes one of the top 10 loans in the pool. Broward Financial Center ($46.5 million, 5%), which is the third-largest loan in the pool, is secured by a 325,583-sq.-ft. office property in Fort Lauderdale, Florida. The loan is on the watchlist because of storm damage from Hurricane Wilma, which included major window damage. As of June 2007, most of the window and interior damage had been repaired, and the remaining restoration is expected to be completed within one month. The insurance company paid the claim for the damage. Occupancy as of March 31, 2007, was 78%, and the year-end 2006 DSC was 1.76x. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2004-2 Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- B AA+ AA 14.00% C AA AA- 12.67% D A+ A 10.17% E A A- 8.99% F A- BBB+ 7.37% G BBB+ BBB 6.34% Ratings Affirmed Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2004-2 Class Rating Credit enhancement ----- ------ ---------------- A-2 AAA 16.80% A-3 AAA 16.80% A-4 AAA 16.80% A-5 AAA 16.80% H BBB- 4.72% J BB+ 4.27% K BB 3.68% L BB- 3.09% M B+ 2.36% N B 2.06% O B- 1.77% XC AAA N/A XP AAA N/A N/A — Not applicable. BUMBLE BEE: Weakened Liquidity Cues Moody's to Cut Ratings ---------------------------------------------------------- Moody's Investors Service lowered the debt ratings of Bumble Bee Foods, LLC and Clover Leaf Seafoods, L.P. (corporate family rating to B1), and placed them on review for possible further downgrade. The LGD assessments are also subject to change. Concurrently, Moody's lowered the Speculative Grade Liquidity Rating to SGL-4 from SGL-2 to reflect weakened near-term liquidity. Bumble Bee and Clover Leaf are the core operating subsidiaries of Connors Brothers Income Fund. The downgrade was prompted by the weakened liquidity stemming from CBIF's Aug. 7, 2007 announcement that it will recognize a $35 million charge in the second quarter ending June 30, 2007. The charge reflects estimated costs of the recently announced voluntary recall of certain canned meat products, manufactured by CBIF's Castleberry's subsidiary, due to two potential botulism incidents. The recalled products, which account for about 4% of CBIF revenue, were manufactured at its Augusta, Georgia plant, which has been temporarily shut down while an investigation is being conducted. The plant itself comprises about 13% of CBIF's total sales. The SGL-4 Speculative Grade Liquidity rating reflects the companies' weakened liquidity, which stems from the need to seek a waiver under its credit agreement, potential increased demands on cash flow and/or reliance on the facility to fund working capital needs and recall expenses. Moody's noted, however, that recall expenses will be largely offset by the six month suspension of monthly distributions to CBIF unit holders, although the timing of the recall outflows remains uncertain. Moody's review will focus on the companies' ability to secure a waiver and amendment to its credit facilities, the timing of cash demands related to the recall, the potential offset from other cash flow sources other than the suspended distributions to CBIF unit holders. Moody's will also assess the overall scope of the recall, as well as the impact on the companies' overall business. To confirm the ratings, the companies would need to demonstrate that liquidity has stabilized, and that the scope and costs of the recall have been contained. Ratings lowered, on review for possible downgrade: Bumble Bee Foods, LLC and Clover Leaf Seafoods L.P. -- Corporate family rating to B1 from Ba3 -- Probability of Default Rating at to B2 from B1 -- $75 million 5-year senior secured revolving credit to B1 from Ba3 -- $200 million 6-year senior secured revolving credit to B1 from Ba3 -- The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-2 Bumble Bee Foods, LLC and Clover Leaf Seafoods, L.P., with combined revenues of about $950 million, are manufacturers of branded, shelf stable seafood and other assorted protein products. These companies are the core operating subsidiaries of Connors Brothers Income Fund. C2 GLOBAL: June 30 Balance Sheet Upside-Down by $1.4 Million ------------------------------------------------------------ C2 Global Technologies Inc. reported total assets of $1.3 million, total liabilities of $2.7 million, and total stockholders' deficit of $1.4 million as of June 30, 2007. The company had a net loss of $400,000 in the second quarter of 2007, compared to a net loss of $2.8 million in the second quarter of 2006. For the six months ended June 30, 2007, the company had a net loss of $1 million compared to a net loss of $1.8 million for the six months ended June 30, 2006. The company had a loss from continuing operations of $0.4 million for the second quarter of 2007 compared to a loss of $3.5 million for the second quarter of 2006. The company had a loss from continuing operations of $1 million for the six months ended June 30, 2007 compared to a loss of $6.2 million for the six months ended June 30, 2006. Full-text copies of the company's financials are available for free at http://researcharchives.com/t/s?2234 Second Quarter Significant Developments In April, a trial scheduling conference was held with respect to the company's patent infringement lawsuit against AT&T, Inc., Verizon Communications Inc., Qwest Communications International Inc., Bellsouth Corporation, Sprint Nextel Corporation, Global Crossing Limited, and Level 3 Communications Inc. The trial date was set to Aug. 4, 2008. In June, the complaint against Bellsouth Corporation was dismissed without prejudice. In May, the company was granted U.S. Patent No. 7,215,663 for its patent entitled "Private IP Communication Network Architecture". This patent, which was applied for in September 2000, is effective through June 12, 2017. It relates generally to multimedia communications networks and, more particularly, to an improved Voice over Internet Protocol network that provides for increased data stream throughput for video/voice/data via a private Internet Protocol communications network with associated communications components. Going Concern Doubt Mintz & Partners LLP, in Toronto, Ontario, expressed substantial doubt about C2 Global Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About C2 Global Headquartered in Toronto, Ontario, C2 Global Technologies Inc. (OTC BB: COBT.OB) -- http://www.c-2technologies.com/-- was incorporated in the State of Florida in 1983 under the name "MedCross Inc." which was changed to "I-Link Incorporated" in 1997 and to "Acceris Communications Inc." in 2003. In August 2005, the company changed its name from to "C2 Global Technologies Inc." C2's business is focused on licensing its patents, which include two foundational patents in VoIP technology. C2 plans to realize value from its intellectual property by offering licenses to service providers, equipment companies and end-users that are deploying VoIP networks for phone-to-phone communications. CAPITAL ONE: Inks $700 Million Buyout Deal With NetSpend Holdings ----------------------------------------------------------------- Capital One Financial Corporation has entered into a definitive agreement under which it will acquire NetSpend Holdings Inc., the parent company of NetSpend Corporation, a retail marketer of prepaid debit cards, for $700 million in an all-cash transaction. On a GAAP basis, the transaction, including the associated integration costs, is not expected to have a material effect on Capital One's earnings per share in 2007, or in 2008, and is expected to be accretive in 2009. On an operating basis, excluding integration costs, the transaction is expected to be accretive in 2008. "This transaction is financially compelling," Scott Grimes, Capital One's senior vice president, payments, said. "NetSpend is profitable, and based on extensive due diligence, we're confident that the combined capabilities of both companies position us to deliver strong profit growth in the future." The prepaid debit market is experiencing significant growth, is attractive to a wide range of consumers, and leverages Capital One's core strengths in credit cards and banking. Prepaid debit cards offer a flexible, safe and reliable alternative to cash for millions of consumers. The acquisition will expand upon the company's existing strategic partnership with NetSpend and further Capital One's ability to offer consumers a broader range of payment solutions while extending its brand through NetSpend's strong retail presence. "Capital One offers innovative debit and credit products to help meet consumers' needs regardless of how they spend and manage their money," Mr. Grimes said. "With NetSpend's broad network of merchant partners, this acquisition immediately adds a powerful channel and further extends Capital One's prepaid solutions to the retail environment." With more than 1.5 million active customers nationwide, NetSpend has the convenient and accessible retail networks in the country, including more than 15,000 locations where cards can be purchased and 50,000 locations where funds can be loaded onto the card. In addition, NetSpend offers products and services online through its website. NetSpend's chief executive officer, Richard Savard, will continue to lead the prepaid business after the acquisition has been finalized and will assume a key executive role within Capital One's Payments business. "We consider Capital One to be among the best payment and card marketers in the country," Mr. Savard said. "This transaction is the natural next step for our company. It enables us to accelerate the success we have had addressing the 70 million U.S. citizens who lack or choose not to have a traditional bank account. Combining our resources with Capital One expands NetSpend's ability to deliver products that drive sales and loyalty for our merchant partners. As an important part of Capital One, we look forward to driving our business and the prepaid industry to the next level." NetSpend's proprietary, end-to-end approach is scalable and customizable, delivering cost benefits and revenue building opportunities to partners. NetSpend distribution relationships with retailers include Safeway, Pathmark, HEB Grocery Stores, and ACE America's Cash Express. NetSpend manages all aspects of the debit card lifecycle, from the card design and approval processes with partners and associations, to production, packaging, distribution, and personalization. NetSpend also oversees inventory and security controls, renewals, lost and stolen card management and replacement. Under the terms of the agreement, NetSpend will become a subsidiary of Capital One N.A. The transaction, which was approved by the board of directors of Capital One and NetSpend is subject to customary regulatory approvals and notifications and is expected to close in the fourth quarter of 2007. About NetSpend Corporation Headquartered in Austin, Texas, NetSpend Corporation -- http://www.netspend.com/-- provides innovative, accessible prepaid debit cards that enable financial freedom for under-banked consumers. NetSpend meets its customers' financial services needs while offering the convenience, security and acceptance of conventional financial services. The NetSpend(R) Prepaid Card Network includes consumer brands and companies serving the un- banked and under-banked markets, and its strategic relationships include card issuers, EFT networks and payment card associations. About Capital One Headquartered in McLean, Virginia, Capital One Financial Corporation -- http://www.capitalone.com/-- is a financial holding company, with 725 locations in New York, New Jersey, Connecticut, Texas and Louisiana. Its principal subsidiaries, Capital One Bank, Capital One Auto Finance, Inc., and Capital One, N.A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. * * * Capital One Financial Corp. has a "B" individual rating from Fitch. The rating was placed on Aug. 16, 2002, with a positive outlook. CARES INVESTMENTS: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Cares Investments, L.L.C. dba Zales Meat Distributors dba Zales Meat Distributors & Discount dba Zales Meat Discount Market 780 West 17 Street, Suite 9 Hialeah, FL 33010 Bankruptcy Case No.: 07-16239 Type of business: The Debtor sells food and beverages in wholesale and retail. See http://zalesmeat.com/ Chapter 11 Petition Date: August 6, 2007 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Elias Leonard Dsouza, Esq. 111 North Pine Island Road, Suite 205 Plantation, FL 33324 Tel: (954) 763-7772 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.P.S. Capital $750,000 280 Trumbull Street Hartford, CT 06103 Rafael Zagales $250,000 5555 Collins Avenue, Suite 12F Miami Beach, FL 33140 Harvest Meat Co. $115,959 P.O. Box 850001 Orlando, FL 33054 Don Green Poultry $83,974 Kansas Packing, L.L.C. $19,000 Gold Kist, Inc. $13,869 Catalina $11,787 Dolphin Fisheries $9,693 High Top $9,551 La Montina-Tigre $9,399 Four Way Freight $5,179 Spiegel $3,459 Ladex $2,688 Fundora Produce $1,828 United Oil $1,351 Pinzon $1,141 Rex Chemicals $854 L.&J. General International $846 Corp. Trujillo & Sons $803 CARIBOU RESOURCES: JED Oil Completes Purchase of All Shares ----------------------------------------------------------- JED Oil Inc. disclosed that on July 31, 2007, it completed the acquisition of all of Caribou Resources Corp.'s shares. Jed Oil has also settled with Caribou's creditors. Caribou is now a wholly owned subsidiary of JED and its name has been changed to JED Production Inc. The transactions completed were both a Plan of Arrangement under the Business Corporation's Act (Alberta) and a Plan of Arrangement under the Companies' Creditors Arrangement Act (Canada). ABCA Arrangement Under the ABCA Arrangement, JED has acquired all of the issued and outstanding common shares of Caribou and the former Caribou shareholders will receive JED common shares, on the basis of one JED common share for ten Caribou common shares. The outstanding stock options and warrants to acquire common shares of Caribou which were not exercised have been terminated. Approval for the ABCA Arrangement was received by the requisite majority of the holders of Caribou common shares, options and warrants held on July 30th and a Final Order approving the ABCA Arrangement was granted by the Court of Queen's Bench of Alberta on July 31. In addition, at a special meeting on July 30th, JED's common shareholders approved the issuance of up to a maximum of 4 million common shares to be issued to the former Caribou shareholders. The number of issued and outstanding Caribou shares at completion of the transactions was approximately 38.53 million shares, so approximately 3.853 million of the maximum of 4 million common shares of JED will be issued. CCAA Plan Under the CCAA Plan, creditors of Caribou ranking in priority behind the major secured creditor, whose position JED has acquired, will receive cash of approximately $345,500 plus the issuance of 5 million JED common shares. Under the CCAA Plan the secured creditors whose security ranks behind JED's will share in the net proceeds from 800,000 of the JED common shares and the unsecured creditors will share in the balance of the cash and JED common shares. Creditors of Caribou who have security that ranks ahead of JED's are not be affected by the CCAA Plan and will be paid by JED. Approvals for the CCAA Plan of Arrangement were received by the requisite majority of both the unsecured creditors and the secured creditors subordinate to JED in two creditor meetings held on June 30th and a Sanction Order approving the CCAA Arrangement was granted by the Court of Queen's Bench of Alberta. In addition, at a special meeting on July 30th, JED's common shareholders approved the issuance of the 5 million common shares to be issued under the CCAA Plan. Following the issuance of up to a maximum of 9 million common shares for both arrangement transactions, JED now has approximately 23.853 million issued and outstanding common shares. "With the completion of the Caribou acquisition, we have acquired the additional assets and resources we need to proceed with our business plan for 2007 and 2008 in accordance with the guidance we provided on June 19th," stated James Rundell, JED's President. "We are looking forward to the opportunities provided by this acquisition." As a result of this combination with Caribou, JED expects to have combined production of approximately 1,500 barrels of oil equivalent per day. Current estimates for 2007 year-end production is approximately 2,900 BOE/d. Utilizing existing lands, the current capital base and the significant reduction in debt, the forecasted exit rate for Q1 2008 is expected to be approximately 4,100 BOE/d and the Q2 2008 exit rate is expected to be 4,500 BOE/d. Preferred Share Amendments At the special meeting of JED's shareholders held on July 30th, amendments to the terms of the Series B Preferred Shares were also approved. The amendments extend the maturity date for the redemption by JED of the preferred shares to February 1, 2010 and reduce the price at which the preferred shares can be converted to common shares from $16.00 to $3.50. Each preferred share has a stated value of $16.00, so under the amendments a person holding 1,000 preferred shares who elects to convert them to common shares would receive 4,571 common shares rather than 1,000. About JED Oil Based in Didsbury, Alberta, JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an oil and natural gas company that commenced operations in the second quarter of 2004 and has begun to develop and operate oil and natural gas properties principally in western Canada and the United States. About Caribou Resources Based in Calgary, Canada, Caribou Resources Corp. (TSX VENTURE:CBU) -- http://www.cariboures.com/-- is a full cycle exploration and development company primarily focused on exploring for natural gas in Northern Alberta, and oil and natural gas in Central Alberta. With a mix of oil and gas prospects, the company is committed to creating shareholder value by conducting exploration and development activities in a highly focused area. In January 2007, Caribou filed for protection under the Canadian Companies' Creditors Arrangement Act. CATHOLIC CHURCH: San Diego Has Until October 15 to File Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of California extended The Roman Catholic Bishop of San Diego's exclusive period to file an amended plan of reorganization until Oct. 15, 2007. The Court also extended the Diocese's exclusive period to solicit acceptances of that plan until Dec. 15, 2007, without prejudice to further requests. Judge Adler noted that an extension of the exclusive periods warranted due to the size and complexity of the Chapter 11 case, the pending settlement conferences, the need to determine property of the bankruptcy estate, and the need to amend the proposed plan to incorporate the results of the mediation and property valuation. Prior to the Court's entry of its order, an Ad Hoc Committee of Parishioners of The Roman Catholic Bishop of San Diego filed a joinder to the request telling the Court that the request is appropriate in light of the size and complexity of the Diocese's Chapter 11 case. The Official Committee of Unsecured Creditors, however, argued that besides the joinder being late-filed, the Ad Hoc Parishioners Committee is also not a party-in-interest in the Diocese's Chapter 11 case. For these reasons, Judge Adler strikes out the Ad Hoc Parishioners Committee's joinder. About the San Diego Diocese The Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. On March 27, 2007, the Debtor filed its plan and disclosure statement. (Catholic Church Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: San Diego Gets Nod to Sell CSE & EWC Properties ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California granted the request and approved the terms and conditions of a purchase and sale agreement and escrow instructions between Catholic Secondary Education - Diocese of San Diego, Incorporated, Diocese of San Diego Education and Welfare Corporation, and William Lyon Homes Inc. Judge Adler authorized and approved (i) the assignment of the Sale Agreement from CSE and EWC to the Diocese, and (ii) the sale and transfer of a real property located at 5910 Linda Vista Road, in San Diego, California, which is owned by CSE and EWC. The Court approves the Roman Catholic Bishop of San Diego's assumption of the Sale Agreement. As advised by, and agreed with the Court, the CSE supported the Diocese's sale request, subject to the assignment of the obligations and mutual release of claims. According to the CSE, the transfer of proceeds of the sale of the Vista Road Property to the Diocese is appropriate and lawful under the California Corporations Code, and is consistent with and in the best interests of the charitable purpose of CSE. Judge Adler holds that William Lyon Homes, Inc.'s statement of position that San Diego has breached their agreement and, thus, may not assume the agreement, is not relevant to the request. Judge Adler says any dispute regarding the agreement must be determined in an appropriate context like a lawsuit for specific performance. About the San Diego Diocese The Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. On March 27, 2007, the Debtor filed its plan and disclosure statement. (Catholic Church Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). CENTER CUT: Moody’s Places Corporate Family Rating at B3 -------------------------------------------------------- Moody's Investors Service assigns first time ratings to Center Cut Hospitality, Inc. as: Ratings assigned are: -- Corporate family rating of B3 -- Probability of default rating of B3 -- $20 million senior secured revolving credit facility due July 2013, rated B2 / 35% / LGD-3 -- $100 million senior secured term loan due July 2014, rated B2 / 35% / LGD-3 -- Speculative Grade Liquidity rating of SGL-3 The ratings outlook is stable. The B3 corporate family rating reflects the company's modest scale, limited scope, weak debt protection metrics, and relatively aggressive growth plans. However the ratings also incorporate the company's reasonable operating metrics, good margins, and sizeable average unit volumes. Lone Star Funds acquired Lone Star Steakhouse and Saloon on Dec. 13, 2006 for about $623 million. As part of the transaction, the company separated two of its steakhouse and seafood restaurants concepts, Del Frisco's Double Eagle Steak Houses and Sullivan's Steakhouses, into a separate entity that was financed on a standalone basis. Center Cut financed the acquisition of Del Frisco's and Sullivan's with a $110 million first lien term loan and $20 million revolver. In addition to bank debt, the company has a $58.5 million senior subordinated note (unrated) with an affiliate of Lone Star Funds and a $19.8 million standby letter of credit with the Bank of Montreal, not back-stopped by Center Cuts' bank facility, to partially fund the potential litigation settlement associated with a dissident shareholder that will be undrawn at close. Center Cut Hospitality, headquartered in Wichita Kansas, is an owner and operator of 22 white table cloth steakhouse and seafood restaurants located through out the United States under the names Del Frisco's Double Eagle Steak Houses and Sullivan's Steakhouses. For the year-ended Dec. 31, 2006, the company's reported revenues and adjusted operating income of $153 million and $17.7 million, respectively. CHARLES PAASO: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Charles Paaso Sandra Paaso 6147 Island Lake Drive Brighton, MI 48116 Bankruptcy Case No.: 07-32575 Chapter 11 Petition Date: August 7, 2007 Court: Eastern District of Michigan (Flint) Judge: Daniel S. Opperman Debtor's Counsel: Michael P. DiLaura, Esq. Michael DiLaura & Associates, P.C. 105 Case Avenue Mt. Clemens, MI 48043 Tel: (586) 468-5600 Fax: (586) 465-9113 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First National Bank of Howell Industrial $1,850,000 c/o Perry Kantner Secured: Kantner & Associates $1,250,000 661 Airport Boulevard Suite 2A Ann Arbor, MI 48108 Detroit Tubing Mill, Inc. Business Guaranty $450,000 c/o Philip R. Fabrizio 6515 Highland, Suite 202 Waterford, MI 48327 Minco Pipe, Inc. Judgment for $148,000 c/o Robert Gardella Business Guaranty 8163 West Grand River, Suite 100 Brighton, MI 48114 Bank of America - Norfolk Credit Card $42,157 AMEX Credit Card $40,745 Bank of America - Newark Credit Card $33,656 U.S. Bank Credit Card $15,601 Monogram Bank N. America Credit Card $8,715 Wells Fargo Credit Card $8,454 T-Bird Collection Specialist Collection Scottsdale $6,594 Vascular Clinic Pfeffer Hanniford & Palka Accounting Services $5,390 Saint Joseph Mercy Medical $4,078 Health System Capital One Bank Credit Card $966 Michigan Heart Medical Bills $305 Kohls/Chase Credit Card $179 Credit Bureau of Collection- MCI $60 Columbus Services Communications Sonora Quest Laboratories Medical $44 Michigan Commercial Credit LLC Guaranty Unknown Internal Revenue Service Personal and Unknown Business Taxes CHURCH & DWIGHT: Earns $40.5 Million in Quarter Ended June 29 ------------------------------------------------------------- Church & Dwight Co. Inc. disclosed on Aug. 7, 2007, its results for the second quarter ended June 29, 2007. The company reported net income for the quarter ended June 29, 2007, of $40.5 million, an increase of 9% over last year's $36.4 million. Net income for the six months ended June 29, 2007, rose to $85.6 million, an increase of 10% over last year's $76.4 million. Net sales were $546.5 million in the second quarter, an $87.9 million or 19% increase over last year's $458.6 million. Current year second quarter sales include the results of the Orange Glo International Inc. (OGI) laundry additive and household cleaners business, which was acquired in August 2006. Excluding the impact of revenue related to OGI and the net effect of foreign currency changes, organic sales increased for the quarter by approximately 5% compared to the second quarter of 2006. James R. Craigie, chairman and chief executive officer, commented, "We are very pleased with our results thus far. We launched a record number of new products in the first half of 2007 and we will continue to support them in the back half of the year with a significant increase in marketing spending. The integration of the OGI business has been successful and is expected to be completed by year-end. We continue to expect full year 2007 organic revenue growth to be in line with our 3 to 4% long-term business model." Consumer Domestic sales in the second quarter, which includes the OGI business, were $386.2 million, a $65.2 million or 20% increase over the prior year second quarter sales of $321.0 million. Sales of Arm & Hammer(R) liquid laundry detergent, Arm & Hammer Super Scoop(R) cat litter, Xtra(R) liquid laundry detergent, Trojan(R) condoms, Arm & Hammer(R) Dental Care toothpaste and SpinBrush(TM) battery-operated toothbrushes, were all higher than in last year's second quarter. These increases were partially offset by higher slotting expenses primarily in support of new product launches as well as lower sales of other toothpaste and antiperspirant products. Consumer International sales of $98.9 million increased 20% over the prior year second quarter sales, of which 7% is due to foreign currency changes and the balance is due to higher sales in Canada, Brazil, Australia, and the UK and the inclusion of the OGI business, especially in Mexico. Specialty Products sales grew 11% due to higher volumes in the animal nutrition business and both higher volumes and improved pricing in the specialty chemicals business. Gross margin was 39.7% in the second quarter compared to 38.9% in the first quarter of 2007 due to margin improvements in household products and our international business. Gross margin was below the second quarter 2006 margin of 40.3% primarily due to lower prior year trade spending, in connection with the introduction of price increases in April 2006 on several household products. Marketing expense was $66.1 million in the second quarter, an $11.9 million increase over the prior year's second quarter period partially due to the acquired OGI business. Marketing expense as a percentage of net sales increased to 12.1% in the quarter compared to 11.8% in the prior year period which reflects the planned increase in spending. Selling, general, and administrative expense was $74.0 million in the second quarter, a $10.1 million increase over the prior year's second quarter due to the operating expenses of the acquired OGI business, higher selling costs as a result of higher sales, higher stock-based compensation expense, and higher legal costs. Operating income increased 15% to $76.6 million in the second quarter compared to $66.7 million in the prior year's second quarter driven by higher sales. Other expense increased to $12.2 million in the second quarter, primarily due to interest associated with borrowings to fund the OGI acquisition. The effective tax rate in the current quarter was 38.7% compared to last year's 37.6%. The current year second quarter tax rate includes an additional $2.1 million valuation allowance for tax assets in one of the company's foreign subsidiaries and includes the benefit of the research and development tax credit which was reinstated by Congress in December 2006. The effective tax rate in last year's second quarter was unfavorably impacted by the expiration of the research and development tax credit on Dec. 31, 2005. At June 29, 2007, the company's consolidated balance sheet showed $2.37 billion in total assets, $1.40 billion in total liabilities, and $973.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 29, 2007, are available for free at http://researcharchives.com/t/s?222f Free Cash Flow and Net Debt At quarter-end, the company had total outstanding debt of $875 million and cash of $107 million for a net debt position of $768 million. This compares to total debt of $933 million and cash of $110 million for a net debt position at Dec. 31, 2006, of $823 million. The company reported net cash from operations of $45 million in the second quarter of 2007 compared to $15 million in the prior year's second quarter. For the first six months of 2007, the company reported $75 million of net cash from operations compared to $29 million in the first half of 2006. The company generated approximately $31 million in free cash flow during the second quarter of 2007 compared to approximately $4 million of free cash flow during the second quarter of 2006. For the first six months, the company has generated approximately $50 million in free cash flow compared to $7 million in the prior period. Free cash flow is defined as net cash from operations less capital expenditures. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) as defined in the company's principal credit agreement, which excludes certain items, was approximately $187 million for the first six months of 2007, an $11 million increase over the same period last year. About Church & Dwight Headquartered in Princeton, New Jersey, Church & Dwight Co. Inc. (NYSE: CHD) -- http://www.churchdwight.com/-- manufactures and markets a wide range of personal care, household and specialty products, under the Arm & Hammer brand name and other well-known trademarks. * * * As reported in the Troubled Company Reporter on June 25, 2007, Standard & Poor's Ratings Services revised its outlook on Princeton, New Jersey-based Church & Dwight Co. Inc. to positive from stable. At the same time, Standard & Poor's affirmed all of its existing ratings on the company, including the 'BB' corporate credit rating. COMBIMATRIX CORP: Posts $3.6 Mil. Net Loss in Qtr. Ended June 30 ---------------------------------------------------------------- CombiMatrix Corp. reported a net loss of $3.6 million and an operating loss of $3.6 million, on total revenues of $1.3 million for the second quarter ended June 30, 2007, compared with a net loss of $3.4 million and an operating loss of $5.1 million, on total revenues of $1.8 million for the same period ended June 30, 2006. The decrease in operating loss for the quarter ended June 30, 2007, primarily reflects a decrease in research and development, and marketing, general and administrative expenses, which more than offset a decrease in total revenues. The increase in net loss is primarily due to warrant gains of $1.5 million recognized in the second quarter last year, versus a warrant loss of $145,000 for the current quarter. These gains/losses is mainly a result of changes in the fair value of stock purchase warrant liabilities associated with certain AR- CombiMatrix stock purchase warrants outstanding at June 30, 2007, and 2006. The decrease in total revenues is mainly a result of the decrease in products revenues, partly offset by increases in revenues from government contracts. Revenues from government contracts revenues increased to $679,000 for the three-month period ended June 30, 2007, vs. $574,000 for the same period in 2006. The increase was due to ongoing performance of the company's electrochemical detection, microfluidics and influenza genotyping contracts during 2007 compared to only the electrochemical detection contract in the comparable 2006 period. Products revenues decreased to $458,000 for the current quarter, compared with $1.2 million during the quarter ended June 30, 2007. The decrease in product revenues was due primarily to the lack of DNA synthesizer instrument sales in 2007 compared to 2006. Internal research and development expenses decreased to $1.1 million for the quarter ended June 30, 2007, compared to $2.2 million for the same period ended June 30, 2006. The decrease was due primarily to the impact of cost reduction efforts in the area of full-time staff and ongoing research and development projects for the CustomArray platform, while continuing to develop microarray-based diagnostics services at CMDX. Marketing, general and administrative expenses decreased to $2.3 million for the 2007 quarter, compared with $3.1 million during the comparable quarter in 2006. The decrease for was due primarily to a decrease in facilities-related costs from executing the Feb. 1, 2007, lease amendment that significantly reduced the company's office space and lease rates, reduction in sales and marketing staff and expenses at the company's Mukilteo operations and overall reductions in general and administrative staff, which included one-time bonuses and severance-related costs in the first quarter of 2006, which were not incurred in 2007. At June 30, 2007, cash and cash equivalents and short-term investments totaled $12.8 million compared to $14.3 million at Dec. 31, 2006. Working capital at June 30, 2007, was $11.7 million, compared $12.0 million at Dec. 31, 2006. At June 30, 2007, the company's consolidated balance sheet showed $41.2 million in total assets, $12.6 million in total liabilities, and $28.6 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?222c Going Concern Doubt PricewaterhouseCoopers LLP, in Seattle, expressed substantial doubt about CombiMatrix Corporation's ability to continue as a going concern aftr auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. PwC reported that the company has suffered recurring losses from operations and management anticipates that the company will require additional financing in the foreseeable future. About CombiMatrix Corp. Headquartered in Seattle, CombiMatrix Corp. (NasdaqGM: CBMX) -- http://www.combimatrix.com/-- is a biotechnology company with a subsidiary, CombiMatrix Molecular Diagnostics, headquartered in Irvine, Calif. CombiMatrix's patented electrochemical manufacturing process utilizes standard semiconductor technology, proprietary software, and chemistry to build arrays of materials-- molecule by molecule. The company's CustomArray(TM) products are DNA microarrays, which have uses in pharmaceutical, biotech, and agrochemical industries as well as in research and government markets. COMM 2004-LNB2: Fitch Upgrades Ratings on Six Loan Classes ---------------------------------------------------------- Fitch Ratings has upgraded COMM 2004-LNB2 as: -- $25.3 million class B to 'AA+' from 'AA'; -- $9.6 million class C to 'AA' from 'AA-'; -- $19.3 million class D to 'AA-' from 'A'; -- $8.4 million class E to 'A+' from 'A-'; -- $9.6 million class F to 'A-' from 'BBB+'; -- $10.8 million class G to 'BBB+' from 'BBB'; -- $10.8 million class H to 'BBB' from 'BBB-'. In addition, Fitch has affirmed these classes: -- $19.8 million class A-1 at 'AAA'; -- $129.5 million class A-2 at 'AAA'; -- $157.6 million class A-3 at 'AAA'; -- $466.5 million class A-4 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; --$4.8 million class J at 'BB+'; -- $6.0 million class K at 'BB'; -- $3.6 million class L at 'BB-'; -- $4.8 million class M at 'B+'; -- $2.4 million class N at 'B'; -- $1.2 million class O at 'B-'. Fitch does not rate the $12.4 million class P. The upgrades are due to increased credit enhancement levels from pay offs and scheduled amortization as well as the defeasance of an additional six loans (13.2%) since Fitch's last rating action. As of the July 2007 distribution date, the pool has paid down 6.3% to $902.7 million from $963.8 million at issuance. To date nine loans (17.9%) have been defeased. There are currently three loans in special servicing (0.8%); however, no losses are expected at this time. Two of the specially serviced loans secured by multifamily properties in Woodville and Greenville, TX were cross-collateralized and cross- defaulted with a third multifamily property in Fort Worth, TX. The loans were transferred to the special servicer due to imminent default of the third loan. An agreement was reached with the Borrower to accept a full payoff of the principal balance of the third loan. The two remaining loans have been reinstated and will be returned to the master servicer. The third specially serviced loan (0.4%) is collateralized by a multifamily property located in Biloxi, MS which was significantly impacted by Hurricane Katrina. The borrower is using insurance proceeds to keep the loan current during renovations. Three loans (29.9%) have investment grade credit assessments: Tysons Corner Center (16.0%), AFR Portfolio (8.0%) and Meadows Mall (5.9%). Based on their stable performance the loans maintain their investment grade credit assessments. The Tysons Corner Center loan is secured by a 1.6 million square foot regional mall in McLean, VA. There are four pari-passu notes, A-1 through A-4. A-1 is included in the trust. Occupancy as of year-end 2006 has increased to 97.8% from 95.9% at issuance. The AFR portfolio loan is secured by 153 office properties located across 19 states. The total debt on the portfolio consists of an A-1, A-2, A-3, A-4 and a B-note. The A-3 note is included in the trust. Occupancy as of March 31, 2007 has increased to 90% from 86.4% at issuance. The Meadows Mall loan is secured by a 312,210 sf regional mall in Las Vegas, NV. The note is split into two equal pari-passu pieces with the A-2 piece included in the trust. Occupancy as of YE 2006 has increased to 97.1% from 96.6% at issuance. CONSECO INC: Impaired Earnings Cue S&P to Lower Ratings ------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and senior debt ratings on Conseco Inc. to 'B+' from 'BB-'. The outlook remains negative. At the same time, Standard & Poor's lowered its counterparty credit and financial strength ratings on Conseco Senior Health Insurance Co. to 'CCC-' from 'CCC'. Its outlook also remains negative. Standard & Poor's also revised its outlook on Conseco's core insurance companies to negative from stable and affirmed its ratings on the companies. "These ratings actions are based on Conseco's announcement that second-quarter operating earnings were impaired by significant continued losses in its run-off segment, the bulk of which is housed in CSH," said Standard & Poor's credit analyst Neal Freedman. "Standard & Poor's expects these losses to continue, though at a lower rate, through the remainder of 2007." The run-off segment lost $133 million in the quarter as a result of the continued adverse development on the company's run-off block of long-term care insurance business and continued refinement of the company's reserve methodology. The negative outlooks reflect Standard & Poor's concern that significant losses in the run-off block will continue, despite management's efforts to-date to implement corrective actions and provide sufficient reserves in anticipation of future adverse development. If the run-off block continues to generate significant losses, further affecting interest coverage, the ratings on Conseco Inc. and the core operating companies will likely be lowered. CORRECTIONS CORP: Earns $32.6 Million in Quarter Ended June 30 -------------------------------------------------------------- Corrections Corporation of America reported net income of $32.6 million for the three months ended June 30, 2007, compared with net income of $25.6 million for the three-month period in 2006. Management revenue from federal customers increased $20.7 million, or 16%, to $150 million during the second quarter of 2007 from $129.3 million during the second quarter of 2006, as a result of higher inmate populations from the Immigration and Customs Enforcement and the U.S. Marshals Service. Federal revenues were positively impacted by a new management contract from ICE at the company's Stewart Detention Center that began receiving detainees in October 2006 and a full quarter impact of a new management contract at T. Don Hutto Residential Center that became effective in May 2006. Additionally, federal revenues were favorably impacted by the backfilling of the vacated beds in Florence Correctional Center with additional USMS detainees as a result of the commencement of operations at new Red Rock Correctional Center in July 2006. Management revenue from state customers also increased by about $13.8 million, or 8.7%, to $171.7 million during the second quarter 2007 from $157.9 million for the same period in 2006. State revenues were primarily impacted by an increase in populations from several state customers including primarily Colorado, Wyoming, and California. Total portfolio occupancy increased to 99% during the second quarter of 2007 from 94.9% during the second quarter of 2006, with compensated man-days increasing 8.6%, to 6.6 million from 6.1 million. Total portfolio occupancy increased despite a 4.1% increase in our average available beds from the second quarter of 2006 as a result of the completion of several expansion and development projects. Adjusted free cash flow decreased by $1.6 million to $42.4 million during the second quarter of 2007 from $44 million generated during the same period in 2006, as an increase in adjusted free cash flow resulting from improved operating performance was offset by an increase in payments for income taxes. First Six Months of 2007 For the six months ended June 30, 2007, the company generated net income of $65.2 million, compared with $47 million for the six months ended June 30, 2006. Financial results for the first six months of 2006 included a pre-tax charge of about $1 million for refinancing transactions completed during the first quarter of 2006. Adjusted free cash flow, which does not include the refinancing charge during 2006, increased 19.4%, or $16.9 million during the first six months of 2007 to $103.9 million compared with $87 million during the first six months of 2006. The increase in adjusted free cash flow primarily resulted from strong operating results despite the increase in payments for income taxes of $18.6 million. Liquidity and Capital Resources During the first six months of 2007, the company capitalized $9.3 million of expenditures related to technology, compared with $7.4 million during the first six months of 2006. The company expects to incur about $7.9 million in information technology expenditures during the remainder of 2007. As of June 30, 2007, liquidity was provided by cash on hand of $81.1 million, investments of $84.8 million, and $114 million available under the company's $150 million revolving credit facility. During the six months ended June 30, 2007 and 2006, the company generated $129.5 million and $91.8 million, respectively, in cash through operating activities, and as of June 30, 2007, and 2006, the company had net working capital of $241 million and $194 million, respectively. The company currently expects to be able to meet cash expenditure requirements for the next year. As of June 30, 2007, the company's balance sheet showed total assets of $2.3 billion, total liabilities of $1.2 billion, and total stockholders' equity of $1.1 billion. A full-text copy of the company's financial report is available for free at http://researcharchives.com/t/s?2235 On July 2, 2007, the company announced the commencement of construction of a new 1,668-bed correctional facility in Adams County, Mississippi. Construction of the new facility is estimated to be completed during the fourth quarter of 2008 at an estimated cost of about $105 million. The company does not currently have a management contract to utilize these new beds, but will market the new beds to various existing and potential customers. About Corrections Corp. of America Corrections Corp. of America -- http://www.correctionscorp.com/-- is headquartered in Nashville, Tenn., and owns and operates privatized correctional facilities in the United States. As of Dec. 31, 2006, it owned 43 correctional, detention, and juvenile facilities, three of which are leased to other operators. It currently operates 64 facilities, with a total design capacity of approximately 72,000 beds in 19 states and the District of Columbia. * * * As reported in the Troubled Company reporter on March 6, 2007, Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on prison and correctional services company Corrections Corp. of America to 'BB' from 'BB-'. The outlook is stable. CWABS ASSET: Moody's Rates Class B-1 Certificates at Ba2 -------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by CWABS Asset-Backed Certificates Trust 2007- QX1 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Quality Home Loans (100%) originated adjustable-rate subprime residential mortgage loans. The ratings are based primarily on the credit quality of the loans and on protection against credit losses from subordination, excess spread and overcollateralization. Moody's expects collateral losses to range from 7.50% to 8%. Servicing will be provided by Countrywide Home Loans Servicing LP. The complete rating actions are: CWABS Asset-Backed Certificates Trust 2007-QX1 Asset-Backed Certificates, Series 2007-QX1 -- Cl. A-1, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned A1 -- Cl. M-4, Assigned A2 -- Cl. M-5, Assigned Baa1 -- Cl. M-6, Assigned Baa2 -- Cl. M-7, Assigned Baa3 -- Cl. B-1, Assigned Ba2 CWALT 2007: Moody's Assigns Low-B Ratings on Two Cert. Classes -------------------------------------------------------------- Moody's Investors Service assigned Aaa ratings to the senior certificates issued by Alternative Loan Trust 2007-OA9 and ratings ranging from Aaa to B2 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate, negative amortization mortgage loans originated by IndyMac Bank, F.S.B., Flagstar Bank, F.S.B. and other originators. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination. Moody's expects collateral losses to range from 1% to 1.20%. Countrywide Home Loans Servicing LP and IndyMac Bank, F.S.B. will service the loans. Countrywide Home Loans Servicing LP will aslo act as a master servicer. The complete rating actions are: Alternative Loan Trust 2007-OA9 Mortgage Pass-Through Certificates, Series 2007-OA9 -- Cl. A-1, Assigned Aaa -- Cl. A-2, Assigned Aaa -- Cl. A-3, Assigned Aaa -- Cl. X-P, Assigned Aaa -- Cl. A-R, Assigned Aaa -- Cl. M-1, Assigned Aaa -- Cl. M-2, Assigned Aa1 -- Cl. M-3, Assigned Aa1 -- Cl. M-4, Assigned Aa1 -- Cl. M-5, Assigned Aa1 -- Cl. M-6, Assigned Aa2 -- Cl. M-7, Assigned Aa3 -- Cl. M-8, Assigned Aa3 -- Cl. M-9, Assigned A2 -- Cl. B-1, Assigned Ba1 -- Cl. B-2, Assigned B2 CYBERONICS INC: Names James Reinstein as Vice Pres. & General Mgr. ------------------------------------------------------------------ Cyberonics Inc. has appointed James A. Reinstein as vice president, sales & marketing, and general manager, international, effective immediately. In this role, Mr. Reinstein will lead the sales and marketing effort in the United States and will be the general manager of Cyberonics Europe SA with responsibility for all sales and distribution outside the United States. Mr. Reinstein joins Cyberonics from Boston Scientific where, since 1990, he has held positions in sales, marketing and product management in the U.S., Asia, Europe and Mexico. He served as a vice president of Boston Scientific Asia, where he led the Korean team and had responsibility for Taiwan and Hong Kong. Prior to that, he held the position of country director of Boston Scientific Mexico, where he built a new management team to turn around that country's organization while growing the top line by 30%. Mr. Reinstein held positions at Boston Scientific that included Inter-Continental Director of Marketing, European Group Marketing Manager, European Product Manager and U.S. marketing management and sales. "James has consistently demonstrated his ability to deliver impressive levels of sales growth,” Dan Moore, Cyberonics' president and chief executive officer, said. “As we refocus our team on epilepsy, he is the ideal person to lead our global sales teams back to respectable growth in our core epilepsy business. I am pleased to have James join the Cyberonics team, and I am confident he will be an important contributor to growing both our domestic and international businesses. I've known James for 15 years while we worked together at Boston Scientific, where he demonstrated his leadership, business acumen and adaptability to working across different regions and cultures." Prior to joining Boston Scientific, Mr. Reinstein spent four years with Procter and Gamble. He received his Bachelor of Arts from the University of Georgia and completed the Executive Management Program at INSEAD in France in 1999. Mr. Reinstein served as chairman of the American Chamber of commerce medical device committee in Korea. He is also a charter board member of the International Society for Pharmacoeconomics and Outcomes Research Asia-Pacific and has served as the Asian Advisor to the U.S. Trade Representatives negotiating the Korean-USA Free Trade Agreement. Cyberonics also announced the resignations of two senior executives, Michael A. Cheney, vice president, marketing & sales, and Shawn P. Lunney, vice president, market development. "Both Michael and Shawn have made important contributions to the development of Cyberonics over a long period of time, and we thank them for all their efforts on Cyberonics' behalf," Mr. Moore commented. About Cyberonics Inc. Headquartered in Houston, Texas, Cyberonics Inc. (NASDAQ: CYBX)-- http://cyberonics.com/-- markets the VNS Therapy system in selected markets worldwide. The VNS Therapy System uses a surgically implanted medical device that delivers electrical pulsed signals to the vagus nerve in the left side of the neck. This therapy has proven effective in significantly reducing the number and/or intensity of seizures in many people suffering from epilepsy and has the potential for use in the treatment of other inadequately treated, chronic disorders. Cyberonics Inc.'s balance sheet as of April 27, 2007, reflected total assets of $13.6 million, total liabilities of $15.7 million, resulting in a total stockholders' deficit of $16.1 million. Going Concern Doubt KPMG LLP raised substantial doubt about Cyberonics Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended April 28, 2006, and April 29, 2005. The auditing firm pointed to the company's recurring losses from operations, the receipt of a notice of default and demand letter and notice of acceleration for a $125 million senior subordinated convertible notes, and incurrence of a potential default of a $40 million line of credit. D&E COMMUNICATIONS: Earns $2.3 Million in Second Quarter 2007 ------------------------------------------------------------- D&E Communications Inc. reported net income for the second quarter ended June 30, 2007, of $2.3 million, compared to a net income of $900,000 for the same period last year. Operating income for the second quarter of 2007 was $6.5 million compared to operating income of $4.3 million in the second quarter of 2006. Total operating revenues were $37.2 million for the second quarter of 2007, compared to $41.4 million in the second quarter of 2006. The second quarter 2006 results were affected by the intangible asset impairment loss recognized in continuing operations of $1.9 million and a loss from discontinued operations of $200,000. Net income before these items was $2.2 million for the second quarter of 2006. The revenue decrease was primarily the result of a decline in directory revenue of $3.4 million, due to the terms of a directory contract which became effective in the fourth quarter of 2006 and which covers three of the four directories that the company publish. For the six months ended June 30, 2007, the company reported total operating revenue of $75.6 million, as compared to $81.6 million in the same period last year. Net income for the six months ended June 30, 2007 was $4.9 million, as compared to $2.5 million for the same period last year. Included in the 2007 results was a gain of $600,00 from life insurance proceeds. Included in the 2006 results was the customer relationships intangible asset impairment loss recognized in continuing operations of $1.9 million and a loss from discontinued operations of $300,000. As of June 30, 2007, the company had total assets of $503.2 million, total liabilities of $314.1 million, preferred stock of utility subsidiary of $1.4 million, and total stockholders' equity of $187.7 million. Management's Comments "Midway through 2007, we are pleased with our results. Delivering quality services is fundamental to our success and our results reflect the company's ability to meet the needs of its customers," said James W. Morozzi, president and chief executice officer of D&E Communications. "A highlight within our Wireline segment was an increase in DSL/high-speed Internet subscribers, as customers switched to faster service at a reasonable rate. D&E's six-month net-income growth, excluding significant one-time gains in 2007 and one-time losses in 2006, was solid. We are doing business in very active and attractive markets and working hard to Deliver Excellence to our customers." About D&E Communications Based in Lancaster County, Pennsylvania, D&E Communications Inc. (NASDAQ: DECC) -- http://www.decommunications.com/-- is an integrated communications provider offering high-speed data, Internet access, local and long distance telephone, voice and data networking, network management and security, and video services. * * * D&E Communications Inc. carries Moody's Investors Service Ba2 bank loan debt rating. DAVITA INC: Messrs. Berg, Brittain, and Diaz Join Board ------------------------------------------------------- DaVita Inc. elected on March 8, 2007, Charles G. Berg as a member of the company's Board of Directors. On July 31, 2007, the Board of Directors of the company appointed Mr. Berg as a member of the Audit Committee of the Board of Directors. On March 23, 2007, the company elected Willard W. Brittain, Jr. as a member of the company's Board of Directors. On July 31, 2007, the Board of Directors of the Company appointed Mr. Brittain as a member of the Clinical Performance Committee and the Public Policy Committee of the Board of Directors. On July 31, 2007, the Board of Directors of DaVita Inc. also elected Paul J. Diaz as a member of the Board. The Board has not yet determined the committees of the Board to which Mr. Diaz may be appointed. Pursuant to the company's director compensation philosophy and plan, Mr. Diaz will receive an initial grant of options to purchase 15,000 shares of the company's stock in connection with his election to the Board. Mr. Diaz will receive the standard compensation amounts payable to non-employee directors of the company as set forth in the plan. No arrangement or understanding exists between Mr. Diaz and any other person or persons pursuant to which he was selected as a director. The company has not been a participant in any transaction since the beginning of its last fiscal year, and is not a participant in any currently proposed transaction, in which Mr. Diaz, or any member of his immediate family, has a direct or indirect material interest. About DaVita Inc. Headquartered in El Segundo, California, DaVita Inc. (NYSE: DVA)-- http://www.davita.com/-- provides dialysis services for patients suffering from chronic kidney failure. It provides services at kidney dialysis centers and home peritoneal dialysis programs domestically in 42 states, and the District of Columbia. As of Dec. 31, 2006, DaVita operated or managed over 1,300 outpatient facilities serving about 104,000 patients. * * * As of Aug. 8, 2007, the company holds Moody's Ba3 long-term corporate family rating and probability of default rating. Moody's rates the company's bank loan debt at Ba1, senior unsecured debt at B1, and senior subordinate at B2. The outlook is stable. Standard & Poor's rated the company's long-term foreign and local issuer credits at BB-. Fitch also rated the company's long-term issuer default rating at B+, bank loan debt at BB, senior unsecured debt at B, and senior subordinate at B-. The outlook is positive. DELTA AIR: Creditors Want Reorganized Debtors to Comply with Plan ----------------------------------------------------------------- Comair Creditors, namely Lehman Brothers Inc., Varde Partners, Inc., Talek Investments, Par-Four Investment Management, LLC, Societe Generale Corporate & Investment Banking, Contrarian Capital Management, LLC, and Cypress Management, claim the Reorganized Delta Air Lines Inc. and its affiliates are violating the terms of the confirmed Joint Plan of Reorganization. Lehman, et al., ask Judge Hardin of the U.S. Bankruptcy Court for the Southern District of New York to direct the Reorganized Debtors to obtain Court approval with respect to (i) certain postpetition aircraft agreements relating to aircraft assets and (ii) the resolution of claims that have an estimated or face amount in excess of $30,000,000, in accordance with the express terms of the Plan. On behalf of the Comair Creditors, Evan C. Hollander, Esq., at White & Case LLP, in New York, relates that just seven short weeks following confirmation of the Plan, the Debtors revised their estimate of the unsecured claims pool at Comair from $800,000,000 to $1,050,000,000. This increase in the Comair claims pool, according to Lehman, would reduce the expected recovery of Comair's unsecured creditors under the Plan by more than 20% from that projected in the Debtors' disclosure statement. Lehman, et al., were advised that a significant portion of the increase in the estimate of the Comair claims pool was attributable to an agreement between the Debtors and an aircraft finance counterparty relating to the restructuring of certain aircraft agreements in respect of 37 Comair aircraft. The Reorganized Debtors' attempt to shield the terms and nature of these recent deals from judicial scrutiny is particularly troubling given the significant impact that they will have on anticipated recoveries for the unsecured creditors of the Comair Debtors, Mr. Hollander asserts. Pursuant to the Plan, holders of general unsecured claims against the Debtors will receive stock in reorganized Delta. The New Delta Common Stock is to be divided between the Delta Debtors and the Comair Debtors based on what was then projected to be "the mid-point of the equity valuation range for the Comair Debtors (i.e. $730,000,000) relative to the mid-point valuation of the equity valuation range for the Delta Debtors (i.e., $10,000,000,000). The Debtors' publicly disclosed estimate of the total unsecured claims against the Comair Debtors, as of February 2, 2007, was $800,000,000, while the total unsecured claims against the Delta Debtors was estimated at approximately $14,200,000,000. The Disclosure Statement provides that parties holding general unsecured claims against the Comair Debtors were projected to recover 76% to 100% of the claims, while holders of general unsecured claims against the Delta Debtors were projected to recover 62% to 78% of the claims. Mr. Hollander notes that at no time prior to the April 9, 2007 deadline to cast ballots with respect to the proposed Plan did the Debtors update their disclosure or provide any advice as to a material change to their estimate of the total amount of unsecured claims in the Comair claims pool. On June 13, 2007, Edward H. Bastian, Delta's executive vice president and chief financial officer, spoke at the Merrill Lynch Global Transportation Conference. Mr. Bastian disclosed for the first time that Delta expected the aggregate amount of allowed claims against the Comair Debtors to be $1,050,000,000. The substantial increase in the Comair Debtors claims pool has reduced the mid-point of the projected recovery of Comair unsecured creditors from 91.25% to about 69.52%, Mr. Hollander points out. Thus, he asserts, the expected recovery of the Comair Debtors' unsecured creditors has plummeted by more than 20% from the amount of recovery projected by the Debtors in the Disclosure Statement. On June 22, 2007, counsel to Lehman, et al., sent a letter to counsel for the Reorganized Debtors to inquire about the significant increase in the Comair claims pool and the corresponding reduction of the anticipated recoveries. The letter also requested the Debtors to confirm that they would obtain Court approval with respect to restructuring proposals related to aircraft assets and the resolution of claims in excess of $30,000,000. A similar letter was sent to the Post-Effective Date Committee. On June 27, 2007, both the Reorganized Debtors and the Post- Effective Date Committee responded to the request, indicating that they did not intend to seek Court approval for the settlements. They contend that the Plan does not require Court authorization for aircraft restructuring proposals or claims settlements of any nature. Section 9.2 of the Plan sets forth the circumstances under which the Reorganized Debtors are authorized to resolve Disputed Claims without further Court approval. Section 9.2, however, does not authorize the Reorganized Debtors to "compromise, settle, or otherwise resolve any Disputed Claims [with respect to those matters described in Section 17.5(d)] without notice to or approval by the Bankruptcy Court or any other party." Section 17.5(d) provides that the Post-Effective Date Committee will only have standing and power to participate in these court proceedings as the deemed successor-in-interest to the Official Committee of Unsecured Creditors: (i) any matters related to proposed modifications or amendments to the Plan; (ii) any applications for allowance of compensation of Professionals; (iii) any actions to enforce, implement or interpret the Plan or to compel the Debtors to make distributions under the Plan; (iv) any appeals to which the Creditors Committee is party as of the Effective Date; (v) actions, if any, relating to approval of Post-Petition Aircraft Agreements; (vi) actions, if any, relating to approval of the treatment selected by the Debtors for holders of Allowed Secured Aircraft Claims against the Delta Debtors and the Comair Debtors; (vii) objections to, or estimations of, any Claims that have an estimated or face amount in excess of $30,000,000 to which either (a) the Creditors Committee has filed an objection before the Confirmation Date and the Creditors Committee's position with respect to such objection is materially different from the position of the Debtors or the Reorganized Debtors; or (b) the Post-Effective Date Committee requested in writing that the Reorganized Debtors estimate or object and the Reorganized Debtors have failed to undertake such estimation or objection within 30 calendar days of such written request; (viii) actions under or pursuant to the Aircraft Claims Objection Procedures Order; and (ix) such other matters as may be mutually agreed upon in advance and in writing by the Post-Effective Date Committee and Reorganized Delta, each in their sole discretion. Mr. Hollander notes that if the Debtors or Reorganized Debtors were free to compromise and resolve matters involving Post- Petition Aircraft Agreements without first obtaining the Court's approval as they contend, there would be no need for the Plan to expressly authorize the Post-Effective Date Committee to participate in "court proceedings" relating to the approval of the agreements. Similarly, he notes, if the Reorganized Debtors were permitted to resolve the matters described in Section 17.5(d) without first obtaining Bankruptcy Court approval, the language in Section 9.2 describing the Disputed Claims that the Reorganized Debtors can resolve "without notice to or approval by the Bankruptcy Court" would be rendered mere surplusage. As the Reorganized Debtors' interpretation of the Plan would contravene cardinal rules of contract interpretation requiring that all words in a contract be given effect, the interpretation cannot stand, Mr. Hollander asserts, citing, among others, Charter Asset Corp. v. Victory Mkts. (In re Victory Mkts.), 221 B.R. 298, 303 (B.A.P. 2d Cir. 1998). Thus, the Reorganized Debtors should be directed to submit to the Bankruptcy Court for approval (i) the Aircraft Finance Settlement and (ii) any of the other aircraft restructuring agreements or claim settlements reviewed by the Post-Effective Date Committee which constitute Post-Petition Aircraft Agreements, Mr. Hollander asserts. Although Section 17.5(d)(vii) operates to circumscribe the rights of the Post-Effective Date Committee to participate in court proceedings concerning claims exceeding $30,000,000 to situations in which either (i) the Creditors Committee filed a written objection before the Confirmation Date or (ii) the Post-Effective Date Committee sent a written request to the Reorganized Debtors seeking an estimation or objection and the Reorganized Debtors fail to undertake such estimation or objection within 30 calendar days of the written request, this fact is of no moment, maintains Mr. Hollander. He relates that the limitation on the Post-Effective Date Committee's rights is explained by the fact that it alone would have had an opportunity to review the claims prior to any court proceedings, and that it should, therefore, not have an opportunity to raise an objection in court where no objection had been raised previously. This, of course, he says, has no bearing on the issue of whether other parties-in-interest who were not given a prior opportunity to review significant settlements should be precluded from participating in the court proceedings mandated by Section 17.5(d). Section 17.5(d)(vii) does not operate to limit the rights of any party other than the Post-Effective Date Committee, Mr. Hollander avers. If the Debtors intended to disenfranchise all parties other than the Post-Effective Date Committee from the claims resolution process, including the Bankruptcy Court, they should have done so clearly and explicitly in the Plan, he points out. "They did not." Accordingly, Mr. Hollander asserts, the Reorganized Debtors should be directed to comply with a plain reading of the terms of the Plan and also seek Bankruptcy Court approval of matters involving claims exceeding $30,000,000. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 2007, the Court confirmed the Debtors' plan. (Delta Air Lines Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 16, 2007, Fitch Ratings has initiated coverage of Delta Air Lines Inc. with the assignment of these debt ratings: issuer default rating 'B'; First-lien senior secured credit facilities 'BB/RR1'; and Second-lien secured credit facility (Term Loan B) 'B/RR4' As reported in the Troubled Company Reporter on May 2, 2007, Standard & Poor's Ratings Services raised its ratings on Delta Air Lines Inc. (B/Stable/--), including raising the corporate credit rating to 'B', with a stable outlook, from 'D', following the airline's emergence from Chapter 11 bankruptcy proceedings. E POINTE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: E Pointe Properties I, Ltd. P.O. Box 440067 Houston, TX 77244-006 Bankruptcy Case No.: 07-35326 Chapter 11 Petition Date: August 6, 2007 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Joan Kehlhof, Esq. Wist Holland & Kehlhof, L.L.P. 720 North Post Oak Road, Suite 610 Houston, TX 77024 Tel: (713) 686-5444 Fax: (713) 686-0703 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 ------ --------------- ------------ Champion Energy Services electricity $129,731 7904 North Sam Houston provider Parkway Suite 200 Houston, TX 77064 Pasadena I.S.D. Tax Office ad valorem taxes $129,505 P.O. Box 1318 Pasadena, TX 77501 Paul Bettencourt, ad valorem taxes $104,122 Tax Assessor P.O. Box 4622 Houston, TX 77210-4622 Capstone Communities property management $83,151 Management services Constellation New Energy former electricity $44,477 provider CenterPointe Energy natural gas service $25,063 M. Power Retail Energy former electricity $21,806 provider O'Connor & Associates property tax consultants $15,464 Comcast cable TV service $14,376 A.I.C.C.O., Inc. insurance premium $13,705 finance- property insurance purchase money $13,705 City of Pasadena Water water service $9,011 Department R.C.I. Utilities utility billing $7,516 servicelectricity Castillo Painting painting services $6,426 Alfred Painting & Carpet carpet and painting $4,322 Cleaning services Venturi Technologies carpet cleaning, repair $4,303 & replacement Presto Maintenance Supply, property maintenance $3,079 Inc. supplies Ameritex Apartment Movers tenant moving services $2,732 Acuity Electric, Inc. electrical repairs $2,500 Reliant Energy guard lights-monthly $2,379 EUNICE ANIFOWOSE: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Eunice Anifowose 9 Golden Star Irvine, CA 92604 Bankruptcy Case No.: 07-12408 Chapter 11 Petition Date: August 7, 2007 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe, LLP 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HFC USA Credit Card $12,047 P.O. Box 40175 City of Industry, CA 91715 Citifinancial Services, Inc. Credit Card $4,962 P.O. Box 140849 Irving, TX 75014 Cash Call Inc. Loans $2,600 P.O. Box 6607 Anaheim, CA 92816 Capital One Bank Credit Card $3,923 American Express Credit Card $1,099 Centurion Bank J.C. Penney Co. Revolving Line of Credit $174 GE Consumer Finance Unknown Debt $142 FAIRVIEW LOGGING: Case Summary & 16 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Fairview Logging, Inc. P.O. Box 1187 Williamston, NC 27892 Bankruptcy Case No.: 07-02874 Type of business: The Debtor is a logging contractor. Chapter 11 Petition Date: August 6, 2007 Court: Eastern District of North Carolina (Wilson) Debtor's Counsel: Walter L. Hinson, Esq. Hinson & Rhyne, P.A. P.O. Box 7479 Wilson, NC 27895-7479 Tel: (252) 291-1746 Total Assets: $631,133 Total Debts: $1,348,700 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ B.B.T. Leasing Corp. lease equipment $375,431 Attention: Managing Agent P.O. Box 31273 Charlotte, NC 28231 John Deere Credit John Deere 648 G; $282,538 Attention: Managing Agent value of security: P.O. Box 4450 $260,000 Carol Stream, IL 60197-4450 $21,165 Financial Federal Credit blanket equipment $162,132 P.O. Box 201478 lien; value of Houston, TX 77216-1478 security: $130,000; value of senior lien: $140,003 B.B.&T. business loan; $98,408 value of security: $228,213; value of senior lien: $240,999 Allpine Oil Co. $38,822 Colony Tire $16,402 WilcoHess, L.L.C. $15,130 A.G. Lassiter Equipment $13,956 Corp. Navistar Financial Corp. Navistar trailers (5); $52,792 value of security: $45,000 Pioneer Machinery, L.L.C. $4,000 Billy Ray's, Inc. $3,694 R.W. Moore Equipment Co., $2,147 Inc. Mark Chesson & Sons, Inc. $1,950 U.S. Cellular $1,127 Unifirst Corporation $762 Bill Clough Ford, Inc. $744 FLINKOTE CO: Disclosure Statement Hearing Scheduled on Nov. 27 -------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on Nov. 27, 2007, 10:00 a.m., to consider the adequacy of the Disclosure Statement explaining the Chapter 11 Plan of Reorganization filed by Flinkote Company and its debtor-affiliate, Flinkote Mines Limited. Under the Plan, Flinkote Mines will merge with the reorganized Debtors on the effective date of the Plan. Treatment of Claims Under the Plan, Administrative and Priority Tax Claims will be paid in full on the distribution date. Holders of Priority Claims will receive cash equal to the allowed amount of the claim. Each holder of Secured Claim against the Debtors will be entitled to any of these treatments: i. the Plan will leave unaltered the legal, equitable and contractual rights entitles the holder; ii. claim holders will receive other treatment; or iii. all of the Collateral will be surrendered by the Debtors. On the distribution date, holders of General Unsecured Claims will receive, either, a total cash payment equal to 35% or 5% of the allowed amount of the claim. Asbestos Personal Injury Claims will be automatically, and without further act, assumed by the trust. Holders of Persent Affilaite Claims will not receive or retain any property. Equity Interest against the Debtors will not also receive or retain any distribution under the plan. Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. The company and its affiliate, Flintkote Mines Limited, filed for chapter 11 protection on April 30, 2004 (Bankr. D. Del. Case No. 04-11300). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represent the Debtors in their restructuring efforts. The Bankruptcy Court appointed James J. McMonagle as the Legal Representative for Future Asbestos Personal Injury Claimants for Flintkote and Mines on Aug. 26, 2004, and Sept. 9, 2004, respectively. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. FORD MOTOR: Recalls 3.6 Million Vehicles to Fix Cruise Control -------------------------------------------------------------- Ford Motor Company is conducting a voluntary safety recall involving speed control deactivation switch systems in 3.6 million vehicles. The service action involves the installation of a fused wiring harness into the speed control electrical circuit, or the replacement of the deactivation switch if it is found to be leaking. This is a quick repair, and will be performed on vehicles built between 1992 and 2003. Ford dealers will provide this service to all affected vehicles at no charge to the customers. The company has a sufficient supply of parts to service the affected trucks. The supply of parts to service the affected cars is expected to be available in early October. Owners of all affected vehicles will be notified by mail. While these vehicles are not subject to the systems interaction issues affecting vehicles in the prior recall populations, Ford is taking this action to address continued customer concerns about the potential for fires in their vehicles. The company cannot be confident in the long term durability of the speed control deactivation switches. At no charge to customers, Ford or Lincoln/Mercury Dealers will inspect the speed control deactivation switch and install a fused wiring harness between the current speed control wiring and the deactivation switch or, if necessary, replace the deactivation switch. The harness acts to protect the switch in the rare event of increased electrical current flow through the switch. Owners of trucks that are affected by this recall will be instructed to take their vehicles to a Ford or Lincoln/Mercury dealership for repairs. Owners of cars that are affected by this recall will be directed to bring their vehicles into their dealership to have the speed control disconnected, as an interim repair, until parts are available to perform the final repair in early October, which is the same as the repair for trucks. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on July 30, 2007, Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, Moody's explained that the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. According to the rating agency, Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules, Moody's relates. In June 2007, S&P raised the Issue Rating on Ford's senior secured credit facilities to B+ from B. FORD MOTOR: Wants Tentative Land Rover & Jaguar Deal by Sept. 30 ---------------------------------------------------------------- Ford Motor Company's financial and legal advisers have begun preparing information to facilitate due diligence for potential bidders of its Land Rover and Jaguar marques as the company hopes to reach a tentative deal by Sept. 30, 2007, the International Herald Tribune reports, quoting people with direct knowledge of the process. The TCR-Europe reported on July 27, 2007, that bidders, including private equity groups Ripplewood Holdings, One Equity Partners, TPG Capital, and Cerberus Capital Management, as well as India's Tata Motors and Mahindra & Mahindra had submitted indicative offers for Land Rover and Jaguar. Ford has hired Goldman Sachs, HSBC and Morgan Stanley to act as advisors. The auto maker plans to let prospective bidders begin due diligence on its Jaguar and Land Rover brands this month. According to IHT's sources, the company also hopes to sell Volvo by the end of the year. The company revealed last month that it had begun a "strategic review" of Volvo -- its first public acknowledgment that it wanted to shed the Swedish carmaker, which it bought in 1999, IHT observes. Bidders for Volvo have yet to emerge as the sale process is still in its early stages, although reports claim BMW might be interested in the brand. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on July 30, 2007, Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, Moody's explained that the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. According to the rating agency, Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules, Moody's relates. In June 2007, S&P raised the Issue Rating on Ford's senior secured credit facilities to B+ from B. FORD MOTOR: June 30 Balance Sheet Upside-Down by $1.9 Billion ------------------------------------------------------------- Ford Motor Company reported financial results for the quarter ended June 30, 2007. At June 30, 2007, the company's balance sheet showed total assets of $279.2 billion, total liabilities of $279.9 billion, and minority interests of $1.2 billion, resulting in a $1.9 billion stockholders' deficit. The company reported $750 million net income of $44.2 billion total sales for the quarter ended June 30, 2007, compared with $317 million net loss of $41.8 billion total sales for the same quarter last year. At June 30, 2007, Ford's Automotive sector had total debt of about $30 billion, unchanged from Dec. 31, 2006. At June 30, 2007, the company's Automotive sector had net cash of $7.4 billion, compared with $3.9 billion at the end of 2006. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on July 30, 2007, Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, Moody's explained that the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. According to the rating agency, Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules, Moody's relates. In June 2007, S&P raised the Issue Rating on Ford's senior secured credit facilities to B+ from B. FRASER PAPERS: S&P Withdraws Ratings at Issuer's Request -------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'CCC-' long-term corporate credit rating, on Toronto-based Fraser Papers Inc. at the issuer's request. Standard & Poor's withdrew the ratings after the company repaid substantially all of its rated obligations. FIRST UNION: Stable Performance Cues S&P to Lift Ratings -------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on eight classes of commercial mortgage pass-through certificates from First Union National Bank Commercial Mortgage Trust's series 2001-C2. Concurrently, S&P affirmed its ratings on the remaining classes from this deal. The raised and affirmed ratings reflect the stable performance of the pool and increased credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior classes of certificates reflect the defeasance of the collateral securing $368 million (42%) of the pool. As of the July 13, 2007, remittance report, the collateral pool consisted of 99 loans with an aggregate trust balance of $867.8 million, down from 107 loans with a balance of $1.002 billion at issuance. The master servicer, Wachovia Bank N.A., reported primarily full-year 2006 financial information for 100% of the pool, which excludes the aforementioned defeasance. Based on this information and excluding credit tenant lease loans, Standard & Poor's calculated a weighted average debt service coverage of 1.53x, up from 1.40x at issuance. There is one REO asset ($4.7 million), which is the only asset with the special servicer. It has an appraisal reduction amount outstanding for $659,952. All of the remaining loans in the pool are current. The pool has experienced six losses totaling $3.9 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $240.3 million (28%) and a weighted average DSC of 1.62x, up significantly from 1.35x at issuance. One of the top 10 loans, which is discussed below, is on the watchlist because of a low DSC. According to inspection reports received from Wachovia, three properties were characterized as "excellent," and the remaining collateral was characterized as "good." Credit characteristics for the second-largest loan, One Franklin Plaza ($41.5 million, 5%), and the fifth-largest loan at issuance, HRT Portfolio ($11.1 million, 1%), are consistent with those of investment-grade obligations. One Franklin Plaza is secured by a 607,036-sq.-ft. class A office building in Philadelphia, Pennsylvania. The sole tenant in the building is GlaxoSmithKline ('AA'), which has a lease expiration in 2013. Standard & Poor's adjusted net cash flow has been flat since issuance. The HRT Portfolio consists of eight cross-collateralized and cross-defaulted fully amortizing loans, each secured by a medical office building. The aggregate space totaled roughly 530,000 sq. ft. at issuance, and the buildings are located in Birmingham, Ala.; Richmond, Va.; San Antonio, Texas; and Houston, Texas. The loans for three of the eight properties have been defeased. Standard & Poor's NCF for the nondefeased properties has been stable since issuance. There is one asset with the special servicer, LNR Partners Inc. The Sherwin Williams Pavilion loan ($4.7 million) is secured by a 64,685-sq.-ft. retail property in Morrow, Georgia. The loan was transferred to LNR in February 2007 due to payment default, and the asset became REO in June 2007. An outstanding ARA totaling $659,952 is in effect. Wachovia reported a watchlist of 22 loans ($104.7 million, 12%). The 10th-largest exposure ($13.5 million, 2%), Polo Club Apartments, is secured by a 280-unit multifamily property in Moon Township, Pennsylvania. The loan is on the watchlist due to a decline in DSC, which S&P attribute to decreased occupancy and rental rates. As of year-end 2006, occupancy was 89% and DSC was 1.07x. At issuance, underwritten occupancy was 95%, while DSC was 1.29x. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised First Union National Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2001-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- F AAA AA+ 13.71% G AA+ AA 11.98% H AA- A- 9.96% J A+ BBB+ 8.51% K BBB+ BBB 6.78% L BBB- BB+ 4.46% M BB+ BB 3.88% N BB BB- 3.19% Ratings Affirmed First Union National Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2001-C2 Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 24.99% A-2 AAA 24.99% B AAA 20.08% C AAA 18.63% D AAA 17.18% E AAA 14.87% O B+ 2.50% P B 2.05% IO AAA N/A N/A - Not applicable. GLEN MEYERS: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Glen C. Meyers Kellee K. Meyers 6115 Paseo Canyon Drive Malibu, CA 90265 Bankruptcy Case No.: 07-12785 Chapter 11 Petition Date: August 7, 2007 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Alan F. Broidy, Esq. Alan F. Broidy, P.C. 1925 Century Park East 17th Floor Los Angeles, CA 91342 Tel: (310) 286-6601 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Credit Card $57,728 P.O. Box 15726 Wilmington, D.C. 19886-5726 Citi Cards Credit Card $14,465 P.O. Box 6410 The Lakes, NV 88901-6410 Jaguar Credit Automobile Loan $12,449 P.O. Box 55000 Dept. #194501 Detroit,MI 48255-1945 Los Angeles County Tax Debt $11,177 Tax Collector E-Commission Credit Card $7,091 Homes & Land Magazine Bank Loan $4,700 Cedars-Sinai Health System Medical Debt $4,270 Cedars-Sinai Medical Center Medical Debt $3,456 Willing & Moser, CPA Accounting Fees $3,360 AMO Recoveries Medical Debt $3,098 Malibu West Swimming Club HOA Dues $2,309 Malibu Physical Therapy Medical Debt $1,820 Kenneth M. House, Medical Debt $1,500 M.D., Ph.D., Inc. Michael P. Gross, M.D. Medical Debt $1,125 Chevron Credit Card $766 Gen. Anesthesia Specialists Medical Debt $708 Partnership GLIMCHER REALTY: To Acquire Merritt Square Thru $57 Million Loan ---------------------------------------------------------------- Glimcher Realty Trust has executed a contract to purchase Merritt Square Mall. The company will purchase Merritt subject to an existing $57 million mortgage loan with a fixed interest rate of 5.35% and a 30-year principal amortization. The loan matures on Sept. 1, 2015. The company will complete the acquisition using funds from its line of credit. The company anticipates closing on this transaction in the fall of 2007. Merritt was built in 1970 and has undergone several renovations and expansions and is now an upscale, fully enclosed super- regional mall. Merritt is located in the Brevard County tourist district, which includes Cocoa Beach and Port Canaveral, one of the busiest cruise ship ports in the world. Merritt has approximately 804,000 square feet of gross leasable area and has retail anchor stores such as, Dillard's, Macy's, JCPenney and Sears as well as a 16-screen Cobb Theater. In-line store occupancy is approximately 94% and average store sales are approximately $350 per square foot. "Merritt Square Mall fits perfectly within our strategy of acquiring strong, well-located properties with high-growth potential," Michael P. Glimcher, president and CEO, stated. "This acquisition will provide us a positive initial return based on the strength of the current income. Additionally, we are excited about the opportunity to leverage our relationships with our national retailers that will result in the improvement of the overall retail mix at the mall." About Merritt Square Mall Headquartered in Merritt Island, Florida, Merritt Square Mall – http://www.merrittsquaremall.com/-- offers a selection of brands from known retailers including Dillard's, JCPenney, Macy's and Sears. About Glimcher Realty Trust Glimcher Realty Trust (NYSE: GRT) is a real estate investment trust, which owns, manages, acquires and develops regional and super-regional malls. The Company is a component of both the Russell 2000(R) Index, representing small cap stocks, and the Russell 3000(R) Index, representing the broader market. * * * As reported in the Troubled Company Reporter on July 12, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit and 'B' preferred stock ratings on Glimcher Realty Trust. S&P said the outlook is stable. GLOUCESTER SPC: S&P Puts Low-B Ratings on Three Note Classes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to the $301,184,210 synthetic CDO notes issued by Gloucester SPC, acting for the account of JPMCC 2007-RR2. The preliminary ratings are based on information as of Aug. 7, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination; -- The swap counterparty's rating with appropriate downgrade triggers; -- The rating, diversity, and vintage of the reference obligations in the reference portfolio; -- The underlying collateral's rating; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness and the series' segregated nature. Preliminary Ratings Assigned Gloucester SPC, acting for the account of JPMCC 2007-RR2 Senior classes Rating Amount -------------- ------ ------ A AAA $65,625,000 B AA $91,875,000 C A+ $24,937,500 D A $11,812,500 E A- $21,000,000 F BBB $30,187,500 G BBB- $19,687,500 H BB $21,000,000 Subordinate classes Rating Amount ------------------- ------ ------ A-S AA $3,453,947 B-S A+ $4,835,526 C-S A $1,312,500 D-S A- $621,711 E-S BBB $1,105,263 F-S BBB- $1,588,816 G-S BB $1,036,184 H-S B $1,105,263 GMAC COMMERCIAL: Fitch Assigns Distressed Rating on Class O Notes ----------------------------------------------------------------- Fitch Ratings upgrades GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2000-C3, as: -- $19.1 million class F to 'AA' from 'AA-'; -- $8.0 million class G to 'AA-' from 'A+'; -- $9.9 million class H to 'A+' from 'A'; -- $12.5 million class S-MAC-1 to 'A+' from 'A-'; -- $8.8 million class S-MAC-2 to 'A-' from 'BBB'; -- $5.3 million class S-MAC-3 to 'BBB' from 'BB+'; -- $14.0 million class S-MAC-4 to 'BBB-' from 'BB'. Fitch assigns a Distressed Rating to this class: -- $3.2 million class O to 'CCC/DR1' from 'CCC'. In addition, Fitch affirms these classes: -- $26.3 million class A-1 at 'AAA'; -- $851.4 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $54.0 million class B at 'AAA'; -- $57.1 million class C at 'AAA'; -- $12.1 million class D at 'AAA'; -- $35.1 million class E at 'AAA'; -- $25.5 million class J at 'BBB'; -- $4.5 million class K at 'BBB-'; -- $9.6 million class L at 'BB'; -- $15.9 million class M at 'B'; -- $3.2 million class N at 'B-'. Fitch does not rate classes P and S-AM. Class S-AM corresponds to the interest in the subordinate companion note to the AmeriSuites loan. Classes S-MAC-1, S-MAC-2, S-MAC-3, and S-MAC-4 represent the interest in the trust corresponding to the junior portion of the MacArthur Center loan. The upgrades are the result of increased credit enhancement due to the defeasance of an additional six loans (2.2%), scheduled amortization and stable performance since Fitch's last rating action as well as improved performance of the MacArthur Center loan. To date, forty-six loans (30.5%) have been defeased. As of the July 2007 distribution date, the pool's certificate balance has decreased 9.9% to $1.19 billion from $1.32 billion at issuance. Three assets (1.7%) are currently in special servicing. Fitch expected losses on the specially serviced assets are anticipated to be absorbed by the non-rated class P. The largest specially serviced asset (0.9%) is a hotel property in Orange, CT and is 90 days delinquent. The asset transferred to special servicing in April 2007 due to monetary default. The special servicer is currently negotiating a workout with the borrower while pursuing foreclosure. The second largest specially serviced asset (0.4%) is a retail property located in Rockingham, NC and is real estate owned. The asset transferred to the special servicer in January 2007 due to monetary default. Fitch reviewed year-end 2006 operating statement analysis reports for the three non-defeased credit assessed loans: Arizona Mills, MacArthur Center and AmeriSuites. Due to their stable performance the loans maintain their investment grade credit assessments. The Arizona Mills loan (11.5%) is secured by a 1.23 million square feet regional mall located in Tempe, AZ. Occupancy as of April 2007 has increased to 97.7% from 97% at issuance. The MacArthur Center loan (11.3%) is secured by 528,846 sf of a 942,662 sf regional mall in Norfolk, VA. Occupancy as of March 2007 has improved to 96.5% from 90% at issuance. The AmeriSuites loan (2.4%) is secured by eight limited service, cross-collateralized, cross-defaulted hotels located in eight states. As of YE 2006 occupancy remains stable at 71% compared to 75.7% at issuance. GOODYEAR TIRE: Names Mark Schmitz as Chief Financial Officer ------------------------------------------------------------ W. Mark Schmitz has been appointed The Goodyear Tire & Rubber Company's executive vice president and chief financial officer, effective immediately. Mr. Schmitz succeeds Richard J. Kramer, who in March was named to the additional post of president of Goodyear's North American Tire business unit. Prior to joining Goodyear, Mr. Schmitz, 56, was most recently vice president and CFO for Tyco International's Fire and Security Segment, where he has been since 2003. Mr. Schmitz, however, spent the majority of his career with General Motors Corp. "As we considered candidates, we sought an experienced CFO who could work with our leadership team to build on our recent successes and drive our business strategy going forward," Robert J. Keegan, Goodyear chairman and chief executive officer, said. "In Mark, we found an individual with a successful track record, who is intimately familiar with the automotive industry and who has considerable international experience." "I'm fortunate to be joining Goodyear at such an exciting time," Mr. Schmitz said. "Following the successful execution of its turnaround strategy, the company is now in a position to pursue growth opportunities. I look forward to working with the leadership team to help the company capitalize on the opportunities that lie ahead." Mr. Schmitz began his career with GM in the late 1970s, where he rose to executive assistant to the president and chief executive officer in Detroit. In 1994, he was assigned to General Motors do Brasil and ultimately was director of finance for Mercosul operations and president of GM do Brasil's finance subsidiary. Finally, from 1999 to 2001, he served as vice president and CFO of GM's DirectTV Latin America. >From 2001 to 2003, Schmitz served as vice president and chief financial officer for Plug Power, Inc. At Tyco International, Mr. Schmitz was part of a leadership team brought in to turn around the Fire and Security business unit, a $12 billion business with eight divisions worldwide. During his tenure, the leadership team implemented new business models and financial controls that underpinned the successful turnaround and the establishment of a solid control environment at Tyco's largest business unit. Mr. Schmitz has had corporate assignments in London, Brazil and China, and he speaks fluent Mandarin Chinese and Portuguese. Mr. Schmitz received his bachelor's degree and his MBA from Ohio State University in Columbus, Ohio. Mr. Schmitz and his wife, Nancy, have four daughters. About Goodyear Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear Tire has marketing operations in almost every country around the world including Chile, Colombia, Guatemala, Jamaica and Peru in Latin America. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services raised its ratings on Goodyear Tire & Rubber Co., including its corporate credit rating to 'BB-' from 'B+'. In addition, the ratings were removed from CreditWatch where they were placed with positive implications on May 10, 2007. Recovery ratings were not on CreditWatch. HAMLET APARTMENTS: Case Summary & 39 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Hamlet Apartments, L.L.C. 1201 Marlowe Drive Clarksville, IN 47129 Bankruptcy Case No.: 07-91620 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Hamlet Enterprises, Ltd. 07-91621 Hamlet Woods, L.L.C. 07-91622 Type of business: The Debtor owns and rents out apartments. Chapter 11 Petition Date: August 6, 2007 Court: Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Debtor's Counsel: C.R. Bowles, Jr., Esq. Greenbaum, Doll & McDonald, P.L.L.C. 101 South 5th Street Louisville, KY 40202 Tel: (502) 589-4200 Estimated Assets Estimated Debts ---------------- --------------- Hamlet Apartments, L.L.C. $10,000 to $1 Million to $100,000 $100 Million Hamlet Enterprises, Ltd. $1 Million to $1 Million to $100 Million $100 Million Hamlet Woods, L.L.C. $1 Million to $1 Million to $100 Million $100 Million A. Hamlet Apartments, LLC's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clark County Treasurer unknown 501 East Court Avenue Jeffersonville, IN 47130 Clarksville Wastewater taxes and/or unknown Treatment services P.O. Box 2668 Jeffersonville, IN 47131 People's Community unknown Bankruptcy 6100 West Chester Road West Chester, OH 45069 B. Hamlet Enterprises, Ltd's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clark County Treasurer taxes $278,351 501 East Court Avenue Jeffersonville, IN 47130 Clarksville Wastewater taxes and/or $76,838 Treatment services P.O. Box 2668 Jeffersonville, IN 47131 Johnson's Commercial trade $26,139 Flooring, Inc. 401 South 32nd Street Louisville, KY 40212 Kightlinger & Gray, L.L.P. bank loan $20,021 Hughes Century Supply trade $15,345 Wilmar Industries trade $13,611 People's Community Bank trade $8,027 Kaufman Carpet Cleaning, trade $4,932 Inc. Absolute Carpet & Upholstery trade $1,894 Davis General Contractors, trade $1,620 Frankie Mikel trade $456 Duke Energy trade $147 Signatue, Inc. trade $122 Environmental Consultants, trade $27 Inc. Insight trade $15 A-1 Concrete Leveling trade unknown C. Hamlet Woods, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clark County Treasurer $87,900 501 East Court Avenue Jeffersonville, IN 47130 Clarksville Wastewater $19,940 Treatment P.O. Box 2668 Jeffersonville, IN 47131 Johnson's Commercial $18,416 Flooring, Inc. 401 South 32nd Street Louisville, KY 40212 Gold Key Realty $10,590 Wilmar Supply Company $10,250 Hughes Century Supply $7,971 Carpet Source $7,654 Kaufman Carpet Cleaning, $6,055 Inc. Kightlinger & Gray, $4,295 L.L.P. Precise Services, Inc. $3,824 Roger's Sewer Service $3,585 Davis General Contractors $3,443 K.D.I. Services $3,105 Absolute Carpet & Upholstery $2,419 Home Depot $1,581 Cohen, Todd, Kite & $1,500 Stanford, L.L.C. Network Communications $1,338 Payne Electric $1,151 Indiana American Water $1,052 Insight $932 HEALTH CARE: Earns $31.9 Million in Second Quarter Ended June 30 ---------------------------------------------------------------- Health Care REIT Inc. released on Aug. 7, 2007, its operating results for the second quarter ended June 30, 2007. The company reported net income of $31.9 million on gross revenues of $119.3 million for the second quarter ended June 30, 2007, compared with net income of $28.0 million on gross revenues of $77.9 million for the same period ended June 30, 2006. Recent Highlights -- Completed net new investments year-to-date totalling $610 million -- Acquired 17 medical office buildings and Paramount Real Estate Services for approximately $292 million during the second quarter -- Reported 2Q07 normalized funds from operations (FFO) growth of 5% -- Issued $400 million of $4.75% convertible senior unsecured notes in July -- Received debt upgrade to BBB from Fitch Ratings -- Expanded and extended existing unsecured lines of credit to $1.15 billion At June 30, 2007, the company's consolidated balance sheet showed $4.82 billion in total assets, $2.55 billion in total liabilities, $2.3 million in minority interests, and $2.27 billion in total stockholders' equity. Dividends for Second Quarter 2007 The Board of Directors declared a dividend for the quarter ended June 30, 2007, of $0.66 per share, as compared to $0.64 per share for the same period in 2006. The dividend will be payable Aug. 20, 2007, to stockholders of record on Aug. 3, 2007, and will be the company's 145th consecutive dividend. Outlook for 2007 The company is affirming its investment guidance of $1.0 billion to $1.2 billion for 2007. Acquisition guidance has been increased to a range of $750 to $950 million from $700 to $800 million, while development funding is now projected to be approximately $250 million versus the prior range of $300 to $400 million. The decline in funded development projection is due to estimated timing of fundings as the company's overall development pipeline remains strong. In addition, the company expects $100 to $200 million of dispositions, resulting in net investments of $800 million to $1.1 billion. The company is adjusting its 2007 guidance for net income available to common stockholders to a range of $1.27 to $1.33 per diluted share from $1.18 to $1.26 per diluted share primarily due to the increase in acquisition guidance, expected interest savings from the $400 million convertible debt offering completed in July 2007, a reduction in projected depreciation and amortization to $146 million from $151 million and $1.0 million in gains on sales of real property in the second quarter. The company's guidance excludes any impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments. About Health Care REIT Inc. Headquartered in Toledo, Ohio, Health Care REIT Inc. (NYSE:HCN) -- http://www.hcreit.com/-- is a self-administered, equity real estate investment trust founded in 1970, that invests across the full spectrum of senior housing and health care real estate, including independent living/continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings. The company also offers a full array of property management and development services. As of June 30, 2007, the company's broadly diversified portfolio consisted of 617 properties in 38 states. * * * As reported in the Troubled Company Reporter on July 24, 2007, Fitch Ratings has upgraded the ratings of Health Care REIT as: issuer default rating to 'BBB' from 'BBB-'; unsecured bank credit facility to 'BBB' from 'BBB-'; senior unsecured notes to 'BBB' from 'BBB-'; convertible senior unsecured notes to 'BBB' from 'BBB-'; preferred stock to 'BBB-' from 'BB+'; the rating outlook is stable. HEXION SPECIALTY: Funds $100 Million of Incremental Term Loans -------------------------------------------------------------- Hexion Specialty Chemicals Inc. funded incremental term loans under its second amended and restated credit agreement in the aggregate amount of $100 million in the form of new tranche C-7 term loans. The proceeds of the incremental term loans will be used to repay revolving loans and for general corporate purposes. The Incremental Credit Facility will mature on May 5, 2013. Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexion.com/-- serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is owned by an affiliate of Apollo Management L.P. The company has locations in China, Australia, Netherlands, and Brazil. It is an Apollo Management L.P. portfolio company. Hexion employs more than 7,000 associates. * * * As reported in the Troubled Company Reporter on July 9, 2007, Standard & Poor's Ratings Services placed its 'B' corporate credit rating and other ratings on Hexion Specialty Chemicals Inc. on CreditWatch with negative implications. The ratings on related entities were also placed on CreditWatch. HORIZON LINES: S&P Rates Proposed $375MM Credit Facilities at BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' rating and a '1' recovery rating to Horizon Lines Inc.'s (BB-/Stable/--) proposed senior secured first-lien credit facilities, consisting of a $250 million revolving credit facility and a $125 million term loan A; both facilities mature in 2012. The Charlotte, North Carolina-based shipping company currently has about $800 million in lease-adjusted debt. "Ratings reflect Horizon Lines' highly leveraged financial profile and participation in the capital-intensive and competitive shipping industry," said Standard & Poor's credit analyst Lisa Jenkins. "Positive credit factors include the barriers to entry afforded by the Jones Act, stable demand from the company's diverse customer base, and improving operating performance." Horizon Lines primarily transports goods between the continental U.S. and Alaska, Puerto Rico, Hawaii, and Guam. It operates under the Jones Act, which requires that shipments between U.S. ports be carried on U.S.-built vessels that are registered in the U.S. and crewed by U.S. citizens. These requirements limit the competitive landscape by excluding direct competition from foreign-flagged vessels. Competition from other modes of transportation is also limited because of cost and geographic considerations. Despite these limitations, however, markets remain competitive as Horizon Lines faces at least one strong competitor in each of its markets. Horizon Lines serve a diverse customer base that includes major manufacturing and consumer products companies. Many of the products it transports are staples, which results in a fairly stable revenue base, although certain products experience more cyclical demand patterns. Horizon Lines is the sole borrower under the company's proposed new senior secured bank facility, which consists of a $250 million revolving credit facility and a $125 million term loan. The rating on the proposed facility is 'BB+', two notches above the corporate credit rating. The recovery rating is '1', reflecting expectations of very high (90% to 100%) recovery in the event of a payment default. The bank facility is secured by all of Horizon Lines' assets, including a first-priority pledge of all capital stock and a perfected first-priority security interest in all tangible and intangible assets of the company. S&P expect Horizon Lines to benefit from improved operating efficiencies over the near to intermediate term, which should lead to better credit metrics, and have factored this into the ratings. If the expected improvement fails to materialize, S&P could revise the outlook to negative. S&P consider an outlook change to positive less likely over the near to intermediate term. ICEWEB INC: Upgrades Fiscal 2007 Revenue Forecast to $19 Million ---------------------------------------------------------------- IceWEB Inc. announced on Wednesday that the company is upgrading its revenue forecast for fiscal 2007 to $19.0 million from previously estimated $17.0 million. IceWEB chief executive officer and chairman, John R. Signorello, stated, "Our third quarter was significantly improved over the same quarter last year. The momentum is now building for 2008 to be a breakout year. We anticipate organic growth to produce $30.0 million in sales in 2008. The sales performance we expect to deliver this year, $19.0 milllion, coupled with the infrastructure we currently have in place positions us to strategically grow all aspects of the business moving forward." For the six months ended March 31, 2007, the company reported a net loss of $573,161 on sales of $8.5 million, compared with a net loss of $1.0 million on sales of $2.1 million for the six months ended March 31, 2006. At March 31, 2007, the company's consolidated balance sheet showed $4.7 million in total assets, $6.0 million in total liabilities, resulting in a $1.3 million total stockholders' deficit. About IceWEB Headquartered in Herndon, Virginia, IceWeb Inc. (OTC: IWEB) -- http://www.iceweb.com/-- is a diversified technology company. The company is a provider of hosted web-based collaboration solutions that enable organizations to establish Internet, Intranet, and email/collaboration services with little or no up-front capital investment. The company also provides consulting services to larger enterprise and government customers including network infrastructure, enterprise email/collaboration, and Internet/Intranet portal implementation and support services. The company also markets an array of information technology services and third party computer network hardware and software to large enterprise and government clients. Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 16, 2007, Sherb & Co. LLP, in Boca Raton, Florida, expressed substantial doubt about Ice Web Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2006. The auditing firm pointed to the company's net losses for the years ended Sept. 30, 2006 and 2005. ICEWEB INC: March 31 Balance Sheet Upside-Down by $1.3 Million -------------------------------------------------------------- IceWeb Inc.'s consolidated balance sheet at March 31, 2007, showed $4.7 million in total assets, $6.0 million in total liabilities, resulting in a $1.3 million total stockholders' deficit. IceWEB Inc. reported net income of $16,904 for the second fiscal quarter ended March 31, 2007, including a $14,733 gain from a sale of assets and $102,928 of interest expense, net. Revenue for the quarter was $5.9 million, compared to $642,000 in the second quarter of fiscal 2006, representing an increase of 915%. Gross profit was $696,224, compared to gross profit of $94,031 in the second quarter of fiscal 2006 – an increase of 540%. Total operating expenses declined to $591,126, compared to operating expenses of $709,659 in the second quarter of fiscal 2006. EBITDA was $170,694 for the second fiscal quarter. Revenue for the six months ended March 31, 2007 were $8.5 million, versus $2.1 million for the six months ended March 31, 2006. Quarterly revenue increased as the company built on the initiatives implemented during its first fiscal quarter ended Dec. 31, 2006, and as the result of the company's strategic focus on high-growth markets for hosted software services and network security. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?222b Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 16, 2007, Sherb & Co. LLP, in Boca Raton, Florida, expressed substantial doubt about Ice Web Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2006. The auditing firm pointed to the company's net losses for the years ended Sept. 30, 2006 and 2005. About IceWEB Headquartered in Herndon, Virginia, IceWeb Inc. (OTC: IWEB) -- http://www.iceweb.com/-- is a diversified technology company. The company is a provider of hosted web-based collaboration solutions that enable organizations to establish Internet, Intranet, and email/collaboration services with little or no up-front capital investment. The company also provides consulting services to larger enterprise and government customers including network infrastructure, enterprise email/collaboration, and Internet/Intranet portal implementation and support services. The company also markets an array of information technology services and third party computer network hardware and software to large enterprise and government clients. INDEVUS PHARMA: Accepts $71.9MM Exchange Offer for 6.25% Sr. Notes ------------------------------------------------------------------ Indevus Pharmaceuticals Inc. has accepted for exchange $71,925,000 aggregate principal amount of its outstanding 6.25% Convertible Senior Notes due July 2008, for an equal amount of the company's 6.25% Convertible Senior Notes due July 2009, representing approximately 99.9% of the total outstanding Old Notes. The exchange offer expired at 9:00 A.M., New York City time, on Aug. 6, 2007. In accordance with the terms of the exchange offer, Indevus has accepted for exchange all of the validly tendered Old Notes. The settlement and exchange of New Notes for the outstanding Old Notes was made promptly. Immediately after the consummation of the exchange offer, approximately $75,000 aggregate principal amount of Old Notes will remain outstanding. The exchange agent for the exchange offer was The Bank of New York Trust Company N.A. Any questions regarding the exchange offer or requests for additional copies of the offering to exchange and related documents which describe the exchange offer in more detail should be directed to the Exchange Agent at (212) 815-8394. About Indevus Pharmaceuticals Based in Lexington, Massachusetts, Indevus Pharmaceuticals Inc. (NASDAQ: IDEV) -- http://www.indevus.com/-- acquires, develops, and markets biopharmaceutical products. The company, instead of developing new drugs based on its neuroscience research, buys drug rights from other pharmaceutical developers. At March 31, 2007, Indevus Pharmaceuticals Inc. had total assets of $76.4 million, total liabilities of $220 million, of which $126,000 is minority interest, resulting in a $143.6 million total stockholders' deficit. JACK IN THE BOX: Board Authorizes Two-for-One Common Stock Split ---------------------------------------------------------------- The board of directors of Jack in the Box Inc. has approved a 2-for-1 split of the company's common stock, to be effected in the form of a special 100 percent stock dividend. The split is subject to stockholder approval of a charter amendment to increase the company's authorized common stock. The proposed increase in authorized common stock would provide sufficient authorized and unissued shares of common stock to ensure consummation of the split and satisfy the company's obligations under its benefit plans and to accommodate other corporate purposes. Jack in the Box Inc. also reported that it will hold a special meeting of stockholders, tentatively scheduled for Sept. 21, 2007, to vote on such increase in the number of authorized shares of common stock. The record date for the special meeting will be Aug. 14, 2007. "The company's strong performance over the past few years has contributed to a significant increase in the price of Jack in the Box(R) common stock and delivered great returns to our stockholders," Linda A. Lang, chairman and chief executive officer, said. "We remain optimistic in the company's continued growth potential and view the stock split as an opportunity to price the stock in a more attractive range for investors. And by increasing the number of shares available to trade, we believe the stock split can also increase the liquidity of the company's common stock." Subject to receiving stockholder approval for an increase in authorized common stock, the record date for the stock split will be Oct. 2, 2007, with the distribution date expected to be on or about Oct. 15, 2007. If stockholders approve the increase in the number of authorized shares, stockholders of record on the record date will receive on the distribution date one additional share of the company's common stock for each share owned. As proposed, the stock split would increase the number of outstanding shares of common stock from approximately 31.4 million to approximately 63 million shares. About Jack in the Box Inc. Headquartered in San Diego, California, Jack in the Box Inc. (NYSE: JBX) -- http://www.jackinthebox.com/-- operates and franchises Jack in the Box(R) restaurants, with more than 2,000 restaurants in 17 states. The company also operates a proprietary chain of convenience stores called Quick Stuff(R), with more than 50 locations, each built adjacent to a full-size Jack in the Box restaurant and including a major-brand fuel station. Additionally, through a wholly owned subsidiary, the company operates and franchises Qdoba Mexican Grill(R), with more than 300 restaurants in 40 states. * * * As reported in the Troubled Company Reporter on June 29, 2007, Standard & Poor's Ratings Services revised its outlook on Jack in the Box Inc. to stable from negative. The ratings on Jack in the Box (including the 'BB-' corporate credit rating) reflect leverage that improved to about 4.1x for the 12 months ended April 15, 2007, from a high 4.5x after the company's December 2006 $475 million term loan issuance. JAMES TAIT: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: James E. Tait P.O. Box 220 Camden, AL 36726 Bankruptcy Case No.: 07-12174 Chapter 11 Petition Date: August 7, 2007 Court: Southern District of Alabama (Selma) Debtor's Counsel: James L. Day, Esq. Von G. Memory, P.A. P.O. Box 4054 Montgomery, AL 36103-4054 Tel: (334) 834-8000 Fax: (334) 834-8001 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. JED OIL: Completes Acquisition of Caribou Resources --------------------------------------------------- JED Oil Inc. disclosed that on July 31, 2007, it completed its acquisition of all of Caribou Resources Corp.'s shares. Jed Oil has also settled with Caribou's creditors. Caribou is now a wholly owned subsidiary of JED and its name has been changed to JED Production Inc. The transactions completed were both a Plan of Arrangement under the Business Corporation's Act (Alberta) and a Plan of Arrangement under the Companies' Creditors Arrangement Act (Canada). ABCA Arrangement Under the ABCA Arrangement, JED has acquired all of the issued and outstanding common shares of Caribou and the former Caribou shareholders will receive JED common shares, on the basis of one JED common share for ten Caribou common shares. The outstanding stock options and warrants to acquire common shares of Caribou which were not exercised have been terminated. Approval for the ABCA Arrangement was received by the requisite majority of the holders of Caribou common shares, options and warrants held on July 30th and a Final Order approving the ABCA Arrangement was granted by the Court of Queen's Bench of Alberta on July 31. In addition, at a special meeting on July 30th, JED's common shareholders approved the issuance of up to a maximum of 4 million common shares to be issued to the former Caribou shareholders. The number of issued and outstanding Caribou shares at completion of the transactions was approximately 38.53 million shares, so approximately 3.853 million of the maximum of 4 million common shares of JED will be issued. CCAA Plan Under the CCAA Plan, creditors of Caribou ranking in priority behind the major secured creditor, whose position JED has acquired, will receive cash of approximately $345,500 plus the issuance of 5 million JED common shares. Under the CCAA Plan the secured creditors whose security ranks behind JED's will share in the net proceeds from 800,000 of the JED common shares and the unsecured creditors will share in the balance of the cash and JED common shares. Creditors of Caribou who have security that ranks ahead of JED's are not be affected by the CCAA Plan and will be paid by JED. Approvals for the CCAA Plan of Arrangement were received by the requisite majority of both the unsecured creditors and the secured creditors subordinate to JED in two creditor meetings held on June 30th and a Sanction Order approving the CCAA Arrangement was granted by the Court of Queen's Bench of Alberta. In addition, at a special meeting on July 30th, JED's common shareholders approved the issuance of the 5 million common shares to be issued under the CCAA Plan. Following the issuance of up to a maximum of 9 million common shares for both arrangement transactions, JED now has approximately 23.853 million issued and outstanding common shares. "With the completion of the Caribou acquisition, we have acquired the additional assets and resources we need to proceed with our business plan for 2007 and 2008 in accordance with the guidance we provided on June 19th," stated James Rundell, JED's President. "We are looking forward to the opportunities provided by this acquisition." As a result of this combination with Caribou, JED expects to have combined production of approximately 1,500 barrels of oil equivalent per day. Current estimates for 2007 year-end production is approximately 2,900 BOE/d. Utilizing existing lands, the current capital base and the significant reduction in debt, the forecasted exit rate for Q1 2008 is expected to be approximately 4,100 BOE/d and the Q2 2008 exit rate is expected to be 4,500 BOE/d. Preferred Share Amendments At the special meeting of JED's shareholders held on July 30th, amendments to the terms of the Series B Preferred Shares were also approved. The amendments extend the maturity date for the redemption by JED of the preferred shares to February 1, 2010 and reduce the price at which the preferred shares can be converted to common shares from $16.00 to $3.50. Each preferred share has a stated value of $16.00, so under the amendments a person holding 1,000 preferred shares who elects to convert them to common shares would receive 4,571 common shares rather than 1,000. About Caribou Resources Based in Calgary, Canada, Caribou Resources Corp. (TSX VENTURE:CBU) -- http://www.cariboures.com/-- is a full cycle exploration and development company primarily focused on exploring for natural gas in Northern Alberta, and oil and natural gas in Central Alberta. With a mix of oil and gas prospects, the company is committed to creating shareholder value by conducting exploration and development activities in a highly focused area. In January 2007, Caribou filed for protection under the Canadian Companies' Creditors Arrangement Act. About JED Oil Based in Didsbury, Alberta, JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an oil and natural gas company that commenced operations in the second quarter of 2004 and has begun to develop and operate oil and natural gas properties principally in western Canada and the United States. The company had $36,015,655 in total assets, $78,266,519 in total liabilities, and a stockholders' deficit of $42,250,864 at Dec. 31, 2006. KB HOME: Completes $250 Million Redemption of 9-1/2% Senior Notes ----------------------------------------------------------------- KB Home has completed the redemption of all $250 million of its 9-1/2% Senior Subordinated Notes due in 2011, plus accrued interest to the date of redemption. Additionally, on July 31, 2007, the company repaid in full its unsecured $400 million term loan, together with accrued interest to the date of repayment. The Term Loan was scheduled to mature on April 11, 2011. "With the significant free cash flow generated from operations and the proceeds from the sale of our interest in Kaufman & Broad SA, we have reduced outstanding debt by more than 33% or by approximately $1.1 billion since the end of our second fiscal quarter in 2006, and currently have over $400 million in cash and no outstanding borrowings under our $1.5 billion revolving credit facility," Jeffrey Mezger, KB Home's president and chief executive officer, said. "The redemption of our 2011 Notes and repayment of the Term Loan underscore our ongoing strategy to strengthen our balance sheet while employing a balanced approach to the use of cash to enhance the company's ability to make investments in our business that we believe will provide future value for our investors," Mr. Mezger said. About KB Home Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.ketb.com/-- is an American homebuilder. The company has domestic operating divisions in 15 states, building communities from coast to coast. Kaufman & Broad S.A., a company subsidiary, is publicly-traded on Euronext Paris and is a homebuilder in France. * * * As reported in the Troubled Company Reporter on April 16, 2007, Moody's Investors Service confirmed the ratings of KB Home, including its Ba1 corporate family rating, Ba1 ratings on the company's senior notes, and Ba2 ratings on the company's subordinated notes. The ratings were taken off review for downgrade, concluding the review that was commenced on Dec. 15, 2006. The ratings outlook is negative. KLINGER ADVANCED: Organizational Meeting Set for August 14 ---------------------------------------------------------- The U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Klinger Advanced Aesthetics, LLC and its debtor-affiliates' chapter 11 cases at 2:00 p.m., on Aug. 14, 2007, at United States Trustee's Office, Room 1401, 14th Floor, One Newark Center in Newark, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Short Hills, New Jersey, Klinger Advanced Aesthetics, LLC -– http://www.aai.com/-- emphasizes the integration of treatments, services (ranging from salon and spa treatments to light medical) and products administered simultaneously. The company and six of its affiliates filed for chapter 11 protection on July 25, 2007 (Bankr. D. N.J. Case Nos. 07-20459 through 07-20465). John K. Sherwood, Esq., at Lowenstein Sandler P.C., represents the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. LEBARON DRYWALL: Court Okays Sale of Alaskan Assets for $1 Million ------------------------------------------------------------------ William M. Barstow, III, the Chapter 11 Trustee in LeBaron Drywall Inc.'s bankruptcy case, obtained authority from the U.S. Bankruptcy Court for the District of Alaska to sell the Debtor's Alaskan real estate property for $1 million. The Trustee tells the Court that the purchase price of $1 million is a reasonable recovery for the assets located in Anchorage, Alaska. There are nine lots being sold, which means that the gross price per lot works out to just $111,000 for each lot. The Debtor has already scheduled the value of these assets at $115,000, says the Trustee. The purchasers for these lots include Aurora Custom Homes, Inc., George Crain, or the highest disinterested bidder. The sale proceeds will be disbursed to pay: 1) the Debtor's share of closing costs; 2) the pro-rated real estated taxes owed to the Municipality of Anchorage up to the date of sale; 3) the senior lien holders of the property; and 4) an escrow for $5,383. Based in Anchorage, Alaska, LeBaron Drywall Inc. builds condominiums. The company filed for Chapter 11 protection on February 21, 2007 (Bankr. D. Alaska Case No. 07-00070). John C. Siemers, Esq., at Burr Pease & Kurtz, represents the Debtor in its restructuring efforts. Erik J. Leroy, Esq., serves as the Debtor's co-counsel. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it listed estimated assets of $18,955,000. The Debtor has until Oct. 10, 2007 to file a plan of reorganization. LNR CFL: Fitch Holds Low-B Ratings on Four Note Classes ------------------------------------------------------- Fitch upgrades LNR CFL 2004-1 LTD., series 2004-CFL, CMBS Resecuritization notes as: -- $3.2 million class I-6 to 'AAA' from 'AA'; -- $3.2 million class I-7 to 'AAA' from 'A'; -- $3.7 million class I-8 to 'A+' from 'A-'. In addition, Fitch has affirmed these classes: -- $10.7 million class I-1 at 'AAA'; -- $1.9 million class I-2 at 'AAA'; -- $3.5 million class I-3 at 'AAA'; -- $3.2 million class I-4 at 'AAA'; -- $3.2 million class I-5 at 'AAA' -- $7.8 million class I-9 at 'BBB'; -- $4.7 million class I-10 at 'BBB-'; -- $2.6 million class I-11 at 'BB+'; -- $2.6 million class I-12 at 'BB+'; -- $242,972 class I-13 at 'BB+'. The rating upgrades are the result of continued amortization increased credit enhancement to the underlying tranasction. LNR CFL 2004-1 is collateralized by a portion of Class I in SASCO 1996-CFL, which is rated 'BB+'. Class H in SASCO 1996-CFL is rated 'AAA'. METROMEDIA INT'L: Gets $2.05/Share Proposal from Fursa Alternative ------------------------------------------------------------------ Metromedia International Group Inc. received a letter from Fursa Alternative Strategies LLC, in which Fursa restated its unsolicited proposal of Aug. 1, 2007, to acquire all issued and outstanding shares of Metromedia common stock, other than the 7,907,610 shares already owned by Fursa, at a purchase price of $2.05 per share in cash. In the restated proposal, Fursa: * affirmed its legal and financial ability to fund the cash portion of its proposed $69 million equity commitment; * provided a revised non-binding letter from a prospective debt financing source, in which this prospective source states it is confident of its ability to arrange the debt financing Fursa seeks, having taken into account the absence of audited U.S. GAAP financial statements for the company and current financing market conditions; and * advised that, although it will seek clarification from the Securities and Exchange Commission, Fursa is confident that its proposal should not trigger heightened disclosure under Rule 13e-3 of the Securities Exchange Act of 1934, as amended, and that a filing with the Securities and Exchange Commission under Schedule 13e-3 will not be required, given that Fursa is not an affiliate of Metromedia and is merely seeking to replace a third party in an already negotiated arms-length agreement. Fursa's proposal is subject to completion of due diligence and the letter from its prospective debt financing source is non-binding and subject to a number of material conditions. On July 17, 2007, Metromedia entered into a definitive agreement with CaucusCom Ventures L.P. and CaucusCom Mergerco Corp., under which Merger Sub commenced on July 18, 2007 a tender offer for all of the shares of Metromedia's outstanding common stock at a price of $1.80 per share in cash. Unless the CaucusCom Offer is extended, the CaucusCom Offer and any withdrawal rights to which Metromedia's stockholders may be entitled will expire at 12:00 midnight, New York City time, on Tuesday, Aug. 14, 2007. After an evaluation of Fursa's Aug. 6, 2007 letter and after consultation with its financial and legal advisors, the Metromedia board has authorized the company and its representatives, subject to execution by Fursa of an acceptable confidentiality agreement, to provide information to and enter into discussions with Fursa and its representatives regarding Fursa's unsolicited proposal. While the Metromedia board has made the determination necessary under its merger agreement with CaucusCom to permit the foregoing to occur, the Metromedia board has not determined that the Fursa proposal, as submitted on Aug. 1, 2007, and clarified on Aug. 6, 2007, is a superior proposal relative to the CaucusCom Offer, and there can be no assurance that Fursa will ultimately make an offer that the Metromedia board may determine constitutes a superior proposal. At this time, the Metromedia board is not making any recommendation with respect to the Fursa proposal and it has not changed, and continues to support, its recommendation that the company's stockholders accept the CaucusCom Offer and tender their shares in the CaucusCom Offer and, if necessary, adopt the CaucusCom merger agreement and the merger and other transactions contemplated thereby. Stockholders of Metromedia can obtain a copy of the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, well as the Solicitation/ Recommendation Statement these documents, free of charge, by directing a request to: Metromedia International Group Inc. Attention: Chief Financial Officer 8000 Tower Point Drive Charlotte, NC 28227 Tel (704) 321-7380 About Fursa Alternative Strategies LLC Headquartered in Lynbrook, New York, Fursa Alternative Strategies LLC – http://www.fursafunds.com/-- owns 7,907,610 shares of Metromedia International's common stock. About Metromedia International Group Inc. Based in Charlotte, North Carolina, Metromedia International Group Inc. (PINK SHEETS: MTRM, MTRMP) – http://www.metromedia-group.com/ -- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. * * * Moody's Investor Services assigned B3 on Metromedia International Group Inc.' subordinated debt and B2 on its junior subordinated debt on March 1994. MIRANT CORP: Settles 2006 Pepco Disputes, Gains $370 Million ------------------------------------------------------------ Mirant Corporation has settled the challenge to its 2006 settlement of its disputes with Potomac Electric Power Company. The 2006 Pepco settlement therefore will become effective in the third quarter of 2007, resulting in a 2007 pre-tax book gain of approximately $370 million and an estimated federal tax deduction of approximately $600 million related to the distribution of Mirant common shares to Pepco and to a supplemental distribution to other claims holders in Mirant's bankruptcy. The 2006 Pepco settlement, once effective, will resolve all remaining disputes between Pepco and Mirant in Mirant's bankruptcy proceedings and will end Mirant's obligations to make any further payments under out-of-market electricity supply contracts for which Mirant became responsible in connection with its purchase of Pepco's generation assets in 2000. Mirant also will receive from Pepco cash reimbursements of $70 million for an advance payment made by Mirant in 2006 under the 2006 Pepco settlement and approximately $36 million for amounts paid by Mirant related to the out-of-market contracts since May 31, 2006. Pepco will receive a claim in Mirant's bankruptcy proceedings for $520 million. To satisfy that claim, Mirant will distribute to Pepco shares reserved by Mirant under its Plan of Reorganization to address unresolved claims. The exact number of shares to be distributed will be determined by Mirant after the 2006 Pepco settlement becomes effective and will be based upon the then- current share price. The challenge to the 2006 Pepco settlement was brought by some holders of claims in Mirant's bankruptcy proceedings. Both the Bankruptcy Court and the U.S. District Court approved the 2006 Pepco settlement, and the challengers appealed to the United States Court of Appeals for the Fifth Circuit. Mirant and those challengers have reached a settlement and the parties shortly will request that the Fifth Circuit dismiss the appeal. Upon the dismissal, the 2006 Pepco settlement will become effective. Under the settlement reached with the claims holders, once the 2006 Pepco settlement has become effective and Mirant has distributed to Pepco the shares due it, Mirant will make a supplemental distribution under the Plan of all but approximately 1 million of the reserved shares that remain after the distribution of shares is made to Pepco on a pro rata basis to the holders of allowed Mirant Debtor Class 3 - Unsecured Claims in its bankruptcy proceedings. Calculated based upon the closing price for Mirant's common stock on Aug. 7, 2007, of $39.63 per share, the number of reserved shares to be distributed to Pepco under the 2006 Pepco settlement would be approximately 13.5 million shares and the number of shares to be distributed in the supplemental distribution under the Plan would be approximately 6.3 million shares. These are estimates and the actual amounts of the shares included in each of the two distributions will depend on the closing price of Mirant's common stock on the date on which the shares are distributed to Pepco. Mirant expects that date to be within two weeks of the Fifth Circuit's order dismissing the pending appeal. Regardless of variances in the closing price of Mirant's common stock, the total number of reserved shares included in both the distribution to Pepco and the supplemental distribution will be approximately 19.8 million shares. Mirant expects to make the supplemental distribution of shares to holders of allowed Mirant Debtor Class 3 - Unsecured Claims shortly after the number of shares to be distributed to Pepco is set in accordance with the 2006 Pepco settlement. The "reserved" shares, including the shares to be distributed either to Pepco or as part of the supplemental distribution, have been issued and included in the calculation of shares outstanding and earnings per share since the company emerged from bankruptcy on Jan. 3, 2006. As a result, the distributions to Pepco and holders of allowed Mirant Debtor Class 3 - Unsecured Claims will not dilute current shareholders. About Mirant Corp. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant's investments in the Caribbean include three integrated utilities and assets in Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and on Feb. 22 filed a Disclosure Statement explaining that Plan. The Court approved the adequacy of Mirant NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the Amended Plan on May 7, 2007. Mirant NY-Gen emerged from chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of Reorganization. * * * The ratings of Mirant Corp. (Issuer Default Rating of 'B+') and its subsidiaries remain on Fitch's Rating Watch Negative following the company's plans to pursue alternative strategic options including a possible purchase of Mirant by a third party. MUSICLAND HOLDING: Buena Vista Seeks to Recover $25 Million ----------------------------------------------------------- Seven secured trade creditors seek to recover $25,000,000, which is alleged to be wrongfully paid to Harris N.A. and its putative agent, Wachovia Bank, N.A. The Trade Creditors are: * Buena Vista Home Entertainment, Inc., * Cargill Financial Services International, Inc., * Hain Capital Group, LLC, * Paramount Pictures Corporation, * Twentieth Century Fox Home Entertainment LLC, * UBS Willow Fund, LLC, and * Varde Investment Partners, L.P. The Trade Creditors were supplying Musicland Holding Corp. and its debtor-affiliates, on credit, with music CDs, DVDs, and similar and related merchandise for sale at the Debtors' retail stores. On August 11, 2003, the Debtors and Congress Financial Corporation entered into an agreement in which Harris N.A., and its agent, Wachovia Bank, will provide the Debtors with a revolving credit of up to $200,000,000. The Revolving Lenders' first priority lien on the Debtors' assets secure the Revolving Credit. The Lien, however, extended only to obligations related to existing and future loans made "on a revolving basis," and letter of credit accommodations. In November 2003, the Debtors also entered into an agreement with the Trade Creditors to induce them to continue supplying inventory to the Debtors' stores, pursuant to a security agreement entered into by and between the Debtors and The Bank of New York, as collateral agent. In return, the Trade Creditors were granted lien in the Debtors' inventory and proceeds. The Inventory Lien was junior only to the security interests and liens of Congress Financial, and the benefit of the Revolving Lenders pursuant to the Congress Facility. Concurrent with the Security Agreement, the Intercreditor Agreement was entered into among BoNY, in its capacity as agent for the Trade Creditors, and Wachovia and Congress Financial, as agent for the Revolving Lenders. Under the Intercreditor Agreement, the Trade Creditors are third party beneficiaries. The Intercreditor Agreement also provides for the subordination of the Trade Creditors' Inventory Lien to the lien of the Revolving Lenders solely to the extent it arose from the Revolving Credit Facility, and not to the Debtors' affiliates. It, however, does not subordinate the Inventory Lien to any lien securing term loan debt or financing other than on a revolving basis. In 2005, the Debtors asked the Revolving Lenders to increase availability under the Revolving Credit Facility. The Revolving Lenders, however, refused to grant the Debtors' request. Sun Music LLC, the Debtors' parent, also did not provide additional capital. Harris would not extend the Revolving Credit Facility under terms of the 2003 Revolving Credit Agreement. At Sun's request, Harris, however, agreed to make a $25,000,000 term loan to the Debtors. Under the Term Loan, the repayment of the Harris Loan was guaranteed by Sun. The Revolving Credit Facility and the Harris Term Loan were to be treated as separate credit facilities, Alan J. Kornfeld, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in New York, relates. Only interest payments were required to be made to Harris monthly because the Revolving Lenders' claims enjoy first preference over the Harris Term Loan. However, Sun instructed the Debtors to repay the Harris Term Loan early before the Revolving Loan were repaid, Mr. Kornfeld contends. The Harris Term Loan was repaid in full in December 2006. The source of the repayment was the Trade Creditors' collateral, Mr. Kornfeld argues. In effect, the Trade Creditors' claims are substantially undersecured by their Inventory Lien, Mr. Kornfeld maintains. Mr. Kornfeld maintains that Wachovia violated the Trade Creditors' rights under the Intercreditor Agreement by treating Harris as if it were a Revolver lender secured by a senior lien. Mr. Kornfeld adds that Harris also tortiously interfered with the Trade Creditors' rights under the Intercreditor Agreement and the Security Agreement, and when it was repaid, converted more than $25,000,000 in the Trade Creditors' collateral and was unjustly enriched. Accordingly, the Trade Creditors ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) award them compensatory damages in an amount to be determined at trial but in all event no less than $25,000,000, plus pre-judgment interest, reasonable attorneys' fees and costs of the lawsuit; and (b) award them punitive and exemplary damages. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. (Musicland Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MUSICLAND HOLDING: Harris Wants Buena Vista Complaint Dismissed --------------------------------------------------------------- Harris, N.A., asks the U.S. Bankruptcy Court for the Southern District of New York to dismiss the Complaint filed by Buena Vista Home Entertainment, Inc., and certain other trade creditors in relation to a $25,000,000 term loan Harris extended to Musicland Holding Corp. and its debtor-affiliates. Robert D. Piliero, Esq., at Piliero Goldstein Kogan & Miller LLP, in New York, asserts that the Complaint should be dismissed as to Harris because the Trade Creditors failed to state a claim upon which relief may be granted. The Buena Vista Plaintiffs, who are trade creditors of the Debtors, entered into an Intercreditor Agreement dated November 2003 with certain lenders who extended a revolving loan to the Debtors. The Intercreditor Agreement was executed by Bank of New York, as agent for the Trade Creditors, and Congress Financial Corporation, as agent for the Revolving Loan Lenders. Wachovia, N.A., is the successor to Congress Financial. Mr. Piliero contends that the Intercreditor Agreement do not contain any limitations respecting amendment of the Revolving Loan Agreement and do not contain any restrictions as to: -- who would extend credit or loan money to the Debtors under the Loan Agreement at any time after it was executed; and -- the types of loans or extensions of credit which could be extended to the Debtors under the Loan Agreement. In August 2005, Harris lent $25,000,000 to the Debtors under a term loan and through an amendment to the Revolving Loan Agreement. Harris was later repaid. The Trade Creditors previously alleged that Wachovia breached the Intercreditor Agreement by entering into an amendment of the Revolving Loan Agreement and allowing the Debtors to repay the Harris Loan. The Trade Creditors also alleged that the same acts gave rise to claims of breach of the covenant of good faith and fair dealing, conversion, and tortious interference with a Trade Security Agreement between the Trade Creditors and the Debtors. Each of the claims asserted under the Complaint is contradicted by the clear and unambiguous terms of the contracts attached to the Complaint and fails to state viable causes of action, Mr. Piliero argues. "In particular, the Intercreditor Agreement made it clear that the liens of the Revolving [Lenders] had priority over and trumped the liens of the [Trade Creditors] and their agent under a certain 'Security Agreement,'" Mr. Piliero maintains. Thus, Harris' receipt of payment was not in contravention of the Intercreditor Agreement or the priorities created under that Agreement, Mr. Piliero says. Mr. Piliero also contends that: 1. Harris cannot have tortiously interfered with Wachovia's performance of any contract as the Harris Amendment was permitted under the terms of the Intercreditor Agreement and there was no breach; 2. Neither Harris nor Wachovia could have tortiously interfered with the Trade Security Agreement as the payment made to Harris was authorized by and consistent with the terms of the Intercreditor Agreement; 3. There could have been no conversion as Harris was entitled by the contract provisions to receive the loan repayment that it obtained; and 4. Harris' receipt of payment cannot constitute unjust enrichment because the lender received what it was entitled to receive under the Amendment and the Intercreditor Agreement. Wachovia Supports Harris' Stand Wachovia Bank asserts that its actions were not only permitted by the contracts' express language, but were also consented to by the Trade Creditors and their predecessors. Thus, Wachovia contends that the Trade Creditors have no factual or legal basis to assert a breach of contract claim or any other claim against it. "The [Trade Creditors'] claims are nothing more than an impermissible attempt to have th[e] Court rewrite the contracts' unambiguous terms for [their] benefit and to Wachovia's substantial detriment," Richard G. Haddad, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York, argues. When considered with the express terms of the subject contracts, including the Intercreditor Agreement and the Trade Security Agreement, it is clear that the Trade Creditors' claims are meritless and that dismissal is warranted, Mr. Haddad emphasizes. Wachovia agrees with Harris' arguments, disputing the allegations asserted under the Trade Creditors' Complaint. Trade Creditors Oppose Motion to Dismiss Plaintiffs Buena Vista Home Entertainment, Inc., Cargill Financial Services International Inc., Hain Capital Group, LLC, and certain trade creditors inform the Court that they bargained for a lien that was subordinate only to obligations under the Debtors' existing revolving credit facility. "[That] lien was leapfrogged when Wachovia, the revolver agent, agreed to use the revolver lien to secure an entirely different kind of obligation, a $25 million term loan by Harris," Alan J. Kornfeld, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in New York, asserts. Harris was not participating in or refinancing the revolving loans, but making a type of loan that was not contemplated or even permitted under the definitions of the Revolving Loan Agreement as it existed when the Intercreditor Agreement was entered, Mr. Kornfeld argues. "Wachovia was required to rewrite basic definitions and permutate the Revolving Loan Agreement to provide Harris with a lien superior to that of [the Trade Creditors." Mr. Kornfeld clarifies that the Trade Creditors were subordinated only to the "Revolving Loan Debt" held by "Revolving Loan Creditors." Under the Revolving Loan Agreement, Revolving Loan Debt was defined to consist of revolving loans exclusively, and new lenders could not become Revolving Loan Creditors except by acquiring uniform participation interests in the revolver. The agreements cannot be read to encompass subordination to the Term Loan, Mr. Kornfeld points out. Wachovia and Harris, Mr. Kornfeld adds, are not entitled to defeat the Trade Creditors' right under the Intercreditor Agreement by restructuring the Revolving Loan Agreement solely to extend loan priority to a non-participant term lender. The Trade Creditors reiterate that Wachovia and Harris intentionally interfered with their contractual relations with respect to the Intercreditor Agreement and the Trade Security Agreement. The Trade Creditors also aver that Harris was paid from the proceeds of their collateral and thus converted property in which they continue to hold a security interest. Mr. Kornfeld adds that dismissal of the Claim for unjust enrichment would be premature until the validity of the contract is established. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. (Musicland Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). N-STAR REAL: Fitch Affirms BB Rating on $15.916MM Class D Notes --------------------------------------------------------------- Fitch has affirmed nine classes of notes issued by N-Star Real Estate CDO III, Ltd., a subsidiary of NorthStar Realty Finance Corp. These affirmations are the result of Fitch's review process and are effective immediately: -- $292,466,850 class A-1 notes at 'AAA'; -- $14,921,778 class A-2A notes at 'AA'; -- $4,973,926 class A-2B notes at 'AA'; -- $16,911,349 class B notes at 'A-'; -- $9,947,852 class C-1A notes at 'BBB+'; -- $5,968,711 class C-1B notes at 'BBB+'; -- $11,937,422 class C-2A notes at 'BBB'; -- $1,989,570 class C-2B notes at 'BBB'; -- $15,916,563 class D notes at 'BB'. N-Star III is a managed collateralized debt obligation, which closed March 10, 2005. N-Star III is revolving until March 2010 with NS Advisors LLC, a subsidiary of NorthStar Realty Finance Corp., serving as collateral manager. NS Advisors LLC is currently rated 'CAM 2' by Fitch. The portfolio is composed of approximately 73% commercial mortgage-backed securities, 14% real estate investment trust securities, 7% corporate securities and 6% CDO. Since last review, the collateral quality has been stable with a weighted average rating of 'BBB/BBB-'. Credit enhancement to the notes increased slightly due to delevering of the capital structure. As the underlying assets in the portfolio amortize during the revolving period, the collateral manager has a 60-day window to reinvest proceeds, otherwise, these proceeds are used to pay down the capital structure on a pro-rata basis. As a result of the paydowns, as of the July 2007 trustee report, the class A, class B, class C, class D overcollateralization ratios have modestly improved to 127.8%, 121.23%, 111.16% and 106.44%, respectively, versus their previous levels at 127.5%, 120.9%, 110.9% and 106.2%, respectively. All OC ratios and interest coverage ratios are passing their covenanted levels. The CMBS assets in the collateral pool range from 1997-2007 vintages with 52% of the portfolio being of the 2004 or earlier vintage. Due to defeasance and amortization, Fitch believes these CMBS assets are a positive factor in this transaction. While there are no defaulted securities in the collateral pool, one CMBS asset (1.55%) was identified as a distressed bond with a 'CCC/DR2' rating. The assets backing this CMBS transaction have shown positive trends since its downgrade. The class, however, could potentially face non-recoverable interest shortfalls due to loans that have since resolved out of the pool. Fitch modeled the transaction assuming losses. Additionally, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. Although cushion above the breakeven default rates is above average, upgrades during the reinvestment period are unlikely given the pool could still migrate to the maximum weighted average rating factor covenant. The rating of the class A-1, A-2A, and A-2B notes addresses the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class B, C-1A, C-1B, C-2A, C-2B and D notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. N-STAR REAL: Fitch Affirms BB Rating on $16.2MM Class E Notes ------------------------------------------------------------- Fitch has affirmed all classes of notes issued by N-Star Real Estate CDO VII Ltd., a subsidiary of NorthStar Realty Finance Corp. These actions are the result of Fitch's review process and are effective immediately: -- $338,250,000 class A-1 at 'AAA'; -- $54,250,000 class A-2 at 'AAA'; -- $50,000,000 class A-3 at 'AAA'; -- $30,300,000 class B at 'AA'; -- $22,000,000 class C at 'A'; -- $14,000,000 class D-FL at 'BBB'; -- $2,000,000 class D-FX at 'BBB'; -- $16,200,000 class E at 'BB'. The income notes are not rated by Fitch. N-Star VII is a managed collateralized debt obligation, which closed June 22, 2006. The CDO has a five-year reinvestment period, which ends July 15, 2011. Upgrades during the reinvestment period are unlikely, given the pool could still migrate to its maximum weighted average rating factor covenant. NS Advisors, LLC, a subsidiary of NorthStar Realty Finance Corp. serves as the collateral manager and is currently rated 'CAM2' by Fitch. The affirmations reflect the expected performance of the underlying collateral. The CDO is collateralized by 61 fixed-rate subordinated classes from 42 CMBS (commercial mortgage backed securities) transactions and 11 floating-rate subordinated classes from seven CMBS transactions (CMBS: 66.27%). In addition, REIT, CDO, and commercial real estate loans make up 21.82%, 9.16%, and 3.42% of the portfolio, respectively. The collateral pool consists of three rated, first-loss CMBS bonds (3.00% of the collateral pool). All are from large loan transactions: one is rated investment grade ('BBB-', 1.09%) and two are rated below investment grade ('BB+', 0.57% and 'BB', 1.34%). No delinquencies are associated with any of the first-loss pieces. As of the July 2007 trustee report, the N-Star VII has not experienced any pay downs. Seven bonds from four CMBS transactions were repaid in full and two new securities, one CMBS and one REIT, have been purchased, representing 3.43% of the CDO. The portfolio's credit quality has improved slightly since closing, improving to a Fitch average rating of approximately 'BBB-' from 'BBB-/BB+' at closing. The CMBS assets in the collateral pool range from the 1999 vintage to the 2007 with approximately two years of seasoning. There are currently no defaulted assets in the portfolio. The rating of the classes A-1, A-2, A-3, and B notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C through E notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. N.Y. WESTCHESTER: Exclusive Plan Filing Moved to December 14 ------------------------------------------------------------ The Honorable Stuart M. Bernstein of the United States Bankruptcy Court for the Southern District of New York further extended New York Westchester Square Medical Center's exclusive periods to: a. file a Chapter 11 plan until Dec. 14, 2007; and b. solicit acceptances of that plan until Feb. 12, 2008. The Debtor's exclusive period to file a plan will expire on Aug. 16, 2007. In April 2007, the Debtor explained to the Court that its status as a healthcare provider inherently impedes its ability to quickly formulate a plan of reorganization. The Debtor said it is constrained by a heavily regulated environment that requires it to obtain approval for all major business decisions. Headquartered in Bronx, New York, New York Westchester Square Medical Center -- http://www.nywsmc.org/-- is a not-for-profit, community acute care hospital and certified stroke center that has served a working class population in the Bronx community since 1929. Its primary facility, located at 2475 St. Raymond Avenue, Bronx, New York 10461, houses 205 beds and provides acute adult medical and surgical care, emergency medicine and ambulatory services. NYWSMC is a membership corporation whose members are selected by the New York-Presbyterian Healthcare System, Inc. The company filed for chapter 11 protection on Dec. 19, 2006 (Bankr. S.D.N.Y. Case No. 06-13050). Burton S. Weston, Esq., at Garfunkel, Wild & Travis, P.C., represents the Debtor. Louis A. Scarcella, Esq., and Robert C. Yan, Esq., at Farrell Fritz PC, represent the Official Committee Of Unsecured Creditors. The Debtor's schedules showed total assets of $49,283,477 and total debts of $35,502,088. NEPHROS INC: Unable to Pay Third Installment Under Settlement Pact ------------------------------------------------------------------ Nephros Inc. disclosed in a regulatory filing with the United States Securities and Exchange Commission that on July 23, 2007, it received a letter stating that the company had failed to pay the third installment under a Settlement Agreement. The letter, received from Marty Steinberg, Esq. as Receiver for Lancer Offshore, Inc., also asked the company to cure the default by July 30. The letter further indicated that the Receiver intends to: (i) file a Certificate of Default and seek a final judgment in the amount of $1.2 million, less those portions the company has already paid, if the company is unable to cure in the time specified, and (ii) seek to recover its attorneys' fees and costs if legal fees are incurred in connection with such filing. Settlement Agreement The company was a defendant in an action captioned Marty Steinberg, Esq. as Receiver for Lancer Offshore, Inc. v. Nephros, Inc., Case No. 04-CV-20547, commenced on March 8, 2004. That action is ancillary to a proceeding captioned Securities and Exchange Commission v. Michael Lauer, et. al., Case No. 03-CV- 80612, commenced on July 8, 2003, wherein the court appointed a Receiver to manage Lancer Offshore, Inc. and various related entities. On Dec. 19, 2005 the U.S. District Court for the Southern District of Florida issued an order approving the Stipulation of Settlement entered into on Nov. 8, 2005 between the Receiver and the company. Under the Settlement, the company will pay the Receiver an aggregate of $900,000 under these payment terms: $100,000 paid no later than 30 days after the Date of Entry; and four payments of $200,000 each at six month intervals thereafter. In addition, any warrants previously issued to Lancer Offshore, Inc. have been cancelled, and the company issued to the Receiver warrants to purchase 21,308 shares of the company's common stock, exercisable for a period of three years at the market price as of the Date of Entry. The company has paid $500,000 to the Receiver and issued the Settlement Warrants. The remaining balance of the Settlement Amount to be paid is $400,000 and the company failed to tender the third $200,000 installment to the Receiver in a timely manner. The Settlement provides that in the event the company fails to pay any portion of the Settlement Amount, the Receiver will provide the company with five business days written notice of the default. During this five business day period, the company has the opportunity to cure the default. If the company fails to cure the default within the cure period, then the Receiver may retain any portion of the Settlement Amount and Settlement Warrants received to date and file a Certificate of Default requesting the entry of a final judgment, and the Court will enter a final judgment against the Company in the amount of $1.2 million less any portion of the Settlement Amount previously paid under the Settlement and awarding any portion of the Settlement Warrants not previously delivered pursuant to the Settlement. The Settlement also provides that in the event of any litigation arising as a result of a default under the Settlement, the Receiver shall be entitled to reasonable attorneys' fees and costs related thereto. Reason for Non-Payment The company relates that it had implemented a strict cash management program to conserve its cash, reduce its expenditures and control its payables and as a result, it was unable to fund the third installment prior to the expiration of the specified cure period. After receipt of the letter, the company informed the Receiver's representatives that it is currently investigating additional funding opportunities and talking to various potential investors who could provide additional financing, which would allow the Company to tender the remaining installments. If the Receiver files a Certificate of Default and the company is unable to obtain additional financing, it would significantly impact the company's ability to execute its cash management program and the company could have to curtail its planned activities or cease its operations. Likely Notes Default If the Receiver files a Certificate of Default and the final judgment amount is in excess of $500,000 and such amount remains undischarged for 90 days, or any action shall be taken by the Receiver to levy upon assets or properties of the Company to enforce such judgment, such occurrence would constitute an “Event of Default” under the company's $5,200,000 principal amount of 6% Secured Convertible Notes due 2012. As a result, the holders of Notes constituting a majority of the principal amount of the Notes then outstanding could declare, by notice to the company, the unpaid principal of, and accrued interest on, all the Notes then outstanding to be due and payable. About Nephros Inc. Headquartered in New York, Nephros, Inc. (AMEX:NEP) -- http://www.nephros.com/-- is engaged in the development of advanced end stage renal disease therapy technology and products that would address both patient treatment needs and the clinical and financial needs of the treatment provider. The company has three products in various stages of development in the hemodiafiltration (HDF) modality to deliver improved therapy to ESRD patients: OLpur MDHDF filter series (consisting of its MD190 and MD220 diafilters) designed expressly for HDF therapy and employing its Mid-Dilution Diafiltration technology; OLpur H2H, its add-on module designed to allow the most common types of hemodialysis machines to be used for HDF therapy, and OLpur NS2000 system, its stand-alone HDF machine and associated filter technology. Nephros has also developed its OLpur HD 190 high-flux dialyzer cartridge, which incorporates the same materials as its OLpur MD series but does not employ its Mid-Dilution Diafiltration technology. At March 31, 2007, the company's balance sheet showed total assets of $3,391,000 and total liabilities of $6,857,000 resulting in a stockholders' deficit of $3,466,000. NEW CENTURY: Court Moves Exclusive Plan Filing Date to Nov. 28 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended New Century Financial Corporation and its debtor-affiliates's exclusive periods to: a) file a chapter 11 plan until Nov. 28, 2007; and b) solicit acceptances of that Plan until Jan. 28, 2008. The Debtors said in papers filed in Court that they are in discussions with the Official Committee of Unsecured Creditors regarding a plan process timeline. The extension of the Exclusive Periods is consistent with that timeline, the Debtors added. In their request filed July 2007, the Debtors told the Court that they will pursue filing a plan and disclosure statement as soon as practicable after the Aug. 31, 2007 claims bar date, but in light of the complexity of their Chapter 11 cases sought extension of the exclusivity by 80 days after that date. The Debtors believe that the proposed dates are consistent with the plan process timeline they have discussed with the Committee. The Debtors assured Judge Carey that the extension of the Exclusive Periods will not harm creditors or other parties-in- interest. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. (New Century Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: Next Periodic Distribution Date is October 1 ---------------------------------------------------------------- Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, informs Judge Gropper of the U.S. Bankruptcy Court for the Southern District of New York that on May 31, 2007, Northwest Airlines Corp. made an initial distribution to the applicable agent or recordholder for individual holders of applicable allowed claims of: * the new common stock for distribution to creditors allocable to Class 1D; * the new common stock for distribution to creditors with a guaranty allocable to Class 1D; and * the new common stock for distribution pursuant to rights offering purchased. Pursuant to the Debtors' First Amended Joint and Consolidated Plan of Reorganization, the Debtors did not make a distribution on July 16, 2007, because at least 2% of the shares in the distribution reserve were not currently available for distribution, Mr. Petrick explains. Mr. Petrick states that catch-up distributions were set instead for July 16, to parties holding Allowed Claims -- that became Allowed after the Initial Distribution Date -- will be made. The next Periodic Distribution Date is October 1, 2007. Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services raised its ratings on Northwest Airlines Corp. and its Northwest Airlines Inc. subsidiary, including raising the long-term corporate credit ratings on both entities to 'B+' from 'D', following their emergence from Chapter 11 bankruptcy proceedings. The rating outlook is stable. In addition, S&P assigned a 'BB-' bank loan rating, one notch above the corporate credit rating, with a '1' recovery rating, to Northwest Airlines Inc.'s $1.225 billion bankruptcy exit financing, based on S&P's expectation of a full recovery of principal in the event of a second Northwest bankruptcy. That bank facility converted from a debtor-in-possession credit facility; S&P withdrew the 'BBB-' rating on the DIP facility. NORTHWEST SUBURBAN: Organizational Meeting Set for August 13 ------------------------------------------------------------ The U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Northwest Suburban Community Hospital, Inc.'s chapter 11 case at 2:00 p.m., on Aug. 13, 2007, at Room 5209, J. Caleb Boggs Federal Building, 844 North King Street, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Ypsilanti, Michigan, Northwest Suburban Community Hospital, Inc., owns and operates of a 55-bed hospital. The company filed for chapter 11 protection on July 31, 2007 (Bankr. D. Del. Case No. 07-11018). Derek C. Abbott, Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell, L.L.P., represent the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. NPS PHARMA: To Retire 2008 Debt with $200 Mil. from Three Deals --------------------------------------------------------------- NPS Pharmaceuticals Inc. entered into three transactions focused on reducing debt and refinancing. The proceeds of the transactions, estimated at $200 million, will be used to retire all of the company's 2008 convertible debt. NPS issued $100 million in Series B Sensipar(R) royalty-backed notes. The notes are non-recourse to NPS, bear an interest rate of 15.5% and will be repaid only after the Series A Sensipar royalty-backed notes are paid in full. The Series B notes mature March 2017. However, based on third-party forecasts of Sensipar sales, NPS expects the royalty payments will be sufficient to repay the Series B notes by December 2012 after which the Sensipar royalties will return to NPS. Second, NPS issued $50 million in convertible notes to funds managed by Visium Asset Management, LLC. These notes will be convertible into NPS common stock at a conversion price of $5.44 per share, reflecting a premium of 30%, relative to the five-day volume-weighted average price for NPS common stock between July 31 and Aug. 6, 2007, mature in 2014 and bear interest at a rate of 5.75% per annum. Third, NPS sold its royalty entitlement from European sales of Preotact by Nycomed for $75 million paid as $50 million up front with another $25 million payable in 2010 if certain sales milestones are achieved. This transaction was with Drug Royalty L.P. 3. NPS chief financial officer Gerard Michel stated: "With $200 million in gross proceeds from the Sensipar B-bond transaction, the private convertible debt offering and the upfront payment from Drug Royalty, we now have all the monies required to retire the 3% convertible debt without significant dilution of current shareholders. These transactions give us a much stronger balance sheet and the flexibility to invest in our late-stage assets. Due to our successful restructuring activities, we are reducing our previous 2007 operating cash burn guidance by $5 million to a new range of $80 to $90 million and reiterating our 2008 cash burn guidance of $35 to $45 million. We are also increasing our previous 2007 year-end cash balance guidance by $15 million to a new range of $65 to $75 million, after retiring the 3% convertible debt." About NPS Pharma NPS Pharmaceuticals Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutic small molecule drugs and recombinant proteins. Its products portfolio of approved drugs and product candidates are primarily used for the treatment of bone and mineral disorders, gastrointestinal disorders, and central nervous system disorders. NPS PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by $226MM ---------------------------------------------------------------- NPS Pharmaceuticals Inc. had $149.9 million in total assets, $375.9 million in total liabilities, and $226 million in total stockholders' deficit as of June 30, 2007. The company incurred a net loss for the second quarter of 2007 of $14.8 million, a 62% reduction from its net loss in the second quarter of 2006 of $39.3 million. For the six months ended June 30, 2007, the net loss was $36 million, a 54% reduction from the same period of the prior year of $77.6 million. The reduction in net loss reflects the 2006 and 2007 restructurings which called for aggressive expense reduction measures. Revenues for the second quarter of 2007 grew 58% to $13.1 million from revenues of $8.3 million in the second quarter of 2006. Revenues for the six months ended June 30, 2007, grew 61% to $23.1 million from revenues of $14.4 million in the same period in the prior year. Increased revenues are primarily the result of higher royalty revenue earned from Amgen on sales of cinacalcet HCl and increased product sales, royalty and milestone revenue earned from Nycomed on sales of Preotact(R). Restructuring charges for the second quarter of 2007 were $4.1 million compared to $6 million for the same period in the prior year. Restructuring charges for the six months ended June 30, 2007 were $11.2 million compared to $6 million for the same period in the prior year. Restructuring charges in 2007 relate primarily to initiatives to restructure operations announced in March 2007 while restructuring charges in 2006 related to initiatives to restructuring operations announced in June 2006. As of June 30, 2007, the company had 46.3 million shares outstanding and $91.4 million in cash, cash equivalents and marketable investment securities as compared to $146.2 million at Dec. 31, 2006. The company's June 30 cash balance does not include net proceeds of approximately $216 million from the recent transaction with Drug Royalty, the sales of Series B and convertible notes and the sale of the Salt Lake City facility. Due to planned decreases in future spending as a result of the March 2007 restructuring and its recent transaction with Nycomed, NPS now expects its 2007 operating cash burn to be no more than $80 million to $90 million and that it will end 2007 with a cash balance of between $65 million and $75 million, after retiring the 3% convertible debt. The company expects to further reduce operating cash burn in 2008 to $35 million to $45 million. "Our second quarter results and recent financing and clinical progress reflect the successful execution of our strategy to monetize non-core assets and drive our late-stage clinical programs. We are pleased to announce that we have raised nearly $200 million which will be used to retire our 2008 convertible debt and strengthen our balance sheet," said Tony Coles, M.D., president and chief executive officer of NPS. "We remain on track to achieve several key milestones this year: the announcement of topline results of the teduglutide Phase 3 study in short bowel syndrome, the continuation of our development work with PREOS and teduglutide in specialty indications, and the consolidation of our operations in New Jersey which will cut our annual facilities costs by 90% and increase our operating flexibility." About NPS Pharma NPS Pharmaceuticals Inc., a biopharmaceutical company, discovers develops, and commercializes therapeutic small molecule drugs and recombinant proteins. Its products portfolio of approved drugs and product candidates are primarily used for the treatment of bone and mineral disorders, gastrointestinal disorders, and central nervous system disorders. NUANCE COMM: To Offer $150 Mil. Unsecured Senior Convertible Notes ------------------------------------------------------------------ Nuance Communications Inc. intends to offer, subject to market and other considerations, approximately $150 million aggregate principal amount of unsecured senior convertible debentures due 2027, through an offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The interest rate, conversion terms and put and call rights applicable to the debentures will be determined by negotiations between Nuance and the initial purchaser of the debentures. Nuance also intends to grant the initial purchaser a 30-day over- allotment option to purchase up to 30 million aggregate principal amount of additional debentures. Nuance intends to use the net proceeds from the offering to partially fund its acquisition of Tegic Communications Inc. About Tegic Communications Inc. Headquartered in Seattle, Tegic Communications Inc. – http://www.tegic.com/-- builds robust, innovative, embedded software designed to enhance communications on small mobile devices. The company has offices in Beijing, Hong Kong, London, New Delhi, Paris, Sao Paulo, Seoul, Singapore, and Tokyo. Tegic is a subsidiary of AOL LLC. About Nuance Communications Based in Burlington, Massachusetts, Nuance Communications Inc. (NASDAQ: NUAN), fka ScanSoft Inc., -- http://www.nuance.com/-- provides speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services that help users interact with information, and create, share and use documents. NUANCE COMMS: S&P Rates Proposed $150MM Convertible Notes at B- --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Burlington, Massachusetts-based Nuance Communications Inc. and assigned its 'B-' rating to Nuance's proposed $150 million senior unsecured convertible notes due 2027. Proceeds from the notes will be used to partially fund the previously announced acquisition of Tegic Communications Inc. The outlook is positive. "The ratings on Nuance reflect the company's rapid growth, highly acquisitive profile, and moderately high debt leverage," said Standard & Poor's credit analyst Martha Toll-Reed. These factors are partly offset by a leading presence in the market for speech recognition products, a significant level of recurring revenues, and a diverse customer base. Nuance is a global provider of speech recognition software and imaging solutions and related services. The company is focused primarily on enterprise customers within the financial services, telecommunications, automotive, and health care sectors. Revenues for the three months ended June 30, 2007 were $157 million, up more than 80% over those of the prior-year period. The positive outlook reflects the company's expanding presence in the market for speech recognition products, strong EBITDA growth, and significant level of recurring revenues. A sustained track record of managing at revenue levels in excess of $500 million, continued successful integration of acquisitions, and maintenance of leverage at or below 4x could lead to rating improvement in the intermediate term. On the other hand, stepped-up acquisition activity resulting in sustained leverage in excess of 4.5x could lead to a stable outlook. NUTRITIONAL SOURCING: Organizational Meeting Set for August 13 -------------------------------------------------------------- The U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Nutritional Sourcing Corporation and its debtor-affiliates' chapter 11 cases at 11:00 a.m., on Aug. 13, 2007, at Room 5209, J. Caleb Boggs Federal Building, 844 North King Street, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. NUTRITIONAL SOURCING: Has Until October 2 to File Schedules ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Nutritional Sourcing Corporation and its debtor-affiliates until 60 days of their bankruptcy filing or Oct. 2, 2007, to file their schedules of assets and liabilities and statements of financial affairs. The Debtors told the Court that they have creditors and parties- in-interest in excess of 6,500. The Debtors relates that they have not been able to have the opportunity to gather the necessary information to prepare their schedules and statements citing: * the size and complexity of their businesses; * certain prepetition invoices have not been received or entered into their financial systems; and * they have been working diligently to complete certain asset sales. Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. NUTRITIONAL SOURCING: Wants Kay Scholer as Bankruptcy Counsel ------------------------------------------------------------- Nutritional Sourcing Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Kay Scholer LLC as their bankruptcy counsel. Kay Scholer will: a. advise the Debtors with respect to their rights, powers and duties as debtors and debtors-in-possession in the continued management and operation of their business and properties; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest; c. advise and consult the Debtors regarding the conduct of the cases, including all of the legal and administrative requirements of operating in chapter 11; d. advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; e. advise the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business, including attendance at senior management meetings, meetings with the Debtors' financial advisors, meetings of the board of directors and committees, and advice on employee, workers' compensation, employee benefits, executive compensation, tax, banking, insurance, securities, corporate, business operation, contracts, joints ventures, real property, press or public affairs, litigation and regulatory matters, and advise the Debtors with respect to continuing disclosure and reporting obligations if any, under securities laws; f. take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against those estates, negotiations concerning all litigation in which the debtors may be involved and objections to claims filed against the estates; g. advise the Debtors with respect to the sale of their assets; h. negotiate and prepare the Debtors' plan of reorganization, disclosure statement and all related agreements or documents and take any necessary action on behalf of the Debtors to obtain confirmation of the plan; i. prepare on the Debtors' behalf all petitions, motions, applications, answers, orders, reports, and papers necessary to the administration of their estates; j. attend meetings with third parties and participate in negotiations with respect to these matters; k. appear before the Court, any appellate courts, and the Office of the U.S. Trustee, and protect the interests of the Debtors' estates before these courts and the Office of the U.S. Trustee; and l. perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with their chapter 11 cases to bring the cases to a conclusion. The Debtors disclose that professionals of the firm bill: Designation Hourly Rate ----------- ----------- Partners $570 - $830 Counsel $525 - $625 Associates $255 - $595 Legal Assistants $130 - $255 Michael B. Solow, Esq., a member at Kay Scholer, assured the Court that firm does not represent any interest adverse to the Debtor or its estate. Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. OASIS HOSPITALITY: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Oasis Hospitality, Inc. 108 East Dolphin/ CL-13 Box 14 South Padre Island, TX 78597 Bankruptcy Case No.: 07-10489 Type of business: The Debtor owns and operates a hotel. Chapter 11 Petition Date: August 6, 2007 Court: Southern District of Texas (Brownsville) Judge: Richard S. Schmidt Debtor's Counsel: Ellen C. Stone, Esq. 62 East Price Road Brownsville, TX 78521 Tel: (956) 546-9398 Fax: (956) 542-1478 Total Assets: $2,141,057 Total Debts: $1,080,860 Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ System 3 Engineering mechanical $16,000 706 West Starr Avenue engineering Pharr, TX 78577 services Steve Spoor Engineering preliminary plan $5,000 202 South 4th Street McAllen, TX 78501 Don M.C. Masters Architect specifications $5,000 1205 North Main Street McAllen, TX 78502 Tom Huebner, P.C. attorney fees $350 Russell M. Salinas loan $0 Roy D. Bailey loan $0 Linebarger, Goggan, Blair & notice only $0 Samsson, L.L.P. John Banks, Esq. notice only $0 Christopher K. Baxter, Esq. notice only $0 OGLEBAY NORTON: Harbinger Commences Offer to Buy Common Stock ------------------------------------------------------------- Harbinger Capital Partners Master Fund I Ltd. and Harbinger Capital Partners Special Situations Fund L.P. is commencing their tender offer to acquire all of the outstanding shares of common stock, par value $0.001 per share, of Oglebay Norton Company for $31 per share in cash plus one Contingent Value Right per share. The tender offer and related withdrawal rights to which Oglebay Norton shareholders may be entitled will expire at 12:00 midnight, New York City time, at the end of Thursday, Sept. 6, 2007, unless the tender offer is extended in accordance the applicable rules and regulations. Harbinger Capital Partners currently owns 2,621,201 Oglebay Norton Shares, representing approximately 18.1% of the company's outstanding shares. The Offer will be dependent upon, Harbinger Capital Partners receiving shares which, when combined with its current holding, represent at least a majority of the total outstanding Shares on a fully diluted basis. The Offer price per Share represents a premium of approximately 30% to the volume weighted average trading price of the Shares over the 30 trading days prior to Harbinger Capital Partners' disclosure of its intention to commence the tender offer. "Oglebay Norton shareholders now have the ability to realize an immediate premium cash value for their investment -- quickly and with certainty -- as an alternative to the current board of directors' plan to pursue strategic alternatives,” Harbinger Capital Partners said. "If our Offer is consummated, we plan to elect a slate of the directors at Oglebay Norton's upcoming annual meeting who we believe will immediately take further action to maximize the value of Oglebay Norton for all its shareholders by pursuing all alternatives, regardless of how they may affect the incumbent Board's interests. Their interests will be fully aligned with other shareholders who believe in Oglebay Norton's long-term prospects, potentially as part of a larger company with greater critical mass and financial resources." "We believe that when shareholders review their options they will quickly come to recognize that our plan is the clearest path to maximizing the value of their investment,” Harbinger Capital Partners concluded. The Offer consideration, which is not conditioned upon any financing arrangements, consists solely of cash plus one Contingent Value Right per Share representing the right to receive an amount equal to the excess, if any, of the purchase price paid by Harbinger Capital Partners or its affiliates in connection with any subsequent tender offer for additional Shares during the six months following the completion of this Proposed Offer over $31.00 per Share. The Offer and obligation to purchase Shares are subject to the conditions, which is available through the information agent for the Offer, Innisfree M&A. About Harbinger Capital Partners Located in New York City, The Harbinger Capital Partners investment team manages in excess of $12 billion in capital as of August 1, 2007 through two complementary strategies. Harbinger Capital Partners Master Fund I Ltd. is focused on restructurings, liquidations, event-driven situations, turnarounds and capital structure arbitrage, including both long and short positions in highly leveraged and financially distressed companies. Harbinger Capital Partners Special Situations Fund L.P. is focused on medium to long term, control oriented and frequently less liquid distressed investments, with flexibility to use other investment strategies and types of securities when opportunities arise. About Oglebay Norton Company Based in Cleveland, Ohio, Oglebay Norton Company (OGBY.PK) -- http://www.oglebaynorton.com/-- provides essential minerals and aggregates to a broad range of markets, from building materials and environmental remediation to energy and industrial applications. * * * As reported in the Troubled Company Reporter on July 31, 2007, Standard & Poor's Ratings Services revised its CreditWatch implications to negative from developing on Oglebay Norton Co., which has a 'B' corporate credit rating. OGLEBAY NORTON: Urges Shareholders to Snub Harbinger's Offer ------------------------------------------------------------ Oglebay Norton Company urges all shareholders to take no action with respect to Harbinger Capital Partners Master Fund I Ltd. and Harbinger Capital Partners Special Situations Fund L.P.'s unsolicited tender offer to acquire all of the outstanding shares of Oglebay Norton's common stock at $31 per share. Trident Acquisition Co. LLC, a jointly-owned subsidiary of Harbinger has delivered to Oglebay Norton a copy of a Form 041, which Harbinger indicated it filed with the Ohio Division of Securities regarding its unsolicited offer. The board of directors of Oglebay Norton, in consultation with independent legal and financial advisors, is in the process of reviewing and evaluating Harbinger's unsolicited tender offer and will advise Oglebay Norton shareholders of the board's position regarding the offer, including its reasons for that position. Oglebay Norton recommends that shareholders defer making any determination with respect to Harbinger's unsolicited tender offer until reading the Board's solicitation/recommendation statement. On July 24, 2007, Oglebay Norton's board has formed a special committee of independent directors to explore strategic alternatives to maximize shareholder value, including a possible sale or merger of the company. The company noted that there can be no assurance that the exploration of strategic alternatives will result in any agreements or transactions. JPMorgan is serving as Oglebay Norton's financial advisor, and Jones Day as legal counsel. About Harbinger Capital Partners Located in New York City, The Harbinger Capital Partners investment team manages in excess of $12 billion in capital as of August 1, 2007 through two complementary strategies. Harbinger Capital Partners Master Fund I Ltd. is focused on restructurings, liquidations, event-driven situations, turnarounds and capital structure arbitrage, including both long and short positions in highly leveraged and financially distressed companies. Harbinger Capital Partners Special Situations Fund L.P. is focused on medium to long term, control oriented and frequently less liquid distressed investments, with flexibility to use other investment strategies and types of securities when opportunities arise. About Oglebay Norton Company Based in Cleveland, Ohio, Oglebay Norton Company (OGBY.PK) -- http://www.oglebaynorton.com/-- provides essential minerals and aggregates to a broad range of markets, from building materials and environmental remediation to energy and industrial applications. * * * As reported in the Troubled Company Reporter on July 31, 2007, Standard & Poor's Ratings Services revised its CreditWatch implications to negative from developing on Oglebay Norton Co., which has a 'B' corporate credit rating. ORLANDO CITYPLACE: Wants to Use SFT Parties' Cash Collateral ------------------------------------------------------------ Orlando CityPlace, LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Middle District of Florida to use the cash collateral of SFT I, Inc., VAF Sub-CDE III, LLC, and Robert Stoehr, and provide adequate protection to the lenders. The Debtors tell the Court that due to the slowing down of overall condominium sales in Orlando, the Debtors were unable to sell sufficient units to amortize their obligations to the SFT Lenders. As evidenced by the short duration of the SFT loan, it was never contemplated that the SFT obligation would be repaid through hotel operations, the Debtors say. The Debtors explain that it has to continue operations in order to maximize the going concern value of its properties subject to a sale. This requires the use of funds on hand and funds to be receive, which may be subject ot a lien in favor of the SFT Parties. The cash collateral is comprised, in whole or in part, of funds to be received as rents or hotel revenue from the Debtors' Lexington condominium-hotel. SFT, according to a loan and security agreement with the Debtors, asserts that it holds a lien on the cash collateral. The Debtors estimate that it owes SFT approximately $28,392,709 in principal. As of the Debtors' bankruptcy filing, the Debtor estimates that the value of the cash collateral consisting of cash and rents to be approximately $10,000. The Debtor has $8,000 of funds on hand, and will require the use of $330,000 in cash collateral to continue and maintain operations. As adequate protection for the use of cash collateral, the Debtors propose to grant SFT a replacement lilen to the same validity, extent, and priorty as its pre-bankruptcy lien. Robert Stoehr, the Debtors relate, may assert some type of interest in the cash collateral as a result of a promissory note for $1,000,000 between Mr. Stoehr as lender and the Debtors as borrowers. Mr. Stoehr is unsecured with respect to his rights against the cash collateral and, thus, is adequately protected by a replacement lien. CDE also asserts an interest in the cash collateral, and is also protected by a replacement lien. About Orlando CityPlace Based in Orlando, Florida, Orlando CityPlace LLC and its affiliates -- http://www.lexingtonorlando.com/-- develop real estate property. The Debtors own the Lexington Hotel and District Five Restaurant on Orlando. The company and its affiliates filed for Chapter 11 protection on July 23, 2007 (Bankr. M.D. Fla. Lead Case No. 07-03159). Jimmy D. Parrish, Esq., Mariane L. Dorris, Esq., and R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Orlando CityPlace, LLC listed total assets of $55,000,000, and total debts of $44,000,000, while O.C.P. Corner, LLC listed total assets of $2,000,000 and total debts of $1,700,000. Orlando CityPlace II, LLC listed total assets and debts of $1 million to $100 million. ORLANDO CITYPLACE: Seeks to Reject Vance Marketing Contracts ------------------------------------------------------------ Orlando CityPlace LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Middle District of Florida to reject an executory contract with Vance Marketing Services, LLC. The Debtors entered into an exclusive brokerage agreement with Vance Marketing which gave Vance the exclusive right to sell units at the Debtors' Lexington hotel. In accordance with the arrangement agreement, the Debtors is focused on selling the real estate and commercial buildings owned by the Debtors at a Court approved auction, rather than the individual units. The Debtors are currently seeking approval to sell all of their assets free of liens and encumbrances. The Debtors tell the Court that the executory contracts are a burden to their estates. Based in Orlando, Florida, Orlando CityPlace LLC and its affiliates -- http://www.lexingtonorlando.com/-- develop real estate property. The Debtors own the Lexington Hotel and District Five Restaurant on Orlando. The company and its affiliates filed for Chapter 11 protection on July 23, 2007 (Bankr. M.D. Fla. Lead Case No. 07-03159). Jimmy D. Parrish, Esq., Mariane L. Dorris, Esq., and R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Orlando CityPlace, LLC listed total assets of $55,000,000, and total debts of $44,000,000, while O.C.P. Corner, LLC listed total assets of $2,000,000 and total debts of $1,700,000. Orlando CityPlace II, LLC listed total assets and debts of $1 million to $100 million. OUTLOOK RESOURCES: Expects to File 2nd Qtr. Financials on Friday ---------------------------------------------------------------- Outlook Resources Inc. discloses that pursuant to Ontario Securities Commission Policy 57-603, it is in default of filing its interim financial statements and MD&A for the six months ended May 31, 2007, which were to have been filed on or before July 30, 2007 pursuant to relevant securities laws. The company has made an application to be granted a Management Cease Trade Order in respect of each individual that is, or was, at any time since the end of the period covered by the last financial statements filed by the company, namely those in respect of the period ended February 28, 2007, a director, officer or other insider of the company who, during that time, had or may have had, access to material information with respect to the Company that has not been generally disclosed. The Management Cease Trade order is revocable within 15 days if the Company files the required financial statements, MD&A and certifications within that time period. It is presently expected that the filings will occur within that time frame. Mr. John Bottomley, President and Chief Executive Officer of Outlook advises that he accepts full responsibility for missing the deadline and is working diligently to ensure the Statements are completed and filed no later than August 10, 2007. The company intends to satisfy the provisions of the Alternate Information Guidelines as set out in the Policy for as long as it remains in default. Should the company fail to SEDAR file its financial statements on or before September 30, 2007, the OSC will impose a cease trade order that all trading in securities of the Company cease for such period specified in the OSC order. Outlook Resources Inc. (TSX: OLR) is a junior, Canadian public company which is engaged in the development of new and emerging opportunities in the bio resources field. The company, through Agassiz Aqua Farms Inc., a wholly-owned subsidiary owns all of the issued and outstanding Class III common shares of Agassiz Aqua Tech Inc., a corporation incorporated under the laws of the Province of Manitoba, which is involved in aquaculture technologies and operations. At Feb. 28, 2006, the company's balance sheet showed total assets of $917,534 and total liabilities of $2,411,076 resulting in a shareholders' deficit of $1,493,542. PAN AMERICAN: Case Summary & 23 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pan American General Hospital, L.L.C. aka Pan American Community Hospital aka Southwestern General Hospital 1221 North Cotton El Paso, TX 79901 Bankruptcy Case No.: 07-30935 Type of business: The Debtor owns and operates a physician-owned hospital that is licensed for 100 beds and is fully accredited by the Joint Commission on Accreditation of Healthcare Organizations, Medicare, and the Texas Department of Health. See http://www.pachosp.com Chapter 11 Petition Date: August 6, 2007 Court: Western District of Texas (El Paso) Judge: Robert C. McGuire Debtor's Counsel: E.P. Bud Kirk, Esq. 6006 North Mesa, Suite 806 El Paso, TX 79912 Tel: (915) 584-3773 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 23 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Glenn Grimsley $1,088,063 1108 Los Jardines Circle El Paso, TX 79912 H.B.O. Associates $328,000 c/o Dr. Miguel Barron 3030 Gateway East El Paso, TX 79905 Internal Revenue Service $190,000 Stop 5022 AUS 300 East 8th Street Austin, TX 78701 Assured Benefits $158,594 Desert Healthcare, Ltd. $150,000 Resolution Consulting, $125,000 Inc. Paul Kisucky, C.R.N.A. $116,000 H.B.O. Associates $328,000 Mario Padilla, M.D. $98,000 Lab Corp. $89,077 Quest Diagnostics $88,105 W. Meshel, M.D. $88,000 Armando Beltran, M.D. $80,000 Texas Tech University $71,175 Medical Staffing Network $70,466 Adac Medical Credit $64,416 Innovations $60,000 Carlos Garcia, M.D. $60,000 Advanced Professional $51,039 Software Invivio M.D.E. $50,604 Lab One, Inc. $45,537 H.C.F.S., Inc. $43,463 Medline Industries, Inc. $41,643 PARKWAY HOSPITAL: Court Confirms First Amended Reorganization Plan ------------------------------------------------------------------ The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York confirmed Parkway Hospital Inc.'s First Amended Plan of Reorganization. The restructuring transactions pursuant to which the Plan will be implemented include, but are not limited to: (a) closing the exit financing transaction; (b) forming creditor trusts and transferring contributed assets; (c) obtaining Court approval of union and employee funds settlements; (d) obtaining Court approval of a new lease; and (e) distributing the Reorganized Debtor Equity in accordance with the Plan. Treatment of Claims Each holder of Secured Tax Claims will be paid in full. A Prepetition Lender Claim will be deemed an allowed claim and reaffirmed in the amount of $8.9 million and the full value of the allowed claim will be reaffirmed post-effective date. The claim in this class will be paid in the ordinary course of business pursuant to the terms of prepetition loan documents. DIP Loan Claims will be waived by the new owner in exchanged for Class B Preferred Stock in the reorganized debtor. Unsecured Priority Claims, estimated at $100,000, which has not been satisfied as of the effective date, will be paid in full on the third business day after the effective date; or the date decreed by a final Court order. Each holder of an Unsecured Nonpriority Trade Claim will receive one-time payment from Creditor Trust I equal to 30% of the holder's claim. If at any point in time, Creditor Trust I will lack cash to pay 30% of all claims, the Reorganized Debtor, within 30 days of receiving a written notice from Creditor Trustee I, will pay additional cash to Creditor Trust I in an amount sufficient to provide Creditor Trust I with cash distributions to holders of this class. The residual of Creditor Trust I will be returned to the Reorganized Debtor after all distributions have been made. The Debtor estimates that, after settlements, claims objections, and setoffs, there will be approximately $14,458,513 in claims. Each holder of an Unsecured Nonpriority Litigation Claim will be entitled to a pro rata share of the beneficial interests in Creditor Trust II. All equity interests in the Debtor will be converted to Class A Common Stock and all subordinated claims will get nothing under the plan. About Parkway Hospital The Parkway Hospital, Inc., operates a 251-bed proprietary, acute care community hospital located in Forest Hills, New York. The Company filed for chapter 11 protection on July 1, 2005 (Bankr. S.D.N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US LLP, represents the Debtor in its restructuring efforts. The firm of Alston & Bird LLP serves as substitute bankruptcy counsel to the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $28,859,000 in total assets and $47,566,000 in total debts. PIONEER NATURAL: Earns $36 Million in Quarter Ended June 30 ----------------------------------------------------------- Pioneer Natural Resources Company released on Aug. 7, 2007, its financial and operating results for the quarter ended June 30, 2007. Net income for the second quarter was $36 million. Second quarter results included several items unrelated to ongoing operations: -- a charge of $47 million related to incremental estimated costs for reclamation of the company's East Cameron 322 facility that was destroyed by Hurricane Rita. The company expects insurance to cover a substantial portion of the incremental costs. -- charges totaling $35 million for drilling and asset impairments associated with exiting Nigeria, which were offset by a related tax benefit of $40 million. -- a charge for a U.S. impairment of $6 million. In the aggregate, the above items represent a net after-tax charge of $29 million. Pioneer also recorded the receipt of its first Alaskan Petroleum Production Tax (PPT) refund. The company earns PPT capital expenditure credits for qualified capital expenditures that can be used to reduce future PPT liabilities, sold to third parties or refunded by the State of Alaska. During the second quarter of 2007, Pioneer monetized $25.0 million of PPT credits through a refund from the State of Alaska ($16 million after-tax), that is included in Interest and Other Income. The company expects to monetize and otherwise benefit from additional PPT credits in future quarters. Oil and gas sales reached the top end of Pioneer's forecasted range due to continued growth in the company's core areas and averaged 105,656 barrels oil equivalent per day (BOEPD), up 7% as compared to the prior year quarter. At June 30, 2007, the company's consolidated balance sheet showed $8.14 billion in total assets, $5.05 billion in total liabilities, and $3.09 billion in total stockholders' equity. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $597.2 million in total current assets available to pay $880.2 million in total current liabilities. Financial Review Second quarter oil sales averaged 25,888 barrels per day (BPD) and natural gas liquids sales averaged 18,140 BPD. Gas sales in the second quarter averaged 370 MMCFPD. The reported price for oil was $60.38 per barrel and included $11.65 per barrel related to deferred revenue from volumetric production payments (VPPs) for which production was not recorded. The price for natural gas liquids was $39.52 per barrel. The reported price for gas was $7.45 per thousand cubic feet (MCF), including $.53 per MCF related to deferred revenue from VPPs for which production was not recorded. Second quarter production costs averaged $12.53 per barrel oil equivalent (BOE), and were impacted primarily by facilities and compression work in Raton and an increase in workover activity, much of which having been postponed due to first quarter weather disruptions. Exploration and abandonment costs were $70 million for the quarter and included $44 million of acreage and unsuccessful drilling costs, including $23 million for Nigeria Block 256, and $26 million of geologic and geophysical expenses, including seismic and personnel costs. As discussed above and reported as net hurricane activity expense, the incremental estimated cost associated with the abandonment of the East Cameron 322 facility resulted in a decrease in after-tax earnings of $30 million. Pioneer invested $476 million during the second quarter 2007, bringing total investments for the first half of 2007 to $984 million, including acquisitions. Capital investments for 2007 were heavily front-end loaded with $390 million of capital invested during the first half of the year in large development projects (South Coast Gas project offshore South Africa and Oooguruk field development on the North Slope of Alaska), high impact exploration and winter-access drilling in Canada. Adjusted to exclude discontinued operations, total sales for the second quarter 2006 averaged 98,893 BOEPD and included oil sales of 24,571 BPD, natural gas liquids sales of 19,143 BPD and gas sales of 331 MMCFPD. Reported prices for second quarter 2006 were $69.71 per barrel for oil, including $13.00 per barrel related to deferred revenue from VPPs for which production was not recorded, $36.32 per barrel for natural gas liquids and $6.25 per MCF for gas, including $.62 per MCF related to deferred revenue from VPPs for which production was not recorded. The company recently announced that it has entered into an agreement with Petrogulf Corporation to acquire an interest in approximately 30,000 net acres in the Raton Basin for $205 million. Pioneer expects the purchase to be structured as part of a like-kind exchange to defer a majority of the company's tax liability on the expected sale of Spraberry assets to Pioneer Southwest Energy Partners L.P. The percentage of total production hedged as of Aug. 6, 2007, was 44% for the remainder of 2007, 19% in 2008, 6% in 2009 and 3% in 2010. Third quarter 2007 amortization of deferred losses on terminated oil and gas hedges is expected to be $38 million. About Pioneer Natural Pioneer Natural Resources (NYSE: PXD) -- http://www.pxd.com/-- is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada, South Africa and Tunisia. * * * As reported in the Troubled Company Reporter on April 25, 2007, Fitch Ratings revised the Rating Outlook for Pioneer Natural Resources' debt ratings to Negative from Stable following the announcement that it will create two master limited partnerships and contribute a portion of the company's ownership interest in the Spraberry and Raton fields. In addition, the company announced that its Board of Directors approved a $450 million increase in the share repurchase program. Fitch currently rates Pioneer's Issuer Default Rating and senior unsecured debt 'BB+'. POPE & TALBOT: Credit Default Cues S&P to Downgrade Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on pulp and lumber producer Pope & Talbot Inc. to 'CCC' from 'CCC+' and its senior unsecured debt rating to 'CC' from 'CCC-'. The outlook is negative. "The downgrade followed the company's announcement that it is in default under its $75 million borrowing-base revolving credit agreement and that it has entered into a forbearance agreement with the lending group," said Standard & Poor's credit analyst Andy Sookram. The company was unable to generate the minimum EBITDA required under its financial covenant for the fourth quarter, ended June 30, 2007. The forbearance agreement requires the company to expand its efforts to improve its balance sheet during the forbearance period, expiring Sept. 17, 2007, by, among other things, soliciting offers to purchase all or substantially all of its assets or equity interests. "We are concerned about the company's ability to maintain adequate liquidity and avoid accelerated maturity of its credit facility, which is due 2012," Mr. Sookram said. Pope & Talbot continues to be hurt by challenging operating conditions, including a weak pricing environment in the lumber markets and issues of raw materials cost and availability in the pulp business. The company has been exploring asset sales and capital infusions to strengthen its balance sheet and generate cash, and is analyzing its ability to restructure its debt and other liabilities. As of Aug. 6, 2007, Pope & Talbot had approximately $5.5 million of borrowing capacity under its borrowing-base revolving credit facility. Mr. Sookram said, "We could lower the ratings if Pope & Talbot cannot improve its balance sheet and liquidity, whether through asset sales or capital infusions; if the forbearance period is not extended and the lenders accelerate maturity of the credit agreement; or if the company restructures its debt through a distressed exchange or in some other manner to the detriment of creditors." RASC: Fitch Lowers Ratings on Three Certificate Classes to BB+ -------------------------------------------------------------- Fitch Ratings has taken rating actions on four Residential Asset Securities Corporation (RASC) mortgage pass-through certificates. Affirmations total $2.39 billion and downgrades total $68.5 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: RASC, Series 2006-KS6 -- $339.2 million class A affirmed at 'AAA' (BL: 33.10, LCR: 2.87); -- $20.7 million class M-1 affirmed at 'AA+' (BL: 30.31, LCR: 2.63); -- $18.5 million class M-2 affirmed at 'AA+' (BL: 27.23, LCR: 2.36); -- $10.9 million class M-3 affirmed at 'AA' (BL: 24.87, LCR: 2.16); -- $9.5 million class M-4 affirmed at 'AA-' (BL: 22.78, LCR: 1.97); -- $9.8 million class M-5 affirmed at 'A+' (BL: 20.65, LCR: 1.79); -- $8.7 million class M-6 affirmed at 'A' (BL: 18.69, LCR: 1.62); -- $8.4 million class M-7 affirmed at 'A-' (BL: 16.65, LCR: 1.44); -- $7.6 million class M-8 downgraded to 'BBB' from 'BBB+' (BL: 14.65, LCR: 1.27); -- $5.7 million class M-9 downgraded to 'BBB-' from 'BBB' (BL: 13.02, LCR: 1.13); -- $5.4 million class B downgraded to 'BB-' from 'BBB-' (BL: 10.79, LCR: 0.94). Deal Summary -- Originators: GMAC-RFC (100%); -- 60+ day Delinquency: 10.78%; -- Realized Losses to date (% of Original Balance): 0.26%; -- Expected Remaining Losses (% of Current Balance): 11.54%; -- Cumulative Expected Losses (% of Original Balance): 10.01%. Series 2006-KS7 -- $345 million class A affirmed at 'AAA' (BL: 32.10, LCR: 2.65); -- $21.2 million class M-1 affirmed at 'AA+' (BL: 29.33, LCR: 2.42); -- $18.7 million class M-2 affirmed at 'AA' (BL: 26.51, LCR: 2.19); -- $11.3 million class M-3 affirmed at 'AA-' (BL: 24.60, LCR: 2.03); -- $10.5 million class M-4 affirmed at 'A+' (BL: 22.37, LCR: 1.85); -- $9.6 million class M-5 affirmed at 'A' (BL: 20.28, LCR: 1.68); -- $9.4 million class M-6 affirmed at 'A-' (BL: 18.12, LCR: 1.50); -- $9.1 million class M-7 affirmed at 'BBB+' (BL: 15.98, LCR: 1.32); -- $7.7 million class M-8 downgraded to 'BBB-' from 'BBB' (BL: 13.99, LCR: 1.16); -- $6.3 million class M-9 downgraded to 'BB+' from 'BBB-' (BL: 12.50, LCR: 1.03). Deal Summary -- Originators: GMAC-RFC (100%); -- 60+ day Delinquency: 10.85%; -- Realized Losses to date (% of Original Balance): 0.24%; -- Expected Remaining Losses (% of Current Balance): 12.10%; -- Cumulative Expected Losses (% of Original Balance): 10.49%. Series 2006-KS8 -- $376.8 million class A affirmed at 'AAA' (BL: 30.72, LCR: 2.72); -- $20.1 million class M-1 affirmed at 'AA+' (BL: 28.12, LCR: 2.49); -- $18.2 million class M-2 affirmed at 'AA' (BL: 25.30, LCR: 2.24); -- $11 million class M-3 affirmed at 'AA-' (BL: 22.96, LCR: 2.03); -- $9.9 million class M-4 affirmed at 'A+' (BL: 20.80, LCR: 1.84); -- $9.6 million class M-5 affirmed at 'A' (BL: 18.68, LCR: 1.65); -- $9.1 million class M-6 affirmed at 'A-' (BL: 16.55, LCR: 1.47); -- $6.9 million class M-7 affirmed at 'BBB+' (BL: 14.81, LCR: 1.31); -- $4.1 million class M-8 affirmed at 'BBB' (BL: 13.72, LCR: 1.21); -- $7.4 million class M-9 downgraded to 'BB+' from 'BBB-' (BL: 11.94, LCR: 1.06). Deal Summary -- Originators: GMAC-RFC (100%); -- 60+ day Delinquency: 10.69%; -- Realized Losses to date (% of Original Balance): 0.14%; -- Expected Remaining Losses (% of Current Balance): 11.29%; -- Cumulative Expected Losses (% of Original Balance): 10.15%. Series 2006-KS9 -- $858.6 million class A affirmed at 'AAA' (BL: 31.40, LCR: 2.70); -- $47.5 million class M-1S affirmed at 'AA+' (BL: 28.63, LCR: 2.46); -- $42 million class M-2S affirmed at 'AA' (BL: 25.66, LCR: 2.21); -- $25.3 million class M-3S affirmed at 'AA-' (BL: 23.38, LCR: 2.01); -- $22.8 million class M-4 affirmed at 'A+' (BL: 21.27, LCR: 1.83); -- $22.2 million class M-5 affirmed at 'A' (BL: 19.18, LCR: 1.65); -- $20.4 million class M-6 affirmed at 'A-' (BL: 17.21, LCR: 1.48); -- $20.4 million class M-7 affirmed at 'BBB+' (BL: 15.11, LCR: 1.30); -- $14.8 million class M-8 downgraded to 'BBB-' from 'BBB' (BL: 13.44, LCR: 1.16); -- $13.6 million class M-9 downgraded to 'BB+' from 'BBB-' (BL: 12.12, LCR: 1.04). Deal Summary -- Originators: GMAC-RFC (100%); -- 60+ day Delinquency: 10.58%; -- Realized Losses to date (% of Original Balance): 0.11%; -- Expected Remaining Losses (% of Current Balance): 11.62%; -- Cumulative Expected Losses (% of Original Balance): 10.69%. RESIDENTIAL ASSET: Moody's Cuts Class M-II-3 Cert. Rating to B3 --------------------------------------------------------------- Moody's Investors Service downgraded one certificate from Residential Asset Mortgage Products, Inc. Trust asset-backed securitization deal series 2003-RS7. The transaction consists of a fixed rate pool and adjustable rate pool. These pools are made up of mortgages that are not eligible for inclusion in Residential Funding Company LLC specific loan program securitization because they do not satisfy the underlying guidelines for those programs. The mortgage loans were originated by affiliates of RFC and serviced by HomeComings Financial Network, Inc., a wholly owned subsidiary of RFC. The most subordinate adjustable-rate certificate has downgraded because existing credit enhancement levels are low given the current projected losses on the underlying pools. The pool of mortgages has seen losses in recent months, and future loss could cause a more significant erosion of the overcollateralization. The pool is currently below the OC target as of the July 25, 2007 reporting date. Complete rating action is: Downgrade: Issuer: Residential Asset Mortgage Products, Inc. -- Series 2003-RS7; Class M-II-3, downgraded to B3 from Baa2. RESOURCE AMERICA: Earns $4.5 Million in Third Qtr. Ended June 30 ---------------------------------------------------------------- Resource America Inc. reported net income of $4.5 million, and $14.3 million for the third fiscal quarter and nine months ended June 30, 2007, respectively, as compared to net income of $3 million, and $15.8 million for the third fiscal quarter and nine months ended June 30, 2006, respectively. Income from continuing operations of $6 million and $15.8 million for the third fiscal quarter and nine months ended June 30, 2007, respectively, as compared to $3.1 million and $13.4 million for the third fiscal quarter and nine months ended June 30, 2006, respectively, an increase of $2.8 million or 91% and $2.4 million or 18%, respectively. The company's discontinued operations for the three months ended June 30, 2007 was negatively impacted primarily by $1.9 million of interest expense on the company's 2005 and 2004 IRS tax assessments related to its legacy loan portfolio and a $374,000 write down taken on a held for sale property, net of a tax benefit of $811,000. Assets under management increased to $16.8 billion at June 30, 2007, from $10.5 billion at June 30, 2006, an increase of $6.3 billion or 60%. As of June 30, 2007, the company posted total assets of $1 billion, total liabilities of $820.7 million, and total stockholders' equity of $199 million. Unrestricted and restricted cash held at June 30, 2007, were $17.2 million, and $15.9 million, respectively. Third Quarter Highlights The company entered into a new 5-year $75 million loan and security agreement with Commerce Bank, N.A., and U.S. Bank, N.A. This facility replaces the $25 million revolving credit facility the company previously had with Commerce Bank. On July 27, 2007, the board of directors of the company disclosed a new share repurchase plan for up to $50 million of its outstanding shares. The company established a new division that will seek to sponsor investment vehicles that will make majority private equity investments in banks. This division will augment the company's existing private equity programs that have raised $62.1 million to invest in banks. The company hired Kent Carstater to lead the new effort. Mr. Carstater was formerly a principal in the investment banking group at Keefe, Bruyette & Woods, an investment bank specializing in the financial services sector. Resource Capital Corp., a real estate investment trust managed by the company and in which the company owns about 1.9 million common shares, declared a cash dividend of $0.41 per common share for the quarter ended June 30, 2007. In June 2007, LEAF Financial Corporation, the company's commercial finance asset manager, along with its investment partnerships, acquired substantially all of the assets of the leasing division of Pacific Capital Bank, N.A., for about $282.2 million, including acquisition costs. LEAF's investment partnerships acquired $269.5 million of leases and notes of which $201.7 million were acquired during the quarter ended June 30, 2007. The company's financial fund management operating segment increased its assets under management at June 30, 2007, to $14.2 billion, an increase of $5 billion or 54%, from June 30, 2006. Resource Real Estate Holdings Inc., the company's real estate asset manager that invests in and manages real estate investment vehicles for itself and for outside investors and operates the company's commercial real estate debt platform, increased its assets under management to $1.5 billion at June 30, 2007, an increase of $800 million or 112%, from June 30, 2006. LEAF had three bank facilities as of June 30, 2007, with an aggregate outstanding balance of $281 million. As of Aug. 3, 2007, these three facilities had an aggregate outstanding balance of $190.6 million. These facilities are non-recourse to the company and are secured by the leases and notes financed thereunder, which assets had a value of $313.9 million as of June 30, 2007, and $208.5 million as of Aug. 3, 2007. LEAF uses these bank facilities to finance leases and notes that it subsequently sells to investment partnerships that LEAF sponsors and manages. The company's bank loan business had two outstanding warehouse facilities as of June 30, 2007, with an aggregate outstanding balance of $414.2 million and $264.5 million as of Aug. 3, 2007. About Resource America Headquartered in Philadelphia, PA, Resource America Inc. (NASDAQ: REXI) -- http://www.resourceamerica.com/-- is a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the financial fund management, real estate and commercial finance sectors. * * * Moody's Investors Service placed Resource America Inc.'s senior unsecured rating at Caa1. SHAMROCK TOWER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Shamrock Tower, L.P. 7500 Bellaire Boulevard, Suite 201 Houston, TX 77036 Bankruptcy Case No.: 07-80410 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- 619 Main, L.P. 07-80409 Chapter 11 Petition Date: August 7, 2007 Court: Southern District of Texas (Galveston) Debtor's Counsel: J. Craig Cowgill, Esq. J. Craig Cowgill & Associates, P.C. 2211 Norfolk, Suite 1190 Houston, TX 77098 Tel: (713) 956-0254 Fax: (713) 956-6284 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtors' List of its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jeffrey R. Singer Property Taxes $25,000 77 Sugar Creek Center Boulevard, Suite 565 Sugar Land, TX 77478-3688 Mobile Mini Ince Property Taxes $5,000 7020 Old Katy Road Houston, TX 77024-2110 SOLUTIA INC: Judge Beatty Rejects Disclosure Statement ------------------------------------------------------ Tiffany Kary of Bloomberg News reports that the U.S. Bankruptcy Court for the Southern District of New York rejected Solutia Inc. and its debtor-affiliates' Disclosure Statement, ordering the Debtors to resolve the $20,000,000,000 environmental liabilities inherited from its former parent, Monsanto Company, first. The Honorable Prudence Carter Beatty said that she needed to see the updated Monsanto Settlement that the Debtors' reorganization plan depends on. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, informed the Court that the Debtors plan to file the Monsanto Settlement by August 15, 2007. The hearing on the Monsanto and Retiree Settlements is postponed until October 1, 2007. A hearing on the confirmation of the Debtors' Plan will be held after that. Nitro Tort Victims' Supplemental Objection The Nitro, West Virginia Tort Victims relate that the Debtors have consistently represented that the Nitro Tort Victims' clams are "Tort Claims," which will be unaffected by the Debtors' Chapter 11 cases or the Debtors' plan of reorganization. The Debtors and the Nitro Tort Victims are in agreement in concept, yet as of July 31, 2007, the parties still have not been able to agree upon mutually consensual language that clearly expresses these intentions. The Debtors' current definition of "Tort Claims," or now, "Legacy Tort Claims" uses language and concepts rooted in the transactions underlying a distribution agreement. The Distribution Agreement is an extremely complex agreement and is not a plan document, Douglas T. Tabachnik, Esq., at the Law Offices of Douglas T. Tabachnik, in Manalapan, New Jersey, notes. Mr. Tabachnik explains that understanding the Debtors' current definition of "Legacy Tort Claims" requires special knowledge of the relationship and transactions between Solutia Inc., and Monsanto. The language of the Plan and the terms defined in the Plan should be plain and clear so as to be understood by a reasonable person, and not a person intimately familiar with the legal relationships and transactions that have transpired between Solutia and Monsanto. The Debtors' disclosure statement should not be approved because the Debtors' Plan provides for third party releases and injunctions without providing any information in the Disclosure Statement or Plan of the acts to be enjoined or identifying the entittles that would be subject to the injunctions, Mr. Tabachnik maintains. Exclusive Periods Extension Sought In July 2007, the Debtors asked the Court to further extend their exclusive period to file a plan of reorganization until Dec. 31, 2007, and their exclusive period to solicit acceptances of that plan until Feb. 29, 2008. The Debtors' exclusive period to file a plan and solicit acceptances of that plan ended on July 30, 2007, and Sept. 28, 2007, respectively. The Debtors filed their First Amended Plan and related disclosure statement, as it has been or may be amended, on May 16, 2007. The modified Plan enjoys the support of many of Solutia Inc.'s significant stakeholders, including the Official Committee of Unsecured Creditors, Official Committee of Solutia's retirees, Monsanto Company, and the Ad Hoc Committee of Trade Claims Creditors. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, told the Court that the Plan is premised on two settlements -- a settlement between Solutia and Monsanto, and a settlement between Solutia and the Retirees Committee, Monsanto and the Creditors Committee. The Settlements achieve a reallocation of legacy liabilities and are the cornerstones of Solutia's Plan, therefore, they must be approved before or in conjunction with the confirmation of Solutia's Plan. The Settlements will be heard on Sept. 5, 2007. Solutia said it is revising its Disclosure Statement and drafting the necessary additional disclosures to comply with the Court's directions. In addition, Solutia said it is preparing for the Sept. 5, 2007 hearing on the Settlements. Solutia believes that the Settlements readily meet the standards for approval under Bankruptcy Rule 9019. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Creditors' Committee Wants Settlements Approved ------------------------------------------------------------ The Official Committee of Unsecured Creditors in Solutia Inc. and its debtor-affiliates' bankruptcy cases; and Monsanto Company and Pharmacia Corporation ask the U.S. Bankruptcy Court for the Southern District of New York to approve: (i) the settlement among Solutia Inc., Monsanto, Pharmacia Corporation, the Creditors Committe, the Official Committee of Retirees, and the Ad Hoc Trade Committee; and (ii) the settlement among Solutia, Monsanto, the Retirees' Committee, and the Creditors Committee Settlement. The Creditors Committee relates that the Settlements are critical components of the Debtors' Second Amended Joint Plan of Reorganization, pursuant to which the Debtors have settled all pending litigation against Monsanto and Pharmacia, including objections to proofs of claim filed by Monsanto and Pharmacia, by fixing legacy liabilities that Monsanto will assume under the Plan, and obtaining Pharmacia's agreement to waive all of its claims against the Debtors with prejudice. The Debtors also have achieved reductions in future benefit obligations to Solutia's retirees through agreement with the Official Committee of Retirees. The Creditors Committee believes that the Settlements achieve a reallocation of the Debtors' legacy liabilities necessary to pave the way for the Debtors' successful reorganization and that the Settlements are fair and equitable, as required under applicable law. The Creditors Committee reserves the right, and intends, to supplement its joinder with additional arguments in support of the Motion and respond to any objections filed in connection with the Motion. Monsanto and Pharmacia also reserve their rights to reply to any objection filed with respect to the Motion; file papers in support of the relief requested; and participate in any hearing, disposition, discovery or any other matter relating to the Motion. Objections (1) Noteholders Committee The Ad Hoc Committee of Solutia Noteholders asks the Court to deny approval of the Monsanto Settlement, or in the alternative, adjourn the hearing on the Motion. Bennett J. Murphy, Esq., at Hennigan, Bennett & Dorman LLP, in Los Angeles, California, notes that the Debtors have not demonstrated that the Monsanto Settlement is fair and equitable because they have not provided the Court with the rigorous analysis necessary for the Court to compare the likelihood of their success in litigation against Monsanto and Pharmacia with the benefits of the settlement. In fact, it is not apparent that the Debtors have even conducted the analysis that would be required to make the determination, he contends. Mr. Murphy states that to obtain approval of the Monsanto Settlement, the Debtors will have to make at least three crucial showings, with respect to which the Motion is wholly inadequate. These are: -- Debtors must lay out for the Court the results of their investigation of the claims between the Debtors, Monsanto and Pharmacia that they conducted at the outset of their Chapter 11 cases, whatever that investigation might have been; -- Debtors must quantify the liabilities they are to retain under the settlement and compare that to the liabilities that would be put to Monsanto if the Debtors prevailed in their litigation; and -- Debtors must demonstrate why their odds of success in litigation are so low that it is worth their retaining those liabilities and paying $240,000,000 to Monsanto. The Noteholders Committee has made these points before. Had the Debtors undertakenthe analysis to establish any of the points, they would have most certainly disclosed so in their disclosure statement, Mr. Murphy tells the Court. Instead, the Debtors have persisted in proposing disclosure on the litigation that consists of little more than a self-serving "sales job" designed to support approval of the Monsanto Settlement, he argues. The memorandum of law in support of the Motion is replete with reasons why the Debtors' litigation against Monsanto and Pharmacia would likely fail. Noticeably absent is any discussion of the possibility that the Debtors might succeed, or of the extensive analysis that the Debtors did, or should have done, to reach their conclusions. Mr. Murphy asserts that any settlement is better than an outright loss in litigation. Contrary to the Debtors' approach, the winning -– not the losing -- scenario is the reference point against which a settlement should be judged, he says. Also absent form the Memo is any critical assessment of the scope, magnitude and timing of the legacy liabilities proposed to be assumed by the Debtors and made forever binding upon them following emergence from bankruptcy, Mr. Muphy notes. To determine whether the Monsanto Settlement is of any benefit to the Debtors at all, much less of sufficient benefit to outweigh the Debtors' chances of success in litigation, the Court needs to know whether or not they will be in a position to thrive as a going, and growing, concern, or remain saddled by another company's legacies, he asserts. Moreover, the Debtors have failed to include a current, complete and fully executed settlement agreement. For that reason alone, the Court should deny approval of the Monsanto Settlement, Mr. Murphy maintains. 2) Nitro Tort Victims The Nitro, West Virginia Tort Victims, which include about 2,300 current and former residents from one or more communities surrounding a now defunct chemical plant located near Nitro, West Virginia, ask the Court to deny the Motion to the extent that it seeks approval of the Monsanto Settlement. Certain Nitro Tort Victims filed proofs of claim asserting claims against the Debtors for property damage, personal injuries and medical monitoring arising from the Debtors' ownership and operation of the Nitro Plant. The Nitro Tort Victims contend that their property has been contaminated and their health has been endangered by the release of dioxin contaminants resulting from the Debtors' tortious conduct at the Nitro Plant. In addition, two separate lawsuits are pending in Putnam County Circuit Court, West Virginia, for injuries suffered from the release of dioxin contaminants produced at the Nitro Plant. The lawsuits name Monsanto and Pharmacia, among others, as defendants. The Nitro Tort Victims relate that they have been assured that it is the Debtors' intent to include claims held by the Nitro Tort Victims in the definition of "Tort Claims" so that their claims will not be affected by the Debtors' Chapter 11 cases and will be resolved under applicable state or federal law outside of the proceedings. However, as of July 30, 2007, the Tort Claims definition proposed by the Debtors and appearing in the Plan does not clearly and unequivocably include the claims held by the Nitro Tort Victims, Douglas T. Tabachnik, Esq., at the Law Offices of Douglas T. Tabachnik, in Manalapan, New Jersey, notes. Additionally, the language in the Debtors' Third Amended Disclosure Statement circulated on July 25, 2007, but not filed, regarding the "Monsanto/Pharmacia Injunction" does not clearly and unequivocably allow the Nitro Tort Victims to pursue claims they have or may have against Monsanto and Pharmacia, he says. A certain relationship agreement, or any amendement to it, between the Debtors and Monsanto, which the Debtors state is critical to their Plan and which purports to contain the terms of the Monsanto Settlement, has not been filed, Mr. Tabachnik tells the Court. The Court and the Nitro Tort Victims do not have the necessary factual background to evaluate the Monsanto Settlement to determine if it is fair and equitable. "No one knows what the terms of that settlement are," Mr. Tabachnik argues. Moreover, the only filed version of the Relationship Agreement that was filed on February 16, 2006, is incomplete and was not signed by Monsanto, he points out. The Relationship Agreement refers to 20 separate exhibits, which are not included. It is quite possible and likely that the Relationship Agreement has materially changed since a version of it was filed almost one and a half years ago. "It is not possible to determine if any other of Monsanto's obligations set forth in the only Relationship Agreement filed has subsequently been negotiated away," Mr. Tabachnik says. The Relationship Agreement filed also provided that Monsanto will indemnify Solutia for all "Tort Claims." Because the definition of Tort Claims has been revised to include "Solutia Tort Claims," it appears that Monsanto is now not indemnifying Solutia for all "Tort Claims," but rather for the "Legacy Tort Claims," Mr. Tabachnik contends. The Motion itself does not include all of the information on which it relies, Mr. Tabachnik states. The amount of "consideration provided by Monsanto" is one of the key terms of the compromise and settlement missing, he points out. Also, the injunctive relief Monsanto will receive in the Monsanto Settlement is exceedingly broad. By its terms, the Monsanto injunction enjoins all other tort claims against Monsanto and all claims of any kind against Monsanto's unnamed "Affiliates." Mr. Tabachnik insists that all of these types of tort claims need to be described so that the parties and tort victims can be apprised that their rights are being affected. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SUN MICROSYSTEMS: Restructuring Plan Aims to Cut Jobs ----------------------------------------------------- Sun Microsystems Inc.'s Board of Directors approved Aug. 1, 2007, a plan to better align the company's resources with its strategic business objectives, including reducing its workforce. The company expects to incur total charges ranging from $100 million to $150 million over the next several quarters in connection with the restructuring plan, the majority of which relate to cash severance costs and is expected to be incurred in the first half of the fiscal year ended June 30, 2008. Additionally, Sun Microsystems' Board amended the company bylaws decreasing the number of board members to 10 from 11. Sun Microsystems' results for the fiscal year ended June 30, 2007, showed net income of $473 million, as compared with a net loss of $864 million for fiscal 2006. For the full fiscal year, the company reported revenues of $13.87 billion, an increase of 6.2 percent over fiscal year 2006. At June 30, 2007, the company's unaudited consolidated balance sheet showed $15.8 million in total assets, $8.6 million in total liabilities, and $7.2 million in total stockholders' equity. Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: SUNW) -- http://www.sun.com/-- provides network computing infrastructure solutions that include computer systems, data management, support services and client solutions and educational services. It sells networking solutions, including products and services, in most major markets worldwide through a combination of direct and indirect channels. Sun Microsystems conducts business in 100 countries around the globe, including Latin America: Chile, Colombia, Brazil, Argentina, Mexico and Venezuela. * * * Sun Microsystems Inc.'s 7.65% Senior Notes due Aug. 15, 2009, carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. SUNCOM WIRELESS: Good Performance Cues S&P to Lift Rating to B- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Berwyn, Pennsylvania-based SunCom Wireless Holdings Inc., including the corporate credit rating, which was raised to 'B-' from 'CCC+'. "The upgrade reflects SunCom's better operating performance, as well as the favorable impact of its May 2007 subordinated debt exchange," said Standard & Poor's credit analyst Susan Madison. The outlook is stable. SunCom is a rural and suburban wireless provider serving about 1.1 million subscribers in North Carolina, South Carolina, Tennessee, Georgia, Kentucky, Puerto Rico, and the U.S. Virgin Islands. Debt at June 30, 2007, totaled about $970 million, including $241 million of secured bank debt. While still vulnerable, SunCom's business position has improved over the last 18 months as it has transitioned to a stand-alone regional wireless provider. Service revenues for the second quarter of 2007 grew 5% sequentially and 19% annually, driven by solid subscriber increases and growth in average revenue per user. The EBITDA margin also expanded to 22.8% from 13.3% a year ago, reflecting the absence of elevated transition costs in 2007, and a growing subscriber base. SunCom's second-quarter operating performance was also bolstered by contributions from roaming revenue, which grew 29% annually and contributed about 10% of total revenues. However, the company's largest roaming partner, has begun to redirect a portion of its traffic to other network providers. As a result, SunCom estimates roaming minutes of use could decline 25% from second-quarter levels. Despite this likely decline in roaming MOUs and associated revenues, Standard & Poor's expects SunCom to maintain credit parameters consistent with a 'B-' corporate credit rating as long as its retail operations, which contribute the bulk of the company's revenues and cash flow, continue to grow. With about $1 billion of bank debt and senior notes outstanding following the recent debt exchange, (which reduced debt and annual interest expense by $732 million and $66 million, respectively), SunCom remains highly leveraged with debt to annualized last quarter EBITDA of about 5.6x after adjusting for operating leases. Although profitability has improved, SunCom still lags its regional wireless peers, most of which have EBITDA margins in the high-30% to low-40% range. SunCom has also announced the engagement of Goldman Sachs & Co. as an adviser to explore strategic alternatives for the company, including the potential sale of substantially all of its business. Potential outcomes of these initiatives are not factored into the rating. TEGRANT CORP: Narrow Operations Scope Cues S&P's B Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Tegrant Corp. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating and its recovery rating of '1' to Tegrant's $265 million first-lien senior secured credit facilities, which include a $50 million revolving credit facility and a $215 million first- lien term loan. The 'BB-' rating is two notches above the corporate credit rating; this and the '1' recovery rating indicate that lenders can expect very high (90%-100%) recovery in the event of a payment default. S&P also assigned a 'CCC+' bank loan rating and '6' recovery rating to Tegrant's $75 million second-lien senior secured credit facilities, indicating the likelihood of negligible (0%-10%) recovery in the event of a payment default. On March 8, 2007, proceeds of the term loans and common stock of $123 million were used to finance the acquisition of Tegrant by a private equity sponsor, Metalmark Capital. Tegrant was previously an indirect subsidiary of Svenska Cellulosa Aktiebolaget SCA (BBB+/Stable/A-2). "The ratings on Tegrant reflect its relatively narrow scope of operations, some exposure to weakening housing-related end markets, and a highly leveraged capital structure," said Standard & Poor's credit analyst Robyn Shapiro. "In addition, Tegrant participates in fragmented and competitive markets. However, these negatives are partially offset by the company's market leading positions in niche industries, diversified customer base, and its manageable debt maturity schedule." With annual sales exceeding $400 million, DeKalb, Illinois-based Tegrant provides protective, retail, and temperature assurance packaging products for a range of end markets in North America, including consumer, health care, and auto components. TOUSA INC: Negative Trends Cue Fitch to Junk Several Ratings ------------------------------------------------------------ Fitch Ratings has downgraded TOUSA, Inc.'s Issuer Default Rating to 'CCC' from 'B-' and simultaneously removed the ratings from rating watch negative. The rating outlook is negative. Fitch currently rates TOUSA as: -- Issuer Default Rating downgraded to 'CCC' from 'B-' Recovery Rating to 'RR2' from 'RR1'; -- Secured revolving credit facility downgraded to 'B-' from 'B+'; -- First lien secured term loan rated 'B-'; -- Second lien secured term loan rated 'CCC-'; -- Senior unsecured notes downgraded to 'CC' from 'CCC+' Recovery Rating to 'RR6' from 'RR5'; -- Senior subordinated notes downgraded to 'CC' from 'CCC-' Recovery Rating remains at 'RR6'; -- Preferred stock rated 'CC'. Fitch assigned a Recovery Rating of 'RR2' to TOUSA's $700 million secured revolving credit facility and $200 million secured first lien term loan, indicating superior (70%-90%) recovery prospects for holders of this debt issue. Fitch assigned an 'RR5' to TOUSA's $300 million secured second lien term loan, indicating below average recovery prospects (10%-30%) in a default scenario. Fitch also assigned an 'RR6' to TOUSA's senior unsecured notes, senior subordinated notes and preferred stock issuance, indicating poor (0%-10%) recovery prospects. Fitch applied a liquidation value analysis for these recovery ratings. The downgrade of the IDR reflects the continued challenging housing conditions in most of TOUSA's markets, negative trends in operating margins and the expectation of further deterioration in its credit metrics with the significant debt burden from the completion of the Transeastern JV global settlement. While the completion of the global settlement allows the company to focus primarily on its business operations going forward, the transaction leaves TOUSA in a highly leveraged position at a time when housing market conditions continue to be difficult. On a pro forma basis as of March 31, 2007, total homebuilding debt to capital will be 68.2%. (This ratio takes into account the company's $117.5 million preferred stock issuance receiving 75% equity credit). The negative outlook reflects the more challenging outlook for homebuilders, the current and expected near-term deterioration of credit metrics for the company, and high cancellation rates, which add to speculative inventory totals. Fitch will also continue to closely monitor the trends of the broad housing market in its assessment of the appropriate credit ratings for all homebuilders. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as land and development spending, general inventory levels, speculative inventory activity, gross and net new order activity and free cash flow trends. Transeastern JV Global Settlement: On July 31, 2007, TOUSA consummated the global settlement with all participants in the company's Transeastern JV, including the JV's senior lenders, its mezzanine lenders, the JV partner and its land bankers. The global settlement, which will end all litigation with the Transeastern JV lenders, was financed by TOUSAs's issuance of new equity and debt securities, including a new $500 million senior secured credit facility, made up of a new $200 million first lien term loan facility and a $300 million second lien term loan facility. As part of the settlement, the Transeastern JV will become wholly owned by TOUSA and merged into one of the company's subsidiaries. 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. 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. TOUSA also recently amended its secured revolving credit facility, reducing the total commitment from $800 million to $700 million and establishing new financial performance covenants. The revised covenants accommodate higher leverage and reduced interest coverage ratios to reflect the Transeastern global settlement as well as projected lower credit metrics due to challenging market conditions. This provides the company with some flexibility in terms of navigating through the difficult current market conditions, while also tightening the covenant thresholds starting in 2009 as TOUSA executes is deleveraging strategy. On a pro forma basis using TOUSA's March 31, 2007 borrowing base, the company would have $385 million of availability under the credit facilities, which includes assets and debt associated with the acquisition of the Transeastern JV. Market conditions remained challenging during the second quarter of 2007. In its preliminary second quarter results, TOUSA reported a 15% decline in net orders for the quarter. Cancellation rates for the second quarter were 33%, up from the 29.1% reported during the first quarter of 2007 and the 29.5% rate reported during the same period last year. Furthermore, the company continues to offer increased sales incentives to maintain sales in light of challenging market conditions. During the second quarter of 2007, sales incentives were approximately 11.8% of the average sales price for the quarter, compared to 11.4% during the first quarter of 2007 and 5.3% during the second quarter of 2006. TOUSA typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. The company extensively uses lot options. At present approximately 54% of its lots are controlled through options and 8% through joint ventures - among the higher percentages of the public builders that Fitch tracks. TOUSA has a small number of specific performance options. A modest amount of its owned or optioned land is unentitled. The company currently has refundable and nonrefundable deposits aggregating $236.5 million and had issued letters of credit of approximately $228.3 million associated with its option contracts. A portion of this represents the capital at risk should TOUSA not go forward with the exercise of its options. At the end of the first quarter of 2007, TOUSA controlled 59,000 lots, down 44% year-over-year and a 15.4% decline sequentially from the end of 2006. The sale of the company's Dallas operations further reduced the number of controlled lots by about 4,000 (1,200 owned and 2,800 optioned). However, TOUSA will acquire through the Traneastern JV global settlement approximately 5,000 additional homesites in Florida, of which 4,000 will be owned (after the takedown of approximately 1,300 lots with an asset value of $51 million) and 1,000 lots are under option contracts (after walking away from about 2,450 lots that no longer meet financial hurdles). The company currently has about 7.6 years of lots controlled (including unconsolidated joint ventures) based on last 12 months deliveries. TOUSA typically looks to manage about 1.5 to 2 years of owned land and between 3 to 4 years of optioned land. Fitch anticipates that the company will take a more cautious stance on land purchases during 2007 and 2008. TRUE TEMPER: Moody's Reviews B3 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service placed True Temper Sports, Inc.'s B3 corporate family rating and other ratings under review for possible downgrade. The review was prompted by Moody's concern over the company's ability to comply with the financial covenants governing its senior secured credit facilities given continued volatile raw material prices and rising medical costs. Notwithstanding these concerns, Moody's recognizes that new OEM product launches should support stronger operating results in the second half of fiscal 2007 relative to the same period last year. LGD assessments are subject to change. These ratings were placed under for possible downgrade: -- Corporate family rating at B3; -- Probability-of-default rating at B3; -- $125 million senior subordinated notes due 2011 at Caa2; -- $20 million senior secured revolving credit facility due 2009 at Ba3; -- $86 million senior secured term loan B due 2011 at Ba3. Moody's review will focus on: i. True Temper's ability to address any potential covenant violations; ii. the outlook for fiscal 2007 given continued volatile raw material costs (particularly for nickel) and rising medical costs; and iii. the status of the Royal Precision integration and CN Precision acquisition. Headquartered in Memphis, Tennessee, True Temper Sports, Inc. is the leading manufacturer of steel golf club shafts. The company also participates in the premium-end of the graphite golf shaft market and manufactures tubular components for other recreational sports including hockey and bicycling. Sales were about $106 million for the twelve months ended April 1, 2007. TULLY'S COFFEE: July 1 Balance Sheet Upside-Down by $5.7 Million ---------------------------------------------------------------- Tully's Coffee Corp.'s consolidated balance sheet at July 1, 2007, showed $17.6 million in total assets, $23.3 million in total liabilities, resulting in a $5.7 million total stockholders' deficit. At July 1, 2007, the company's consolidated balance sheet also showed strained liquidity with $10.0 million in total current assets available to pay $16.4 million in total current laibilities. Tully's Coffee Corp. reported a net loss of $2.2 million on net sales of $16.8 million for the first quarter ended July 1, 2007, compared with a net loss of $2.4 million on net sales of $14.0 million for the same period ended July 2, 2006. Total sales for first quarter 2008 reached $16.8 million, a 19.9% increase from the comparable period in fiscal 2007. For the eleventh consecutive fiscal quarter, Tully's reported an increase in its U.S. sales (based on comparisons of 13 week periods to the same period a year earlier). U.S. sales were $16.3 million for first quarter 2008, a 19.2% increase compared to the same period last year. Tully's retail comparable store sales increased 9.5% compared to the same period last year and overall retail sales also increased 9.5% to $10.5 million. At July 1, 2007, there were 131 U.S. Tully's stores (90 company-operated and 41 franchised) as compared to 117 U.S. stores a year earlier. In first quarter 2008, Tully's wholesale division sales rose $1.7 million to $5.7 million, a 41.6% increase from last year. During first quarter 2008, Tully's earnings before interest, taxes, depreciation and amortization improved by $361,000 (25.2%) to negative $1.1 million in the first quarter 2008. Full-text copies of the company's consolidated financial statements for the quarter ended July 1, 2007, are available for free at http://researcharchives.com/t/s?222d Headquartered in Seattle, Tully's Coffee Corporation -- http://www.tullys.com/-- is a specialty retailer and wholesaler of hand-craft roasted, gourmet coffees. Tully's operates and franchises retail coffeehouses, and sells its gourmet whole bean and ground coffees and Bellaccino bottled beverages through grocery locations, office coffee services and foodservice channels in the western United States. UNIFI INC: Terminates Brian Parke as Chairman, President and CEO ---------------------------------------------------------------- The Board of Directors of Unifi Inc. terminated Brian R. Parke as the company's chairman, president and chief executive officer without cause, effective immediately. As a result of the termination, the employment agreement between the company and Mr. Parke dated as of Jan. 23, 2002, was also terminated as of the termination date. Pursuant to the terms of the employment agreement, and as a result of the termination, Mr. Parke is entitled to receive an aggregate of $2,312,500, representing three years of his then-current base salary, together with additional compensation equal to thirty days of his then-current base salary in lieu of the thirty days' prior written notice of termination provided in the employment agreement. The cash compensation is payable in thirty-seven equal monthly installments, less appropriate deductions, including state and federal taxes. In addition to the cash compensation, i. all current unexercised, non-vested options to purchase the registrant's common stock previously granted to Mr. Parke have become fully vested and will remain exercisable through the end of their original terms; ii. for a period of three years following the termination date, Mr. Parke and his eligible family members are entitled to certain medical and insurance benefits equal to those provided to him during his employment; iii. Mr. Parke is also entitled to all accrued benefits under the registrant's supplemental key employee retirement plan; and iv. Mr. Parke is also entitled to the payment by the registrant of all reasonable costs in connection with his eventual relocation to his native country of Ireland, which costs will be grossed up for applicable taxes. The confidentiality and non-competition provisions of the employment agreement survive the termination of the employment agreement for five years and three years, respectively. The employment agreement was previously filed by the Registrant as Exhibit 10g to its Annual Report on Form 10-K for the fiscal year ended June 30, 2002. A description of the employment agreement is included in the registrant's definitive proxy statement on Schedule 14A dated Sept. 26, 2006 under the heading "Executive Officers and Their Compensation - Employment and Termination Agreements." Appointment of New Chairman an Acting CEO Following the termination, the Board appointed Stephen Wener as the company's new chairman and "acting" chief executive officer, effective Aug. 1, 2007. Mr. Wener, 63, who lives in Franklin Lakes, New Jersey, has served as the president and CEO of Dillon Yarn Corporation, a privately owned South Carolina corporation, since 1980. Mr. Wener has been a Director since May 2007. As previously disclosed, the corporation purchased Dillon's polyester and nylon texturing operations on Jan. 1, 2007. A description of the various relationships required to be disclosed pursuant to Item 404(a) of Regulation S-K have previously been filed by the Registrant on its Current Report on Form 8-K dated May 24, 2007. Mr. Wener has not entered into any agreement or other arrangement with the company for his services as chairman and "acting" CEO. Resignation of Other Officers Effective Aug. 1, 2007, Mr. Parke, R. Wiley Bourne, Jr., Charles R. Carter, Sue W. Cole, J.B. Davis and Donald F. Orr each resigned as members of the Board. Mr. Bourne was a member of the company's governance committee and audit committee and chairman of the audit committee. Mr. Carter was a member of the registrant's compensation committee and governance committee and chair of the governance committee. Ms. Cole was a member of the registrant's compensation committee and governance committee. Mr. Davis was a member of the company's governance committee. Mr. Orr was a member of the company's audit committee, compensation committee and governance committee and was the independent "lead director" of the board. In light of the termination and the appointment of Mr. Wener as chairman, Messrs. Bourne, Carter, Davis and Orr and Ms. Cole indicated that they were resigning from the Board because they felt it was in the best interest of the registrant and its shareholders and created the necessary reduction in the size of the board to provide Mr. Wener with the leeway to reconstitute its membership. About Unifi Inc. Unifi Inc. (NYSE: UFI) -- http://www.unifi.com/-- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. Key Unifi brands include, but are not limited to: aio(R) - all-in-one performance yarns, Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R), and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. * * * As of Aug. 8, 2007, the company holds Moody's B3 long-term corporate family rating and probability of default rating. The company's senior secured debt is also rated at Caa1. The outlook is stable. Standard & Poor's also rates the company's long-term foreign and local issuer credits at CCC+. The outlook is negative. WARNER MUSIC: June 30 Balance Sheet Upside-Down by $23 Million -------------------------------------------------------------- Warner Music Group Corp. reported on Aug. 7, 2007, its third quarter results for the third quarter ended June 30, 2007. Net loss was $17 million for the quarter. Adjusted to exclude non-recurring items, net loss was $29 million for the quarter. Net loss in the third quarter of fiscal 2006 was $14 million. Total revenue of $804 million for the third quarter of fiscal 2007 decreased 2% from the prior-year quarter, or 5% on a constant- currency basis. Digital revenue increased to $119 million, or 15% of total revenue in the quarter, up 29% from $92 million in the prior-year quarter and up 7% sequentially from $111 million in the second quarter of fiscal 2007. Operating income increased to $45 million in the quarter compared to $28 million in the prior-year quarter. Adjusted to exclude $38 million in expenses related to the company's realignment initiatives, a $52 million benefit related to the company's settlement with Bertelsmann AG regarding Napster and $8 million in expenses incurred in connection with the potential acquisition of EMI Group plc, operating income for the quarter increased 39% to $39 million. Operating income before depreciation and amortization (OIBDA) increased to $107 million from $86 million in the prior-year quarter. Adjusted to exclude non-recurring items, OIBDA for the quarter increased 17% to $101 million. "We are transforming Warner Music Group to a music-based content company with a more comprehensive approach to participating in artist revenue streams to drive our long-term success," said Edgar Bronfman, Jr., Warner Music Group's chairman and chief executive officer. "Despite a challenging industry environment, we achieved several milestones this quarter which validate our A&R strategy. According to sales data released this quarter, our global market share for calendar year 2006 improved, moving us up to the third- largest global recorded music company. We also reached a WMG 10- year record for U.S. album share for both the quarter and first half of 2007." Michael Fleisher, Warner Music Group's executive vice president and chief financial officer, added: "Given our ongoing focus on financial discipline, our realignment initiatives announced last quarter remain on track for total one-time restructuring and implementation charges in the range of $65 million to $80 million by the completion of our fiscal year 2007." Third-Quarter Results For the third quarter of fiscal 2007, revenue slipped 2% to $804 million from $822 million in the same period last year, or 5% on a constant-currency basis. This decline was driven by a challenging Recorded Music industry environment as the shift in consumption patterns from physical sales to new forms of digital music continues. Declines in the company's physical Recorded Music revenue were only partially offset by increases in Music Publishing and digital Recorded Music revenue. Domestic revenue was down 1% while international revenue declined 4%, or 9% on a constant-currency basis. Operating income for the quarter rose to $45 million from $28 million in the prior-year quarter and operating margin was up 2.2 percentage points to 5.6%. Adjusted to exclude non-recurring items, operating income for the quarter rose 39% to $39 million and operating margin was up 1.5 percentage points to 4.9%. OIBDA for the quarter rose to $107 million from $86 million in the prior-year quarter and OIBDA margin increased 2.8 percentage points to 13.3%. Adjusted to exclude non-recurring items, OIBDA for the quarter grew 17% to $101 million and OIBDA margin widened 2.1 percentage points to 12.6%. The increase in OIBDA margin this quarter reflected cost-management initiatives and a more profitable revenue mix. In addition, the company realized a temporary benefit from its previously announced realignment plan as it continues to make investments focused on new business initiatives. The company reported a cash balance of $396 million, total long- term debt of $2.3 billion and net debt (total long-term debt minus cash) of $1.9 billion, all as of June 30, 2007. For the quarter, net cash provided by operating activities was $90 million compared to $18 million in the comparable fiscal 2006 quarter. Free cash flow (calculated by taking cash flow from operations less capital expenditures and cash paid or received for investments) was $57 million, compared to negative $33 million in the comparable fiscal 2006 quarter. Unlevered after-tax cash flow (calculated by excluding cash interest paid from free cash flow) was $105 million, which includes net cash from the non-recurring items, compared to unlevered after-tax cash flow of $14 million in the comparable fiscal 2006 quarter. At June 30, 2007, the company's consolidated balance sheet showed $4.55 billion in total assets, $4.58 billion in total liabilities, resulting in a $23 million total stockholders' deficit. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $1.27 billion in total current assets available to pay $1.83 billion in total current liabilities. 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?2233 Non-Recurring Items On May 8, 2007, the company announced a realignment plan to implement changes intended to better align the company's workforce with the changing nature of the music industry and to improve financial flexibility by consolidating and streamlining the structure of the company's businesses. Approximately $38 million of non-recurring costs were incurred in the third quarter of fiscal 2007, consisting of $32 million in restructuring costs and $6 million in non-recurring severance and IT outsourcing related charges reflected in selling, general and administrative expenses. Of the $38 million of non-recurring costs, $33 million were incurred by the Recorded Music division, $1 million were incurred by the Music Publishing division and $4 million were corporate costs. This quarter's restructuring and severance charges related primarily to redirecting resources to growth areas of the company's businesses and eliminating duplicative positions. On April 24, 2007, the company and Bertelsmann AG jointly announced a settlement of contingent claims held by the company relating to Bertelsmann AG's relationship with Napster in 2000- 2001. The settlement covers the resolution of the related legal claims against Bertelsmann AG by the company's Recorded Music and Music Publishing businesses. As part of the settlement, the company received $110 million, which was allocated 90% to Recorded Music and 10% to Music Publishing. Net of amounts payable to artists and songwriters, the company recorded other income of $52 million in the third quarter of fiscal 2007 related to this settlement. Of the $52 million, $49 million went to the Recorded Music division and $3 million went to the Music Publishing division. The balance of the $110 million, or $58 million, is being shared with the company's recording artists and songwriters. In the third quarter of fiscal 2007, the company expensed $8 million in costs associated with the potential acquisition of EMI Group plc, all at the corporate level. These non-recurring items had a related tax benefit of $6 million. About Warner Music Group Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is a stand-alone music company that operates through numerous international affiliates and licensees in more than 50 countries. * * * As reported in the Troubled Company Reporter on July 23, 2007, Standard & Poor's Ratings Services said that its ratings for Warner Music Group, including the 'BB-' corporate credit rating, remain on CreditWatch with negative implications. The ratings have been on CreditWatch because of S&Ps' concern about the company's interest in EMI Group PLC. S&P still see uncertainty surrounding management's alternate strategies following WMG's statement that it will not submit a competing bid for EMI. WCI COMMUNITIES: Generates $310 Mil. Positive Cash Flow in 2007 --------------------------------------------------------------- WCI Communities Inc. president and chief executive officer, Jerry Starkey, said, "Despite the continued weakness in the homebuilding marketplace, WCI has received about $130 million of positive free cash flow already this year, including $25 million to $30 million in the second quarter." "And the company expects to generate an additional $400 million to $600 million of free cash flow during the remainder of the year." Free cash flow is net cash flow from operations plus or minus net cash flow from investments in property and equipment. The majority of this cash flow for the balance of the year is expected to come from the closing of the company's One Bal Harbour tower, which is sold-out and expected to account for about $350 million of cash flow, mostly in the fourth quarter. Three other towers in New Jersey; Bonita Springs, Florida; and Palm Coast, Florida; are also expected to be completed and deliver units in the second half of the year. The year-to-date default rates for the company's tower homes totaled 17%, and the assumption for defaults on the towers scheduled to close during the second half of the year is about 12%. The lower expected default rate for the balance of the year relates to the fact that the mix of towers scheduled to close during the remainder of this year are better located and have a higher percentage of sold units than the towers that closed earlier in the year. In addition, the company's free cash flow expectations assume that about 500 to 600 traditional homes close in the second half of the year. The backlog of almost 700 traditional homes as of June 30, 2007, already includes about 500 homes scheduled to close by year end. Mr. Starkey continued, "WCI continues to have sufficient liquidity and available credit." Currently, the company has over $475 million of liquidity in cash and borrowing capacity on its corporate revolving credit facility. Although the quarterly review by the external accountants is not yet complete, the company does not appear to be in default under any of its credit agreements. However, the company has begun discussions with its lenders to amend its credit agreements to provide broader latitude to operate during this protracted downturn. While there can be no assurance that the amendment will be granted, the company believes the negotiations will conclude successfully, and that the company's credit agreements will remain in place and provide adequate liquidity for the foreseeable future. As previously announced, the company continues to work with its financial advisors to explore alternatives to increase shareholder value. No assurances can be given, however, that any transaction will be consummated. Second Quarter Earnings Release WCI has scheduled its second quarter earnings release and conference call for Aug. 16, 2007. The company expects to issue the earnings press release before the market opens with a conference call to discuss the results commencing at 2:00 PM EDT. The company currently expects its 10-Q to be filed after August 9th due to an excess amount of time it has taken to close the books and go through the review process, principally as a result of recent employee attrition. About WCI Communities Headquartered in Florida, WCI Communities Inc. (NYSE: WCI) -- http://www.wcicommunities.com/-- is a home builder catering to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers both traditional and tower home choices and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build about 20,000 traditional and tower homes. * * * As of Aug. 8, 2007, the company holds Moody's B3 long-term corporate family rating and probability of default rating. Moody's rates the company's senior subordinate at Caa2. The outlook is negative. Standard & Poor's also rates the company's long-term foreign and local issuer credits at CCC+. WORKFLOW MANAGEMENT: S&P Junks Issuer Rating on Second-Lien Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on print management company Workflow Management Inc., including its corporate credit rating, to 'B' from 'BB-'. At the same time, Standard & Poor's affirmed its 'BB-' rating on the company's first-lien senior secured credit facility, while the recovery rating was changed to '1', indicating the expectation for very high (90%-100%) recovery in the event of default, from '2'. The issue rating on the company's second-lien term loan was lowered to 'CCC+' from 'B', while the recovery rating was revised to '6', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default, from '5'. The ratings on Workflow were removed from CreditWatch where they were listed with negative implications on Nov. 26, 2006. The outlook is negative. The downgrade reflects operating trends that have resulted in lower revenue and cash flow over the last year and a decline in EBITDA interest coverage to the mid- to high-1x range at March 2007. In addition, Workflow faces $28 million in amortization payments on its credit facility in 2008. Over the last year, the company experienced declines in revenues, due to a portion of its customers reducing volumes. As a result, the company has produced cash flows that have been well below our previous expectations. While S&P believe that Workflow will continue to benefit from a diversified customer base, long-standing customer relationships, and significant recurring revenues, S&P expect the company to experience continued competition in its product portfolio. "As a result, current operating momentum may challenge Workflow's ability to generate levels of EBITDA meaningfully greater than its interest expense and amortization payments in 2008," said Standard & Poor's credit analyst Guido DeAscanis. XOMA LTD: Appoints Steven Engle as President & Chief Exec. Officer ------------------------------------------------------------------ XOMA Ltd. has named Steven B. Engle as president, chief executive officer and a member of the company's board of directors. Mr. Engle succeeds Jack Castello, the company's former president and chief executive officer, who disclosed his retirement plans earlier this year. Mr. Castello will remain with the company as non-executive chairman of the board during a transition period, expected to run through October of 2007. "On behalf of the XOMA board, I couldn't be more pleased that Steve has joined XOMA to serve as the company's next president and chief executive officer," Denny Van Ness, a member of XOMA's board of directors, said. "His leadership experience in our industry, together with his expertise in therapeutic products, operations and corporate development, make him the right person to lead XOMA forward. I am confident in Steve's ability to enhance and execute the company's strategic plan to create value for XOMA shareholders." "I also want to thank Jack Castello for his strong leadership and years of service at XOMA,” Mr. Van Ness added. “It is due to his efforts that XOMA is so well-positioned today. We appreciate his many contributions to the company and wish him all the best in retirement." "XOMA's leadership in therapeutic antibody discovery and development is based on its world class technologies and proven capabilities as well as an expanding pipeline of product candidates,” Mr. Engle stated. “The growing use of therapeutic antibodies is one of the largest opportunities in healthcare. To address this opportunity, XOMA has built an extensive business platform which combines revenue-generating collaborations, licensing programs, royalties on marketed products, and a proprietary pipeline. I look forward to working with XOMA's talented employees and the company's partners in creating long- term value and bringing the benefits of antibody therapeutics to patients with unmet medical needs." Mr. Engle has more than 25 years of executive leadership and biotechnology and pharmaceutical industry experience. He served as chairman of the board and chief executive officer of La Jolla Pharmaceutical Company, a publicly-held biopharmaceutical company focused on the research and development of therapeutic products for autoimmune and antibody-mediated diseases. He joined La Jolla Pharmaceutical Company in 1993, became president and a director in 1994, CEO in 1995, and chairman of the board in 1997. Prior to joining La Jolla, he held executive-level positions at Cygnus Therapeutic Systems, a developer of drug delivery systems, and Micro Power Systems Inc., a manufacturer of high technology products, including medical devices. He began his professional career with the Strategic Decisions Group and the Stanford Research Institute. Mr. Engle is a graduate of the University of Texas with BS and MS degrees in Biomedical Engineering. Pursuant to NASDAQ requirements, the company noted that as part of his employment agreement Mr. Engle received an option to purchase 500,000 XOMA common shares at an exercise price of $5 per share, which will be exercisable immediately, and an option to purchase 2,100,000 XOMA common shares at an exercise price equal to the closing price on Aug. 3, 2007, which is exercisable on the company's normal four-year vesting schedule. About XOMA Ltd. Based in Berkeley, California, XOMA Ltd. (NasdaqGM: XOMA) -- http://www.xoma.com/-- develops and manufactures therapeutic antibodies, with a therapeutic focus that includes cancer and immune diseases. XOMA has a royalty interest in RAPTIVA(R) (efalizumab), a monoclonal antibody product marketed to treat moderate-to-severe plaque psoriasis. XOMA's discovery and development capabilities include antibody phage display, bacterial cell expression, and Human Engineering(TM) technologies. The company pipeline also includes proprietary and collaborative programs in preclinical and clinical development. * * * As reported in the Troubled Company Reporter on June 6, 2007, Xoma Ltd. reported total shareholders' deficiency of $5.9 million, from total assets of $70.3 million and total liabilities of $76.2 million as of March 31, 2007. * Fitch Publishes New Report Offering on Par Rating Activity ------------------------------------------------------------ Fitch Ratings has published a new report offering a macro view of par rating activity and issuance patterns for the U.S. bond market through the second quarter of 2007, as well as a look at the profile of bonds scheduled to mature through 2009 by rating and industry. The par value of U.S. corporate bonds affected by upgrades totaled $34.6 billion in the second quarter, or 1.0% of market volume, while downgrades affected $23.8 billion in bonds (0.7% of market volume). Rating changes for the most part were concentrated at the speculative grade level. Investment grade issues in contrast experienced relatively little activity. Investment grade rating activity in total, considering both upgrades and downgrades affected less than 1% of investment grade volume. Speculative grade upgrades totaled $20.3 billion (3.3% of sector volume) while downgrades totaled $14.1 billion (2.3% of sector volume). The par value of upgrades topped downgrades across all rating categories in the second quarter, albeit by a small margin and on generally low volumes. In addition, the low level of corporate defaults continued to contribute to limited rating deterioration at the 'CCC' - 'C' level with defaults affecting just $1.8 billion in U.S. bonds in the second quarter. According to Fitch's U.S. High Yield Default Index, the trailing 12 month high yield default rate still remains below 1%, ending June at 0.6% and flat at 0.6% at the end of July. New issuance totaled $256 billion in the second quarter of 2007, up 11% quarter-over-quarter and 19% year-over-year (relative to 2006's second quarter issuance activity). 'The second quarter's strong results were mostly due to a very meaningful pick-up in issuance among industrials' said Paul Mancuso, Senior Director, Fitch Credit Market Research. 'Industrial new issuance totaled $112.9 billion compared with $83.8 billion in the first quarter and $71.2 billion in the second quarter of 2006.' Issuance gains were registered across the rating spectrum with both investment grade and non investment grade industrials participating. In total, 17 of the 23 industrial sectors tracked by Fitch saw a year-over-year up tick in issuance in the second quarter. 'Despite positive rating and issuance trends in the first half of this year, the recent dislocation in the credit markets has dramatically altered the environment for U.S. bond market issuers and investors,' said Mariarosa Verde, Managing Director, Fitch Credit Market Research. 'Spreads have widened significantly since June and the market's ability to absorb projected deal volume in the second half of the year is uncertain. If funding constraints begin to negatively affect corporate fundamentals, the remainder of 2007 may look very different from the benign first half.' The par value of bonds maturing through the end of 2007 totals $194.9 billion. The bulk (95%) of this volume ($186.0 billion) consists of investment grade bonds with the remaining volume ($8.9 billion) residing at the speculative grade level. Approximately 1.3%, 3.4% and 6.1% of speculative grade volume is scheduled to mature in 2007, 2008 and 2009, respectively. As of June 30, 2007, the U.S. Corporate Bond Market totaled $3.7 trillion in outstanding par value split 82% investment grade and 18% speculative grade. Across the pool of industrial bonds, the par value share of issues rated speculative grade is substantially higher at 31%. * Fried Frank Appoints Nine Partners Effective September 1 ---------------------------------------------------------- Fried, Frank, Harris, Shriver & Jacobson LLP has elected nine lawyers to the firm's partnership. As of Sept. 1, 2007, the new partners are Peter Guryan, Francois Hellot, Barbara Levy, Richard C. Park, Brian D. Pfeiffer, Tiffany Pollard, Damian P. Ridealgh, Joshua Wechsler, and Eli Weiss. "We are very excited and proud to have these colleagues as partners of the firm, and we look forward to their role in the continued growth and success of Fried Frank,” Valerie Ford Jacob, Fried Frank's chairperson, and Justin Spendlove, Fried Frank's managing partner, stated in a joint statement. Attorneys Elected to Partner Peter Guryan, an attorney in the Antitrust Department in the firm's New York office, focuses his practice on antitrust counseling, government and regulatory review of mergers and acquisitions, and litigation. He has represented major corporations in a wide range of industries in connection with merger, joint venture, and civil non-merger investigations before the United States Department of Justice and the Federal Trade Commission. Prior to joining Fried Frank in 2001, Mr. Guryan was a trial attorney at the Department of Justice in the antitrust division's telecommunications task force. He began his legal career as a law clerk to the Hon. Harold A. Ackerman, U.S. District Court for the District of New Jersey from 1996 to 1998. He received his JD, cum laude, from Cornell Law School in 1996 and his BA from Cornell University in 1992. He is admitted to practice in New York and before the U.S. District Court for the Southern District of New York. Francois Hellot, an attorney in the Paris corporate department, centers his practice on mergers and acquisitions for public and private companies based in France and abroad, and on private equity transactions (venture capital and leveraged buy-outs). He has extensive experience representing both financial investors and managers. Mr. Hellot joined the firm in 2005 as European counsel. He received his advanced degree in English and North American business law in 1994, from the University of Paris - I. He also holds a degree from the Paris Institute for Political Studies. He was admitted to the Paris bar in 1997. Barbara Levy, an attorney in Fried Frank's Paris office, focuses her practice primarily on corporate and commercial litigation. In addition to her general corporate litigation work, she has developed a strong practice in the areas of trademarks, intellectual property and related commercial issues, distribution and antitrust law, and general contract law. Her clients include French and International companies, in a wide variety of industries, including luxury goods, fashion, telecommunications, and automotive. Mrs. Levy joined the firm in 2005 as European counsel. She has an advanced degree in international private law from the University of Paris - II, with honors, with a specialization in international commercial arbitration. She was admitted to the Paris bar in 1990. Prior to joining the Firm in 2005, Barbara Levy was a partner at the firm Veil Jourde. Richard C. Park, an attorney in the antitrust department in Fried Frank's Washington, DC office focuses his practice on a full range of antitrust counseling, with a particular focus on mergers and acquisitions, joint ventures, and representation of clients in connection with investigations by the U.S. Department of Justice and the Federal Trade Commission. He has significant experience representing clients in merger and civil non-merger matters involving a wide variety of industries including, software, pharmaceuticals, defense, telecommunications and media. Mr. Park joined the firm in 1999. He is a former vice chair of the ABA antitrust telecommunications committee. He received his LLM from Georgetown University Law Center in 1997, his JD from Northeastern University School of Law in 1995, and his BA from Cornell University in 1992. He is admitted to the bar in the District of Columbia and New York. Brian D. Pfeiffer, an attorney in the New York bankruptcy department, has a broad range of experience advising clients on a variety of bankruptcy and/or restructuring-related matters. His practice spans debtor representations in connection with Chapter 11 cases and out-of-court restructurings, creditors' committees or significant creditors in connection with chapter 11 cases, and he has also represented a variety of significant creditors or third- party acquirers in restructuring situations. He joined the Firm in 1999. Mr. Pfeiffer received his JD in 1999 from Hofstra University School of Law and received his BA from the State University of New York at Albany in 1996. He is admitted to the bar in New York and to practice before the United States District Court for the Southern District of New York. Tiffany Pollard, an attorney in the New York corporate department, focuses her practice on private equity transactions and mergers and acquisitions representing both private equity firms and public and private corporations. In addition, she regularly advises clients on issues of corporate governance and securities law compliance. She joined the firm in 2000. Ms. Pollard received her JD from Michigan Law School in 1998 and her BA from the University of California at Berkeley in 1991. She is admitted to the bar in New York. Damian P. Ridealgh, an attorney in the corporate department, focuses his practice primarily on the representation of financial institutions as borrowers and issuers in leveraged finance transactions, with a particular focus on acquisition financings. Prior to joining the Firm in 2004, Mr. Ridealgh worked as a banking associate at Ashurst, primarily in their London office, with secondments to Deutsche Bank, London and Ashurst's Brussels offices. Mr. Ridealgh received his JD equivalent in 1999 from the College of Law London and his LLM in 1997 from University College, London. He is admitted to the bar in England and Wales and is applying for admission to the bar in New York. Joshua Wechsler, an attorney in the Hong Kong and New York corporate department, concentrates his practice in corporate finance and the U.S. securities laws representing both issuers and underwriters in a variety of debt and equity financing transactions, including initial public offerings, private placements, high-yield debt offerings and cross-border financings. He has also acted for a number of issuers in connection with corporate governance matters and reporting under the U.S. securities laws. Prior to joining Fried Frank, he served as a staff attorney in the U.S. Securities and Exchange Commission's division of corporation finance. Mr. Wechsler joined the Firm in 1998 and became special counsel in 2004. Mr. Wechsler helped launch the firm's Asian capital markets practice with the opening of the Firm's Hong Kong office in 2007. He received his JD from St. Thomas University School of Law in 1993 and his LLM in from the Georgetown University Law Center in 1994. He received his BA from the University of Florida in 1990. Mr. Wechsler is admitted to the bar in New York and Florida. Eli Weiss, an attorney in the New York tax department, focuses his practice on the representation of domestic and international clients in numerous transactions, including acquisitions and divestitures, public and private financings, joint ventures and the design and implementation of workout and reorganization plans. He joined the firm in 1999. Mr. Weiss received his JD, magna cum laude, in 1999 from the Georgetown University Law Center, where he was elected to the Order of the Coif. He received his BA in 1990 and MA in 1992 from Beth Medrash Govoha. Mr. Weiss is admitted to the bar in New York. About Fried Frank Harris Shriver & Jacobson Fried Frank Harris Shriver & Jacobson LLP -- http://www.friedfrank.com-- is an international law firm with more than 600 attorneys in offices in New York, Washington, D.C., London, Paris, Frankfurt and Hong Kong. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, well as many of the largest companies in the world. The firm offers legal counsel on M&A, private equity, asset management, capital markets and corporate finance matters, white-collar criminal defense and civil litigation, securities regulation, compliance and enforcement, government contracts, environmental law and litigation, real estate, tax, bankruptcy, antitrust, benefits and compensation, intellectual property and technology, international trade, and trusts and estates. The firm has an association with Huen Wong & Co. in Hong Kong. * Thomas Brennan Joins Mitchell Silberberg's Bankruptcy Practice ---------------------------------------------------------------- Mitchell Silberberg & Knupp LLP, a mid-sized law firm which has provided integrated legal and business solutions for nearly 100 years, announced that Thomas Brennan has joined the firm's Bankruptcy practice. With more than 38 years of experience in corporate law, most recently in the areas of creditors rights and bankruptcy reorganizations, Mr. Brennan represents lenders and lender groups in resolving troubled financing arrangements, and purchasers of distressed assets and loan portfolios. He also advises clients regarding bankruptcy issues and related areas of commercial law, lender liability and fraudulent transfers. In addition to his considerable bankruptcy trial experience, Mr. Brennan has handled numerous corporate transactions, including significant purchase and sale agreements, leases, and corporate workouts. "We are fortunate to have someone of [Mr. Brennan's] stature and experience join Mitchell Silberberg & Knupp's bankruptcy practice," said Thomas Lambert, managing partner of Mitchell Silberberg & Knupp. "[Mr. Brennan] is a welcome addition to the firm." Mr. Brennan was most recently a partner at Paul Hastings, Janofsky & Walker LLP. During his career he has participated in major bankruptcies and reorganizations, including Equity Funding, Orange County, Circle K, Westgate California and US National Bank. Mr. Brennan received a Bachelor of Science degree in Mathematics from Fordham University and a J.D. from Harvard Law School. He served as Representative for the Harvard Law School Fund as well as a member of the Panel of Arbitrators for the American Arbitration Association. About Mitchell Silberberg Established in 1908, Mitchell Silberberg & Knupp's -- http://www.msk.com/-- 125 attorneys provide integrated legal and business solutions addressing its clients' concerns in the following areas: Labor and Employment; Intellectual Property and Technology; Entertainment and New Media; Immigration and Benefits; Tax and Family Wealth Planning; Corporate Law, and Litigation. Mitchell Silberberg & Knupp LLP has offices in Los Angeles and Washington, D.C. For more information, visit. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Linda Grant Williams Bankr. S.D. N.Y. Case No. 07-22733 Chapter 11 Petition filed August 3, 2007 Filed as Pro Se In Re Intergrated Support Strat. Bankr. E.D. Penn. Case No. 07-14401 Chapter 11 Petition filed July 31, 2007 Filed as Pro Se In Re n/a ms and es, inc. Bankr. C.D. Calif. Case No. 07-16561 Chapter 11 Petition filed August 1, 2007 See http://bankrupt.com/misc/cacb07-16561.pdf In Re Robert W. Gordon Bankr. M.D. Fla. Case No. 07-06783 Chapter 11 Petition filed August 1, 2007 See http://bankrupt.com/misc/flmb07-06783.pdf In Re Home Boys, Inc. Bankr. S.D. Ohio Case No. 07-56043 Chapter 11 Petition filed August 1, 2007 See http://bankrupt.com/misc/ohsb07-56043.pdf In Re Yvonne Price Perk Bankr. E.D. Va. Case No. 07-50741 Chapter 11 Petition filed August 1, 2007 See http://bankrupt.com/misc/vaeb07-50741.pdf In Re Shelece Marie Yoakum Bankr. D. Ariz. Case No. 07-03732 Chapter 11 Petition filed August 2, 2007 See http://bankrupt.com/misc/azb07-03732.pdf In Re Chriesties Town Mall, Inc. Bankr. D. Conn. Case No. 07-50447 Chapter 11 Petition filed August 2, 2007 Filed as Pro Se In Re Saddle Rack Saloon, Inc. Bankr. N.D. Ga. Case No. 07-72197 Chapter 11 Petition filed August 2, 2007 Filed as Pro Se In Re Three Lumps, L.L.C. Bankr. E.D. Tex. Case No. 07-41685 Chapter 11 Petition filed August 2, 2007 See http://bankrupt.com/misc/txeb07-41685.pdf In Re Cascavilla Awai Lane Properties, L.L.C. Bankr. N.D. Tex. Case No. 07-33648 Chapter 11 Petition filed August 2, 2007 See http://bankrupt.com/misc/txnb07-33648.pdf In Re Main Street Special Events & Catering, Inc. Bankr. S.D. Tex. Case No. 07-35053 Chapter 11 Petition filed August 2, 2007 Filed as Pro Se In Re Hamid Reza B. Kermanshahi Bankr. W.D. Wash. Case No. 07-13613 Chapter 11 Petition filed August 2, 2007 See http://bankrupt.com/misc/wawb07-13613.pdf In Re Donald Ray Stephens Bankr. N.D. Fla. Case No. 07-50255 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/flnb07-50255.pdf In Re Holloway Trucking Company, Inc. Bankr. N.D. Miss. Case No. 07-12722 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/msnb07-12722.pdf In Re Thomas E. Brown, III Bankr. E.D. N.C. Case No. 07-02856 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/nceb07-02856.pdf In Re American Home Decor, L.L.C. Bankr. D. N.J. Case No. 07-21039 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/njb07-21039.pdf In Re Pamela A. Rapp Bankr. D. S.C. Case No. 07-04126 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/scb07-04126.pdf In Re Carrol E. Rea Bankr. W.D. Tenn. Case No. 07-12368 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/tnwb07-12368.pdf In Re Real Data, Inc. Bankr. S.D. Tex. Case No. 07-35126 Chapter 11 Petition filed August 3, 2007 See http://bankrupt.com/misc/txsb07-35126.pdf In Re Hobbs Trucking Company, Inc. Bankr. E.D. Tenn. Case No. 07-13161 Chapter 11 Petition filed August 4, 2007 See http://bankrupt.com/misc/tneb07-13161.pdf In Re Venux Technology Group, Inc. Bankr. W.D. Mich. Case No. 07-05643 Chapter 11 Petition filed August 5, 2007 See http://bankrupt.com/misc/miwb07-05643.pdf In Re Nesas Corporation Bankr. W.D. Wash. Case No. 07-13644 Chapter 11 Petition filed August 5, 2007 See http://bankrupt.com/misc/wawb07-13644.pdf In Re Forbes Property Management, Inc. Bankr. E.D. Ark. Case No. 07-14242 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/akeb07-14242.pdf In Re Swingline Equity Co., Inc. Bankr. C.D. Calif. Case No. 07-12744 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Rite Tire, Inc. Bankr. S.D. Fla. Case No. 07-16210 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/flsb07-16210.pdf In Re Stevens Tire Co., Inc. Bankr. M.D. Ga. Case No. 07-51807 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/gamb07-51807.pdf In Re Cirillo Custom Homes, Inc. Bankr. N.D. Ga. Case No. 07-72626 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/ganb07-72626.pdf In Re Marna Real Estate Investments, L.L.C. Bankr. N.D. Ga. Case No. 07-72644 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/ganb07-72644.pdf In Re C.S. First Group, Inc. Bankr. D. Nebr. Case No. 07-81548 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Christine Louise Compagnon Bankr. D. Nev. Case No. 07-51045 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Grace Community Baptist Church, Inc. Bankr. E.D. Penn. Case No. 07-14555 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/paeb07-14555.pdf In Re The Seal of the Living Gold Holy Church Bankr. S.D. Tex. Case No. 07-35289 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Classic Country Living, Inc. Bankr. W.D. Tex. Case No. 07-51965 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Electronic Scriptorium, Ltd. Bankr. E.D. Va. Case No. 07-12093 Chapter 11 Petition filed August 6, 2007 See http://bankrupt.com/misc/vaeb07-12093.pdf In Re Teddy Lee Burns Bankr. E.D. Va. Case No. 07-71694 Chapter 11 Petition filed August 6, 2007 Filed as Pro Se In Re Albert H. Hudson D.D.S., P.C. Bankr. M.D. Ga. Case No. 07-10968 Chapter 11 Petition filed August 7, 2007 See http://bankrupt.com/misc/gamb07-10968.pdf In Re Frank Laurel Campbell Bankr. S.D. Iowa Case No. 07-02620 Chapter 11 Petition filed August 7, 2007 See http://bankrupt.com/misc/iasb07-02620.pdf In Re Premier U.S.A., Inc. Bankr. D. N.J. Case No. 07-21190 Chapter 11 Petition filed August 7, 2007 See http://bankrupt.com/misc/njb07-21190.pdf In Re 103 Drive Thru Partners Bankr. N.D. Ohio Case No. 07-33411 Chapter 11 Petition filed August 7, 2007 See http://bankrupt.com/misc/ohnb07-33411.pdf In Re Medical Ambulance Services, Inc. Bankr. D. P.R. Case No. 07-04424 Chapter 11 Petition filed August 7, 2007 See http://bankrupt.com/misc/prb07-04424.pdf In Re Core Captial, L.L.C. Bankr. S.D. Tex. Case No. 07-35409 Chapter 11 Petition filed August 7, 2007 Filed as Pro Se In Re James Michael Jugon Bankr. S.D. Tex. Case No. 07-35443 Chapter 11 Petition filed August 7, 2007 Filed as Pro Se ********* 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 ***