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/raid1/www/Hosts/bankrupt/TCR_Public/070914.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, September 14, 2007, Vol. 11, No. 218 Headlines ADELPHIA COMMS: Distributes to Holders of Allowed Claims ALERIS INTERNATIONAL: Completes Wabash Alloys Buyout from Connell AMERICAN HOME: Delaware Court Approves Pact with Fannie Mae AMERIQUEST MORTGAGE: S&P Lowers Ratings on 25 Certificate Classes ARCADIA RESOURCES: Resolves Licensure Issues with Medicare AVADO BRANDS: Wants Until Nov. 5 to File Schedules and Statements AVADO BRANDS: Gets Interim Nod to Access $24 Million DDJ Financing AYISHA BENHAM: Case Summary & Largest Unsecured Creditor BASELINE GAS: High Leverage Prompts Moody's to Junk Rating BEAR STERNS: Fitch Junks Ratings on Two Certificate Classes BPO MANAGEMENT: Posts $1.3 Million Net Loss in Qtr. Ended June 30 C-BASS: Fitch Junks Rating on 2003-RP1 Class B-2 Certificates C-BASS: Fitch Downgrades Ratings on $3.2 Million Certificates CALPINE CORPORATION: Inks Pact Allowing $54.5 Million in Claims CALPINE CORP: Completes Sale of 50% Acadia Plant Stake to Cajun CHAPARRAL STEEL: Stockholders Give Nod on Gerdau Ameristeel Merger CHESAPEAKE ENERGY: S&P Holds BB Corporate Credit Rating CII CARBON: Rain Takeover Prompts S&P to Withdraw B+ Ratings CINCINNATI BELL: June 30 Balance Sheet Upside-Down by $744 Million COBA LLC: Voluntary Chapter 11 Case Summary CREDIT SUISSE: S&P Affirms Ratings on 19 Certificate Classes CV THERAPEUTICS: June 30 Balance Sheet Upside-Down by $129 Million DELPHI CORP: Gets Nod to File GM Settlement Exhibits Under Seal DUN & BRADSTREET: June 30 Balance Sheet Upside-Down by $429.6 Mil. DURA AUTOMOTIVE: Disclosure Statement has Adequate Information DURA AUTOMOTIVE: Wants Court Nod on Solicitation Procedures EASTMAN KODAK: S&P Holds B+ Rating and Removes Negative Watch EMERITUS CORP: June 30 Balance Sheet Upside-Down by $111.5 Million FOOT LOCKER: May Be Unable to Comply with Fixed Charge Ratio FOOT LOCKER: S&P Retains BB+ Ratings Under Negative Watch FORD MOTOR: Inks Landmark Agreement with Romanian Government GENERAL MOTORS: Has Until Midnight to Finalize Deal with UAW GERDAU AMERISTEEL: Chaparral's Shareholders Approve Merger Deal GLOBAL CREDIT: S&P Puts BB Rating Under Negative CreditWatch GLOBAL POWER: Disclosure Statement Hearing Set for October 9 GLOBAL POWER: Court Extends Exclusivity Period to September 28 GLOBAL POWER: Court Approves Ninth Omnibus Objection to Claims GREEN EARTH: S&P Withdraws B+ Rating at Sponsor's Request GREGORY DUNCAN: Case Summary & 14 Largest Unsecured Creditors GS MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes HARRAH'S ENTERTAINMENT: Affiliate Purchases Macau Orient Golf HEALTHSPRING INC: S&P Assigns B+ Counterparty Credit Rating HILB ROGAL: Refinancing Plans Prompts S&P to Affirm BB Rating HOLOGIC INC: High Leverage Cues S&P's BB- Corporate Credit Rating HUDSON MEZZANINE: Moody's Downgrades Ratings on Three Notes HUMBERTO GONZALES: Case Summary & 16 Largest Unsecured Creditors INDEPENDENCE VII: Moody's Reviews Ba1 Rating and May Downgrade INSIGHT COMMS: Posts $8.1 Mil. Net Loss in Qtr. Ended June 30 INNOVATIVE COMM: Stan Springel Appointed as Chapter 11 Trustee INTERNATIONAL RECTIFIER: Delays Filing of Annual Financial Report INTERNATIONAL RECTIFIER: S&P Retains Negative Watch on BB Rating INTERSTATE BAKERIES: Seeks Court Nod on Exclusivity Extension IWT TESORO: Wants Approval on Rader & Coleman as Special Counsel IWT TESORO: Selects Focus Management as Financial Advisor JETBLUE AIRWAYS: COO Russ Chew Appointed as President JHT HOLDINGS: Weak Performance Prompts S&P's Negative Watch JORDAN INDUSTRIES: S&P Withdraws Ratings at Company's Request KARA HOMES: Wants Court to Approve Peter Costanzo as Auctioneer KARA HOMES: Maplewood Homebuilders Takes Care of 12 Properties LEAP WIRELESS: James D. Dondero Resigns from Board of Directors LENNOX INTERNATIONAL: Completes Stock Exchange Deal with AOC MAC-GRAY CORP: S&P Lowers Corporate Credit Rating to BB- from BB MADISON SQUARE: Credit Support Level Cues S&P to Hold Ratings MARCAL PAPER: Disclosure Statement Hearing Deferred to Oct. 26 MARCAL PAPER: Court OKs Exit Financing Pact with Merrill Lynch MERRILL LYNCH: Fitch Cuts Ratings on Three Certificate Classes ML-CFC: Fitch Puts Low-B Ratings on Six Certificate Classes MORGAN STANLEY: Credit Enhancement Cues S&P to Affirm Ratings MOUNTAIN LAKE: Competitive Market Cues S&P's B+ Credit Rating MWAM CBO: Fitch Junks Rating on $21.8 Million Class B Notes NEW MOUNTAIN: Moody's Rates $235 Million Senior Loan at B1 NORCAL WASTE: S&P Withdraws BB- Rating at Company's Request OGLEBAY NORTON: Harbinger Prepared to Enter into Definitive Pact PACER HEALTH: June 30 Balance Sheet Upside-Down by $7.4 Million PACIFIC LUMBER: Has No Cause to Extend Exclusivity, BoNY Says PACIFIC LUMBER: Committee Wants Exclusivity Extension Plea Denied PACIFIC LUMBER: Revises Exclusivity Extension Plea PATRICIA PASCO: Voluntary Chapter 11 Case Summary PEADEN GRILL: Case Summary & 26 Largest Unsecured Creditors POLYONE CORP: Posts $5.4 Million Net Loss in Quarter Ended June 30 QUANTA SERVICES: InfraSource Buy Cues Moody's to Up Rating to Ba3 REDDY ICE: Earns $20.25 Million from Clod Storage Business Sale REGENCY GAS: Good Credit Implications Cue S&P to Lift Rating RESPONSE BIOMEDICAL: Names S. Wayne Kay as Chief Exec. Officer SANDY CREEK: S&P Rates $1 Billion Sr. Credit Facilities at BB- SEA CONTAINERS: Wants Exclusive Period Extended to December 21 SECURITIZED ASSET: Fitch Places BB+ Rating on Negative Watch SENTINEL MANAGEMENT: Trustee Wants Jenner & Block as Counsels SENTINEL MANAGEMENT: Gets Dec. 17 Extension to File Plan SHERWOOD III: Moody's Cuts Rating on $7 Mil. Class C Notes to Ba3 SINCLAIR BROADCAST: Paying $0.15/Share Dividend on October 12 SPHERIS INC: Secures $95 Million Senior Credit Facilities STATIC RESIDENTIAL: Moody's Cuts Rating on Class D Notes to Ba3 SUN MICROSYSTEMS: Inks Deal to Acquire Majority of Cluster File TCO FUNDING: Moody's Affirms Ba3 Ratings on $264 Million Loans TRACY ARNOLD: Case Summary & 17 Largest Unsecured Creditors TRICHE HAULING: Case Summary & 20 Largest Unsecured Creditors TUPPERWARE BRANDS: S&P Affirms BB Corporate Credit Rating US ONCOLOGY: Revenue Pressure Cues Moody's to Cut Rating to B2 VOLT INFORMATION: Net Income Up 9% in Quarter Ended July 29 WCI COMMUNITIES: S&P Holds Junk Ratings and Removes Negative Watch WERNER LADDER: Committee Wants D&O Medical Benefit Funding Stopped WERNER LADDER: Insurance Recipients Want Panel's Motion Modified * Fitch Puts Tobacco Settlement Bonds' Ratings Under Watch * Moody's Takes Ratings Actions on Portfolio Credit Default Swap * S&P Places 48 US CDO Tranche Ratings Under Negative Watch * Buccino Just For Feet Testimony Results in $41.5 Mil. Payments * Chadbourne & Parke Files Pro Bono Suit to Up Judicial Salaries * Prof. Joost Pauwelyn Joins King & Spalding as Senior Advisor * BOOK REVIEW: Investing in Junk Bonds: Inside the High Yield Debt Market ********* ADELPHIA COMMS: Distributes to Holders of Allowed Claims -------------------------------------------------------- Adelphia Communications Corporation provided a chart that summarizes the distributions of cash and shares of TWC Class A Common Stock to holders of allowed claims under the Plan made through Aug. 31, 2007. The chart is based on the assumption that distributions made to Indenture Trustees for the benefit of the underlying noteholders will be distributed in their entirety to the noteholders and will not be subject to holdback or reduction with respect to any claims of the applicable Indenture Trustee. The chart does not reflect additional distributions that may be made after Aug. 31, 2007 as a result of the release of escrows, reserves and holdbacks. The amount and timing of additional distributions resulting from the release of the escrows, reserves and holdbacks are subject to the terms and conditions of the First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of Adelphia Communications Corporation and Certain Affiliated Debtors, dated as of Jan. 3, 2007, and numerous other conditions and uncertainties, many of which are outside the control of Adelphia Communications Corporation and its subsidiaries. A full-text copy of the chart is available for free at: http://ResearchArchives.com/t/s?2354 Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Court confirmed the Debtors' First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Feb. 13, 2007. ALERIS INTERNATIONAL: Completes Wabash Alloys Buyout from Connell ----------------------------------------------------------------- Aleris International Inc. has completed its purchase of Wabash Alloys from Connell Limited Partnership. "The combination of Wabash Alloys and our specification alloy business unit will create an organization well positioned to serve the needs of a broad customer base with enhanced processing capabilities," Steve Demetriou, chairman and chief executive officer stated. As reported in the Troubled Company Reporter on July 10, 2007, Aleris International has entered into a definitive agreement to acquire Wabash Alloys from Connell Limited for approximately $194 million, with certain adjustments for working capital and other items. About Wabash Alloys Headquartered in Wabash, Indiana Wabash Alloys -- http://www.wabashalloys.com/-- uses aluminum scrap to produce aluminum casting alloys and molten aluminum. The company's products are used by customers in the die casting, sand casting, and steel producing industries. Wabash Alloys maintains eight facilities, located in the US, Canada, and Mexico. The company was founded in 1958 and is owned by Connell Limited Partnership. About Aleris Headquartered in Beachwood, Ohio, Aleris International Inc. (NYSE: ARS) -- http://www.aleris.com/-- manufactures aluminum rolled products and extrusions, aluminum recycling and specification alloy production. The company is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. The company operates 55 production facilities in North America, Europe, South America and Asia, and employs approximately 9,200 employees. * * * Standard & Poor's assigned Aleris International Inc. a B+ senior secured first-lien term loan rating with a '2' recovery rating. AMERICAN HOME: Delaware Court Approves Pact with Fannie Mae ----------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware has approved a stipulation inked by American Home Mortgage Investment Corp. and its debtor-affiliates with Fannie Mae that will allow American Home to continue servicing a portfolio of $5,200,000,000 in government-backed mortgage loans pending the sale of its servicing business. On July 31, 2007, Fannie Mae notified American Home that it was terminating Melville-New York based company's servicing rights as a result of breaches of their servicing deal related to American Home's declining financial condition. On August 6, American Home and its affiliates sought Chapter 11 protection, seeking to sell their servicing business as well as certain mortgage loans and mortgage-backed residual interests in securitization trusts under a bankruptcy court-supervised bidding and auction. The Debtors told the Delaware Court they expect to obtain the maximum return from the sale of their servicing business if they continue to service 36,700 loans under the Fannie Mae Portfolio, and subsequently sell their servicing rights to the highest bidder. The servicing rights under the Fannie Mae portfolio represent approximately 10% in unpaid principal balance, and 15% in loan value, of the loans serviced by the AHM and its debtor- subsidiaries' servicing business. Under the parties' stipulation, Fannie Mae has agreed to allow the Debtors to retain their servicing rights, pending the sale of their servicing business. The Debtors, however, are required to to close the sale by October 31, 2007, and gather bids for by September 18, and (ii) sign a binding agreement for the sale of servicing rights with a Fannie Mae-approved servicer on or before October 1 . In an event of default under the stipulation, Fannie Mae will receive from AHM $3,250,000 on top of all amounts due under the their servicing deal, and will designate Bank of America as interim servicer effective November 1, 2007. 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. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. 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. 6, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERIQUEST MORTGAGE: S&P Lowers Ratings on 25 Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 13 classes of asset-backed pass-through certificates from eight Ameriquest Mortgage Securities Inc. transactions. In addition, S&P lowered its ratings on 12 other classes from nine series and removed them from CreditWatch with negative implications. Lastly, S&P affirmed its ratings on 27 classes from 10 series. The downgrades reflect the adverse performance of the collateral pools. Monthly net losses have significantly outpaced monthly excess interest, resulting in the erosion of overcollateralization and subordination. In fact, O/C has been reduced to zero for three of the 10 transactions (series 2002-C, 2003-1, and 2003-2), resulting in the default of the lowest rated class in each of these series. As of the Aug. 25, 2007, distribution date, total delinquencies ranged from 15.91% (series 2003-7) to 31.57% (series 2002-AR1) of the current pool balances. Cumulative realized losses ranged from 1.18% (series 2004-R2) to 2.35% (series 2002-C) of the original pool balances. Six of the 10 transactions had outstanding pool balances of less than 10%, while the other four had outstanding pool balances of less than 22%. The affirmed ratings reflect adequate actual and projected credit support provided by subordination. The collateral for these deals consists of 30-year, fixed- and adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-C M-2 D CCC 2003-1 M-2 BBB A+ 2003-1 M-4 D CCC 2003-2 M-4 D CCC 2003-6 M-5 B BBB 2003-7 M-4 BB A- 2003-AR2 M-2 BBB AA- 2004-R2 M-7 BB+ BBB+ 2004-R2 M-8 B BBB 2004-R4 M-3 BBB- A- 2004-R4 M-4 B BBB+ 2004-R4 M-5 B- BBB 2004-R4 M-6 CCC BBB- Ratings Lowered and Removed from CreditWatch Negative Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-AR1 M-3 BBB A/Watch Neg 2002-AR1 M-4 BBB- A-/Watch Neg 2002-4 M-4 CCC BB/Watch Neg 2003-1 MF-3, MV-3 CCC B/Watch Neg 2003-2 M-2 BB A/Watch Neg 2003-2 M-3 CCC B/Watch Neg 2003-6 M-6 CCC B/Watch Neg 2003-7 M-5 CCC BB-/Watch Neg 2003-AR2 M-3 CCC BBB/Watch Neg 2004-R2 M-9 CCC BBB-/Watch Neg 2004-R4 M-7 CCC B/Watch Neg Ratings Affirmed Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2002-AR1 M-1, M-2 AAA 2002-C M-1 BBB 2002-4 M-2 AA- 2002-4 M-3 BBB 2003-1 M-1 AA+ 2003-2 M-1 AA+ 2003-6 M-1 AA 2003-6 M-2 A 2003-6 M-3 A- 2003-6 M-4 BBB+ 2003-7 A, M-1 AAA 2003-7 M-2 AA+ 2003-7 M-3 A+ 2003-AR2 M-1 AAA 2004-R2 A-1A, A-1B, A-4 AAA 2004-R2 M-1 AA+ 2004-R2 M-2 AA 2004-R2 M-3 AA- 2004-R2 M-4 A+ 2004-R2 M-5 A 2004-R2 M-6 A- 2004-R4 M-1 AA 2004-R4 M-2 A ARCADIA RESOURCES: Resolves Licensure Issues with Medicare ---------------------------------------------------------- Arcadia Resources Inc. disclosed on Tuesday that it has received notification from the Centers for Medicare and Medicaid Services confirming the correction of the issuance date for one of the company's supplier numbers. As a result, the company will bill and expects to receive Medicare reimbursement for certain durable medical and respiratory equipment and services previously thought to be uncollectible due to this licensure issue. The notification specifically relates to goods sold and services provided subsequent to the Alliance Oxygen and Medical Equipment acquisition in July 2006. In total, the company has established reserves of approximately $1.3 million due to these Florida licensure issues. "These anticipated Medicare payments will improve our liquidity and financial position in the short-term. We expect this will provide between $700,000 and $800,000 in additional EBITDA and cash flow for the company and will help us move towards our stated commitment of being EBITDA and cash flow positive beginning in October 2007, our fiscal 2008 third quarter," said Marvin Richardson, chief executive officer. Arcadia Resources says that the post-acquisition licensure and credentialing process for durable medical equipment operations is time consuming and has resulted in delays in billing and collections. In some instances, the claims were initially denied, requiring the company to establish significant reserves following the acquisitions. "We are encouraged that a portion of the fully reserved receivables related to similar DME licensure issues from other business acquisitions may ultimately be collected. Further, this positive news will be one of the considerations in determining the adequacy of our accounts receivable reserves going forward," concluded Mr. Richardson. About Arcadia Resources Headquartered in Southfield, Mich. Arcadia Resources, Inc. (AMEX: KAD) -- http://www.arcadiaresourcesinc.com/-- is a national provider of alternate site healthcare services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing. Through industry partnerships, the company is also establishing walk-in routine (non-emergency) medical clinics inside of retail stores. The company reported net revenues of $42.2 million for the fiscal first quarter ended March 31, 2007. EBITDA loss for the fiscal first quarter of 2008 was $2.2 million, of which $1.8 million was attributable to the company's clinic business. * * * As reported in the Troubled Company Reporter on July 4, 2007, BDO Seidman LLP, in Troy, Michigan, expressed substantial doubt about Arcadia Resources Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations. AVADO BRANDS: Wants Until Nov. 5 to File Schedules and Statements ----------------------------------------------------------------- Avado Brands, Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend their deadline to file their schedules of assets and liabilities and statements of financial through Nov. 5, 2007. The Debtors relate that they haven't had sufficient time to collect and assemble all of the requisite financial data and other information needed to prepare all of the schedules and statements required by the Bankruptcy Rules. The Debtors further relate to the Court that they have already begun to work diligently on the documents. However, the Debtors believe that they will need at least 60 days, instead of the 15 days provided in the Bankruptcy Code, to complete the filing. About Avado Brands Madison, Georgia-based Avado Brands, Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). Deborah D. Williamson, Esq., and Thomas Rice, Esq., at Cox & Smith Incorporated, represented the Debtors. On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Klee, Tuchin, Bogdanoff & Stern LLP represents the Debtors in their latest restructuring efforts. Donald J. Detweiler, Esq. and Sandra G.M. Selzer, Esq. at Greenberg Traurig, LLP serves as the Debtors' local counsel. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. AVADO BRANDS: Gets Interim Nod to Access $24 Million DDJ Financing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave Avado Brands, Inc. and its debtor-affiliates interim approval to obtain debtor-in-possession financing in the amount of $24 million from DDJ Capital Management, LLC. The Debtors tell the Court that that they need the funds in order to continue the operation of their businesses. The Debtors add that the use of cash collateral alone is not sufficient to meet the Debtors' immediate post-petition liquidity needs. And besides, the Debtors are prohibited to use pre-petition cash collateral. The Debtors also relate to the Court that they were unable to obtain funds from other sources in more terms favorable than those offered by DDJ. The Debtors assure the Court that the DIP financing is essential to their businesses and the preservation of their assets and properties, and is in the best interest of the Debtors, their estates and creditors. DIP Liens Senior to Pre-Petition Liens The Debtors disclose that pursuant to a credit agreement dated May 19, 2005, among the Debtors and their subsidiaries, borrowers, DDJ Capital, agent and certain lenders, the pre-petition lenders provided loans to the Debtors. As of the bankruptcy filing, the Debtors disclose that they owe the pre-petition lenders an amount not less than $47 million. As collateral to their pre-petition obligations, the Debtors granted the pre-petition agent a line on substantially all of the Debtors' assets. However the pre-petition agent and lenders, the Debtors further relate, have consented that DIP liens will be granted priority over the pre-petition liens. The Court has set a final hearing on the Debtors' request to access DDJ Capital's DIP financing on Sept. 26, 2007, at 10:30 a.m. About Avado Brands Madison, Georgia-based Avado Brands, Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). Deborah D. Williamson, Esq., and Thomas Rice, Esq., at Cox & Smith Incorporated, represented the Debtors. On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Klee, Tuchin, Bogdanoff & Stern LLP represents the Debtors in their latest restructuring efforts. Donald J. Detweiler, Esq. and Sandra G.M. Selzer, Esq. at Greenberg Traurig, LLP serves as the Debtors' local counsel. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. AYISHA BENHAM: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Ayisha Benham 3801 Painted Pony Road Richmond, CA 94803 Bankruptcy Case No.: 07-42959 Chapter 11 Petition Date: September 13, 2007 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Marc Voisenat, Esq. Law Offices of Marc Voisenat 1330 Broadway, Suite 1035 Oakland, CA 94612 Tel: (510) 272-9710 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Capital One $600 P.O. Box 85520 Richmond, VA 23285 BASELINE GAS: High Leverage Prompts Moody's to Junk Rating ---------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Baseline Oil & Gas Corp. Moody's assigned a Caa2 Corporate Family Rating and Probability of Default Rating to Baseline, and a Caa1 rating (LGD 3, 41%) to its proposed $110 million of senior secured notes due 2012. Proceeds from the senior secured notes offering, combined with a proposed offering of $50 million of senior subordinated convertible notes due 2013 (not rated), will be used to fund the acquisition of certain properties from DSX Energy Limited, LLP and retire approximately $33 million of existing indebtedness. Moody's also assigned speculative grade liquidity rating of SGL-3 to Baseline. The rating outlook is stable. Pete Speer, Moody's Vice-President/Senior Analyst commented, "Baseline's Caa2 corporate family rating reflects its very high leverage on a small reserve base that is concentrated in two Texas fields. There is also substantial uncertainty regarding company's future operating cost structure and capital productivity given its limited operating history, having commenced operations in April 2007 following the acquisition of its North Texas properties." The stable outlook is based on an expectation of generally supportive commodity prices (particularly for oil) for the remainder of 2007 and that Baseline will achieve its near term production growth targets and meet its forecasts for unit operating costs. Baseline's forecasts for free cash flow are relatively modest in comparison to its debt levels over the near to medium term, so there is limited opportunity for meaningful de- leveraging or positive ratings momentum in the near term. Pro forma for the DSX acquisition, Baseline will have approximately 11 million boe of total proved reserves, 4 million boe of proved developed producing (PDP) reserves, and current daily net production of 1,900 boe per day. This reserve and production scale is the smallest of all E&P companies rated by Moody's and is concentrated in the Eliasville Field of North Texas and the Blessing Field along the Texas Gulf Coast, providing low diversification. The $160 million of debt equates to over $24/boe of proved developed reserves and $39/boe of PDP reserves, which are among the highest levels of all rated E&P's. Based on pro forma production for the six months ended June 30, 2007, pro forma interest expense per boe would be approximately $28/boe. Even if Baseline achieves the increased 2008 production levels included in its proved reserve reports, the interest burden would be in excess of $20/boe for 2008. Approximately $9/boe for pro forma June 2007 and $7/boe of forecasted 2008 interest expense relate to the senior subordinated convertible notes which could be paid-in-kind. This would reduce the cash burden but only defer the payment until the subordinated notes maturity date, unless the notes are converted into equity. Lending support to the rating is the relative balance of Baseline's proved reserves between oil and gas. In the near term, oil will account for over 45% of production which should help overall price realizations for the remainder of 2007. However, the company's gas production is expected to grow faster than its oil production, reducing oil to around 40% of production in 2008. The company also has good visibility into near to medium term production growth through the conversion of PDNP and PUDs to producing reserves. While much of this activity will be relatively low risk recompletions, the company will still need to execute with the drillbit in developing its PUD locations. Baseline acquired the North Texas properties for $28.6 million and is acquiring the DSX properties for $100 million. The DSX purchase price amounts to approximately $54,000 per barrel of daily production and $19/boe including future development costs, which is in line with recent transactions but high by historical standards. Baseline paid approximately $53,000 per barrel of daily production for the North Texas properties and $8.60/boe including future development costs. This acquisition price per boe appears low but this pricing reflects the Elias field's high operating cost structure and 23 year reserve life. Operating costs for the Elias field were $29/boe in the second quarter of 2007 due to its ongoing waterflood operations. The SGL-3 rating reflects adequate liquidity. Baseline currently forecasts capital spending to be within operating cash flow and plans to employ hedging to mitigate its commodity price exposure. Even with its sales prices hedged, the company is exposed to oilfield service cost inflation and operational issues that could result in its operating costs coming in significantly higher than forecasted. Also, Moody's believes that the company's planned capital spending levels may not be sufficiently productive to adequately replace its reserves and achieve its production growth targets, which could lead to higher capital spending. These uncertainties combined with working capital fluctuations may result in operating cash flow shortfalls that will require Baseline to use its cash balances (estimated to be $16 million at closing) and $20 million senior secured revolving credit facility. Other sources of cash are limited since Baseline's assets are fully encumbered. Baseline's high leverage and tight liquidity necessitates a high level of hedging which requires strong controls over these activities and magnifies the company's production interruption risks. Although its operations are currently all onshore, the DSX properties account for over 70% of current production and are located on the Texas Gulf Coast and therefore vulnerable to hurricanes. Pursuant to the terms of an inter-creditor agreement, the $110 million senior secured notes are contractually subordinated to the $20 million senior secured revolver. Even with this second lien status, the senior secured notes are notched up from the CFR under Moody's LGD methodology due to the relative size of the senior subordinated convertible notes. However, the senior secured carve-out does allow the revolver to increase with increases in PV-10. A relatively small increase in the size of the revolver could result in a downgrade of the senior secured notes under Moody's LGD methodology. Baseline Oil & Gas Corp. is an independent exploration and production company based in Houston, Texas. BEAR STERNS: Fitch Junks Ratings on Two Certificate Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on these classes from Bear Stearns Asset Backed Securities Trust, series 2005-1: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded to 'BBB-' from 'A'; -- Class M3 downgraded to 'BB' from 'A-'; -- Class M4 downgraded to 'BB-' from 'BBB+'; -- Class M5 downgraded to 'B' from 'BBB'; -- Class M6 downgraded to 'CC' from 'BBB-', and assigned a Distressed Recovery (DR) rating of 'DR2'. -- Class M7 downgraded to 'CC' from 'B+'; and assigned DR rating of 'DR3'. The mortgage pool consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. At origination, approximately 13.68% of the loans may be subject to special rules, disclosure requirements and other provisions that were added to the federal Truth-in- Lending Act by the Home Ownership and Equity Protection Act (HOEPA) of 1994. The affirmations reflect adequate relationships of credit enhancement (CE) to future loss expectations and affect approximately $72.6 million of outstanding certificates. The downgraded classes reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $43.2 million of outstanding certificates. For the past year, the overcollateralization (OC) has been below the target amount due to losses exceeding excess spread. The decline of the OC has put negative pressure on the most subordinate bonds. As of the July 2007 remittance period, the 60+ delinquency (inclusive of foreclosures and REO) was 23.42% and the cumulative loss to date is 2.78%. EMC Mortgage Corporation., rated 'RPS1' by Fitch, is the servicer for the above loans. Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. BPO MANAGEMENT: Posts $1.3 Million Net Loss in Qtr. Ended June 30 ----------------------------------------------------------------- BPO Management Services Inc. incurred a net loss of $1.3 million in the three months ended June 30, 2007, an increase from the $597,076 net loss reported in the same period last year. This loss includes approximately $300,000 in non-cash charges related to the issue of bridge loan warrants, management stock options and balance sheet amortization/depreciation expense items. In addition, the company experienced higher than normal SG&A expenses associated with business integration activities related to recently acquired business units and professional service expenses associated with new acquisition activity. Second quarter total revenue for the three months ended June 30, 2007 was $2.4 million, up 86% compared to total revenue of $1.3 million for the three months ended June 30, 2006. Enterprise Content Management experienced continued growth and new contract wins. Net revenue from ECM products and services during the three months ended June 30, 2007,increased 86% to $1.4 million compared to $727,952 during the three months ended June 30, 2006. In addition, the company completed the acquisition of DocuCom on June 21, 2007. This acquisition adds the DocuCom data and document management solutions capability, with its long-term Canada-based customer relationships, and enhances the company's ability to offer high quality, cost-effective service utilizing its near shore delivery model to its US customers. The company also completed the acquisition of Human Resource Micro Systems, which took place on June 29, 2007. The HRMS product delivers customizable software solutions for domestic and global mid-market organizations seeking to optimize their human resources service delivery and is being integrated with the company's existing HRO operations based in San Francisco, California in order to broaden the company's HRO offering to its customers. IT Infrastructure and Outsourcing also saw continued growth and new contract wins. Net revenue from ITO during the three months ended June 30, 2007, increased by 134% to $1.0 million compared to $428,483 during the three months ended June 30, 2006. The company closed the quarter with $5.3 million in cash and cash equivalents. "We achieved a number of key milestones this quarter, including strong growth in both our ECM and ITO business segments, which contributed to overall strong growth in revenue," commented Patrick Dolan, chief executive officer. "Consistent with our growth plan, we completed a capital raise that enabled us to complete our previously announced acquisitions, DocuCom and HRMS, allowing us to continue to build out our full-service BPO capability. These acquisitions strategically expanded both our service offerings as well as our geographic footprint in North America, and added a number of key customers in these markets. By consolidating the best technologies and business processes in what is currently a very fragmented marketplace, we continue to position ourselves to become the leading provider of end-to-end back office outsourcing solutions for middle market enterprises." "Our long-term strategy is to offer a comprehensive suite of end- to-end back office outsourcing services that are uniquely designed to solve the needs of the middle market enterprise, a market that is fragmented and too small to be adequately served by Tier 1 providers. We completed a number of acquisitions over the past two years and will continue to selectively pursue strategic acquisitions to maximize cross-selling opportunities and better penetrate the middle market," Dolan continued. "Going forward, we will continue to focus on managing daily operations and executing against our business plan, which we believe will ultimately maximize shareholder value," Dolan continued. Net cash provided by financing activities during the first six months of 2007 was $13.3 million of which $12.4 million came from the net proceeds from the sale of $14.0 million of preferred shares. In the first six months of fiscal 2007, the company received $400,000 in cash proceeds from bridge loans and repaid bank debt in the amount of $179,483. The bridge loan was provided by Mr. Dolan, the company's chief executive officer and the company issued a warrant to purchase 133,333 shares of common stock pursuant to the bridge loan agreement. The company has funded its operations primarily from the private placement of shares of its common stock and preferred stock and through the founders bridge loan facility established in August 2006. At June 30, 2007, the company had total contractual obligations of approximately $5.3 million. Approximately $4.1 million of this total will mature in the next 12 months. The company's consolidated balance sheet at June 30, 2007, showed $22.2 million in total assets, $9.6 million in total liabilities, and $12.6 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?2348 Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2007, Kelly & Company, in Costa Mesa, Calif., expressed substantial doubt about BPO Management Services Inc. fka netGuru 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 net losses for the year ended Dec. 31, 2006. The firm also noted the company's reliance upon private equity funding to fund its operating capital requirements. About BPO Management Headquartered in Anaheim Hills, Calif., BPO Management Services Inc. (OTC BB: BPOM.OB) -- http://www.bpoms.com/-- is a business process outsourcing service provider that offers a diversified range of on-demand services, including human resources, information technology, enterprise content management, and finance and accounting, to support the back-office functions of middle- market enterprises on an outsourced basis. C-BASS: Fitch Junks Rating on 2003-RP1 Class B-2 Certificates ------------------------------------------------------------- Fitch Ratings has taken rating actions on these classes from C-BASS Mortgage Loan asset-backed certificates, series 2003-RP1: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class B-1 downgraded to 'BB' from 'BBB'; -- Class B-2 downgraded to 'CCC' from 'BB', and assigned a Distressed Recovery (DR) rating of 'DR2'. The trust consists primarily of one-to-four family, adjusted-rate and fixed-rate mortgage loans, FHA insured and VA guaranteed mortgage loans, manufacturing housing installment contracts or installment loan agreements secured by first liens, second liens, or third liens on residential real properties. The mortgage loans include loans which had defaulted in the past and are re- performing or are performing under the provisions of a bankruptcy plan or a forbearance plan, or loans which are performing under the terms of the related original notes or such notes as modified The affirmations reflect adequate relationships of credit enhancement (CE) to future loss expectations and affect approximately $53.8 million of outstanding certificates. The downgraded classes reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $3.3 million of outstanding certificates. For the past year, the overcollateralization has been below the target amount due to losses exceeding excess spread. The decline of the OC has put negative pressure on the most subordinate bonds. As of the July 2007 remittance period, the 60+ delinquency (inclusive of foreclosures and REO) was 40.26% and the cumulative loss to date is 9.84%. C-BASS ABS, LLC deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. Litton Loan Servicing LP, rated 'RSS1/Rating Watch Negative' acts as servicer for this transaction. C-BASS: Fitch Downgrades Ratings on $3.2 Million Certificates ------------------------------------------------------------- Fitch Ratings has taken these rating actions on C-BASS mortgage pass-through certificates. Affirmations total $59.8 million and downgrades total $3.2 million. Break Loss percentages and Loss Coverage Ratios for each class are included with these rating actions: * C-BASS 2005-RP1 -- $34.9 million classes AF-1A, AF-1B, AF-2, AF-3, AV affirmed at 'AAA' (BL: 49.39, LCR: 3.75) -- $10.1 million class M1 affirmed at 'AA' (BL: 41.08, LCR: 3.12) -- $6.5 million class M2 affirmed at 'A' (BL: 30.89, LCR: 2.35) -- $4.7 million class M3 affirmed at 'A-' (BL: 23.53, LCR: 1.79) -- $3.6 million class B-1 affirmed at 'BBB+' (BL: 17.99, LCR: 1.37) -- $3.2 million class B-2 downgraded to 'BB' from 'BBB' (BL: 12.97, LCR: 0.99) Deal Summary -- Originators: Various Originators; -- 60+ day Delinquency: 41.78%; -- Realized Losses to date (% of Original Balance): 2.81%; -- Expected Remaining Losses (% of Current Balance): 13.16%; -- Cumulative Expected Losses (% of Original Balance): 8.81%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness. CALPINE CORPORATION: Inks Pact Allowing $54.5 Million in Claims --------------------------------------------------------------- Calpine Corporation and its debtor-affiliates have reached an agreement in principle with an ad hoc group of holders of the 7.875% Senior Notes due 2008, 7.75% Senior Notes due 2009, 8.625% Senior Notes due 2010, and 8.5% Senior Notes due 2011 and the indenture trustee for unsecured notes, the company said in a statement. The Agreement, subject to definitive documentation and approval of the U.S. Bankruptcy Court for the Southern District of New York, provides that approximately $109,000,000 of claims for make-whole premiums asserted by the Calpine Unsecured Noteholders and disputed by the Debtors have been compromised and settled and will be allowed as unsecured claims against Calpine in an aggregate amount of $54,500,000. Calpine disclosed in its company statement that the allowed unsecured claims will be allocated as: -- $700,000 for 7.875% Senior Notes due 2008, -- $2,950,000 for 7.75% Senior Notes due 2009, -- $18,250,000 for 8.625% Senior Notes due 2010, and -- $32,450,000 for 8.5% Senior Notes due 2011. The Debtors have agreed to pay the reasonable professional fees incurred by the Calpine Unsecured Noteholders and the Indenture Trustee. The Debtors will seek approval of the Agreement from the Court on October 10, 2007. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement has been reset to Sept. 25. (Calpine Bankruptcy News, Issue No. 60 Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Completes Sale of 50% Acadia Plant Stake to Cajun --------------------------------------------------------------- Cleco Midstream Resources, a subsidiary of Cleco Corp., disclosed the completed sale of Calpine Corp.'s interest in Acadia Power Partners to Cajun Gas Energy, L.L.C., a subsidiary of investment funds managed by King Street Capital Management, L.L.C. With a bid of $189 million, Cajun was the successful bidder in a July 30 bankruptcy auction for Calpine's 50% ownership in Acadia. The claims settlement reached between Cleco and Calpine back in April included the sale of Calpine's interest in Acadia. It also resolved all of Cleco's issues related to Calpine's bankruptcy, including Calpine's default on tolling agreements it had for Acadia's output. As part of the Cajun purchase, Cleco received an $85 million priority distribution payment. The Federal Energy Regulatory Commission approved the sale making Cleco and Cajun co-owners of the 1,160-megawatt, natural gas-fired power plant located near Eunice, Louisiana. Cleco is going to manage and operate the plant. "I am very pleased with the full outcome of the Acadia settlement," Mike Madison, Cleco president and CEO, said. "Despite the downturn in the wholesale generation business, we preserved our stake in Acadia by carefully managing our risks. As a result, we now have an opportunity to work with Cajun and maximize the value of the Acadia asset." "Cajun's bid for Calpine's half of the plant reaffirms that Acadia is indeed a valuable asset and a good investment," Darren Olagues, senior vice president of Cleco Midstream Resources, said. "We're eager to begin working with Cajun to start developing a common strategy for Acadia." Cleco Corp. -- http://www.cleco.com/-- is a regional energy company headquartered in Pineville, Louisiana. It operates a regulated electric utility company that serves 268,000 customers across Louisiana. Cleco also operates a wholesale energy business with approximately 1,350 megawatts of generating capacity. Cajun Gas Energy, L.L.C. is a subsidiary of investment funds managed by King Street Capital Management, L.L.C. About Calpine Corp. Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement has been reset to Sept. 25. CHAPARRAL STEEL: Stockholders Give Nod on Gerdau Ameristeel Merger ----------------------------------------------------------------- Chaparral Steel Company's stockholders, at a special meeting held in Dallas, Texas on September 12, adopted the merger agreement under which Chaparral is to be acquired by Gerdau Ameristeel Corporation. Approximately 99.7% of the shares voted were cast in favor of the merger. The number of shares voted in favor of the merger represented approximately 75% of the total shares outstanding and entitled to vote at the meeting. "We are pleased to announce that our stockholders have approved the proposed merger with Gerdau Ameristeel," Tommy Valenta, president and CEO of Chaparral Steel, commented. "I am excited because this was a decision made by our stockholders and they voted overwhelmingly in favor of the transaction. Our stockholders clearly share our belief that the merger creates significant value and a bright future for the company and for the exceptional people who have participated in our success." Chaparral expects the merger to be consummated today, Sept. 14, 2007. About Gerdau Ameristeel Corporation Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA.TO) -- http://www.ameristeel.com/-- is a mini-mill steel producer in North America. Through its vertically integrated network of 17 mini-mills, 17 scrap recycling facilities and 52 downstream operations, Gerdau Ameristeel serves customers throughout North America. The company's products are sold to steel service centers, steel fabricators, or directly to original equipment manufactures for use in a variety of industries, including construction, cellular and electrical transmission, automotive, mining and equipment manufacturing. About Chaparral Steel Company Headquartered in Midlothian, Texas, Chaparral Steel Company (Nasdaq: CHAP)-- http://www.chaparralsteel.com/-- is a producer of structural steel products in North America. The company is also a producer of steel bar products. The company operates two mini-mills located in Midlothian, Texas and Dinwiddie County, Virginia that together have an annual rated production capacity of 2.8 million tons of steel. Founded in July 1973, the company manufactures over 230 different types, sizes and grades of structural steel and bar products. The company markets its products throughout the United States, Canada and Mexico, and to a limited extent in Europe. * * * Mood'y Investor Services assigned Ba3 on Chaparral Steel Company's probability of default and long term corporate family ratings in July 2007. CHESAPEAKE ENERGY: S&P Holds BB Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on oil and gas exploration and production company Chesapeake Energy Corp. The affirmation completes S&P's review of the company's recently announced 2008-2009 financial plan. The outlook is positive. The salient features of the revised financial plan include: Lower capital spending: Capital expenditures are $1 billion lower in 2008-2009 relative to previous expectations. The sale of certain mature producing assets: In 2008-2009, Chesapeake plans to sell five packages of mature assets, presumably to upstream MLPs or financial buyers, for anticipated proceeds in the $2 billion area. The formation of a privately-held MLP to house the company's midstream gas assets. With annualized cash flow from operations of $100 million, the entity is expected to be valued at over $1 billion. Separately, the company announced that it is shutting in 125 million cubic feet equivalent of net daily production (200 mmcfe on a gross basis), due to low current natural gas price realizations. At the same time, the company confirmed its 2007-08 production growth guidance. Standard & Poor's views Chesapeake's revised financial plan as credit-enhancing. If the company executes the plan as outlined, it could generate nearly $2 billion in excess cash over the next two years that could be used to pay down debt. However, several uncertainties exist, which could hamper positive ratings momentum. Higher-than-expected capital expenditures and more frequent "tack- on" acquisitions remain risks, particularly given the company's track record of aggressive spending. Less robust reserve growth, higher-than-expected operating costs, and lower commodity prices are also concerns, although the company has significantly hedged commodity price risk for the next two years. "The ratings on Chesapeake reflect a leveraged financial profile, an aggressive growth strategy, and participation in the highly cyclical and capital-intensive oil and gas exploration and production sector," said Standard & Poor's credit analyst David Lundberg. "These concerns are partially offset by a large and attractive reserve base with favorable growth prospects, good production visibility, and a competitive cost structure." As of June 30, 2007, Oklahoma City, Okla.-based Chesapeake had $9.4 billion of debt and $2 billion of preferred stock. CII CARBON: Rain Takeover Prompts S&P to Withdraw B+ Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B+' corporate credit and senior secured debt ratings on Kingwood, Texas-based calcined petroleum coke producer CII Carbon LLC. The ratings had been placed on CreditWatch with negative implications on June 6, 2007. The withdrawal followed the completion of unrated Rain Calcining Ltd.'s takeover of CII and the subsequent full repayment of CII's outstanding bank credit facility. CINCINNATI BELL: June 30 Balance Sheet Upside-Down by $744 Million ------------------------------------------------------------------ Cincinnati Bell Inc.'s consolidated balance sheet at June 30, 2007, showed $1.95 billion in total assets and $2.69 billion in total liabilities, resulting in a $744.0 million total shareholders' deficit. The company's consolidated balance sheet at June 30, 2007, also showed $314.0 million in total current assets available to pay $315.9 million in total current liabilities. The company reported net income of $24.2 million in the second quarter ended June 30, 2007, relatively flat compared to the net income of $24.3 million reported in the same period last year. Excluding special items, net income increased 7.0%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) equaled $118.0 million, up $2.0 million, or 2.0% from a year ago. The company reported revenue of $329.0 million for the second quarter of 2007, up 2.0% year-over-year, and operating income of $81.0 million. "By focusing on consistent execution of our strategy, Cincinnati Bell achieved year-over-year and sequential revenue increases in our key growth areas of Wireless, DSL and Data Center and Managed Services. This led to the company's EBITDA growth in the quarter," said Jack Cassidy, president and chief executive officer of Cincinnati Bell Inc. "In addition, we once again maintained our competitive edge in the market with the launch of our converged wireless and Wireless Internet service known as CB Home Run." "Cincinnati Bell delivered another solid quarter," said Brian Ross, chief financial officer. "Revenue and EBITDA increased and we continued to generate strong cash flow to reduce debt. We also continued to invest prudently in data center growth as evidenced by completing and immediately billing new raised floor capacity in the quarter." Quarterly free cash flow was $38.0 million, down $14.0 million from the prior year due primarily to $16.0 million of capital expenditures related to the construction of additional data center capacity. Capital expenditures in the quarter equaled $48.0 million, up $9.0 million from the second quarter of 2006. The company used its free cash flow to reduce debt to approximately $1.96 billion. As of June 30, 2007, the company held $26.7 million in cash and cash equivalents. At June 30, 2007, the company had $246.0 million of availability under the corporate credit facility. The primary uses of cash will be for funding the company's capital expenditures, which is expected to be approximately 19.0% of 2007 revenue and includes approximately 8.0% of revenue in order to construct additional data centers and the 3G network for its wireless business, repayments of debt and related interest, dividends on the 6 3/4% Cumulative Convertible Preferred Stock, and working capital. 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?2349 About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. COBA LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: COBA, LLC dba Famous Sams #49 2423 South Brighton Circle Mesa, AZ 85209 Bankruptcy Case No.: 07-04632 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- B.C. Jacobs, Inc. 07-04631 Chapter 11 Petition Date: September 13, 2007 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtors' Counsel: Dennis J. Wortman, Esq. Dennis J. Wortman, P.C. 202 East Earll Drive, Suite 490 Phoenix, AZ 85012 Tel: (602) 257-0101 Fax: (602) 776-4544 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtors did not file a list of their 20 largest unsecured creditors. CREDIT SUISSE: S&P Affirms Ratings on 19 Certificate Classes ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 19 classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2004-C5. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Aug. 17, 2007, remittance report, the collateral pool consisted of 223 loans with an aggregate trust balance of $1.80 billion, down slightly from 228 loans with a $1.87 billion balance at issuance. Excluding the defeased collateral ($13.5 million, 1%) the master servicer, KeyBank Corp., reported year-end 2006 financial information for slightly less than 100% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.40x, down slightly from 1.43x 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 experienced one loss totaling $32,939. The top 10 loans have an aggregate outstanding balance of $695.6 million (38%) and a weighted average DSC of 1.33x, relatively flat compared with 1.34x at issuance. 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 the fourth-largest loan, Eastgate Mall, remain consistent with a low investment-grade obligation. The Eastgate Mall loan has a whole-loan balance of $62.3 million and a trust balance of $51.3 million. The whole loan consists of an A note that is held in the trust and two B notes totaling $11 million that are held outside of the trust. The loan is secured by 557,191 sq. ft of an 848,981-sq.-ft. regional mall in Cincinnati, Ohio. As of June 30, 2007, occupancy increased to 96%, up from 91% at issuance. Despite the increase in occupancy, Standard & Poor's adjusted net cash flow is 13% below its level at issuance due to a slight decrease in base rent and increased operating expenses. KeyBank reported a watchlist of 33 loans with an aggregate outstanding balance of $174 million (10%). Of the seven loans on the watchlist that exceed $10 million, two are in excess of $15 million and are: -- The Kingwood Lakes Apartments loan ($16.3 million, 1%) is secured by a 390-unit apartment complex in 2003 in Kingwood, Texas, approximately 15 miles northeast of Houston. As of year-end 2006 the DSC was 1.01x and occupancy was 81%. The decline in DSC is due to lower base rent as a result of lower occupancy and increased operating expenses. -- The Sunshine Key loan ($15.9 million, 1%) is secured by a 409-pad manufacturing housing property, built in 1970, in Marathon, Florida. The loan appears on the watchlist due to damage caused by hurricane Wilma. The borrower has notified its insurance carrier of the damage and is pursuing its claims with the carrier. The master servicer is awaiting the damage report. The year-end 2006 DSC was 1.52x and occupancy was 80%. 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 Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2004-C5 Class To Credit enhancement ----- -- ------------------ A-1 AAA 20.73 A-2 AAA 20.73 A-3 AAA 20.73 A-AB AAA 20.73 A-4 AAA 20.73 A-1-A AAA 20.73 AJ AAA 15.16 B AA 11.92 C AA- 11.01 D A 9.20 E A- 7.77 F BBB+ 6.48 G BBB 5.44 H BBB- 4.02 J BB+ 3.76 K BB 3.11 L BB- 2.59 A-X AAA N/A A-SP AAA N/A N/A - Not applicable. CV THERAPEUTICS: June 30 Balance Sheet Upside-Down by $129 Million ------------------------------------------------------------------ CV Therapeutics Inc.'s consolidated balance sheet at June 30, 2007, showed $307.7 million in total assets and $436.7 million in total liabilities, resulting in a $129.0 million total stockholders' deficit. The company reported a net loss of $57.6 million in the three months ended June 30, 2007, a decrease from the $73.1 million net loss reported in the same period last year, mainly due to increased revenues. Excluding the impact of the non-recurring charges, net loss for the quarter was $39.0 million. For the quarter ended June 30, 2007, the company recorded total revenues of $25.4 million which consisted of $15.3 million of net product sales of Ranexa(R) (ranolazine extended-release tablets) and $10.1 million of collaborative research revenue. This compares to total revenues of $6.9 million for the same period in the prior year, which consisted of $1.2 million of net product sales of Ranexa, $4.9 million of collaborative research revenue and $751,000 of co-promotion revenue related to ACEON(R) (perdindopril erbumine) Tablets, which the company ceased co- promoting in the quarter ended Dec. 31, 2006. Costs and expenses were $83.1 million for the quarter ended June 30, 2007, and included $18.6 million of non-recurring charges relating to the company's restructuring plan initiated in May 2007 to lower annual operating expenses through optimization of its field sales organization, enhanced R&D activities and reductions in SG&A spending. Excluding the impact of these non-recurring charges, costs and expenses for the quarter were $64.5 million compared to $80.4 million for the same quarter in 2006 and $71.2 million for the prior quarter ended March 31, 2007. The year-over-year decline was primarily due to lower research and development expenses resulting from lower clinical trial expenses related to the completion of the MERLIN TIMI-36 study of Ranexa and lower marketing expenses due to the end of the ACEON(R) co-promotion arrangement. At June 30, 2007, the company had cash, cash equivalents, marketable securities and restricted cash of approximately $223.7 million. At June 30, 2007, the company had total outstanding contractual obligations of $551.2 million, of which payments of $16.4 million are due in 2007. 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?234f About CV Therapeutics Headquartered in Palo Alto, Calif., CV Therapeutics Inc. (NasdaqGM: CVTX) -- http://www.cvt.com/-- is a biopharmaceutical company focused on applying molecular cardiology to the discovery, development and commercialization of novel, small molecule drugs for the treatment of cardiovascular diseases. CV Therapeutics' approved product, Ranexa(R) (ranolazine extended-release tablets), is indicated for the treatment of chronic angina in patients who have not achieved an adequate response with other antianginal drugs, and should be used in combination with amlodipine, beta- blockers or nitrates. DELPHI CORP: Gets Nod to File GM Settlement Exhibits Under Seal --------------------------------------------------------------- Delphi Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to file certain exhibits to the Master Restructuring Agreement between Delphi Corp. and General Motors Corp. under seal. The MRA Exhibits will remain confidential and will be served on and made available only to: * the U.S. Trustee for the Southern District of New York; * counsel to the Official Committee of Unsecured Creditors; and * other parties agreed to in writing by the Debtors and GM. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, explains that the MRA Exhibits contain detailed descriptions of sensitive business information and trade terms that will, if publicly disclosed, detrimentally affect the competitiveness of the Debtors and GM, as well as the parties' ability to negotiate the terms of future agreements. Specifically, the MRA Exhibits include schedules of certain assets held by certain of the Debtors' business units, financial projections, purchasing and pricing information, information related to new business opportunities and extensions of existing contracts, information relevant to the marketing of certain of the Debtors' non-core assets, and metrics and procedures for calculating various payment amounts provided for in the MRA. After evaluating whether they could effectively redact the MRA Exhibits, the Debtors and GM concluded that redaction was not appropriate because the amount of redaction required would not permit parties-in-interest to conduct a meaningful review of the Exhibits. In addition, redacted versions of the Exhibits could be misleading. As previously reported, the Debtors and GM have determined, in furtherance of the Joint Plan of Reorganization, to settle various disputes and compromise certain claims as provided by two a Global Settlement Agreement and the MRA. The GSA addresses primarily those matters for which the Debtors and GM have agreed upon resolutions that can be implemented in the short term, Mr. Butler relates. Accordingly, most obligations set forth in the GSA are to be performed upon, or as soon as reasonably practicable after, the occurrence of the Effective Date of the Plan. By contrast, resolution of most of the matters addressed in the MRA will require a significantly longer period that will extend for a number of years after confirmation of the Plan, Mr. Butler adds. The Debtors believe the GSA and the MRA will permit them to implement the Plan with material support and broad cooperation from GM, their largest customer. Likewise, the agreements will allow GM to manage the effects of its largest supplier's transformation on GM's supply chain and operations. GM Settlement As reported in the Troubled Company Reporter on Sept. 7, 2007, pursuant to the Debtors' Plan, subject to Court approval as part of the plan confirmation process, Delphi and GM have entered into comprehensive settlement agreements consisting of a Global Settlement Agreement. Most obligations set forth in the GSA are to be performed upon the occurrence of the Effective Date of the Plan or as soon as reasonably possible after. By contrast, resolution of most of the matters addressed in the MRA will require a significantly longer period that will extend for a number of years after confirmation of the Plan. The GSA is intended to resolve outstanding issues among Delphi and GM that have arisen or may arise before Delphi's emergence from Chapter 11, and will be implemented by Delphi and GM in the short term. The GSA addresses, among other things, commitments by Delphi and GM regarding OPEB and pension obligations, other GM contributions with respect to labor matters, releases, and claims treatment. -- GM will make significant contributions to cover costs associated with certain post-retirement benefits for certain of the company's active and retired hourly employees, including health care and life insurance; -- Delphi will freeze its Hourly Pension Plan as soon as possible following the Effective Date, as provided in the union settlement agreements, and GM's Hourly Pension Plan will become responsible for certain future costs related to Delphi's Hourly Pension Plan; -- Delphi will transfer certain assets and liabilities of its Hourly Pension Plan to the GM Hourly Pension Plan, as set forth in the union term sheets; -- Shortly after the effective date, GM will receive an interest bearing note from Delphi in the amount of $1.5 billion to be paid within 10 days of its issuance; -- GM will make significant contributions to Delphi to fund various special attrition programs, consistent with the provisions of the union Memorandum of Understanding; -- GM and certain related parties and Delphi and certain related parties will exchange broad, global releases (which will not apply to certain surviving claims as set forth in the GSA); and -- On the Effective Date, subject to certain surviving claims in the GSA and in satisfaction of various GM claims, Delphi will pay GM $2.7 billion, and the GM Proof of Claim will be settled. The MRA is intended to govern certain aspects of Delphi and GM's commercial relationship following Delphi's emergence from Chapter 11. The MRA addresses, among other things, the scope of GM's existing and future business awards to Delphi and related pricing agreements and sourcing arrangements, GM commitments with respect to reimbursement of specified ongoing labor costs, the disposition of certain Delphi facilities, and the treatment of existing agreements between Delphi and GM. Through the MRA, Delphi and GM have agreed to certain terms and conditions governing, among other things: -- the scope of existing business awards, related pricing agreements, and extensions of certain existing supply agreements; -- GM's ability to move production to alternative suppliers; and -- Reorganized Delphi's rights to bid and qualify for new business awards. a) GM will make significant, ongoing contributions to Delphi and Reorganized Delphi to reimburse the company for labor costs in excess of $26 per hour at specified manufacturing facilities; b) GM and Delphi have agreed to certain terms and conditions concerning the sale of certain of its non-core businesses; c) GM and Delphi have agreed to certain additional terms and conditions if certain of its businesses and facilities are not sold or wound down by certain future dates; and d) GM and Delphi have agreed to the treatment of certain contracts between Delphi and GM arising from Delphi's separation from GM and other contracts between Delphi and GM. About Delphi Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. The Court has set a hearing on October 3 to consider the adequacy of the Disclosure Statement. (Delphi Bankruptcy News, Issue No. 84 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUN & BRADSTREET: June 30 Balance Sheet Upside-Down by $429.6 Mil. ------------------------------------------------------------------ Dun & Bradstreet Corp.'s consolidated balance sheet at June 30, 2007, showed $1.41 billion in total assets, $1.84 billion in total liabilities, and $4.8 million in minority interest, resulting in a $429.6 million total stockholders' deficit. The company's consolidated balance sheet at June 30, 2007, likewise showed $585.4 million in total current assets available to pay $853.8 million in total current liabilities. The company reported net income of $87.6 million in the three months ended June 30, 2007, an increase from the $52.2 million reported in the same period last year, due primarily to the resolution of the company's remaining legacy tax matter with the IRS for the tax years 1997 - 2002. This resulted in a $31.2 million net non-core gain during the second quarter of 2007. "Our second quarter results reflect continued financial momentum, driven by our US business, which will continue to serve as the primary engine for total company revenue and margin growth for the balance of the year," said Steve Alesio, chairman and chief executive officer of D&B. "We remain confident in our ability to deliver on our financial commitments for 2007, and we feel good about our prospects for the future as we maintain our focus on driving total shareholder return." Net income before non-core gains and charges for the quarter ended June 30, 2007, were $59.0 million, up 7.0% from $55.2 million in the prior year similar period. Core and total revenue for the second quarter of 2007 was $396.8 million, up 6.0% from the prior year similar period. Operating income before non-core gains and charges for the second quarter of 2007 was $98.2 million, up 10.0% from the prior year similar period. On a GAAP basis, operating income was $93.3 million, up 9.0% from the prior year similar period. During the second quarter of 2007, the company also incurred transition costs of $3.1 million compared with $4.8 million in the prior year similar period. Free cash flow for the first six months of 2007, excluding the impact of legacy tax matters, was $203.4 million, up 25.0 percent from the first six months of 2006. The company defines free cash flow as net cash provided by operating activities less capital expenditures and additions to computer software and other intangibles. Net cash provided by operating activities for the first six months of 2007, excluding the impact of legacy tax matters, was $236.5 million, up 29.0% from the first six months of 2006. On a GAAP basis, net cash provided by operating activities for the first six months of 2007 was $236.5 million, compared to $137.9 million in the prior year similar period. Share repurchases during the second quarter of 2007, under the company's current one-year program commenced in the fourth quarter of 2006, totaled $47.1 million, with $190.8 million repurchased since inception. This amount is in addition to the company's existing repurchase program to offset the dilutive effect of shares issued under employee benefit plans, which totaled $27.8 million in the second quarter of 2007. The company ended the quarter with $154.8 million of cash and cash equivalents. 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?234d About Dun & Bradstreet Based in Short Hills, New Jersey, The Dun & Bradstreet Corporation (NYSE:DNB) -- http://www.dnb.com/-- is the world's leading source of commercial information and insight on businesses. D&B's global commercial database contains more than 115 million business records. The database is enhanced by D&B's proprietary DUNSRight(R) Quality Process, which provides customers with quality business information. DURA AUTOMOTIVE: Disclosure Statement has Adequate Information -------------------------------------------------------------- DURA Automotive Systems Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve the Disclosure Statement explaining the terms of the Joint Plan of Reorganization. The Debtors filed their Plan on Aug. 22, 2007. Section 1125(b) of the Bankruptcy Code requires that a plan proponent provide "adequate information" regarding its proposed plan of reorganization. Section 1125(a)(1) defines adequate information as "information of a kind, and in sufficient detail, as far as is reasonably practical in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan." The Debtors aver that the Disclosure Statement complies with all aspects of Section 1125. Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that the Disclosure Statement is the product of the Debtors' extensive review and analysis of the circumstances leading to the Chapter 11 cases and a thorough analysis of the Plan. In drafting the Disclosure Statement, the Debtors sought the assistance and input of their financial and legal advisors, Mr. Madron tells the Court. The Debtors also sought and received comments on the Plan and Disclosure Statement from the retained professionals for the ad hoc group of certain of the Debtors' second lien prepetition secured lenders, agents to the Debtors' postpetition secured lenders, the Official Committee of Unsecured Creditors, the indenture trustee for senior notes, and backstop party Pacificor, LLC. Mr. Madron maintains that the Disclosure Statement contains the pertinent information necessary for holders of eligible claims to make an informed decision about whether to vote to accept or reject the Plan, including, among other things: * the treatment of all classes of creditors and equity interests; * a description and summary of the injunction and releases granted by the Plan; * the purpose, use, and effect of the Plan's contemplated substantive consolidation; * the Debtors' history, including certain events leading to the commencement of the Chapter 11 cases; * the operation of the Debtors' businesses and significant events during the Chapter 11 cases; * the Debtors' corporate structure and prepetition capital structure and indebtedness; * securities to be issued under the Plan; * risk factors to consider that may affect the Plan; * restructuring transactions contemplated by the Plan; * the means for implementation of the Plan; and * a disclaimer indicating that no statements or information concerning the Debtors and their assets and securities are authorized other than those set forth in the Disclosure Statement. A hearing is scheduled for Sept. 26, 2007, at which time the Court will evaluate DURA's Disclosure Statement to determine whether it contains "adequate information" to enable creditors to vote to accept the Plan. About DURA Automotive Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expires on Sept. 30, 2007. (Dura Automotive Bankruptcy News, Issue No. 28 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Wants Court Nod on Solicitation Procedures ----------------------------------------------------------- DURA Automotive Systems Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve certain procedures by which they will solicit acceptances or rejections of the Plan in order to conduct an effective solicitation of acceptances or rejections of the Joint Plan of Reorganization. In accordance with Rule 3018(c) of the Federal Rules of Bankruptcy Procedure, the Debtors prepared and customized ballots for individual holders of claims in Class 3 and Class 5, and master ballots for Class 3, the only classes entitled to vote to accept or reject the Plan. Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that holders of claims in Classes 1 and 2 are unimpaired because the Plan contemplates either paying those claims in full, or rendering them unimpaired. Accordingly, Class 1 and 2 claim holders are deemed to accept the Plan pursuant to Section l126(f) of the Bankruptcy Code, and not entitled to vote. Holders of claims in Classes 4, 6, and 7 and equity interests in Class 8 are also not entitled to vote on the Plan because they will not receive any distribution on account of their claims. Those classes are therefore deemed to reject the Plan pursuant to Section l126(g), Mr. Madron says. Solicitation Procedures Within five business days after the Court approves the Disclosure Statement, Kurtzman Carson Consultants, LLC, or Financial Balloting Group will send a complete solicitation package to Holders of Class 3 Senior Notes Claims. The Solicitation Package consists of: * the Plan; * the Disclosure Statement; * the Disclosure Statement Order; * a notice on the hearing to consider confirmation of the Plan; * subscription documents for participation in the Rights Offering under the Plan; * appropriate ballot, master ballot, and voting instructions; * pre-addressed, postage pre-paid return envelope; and * appropriate letter of four customized letters from the Debtors. Kurtzman Carson is the Debtors' claims and solicitation agent. Financial Balloting will assist Kurtzman Carson as: (a) the special voting agent with respect to soliciting votes of holders of claims based on publicly traded securities, in particular, the Class 3 Senior Notes Claims; and (b) as the subscription agent for the Rights Offering. Holders of Class 5 Other General Unsecured Claims will receive the Solicitation Package excluding the Subscription Documents. Holders of claims in Classes 1, 2, 4, 6, and 7 will receive notices of their non-voting status and the Solicitation Package excluding the Ballots and Master Ballots, Subscription Documents, and Letters. Holders of Class 8 Equity Interests will receive the appropriate Notice of Non-Voting Status and the Confirmation Hearing Notice. Holders of DIP Claims, Administrative Claims, Priority Tax Claims, and Other Priority Claims will receive the appropriate Notice of Non-Voting Status and the Solicitation Package excluding the Ballots and Master Ballots, Subscription Documents, and Letters. Voting Record Date Bankruptcy Rule 3017(d) provides that, for the purposes of soliciting votes in connection with the confirmation of a plan of reorganization, "creditors and equity security holders shall include holders of stocks, bonds, debentures, notes and other securities of record on the date the order approving the disclosure statement is entered or another date fixed by the court, for cause, after notice and a hearing." Bankruptcy Rule 30l8(a) contains a similar provision regarding determination of the record date for voting purposes. In accordance with Bankruptcy Rules 3018(a) and 3017(d), the Debtors ask the Court to establish the date on which the hearing to consider approval of the Disclosure Statement commences as the record date for purposes of determining: (1) the creditors and interest holders that are entitled to receive the Solicitation Package pursuant to the Solicitation Procedures; (2) the creditors and interest holders entitled to vote to accept or reject the Plan; and (3) whether claims or interests have been properly transferred to an assignee pursuant to Bankruptcy Rule 3001(e) so that those assignee can vote as the holder of the appropriate claims or equity interests. The Disclosure Statement Hearing is currently set for September 26, 2007, Mr. Madron notes. Temporary Claim Allowance Procedures The Debtors also ask the Court to approve certain procedures regarding the temporary allowance of claims for voting purposes only. Specifically, if an objection to a claim is pending on the Voting Record Date, the claim holder will receive a copy of the Confirmation Hearing Notice and a notice informing the holder that it may not vote on the Plan unless one or more of these events occur prior to the deadline to cast votes: * The Court temporarily allows the disputed claim for voting purposes pursuant to Bankruptcy Rule 30l8(a); * The Debtors and the claim holder enter into a stipulation or agreement resolving the claim objection and permitting the claim holder to vote its claim in an agreed upon amount; * The Debtors voluntarily withdraw the pending claim objection; or * The Court overrules the claim objection. Voting Deadline In addition, the Debtors ask the Court to establish 5:00 p.m., prevailing Pacific time, on the date that is 10 days before the Plan Confirmation Hearing, as the deadline to cast votes in favor of or against the Plan, as well as the deadline by which a Rights Offering Participant must affirmatively elect to participate in the Rights Offering. The Debtors also seek the Court's authority to extend the Voting Deadline for all voting creditors, if necessary, without further Court order, to date no later than five business days before the Confirmation Hearing. Plan Confirmation Hearing Moreover, the Debtors ask the Court to convene the Plan Confirmation Hearing approximately 47 days after the Solicitation Package is distributed to voting creditors, which date may be continued from time to time by the Court or the Debtors without further notice other than adjournments announced in open Court. The proposed timing for the Confirmation Hearing will enable the Debtors to pursue confirmation of the Plan in a timely manner, Mr. Madron avers. The Confirmation Hearing Notice to be sent to parties-in-interest contains, among other things, the: (a) deadline to object to the Plan; (b) Confirmation Hearing date and time; (c) Voting Deadline; (d) Voting Record Date; and (e) Temporary Claim Allowance Procedures. According to Mr. Madron, the Confirmation Hearing Notice will inform parties-in-interest that the Plan, the Disclosure Statement, the Disclosure Statement Order, and all other Solicitation Package materials except Ballots, Master Ballots and Subscription Documents can be obtained by: * accessing the Debtors' Web site at: http://dura.kccllc.net/dura * writing to: Dura Automotive Systems, Inc. c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue, EI Segundo, CA 90245 * sending an email to durainfo@kccllc.com; or * calling (800) 820-0985. The Debtors propose that objections to confirmation of the Plan or proposed modifications to the Plan, if any, must: -- be in writing; -- state the name and address of the objecting party; -- state the amount and nature of the claim or interest of the objecting party; -- state with particularity the basis and nature of the Plan Objection and, if practicable, proposed modifications to the Plan that will resolve the Objection; and -- be filed, together with proof of service, with the Court and served so as to be received by these Notice Parties no later than 4:00 p.m., prevailing Eastern Time, on the date that is 21 days prior to the date of the Confirmation Hearing: * the Debtors, * Kirkland & Ellis LLP and Richards Layton & Finger, P.A., counsel to the Debtors, * the U.S. Trustee; * Young Conaway Stargatt & Taylor, LLP, and Kramer Levin Naftalis & Frankel LLP, counsel to the Official Committee of Unsecured Creditors, * Willkie Farr & Gallagher LLP, counsel to the Bank of New York Trust Company, N.A., as Indenture Trustee for the Senior Notes, * Weil, Gotshal & Manges LLP and Winston & Strawn, counsel to the DIP Lenders; * Kurtzman Carsou Consultants LLC, the Debtors' claims and solicitation agent, * Potter Anderson & Corroon LLP and Bracewell & Giuliani, counsel to the Second Lien Group, * Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent to the 2nd Lien Lenders, and * Latham & Watkins LLP, counsel to backstop party, Pacificor LLC. The proposed timing for filing and service of objections and proposed modifications, if any, will afford the Court, the Debtors, and other parties-in-interest sufficient time to consider the objections and proposed modifications prior to the Confirmation Hearing, Mr. Madron relates. The Debtors seek the Court's permission to file their reply to any Plan Objections by 12:00 p.m., prevailing Eastern Time, two business days before the Confirmation Hearing. About DURA Automotive Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expires on Sept. 30, 2007. (Dura Automotive Bankruptcy News, Issue No. 28 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: S&P Holds B+ Rating and Removes Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Eastman Kodak Co., and removed the ratings from CreditWatch, where they had been placed with negative implications on Aug. 2, 2006. The outlook is negative. At the same time, S&P raised the ratings on the company's $1 billion senior secured revolving credit facility to 'BB,' two notches above the corporate credit rating, from 'B+', and revised the recovery rating to '1,' reflecting the expectation of very high (90%-100%) recovery in the event of a payment default, from '2'. The bank loan and recovery rating revision follows an analysis of the collateral pledged to the remaining $1 billion revolving credit facility. "We have affirmed the ratings," said Standard & Poor's credit analyst Tulip Lim, "based on our comfort that still-meaningful cash balances provided by the sale of the Health Group support intermediate-term business reinvestment and liquidity." The negative outlook conveys our continued concerns regarding the overall business, the likelihood of success with respect to management's digital business strategy, and uncertainty that substantial restructuring involving cash payments will soon be over. EMERITUS CORP: June 30 Balance Sheet Upside-Down by $111.5 Million ------------------------------------------------------------------ Emeritus Corporation's consolidated balance sheet at June 30, 2007, showed $950.5 million in total assets and $1.06 billion in total liabilities, resulting in a $111.5 million total shareholders' deficit. The company's consolidated balance sheet at June 30, 2007, likewise showed strained liquidity with $63.8 million in total current assets available to pay $125.6 million in total current liabilities. The company reported incurred a net loss of $1.6 million in the three months ended June 30, 2007, a decrease from the $7.6 million net loss reported in the same period last year, mainly due to higher reported operating revenues and increased equity gains in unconsolidated joint ventures. Revenues rose to $110.8 million from $103.7 million. The improvement was primarily the result of rate improvements of $4.0 million and occupancy improvements of $2.6 million. The remainder was additional management fees from the company's Blackstone joint venture that did not exist in the second quarter of 2006. Equity gains in unconsolidated joint ventures improved by $7.5 million primarily as the result of the $7.7 million gain on sale of the company's pharmacy joint venture. Operating income from continuing operations for the second quarter of 2007 was $7.3 million after adjusting for non-cash stock option expenses of $786,000, $1.1 million in merger-related severance expenses, and an expense reduction of $2.5 million from a change in estimated ultimate losses for prior year professional liability claims. This represents an improvement of $5.1 million from second quarter 2006 operating income from continuing operations of $2.2 million after adjusting for an expense reduction of $1.7 million from a change in the estimated ultimate losses for prior year professional liability claims. Community operating expenses increased $1.8 million to $69.5 million in second quarter of 2007 from $67.7 million in second quarter of 2006. The increase of $2.5 million was due to increases in labor-related costs, which was offset by a decrease of $1.4 million in professional and general liability insurance. Interest expense increased to $16.9 million from $12.5 million, parimarily due to an increase of $4.8 million in interest expense from the Fretus, HRT, and HCPI acquisitions and the new Washington community acquired in July 2006, partially offset by reductions in other interest expense due to normal pay downs on loans and mortgages. The second quarter 2007 loss from continuing operations before income taxes was $8.8 million after adjusting for the pharmacy joint venture gain on sale of $7.7 million, merger-related severance costs of $1.1 million, non-cash stock option compensation expenses of $786,000 and an expense reduction of $2.5 million from a change in estimated ultimate losses for prior year professional liability claims. This represents an improvement of $600,000 compared to a loss of $9.4 million in the second quarter of 2006 after adjusting for an expense reduction of $1.7 million from a change in the estimated ultimate losses for prior year professional liability claims. Daniel R. Baty, chairman & chief executive officer said, "During the second quarter, we experienced ongoing positive improvements in the financial performance of our growing portfolio of communities compared to the prior year. Not only did our overall revenues increase, but our operating margins also improved, resulting in improved cash flow." Subsequent Events In July 2007, the company closed on the public offering of 11,300,800 new issuance shares of common stock, including the exercise of an over-allotment option. The company received net proceeds of $328.7 million after closing costs. The proceeds from the offering will be used to retire $82.3 million in long-term debt and to pay $181.4 million of the purchase price of $595.1 million (excluding closing costs) for the acquisition of 52 communities, 44 of which are currently operated by Emeritus under long-term leases and eight of which are currently operated by Summerville Senior Living Inc. under long-term leases. The balance of $65.0 million will be used to finance facility development, facility acquisitions and capital expenditures, and also for other general corporate purposes. The company disclosed on Sept. 4, 2007, the completion of its merger with Summerville Senior Living Inc. 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?234c About Emeritus Corp. Based in Seattle, Washington, Emeritus Corporation (AMEX: ESC) -- http://www.emeritus.com/-- is a national provider of assisted living and Alzheimer's and related dementia care services to seniors. Emeritus currently operates, or has an interest in, 287 communities representing capacity for approximately 24,712 units and 29,474 residents in 36 states. FOOT LOCKER: May Be Unable to Comply with Fixed Charge Ratio ------------------------------------------------------------ Foot Locker Inc. disclosed in a filing with the U.S. Securities and Exchange Commission that based on its second quarter financial results and business uncertainties for the second half of the year, it may not continue to be in compliance with the fixed charge coverage ratio. In addition, the company adds, the restricted payment provision may prohibit the company from the payment of the dividend at the current rate in 2008. In the event that the company does not satisfy one or more of the covenants, it will evaluate several options and expects that it would be able to obtain a waiver, amend the agreement, or enter into a new credit facility. Credit Facility The company discloses that it has a $200 million revolving credit facility. Other than to support standby letter of credit commitments, of which $14 million were in place at Aug. 4, 2007, the revolving credit facility has not been used during 2007. In 2004, the company obtained a 5-year, $175 million amortizing term loan from the bank group participating in the revolving credit facility, of which $88 million is outstanding as of Aug. 4, 2007. Under the company's revolving credit and term loan agreement the company is required to satisfy certain financial and operating covenants, including a minimum fixed charge coverage ratio. In addition, this agreement restricts the amount the company may expend in any year for dividends to 50% of its prior year's net income. About Foot Locker Headquartered in New York, Foot Locker, Inc. (NYSE: FL) --- http://www.footlocker-inc.com/-- is a retailer of athletic footwear and apparel, operated 3,942 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of Feb. 3, 2007. FOOT LOCKER: S&P Retains BB+ Ratings Under Negative Watch --------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including the 'BB+' corporate credit rating, on New York City- based specialty footwear retailer Foot Locker Inc. will remain on CreditWatch with negative implications, where they were placed on Aug. 18, 2006. This statement follows the company's announcement that it may not remain in compliance with its fixed-charge coverage ratio based on actual second-quarter and anticipated second-half performance. "We expect that Foot Locker will be able to obtain a waiver or amendment for the fixed-charge coverage ratio, but we will monitor developments as they occur," said Standard & Poor's credit analyst David Kuntz. Additionally, the company's restricted payment provision may prohibit dividend payments at current levels. FORD MOTOR: Inks Landmark Agreement with Romanian Government ------------------------------------------------------------ Ford Motor Company has reached agreement with the Romanian government for the purchase of the Craiova vehicle manufacturing plant in the southwest of the country. Ford of Europe President and CEO, John Fleming, and Calin Popescu- Tariceanu, Prime Minister of Romania, witnessed the signing of the documents which begin the process of transferring ownership of the facility to Ford. The documents were signed by Mr. Lyle Watters, Director of Business Strategy, Ford of Europe, and Mr. Sebastian Vladescu, President of the Privatisation Committee for Automotive Craiova and Secretary of State for Economy and Finance. Speaking at the signing ceremony at the Frankfurt Motor Show in Germany, John Fleming said: "This is great news for Ford, for Romania and for Craiova. We are acquiring a plant with a skilled and enthusiastic workforce and together we will work to transform the plant into an industry benchmark for vehicle manufacturing in Central Europe." "Ford has shared with us their exciting vision for the future of Craiova," Prime Minister Tariceanu commented. "In time the plant will be producing over 300,000 Ford vehicles and engines a year, all proudly made in Romania." In addition to the EUR57 million to be paid to the government for their 72.4% stake in Automotive Craiova, Ford will transfer to a new company significant land parcels not required for production plans. The same offer will be made to all the minority shareholders. Ford has also committed to spending another EUR675 million to upgrade and modernise the plant. And, by 2012, the company expects to be spending around EUR1 billion a year in Romania to support the Craiova operations. Employment levels at the plant will almost double, from the existing 3,900 to 7,000. Ford's purchase of the Craiova facility will be ratified by the Romanian government via a special law which will make its way through parliament in the not-too-distant future. When all the formalities are completed, Ford will become the new owner towards the end of the year. "I wish to place on record Ford Motor Company's gratitude to the government of Romania and its agencies involved in the negotiation process," Mr. Fleming said. "Given the intense nature of the discussions we have had over many weeks, it would have been understandable had the relationship become strained. Despite the complex negotiations, the atmosphere was always cordial and very positive. We appreciated that very much. "Although we have reached this landmark stage, there is still much planning work for us to do before we assume full responsibility for the plant. While I do not want to be too specific at this stage about the vehicle we shall be building in Craiova, I can confirm that we will start with a small car built solely in Craiova and we expect up to 90% of vehicle production to be exported. "For the foreseeable future, it is business as usual at Craiova," Mr. Fleming added. "During this transition period there will be much to discuss with the employees at the plant. I hope today's news pleases them as much as it does me and my management team." The Ford of Europe president and CEO also confirmed that he would be travelling to Romania with other members of the Ford of Europe senior management group on Sept. 14, 2007. While there he will join Prime Minister Tariceanu at the plant, meet employees and view some of the facilities. In its Technical Offer document, presented to the Romanian Authority for State Assets Recovery at the beginning of the negotiations in July, the company made these statements: * Craiova will be a cornerstone of Ford's Europe's manufacturing base and a key element of our plan to increase Ford sales in Europe to over two million units per year. * Craiova will be incorporated into the global Ford organisation, building strong and sustainable relationships with local, regional and global economies. * The application of our Ford Production system, a renowned lean-manufacturing principle, ensures leading-edge manufacturing standards. * Investments made to upgrade and modernise the plant will include a new, automated 1,000 tonne press line and automate some of the existing production lines in the Craiova press shop; the installation of a new body construction shop; modernise and expand the capacity and flexibility of the paint shop operations and new equipment and tooling in the trim and final areas of assembly. Where possible, the company aims to use local suppliers and labor to support these efforts. * Protecting the health of its employees and ensuring their safety are of paramount importance. The company works to continuously reduce the risk of accidents and injures and to increase our employees' awareness of health and safety issues. * The company's product plans for Craiova will require a substantial increase in employment. * The company plans to collaborate with other local companies to build a sustainable base of technical expertise through apprenticeship and work experience programmes. * Providing equal opportunity and fostering diversity (valuing and respecting every individual) will be key principles in our recruitment approach. * The company will work in partnership with those local unions officially representing its employees to establish competitive and sustainable practices. These will distinguish Craiova as a flexible, world-class manufacturing operation capable of dealing with the many changes that occur in a fast-moving global industry. 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. GENERAL MOTORS: Has Until Midnight to Finalize Deal with UAW ------------------------------------------------------------ General Motors Corp., chosen by the United Auto Workers as lead negotiator on a new four-year contract along with Ford Motor Co. and Chrysler LLC, has until 11:59 tonight to work on that deal, various reports say. At that point, the Wall Street Journal relates, GM can either ask for an extension or the union would strike. Chrysler and Ford, WSJ added citing people familiar with the matter, agreed with the union to extend indefinitely the current contract, which was to expire today. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on May 28, 2007, Standard & Poor's Ratings Services placed General Motors Corp.'s corporate credit rating at B/Negative/B-3. At the same time, Moody's Investors Service affirmed GM's B3 Corporate Family Rating and B3 Probability of Default Rating, and maintained its SGL-3 Speculative Grade Liquidity Rating. The rating outlook remains negative, according to Moody's. GERDAU AMERISTEEL: Chaparral's Shareholders Approve Merger Deal --------------------------------------------------------------- Chaparral Steel Company's stockholders, at a special meeting held in Dallas, Texas on September 12, adopted the merger agreement under which Chaparral is to be acquired by Gerdau Ameristeel Corporation. Approximately 99.7% of the shares voted were cast in favor of the merger. The number of shares voted in favor of the merger represented approximately 75% of the total shares outstanding and entitled to vote at the meeting. "We are pleased to announce that our stockholders have approved the proposed merger with Gerdau Ameristeel," Tommy Valenta, president and CEO of Chaparral Steel, commented. "I am excited because this was a decision made by our stockholders and they voted overwhelmingly in favor of the transaction. Our stockholders clearly share our belief that the merger creates significant value and a bright future for the company and for the exceptional people who have participated in our success." Chaparral expects the merger to be consummated today, Sept. 14, 2007. About Chaparral Steel Company Headquartered in Midlothian, Texas, Chaparral Steel Company (Nasdaq: CHAP) -- http://www.chaparralsteel.com/-- is a producer of structural steel products in North America. The company is also a producer of steel bar products. The company operates two mini-mills located in Midlothian, Texas and Dinwiddie County, Virginia that together have an annual rated production capacity of 2.8 million tons of steel. Founded in July 1973, the company manufactures over 230 different types, sizes and grades of structural steel and bar products. The company markets its products throughout the United States, Canada and Mexico, and to a limited extent in Europe. About Gerdau Ameristeel Corporation Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA.TO) -- http://www.ameristeel.com/-- is a mini-mill steel producer in North America. Through its vertically integrated network of 17 mini-mills, 17 scrap recycling facilities and 52 downstream operations, Gerdau Ameristeel serves customers throughout North America. The company's products are sold to steel service centers, steel fabricators, or directly to original equipment manufactures for use in a variety of industries, including construction, cellular and electrical transmission, automotive, mining and equipment manufacturing. * * * Moody's Investor Services placed Gerdau Ameristeel Corporation's probability of default and long-term corporate family ratings at "Ba1" in July 2007. GLOBAL CREDIT: S&P Puts BB Rating Under Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on the issue of Global Credit Pref Corp.'s preferred shares on CreditWatch with negative implications. The CreditWatch placement mirrors the CreditWatch action on the credit-linked note to which the issue of preferred shares is linked. The CLN was placed on CreditWatch Negative due to negative rating migration in the reference portfolio. Standard & Poor's will continue to monitor the underlying portfolio and expects to resolve the CreditWatch placement within a period of 90 days and update its opinion. Global Credit Pref Corp. Ratings Placed on CreditWatch Negative To From -- ---- Preferred shares Global scale: BB/Watch Neg BB Canadian scale: P-3/Watch Neg P-3 (Related CLN: The Toronto-Dominion Bank CDN $48,031,000 Portfolio Credit Linked Notes) GLOBAL POWER: Disclosure Statement Hearing Set for October 9 ------------------------------------------------------------ The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware set a hearing at 1:00 p.m., on Oct. 9, 2007, to consider the adequacy of the Disclosure Statement explaining Global Power Equipment Group Inc., and its debtor- affiliates' Joint Chapter 11 Plan of Reorganization. The Debtors filed their plan and disclosure statement on September 10. The Debtors relate that their businesses will continue to be operated in substantially their current form. However, debtor- affiliates The Deltak Construction Services, Inc., and Deltak, L.L.C., will continue to wind-down their heat recovery steam generation business segment. Also, pursuant to certain transactions, the Debtors utilized a centralized cash management system wherein cash received by the operating subsidiaries is transferred to the Global Power's cash accounts and then subsequently transferred to subsidiaries to meet operating needs. Debtor Groups For purposes of voting on the Plan, the Debtors relates that the estates of certain debtor-affiliates are treated as a single estate. The groups are: * GPEG Debtor Group, comprised of: -- Global Power Equipment Group Inc. -- Global Power Professional Services, L.L.C.; * Braden Debtor Group, comprised of: -- Braden Manufacturing, L.L.C. -- Braden Construction Services, Inc.; and * Williams Debtor Group, comprised of: -- Williams Industrial Services Group, L.L.C. -- Williams Industrial Services, LLC -- Williams Specialty Services, LLC -- Williams Plant Services, LLC -- WSServices, LP. The Debtors however relates that Deltak Construction Services, Inc. and Deltak, L.L.C. will not be treated as comprising one estate. Treatment of Claims Under the Plan, Administrative Claims and Tax Claims will be paid in full. 1. GPEG Debtor Claims Holders of Priority Claims, Secured Claims, and Unsecured Claims will be paid in full. Holders of Subordinated Note Claims will receive a pro rata share of the Noteholder Settlement Amount in accordance with the Noteholder Settlement Agreement. Claimants under this class are expected to recover 96% of their claims. Holders of WARN Act (Individual) Claims will receive cash equal to their pro rata share of the WARN Act (Individual) Settlement Amount while holders of WARN Act (Putative Class) Claims will receive cash equal to their pro rata share of the WARN Act (Putative Class) Settlement Amount. Holders under these two classes are estimated to recover 100% of their claims. All Equity Interests in Global Power Equipment will be cancelled. Holders, on the Plan Distribution Date, will receive one share of New Common Stock in New GPEG for each share of common stock of GPEG owned; and ratable rights proportion of rights to acquire new common stock in New GPEG in accordance with the Rights Offering described in the Plan. Allowed Equity Interest in other GPEG Debtors will be fully reinstated and retained. 2. Williams Debtor Claims Holders of Priority Claims, Secured Claims, and Unsecured Claims will be paid in full. Equity Interest will be fully reinstated and retained. 3. Braden Debtor Claims Holders of Priority Claims, Secured Claims, and Unsecured Claims will be paid in full. Equity Interest will be fully reinstated and retained. Holders of Subordinated Note Guarantee Claims will receive the same treatment given to GPEG Debtors. 4. Deltak Claims Holders of Priority Claims and Secured Claims will be paid in full. Holders of Subordinated Note Guarantee Claims will receive the same treatment given to GPEG Debtors. Holders of WARN Act (Individual) Claims will receive cash equal to their pro rata share of the WARN Act (Individual) Settlement Amount while holders of WARN Act (Putative Class) Claims will receive cash equal to their pro rata share of the WARN Act (Putative Class) Settlement Amount. Holders under these two classes are estimated to recover 100% of their claims. If Deltak's general unsecured creditors accept the plan, then as determined by the Deltak Plan Administrator, they will receive a pro rata share of: * the Deltak Settlement Amount of $34 million in cash; * the Deltak Avoidance Action Recoveries; and * the Deltak Warranty Recoveries. If unsecured creditors reject the plan, they will instead receive a pro rata share of the Deltak Plan Reserve. However, if the Deltak Plan Reserve isn't established pursuant to the plan, then general unsecured creditors will receive a pro rata share, in cash, of the Alternative Deltak Settlement of $30 million. Equity Interest in Deltak will be reinstated and retained. 5. Deltak Construction Claims Holders of Priority Claims, Secured Claims, and Unsecured Claims will be paid in full. Equity Interest will be fully reinstated and retained. Holders of Subordinated Note Guarantee Claims will receive the same treatment given to GPEG Debtors. About Global Power Headquartered in Oklahoma, Global Power Equipment Group Inc. (Pink Sheets: GEGQQ) -- http://www.globalpower.com/-- is a design, engineering and manufacturing firm providing an array of equipment and services to the energy, power infrastructure and process industries. The company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, and has over 40 years of power generation industry experience. The company's equipment is installed in power plants and in industrial operations in more than 40 countries on six continents. In addition, the company provides routine and specialty maintenance services to nuclear, coal-fired, fossil, and hydroelectric power plants and other industrial operations. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No. 06-11045). Eric Michael Sutty, Esq., Jeffrey M. Schlerf, Esq., Kathryn D. Sallie, Esq., and Mary E. Augustine, Esq., at The Bayard Firm and Malka S. Resnicoff, Esq., and Matthew C. Brown, Esq., at White & Case LLP, represent the Debtor. Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Matthew B. McGuire, Esq., at Landis Rath & Cobb LLP, represent the Official Committee of Unsecured Creditors. At Sept. 30, 2005, the Debtors' balance sheet showed total assets of $381,131,000 and total debts of $123,221,000. GLOBAL POWER: Court Extends Exclusivity Period to September 28 -------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware issued a fourth bridge order extending Global Power Equipment Group Inc., and its debtor-affiliates' exclusive period to file a chapter 11 plan until Sept. 28, 2007. Judge Shannon also extended the Debtors' exclusive period to solicit acceptance of the plan to Nov. 27, 2007. The Court has scheduled a hearing on September 28 to consider further the Debtors' request to extend their exclusive periods. Headquartered in Oklahoma, Global Power Equipment Group Inc. (Pink Sheets: GEGQQ) -- http://www.globalpower.com/-- is a design, engineering and manufacturing firm providing an array of equipment and services to the energy, power infrastructure and process industries. The company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, and has over 40 years of power generation industry experience. The company's equipment is installed in power plants and in industrial operations in more than 40 countries on six continents. In addition, the company provides routine and specialty maintenance services to nuclear, coal-fired, fossil, and hydroelectric power plants and other industrial operations. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No. 06-11045). Eric Michael Sutty, Esq., Jeffrey M. Schlerf, Esq., Kathryn D. Sallie, Esq., and Mary E. Augustine, Esq., at The Bayard Firm and Malka S. Resnicoff, Esq., and Matthew C. Brown, Esq., at White & Case LLP, represent the Debtor. Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Matthew B. McGuire, Esq., at Landis Rath & Cobb LLP, represent the Official Committee of Unsecured Creditors. At Sept. 30, 2005, the Debtors' balance sheet showed total assets of $381,131,000 and total debts of $123,221,000. GLOBAL POWER: Court Approves Ninth Omnibus Objection to Claims -------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware sustained the ninth omnibus objection filed by Global Power Equipment Group Inc., and its debtor- affiliates, BankruptcyLaw360 reports. Judge Shannon ruled that the dismissal of the claims is in the best interest of the estate, the report adds. The ruling allows the Debtors to throw out a multitude of claims. Headquartered in Oklahoma, Global Power Equipment Group Inc. (Pink Sheets: GEGQQ) -- http://www.globalpower.com/-- is a design, engineering and manufacturing firm providing an array of equipment and services to the energy, power infrastructure and process industries. The company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, and has over 40 years of power generation industry experience. The company's equipment is installed in power plants and in industrial operations in more than 40 countries on six continents. In addition, the company provides routine and specialty maintenance services to nuclear, coal-fired, fossil, and hydroelectric power plants and other industrial operations. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No. 06-11045). Eric Michael Sutty, Esq., Jeffrey M. Schlerf, Esq., Kathryn D. Sallie, Esq., and Mary E. Augustine, Esq., at The Bayard Firm and Malka S. Resnicoff, Esq., and Matthew C. Brown, Esq., at White & Case LLP, represent the Debtor. Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Matthew B. McGuire, Esq., at Landis Rath & Cobb LLP, represent the Official Committee of Unsecured Creditors. At Sept. 30, 2005, the Debtors' balance sheet showed total assets of $381,131,000 and total debts of $123,221,000. GREEN EARTH: S&P Withdraws B+ Rating at Sponsor's Request --------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' preliminary rating and '1' recovery rating on Green Earth Fuels Of Houston LLC's $91 million senior secured credit facilities. The facilities are comprised of a $20 million term loan, a $61 million synthetic letter of credit, and a $10 million working-capital bank loan. The ratings were withdrawn at the request of the sponsor. GREGORY DUNCAN: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gregory B. Duncan Laurie L. Duncan P.O. Box 490 Whitefish, MT 59937 Bankruptcy Case No.: 07-61053 Chapter 11 Petition Date: September 11, 2007 Court: District of Montana (Butte) Debtor's Counsel: R. Clifton Caughron, esq. P.O. Box 531 Helena, MT 59624-0531 Tel: (406) 442-4446 Fax: (406) 442-4481 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Amex Credit Card $34,612 P.O. Box 297871 Fort Lauderdale, FL 33329 Asset Acceptance Factoring Company $19,833 P.O. Box 2036 Account Chase Warren, MI 48090 Manhattan Bank U.S. Bank Business Credit Card $17,300 101 5th Street East, Suite A Saint Paul, MN 55101 Nordstrom F.S.B. Charge Account $10,761 Capital 1 Bk. Credit Card $6,892 Discover Fin. Credit Card $4,811 First Premier Bank Credit Card $4,775 H.S.B.C./N.E.I.M.N. Charge Account $3,454 Bank of America Credit Card $1,045 Texaco/CitiBank Credit Card $655 N.C.O./Collection Agency Factoring Company $593 Account N.C.O. A.S.G.N.E. of S.B.C. C.B.A. Collection Bureau Collection Comcast $383 Allied Interstate, Inc. Collection Directv $262 Riddle Association 11 Directv $262 GS MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes ------------------------------------------------------------- Fitch Ratings has upgraded these two classes of GS Mortgage Securities Corp. II series 2004-C1: -- $7.8 million class C to 'AAA' from 'AA+'; -- $16.7 million class D to 'AA' from 'AA-'. In addition, Fitch has affirmed these 16 classes: -- $371.6 million class A-1 at 'AAA'; -- $190.5 million class A-2 at 'AAA'; -- $153.3 million class A-1A at 'AAA'; -- Interest only classes X-1 and X-2 at 'AAA'; -- $20.1 million class B at 'AAA'; -- $12.3 million class E at 'A'; -- $13.4 million class F at 'A-'; -- $7.8 million class G at 'BBB'; -- $7.8 million class H at 'BBB-'. -- $5.6 million class J at 'BB+'; -- $3.3 million class K at 'BB'; -- $3.3 million class L at 'BB-'; -- $4.5 million class M at 'B+'; -- $3.3 million class N at 'B'; -- $3.3 million class O at 'B-'. Fitch does not rate the $13.4 million class P. The upgrades reflect the improved credit enhancement levels from scheduled amortization and the defeasance of three loans (11%) since Fitch's last rating action. A s of the August 2007 distribution date, the pool has paid down 6.1%, to $838.2 million from $892.3 million at issuance. In total, eight loans (25.5%) have defeased. There are currently no delinquent or specially serviced loans. The two remaining non-defeased credit assessed loans, The Water Tower Center (6.3%) and The DDR Portfolio (5.8%), maintain the investment grade credit assessments based on their stable performance. The Water Tower Place loan is secured by a regional anchored shopping mall located in Chicago, IL. There are a total of six pari passu notes A-1 through A-6 with the A-3 and A-4 pieces included in the trust. As of March 2007, occupancy decreased to 81.8% from 96.1% at issuance, as a result of a Lord & Taylor store closing. The DDR Portfolio loan is secured by 10 anchored retail malls located in eight states. There are three pari passu notes A-1, A-2, and A-3 with the A-2 piece included in the trust. As of June 2007, the portfolio occupancy increased to 95.4% from 92.9% at issuance. HARRAH'S ENTERTAINMENT: Affiliate Purchases Macau Orient Golf ------------------------------------------------------------- Harrah's Entertainment Inc.'s subsidiary, Harrah's Operating Company Inc., has acquired Macau Orient Golf. Macau Orient is the seventh course in the Harrah's collection of golf courses. "This investment reaffirms our commitment to Asia and to the Macau market," Gary Loveman, chairman, president and CEO of Harrah's Entertainment, said. "We are delighted to have a compelling amenity to offer our best customers in one of the most exciting and dynamic markets in the world." "Golf courses are a proven attraction for our customers," said Michael Chen, president of the Asia-Pacific Region for Harrah's Entertainment. "We are eager to improve the golf course to make it one of the most authentic links-style courses in the Pearl River Delta enhancing the quality of attractions available for visitors to Macau." About Macau Orient Golf Macau Orient Golf is located on Cotai and adjacent to the Lotus Bridge, one of the two border crossings into Macau from China. About Harrah's Entertainment Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.(NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. * * * Standard & Poor's placed Harrah's Entertainment Inc.'s long term foreign and local issuer credit ratings at "BB" in December 2006, which still hold this date. HEALTHSPRING INC: S&P Assigns B+ Counterparty Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' counterparty credit rating to HealthSpring Inc. Standard & Poor's also said that the outlook on Healthspring is stable. At the same time, Standard & Poor's assigned 'BB-' loan and '2' recovery ratings to HealthSpring's proposed $400 million senior secured credit facility. The facility will consist of a five- year, $300 million term loan and a five-year, $100 million revolver. A '2' recovery rating indicates the expectation for substantial (70%-90%) recovery in the event of default. Healthspring is a publicly traded managed care organization that owns a group of health insurance companies. Its companies primarily sell Medicare Advantage products -- which constituted more than 95% of premium revenue as of June 30, 2007 -- in Alabama, Illinois, Mississippi, Tennessee, and Texas. Healthspring will use the term loan proceeds in the acquisition of Leon Medical Centers Health Plans Inc., a 26,000 member Medicare Advantage HMO that operates five medical facilities in Miami-Dade County, Florida. The transaction is expected to close in the fourth quarter of 2007. The credit rating reflects the company's limited market profile and marginal capital adequacy as well as the high level of intangibles relative to equity that will result from the pending deal. Partially offsetting these negative factors are the company's good earnings profile underscored by a strong ROR, established competitive position in its niche marketplace, and focused operational skill sets. Including the Leon acquisition, S&P expect that Healthspring's Medicare Advantage membership will be 154,000 at year-end 2007. In 2008, the company will likely continue to grow its membership base and to prepay the outstanding term loan debt. This will further improve debt leverage, debt to EBITDA, and EBITDA interest coverage. HILB ROGAL: Refinancing Plans Prompts S&P to Affirm BB Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' counterparty credit and bank loan ratings on Hilb, Rogal & Hobbs. The outlook remains positive. Standard & Poor's subsequently withdrew the ratings at the request of HRH's management. Consequently, the company is no longer subject to surveillance by Standard & Poor's. "These rating actions follow HRH's announced plans to refinance its credit agreement dated April 26, 2006, and subsequently issue senior notes under a noncommitted master shelf agreement," said Standard & Poor's credit analyst Tracy Dolin. These notes will, in part, be used to pay in full $98.75 million outstanding under the term loan facility of the credit agreement dated April 26, 2006. The ratings were based on HRH's healthy operating results and cash flow, improving financial flexibility, and greater clarity around its business model. Partially offsetting these strengths are the possibility of residual integration risks with its acquired entities, the competitive nature of the regional middle-market broker space, lack of earnings diversification versus more highly rated peers, industry cyclicality, and regulatory and litigation risks. As of June 30, 2007, the company's ROR and EBITDA margin were 19.7% and 27.1%, respectively, and debt-to-capital and adjusted fixed-charge coverage were 32.1% and 6.3x, respectively. Organic revenue growth was flat for the first six months of 2007 due to declining rates. Notably, HRH demonstrated strong organic revenue growth of 14.4% in its international segment, excluding its Glencairn operation that was acquired less than 13 months ago. To date, the company has demonstrated a healthy acquisition appetite as it completed nine acquisitions totaling almost $85 million in annual revenues. Standard & Poor's believes the company will continue to pursue opportunistic acquisitions in favor of share repurchasing through generation of strong operating cash flows. HOLOGIC INC: High Leverage Cues S&P's BB- Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB-' corporate credit rating to Bedford, Massachussetts-based Hologic Inc. with a stable outlook. At the same time, loan and recovery ratings were assigned to Hologic Inc.'s proposed $2.55 billion senior secured facilities, consisting of a $250 million term loan A facility, a $850 million term loan B facility, a $1.25 billion term loan X facility, and a $200 million revolving credit facility. The facilities are rated 'BB' with a recovery rating of '2', indicating the expectation for substantial (70%-90%) recovery in the event of a payment default. "The ratings on these facilities are placed on CreditWatch with positive implications, given the company's intention to issue within the next few months, a significant amount of unsecured, equity-linked instruments to replace most or all of the term loan X facility," said Standard & Poor's credit analyst David Lugg. If the market placement of these securities is successful and replaces the entire term loan X facility, the bank loan rating on the remaining secured debt will likely be raised one notch to 'BB+'. Hologic will use these borrowings, along with more than $3.6 billion of stock, to fund the $6.0 billion acquisition of Cytyc Corp. Cytyc's Pap tests and abnormal uterine bleeding treatments complement Hologic's mammography, osteoporosis, and breast biopsy franchises, creating a leading player in the women's health care market. Initially, S&P estimate that lease-adjusted debt leverage will be high, at 4.9x as of Sept. 30, 2007. However, the expected continued rapid growth of high-margined products should enable the free cash flow that could reduce borrowings markedly over the next two years. The ratings reflect Hologic's initially high leverage, short track record of success, challenge to integrate this acquisition of Cytyc, and strong positions in attractive specialty medical markets. This transforming transaction almost doubles the size of Hologic, bringing additional product and geographic breadth. The company's specialty surgical and diagnostic products focus on the medical needs of women, a market characterized by limited competition from a few, but very large, firms and some exposure to reimbursement challenges. Technological innovation that produces products with greater accuracy and ease-of-use is a key to success in this market. HUDSON MEZZANINE: Moody's Downgrades Ratings on Three Notes ----------------------------------------------------------- Moody's Investors Service has lowered its ratings on these Notes issued by Hudson Mezzanine Funding 2006-1, Ltd.: 1) $170,000,000 Class C Deferrable Floating Rate Notes Due 2042 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa1 2) $84,000,000 Class D Deferrable Floating Rate Notes Due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3 3) $26,000,000 Class E Deferrable Floating Rate Notes Due 2042 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions are the results of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. Moody's also confirmed the rating of the following class of Notes issued by Hudson Mezzanine Funding 2006-1, Ltd.: * $230,000,000 Class B Floating Rate Notes Due 2042 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Aa2 HUMBERTO GONZALES: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Humberto T. Gonzales, Esq. 1720 Sixteenth Street Northwest Washington, DC 20009 Tel: (202) 302-1476 Bankruptcy Case No.: 07-00466 Chapter 11 Petition Date: September 10, 2007 Court: District of Columbia (Washington, D.C.) Judge: S. Martin Teel, Jr. Debtor's Counsel: Edward M. Kimmel Kimmel & Roxborough, L.L.C. 7629 Carroll Avenue, Suite 500 Takoma Park, MD 20912 Tel: (301) 891-8454 Fax: (301) 270-2137 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Option One Mortgage Co. Deed of Trust $431,884 P.O. Box 44042 value of security: Jacksonville, FL 32231-4042 $420,000 E.M.C. Mortgage Co. Deed of Trust; $350,000 P.O. Box 141358 value of security: Irving, TX 75014-1358 $1,200,000 Internal Revenue Service $170,000 P.O. Box 1076 Baltimore MD 21203-1076 Tim & Jennifer Touchette $75,000 Denise Waldrop $60,000 Eric Fanning $22,000 Benny Kass Professional Service $20,000 Carthage Cono value of security: $17,042 Association $1,200,000 Bank of America $12,034 Chubb Insurance $6,685 Wells Fargo National Bank $3,000 History Matters $1,665 A.D.T. Security services $884 Bank of America Credit Card Purchases $508 District of Columbia $1 Atrium Interiors $1 INDEPENDENCE VII: Moody's Reviews Ba1 Rating and May Downgrade -------------------------------------------------------------- Moody's Investors Service placed these notes issued by Independence VII CDO, Ltd. on review for possible downgrade: * $24,900,000 Class E Sixth Priority Mezzanine Deferrable Floating Rate Notes due 2045; -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * $5,400,000 Class F Seventh Priority Mezzanine Deferrable Floating Rate Notes due 2045; -- Prior Rating: Ba1 -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of residential mortgage-backed securities. INSIGHT COMMS: Posts $8.1 Mil. Net Loss in Qtr. Ended June 30 ------------------------------------------------------------- Insight Communications Company Inc. reported financial results for the quarterly period ended June 30, 2007. The company disclosed net loss of $8.1 million on $355.5 million revenue for the quarter ended June 30, 2007, compared with a net loss of $10.8 million on $311.7 million revenue for the same period of 2006. At June 30, 2007, the company's balance sheet showed total assets of $3.8 billion and total liabilities of $3.4 billion, resulting in a $340.7 million stockholders' equity. Revenue for the three months ended June 30, 2007, increased 14% over the prior year, due primarily to Revenue Generating Unit growth across all of the company's services, as well as video rate increases. Revenue for the six months ended June 30, 2007, totaled $695.0 million, an increase of 13% over the prior year. Cash provided by operations for the six months ended June 30, 2007 and 2006 was $180.4 million and $133.3 million. The increase was primarily attributable to the decrease in the company's net loss and the timing of cash receipts and payments related to its working capital accounts. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?2353 About Insight Communications Insight Communications (NASDAQ: ICCI) operates cable operator in the U.S., serving about 1.3 million customers in the four contiguous states of Illinois, Indiana, Ohio, and Kentucky. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering analog and digital video, high-speed Internet, and voice telephony in selected markets to its customers. * * * As reported in the Troubled Company Reporter on April 9, 2007, Fitch Ratings has placed Insight Communications Company, Inc.'s and Insight Midwest, LP's 'B+' Issuer Default Rating on Rating Watch Negative. As reported in the Troubled Company Reporter on April 4, 2007, Dominion Bond Rating Service placed the ratings of Insight Communication Company Inc., Insight Midwest, LP, and Insight Midwest Holdings LLC Under Review with Negative Implications. Among these ratings under review is Insight Communication Company's Unsecured Notes, currently rated B (low). INNOVATIVE COMM: Stan Springel Appointed as Chapter 11 Trustee -------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania appointed Stan Springel as the chapter 11 trustee overseeing Innovative Communication Corporation's estate. Mr. Springel, a corporate restructuring specialist who had been given control of parent companies Innovative Communication Corporation, LLC, and Emerging Communications, Inc. on March 15, 2007, requested and gained control over ICC. ICC is a holding company for a number of media and telecommunications ventures, including Innovative Telephone (formerly the Virgin Islands Telephone Company or VITELCO), the Virgin Islands Daily News, and the St. Thomas and St. Croix cable companies. ICC and its parent companies have been engaged in protracted bankruptcy proceedings with National Rural Utilities Cooperative Finance Corporation and its affiliate Rural Telephone Finance Cooperative, which as of May 31, 2007, had $493 million in credit extended to ICC and an unsatisfied court judgment in excess of $524 million against ICC. All loans have been on non-accrual status since Feb. 1, 2005. ICC has not made debt service payments to RTFC since June 2005. RTFC is the primary secured lender to ICC. The Court also cited the failure of ICC to honor pension contribution obligations resulting in government liens on the subsidiaries' property. RTFC also holds an unsatisfied court judgment of $100 million against Jeffery Prosser, who has been in control of ICC. "The Trustee is authorized and directed to vote ECI's shares of stock in Innovative Communication Corporation, a wholly-owned, non-debtor subsidiary of ECI, to remove the current board of directors and officers of ICC if necessary, to take related corporate action to effectuate the Trustee's control over New ICC in order to facilitate a transaction for the refinancing or sale of the Debtors and their Operating Subsidiaries and, if necessary, to file a voluntary bankruptcy petition on behalf of ICC," the court order states. Mr. Prosser has filed a notice of appeal of the order. "This is a positive development in this protracted proceeding," CFC and RTFC CFO Steven Lilly, said. "We very much appreciate the Court's ruling, which moves us toward the resolution of this troubled credit issue." National Rural Utilities Cooperative Finance Corporation is a not- for-profit finance cooperative that serves the nation's rural utility systems, the majority of which are electric cooperatives and their subsidiaries. With more than $18 billion in assets, CFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services. Rural Telephone Finance Cooperative is a not-for-profit finance cooperative that serves the financial needs of the rural telecommunications industry. RTFC has approximately $2 billion in credit outstanding to its rural telecommunications members and their affiliates and is a managed affiliate of CFC. Both CFC and RTFC are headquartered in Herndon, Virginia. Based in Christiansted, St. Croix, U.S. Virgin Islands, Innovative Communication Corporation is telecommunications and media company with eextensive holdings throughout the Caribbean basin. The company's operations are in Belize, British Virgin Islands, Guadeloupe, Martinique, Saint-Martin, Sint Maarten, U.S. Virgin Islands and France and include local, long distance and cellular telephone companies, Internet access providers, cable television companies, business systems, and The Virgin Islands Daily News, a Pulitzer Prize-winning newspaper. On Feb. 10, 2006, creditors Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and Greenlight Capital Offshore, Ltd., filed involuntary chapter 11 petition againsts Innovative Communication Company LLC and Emerging Communications, Inc., and Jeffrey J. Prosser, the company's principal (Bankr. D. Del. Case Nos. 06-10133 through 06-10135). The Greenlight creditors disclosed $18,780,614 in total claims. On July 31, 2006, Innovative LLC, Emerging, and Mr. Prosser, filed voluntary chapter 11 petitions (Bankr. D. V.I. Case Nos. 06-30007 through 06-30009). Pursuant to Rule 1003-1 of the Local Bankruptcy Rules of the District Court of the Virgin Islands, Bankruptcy Division, Mr. Prosser, and Bobby Lubana, were designated as the individuals who are the principal operating officers of the alleged debtor. On Dec. 14, 2006, the Delaware Bankruptcy Court entered an order transferring the venue of the involuntary bankruptcy cases transferring to the U.S. District Court for the District of the Virgin Islands, Bankruptcy Division. On July 5, 2007, the Greenlight creditors filed an involuntary chapter 11 petition against Innovative Communication Corporation (Bankr. D. V.I. Case No. 07-30012). The creditors disclosed total aggregate claims of $56,341,843. Matthew J. Duensing, Esq., and Richard H. Dollison, Esq., at Stryker, Duensing, Casner & Dollison, and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the creditors. Stan Springel of Alvarez & Marsal, the Court-appointed chapter 11 trustee, is represented by Andrew Kamensky, Esq., Hunton & Williams. INTERNATIONAL RECTIFIER: Delays Filing of Annual Financial Report ----------------------------------------------------------------- International Rectifier Corporation disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it will be unable to timely file its Annual Report on Form 10-K for the fiscal year ended June 30, 2007. The company previously disclosed on April 9, 2007, that the Audit Committee of the Board of Directors determined that the company's financial statements for the preceding six quarters and the fiscal year ended June 30, 2006, should no longer be relied upon. Additionally, on May 11, 2007, the Audit Committee has also determined that the company's financial statements for the quarters ended March 31, 2005 and June 30, 2005, and for the fiscal year ended June 30, 2005 should no longer be relied upon. These determinations were based on accounting irregularities discovered at the company's Japan subsidiary by independent investigators hired by outside legal counsel conducting an investigation at the Audit Committee's request. In addition to accounting irregularities discovered in connection with the company's ongoing investigation, the company has also identified issues associated with its transfer pricing methodology and other tax issues for its fiscal years 2002 through 2007. Review of potential tax liabilities, credits and related matters is currently under way. The company has not yet completed its determination of the amount of additional tax liability, but believes the amount of any potential tax liability is material to income in fiscal years 2004 through 2007. Accordingly, at a meeting on Aug. 29, 2007, the Audit Committee concluded that, in addition to the periods specified in the company's April 9, 2007 Current Report on Form 8-K and May 11, 2007 Current Report on Form 8-K/A, the Company's financial statements for: (i) the fiscal quarters ended Sept. 30, 2003, Dec. 31, 2003, March 31, 2004 and June 30, 2004; (ii) the 2004 fiscal year ended June 30, 2004; and (iii) the fiscal quarters ended September 30, 2004 and Dec. 31, 2004, should not be relied upon. The Audit Committee has discussed the matters disclosed in this filing with the company's independent registered public accounting firm. International Rectifier Corporation -- http://www.irf.com/-- (NYSE:IRF) is a world leader in power management technology. IR's analog, digital, and mixed signal ICs, and other advanced power management products, enable high performance computing and save energy in a wide variety of business and consumer applications. Leading manufacturers of computers, energy efficient appliances, lighting, automobiles, satellites, aircraft, and defense systems rely on IR's power management solutions to power their next generation products. The company has manufacturing facilities in the U.S., Mexico, United Kingdom, Germany and Italy; and has subsidiaries in Japan and Singapore. INTERNATIONAL RECTIFIER: S&P Retains Negative Watch on BB Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB' corporate credit rating on International Rectifier Corp. remains on CreditWatch with negative implications. International Rectifier has stated that it cannot timely file its form 10-K for the June 30, 2007 fiscal year, because of an ongoing investigation, led by IR's audit committee, into the company's financial reporting at a foreign subsidiary and related material weaknesses in internal controls. As a result of the investigation, as well as accounting issues related to restructuring costs and tax matters, IR will need to restate prior years' financial statements. "The ratings originally were placed on CreditWatch on April 9, 2007, when the matter was first disclosed; subsequently, the company extended the period of time during which its financial results were not to be relied upon, extending back to fiscal 2002," said Standard & Poor's credit analyst Bruce Hyman. Additionally, the company's chief financial officer and certain sales executives have left the company, and the CEO has been placed on leave. The company has further found that cash tax liabilities may exceed $75 million, while its cash outlays related to the investigation have been substantial. While the quality of both accounting and corporate governance remain analytical concerns, IR is believed to have sufficient operating liquidity (net cash was over $500 million at Dec. 31, 2006, the last-filed financial statement date) and has no debt, which should cushion the downside risk to the corporate credit rating. S&P will continue to monitor events to assess the effect on its ratings on International Rectifier. INTERSTATE BAKERIES: Seeks Court Nod on Exclusivity Extension ------------------------------------------------------------- Interstate Bakeries Corporation filed a motion with the U.S. Bankruptcy Court requesting an extension of its exclusive period in which to file a Plan of Reorganization through Jan. 15, 2008, and its exclusive period to solicit acceptances of any Plan of Reorganization through March 15, 2008. The current exclusivity periods will expire Oct. 5, 2007, and Dec. 5, 2007. The company has contacted more than 50 potential investors and has received significant interest to fund the company's business plan that will provide IBC with sufficient liquidity to continue operations, position it for future success and maximize value of the bankruptcy estates. There can be no assurance, however, that the necessary financing to fund the plan will be provided to the company on acceptable terms or at all. The request to extend exclusivity is predicated on achieving agreements with the company's two principal unions by Sept. 30, 2007. In addition, the indications of interest for the financing of the business plan that have been received mandate that such agreements have been reached. The proposed modifications to existing collective bargaining agreements call for union alignment to a more capable and more cost-effective Path-to-Market, specific health and welfare concessions, and increased work rule flexibility. IBC's two principal labor unions are the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the International Brotherhood of Teamsters. If such agreements are not reached, the company, in the same motion, has alternatively asked the Court for interim approval of a 30-day extension from the existing deadline to file a plan of reorganization and a 30-day extension from the existing deadline to solicit acceptances in order to allow sufficient time to formulate a rational strategy for maximizing value of the bankruptcy estates, including a sale of the company and/or its assets in its entirety or in a series of transactions. The company's debtor-in-possession financing agreement is scheduled to expire on Feb. 9, 2008. IBC does not expect the financing agreement will be extended unless its emergence from Chapter 11 protection is imminent. Additionally, the company believes that it will be difficult in the current market environment to find alternative debtor-in- possession financing, making the financing of the company's business plan and achievement of agreements with its two principal labor unions even more critical to IBC's ability to survive. The company said it plans to transition its decades-old, high-cost "one-size-fits-all" traditional route delivery structure to an advanced Path-to-Market structure it believes creates better jobs for sales employees and will significantly drive selling and delivery productivity. To effect the change, however, the company said it requires flexibility to meet constantly changing market demands. "Currently, IBC is hindered by work rules under its collective bargaining agreements that prohibitively restrict how it can operate its business," the company said. "These agreements must be modified for the business plan to be implemented." The company has made progress with the BCTGM on finding solutions to the challenges it is facing, including Path-to-Market and cost structure issues, but discussions with the IBT "have not been fruitful," the company said. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and seven of its debtor-affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Oct. 5, 2007. IWT TESORO: Wants Approval on Rader & Coleman as Special Counsel ---------------------------------------------------------------- I.W.T. Tesoro Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Rader & Coleman, P.L. as their special counsel. Rader & Coleman will perform legal services including: a. the supervision and assistance with the preparation of all SEC filings; b. communication with the SEC on behalf of the Debtors; c. work with the Debtors' auditors and financial management to prepare all necessary books and records as well as certain required filings; d. aid Debtors counsel, to the extent necessary, with any negotiations involving the secured lenders and consult with the Debtors and their counsel with respect to any corporate governance or structure issues which may arise. In the event that the Debtors go forward with a particular reorganization transaction, Rader & Coleman will assist in strategy, structure and documentation required for such a transaction. The Debtors propose to pay Rader & Coleman its customary hourly rates that ranges from $275 to $350 per hour for attorneys and $120 per hour for paraprofessionals. Gayle Coleman, Esq. will continue to be primarily responsible for the legal needs of the Debtors and her hourly rate is $275. The Debtors disclose that Rader & Coleman has represented the Debtors since June 2002 and was counsel to Debtor, IWT Tesoro Corporation when it acquired International Wholesale Tile, Inc. The Debtors believe that the retention of Rader & Coleman is essential to the efficient and successful administration of their Chapter 11 cases and that it is in the best interests of the creditors that Rader & Coleman continue to represent the Debtors. The firm can be reached at: Gayle Coleman, Esq. Rader & Coleman, P.L. 2101 Northwest Boca Raton Boulevard, Suite 1 Boca Raton, Florida 33431 Tel: (561) 368-0545 Fax: (561) 367-1725 http://www.raderandcoleman.com/ I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, -- http://www.iwttesoro.com/-- is headquartered in New York City. The company and its subsidiaries distribute building materials, specifically hard floor and wall coverings. They are wholesalers and do not sell directly to any end user. Their products consist of ceramic, porcelain and natural stone floor, wall and decorative tile. They import a majority of these products from suppliers and manufacturers in Europe, South America, and the Near and Far East. Their markets include the United States and Canada. They also offer private label programs for branded retail sales customers, buying groups, large homebuilders and home center store chains. The Debtor and its debtor-affiliates, International Wholesale Tile, Inc. and American Gres, Inc., filed for Chapter 11 bankruptcy protection on Sept. 6, 2007 (Bankr. S.D. NY Lead Case No. 07-12841). Dawn K. Arnold, Esq. and Jonathan S. Pasternak, Esq. at Rattet, Pasternak & Gordon-Oliver, L.L.P. represent the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had total assets of $39,798,579 and total debts of $47,940,983. IWT TESORO: Selects Focus Management as Financial Advisor --------------------------------------------------------- I.W.T. Tesoro Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to hire Focus Management Group, USA, Inc. as their financial advisor. Focus Management will: a. provide assistance in connection with the Debtors' Chapter 11 case; b. review and validate, or if so requested, assist in the preparation of the Debtors' business plans, cash flow projections, restructuring programs, and other reports or analyses prepared by the Debtors or its professionals in order to advise the Debtors on the viability of the continuing operations and the reasonableness of projections and underlying assumptions; c. review and analyze any restructuring plan to be presented to the Debtors' provider of post-filing financing; d. review, evaluate, assist and analyze the financial ramifications of proposed transactions for which the Debtors may seek Court approval, including DIP financing and cash management compensation or retention and severance plans; e. assist the Debtors, as may be requested, in communicating with its customers, vendors, employees, and other stakeholders in the Debtors' business regarding the status of its bankruptcy case including the preparation of initial communication materials and updates as necessary. f. manage and coordinate information requested by Official Committee of Unsecured Creditors or the legal and financial advisors for any committee; g. review, evaluate and analyze the Debtors' internally prepared financial statements and related documentation, in order to evaluate the performance of the Debtors as compared to projected results on an ongoing basis; h. review and analyze the development, evaluation and documentation of any plan(s) of reorganization or strategic transaction(s), including developing, structuring and negotiating the terms and conditions of potential plan(s) or strategic transaction(s) and the consideration that is to be provided to unsecured creditors; i. render testimony in connection with procedures (a) through (i) above, as required, on behalf of the Debtors; j. coordinate operations of the Debtors with their management and counsel, and assist management with monitoring and reporting to the Court and all interested parties; k. provide other services, as requested by the Debtors and agreed by Focus Management. The Debtors propose to pay Focus Management its customary hourly rate ranging from $375 for senior consultants to $400 for managing directors. These hourly rates are adjusted periodically. To the best of the Debtors' knowledge, Focus Management has no connection with the creditors or any other party in interest or their attorneys. The firm can be reached at: FOCUS Management Group 5001 W. Lemon Street Tampa, FL 33609-1103 Tel: (813) 281-0062 Fax: (813) 281-0063 http://www.focusmg.com/ I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, -- http://www.iwttesoro.com/-- is headquartered in New York City. The company and its subsidiaries distribute building materials, specifically hard floor and wall coverings. They are wholesalers and do not sell directly to any end user. Their products consist of ceramic, porcelain and natural stone floor, wall and decorative tile. They import a majority of these products from suppliers and manufacturers in Europe, South America, and the Near and Far East. Their markets include the United States and Canada. They also offer private label programs for branded retail sales customers, buying groups, large homebuilders and home center store chains. The Debtor and its debtor-affiliates, International Wholesale Tile, Inc. and American Gres, Inc., filed for Chapter 11 bankruptcy protection on Sept. 6, 2007 (Bankr. S.D. NY Lead Case No. 07-12841). Dawn K. Arnold, Esq. and Jonathan S. Pasternak, Esq. at Rattet, Pasternak & Gordon-Oliver, L.L.P. represent the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had total assets of $39,798,579 and total debts of $47,940,983. JETBLUE AIRWAYS: COO Russ Chew Appointed as President ----------------------------------------------------- JetBlue Airways has appointed chief operating officer Russ Chew to president. With his added responsibilities as president, Mr. Chew will work directly with chief executive officer Dave Barger to execute the company's vision and strategic plan. "Since Russ joined our team, we have established the right foundation for continuous improvement," Mr. Barger said. "Russ will help lead our efforts to develop JetBlue's long-term business strategy that values our culture and takes full advantage of our financial opportunities." "I am honored to take on this additional responsibility," said Mr. Chew. "JetBlue has incredible talent and vision, and bringing that vision to life for our customers and crewmembers, especially in this competitive and operational environment, will depend on our ability to set the right course for our future. JetBlue crewmembers have demonstrated their unique ability to tackle challenges, especially when given the right tools and resources, while staying true to our company's values. I am committed to serving our crewmembers so they may continue to serve our customers with signature JetBlue service." Mr. Chew joined JetBlue after four years with the Federal Aviation Administration as Chief Operating Officer, after a 17-year career with American Airlines in their Operations and Planning units. About JetBlue Airways Corp. Headquartered in Forest Hills, New York, JetBlue Airways Corp. (Nasdaq:JBLU) -- http://www.jetblue.com/-- provides passenger air transportation services primarily in the United States. As of Feb. 14, 2006, the company operated approximately 369 daily flights serving 34 destinations in 15 states, Puerto Rico, the Dominican Republic, and the Bahamas. The company also provides in-flight entertainment systems for commercial aircraft, including live in-seat satellite television, digital satellite radio, wireless aircraft data link service, and cabin surveillance systems and Internet services, through its wholly owned subsidiary, LiveTV LLC. * * * As reported in the Troubled Company Reporter on Aug. 14, 2007, Fitch Ratings affirmed these debt ratings of JetBlue Airways Corp.: (i) issuer default rating at 'B'; and (ii) senior unsecured convertible notes at 'CCC' with a recovery rating of 'RR6'. The rating outlook is stable. JHT HOLDINGS: Weak Performance Prompts S&P's Negative Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on JHT Holdings Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. The rating action is based on the trucking company's worse-than-expected financial performance for the first half of 2007 and unexpected labor- related cost pressures. Kenosha, Wisconsin-based JHT is the leading hauler of heavy-duty (class 8) trucks in North America, with more than a 95% market share. The company also transports medium-duty (class 5-7) trucks, with an approximately 50% market share. JHT is experiencing a decrease in volumes and an erosion in operating profitability because of the significant downturn in demand for medium- and heavy-duty trucks. S&P had anticipated a downturn in truck demand; however, declines have been more severe than expected due to weak economic conditions in the U.S. JHT has recently completed an amendment to its $130 million senior credit facility (rated 'B+', with a '3' recovery rating), which allowed some covenant relief. Still, flexibility under its new covenants remains limited. "In resolving the CreditWatch, we will assess the company's operating prospects and liquidity, given the likelihood of continued weakness over the near term and uncertainty over the timing of a recovery in demand," said Standard & Poor's credit analyst Anita Ogbara. "If it appears that JHT's financial performance and liquidity will remain weaker than previously expected, we will likely lower the ratings." JORDAN INDUSTRIES: S&P Withdraws Ratings at Company's Request ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Deerfield, Illinois-based Jordan Industries Inc. at the company's request. Jordan's outstanding $94.8 million discount debentures are mostly held by insiders, and the company is no longer required to provide information on its financial condition. KARA HOMES: Wants Court to Approve Peter Costanzo as Auctioneer --------------------------------------------------------------- Kara Homes Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of New Jersey for permission to employ Peter Costanzo Auctioneers and Appraisers Inc. as their auctioneer. As the Debtors' auctioneer, the firm will conduct an auction on the Debtors' property, Horizon at Woods Landing, located in Hamilton Township in Atlantic County, New Jersey. The Debtors tell the Court that ING Direct will pay $5,000 for the marketing of the property and a third party purchaser will pay 2% premium on the final bid price, under the agreement. Additionally, the Debtors said that ING Direct will pay $10,000 administrative fee to the firm if ING Direct is the successful bidder. Peter Constanzo, a member of the firm, assures the Court that the firm does not hold any interests adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Costanzo can be reached at: Peter Costanzo Peter Costanzo Auctioneer and Appraisers Inc. 22 Smock Street Neptune, New Jersey 07753 Tel: (732) 776-7222 Headquartered in East Brunswick, New Jersey, Kara Homes Inc. aka Kara Homes Development LLC, builds single-family homes, condominiums, town homes, and active-adult communities. The company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed separate chapter 11 petitions in the same Bankruptcy Court. On Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions. On June 8, 2007, 20 more affiliates filed separate chapter 11 petitions. David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al., represents the Debtors. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard represents the Official Committee of Unsecured Creditors. Traxi LLC serves as the Debtors' crisis manager. The Debtors engaged Perry M. Mandarino as chief restructuring officer, and Anthony Pacchia as chief financial officer. When Kara Homes filed for protection from its creditors, it listed total assets of $350,179,841 and total debts of $296,840,591. KARA HOMES: Maplewood Homebuilders Takes Care of 12 Properties -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has approved its reorganization plan for Kara Homes, transferring control of 12 Kara-related properties to Maplewood Homebuilders LLC, effective immediately. Kara Homes halted construction and further development for projects throughout its portfolio, with its bankruptcy filing in October 2006. Through this reorganization plan Maplewood Homebuilders will own and manage 12 properties, which represent approximately 600 homes throughout Central and Southern New Jersey: 1. Bergen Mills CF (Monroe) 2. Buckley Estates (Marlboro) 3. Cottage Gate (Middletown) 4. Cottage Gate II (Middletown) 5. Hawkins Ridge (Jackson) 6. Landings at Manahawkin (Stafford) 7. Orchard Meadows (Manalapan) 8. Ridgeview (Mt. Arlington) 9. Toby Gardens (Old Bridge) 10. Waters Edge (Little Egg Harbor) 11. Winding Run (Little Egg Harbor) 12. Woodlake Greens (Lakewood) In order to jump-start these stalled developments, Maplewood Homebuilders expects to invest more than $200 million into these properties to complete the homes in each community, build the shared amenities and improve the quality of these neighborhoods. Despite the varying development and construction stages for each of these communities under construction, Maplewood Homebuilders has completed the first step necessary to deliver these homes to their owners. "Our first priority now is to those homeowners and contract holders who have been waiting for a resolution to the Kara Homes bankruptcy," Kevin Fiore, chief operating officer of Maplewood Homebuilders, said. Maplewood Homebuilders intends to work with those individuals and families who have existing contracts with Kara Homes and looks forward to completing homes located throughout these 12 communities. "After a period of turmoil and uncertainty for many home buyers, we are excited about this transaction and believe it represents a wonderful opportunity for current and prospective buyers in these communities to forge ahead with the construction of their quality homes," Mr. Fiore added. "We are proud of our investment in these communities and welcome the opportunity to help these homeowners move forward." Maplewood Homebuilders brings together a blend of real estate development and investment expertise, led by Glen Fishman, Kevin Fiore and Plainfield Asset Management, which is committed to revitalizing these communities. Led by this veteran real estate development and investment team, Maplewood Homebuilders will have a portfolio of approximately 600 homes in its new 12-community portfolio, with individual home prices ranging from the low $300,000s to in excess of $1.5 million. As development of these properties comes to fruition, Maplewood Homebuilders will actively explore future growth opportunities to leverage its presence in the high-end residential marketplace. About Maplewood Homebuilders LLC Maplewood Homebuilders LLC is a joint venture between Glen Fishman, a real estate developer in New Jersey, and an entity affiliated with Plainfield Asset Management LLC, a hedge fund based in Greenwich, Connecticut. About Plainfield Asset Management Plainfield Asset Management LLC is an investment adviser registered with the Securities and Exchange Commission. Plainfield manages in excess of $2.8 billion in equity capital. Plainfield's founder and chief investment officer Max Holmes has led the purchase of several companies in the last several years, including FAO Schwarz Inc., eToys Inc., Sure Fit Inc., Covanta Energy Corporation (now Danielson Holdings Corp.), Asprey International Limited and SMART Papers. About Kara Homes Inc. Headquartered in East Brunswick, New Jersey, Kara Homes Inc. aka Kara Homes Development LLC, builds single-family homes, condominiums, town homes, and active-adult communities. The company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed separate chapter 11 petitions in the same Bankruptcy Court. On Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions. On June 8, 2007, 20 more affiliates filed separate chapter 11 petitions. David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al., represents the Debtors. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard represents the Official Committee of Unsecured Creditors. Traxi LLC serves as the Debtors' crisis manager. The Debtors engaged Perry M. Mandarino as chief restructuring officer, and Anthony Pacchia as chief financial officer. When Kara Homes filed for protection from its creditors, it listed total assets of $350,179,841 and total debts of $296,840,591. The Court has extended the Debtors' exclusive period to solicit acceptances of their plan to Oct. 9, 2007. LEAP WIRELESS: James D. Dondero Resigns from Board of Directors --------------------------------------------------------------- James D. Dondero has resigned from of Leap Wireless International Inc.'s board of directors effective Sept. 10, 2007. Mr. Dondero, president of Highland Capital Management L.P. joined Leap's board in 2004, and served as chairman of the board's compensation committee. "I am honored to have been associated with such a capable and diligent board of directors and very proud of the accomplishments of Leap's outstanding management team that has created billions of dollars of value for shareholders," Mr. Dondero stated. "While I regret what might seem to be the awkward timing of my departure, this is something I have been considering in light of my other responsibilities and recent developments with the company." "My experience tells me that it is best for me to come to a decision sooner rather than later," he continued. "I believe the company has an excellent future and tremendous potential for growth, and I am confident that, as it has always done in the past, this board will continue to do what is in the best interests of all shareholders." The company expressed its appreciation for the contributions Mr. Dondero has made over the years and thanked him for his dedicated service to Leap and its shareholders. About Leap Wireless International Inc. Based in San Diego, California, Leap Wireless International Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides innovative, wireless services to a diverse customer base. Leap pioneered both the Cricket(R) and Jump MobileTM services. The company and its joint ventures now operate in 23 states and hold licenses for 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. Jump Mobile is a unique prepaid wireless service designed for the mobile-dependent, urban youth market. * * * As reported in the Troubled Company Reporter on Sept. 10, 2007, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit ratings on wireless carriers MetroPCS Communications Inc. and Leap Wireless International Inc. LENNOX INTERNATIONAL: Completes Stock Exchange Deal with AOC ------------------------------------------------------------ Lennox International Inc. has completed its agreement with A.O.C. Corporation. Under terms of the agreement, LII has acquired 2,695,770 shares of LII common stock owned by A.O.C. in exchange for 2,239,563 newly-issued LII common shares. The transaction reduces the number of outstanding shares of LII common stock by 456,207 shares, at minimal cost to LII. Headquartered in Richardson, Texas, Lennox International Inc. (NYSE: LII) -- http://www.lennoxinternational.com/-- manufactures and markets a broad range of products for heating, ventilation, air conditioning, and refrigeration markets, including residential and commercial air conditioners, heat pumps, heating and cooling systems, furnaces, prefabricated fireplaces, chillers, condensing units, and coolers. Lennox has solid positions in its equipment markets, with well-established brand names, well as products spanning all price points. * * * Moody's Investors Service's assigned 'Ba2' on Lennox International Inc.'s long term corporate family rating and probability of default. The outlook is positive. Standard & Poor's assigned 'BB-' on its long term foreign and local issuer credit rating. MAC-GRAY CORP: S&P Lowers Corporate Credit Rating to BB- from BB ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Waltham, Massachusetts-based Mac-Gray Corp., including its corporate credit rating to 'BB-' from 'BB'. The outlook is stable. "The downgrade reflects a more aggressive financial policy and our belief that Mac-Gray will continue to pursue acquisitions and thus be challenged to reduce leverage and improve credit measures to those more in line with our prior expectations," said Standard & Poor's credit analyst Jean C. Stout. The company recently announced that it had acquired Hof Service Company Inc., a laundry facilities management company serving multihousing clients in Washington, D.C., Maryland, and Virginia, and a distributor of commercial laundry equipment serving the mid- Atlantic region, for $43 million. The acquisition was funded by an expansion of the company's existing revolving credit facility. "The 'BB-' rating incorporates the company's active acquisition strategy, moderately high leverage, and relatively narrow business focus," said Ms. Stout. These factors are partly offset by the company's position as a leading supplier of debit card and coin- operated laundry equipment services in the highly fragmented and regional U.S. laundry market, and its relatively stable and predictable cash flow stream. MADISON SQUARE: Credit Support Level Cues S&P to Hold Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on four classes of CMBS-backed notes from Madison Square 2004-1 Ltd. Concurrently, S&P affirmed its ratings on five other classes from the same series. The upgrades primarily reflect the positive credit migration of the underlying CMBS collateral. The affirmations reflect credit support levels that adequately support the current ratings. S&P expect the three subordinate classes to eventually receive deferred interest that is currently funding an interest reserve shortfall fund to protect the interest payments to classes J through L. As of the Aug. 28, 2007, remittance report, the collateral pool consisted of 29 classes of subordinated fixed-rate CMBS pass- through certificates, three classes of subordinated fixed-rate re- REMIC certificates, and one class of subordinated floating-rate CMBS certificates. The aggregate principal balance is $603.9 million, down from $1.056 billion at issuance. The collateral pool consists of nine distinct CMBS transactions issued between 1996 and 1999. Eighty percent of the collateral balance is concentrated in five underlying transactions: -- Commercial Mortgage Asset Trust's series 1999-C1 (30%); -- Capco America Securitization Corp.'s series 1998-D7 (18%); -- Credit Suisse First Boston Mortgage Securities Corp.'s series 1999-C1 (16%); -- Credit Suisse First Boston Mortgage Securities Corp.'s series 1997-C2 (9%); and -- First Chicago/Lennar Trust's series 1997-CHL1 (8%). The floating-rate CMBS certificate is secured by the SunSpree Resort asset, with a total exposure of $61.5 million, including $15.2 million of servicer advances. The 507-room full-service hotel is located in Lake Buena Vista, Florida, and was REO before the issuance of Madison Square 2004-1. At the time the transaction was issued, Standard & Poor's assumed a 56% occupancy rate and an average daily rate of $72.97 to derive a value of $8.2 million. Year-end 2006 occupancy was 51%, while the reported net cash flow was $711,582. The property was under contract for sale with a closing anticipated in the third quarter of 2006; however, the sale did not go through. The asset is currently being marketed for sale at a value indicating a severe loss. The deferred interest balances for classes P, Q, and S will continue to increase until the asset is liquidated. The nine CMBS transactions are collateralized by 855 loans with an outstanding principal balance of $5.4 billion, down from 1,237 loans with an aggregate principal balance of $9 billion at issuance. The certificates in the collateral pool with public ratings from Standard & Poor's (25% of the current trust balance) and those with credit estimates (75% of the current trust balance) exhibit credit characteristics consistent with 'B+' rated obligations, up from 'CCC+' at issuance. Thirty percent of the certificates are currently rated investment-grade or have received credit estimates commensurate with investment-grade obligations, while none did at issuance. The collateral consists of CMBS pass-through certificates rather than mortgage loans. Losses associated with the loans are first realized by the CMBS trusts that issued the pass-through certificates, 22% of which are first-loss positions. Realized losses on the first-loss positions, which include the SunSpree Resort exposure, will result directly in principal losses to the Madison Square 2004-1 Ltd. unrated class T. Subordination is available to the remaining 78% of the collateral to absorb various levels of losses before the Madison Square 2004- 1 Ltd. certificates are affected. Standard & Poor's analysis included loss projections on the underlying collateral and an evaluation of the impact of those losses on the transaction's capital structure. The resultant credit support levels adequately support the raised and affirmed ratings. Ratings Raised Madison Square 2004-1 Ltd. CMBS-backed notes series 2004-1 Rating ------ Class To From ----- -- ---- K AAA AA+ L A A- M BBB+ BBB N BBB BBB- Ratings Affirmed Madison Square 2004-1 Ltd. CMBS-backed notes series 2004-1 Class Rating ----- ------ J AAA O BB+ P B+ Q B S B- MARCAL PAPER: Disclosure Statement Hearing Deferred to Oct. 26 -------------------------------------------------------------- The Honorable Morris Stern of the United States Bankruptcy Court for the District of New Jersey moved the hearing to consider approval of Marcal Paper Mills Inc.'s Amended Disclosure Statement explaining its Amended Chapter 11 Plan of Reorganization from Sept. 26, 2007, to Oct. 26, 2007, at 10:00 a.m. The Debtor's Plan proposes to pay holders of Other Priority Claims with cash equal to their allowed claim after the effective date of the Plan. Prepetition Secured Lender Claims will be paid in full, in cash in an amount equal to the principla and all interest accrued. Holders of Other Secured Claims will be reinstated in accordance with the provision of Section 1124(20 of the Bankruptcy Code. General Unsecured Claims will receive a pro rata share of up to $31.72 million in aggregate, provided, no holder of this claim will receive more than 52% of the holder's claim. Equity Interest will not receive any distribution under the Plan. A full-text copy of Marcal Paper's Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070813031049 Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets and debts of more than $100 million. MARCAL PAPER: Court OKs Exit Financing Pact with Merrill Lynch -------------------------------------------------------------- Marcal Paper Mills Inc.'s exit financing agreement with Merrill Lynch Commercial Finance Corp., which were filed under seal, recently obtained approval from the United States Bankruptcy Court for the District of New Jersey. In the exit financing order, the Court ruled that in the event that during the Debtor's exclusivity period, the Debtor receives an exit financing commitment from a third party, Merrill Lynch must be provided a right of first refusal. Failure to do so will entitle Merrill Lynch to a $1,080,000 fee. On July 2, 2007, the Court authorized the Debtor to pay expense deposit and furnish indemnities to Merrill Lynch in connection with securing the Debtor's exit financing. Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets and debts of more than $100 million. MERRILL LYNCH: Fitch Cuts Ratings on Three Certificate Classes -------------------------------------------------------------- Fitch Ratings has taken rating actions on these classes from Merrill Lynch Mortgage Investors, Inc. trust mortgage loan asset- backed certificates 2005-SD1: -- Class A-2 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BBB+' from 'A'; -- Class B-1 downgraded to 'BB' from 'BBB'; -- Class B-2 downgraded to 'B- from 'BB', and assigned a -- Distressed Recovery rating of 'DR2' The trust fund consists primarily of sub-prime mortgage loans secured by first or second liens on real properties that were acquired by Merrill Lynch Mortgage Lending, Inc. from various originators. At origination, underwriting criteria had not been provided with respect to approximately 57.51% of the mortgage loans and approximately 10% of the mortgage loans had defaulted in the past and are re-performing or are performing under the provisions of a bankruptcy plan or a forbearance plan, or loans which are performing under the terms of the related original notes or such notes as modified. The affirmations reflect adequate relationships of credit enhancement (CE) to future loss expectations and affect approximately $42.1 million of outstanding certificates. The downgraded classes reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $14.1 million of outstanding certificates. For the past year, the overcollateralization has been below the target amount due to losses exceeding excess spread. The decline of the OC has put negative pressure on the most subordinate bonds. As of the July 2007 remittance period, the 60+ delinquency (inclusive of foreclosures and REO) was 30.59% and the cumulative loss to date is 2.26%. Litton Loan Servicing LP, rated 'RSS1/Rating Watch Negative' acts as servicer for this transaction. ML-CFC: Fitch Puts Low-B Ratings on Six Certificate Classes ---------------------------------------------------------- Fitch Ratings has assigned these ratings to ML-CFC Commercial Mortgage Trust, series 2007-8, commercial mortgage pass-through certificates: -- $37,260,000 class A-1 'AAA'; -- $816,519,000 class A-1A 'AAA'; -- $122,485,000 class A-2 'AAA'; -- $72,676,000 class A-SB 'AAA'; -- $655,815,000 class A-3 'AAA'; -- $126,891,000 class AM 'AAA'; -- $116,645,000 class AM-A 'AAA'; -- $109,443,000 class AJ 'AAA'; -- $100,607,000 class AJ-A 'AAA'; -- $2,435,364,703 class X 'AAA'; -- $12,177,000 class B 'AA+'; -- $39,575,000 class C 'AA'; -- $27,398,000 class D 'AA-'; -- $9,132,000 class E 'A+'; -- $18,266,000 class F 'A'; -- $21,309,000 class G 'A-'; -- $33,486,000 class H 'BBB+'; -- $24,354,000 class J 'BBB'; -- $15,221,000 class K 'BBB-'; -- $15,221,000 class L 'BB+'; -- $9,133,000 class M 'BB'; -- $3,044,000 class N 'BB-'; -- $3,044,000 class P 'B+'; -- $6,089,000 class Q 'B'; -- $3,044,000 class S 'B-'. Class X is a notational amount and interest-only. The $36,530,703 class T is not rated by Fitch. Classes A-1, A-1A, A-2, A-SB, A-3, AM, AM-A, AJ, AJ-A, B, C, D, and F are offered publicly, while classes X, G, H, J, K, L, M, N, P, Q, S, and T are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 218 fixed-rate loans having an aggregate principal balance of approximately $2,435,364,703, as of the cutoff date. The deal closed Aug. 28, 2007. MORGAN STANLEY: Credit Enhancement Cues S&P to Affirm Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 22 classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2004-HQ4. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Aug. 14, 2007, remittance report, the trust collateral consisted of 91 mortgage loans with an outstanding principal balance of $1.33 billion, down slightly from 92 loans totaling $1.37 billion at issuance. Excluding the $71.3 million (5%) of collateral in the pool that had been defeased as of late-August 2007, the master servicer, Wells Fargo Bank N.A., reported financial information for 99% of the loans in the pool. Ninety- nine percent of the servicer-reported information was full-year 2006 data. Using this information, Standard & Poor's calculated a weighted average debt service coverage of 1.79x, down from 2.02x at issuance. The DSC calculations do not include additional debt service for partial interest-only loans. All of the loans in the pool are current, and no loans are with the special servicer. To date, the trust has experienced one loss totaling $54,370. The top 10 exposures secured by real estate have an aggregate outstanding balance of $794.7 million (60%). Standard & Poor's calculated a weighted average DSC for the top 10 exposures of 1.90x as of Dec. 31, 2006, compared with 1.92x at issuance. Both DSC calculations included additional debt service for four of the top 10 exposures that have initial interest-only periods but had not begun to fully amortize in 2006. One of the top 10 exposures is on the master servicer's watchlist and is discussed below. Standard & Poor's reviewed the property inspection reports provided by Wells Fargo for the assets underlying the top 10 exposures, and all were reported to be in "good" or "excellent" condition. Four exposures exhibited investment-grade credit characteristics at issuance and continue to do so. Details of these exposures are: -- The Bank of America Plaza is the largest exposure in the pool and is secured by a 55-story, 1.4 million-sq.- ft. office tower in Los Angeles. The property is encumbered by a $189.7 million A note that is split into five pari passu pieces, all of which are included in the trust and make up 14% of the pool balance. In addition, there is a $50 million B note held outside the trust. Standard & Poor's calculated a DSC of 1.94x as of Dec. 31, 2006, compared with 2.01x at issuance. This calculation includes additional debt service for the loan that had an initial interest-only period until September 2006. The adjusted net cash flow for this exposure is comparable to its level at issuance. Occupancy was 94% as of year-end 2006, down from 98% at issuance. -- The second-largest exposure in the pool, the Wells REF portfolio, has an interest-only A note with a whole- loan balance of $350 million. The note is split into three pari passu pieces, $125 million of which makes up 9% of the trust balance. The exposure is secured by nine class A office properties totaling 2.9 million sq. ft. located across five states and the District of Columbia. Standard & Poor's underwritten NCF has been stable since issuance. Reported combined DSC was 3.54x as of year-end 2006, and occupancy was 100% as of April 2007, compared with a DSC of 3.55x and occupancy of 100% at issuance. -- The fourth-largest exposure in the pool, the Eastview Mall, has a trust balance of $99.8 million (8%). The loan is secured by 710,900 sq. ft. of a 1.4 million- sq.-ft. single-story enclosed mall in Rochester, N.Y. Standard & Poor's underwritten NCF has been stable since issuance. The property reported a DSC of 1.95x as of year-end 2006 and occupancy of 94% as of April 2007, compared with a DSC of 1.99x and occupancy of 98% at issuance. -- The sixth-largest exposure in the pool, the Mall at Millenia, is secured by 518,150 sq. ft. of a 1.1- million-sq.-ft. super-regional retail mall in Orlando, Florida. The loan consists of a $195 million A note that is participated into four pari passu pieces, $57.5 million of which makes up 4% of the trust balance. The property is also encumbered by a $15 million B note held outside the trust. Standard & Poor's underwritten NCF has increased by 22% since issuance. Standard & Poor's calculated a DSC of 2.01x as of Dec. 31, 2006, up from 1.64x at issuance. This calculation includes additional debt service for the loan that has an initial interest-only period until May 2008. Occupancy was 100% as of January 2007, up from 94% at issuance. Well Fargo reported a watchlist of 17 loans with an aggregate outstanding balance of $126.7 million (10%). The eighth-largest exposure ($28.7 million, 2%), 201 Old Country Road, is secured by a three-story 217,000-sq.-ft. office building in Melville, N.Y. The loan is on the watchlist due to upcoming lease expirations of three major tenants that occupy approximately 69% of the gross leasable area. The borrower has indicated that 38% of the GLA is currently being marketed. Standard & Poor's calculated a DSC of 1.15x as of Dec. 31, 2006, down from 1.29x at issuance. This calculation includes additional debt service for the loan that had an initial interest- only period until September 2006. Occupancy was 100% as of June 2007, the same as at issuance. The remaining loans on the watchlist have low DSCs, low occupancies, and/or upcoming lease expirations. Standard & Poor's stressed various assets securing the loans in the mortgage pool as part of its analysis, including those on the watchlist or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the affirmed ratings. Ratings Affirmed Morgan Stanley Capital I Trust 2004-HQ4 Commercial mortgage pass-through certificates series 2004-HQ4 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-2 AAA 12.14 A-3 AAA 12.14 A-4 AAA 12.14 A-5 AAA 12.14 A-6 AAA 12.14 A-7 AAA 12.14 B AA+ 10.98 C AA 9.56 D AA- 8.53 E A 6.72 F A- 5.94 G BBB+ 5.04 H BBB 4.13 J BBB- 2.97 K BB+ 2.58 L BB 2.19 M BB- 1.81 N B+ 1.68 O B 1.42 P B- 1.16 X-1 AAA N/A X-2 AAA N/A N/A - Not applicable. MOUNTAIN LAKE: Competitive Market Cues S&P's B+ Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Mountain Lake Acquisition Co., a holding company established by senior management of U.S. Xpress Enterprises Inc. to purchase all of the trucking company's outstanding Class A common shares. Following the transaction's close, Mountain Lake Acquisition Co. will be merged into U.S. Xpress Enterprises Inc. The outlook is stable. At the same time, S&P assigned a 'B+' bank loan rating, the same as the corporate credit rating, and '4' recovery rating, indicating expectations of average (30%-50%) recovery in the event of a payment default, to Mountain Lake Acquisition Co.'s proposed $235 million senior secured credit facility. The facility consists of a $185 million senior secured term loan B due 2014 and a $50 million revolving credit facility due 2012. The ratings are based on preliminary terms and are subject to review of final documentation. "The ratings on Mountain Lake Acquisition, which is acquiring U.S. Xpress Enterprises, reflect the intensely competitive, highly fragmented, cyclical truckload market, as well as the company's highly leveraged capital structure, and below-average operating performance relative to its peers," said Standard & Poor's credit analyst Anita Ogbara. "This is partially offset by the company's meaningful business position as a major truckload carrier with good customer, end-market, and geographic diversity." Chattanooga, Tennessee-based U.S. Xpress is the sixth-largest truckload carrier in the U.S., operating a fleet of approximately 7,700 tractors and 22,000 trailers, in more than 30 major terminals primarily located in the U.S. While the company maintains a meaningful market position, it operates in a very fragmented industry where the top 10 truckload companies account for less than 5% of the total for-hire truckload market. As a result, U.S. Xpress faces intense competition and pricing pressure from other large industry players. The company does benefit from customer and end-market diversity, with no single customer accounting for more than 6% of revenues in 2006, and a fairly balanced mix of industries including retail, manufacturing, food, and consumer products. U.S. Xpress also serves the contract logistics market, generating about 21% of 2006 revenues in this segment. Finally, the company's national network of terminals helps provide broad geographic coverage, diversify its service offering, and improve asset utilization. In the near term, S&P expect the company to focus on improving its operating performance and profitability, as well as repaying debt, which should help strengthen credit metrics. Given the company's heavy debt load and industry challenges, an outlook change to positive is unlikely in the near term. Should industry challenges intensify, causing credit measures to deteriorate, S&P would likely revise the outlook to negative. MWAM CBO: Fitch Junks Rating on $21.8 Million Class B Notes ----------------------------------------------------------- Fitch takes rating actions on MWAM CBO series 2001-1, Ltd. notes as: -- $98,773,673 class A notes downgraded to 'AA+' from 'AAA'; -- $21,875,000 class B notes downgraded to 'C/DR1' from 'B/DR2'; -- $14,730,078 class C-1 notes remain at 'C', DR revised to 'DR6' from 'DR5'; -- $10,147,533 class C-2 notes remain at 'C', DR revised to 'DR6' from 'DR5'. MWAM 2001-1 is a collateralized debt obligation (CDO) managed by Metropolitan West Asset Management (MWAM), which closed on Jan. 24, 2001. MWAM 2001-1 is composed of residential mortgage- backed securities (RMBS), commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), CDOs, investment grade corporates and US government securities. Included in this review, Fitch discussed recovery rates for some of the assets in the portfolio with the asset manager. In addition, Fitch Ratings conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the break-even default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. These downgrades reflect continued collateral deterioration resulting from negative credit migration since the last rating action in February 2006. As of the July 26, 2007 trustee report, the percentage of the portfolio rated below investment grade increased to approximately 49% from 43% since the last review. Consequently, due to overcollateralization (OC) haircuts for assets rated below 'BB-' the class A OC, class B OC, and C OC ratios, reported at 118.18%, 96.75%, and 80.21%, respectively, as of the July trustee report, on average went down from 121.30%, 103.26% and 89.81% respectively, as of the last review in February 2006. In addition, the weighted average coupon (WAC) test continues to fail at 7.73%, relative to a trigger of 8.10%. The transaction is sensitive to interest rate changes given that almost 25% of the portfolio consists of inverse and range floaters. The rating of the class A notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class B and C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. NEW MOUNTAIN: Moody's Rates $235 Million Senior Loan at B1 ---------------------------------------------------------- Moody's Investors Service assigned a first time rating of B1 (LGD3, 43%) to the $235 million first lien senior secured credit facilities ($50 million revolving credit and $185 million term loan B) of New Mountain Lake Acquisition Company. The Corporate Family and Probability of Default ratings are each B2 and the outlook is stable. The term loan B will fund the planned tender offer by Mountain Lake for the outstanding class A common shares of U.S. Xpress Enterprises, Inc. not owned by Mountain Lake or its affiliates. Upon completion of the tender offer, Mountain Lake will merge with U.S. Xpress. U.S. Xpress will be the surviving entity and will assume all of the obligations of Mountain Lake. The B2 corporate family rating reflects the high debt service burden, with weak EBIT to Interest coverage in particular, that will result from the going-private transaction. Additionally, this leveraging transaction is being pursued during a period marked by excess truckload capacity because of the weak demand environment and significant investment that took place ahead of the stricter engine emission standards that came into effect at the end of 2006. This has the potential to limit the amount and timing of planned debt reduction. Pro forma EBIT to Interest of about 1.0 time is expected, which is typically reflective of issuers rated lower than B2. Nevertheless, a large depreciation component supports a sizeable level of funds from operations. "The relatively young fleet provides flexibility to defer capital expenditures to help generate free cash flow to service the higher debt burden," said Jonathan Root, Moody's High Yield ransportation Analyst. Adequate alternate liquidity from a revolving credit and the unused portion of an accounts receivable securitization facility after issued letters of credit, as well as the potential to sell excess equipment also support the B2 corporate family rating. The stable outlook reflects Moody's view that the company retains the ability to preserve cash flows at levels sufficient to meet the higher debt service obligations through a weaker operating environment. Downwards rating pressure could arise if demand falls and the company does not reduce expenses to preserve the operating margin. Debt to EBITDA being sustained above 6.0 times or EBIT to Interest being sustained below 1.0 time would pressure the ratings. Deterioration in liquidity such that availability under the revolver was sustained below $40 million or there was only a modest cushion for compliance with financial covenants would also pressure the ratings. Ratings or the outlook could be upgraded if Debt to EBITDA was sustained below 4.3 times and EBIT to Interest was sustained above 2.0 times. Assignments: Issuer: New Mountain Lake Acquisition Corp. -- Probability of Default Rating, Assigned B2 -- Corporate Family Rating, Assigned B2 -- Senior Secured Bank Credit Facility, Assigned a range of 43 - LGD3 to B1 -- Outlook, Assigned Stable New Mountain Lake Acquisition Company, based in Chattanooga, Tennessee is an acquisition vehicle created to facilitate the going-private transaction being pursued by the current majority shareholders of U.S. Xpress Enterprises, Inc. U.S. Xpress Enterprises, Inc., a Nevada Corporation, headquartered in Chattanooga, Tennessee, provides truckload transportation services in North America, including line-haul, dedicated and inter-modal freight services. NORCAL WASTE: S&P Withdraws BB- Rating at Company's Request ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on San Francisco, California-based Norcal Waste Systems Inc. at the company's request. OGLEBAY NORTON: Harbinger Prepared to Enter into Definitive Pact ---------------------------------------------------------------- Despite the Oglebay Norton Company's disclosure which claims that Harbinger Capital Partners were invited into the company's "process," Harbinger Capital Partners wants to set the record straight: Harbinger Capital Partners were never invited into a "process," and in fact it is Harbinger Capital Partners' firm belief that they started the "process." Notwithstanding the inaccuracies of the company's statement, Harbinger Capital Partners are committed to protecting and maximizing the value of Oglebay Norton for all shareholders. Harbinger Capital Partners yesterday said it is prepared immediately to enter into a definitive merger agreement to purchase all the capital of Oglebay Norton for $31.00 per share in cash while allowing the company the opportunity to seek a higher offer for its shareholders. Harbinger Capital Partners said that it is prepared immediately to: 1) sign a definitive agreement that will provide Oglebay Norton shareholders with $31 per share in cash with customary break-up protection at market rates; and 2) allow Oglebay Norton a 30-day go shop provision to explore whether a higher offer is achievable, subject to Harbinger's right to match any and all competing offers. Harbinger's offer is not subject to the conduct of due diligence, the receipt of material non-public information or financing. Moreover, Harbinger will not require that the Company provide extensive representations regarding it business. Harbinger Capital Partners said: "Our proposal is a win-win for Oglebay Norton shareholders: they will have the certainty of knowing they will receive $31 in cash, with the opportunity to receive more if a higher bid materializes. We urge shareholders to make it clear to the board of Oglebay Norton that further delay and undue complication will not be tolerated." Harbinger Capital Partners said it has taken this additional step to protect Oglebay shareholders with an attractive alternative that the Oglebay board can easily embrace. In the meantime, Harbinger's $31 all cash tender offer remains outstanding, subject to its terms. Oglebay's Statement In a statement released on Wednesday, Oglebay Norton provided an update on its ongoing exploration of strategic alternatives process. The company stated that as previously disclosed on July 24, 2007, the Oglebay Norton Board of Directors formed a Special Committee of independent directors to explore strategic alternatives to maximize shareholder value, including a possible sale or merger of the company. As part of this process, numerous potential buyers were contacted and have signed a confidentiality agreement. Over the past two weeks, the Company's management has met with several of the potential buyers and additional meetings are planned. As part of this process, Oglebay Norton has already received an indication of interest in excess of $31.00 per share, which affirms the Special Committee's belief that this process may generate value greater than the $31.00 per share offered by Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. in connection with Harbinger's unsolicited tender offer. "The Company is engaged in an orderly process designed to maximize value for all Oglebay Norton shareholders," said Thomas O. Boucher Jr., Chairman of the Board and Special Committee. "We understand our shareholders' desire to see a resolution of the process and appreciate their patience as we continue our discussions with potential buyers. We continue to believe that this process may result in an offer that is superior to Harbinger's unsolicited bid of $31.00 per share." Oglebay Norton noted that Harbinger has been invited to participate in the company's process, but thus far, Harbinger has not responded to this invitation. Oglebay Norton's Special Committee is committed to continuing its robust exploration process to maximize value for all Oglebay Norton shareholders. Accordingly, the Special Committee is again extending an invitation to Harbinger to participate in the process. Annual Meeting In order to ensure that Oglebay Norton shareholders can make an informed decision, the company has rescheduled its 2007 annual meeting of shareholders to Tuesday, Nov. 13, 2007, by which time the review of strategic alternatives is expected to be completed. Harbinger previously announced that it has extended its unsolicited tender offer until 5:00 pm, New York City time, on Friday, September 14, 2007. A majority of Oglebay Norton's Board continues to recommend that shareholders take no action with respect to Harbinger's unsolicited tender offer until the Board has completed its strategic review. Shareholders who have already tendered and wish to withdraw their shares may call the Company's Information Agent, Georgeson Inc. Banks and bankers can call +1-212-440-9800 and all others can call toll-free at +1-888-605-7543. JPMorgan is serving as lead financial advisor to Oglebay Norton and Imperial Capital, LLC is co-financial advisor. Jones Day is serving as legal counsel to the Company and Porter Wright Morris & Arthur is serving as legal counsel to the Special Committee. Georgeson Inc. is serving as Oglebay Norton's proxy advisor. Harbinger's Demand Prior to releasing the statement, the Board of Directors of Oglebay Norton received a demand from Harbinger than Oglebay remove the remaining impediments to its offer to acquire all of the outstanding Shares of Oglebay Norton for $31.00 per Share in cash plus one Contingent Value Right per Share before the offer expires at 5:00 pm, New York City time, today, September 14, 2007, unless otherwise extended. The Board has until that time to take the actions necessary to allow Harbinger Capital Partners' to close the Offer without undue delay. Harbinger related that on Sept. 7, 2007, after a sufficient number of common shares had been tendered to satisfy the "minimum condition" to the Offer, Harbinger sent a letter to the Oglebay Norton Board, specifically requesting that the Board terminate the company's poison pill and satisfy the maritime condition of the offer. Given the overwhelming response to the Offer -- the combination of the tendered shares and Harbinger's own shares represented approximately 75% of the total outstanding Shares not controlled by the company's Chairman -- Harbinger expects and demands that the Board move quickly to remove the outstanding conditions to the offer. Harbinger adds that as of Tuesday, the company's Board has taken no action and refused to engage in any meaningful dialogue with Harbinger Capital or its advisors. Harbinger Capital Partners noted, "The Oglebay Norton Board has until [today]day to fulfill its fiduciary responsibility of maximizing shareholder value by removing the obstacles to our offer and allowing shareholders to receive the unmatched value we are presenting. Since we launched our offer in early August, the Board has completely stonewalled us and its shareholders, potentially squandering this attractive opportunity. With time running short, we urge the Board to immediately terminate the Company's poison pill and satisfy the maritime condition of the offer so that we can proceed with our Offer. It would be unconscionable if shareholders were prevented from receiving $31 per share in cash while the Board continues to pursue a sham 'strategic review process' that is unlikely to result in any value creation." Harbinger Capital Partners encourages Oglebay Norton shareholders to also contact the Company's Board directly to express their dissatisfaction with the Board's conduct and demand that the Board remove the remaining obstacles to the Offer so that it can be consummated in a timely manner. JPMorgan is serving as lead financial advisor to Oglebay Norton and Imperial Capital, LLC is co-financial advisor. Jones Day is serving as legal counsel to the company and Porter Wright Morris & Arthur is serving as legal counsel to the Special Committee. Georgeson Inc. is serving as Oglebay Norton's proxy advisor. 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 Aug. 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 attractive 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. PACER HEALTH: June 30 Balance Sheet Upside-Down by $7.4 Million --------------------------------------------------------------- Pacer Health Corp.'s consolidated balance sheet at June 30, 2007, showed $16.3 million in total assets and $8.6 million in total liabilities, resulting in a $7.4 million total stockholders' deficit. The company's consolidated balance sheet at June 30, 2007, likewise showed strained liquidity with $9.3 million in total current assets available to pay $10.3 million in total current liabilities. The company reported a net loss of $301,000 in the three months ended June 30, 2007, a decrease from the $3.5 million net loss reported in the same period last year, mainly due to the disposal of Southpark and the acquisition of Knox County Hospital. During the three months ended June 30, 2006, Southpark had a net loss of approximately $1.6 million, which was included in discontinued operations. Net revenues for continuing operations increased to $10.7 million from $3.2 million. Patient service revenue of $2.4 million for Southpark was included in discontinued operations for the three months ended June 30, 2006. The increase in revenue was primarily due to the acquisition of Knox County Hospital. Operating expenses for continuing operations rose from $4.0 million to $11.2 million. Operating expenses of $3.7 million for Southpark was included in discontinued operations for the three months ended June 30, 2006. Operating expenses increased primarily due to the acquisition of Knox County Hospital. Other income was $268,583 for the three months ended June 30, 2007, compared to other expenses of approximately $1.1 million in 2006. Other income consisted primarily of the gain on the sale of the minority interest of $980,458 and a loss on the change in the fair market value of derivatives of $285,635. Interest expense for the three months ended June 30, 2007, and 2006 was $474,238 and $183,873, respectively. Interest expense of $278,559 for Southpark was included in discontinued operations for the three months ended June 30, 2006. At June 30, 2007, the company had total long term debt of approximately $4.9 million, which includes a financing lease of approximately $1.8 million on sale leaseback of real property on Sept. 29, 2006. 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?2350 About Pacer Health Corporation Headquartered in Miami, Florida, Pacer Health Corporation (OTCBB: PHLH) -- http://www.pacerhealth.com/ -- is an owner-operator of acute care hospitals, medical treatment centers and psychiatric care facilities serving non-urban areas throughout the Southeast. PACIFIC LUMBER: Has No Cause to Extend Exclusivity, BoNY Says ------------------------------------------------------------- The Bank of New York Trust Company, N.A., as Indenture Trustee and Collateral Agent for the Timber Notes, asserts that Scotia Pacific Company LLC does not have a legitimate cause to warrant further extension of its exclusivity period. As reported in the Troubled Company Reporter on Aug. 29, 2007, Pacific Lumber Company and its debtor-affiliates asked the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to further extend the time by which they have the exclusive right to: (a) file a plan of reorganization through and including December 17, 2007; and (b) solicit acceptances for that plan through and including February 17, 2008. Zack A. Clement, Esq., at Fulbright & Jaworski L.L.P., in Wilmington, Delaware, notes that Scopac's case is being conducted on the implausible premise that Scopac's value is high enough that there will be value left over for the equity owned by The Pacific Lumber Company and MAXXAM, Inc. In reality, Mr. Clement argues, there is no value for equity because: (a) Scopac's timber operations are not generating significant cash flows; and (b) Scopac's non-income earning marbled murrelet conservation areas -- MMCA Lands -- have materially less value than asserted by Scopac. In particular, Mr. Clement says, there is not sufficient value in Scopac's assets to enable the Debtor to pay: * approximately $36,000,000 owed on the Bank of America revolver; * the minimum $785,000,000 currently owed on the Timber Notes if the Indenture Trustee is fully secured; * $1,000,000 of small trade debt; * $50,000,000 of contingent lawsuit debt; and * more than $1,000,000,0000 of allegedly non-dischargeable qui tam claims. "Because Scopac, PALCO and MAXXAM refuse to accept this reality, they could not make a deal with secured creditors in connection with restructuring negotiations in 2005, and have come nowhere close to making a deal with the Indenture Trustee in current negotiations concerning a plan of reorganization," Mr. Clement informs the Court. The Debtors began negotiations with certain Noteholders in mid 2005, and they have been in bankruptcy for almost eight months. There is no reason why Scopac should not have already completed the valuation of its non-core, non-incoming producing MMCA Lands after over two years of the Debtor's restructure negotiations, Mr. Clement asserts. "The Debtors are certainly aware of their current cash flows and, through their numerous valuation experts, can determine, with relative ease, an appropriate valuation of their enterprise." Moreover, any value attributed to the Lawsuit against the state of California would not be relevant to form the basis of a plan because lawsuits are inherently speculative, the Indenture Trustee adds. Also, the Qui Tam Actions are proceeding only against the non- debtor defendants, the Actions against the Debtors have been stayed, Mr. Clement avers. The Qui Tam Relators have also suggested that any judgment arising from a violation of the False Claims Act would be non-dischargeable. Mr. Clement argues that Scopac, rather than stabilizing its company, has fundamentally altered its business for PALCO's benefit who is running insolvent. Scopac's August 21 Plan Offer Mr. Clements notes that Scopac waited until August 21, 2007, to make its first plan offer to the Noteholders, then premised it on implausibly high values which were completely out of line with reality. Under the August 21 Offer, Mr. Clement points out, Scopac offered the Indenture Trustee only: (i) a percentage of the equity of a newly formed affiliate of Scopac; and (ii) a junior secured note behind hundreds of millions of dollars that Scopac intends to raise at confirmation to pay down other creditors. "Scopac's offer was plainly not the indubitable equivalent of the Indenture Trustee's existing first lien claim, thus not a fair and equitable offer," Mr. Clement argues. According to Mr. Clement, The August 21 offer assumed high values for the MMCA Lands, placed all risk on the Indenture Trustee since the value of the Indenture Trustee's equity in the newly formed entity would disappear if (a) the MMCA Lands do not sell for what Scopac believes, (b) the Lawsuit against the State of California is ultimately unsuccessful, or (c) the qui tam claims are ultimately allowed and found to be-non dischargeable. The Indenture Trustee does not believe that the August 21 offer supports the Debtors' claim that they have been engaging in good faith negotiations. BoNY's Counteroffer To address the risks in Scopac's offer, the Indenture Trustee made a good faith counteroffer dated August 28, 2007, suggesting that Scopac propose a plan under which the Debtor would, over the course of six months, either (1) sell the MMCA Lands; (2) obtain junior debt financing; and/or (3) sell equity and use the funds to pay the Indenture Trustee's claim down by $350,000,000 to a level where Scopac's cash flows from timber operations might be able to service the remaining first lien secured claim of the Indenture Trustee at current market rates of interest. If, at the end of six months, Scopac could not raise $350,000,000 to pay down the Timber Notes by any of those methods, then, because Scopac would not have a level of debt that could be serviced by a note that would be offered in the marketplace, Scopac would sell all of its assets in a Section 363 sale. Under the Counteroffer, Scopac would reduce the risk associated with the alleged high valuation of the MMCA Lands by exposing them to the market to determine their true worth, and leave the Indenture Trustee with a remaining first priority lien that would protect it against the risk of the qui tam lawsuit, Mr. Clements contends. A full-text copy of the Indenture Trustee's Counteroffer for a Consensual Scopac Plan is available for free at: http://ResearchArchives.com/t/s?234a The Use of Markets to Establish Value Mr. Clement notes that Scopac has rejected the use of markets to establish value of its assets and instead, seeks a trial to determine theoretical values. Scopac apparently wants, Mr. Clement tells the Court, to fight three separate litigation wars -- two in the Bankruptcy Court and one in California: 1. Scopac has hired eight experts to testify on a theoretical basis about how much (i) its income earning timber operations, (ii) its MMCA Lands, and (iii) its Lawsuit Against California are worth. 2. Scopac asked the Court to decide the qui tam lawsuit which focuses on the central issue of the number of harvestable redwood trees that are actually on Scopac's property. 3. The Debtors and MAXXAM hope to return to California in 2009 after the bankruptcy cases are over to sue the State of California. On the other hand, the Indenture Trustee wishes to file a plan based on the reality of the marketplace that is likely to bring peace to the company that has experienced constant friction with regulators and has been engaged in continuous litigation ever since MAXXAM acquired PALCO, according to Mr. Clement. The Indenture Trustee proposes to sell Scopac's assets as a going concern in a Section 363 sale, including the income producing timberlands, the MMCA Lands and the Lawsuit Against California. A full-text copy of the Term Sheet for the Indenture Trustee's Plan is available for free at http://ResearchArchives.com/t/s?234b Mr. Clement asserts that the proposed sale will: -- preserve Scopac as a going concern; -- exclude old owners based on the reality that there is not a value for them; and -- give to the purchaser the ability to sit down with the California regulators and agree upon rates of logging while settling the Lawsuit Against California. Accordingly, the Indenture Trustee asks the Court to: (a) deny Scopac's request to extend its Exclusive Periods, (b) immediately terminate Scopac's Exclusive Period, and (c) permit it to file its proposed plan of reorganization. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on Sept. 18, 2007 (Scotia/Pacific Lumber Bankruptcy News, Issue No. 26, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Committee Wants Exclusivity Extension Plea Denied ----------------------------------------------------------------- Time is running out on Pacific Lumber Company and its debtor- affiliates' ability to successfully reorganize, John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, counsel for the Official Committee of Unsecured Creditors points out. "[Moreover,] the Debtors' business appears to be in freefall", Mr. Fiero tells the U.S. Bankruptcy Court for the Southern District of Texas. The Debtors continue to lose money at an alarming rate. The PALCO Debtors expect to be fully drawn on their DIP financing by October. At the same time, Scopac is burning through substantially all of its available cash under a new intercompany arrangement that requires Scopac to handle harvest costs and build up a log deck of its own. The PALCO Debtors' ability to ever purchase those logs, however, is still in doubt, according to Mr. Fiero. Although the Debtors say they have reached out to creditors and are diligently working on a plan, the fact remains that no substantive progress on a feasible reorganization plan has been made from the perspective of the Official Committee of Unsecured Creditors, Mr. Fiero states. The Debtors have had no material negotiations with the Committee about the structure of a plan for more than eight months now. Aside from providing a copy of a single term sheet prepared for the Noteholders, the Debtors have not made any formal plan proposals to the Committee, Mr. Fiero relates. The Creditors Committee says that it has seen virtually no tangible progress in the Debtors' cases except a concerted effort by the Debtors to develop an extremely theoretical and academic valuation of their assets in an effort to preserve value for the benefit of MAXXAM. The Debtors appear to have been very active n terms of gearing up for valuation litigation. Even if that valuation is ongoing, however, that is no basis for extending exclusivity, Mr. Fiero contends. The Debtors are supposed to be working towards a confirmable plan, not taking the extra time to prepare for an inevitable valuation fight, Mr. Fiero says. "[I]t is time for the Debtors to realize that these companies are vastly over-leveraged," Mr. Fiero says. "Creditor interests must now come first. In the absence of real (not theoretical) evidence to the contrary, it appears that equity is out of the money in these cases." The Debtors appear to be working up a plan, but the creditor constituencies remain in the dark, Mr. Fiero avers. The Debtors have had eight months to propose something, yet they have failed to file a plan. It is time for the creditor constituencies to be in a position to take their shot, Mr. Fiero maintains. Hence, the Creditors Committee asks the Court to deny the Debtors' request. As reported in the Troubled Company Reporter on Aug. 29, 2007, the Debtors asked the Court to further extend the time by which they have the exclusive right to: (a) file a plan of reorganization through and including December 17, 2007; and (b) solicit acceptances for that plan through and including February 17, 2008. The Court is set to hear the Debtors' request today, September 14. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on Sept. 18, 2007 (Scotia/Pacific Lumber Bankruptcy News, Issue No. 26, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Revises Exclusivity Extension Plea -------------------------------------------------- Pacific Lumber Company and its debtor-affiliates tells the U.S. Bankruptcy Court for the Southern District of Texas that they intend to reduce their request for a further extension of their Exclusive Filing Period to only 30 days. The Debtors now ask the Court to further extend the time by which they have the exclusive right to: (a) file a plan of reorganization through and including October 18, 2007; and (b) solicit acceptances of that plan through and including February 19, 2008. Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble Culbreth & Holzer, P.C., in Corpus Christi, Texas, informs the Court that the Debtors finally got enough information from Court-approved appraisers and valuation experts, which while only verbal, confirms their prior statements that their estates have substantial value available for equity -- a matter that drives the terms of the plan. The information, however, is still preliminary and additional time is needed to obtain finalized information and opinions for use with the plan, Mr. Holzer explains. The Debtors' management are determined not to seek any further extensions of exclusivity, according to Mr. Holzer. The Debtors relate that they are currently working with the major constituencies on the details of a proposed scheduling order necessary to conduct a complete confirmation hearing in February 2008. The Debtors also expect to file their joint objection to the qui tam proofs of claims second week of September 2007, Mr. Holzer adds. BoNY Talks Back Although the Debtors have reduced its extension request of their Exclusive Plan Filing Period, they, however, continue to seek exclusivity through February 17, 2008, to pursue confirmation of whatever plan they file, Zack A. Clement, Esq., at Fulbright & Jaworski L.L.P., in Houston, Texas, points out. Extending the Exclusive Solicitation Period through February 2008 will give the Debtors 120 days to try to confirm a plan, instead of the 60 days contemplated by the Bankruptcy Code, Mr. Clement contends. In addition, The Bank of New York Trust Company, N.A, as indenture trustee for the Timber Notes, questions the Debtors' move in sending a plan offer dated August 21, 2007 to the Timber Noteholders when they relate that they received critical valuation confirmation "just last week", the first week of September. Mr. Clement relates that Christopher Di Mauro, a managing director of the Los Angeles office of Houlihan Lokey, prepared a declaration in support of the Indenture Trustee's objection to an extension of Scopac's Exclusive Periods. The Di Mauro Declaration clearly demonstrates the complete implausibility of the Debtors' position on the value of their assets, Mr. Clement asserts. Thus, Mr. Clement reiterates, rather than engaging in a protracted and costly litigation concerning theoretical values, the Debtors' exclusivity period should be terminated to allow the Indenture Trustee to file its plan to test Scopac's alleged values by the market. The Indenture Trustee intends to offer into evidence the Di Mauro Declaration at the September 14 hearing. The Declaration contains certain financial information designated by Scopac as confidential, Mr. Clement notes. Thus, the Indenture Trustee seek the Court's authority to file the Di Mauro Declaration under seal pursuant to the Confidentiality Agreement between Scopac and the Indenture Trustee. Mr. Clement notes that the Confidentiality Agreement provides that upon the filing of a motion to seal is filed, Scopac must, within two business days, object to the public disclosure of the subject information and request a hearing to argue that the information should remain under seal. Pursuant to the Confidentiality Agreement, if no objection or request for hearing is filed by Scopac by September 13, the Di Mauro Declaration will become public, Mr. Clement states. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on Sept. 18, 2007 (Scotia/Pacific Lumber Bankruptcy News, Issue No. 26, http://bankrupt.com/newsstand/or 215/945-7000). PATRICIA PASCO: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Patricia Lynn Pasco aka Patricia Pasco Dooney 2111 Franklin Street, Suite 5 San Francisco, CA 94109 Bankruptcy Case No.: 07-31178 Chapter 11 Petition Date: September 12, 2007 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Marc Voisenat, Esq. Law Offices of Marc Voisenat 1330 Broadway, Suite 1035 Oakland, CA 94612 Tel: (510) 272-9710 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor does not have any creditors who are not insiders. PEADEN GRILL: Case Summary & 26 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Peaden Grill & Groccery, Inc. 4206 N.C. 33 West Greenville, NC 27871 Bankruptcy Case No.: 07-03342 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Billy R. Peaden & Cindy G. Peaden 07-03342 Chapter 11 Petition Date: September 11, 2007 Court: Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtors' Counsel: John G. Rhyne, Esq. Hinson & Rhyne, P.A. P.O. Box 7479 Wilson, NC 27895-7479 Tel: (252) 291-1746 Total Assets Total Debts ------------ ----------- Peaden Grill & Groccery, Inc. $54,997 $809,354 Billy R. Peaden & Cindy G. Peaden $489,580 $1,205,721 A. Peaden Grill & Groccery, Inc's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Red Star Oil Company Creditor may claim $475,000 Attn: Managing Agent security interest, 802 Purser Drive, 401 South but there is no Raleigh, NC 27603 UCC-1 Financing Agreement U.S. Small Business No collateral on $140,000 Administration assets owned by Attn: Managing Agent this Debtor. P.O. Box 740192 Collateral of Billy Atlanta, GA 30374-0192 and Cindy PEaden is pledged for this obligation. $26,019 Stallings Brothers, Inc. claim for gasoline $112,000 c/o Andy W. Gay, Esq. delivered P.O. Box 10 Zebulon, NC 27597 Wachovia Bank Line of Credit $25,000 Mid East Acceptance 1995 Catering $7,000 Corporation Truck (manufacturer is U.D.) 116,000 miles; value of security: $4,000 Embarq/R.H. Donnelly ads $1,335 B. Billy R. Peaden's & Cindy G. Peaden's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Red Star Oil Company, Inc. All real estate; $475,000 802 Purser Drive, 41 South 4212 N.C. 33 West Raleigh, NC 27603 Greenville; 608 Holland Road, Greenville; value of security: $478,000; value of senior lien: $519,673 Small Business Administation 4206 N.C. 33 Highway, $332,122 North Carolina District Greenvile where Office Peaden #1 convenience 200 North College Street, store is located; Suite A2015 value of security: Charlotte, NC 28202-2173 $177,000 Stallings Brothers, Inc. services provided $108,236 c/o Andy W. Gay, Esq. P.O. Box 10 Zebulon, NC 27597 Small Business Administation Loan for Downeast $26,000 Motor Speedway (defunct) L.A. Webb 608 Holland Road $18,000 ("Barnes Tract") Greenville, NC Vacant land; value of security: $17,000 First Citizens Bank & Trust Line of credit $15,728 Company Wachovia Bank Line of Credit $10,182 GreenCap Financial 1998 Ford Econoline $9,869 and 1999 Chevy Suburban; value of security: $7,025 Southern Loans, Inc. 2002 Ford Expedition $8,796 89,000 miles; value of security: $8,000 American General Financial 1997 Dodge Ram; $8,528 Services 1990 Ford Truck; value of security: $6,025 Bank of America $5,516 Equity One N.P.M.S.I. $4,196 Capital One $2,761 Wachovia Bank $2,000 C.C.H.C. medical $1,475 Time Financing Services Unsecured loan $991 First Citizens Bank & Trust constant credit on $964 Company checking account Ecolab medical bill $750 Bank of America $535 Wachovia Bank credit card $320 POLYONE CORP: Posts $5.4 Million Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ PolyOne Corporation reported a net loss of $5.4 million in the three months ended June 30, 2007, a reversal of the $42.5 million net income reported in the same period last year. Second quarter 2007 earnings included $23.9 million of special items, including $15.9 million associated with the divestment of the Oxy Vinyls L.P. joint venture on July 6, 2007, and $6.4 million in premium costs associated with the redemption of $100.0 million of the company's 10.625 percent Senior Notes due 2010. Adjusting for the above and other special items, the company's operating income was $36.3 million compared to operating income before special items of $62.6 million in the second quarter of 2006. Sales in the second quarter of 2007 reached $688.8 million, flat compared to $686.4 million reported in the same period last year. The year-over-year decline in second quarter 2007 earnings is primarily attributable to: -- The July 6, 2007, strategic divestment of the OxyVinyls joint venture and the redemption of $100.0 million of the company's 10.625% Senior Notes due in 2010, which in combination resulted in charges of $22.3 million; -- Lower income from the Resin and Intermediates joint ventures and the Vinyl Business segment; -- Non-recurring benefits to second quarter 2006 results that included one-time insurance, legal settlements and adjustments to related reserves of $8.4 million; and -- A reversal totaling $14.1 million of a deferred tax allowance associated with domestic earnings when compared to the second quarter of 2006. A marked downward shift in residential building and construction demand drove OxyVinyls earnings down $40.4 million, dropping from $41.3 million for the first six months of 2006 to $900,000 for same period in 2007. On July 6, 2007, the company divested its OxyVinyls equity interest for $261.0 million in cash. "While the downturn in construction and residential housing significantly affected our R&I joint ventures and Vinyl Business in North America, we are encouraged by the operating performance in our non-vinyl businesses," said Stephen D. Newlin, chairman, president and chief executive officer. "Second quarter operating income for the four businesses that comprise the All Other business segment improved 60.0%, led by increased gross margins realized through specialization efforts. Additionally, in the second quarter, North American Color and Additives turned profitable and our International Color and Engineered Materials segment delivered double-digit sales and earnings growth." For the second quarter of 2007, PolyOne reported operating income of $12.4 million and gross margin of 12.3 percent, down from the same period in 2006, primarily due to weakness in the chloro-vinyl businesses. Newlin added, "Although much work remains in our transformation, our strategies are delivering results earlier than anticipated. Moreover, with the divestment of our interest in the OxyVinyls joint venture, we have significantly reduced our exposure to the building and construction end markets, eliminated a major source of earnings volatility and reduced our debt. We now have increased flexibility to explore new value-creating opportunities for the company in support of our strategy." At June 30, 2007, the company's consolidated balance sheet showed $1.76 billion in total assets, $1.16 billion in total liabilities, and $601.4 million in total stockholders' equity. Fiull-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?2351 About PolyOne Corp. Headquartered in northeast Ohio, PolyOne Corporation -- http://www.polyone.com/-- is a leading global provider of specialized polymer materials, services and solutions. PolyOne has operations in North America, Europe, Asia and Australia, and joint ventures in North America and South America. * * * As reported in the Troubled Company Reporter on July 13, 2007, Fitch Ratings upgraded PolyOne Corporation's Issuer Default Rating to 'BB-' from 'B', Senior unsecured debt and debentures to 'BB-' from 'B+/RR3', and rating outlook to stable. QUANTA SERVICES: InfraSource Buy Cues Moody's to Up Rating to Ba3 ----------------------------------------------------------------- Moody's Investors Service upgraded Quanta Services, Inc. Corporate Family Rating to Ba3 from B1 to reflect the acquisition of Infrasource, reduced debt leverage, ample cash flow generation relative to debt levels, and ongoing growth. This rating action concludes the review that began March 19, 2007. The ratings outlook is stable. Moody's anticipates that the company's debt leverage as measured by debt to EBITDA will decline below 2.5 times at the end of this year and free cash flow to unadjusted debt will be in the mid twenty percent range. The ratings could be upgraded or the outlook changed to positive if the company continues to manage its balance sheet in a conservative manner and generates free cash flow to debt of over 15% on a sustainable basis. Additionally, future acquisitions would have to be financed conservatively and the company must have access to surety bonding through various carriers such that the loss of any one carrier would not force a significant loss of business. The company's revolver size and unused capacity would also be considered in any future rating upgrades as this would serve as a backstop to unlikely problems with surety bonding. The ratings could be downgraded and/or the outlook changed to negative if the company's leverage were to increase above 3 times, or if its backlog were to decline meaningfully. Additionally, a significant decline in the company's access to surety bonding could be a concern. Headquartered in Houston, Texas, Quanta Services, Inc. provides specialized contracting services, offering end-to-end network solutions to the electric power, gas, telecommunications, and cable television industries. Revenues for the trailing twelve months ended June 30, 2007 were approximately $2.3 billion. REDDY ICE: Earns $20.25 Million from Clod Storage Business Sale --------------------------------------------------------------- Reddy Ice Holdings Inc. has completed the divestiture of its bottled water business and substantially all of its cold storage business for total gross proceeds of $20.25 million. The businesses disposed of generated revenue of approximately $9 million and Adjusted EBITDA of $1.6 million for the twelve months ended June 30, 2007. "These businesses were sold at attractive valuations and the successful completion of the transactions represent a continuation of our strategy to focus on the growth of our core ice business," Jimmy C. Weaver, chief executive officer, commented. "We would like to thank the employees of those operations for their years of hard work and wish them future success." The company's existing senior credit agreement requires that the net proceeds from the sale of the company's non-ice businesses will be used either to repay term borrowings under the credit facility or to make acquisitions and/or capital expenditures within twelve months of the receipt of such proceeds. The company is reviewing its options with regards to the use of the net proceeds. Milkie Ferguson Investments Inc. acted as the company's financial advisor on the sale of the non-ice businesses. To date in the third quarter of 2007, the company has completed three additional acquisitions for an aggregate purchase price of approximately $2.8 million. Annual revenues associated with these acquisitions are approximately $2.1 million and Adjusted EBITDA of $0.7 million. About Reddy Ice Headquartered in Dallas, Texas, Reddy Ice Holdings Inc. (NYSE: FRZ) -- http://www.reddyice.com/-- and its subsidiaries manufacture and distribute packaged ice in the U.S. serving about 82,000 customer locations in 31 states and the District of Columbia under the Reddy Ice brand name. Typical end markets include supermarkets, mass merchants, and convenience stores. * * * As reported in the Troubled Company Reporter on July 5, 2007, Moody's Investors Service placed these ratings under review for possible downgrade: (i) corporate family rating, rated B1; (ii) PDR, rated B1; and (iii) $151MM, 10.5% Sr. Disc. Notes due 2012, rated B3 (LGD5, 89%). REGENCY GAS: Good Credit Implications Cue S&P to Lift Rating ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Regency Gas Services LP to 'BB-' from 'B+'. At the same time, S&P affirmed the 'B' rating on Regency Energy Partners LP's senior unsecured notes maturing in 2013, and withdrew the 'BB' rating on Regency Gas' $250 million senior secured credit facility. In addition, all of the ratings were removed from CreditWatch with positive implications, where they were placed on July 24, 2007. The outlook is stable. The rating actions reflect the favorable credit implications S&P expects from ownership by GE Energy Financial Services and the deleveraging effect of the company's equity issuance in July. The rating on the unsecured notes remains the same, due to the double notching effect of the upsized senior secured revolving credit facility (unrated). The ratings on Regency reflect a weak business risk profile and aggressive financial risk profile. Regency Gas Services LP is the operating subsidiary of Regency Energy Partners, a master limited partnership engaged in the gathering, processing, marketing, and transmission of natural gas and natural gas liquids in northern Louisiana, Texas, and the Midcontinent region. "The stable outlook on Regency reflects a stronger financial profile, combined with the influence of owner GE Energy Financial Services, somewhat offset by the uncertainty associated with possible future drop-down strategies," noted Standard & Poor's credit analyst Plana Lee. Further upward ratings movement is possible through stronger cash flow performance, prudently financed acquisitions of predominantly fee-based assets, and ongoing implementation of the company's hedging program. "Conversely, ratings could be lowered due to lower-than-expected cash flows due to disappointing volumes and commodity price sensitivity, or aggressively financed acquisitions that detract from credit protection measures," she continued. RESPONSE BIOMEDICAL: Names S. Wayne Kay as Chief Exec. Officer -------------------------------------------------------------- Response Biomedical Corporation has appointed S. Wayne Kay as chief executive officer. Mr. Kay was also appointed to the company's board of directors. Mr. Kay is a former president, CEO and director of Quidel Corporation, a company in the discovery, development, manufacturing and marketing of rapid diagnostic solutions at the point-of-care in infectious diseases and reproductive health. During his tenure he designed and managed a strategy responsible for building and sustaining unprecedented market leadership of rapid influenza testing. He was also responsible for improving the financial performance of the company during his tenure. Since leaving Quidel in 2004, Mr. Kay served as an executive advisor to the management and boards of several early stage companies, mainly in the San Francisco and San Diego areas. He also served as an executive advisor to blue-chip healthcare/life sciences venture capital funds, Kleiner Perkins Caufield and Byers. "We are very excited to have attracted such an experienced, proven executive to lead Response Biomedical," Dr. Richard Bastiani, chairman, said. "Wayne has a wealth of experience in the diagnostics industry, and particularly in POC, and has a proven acumen for building strong teams and executing on strategy. He led Quidel through a strong expansion phase in their history and his many years experience will be invaluable to lead the company, as we begin our expected rapid growth phase." "I am very pleased to be joining Response Biomedical at this exciting time in the evolution of the company," Mr. Kay said. "With partnerships in place with Shionogi & Co. Ltd. and 3M Company, we are poised for strong growth. I look forward to leading the execution of our cardiovascular partnering strategy, as well as the scale-up in manufacturing, the launch of the new RAMP(R) Reader and the regulatory approval of three products, all anticipated in the next few quarters. These are the building blocks which I believe will significantly enhance shareholder value." "On behalf of the Board of Directors, I'd also like to take this opportunity to thank Bill Radvak for his many years of dedicated service to the company," Dr. Bastiani continued. As part of Mr. Kay's compensation package, he has been granted options to acquire 1,500,000 common shares of the Company, subject to vesting requirements. The options are exercisable at a price of $1.07 per common share. About Response Biomedical Based in Burnaby, British Columbia, Response Biomedical Corp. (TSX-V: RBM) -- http://www.responsebio.com/-- develops, manufactures and markets rapid on- site RAMP tests for medical and environmental applications providing reliable information in minutes, anywhere, every time. RAMP represents a new class of diagnostic, with the potential to be adapted to more than 250 medical and non- medical tests currently performed in laboratories. The RAMP System consists of a portable fluorescent Reader and single-use, disposable Test Cartridges. RAMP tests are commercially available for the early detection of heart attack, environmental detection of West Nile virus, and biodefense applications including the rapid on-site detection of anthrax, smallpox, ricin and botulinum toxin. Going Concern Doubt As reported in the Troubled Company Reporter on May 10, 2007, Ernst & Young LLP, in Vancouver, B.C., raised substantial doubt about Response Biomedical Corp.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditor pointed to the company's inability to generate sufficient cash flows, significant losses to date, and dependence on series of debt and equity financings to continue its operations. The company posted a net loss of $53,592,082 on revenues of $4,420,058 for the year ended Dec. 31, 2006, as compared with a net loss of $44,263,915 on revenues of $3,489,680 in the prior year. SANDY CREEK: S&P Rates $1 Billion Sr. Credit Facilities at BB- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its final 'BB-' rating and '2' recovery rating to Sandy Creek Energy Associates L.P.'s (SCEA) $1 billion first-lien senior secured credit facilities. The '2' rating indicates substantial recovery (70% to 90%) of principal in a default scenario. The preliminary ratings were assigned on Aug. 14, 2007. Sandy Creek Holdings LLC's $200 million senior secured term loan is unrated. Loan proceeds will be used to build the Sandy Creek Energy Station, a nominal 900 MW coal-fired power generation plant in Riesel, Texas. The unit will dispatch into the Electric Reliability Council of Texas (ERCOT)-North subregion of the ERCOT interconnect. The outlook is stable. SCEA, a Delaware limited partnership, is the special-purpose, bankruptcy-remote operating entity formed to build, finance, own, and operate the plant. LS Power Group and Dynegy Inc. jointly own the partnership through their affiliates. SEA CONTAINERS: Wants Exclusive Period Extended to December 21 -------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to file a Chapter 11 plan through and including Dec. 21, 2007, and to solicit acceptances of that plan through and including Feb. 19, 2007. While the Debtors have made tremendous progress on many fronts in their efforts to reorganize and maximize their estates for the benefit of creditors, there remain certain outstanding issues which currently prevent them -- or any party for that matter -- from filing a confirmable Chapter 11 plan, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, explains. These issues include: (1) obtaining and analyzing information from the discovery process necessary to value the Debtors' interests in GE SeaCo SRL, (2) gaining better clarity on the validity of GE SeaCo's and GE Capital Corporation's significant claims against the estates, including determining whether to estimate the claims in the Bankruptcy Court pending an arbitrator's decision, and (3) reaching a global settlement among the Debtors, Official Committees of Unsecured Creditors of Sea Containers Ltd. and Sea Container Services Ltd. regarding various intercompany issues and pension and other claims asserted against SCL and SCSL. In addition, Mr. Greecher says, the Debtors are undertaking discovery in connection with, and preparing for, the change of control arbitration with GE Capital, scheduled to begin in mid- October. While the Debtors actively are considering plan alternatives that do not hinge on the outcome of the change of control arbitration, for various reasons, the arbitrator's decision may ultimately "guide the process for confirming a chapter 11 plan in these cases and inform the terms of such plan," he adds. "Any plan filed without a resolution of these key issues could suffer such defects as to be patently unconfirmable. Moreover, such a plan would result in needless distraction from the formulation of a confirmable chapter 11 plan," Mr. Greecher asserts. The Debtors submit that their progress in their Chapter 11 cases coupled with the many restructuring task yet to be completed and contingencies yet to be resolved, amply justify the requested extension. The Court will convene a hearing on September 27, 2007, to consider the Debtors' request. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers Ltd. disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Court extended the Debtors' exclusive period to file a Plan of Reorganization to Sept. 28, 2007. (Sea Containers Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SECURITIZED ASSET: Fitch Places BB+ Rating on Negative Watch ------------------------------------------------------------ Fitch Ratings has taken these rating actions Securitized Asset Backed Receivables, LLC 2005-FR1: -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 rated 'BBB+', placed on Rating Watch Negative; -- Class B-2 rated 'BBB', placed on Rating Watch Negative; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative; -- Class B-4 rated 'BB+', placed on Rating Watch Negative; The collateral on the transactions consist of 30 year fixed-rate and adjustable-rate mortgage loans secured by first- and second- lien deeds of trust on residential properties, all extended to subprime borrowers. All of the mortgage loans were originated or acquired by Fremont Investment and Loan. The loans are being serviced by Saxon Mortgage Services, Inc. (rated 'RPS2+' by Fitch). This transaction was placed on 'Under Analysis' on Aug. 21, 2007. The affirmations affect approximately $134.2 million in outstanding certificates. Approximately $14.5 million in outstanding certificates are placed on Rating Watch Negative pending Fitch's receipt of additional performance information that could impact the assigned ratings. Fitch has determined that this pending information would have an inconsequential impact on the certificates that were affirmed. Once this information is received, Fitch will proceed with an analysis of the certificates placed on Rating Watch Negative utilizing its current subprime methodology. SENTINEL MANAGEMENT: Trustee Wants Jenner & Block as Counsels ------------------------------------------------------------- Frederick Grede, Chapter 11 trustee for Sentinel Management Group, Inc.'s bankruptcy estate, asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain Jenner & Block, L.L.P. as his counsel. As counsel, Jenner & Block, L.L.P. will assist the Trustee in all matters concerning the administration of the Debtor's estate. The Trustee tells the Court that the firm's professionals currently bill: Designation Hourly Rates ----------- ------------ Partners $450 - $900 Associates $275 - $425 Paralegals $180 - $235 Project Assistants $125 - $135 Vincent E. Lazar, Esq., a partner in the firm, assures the Court that the firm does not hold any interests adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Lazar can be contacted at: Vincent E. Lazar, Esq. 330 North Wabash Avenue Chicago, IL 60611-7603 Tel: (312) 222-9350 Fax: (312) 527-0484 About Sentinel Management Group, Inc. Based in Northbrook, Illinois, Sentinel Management Group Inc.-- http://www.sentinelmgi.com/--is a full service firm offering a variety of security solutions. The company filed a chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). The Debtor selected Ronald Barliant, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd. as its counsel. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. SENTINEL MANAGEMENT: Gets Dec. 17 Extension to File Plan -------------------------------------------------------- Sentinel Management Group Inc.'s exclusive period to file a plan has been extended by the U.S. Bankruptcy Court for the Northern District of Illinois until Dec. 17, 2007. Until after that date, other parties are barred from filing any plan. Separately, Frederick Grede, Sentinel's Chapter 11 Trustee, is beginning the process of selling off a set of six Skyline Suite tickets to Bears games, with a total face value of about $50,000, Ann Saphir of Chicago Business reports. Charles Mosley, a former executive, opposed the sale. He asserted he owns the tickets and asked Sentinel to return them. At a hearing held Wednesday, Mr. Mosley agreed to take two of the tickets and turn the other four over to Sentinel, which will auction them off on eBay’s StubHub, the source says, citing a Court's order on the matter. Earlier, Henry Shatkin, a Chicago resident who had an account at Sentinel, sued Bank of New York Mellon Corp. (BK) alleging the bank failed in its duties as custodian of Sentinel's client assets, Chad Bray of Dow Jones Newswires relates. According to Dow Jones, the lawsuit alleges that Sentinel, with the assistance or acquiescence of Bank of New York Mellon, employed a "covert and undisclosed leveraging program under which client assets were used as security for huge loans obtained by Sentinel" beginning in 2004. Last month, Dow Jones adds, the Securities and Exchange Commission charged Sentinel with mixing hundreds of millions of dollars of client assets with its own accounts without clients' knowledge, some of which were used as collateral for a $321 million credit line. The Debtor's Trustee recently sought Court permission to subpoena the Bank of New York for its records on Sentinel. Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- is a full service firm offering a variety of security solutions. The company filed a chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd. represent the Debtor. In August 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Mr. Grede selected Catherine L. Steege, Esq., Christine L. Childers, Esq., and Vincent E. Lazar, Esq., at Jenner & Block LLP as his counsels. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. SHERWOOD III: Moody's Cuts Rating on $7 Mil. Class C Notes to Ba3 ----------------------------------------------------------------- Moody's Investors Service has downgraded these notes issued by Sherwood III ABS CDO, Ltd. * Class Description: $24,000,000 Class B Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Baa3 * Class Description: $7,000,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ba3 Moody's Investors Service also placed these notes issued by Sherwood III ABS CDO, Ltd. on review for possible downgrade: * Class Description: $59,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $51,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $18,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. SINCLAIR BROADCAST: Paying $0.15/Share Dividend on October 12 ------------------------------------------------------------- Sinclair Broadcast Group Inc.'s board of directors has declared a quarterly cash dividend of $0.15 per share on the company's Class A and Class B common stock. The dividends are payable on Oct. 12, 2007, to the holders of record at the close of business on Oct. 1, 2007. The common stock will trade ex-dividend on Sept. 27, 2007. Headquartered in Baltimore, Maryland, Sinclair Broadcast Group Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is a diversified television broadcasting company that owns and operates programs or provides sales services to 58 television stations in 36 markets. Sinclair's television group is affiliated with all major networks and reaches approximately 22% of all U.S. television households. * * * As reported in the Troubled Company Reporter on July 16, 2007, Moody's Investors Service upgraded Sinclair Broadcast Group's 4.875% convertible subordinated notes to B1 from B2 and its subsidiary, Sinclair Television Group Inc.'s 8% Senior Subordinated Notes to Ba3 from B1. SPHERIS INC: Secures $95 Million Senior Credit Facilities --------------------------------------------------------- Cratos Capital Partners, LLC and Ableco Finance, LLC have arranged a $95 million senior credit facility for Spheris, Inc., a portfolio company of Warburg Pincus, LLC and TowerBrook Partners, L.P. Cratos served as the Administrative Agent while Ableco served as the Documentation Agent. The $95 million senior secured credit facilities consist of a $25 million revolving line of credit and a $70 million term loan. Proceeds under the facilities were used to refinance existing senior debt and for ongoing working capital needs. "Cratos Capital and Ableco structured a credit facility that was both flexible and accommodating and that remained very consistent throughout the underwriting and closing process," Brian Callahan, Chief Financial Officer of Spheris, said. "Further, we believe we have partnered with two lenders that will be supportive of the growth initiatives of Spheris." About Cratos Capital Headquartered in Alpharetta, Georgia, Cratos Capital Partners LLC -- http://www.cratoscapital.com/-- is a commercial finance company that provides tailored senior and junior debt solutions to middle market companies on a national basis. About Ableco Finance Ableco Finance LLC is a specialty finance company, formed by the management of New York City-based Cerberus Capital Management, L.P. -- http://www.cerberuscapital.com/-- that invests in leveraged buyouts and leveraged "roll-ups," bridge loans, recapitalizations, refinancing, debt restructurings, acquisitions and Chapter 11 reorganizations, including debtor-in-possession and exit financing. About Spheris Headquartered in Franklin, Tennessee, Spheris Inc. -- http://www.spheris.com/-- is an outsource provider of clinical documentation technology and services to health systems, hospitals and group medical practices throughout the U.S. Spheris offers a highly advanced, Web-based technology platform, available as an independent solution to support in-house departments or blended with Spheris' outsource services. Spheris employs approximately 5,500 skilled medical language specialists supporting the company's clients through a secure network. * * * As reported in the Troubled Company Reporter on Sept. 11, 2007, Moody's Investors Service revised Spheris Inc.'s rating outlook to stable from negative. Concurrently, Moody's affirmed the B3 Corporate Family Rating and B3 Probability of Default rating. As reported in the Troubled Company Reporter on Sept. 7, 2007, Standard & Poor's Rating Services revised its outlook on 'B-'-rated medical transcription provider Spheris Inc. to stable from negative. STATIC RESIDENTIAL: Moody's Cuts Rating on Class D Notes to Ba3 --------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade and downgraded these notes issued by Static Residential CDO 2006-B, Ltd.: * Class Description: $145,000,000 Class A-1(b) Floating Rate Notes, due 2037 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $110,000,000 Class A-2 Floating Rate Notes, due 2037 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $80,000,000 Class B-1 Floating Rate Notes, due 2037 -- Prior Rating: Aa1 -- Current Rating: Aa1, on review for possible downgrade * Class Description: $35,000,000 Class B-2 Deferrable Interest Floating Rate Notes, due 2037 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade * Class Description: $40,000,000 Class C Deferrable Interest Floating Rate Notes, due 2037 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba1 * Class Description: $40,000,000 Class D Deferrable Interest Floating Rate Notes, due 2037 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba3 According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists of mortgage-backed securities. SUN MICROSYSTEMS: Inks Deal to Acquire Majority of Cluster File --------------------------------------------------------------- Sun Microsystems Inc. has executed a definitive agreement pursuant to which Sun will acquire the majority of Cluster File Systems Inc.'s intellectual property and business assets, including the Lustre File System. By acquiring Cluster File Systems Inc., Sun intends to add support for the Solaris (TM) Operating System on Lustre and plans to continue enhancing Lustre on Linux and Solaris OS across multi vendor hardware platforms. Sun also plans to deliver Lustre servers on top of Sun's open source Solaris ZFS solution, which is one of the growing storage virtualization technologies in the marketplace. The agreement further extends Sun's momentum in open source and Solaris and complements the company's current direction to provide the industry's most complete end-to-end High Performance Computing storage solution. "This acquisition, coupled with the recent statement of the Sun Constellation System, the most open petascale capable HPC architecture in the industry, shows our long-term commitment to the open source community and leadership in HPC," John Fowler, executive vice president, Systems Group, Sun Microsystems Inc., said. "Adding the Lustre technology to our already broad and innovative product line-up will strengthen our portfolio and enable Sun and our partners to offer customers an even more complete and open HPC solution." "Lustre provides network centric scalability for storage that is well matched with the complete and open Sun Constellation System architecture for petascale levels of performance," says Peter Braam, CEO, Cluster File System Inc. "This is a clean and extremely scalable approach to provide high bandwidth and low latency access to large amounts of data for HPC applications." "Our team is tremendously excited about joining Sun and furthering the mission of extreme scale computing," Mr. Braam added. "We have already worked together to deliver several large clusters, for example the fastest supercomputer in Asia at Tokyo Tech and we're now in the process of installing a 500+ TeraFlop and 1.7 PetaByte cluster at Texas Advanced Computing Center." The transaction is subject to customary closing conditions and is expected to be completed in the beginning of Sun's second fiscal quarter, beginning Oct. 1, 2007. The terms of the deal were not disclosed as the transaction is immaterial to Sun's earnings per share. About Cluster File Systems Inc. Headquartered in Boulder, Colorado, Cluster File Systems Inc. -- http://www.clusterfs.com/-- is into high-performance, scalable cluster file system technology. Experience, insights, and engineering have enabled CFS to surpass the scalability limits of modern computing. The company's Lustre File System powers clusters with ten of thousands of nodes and petabytes of data, delivering parallel I/O and metadata throughput on many of the Linux-based supercomputers. CFS provides technical support, training, and engineering services, and is actively working with storage and cluster vendors to develop the next generation of intelligent storage devices. The Lustre File System for Linux is open source software developed and maintained by CFS. About Sun Microsystems Inc. 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. carries Moody's "Ba1" probability of default and long-term corporate family ratings with a stable outlook. The ratings were placed on Sept. 22, 2006, and Sept. 22, 2005, respectively. Sun Microsystems also carries Standard & Poor's "BB+" long-term foreign and local issuer credit ratings, which were placed on March 5, 2004, with a stable outlook. TCO FUNDING: Moody's Affirms Ba3 Ratings on $264 Million Loans -------------------------------------------------------------- Moody's affirmed the B2 corporate family rating for TCO Funding Corp. and the Ba3 ratings on its $40 million revolving credit facility due 2010 and $224 million first lien term loan due 2012. The ratings outlook was changed to positive from stable prompted primarily by the company's recently announced prospective IPO offering. Tensar plans to use the proceeds of the IPO to reduce the company's leverage. Tensar expects to sell approximately $175 million of common stock with primary and secondary offerings amounting to $150 million and $25 million, respectively. The proceeds from the primary offering are anticipated to be used to pay down debt. Upon the successful completion of the IPO, the company is expected to reduce its projected Sept. 30, 2007 debt leverage (debt to EBITDA) by approximately two turns to 4 times. Post the successful completion of the IPO and reduction in debt levels, the company will be strongly positioned in the B2 ratings category. These rating/assessments were affirmed/revised: -- $40 million revolving credit facility, due 2010, affirmed at Ba3 (LGD2 -- 28%), previously Ba3 (LGD2-29%); -- $224 million first lien term loan, due 2012, affirmed at Ba3 (LGD2 -- 28%), previously Ba3 (LGD2-29%); -- Corporate family rating, affirmed at B2; -- Probability of Default, affirmed at B2; -- Outlook changed to positive from stable. Moody's notes that because of potential changes in the company's capital structure, there is a possibility that the Ba3 ratings on the company's first lien facilities could be lowered if there is a reduction in the debt cushion resulting from a paydown of junior capital. Key rating factors supporting the change in the outlook to positive include: (i) anticipation that the IPO proceeds will significantly reduce the company's debt burden and improve the company's balance sheet; (ii) the expectation that there will continue to be strong demand for the company's products; and (iii) Tensar's patents and processes combined with the company's geographically diverse distribution network create meaningful barriers to entry. The ratings could be upgraded if: (i) the company's free cash flow to debt increases to above 8% on a sustainable basis; (ii) leverage would improve to and be anticipated to remain below 4 times; and (iii) Moody's anticipates the company to manage its balance sheet in a conservative manner. The key rating factors pressuring Tensar's rating include: (i) the company's low free cash flow generation relative to debt levels, as the ratio is expected to remain below 8% for 2007; (ii) the likelihood that the company may stimulate its growth through debt financed acquisitions thus creating a level of uncertainty in the company capital structure; and (iii) the high level of customer concentration - top ten distributors of its products represented 49% of the company's 2006 sales with the number 1 customer -- Contech Construction Products -- represented over 15% of sales for the same time period. The positive rating outlook would likely be changed back to stable if the company fails to execute on the contemplated IPO, thereby maintaining its current capital structure and high leverage. The ratings could be lowered if: (i) the company were to make a significant debt financed acquisition without a corresponding EBITDA and cash flow contribution; (ii) leverage was projected to increase and remain above 6 times; (iii) the company's margins were to decline by over 150 basis points due to increased competition or an inability to pass on raw material price increases; and/or (iv) if the company loses market share, particularly from its top 3 clients. Headquartered in Atlanta, Georgia, Tensar offers an integrated suite of products and services that provide soil stabilization, earth retention, foundation support, and erosion and sediment control. Revenues for the trailing twelve month period ended June 30, 2007 were $216 million. TRACY ARNOLD: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Tracy Yvette Arnold 6103 Erika Place Glenn Dale, MD 20769 Bankruptcy Case No.: 07-18755 Chapter 11 Petition Date: September 12, 2007 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Laura J. Margulies, Esq. Laura Margulies & Associates, LLC 6205 Executive Boulevard Rockville, MD 20852 Tel: (301) 816-1600 Fax: (301) 816-1611 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ NASA FCU $28,647 P.O. Box 3100 Merrifield, VA 22119 HEW Fed. CU $24,511 200 Independence Avenue Washington, DC 20201 SECU $20,187 8503 LaSalle Road Baltimore, MD 21204 WFS Financial $14,041 Secured: $35,000 Ninety Five Office Park, LLC $12,743 SZABO $10,054 Signal $9,500 Capital One $2,453 780 WAVA 105.1 $2,976 ADT Security Systems, Inc. $2,274 Staples $2,347 Horizon Power & Light $2,320 Glenn Dale Greens HOA Inc. $480 American Home Mortgage $100 Home Loan Services $100 New Century Mortgage $100 Chase Manhattan Mortgage Corp. $100 TRICHE HAULING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Triche Hauling & Materials Co., L.L.C. 256 Ideal Street Paincourtville, LA 70391 Bankruptcy Case No.: 07-11713 Chapter 11 Petition Date: September 11, 2007 Court: Eastern District of Louisiana (New Orleans) Judge: Elizabeth W. Magner Debtor's Counsel: Thomas E. Schafer, III, Esq. 328 Lafayette Street New Orleans, LA 70130 Tel: (504) 522-0203 Fax: (504) 523-2795 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First American Bank accounts $444,600 P.O. Box 550 receivable, 2002 Vacherie, LA 70090 Kenworth tractor and 2000 Travis trailer; value of security: $104,000 Martin Marietta Materials $39,680 P.O. Box 75328 Charlotte, NC 28275 Capital One $29,150 P.O. Box 4539 Houston, TX 77210 Southland International $15,581 Southern Tire $12,240 Kenworth of South Louisiana $10,941 Plaquemine Truck Stop $10,394 Chase Bank Credit Card $7,637 Vulcan $6,538 Louisiana Department of $6,025 Revenue L.B. Landry Trucking $5,000 St. Mary Parish Tax Collector $4,965 Bennett & Bennett $4,544 Association Arable's Trucking Services, $3,776 L.L.C. Theriot's Dozer Service, $3,760 L.L.C. Port City Tarpaulin & Supply $3,718 Louisiana Machinery $3,113 Klein Enterprises, L.L.C. $2,500 Fleet Pride $2,492 Louisiana Department of $2,277 Public Safety TUPPERWARE BRANDS: S&P Affirms BB Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to Orlando, Florida-based Tupperware Brands Corp.'s proposed $750 million senior secured credit facilities. The facilities were rated 'BBB-', with a recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default. The ratings are based on preliminary terms and are subject to review upon final documentation. Also, Standard & Poor's affirmed its 'BB' corporate credit rating on the company. The outlook is stable. Net proceeds from the bank facilities will primarily be used to refinance existing debt and for general corporate purposes. The total bank facilities will consist of a $200 million senior secured revolving credit facility maturing in 2012 ($50 million expected to be drawn at the close of the transaction) and a $550 million senior secured term loan A, also maturing in 2012. "We don't expect total outstanding debt to materially increase following the transaction," said Standard & Poor's credit analyst Christopher Johnson. For the complete recovery analysis on Tupperware Brands' proposed $750 million financing, see Standard & Poor's recovery report, to be published on RatingsDirect immediately following the release of this report. The ratings on Tupperware reflect the risks of direct-sales distribution and the company's participation in the highly competitive cosmetics industry. These factors are somewhat mitigated by Tupperware's well-known brand name and premium product position within the mature molded-plastic storage category, and improved product and geographic diversity as a result of the December 2005 acquisition of the direct-selling business of Sara Lee Corp. US ONCOLOGY: Revenue Pressure Cues Moody's to Cut Rating to B2 -------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of US Oncology Holdings, Inc. to B2 from B1 and is maintaining a negative ratings outlook. Holdings is the parent company of US Oncology, Inc. The downgrade reflects pressure on revenue growth and the decline in EBITDA over the last 12 months resulting from a combination of a program to reduce management service fees as affiliated practices share in the profitability of the company's pharmaceutical services segment and the discontinuation of Medicare coverage of the use of Erythropoiesis Stimulating Agents ("ESA") in anemia of cancer patients. These recent developments have resulted in weaker credit metrics, notably very high financial leverage approaching 7 times on an adjusted basis, that no longer support the B1 Corporate Family Rating. Further, while acknowledging the available cash balance of approximately $130 million at June 30, 2007, Moody's believes the declining operating results and the scheduled step down in the required levels of financial covenants have weakened the company's liquidity position. Moody's expects further deterioration of operating results from additional limitations on Medicare reimbursement for the use of ESAs in cancer care in accordance with the National Coverage Decision ("NCD") effective July 30, 2007. The NCD that is expected to significantly reduce Medicare reimbursement of ESAs in the treatment of anemia in cancer patients receiving chemotherapy. This reimbursement change is expected to result in a considerable reduction of the company's revenue, net income and cash flow in future periods. The company disclosed that ESA administration accounted for approximately $84 million and $34 million of revenue and operating income, respectively, in the six months ended June 30, 2007. The negative rating outlook reflects limited tolerance for negative deviations from expectations. For example, Moody's could further downgrade the rating if financial leverage were to increase meaningfully (i.e., if debt to EBITDA increased one half turn). Further, Moody's believes the expected deterioration of operating results and weakening credit metrics may require the company to revise certain requirements or elect certain options related to existing debt instruments. Moody's understands that the reduced operating results and the scheduled step down of required financial covenant levels in the company's senior secured credit facility may make it difficult for the company to remain in compliance and could necessitate an amendment of the facility in the very near term. Should US Oncology not obtain the amendment as expected, some comfort can be derived from the level of the company's unrestricted cash balance. Moody's also believes the company may exercise the PIK toggle on Holdings' unsecured notes following the cash payment of interest due in September. While this strengthens the short term liquidity position of US Oncology, Moody's would view the election as a negative development as it merely defers the required repayment of debt and increases the overall cost of the company's debt. Moody's notes that the accretion of PIK interest on Holdings' notes will not affect the company's compliance with financial covenants associated with the senior secured facilities as the definition of leverage under the covenant calculations excludes the debt of Holdings. The B2 Corporate Family Rating considers US Oncology's significant scale and diversity and its unique position in the cancer care market. The company also continues to diversify its sources of revenue through the extension of product offerings without deviating from its core focus on providing cancer care. The most significant example of this is the company's "in-sourcing" of the pharmaceutical distribution function during 2005. The ratings also reflect US Oncology's leading market position in providing services to physicians treating patients with cancer, senior management's tenor and experience in the oncology marketplace, the company's conservative approach to expansion and the expectation that the company will continue to add physicians to its network, which should help offset the loss of revenue from reimbursement changes. These ratings have been downgraded: US Oncology Holdings, Inc.: -- Corporate Family Rating, to B2 from B1 -- Probability of Default Rating, to B2 from B1 -- Senior unsecured PIK toggle notes due 2012, to Caa1 (LGD6, 91%) from B3 (LGD6, 91%) US Oncology, Inc.: -- Senior secured revolving credit facility, to Ba2 (LGD2, 17%) from Ba1 (LGD2, 17%) -- Senior secured term loan due 2011, to Ba2 (LGD2, 17%) from Ba1 (LGD2, 17%) -- Senior unsecured notes due 2012, to B2 (LGD4, 52%) from B1 (LGD4, 53%) -- Senior subordinated notes due 2014, to B3 (LGD5, 76%) from B2 (LGD5, 76%) -- The ratings outlook is negative. US Oncology, headquartered in Houston, Texas, provides service and support to its affiliated cancer care sites. The company provides affiliated physician practices with administrative and billing support, access to advanced treatments and technologies, opportunities to build integrated community-based cancer care centers, the ability to improve therapeutic drug management programs and participate in cancer-related clinical research studies. US Oncology also provides services to pharmaceutical manufacturers, including product distribution and informational services. Moody's estimates that the company generated revenue of approximately $2.9 billion for the twelve months ended June 30, 2007. VOLT INFORMATION: Net Income Up 9% in Quarter Ended July 29 ----------------------------------------------------------- Volt Information Sciences Inc. reported financial results for the company's third quarter and nine months ended July 29, 2007. For the third quarter of fiscal 2007 ended July 29, 2007, net income increased by 9% to $9.1 million compared to $8.4 million in fiscal 2006 third quarter. For the first nine months of fiscal 2007, the company reported net income of $16.2 million compared to $17.1 million last year. General corporate expenses decreased by $0.4 million in the third quarter of fiscal 2007, due to lower professional fees than the comparable fiscal 2006 quarter. Cash and Cash Equivalents Cash and cash equivalents, excluding restricted cash, was $24.3 million at the end of the quarter. At July 29, 2007, the company sold a participating interest in accounts receivable of $90 million under its securitization program and had the ability to finance an additional $110 million under the facility. In addition, the company may borrow under a secured $40 million revolving credit facility and the company's wholly owned subsidiary, Volt Delta Resources, may borrow under a separate $100 million revolving secured credit facility. At July 29, 2007, $20.6 million was drawn under the Delta Credit Facility, of which $5.6 million was borrowed in foreign currencies. During the third quarter of fiscal 2007, the company repurchased about 752,000 shares of its common stock in the open market as treasury stock at a cost of $15 million. LSSi Corp. Merger Volt Delta has received the regulatory clearances to proceed with its definitive merger agreement with LSSi Corp. The transaction is expected to close within the next two weeks and as a result of the merger, LSSi Data Corp. will become a wholly owned subsidiary of Volt Delta. The total merger consideration will be about $70 million in cash subject to adjustment based upon the amount of LSSi's working capital on the closing date. The company expects significant synergies between the operations and the acquisition to become accretive to earnings about six months after closing. "We are pleased to report an increase in earnings for the third fiscal quarter due in part to the Computer Systems segment, which returned to positive quarterly year over year comparisons, and the Telecommunication Services segment, which has started to recognize both revenue and profits from multi-year contracts," Steven A. Shaw, president and chief executive officer of Volt, stated. "We are addressing margin pressure in Technical Placement and the ongoing softening in the Administrative and Industrial sector of the economy with greater efficiencies and investments to support and grow our newer direct placement and RPO service offerings." At July 29, 2007, the company's balance sheet showed total assets of $731.5 million, total liabilities of $403.5 million, and total stockholders' equity of $328 million. Full-text copies of the company's financials are available for free at http://ResearchArchives.com/t/s?2330 About Volt Information Headquartered in New York City, Volt Information Sciences Inc. (NYSE: VOL) -- http://www.volt.com/-- provides national Staffing Services and Telecommunications and Information Solutions with a Fortune 100 customer base. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. * * * Moody's Investor Services placed Volt Information Sciences' issuer default rating at 'BB' in June 2006, which still holds to this date. WCI COMMUNITIES: S&P Holds Junk Ratings and Removes Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating and its 'CCC-' senior subordinated debt rating on WCI Communities Inc. Concurrently, Standard & Poor's removed the ratings from CreditWatch, where they were placed with negative implications on March 16, 2007, following the announcement that affiliates of Carl Icahn intended to launch a hostile tender offer for WCI's common shares. The rating actions affect $650 million of subordinated notes. The outlook is negative. "The rating actions follow WCI's announcement that its new board of directors met and has decided to terminate the company's sale process," explained Standard & Poor's credit analyst James Fielding. The recent election of the substantially new board settled a potentially disruptive proxy battle, but it leaves questions regarding the strategic direction of this undercapitalized homebuilder unanswered. "The low speculative-grade ratings acknowledge strategic concerns and also reflect earnings and liquidity pressures stemming from the extremely competitive conditions in WCI's core Florida housing markets," Mr. Fielding remarked. "Despite ongoing operating challenges, cash flow is likely to be positive over the next several months, and the company has successfully renegotiated its revolving line of credit, which should provide adequate liquidity in the near term." Standard & Poor's will lower the ratings on WCI if liquidity pressures mount as a result of a spike in cancellation rates or further deterioration in gross order trends. The current negative outlook further reflects Standard & Poor's expectations that any improvement in WCI's operating performance will lag that of more diversified peers, as conditions in WCI's oversupplied Florida housing markets are extremely challenging, and wealthier customers in particular are reticent to commit to discretionary home purchases at this point in the housing cycle. However, an outlook revision back to stable and/or an upgrade could be warranted if WCI's new board of directors and management successfully implement a strategy to meaningfully recapitalize WCI and reduce overhead and carrying costs. WERNER LADDER: Committee Wants D&O Medical Benefit Funding Stopped ------------------------------------------------------------------ Werner Holding Co. (DE), Inc., aka Werner Ladder Co., and its debtor-affiliates currently purchase health and dental insurance for certain of their retired directors and officers along with their spouses. The Debtors' books and records regarding the Directors' Insurance are minimal and there has never been any formal plan or program with respect to the purchase of the Directors' Insurance. In fact, the only documents mentioning the Directors' Insurance are the original board minutes from the early 1980s authorizing the company to procure the insurance. The recipients of the Directors' Insurance are these former directors and their spouses and families: * J.J. Despoy * M. Fitzgerald * J.D. McKay * H.L. Solot * R.P. Sulecki * D.M. Werner * R.I. Werner * R.L. Werner Representing the Official Committee of Unsecured Creditors, Dennis A. Meloro, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware, relates that the total monthly cost associated with the Directors' Insurance ranges between $7,000 and $11,000 per month. Mr. Meloro explains that the Committee's investigation reveals that the Debtors are not obligated to provide the Directors' Insurance. The Directors' Insurance is terminable at will and is not governed by Section 1114 of the Bankruptcy Code, Mr. Meloro says. The Directors' Insurance applies to directors who are entitled to supplemental pension benefits, which were already terminated by the Debtors pursuant to a Court order. Thus, Mr. Meloro notes, there are no more directors who currently qualify for the Directors' Insurance. Mr. Meloro contends that continued payments to the Directors' Insurance will deplete the estates of limited resources, which are needed in order to increase the likelihood that the Committee will be able confirm a plan of reorganization and provide value to the estates' unsecured creditors. Accordingly, the Committee asks the U.S. Bankruptcy Court for the District of Delaware to authorize and direct the Debtors to immediately and permanently cease funding the Directors' Insurance. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted their own chapter 11 plan and disclosure statement explaining that plan. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement started on August 23 and was continued to September 12. The Debtors' exclusive period to file a chapter 11 plan expired on June 30, 2007. (Werner Ladder Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or (215/945-7000). WERNER LADDER: Insurance Recipients Want Panel's Motion Modified ---------------------------------------------------------------- Howard L. Solot; Donald M. Werner; Richard P. Sulecki; Joseph J. Despoy; Richard L. Werner; Robert I. Werner; and James McKay object to the Official Committee of Unsecured Creditors' request to direct Werner Holding Co. (DE), Inc., aka Werner Ladder Co., and its debtor-affiliates to immediately and permanently cease funding health and dental insurance coverage for certain of the Debtors' retired officers and directors and their spouses. Mr. Solot, et al., are retired former officers and directors of the Debtors, who, together with their spouses, presently receive the Medical Coverage that the Motion seeks to terminate. Mr. Solot, et al., state that they do not oppose the Committee's proposed termination of the Medical Coverage. However, they propose that any Court order approving the Motion should be modified to provide that: (a) the Medical Coverage Recipients will be afforded a reasonable opportunity to procure replacement health and dental insurance, such that the termination of the Medical Coverage will be effective 60 days after the entry of the Order and not immediately; (b) nothing in the Order is intended to limit, affect or impact nor will it limit the Recipient's ability to apply for and receive any applicable COBRA benefits; and (c) the Recipients will be afforded a 30-day period to file a claim or to amend an existing claim in connection with any claim that may arise for damages in connection with the termination of the Medical Coverage. Accordingly, Mr. Solot, et al., consent to the approval of the Committee's Motion based on their own proposed terms and modifications. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted their own chapter 11 plan and disclosure statement explaining that plan. On Sept. 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement started on August 23 and was continued to September 12. The Debtors' exclusive period to file a chapter 11 plan expired on June 30, 2007. (Werner Ladder Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or (215/945-7000). * Fitch Puts Tobacco Settlement Bonds' Ratings Under Watch ---------------------------------------------------------- Fitch Ratings place all of its outstanding Tobacco Settlement Asset-Backed Bonds ratings on Rating Watch Positive. This action is due to Fitch's upgrade of the corporate rating of the domestic tobacco industry to 'BBB' from 'BBB-' with a Stable Outlook on Aug. 29, 2007. Fitch's rating of the most senior tranches of tobacco settlement bonds is influenced by Fitch's corporate rating of the tobacco industry, with a maximum attainable rating of one notch above the tobacco industry rating. As such, Fitch's maximum rating for tobacco settlement bonds has moved to 'BBB+' from 'BBB'. In addition, Fitch is reviewing its consumption stresses to incorporate some of the same developments that were incorporated in the industry upgrade. Per Fitch's criteria, the ratings on the tobacco bonds are the lower of the maximum attainable rating and the rating commensurate with the stress at which each tranche passes. The corporate rating of the domestic tobacco industry incorporates the creditworthiness of the domestic tobacco subsidiaries on a stand-alone basis, without reliance on parental financial support. The recent corporate rating actions reflect the operational and financial improvements of the major industry participants over the past two years and the continued manageability of litigation risk. Fitch's assessment of the domestic tobacco industry centers on class action cases with the greatest near-to-intermediate term risk. Beyond the legal issues, there are several continuing negative pressures on the tobacco industry including extensive smoking bans which diminish demand and rising excise taxes that can reduce pricing flexibility. Despite these industry factors, the tobacco businesses generate substantial free cash flow. Fitch's ratings on the senior most tobacco settlement bonds can be as high as one notch above the industry rating. Fitch believes that in the event of bankruptcy the Master Settlement Agreement (MSA) would be viewed as an executory contract whereby the manufacturers would be likely to choose to continue making payments under the MSA in order to retain the benefits under the MSA, allowing Fitch to assign a rating one notch higher than the industry rating. Over the past year, the tobacco industry's litigation environment has improved with favorable rulings for the leading tobacco manufacturers. In light of recent rulings, Fitch is reviewing its cash flow stresses for all rating levels in consideration of the decreased tobacco litigation over the near term. Fitch anticipates that most upgrades will be limited to one notch. Notification of any upgrades will be announced upon Fitch's review of the transactions. Additionally, Fitch will update its Tobacco Settlement Bond criteria to reflect the changes to the cash flow stresses within the next 60 days. Fitch places these tobacco settlement asset-backed bonds on Rating Watch Positive: * Inland Empire Tobacco Securitization Authority tobacco settlement asset-backed bonds Series 2007 Inland Empire Tobacco Securitization Corporation) (Riverside County, California) -- $32,500,000.00 Series 2007A Senior Current Interest Bonds, due June 1, 2021, 'BBB'; -- $55,150,000.00 Series 2007A Senior Current Interest Bonds, due June 1, 2021, 'BBB'; -- $53,757,702.60 Series 2007B Senior Convertible Turbo Term Bonds, due June 1, 2026, 'BBB'; -- $53,541,801.45 Series 2007C-1 Subordinate Turbo Capital Appreciation Term Bonds, due June 1, 2036, 'BBB'; -- $29,652,581.40 Series 2007C-2 Subordinate Turbo Capital Appreciation Term Bonds, due June 1, 2047, 'BBB'; -- $23,457,163.80 Series 2007D Subordinate Turbo Capital Appreciation Term Bonds, due June 1, 2057, 'BBB-'; -- $18,948,552.00 Series 2007E Subordinate Turbo Capital Appreciation Term Bonds, due June 1, 2057, 'BB'. * California County Tobacco Securitization Agency (Golden Gate Tobacco Funding Corporation), tobacco settlement asset-backed bonds, series 2007 (Marin County) -- $8,830,000 Series 2007A Current Interest Turbo Bonds, due May 15, 2021, 'BBB'; -- $6,123,570 Series 2007B Convertible Turbo Bonds, due May 15, 2028, 'BBB'; -- $9,280,000 Series 2007A Current Interest Turbo Bonds, due May 15, 2036, 'BBB'; -- $17,275,000 Series 2007A Current Interest Turbo Bonds, due May 15, 2047, 'BBB'; -- $2,288,202 Series 2007 C Subordinate Turbo Capital Appreciation Bonds, due May 15, 2057, 'BBB-'; -- $2,187,675 Series 2007 D Subordinate Turbo Capital Appreciation Bonds, due May 15, 2057, 'BB'; -- $1,928,680 Series 2007 E Subordinate Turbo Capital Appreciation Bonds, due May 15, 2057, 'B'. * Silicon Valley Tobacco Securitization Authority tobacco settlement asset-backed bonds, series 2007 (Santa Clara County, California): Series 2007 turbo capital appreciation term bonds -- 43,604,065.50 series 2007A, due June 1, 2036 'BBB'; -- $11,339,136.60 series 2007A, due June 1, 2041 'BBB'; -- $13,617,538.40 series 2007A, due June 1, 2047 'BBB'; -- $ 4,407,579.55 series 2007B, due June 1, 2047 'BBB-'; -- $20,160,692.00 series 2007C, due June 1, 2056 'BB'; -- $8,901,000.00 series 2007D, due June 1, 2056 'B'; * Golden State Tobacco Securitization Corporation tobacco settlement asset-backed bonds, series 2007 (California) a. Series 2007A-1 senior current interest serial bonds: -- $27,335,000 due June 1, 2008 'BBB'; -- $30,730,000 due June 1, 2009 'BBB'; -- $34,080,000 due June 1, 2010 'BBB'; -- $19,920,000 due June 1, 2011 'BBB'; -- $15,605,000 due June 1, 2011 'BBB'; -- $18,710,000 due June 1, 2012 'BBB'; -- $20,470,000 due June 1, 2012 'BBB; -- $6,395,000 due June 1, 2013 'BBB'; -- $11,655,000 due June 1, 2013 'BBB'; -- $20,570,000 due June 1, 2014 'BBB'; -- $23,190,000 due June 1, 2015 'BBB'; -- $28,875,000 due June 1, 2016 'BBB'; -- $5,140,000 due June 1, 2017 'BBB'; -- $27,255,000 due June 1, 2017 'BBB'; b. Series 2007A-1 senior current interest turbo term bonds: -- $863,100,000 due 2027 'BBB'; -- $610,525,000 due 2033 'BBB'; -- $1,250,000,000 due 2047 'BBB'; -- $693,575,000 due 2047 'BBB'; c. Series 2007A-2 senior convertible turbo term bonds: -- $389,192,591.40 due June 1, 2037 'BBB'. * Chautauqua Tobacco Asset Securitization Corporation (New York), tobacco settlement revenue bonds, series 2000 -- $1,450,000 turbo term bonds due July 1, 2012 'BBB'; -- $1,100,000 turbo term bonds due July 1, 2016 'BBB'; -- $4,820,000 turbo term bonds due July 1, 2024 'BBB'; -- $22,160,000 turbo term bonds due July 1, 2040 'BBB'; * New York Counties Tobacco Trust I (New York), tobacco settlement pass-through bonds, series 2000 -- $910,000 serial bonds due June 1, 2008 'BBB'; -- $1,020,000 serial bonds due June 1, 2009 'BBB'; -- $1,150,000 serial bonds due June 1, 2010 'BBB'; -- $1,310,000 serial bonds due June 1, 2011 'BBB'; -- $1,450,000 serial bonds due June 1, 2012 'BBB'; -- $1,720,000 serial bonds due June 1, 2013 'BBB'; -- $2,020,000 serial bonds due June 1, 2014 'BBB'; -- $2,200,000 serial bonds due June 1, 2015 'BBB'; -- $14,890,000 turbo term bonds due June 1, 2019 'BBB'; -- $2,370,000 flexible amortization term bonds due June 1, 2023 'BBB'; -- $39,710,000 flexible amortization term bonds due June 1, 2028 'BBB'; -- $60,450,000 flexible amortization term bonds due June 1, 2035 'BBB'; -- $71,840,000 flexible amortization term bonds due June 1, 2042 'BBB'; * Niagara Tobacco Asset Securitization Corporation (New York), tobacco settlement asset-backed bonds, series 2000 -- $535,000 serial bonds due May 15, 2016 'BBB'; -- $65,000 serial bonds due May 15, 2016 'BBB'; -- $600,000 serial bonds due May 15, 2017 'BBB'; -- $70,000 serial bonds due May 15, 2017 'BBB'; -- $635,000 serial bonds due May 15, 2018 'BBB'; -- $530,000 serial bonds due May 15, 2018 'BBB'; -- $260,000 serial bonds due May 15, 2019 'BBB'; -- $820,000 serial bonds due May 15, 2019 'BBB'; -- $105,000 serial bonds due May 15, 2019 'BBB'; -- $780,000 serial bonds due May 15, 2020 'BBB'; -- $490,000 serial bonds due May 15, 2020 'BBB'; -- $485,000 serial bonds due May 15, 2021 'BBB'; -- $875,000 serial bonds due May 15, 2021 'BBB'; -- $210,000 serial bonds due May 15, 2022 'BBB'; -- $1,175,000 serial bonds due May 15, 2022 'BBB'; -- $11,995,000 turbo term bonds due May 15, 2029 'BBB'; -- $10,575,000 turbo term bonds due May 15, 2034 'BBB'; -- $14,945,000 turbo term bonds due May 15, 2040 'BBB'; * Rensselaer Tobacco Asset Securitization Corporation (New York), tobacco settlement asset-backed bonds, series 2001 -- $160,000 serial bonds due June 1, 2008 'BBB'; -- $200,000 serial bonds due June 1, 2009 'BBB'; -- $215,000 serial bonds due June 1, 2010 'BBB'; -- $245,000 serial bonds due June 1, 2011 'BBB'; -- $270,000 serial bonds due June 1, 2012 'BBB'; -- $295,000 serial bonds due June 1, 2013 'BBB'; -- $310,000 serial bonds due June 1, 2014 'BBB'; -- $340,000 serial bonds due June 1, 2015 'BBB'; -- $385,000 serial bonds due June 1, 2016 'BBB'; -- $5,235,000 super sinker term bonds due June 1, 2025 'BBB'; -- $10,890,000 super sinker term bonds due June 1, 2035 'BBB'; -- $13,355,000 super sinker term bonds due June 1, 2043 'BBB'; * Ulster Tobacco Asset Securitization Corporation (New York), tobacco settlement asset-backed bonds, series 2001 -- $11,765,000 current interest term bonds due June 1, 2030 'BBB'; -- $10,190,000 current interest term bonds due June 1, 2040 'BBB'; -- $4,610,000 convertible capital appreciation bonds due June 1, 2025 'BBB'; -- $4,765,000 convertible capital appreciation bonds due June 1, 2040 'BBB'; * Badger Tobacco Asset Securitization Corporation (Wisconsin), series 2002 -- $31,220,000 serial bonds due June 1, 2008 'BBB'; -- $33,565,000 serial bonds due June 1, 2009 'BBB'; -- $32,770,000 serial bonds due June 1, 2011 'BBB'; -- $34,040,000 serial bonds due June 1, 2012 'BBB'; -- $209,260,000 fixed amortization bonds due June 1, 2017 'BBB'; -- $562,130,000 turbo term bonds due June 1, 2027 'BBB'; -- $100,000,000 turbo term bonds due June 1, 2028 'BBB'; -- $414,470,000 turbo term bonds due June 1, 2032 'BBB'. * The California County Tobacco Securitization Agency (Alameda County Tobacco Asset Securitization Corporation), series 2002 -- $2,985,000 serial bonds due June 1, 2008 'BBB'; -- $3,020,000 serial bonds due June 1, 2009 'BBB'; -- $3,070,000 serial bonds due June 1, 2010 'BBB'; -- $3,130,000 serial bonds due June 1, 2011 'BBB'; -- $2,905,000 serial bonds due June 1, 2012 'BBB'; -- $5,605,000 turbo term bonds due June 1, 2019 'BBB'; -- $51,485,000 turbo term bonds due June 1, 2029 'BBB'; -- $45,170,000 turbo term bonds due June 1, 2035 'BBB'; -- $76,250,000 turbo term bonds due June 1, 2042 'BBB'. * Alameda County Tobacco Asset Securitization Corporation, series 2006 -- $38,683,877.20 capital appreciation bonds 2006A due June 1, 2050 'BBB-' -- $12,790,902.40 capital appreciation bonds 2006B due June 1, 2050 'BB'. * The California County Tobacco Securitization Agency (Fresno County Tobacco Funding Corporation), subordinate series 2006 -- $16,605,906.60 subordinate series 2006A turbo capital appreciation bonds due June 1, 2046 'BBB' -- $2,889,808.80 subordinate series 2006B turbo capital appreciation bonds due June 1, 2046 'BBB-' -- $9,756,936.00 subordinate series 2006C turbo capital appreciation bonds due June 1, 2055 'BB-'. * The California County Tobacco Securitization Agency (Kern County Tobacco Funding Corporation), series 2002 -- $40,960,000 turbo term bonds 2006A due June 1, 2043 'BBB'; -- $27,875,000 turbo term bonds 2006B due June 1, 2029 'BBB'; -- $29,010,000 turbo term bonds 2006B due June 1, 2037 'BBB'; -- $4,920,000 turbo term bonds 2006C due June 1, 2015 'BBB'. * California County Tobacco Securitization Agency (Los Angeles County Tobacco Securitization Corporation), series 2006 -- $60,279,685 convertible turbo bonds series 2006A due June 1, 2021 'BBB'; -- $46,370,435 convertible turbo bonds series 2006A due June 1, 2028 'BBB'; -- $62,196,244 convertible turbo bonds series 2006A due June 1, 2036 'BBB'; -- $53,157,077 convertible turbo bonds series 2006A due June 1, 2041 'BBB'; -- $72,159,811 convertible turbo bonds series 2006A due June 1, 2046 'BBB'; -- $13,586,212 turbo capital appreciation bonds series 2006B due June 1, 2046 'BBB-'; -- $12,077,640 turbo capital appreciation bonds series 2006C due June 1, 2046 'BB'. * California County Tobacco Securitization Agency (Merced County Tobacco Funding Corporation), series 2005 -- $2,200,000 series 2005B turbo term bonds due June 1, 2018 'BBB'; -- $6,515,000 series 2005A turbo term bonds due June 1, 2026 'BBB'; -- $15,160,000 series 2005A turbo term bonds due June 1, 2038 'BBB'; -- $15,815,000 series 2005A turbo term bonds due June 1, 2045 'BBB'. * California County Tobacco Securitization Agency (Stanislaus County Tobacco Funding Corporation), series 2002 -- $4,565,000 turbo term bonds due June 1, 2019 'BBB'; -- $24,490,000 turbo term bonds due June 1, 2033 'BBB'; -- $34,725,000 turbo term bonds due June 1, 2043 'BBB'. * California County Tobacco Securitization Agency (Stanislaus County Tobacco Funding Corporation), series 2006 -- $20,965,835 subordinate series 2006A due June 1, 2046 'BBB'; -- $2,827,546 subordinate series 2006B due June 1, 2046 'BBB-'; -- $9,446,325 subordinate series 2006C due June 1, 2055 'BB'. * California Statewide Financing Authority, series 2002 -- $905,000 series 2002A serial bonds due May 1, 2008 'BBB'; -- $860,000 series 2002A serial bonds due May 1, 2009 'BBB'; -- $820,000 series 2002A serial bonds due May 1, 2010 'BBB'; -- $785,000 series 2002A serial bonds due May 1, 2011 'BBB'; -- $1,040,000 series 2002A serial bonds due May 1, 2012 'BBB'; -- $1,020,000 series 2002A serial bonds due May 1, 2013 'BBB'; -- $955,000 series 2002A serial bonds due May 1, 2014 'BBB'; -- $935,000 series 2002A serial bonds due May 1, 2015 'BBB'; -- $930,000 series 2002A serial bonds due May 1, 2016 'BBB'; -- $930,000 series 2002A serial bonds due May 1, 2017 'BBB'; -- $28,045,000 series 2002A turbo term bonds due May 1 2029, 'BBB'; -- $27,540,000 series 2002A turbo term bonds due May 1 2037, 'BBB'; -- $33,095,000 series 2002A turbo term bonds due May 1, 2043 'BBB'; -- $895,000 series 2002B serial bonds due May 1, 2008 'BBB'; -- $850,000 series 2002B serial bonds due May 1, 2009 'BBB'; -- $810,000 series 2002B serial bonds due May 1, 2010 'BBB'; -- $775,000 series 2002B serial bonds due May 1, 2011 'BBB'; -- $1,030,000 series 2002B serial bonds due May 1, 2012 'BBB'; -- $1,010,000 series 2002B serial bonds due May 1, 2013 'BBB'; -- $945,000 series 2002B serial bonds due May 1, 2014 'BBB'; -- $925,000 series 2002B serial bonds due May 1, 2015 'BBB'; -- $920,000 series 2002B serial bonds due May 1, 2016 'BBB'; -- $920,000 series 2002B serial bonds due May 1, 2017 'BBB'; -- $27,765,000 series 2002B turbo term bonds due May 1, 2029 'BBB'; -- $27,265,000 series 2002B turbo term bonds due May 1, 2037 'BBB'; -- $32,765,000 series 2002B turbo term bonds due May 1, 2043 'BBB'. * California Statewide Financing Authority, Pooled Tobacco Securitization Program, series 2006 -- $29,064,420 series 2006A turbo capital appreciation bonds due June 1, 2046 'BBB'; -- $6,752,856 series 2006B turbo capital appreciation bonds due June 1, 2046 'BBB-'; -- $23,149,900 series 2006C turbo capital appreciation bonds due June 1, 2055 'BB'. * The Children's Trust Fund (Puerto Rico), series 2002 -- $11,460,000 serial bonds due May 15, 2008 'BBB'; -- $5,000,000 serial bonds due May 15, 2009-1 'BBB'; -- $6,975,000 serial bonds due May 15, 2009-2 'BBB'; -- $11,315,000 serial bonds due May 15, 2010 'BBB'; -- $4,000,000 serial bonds due May 15, 2011-1 'BBB'; -- $8,135,000 serial bonds due May 15, 2011-2 'BBB'; -- $13,805,000 serial bonds due May 15, 2012 'BBB'; -- $15,505,000 serial bonds due May 15, 2013 'BBB'; -- $17,265,000 serial bonds due May 15, 2014 'BBB'; -- $423,290,000 turbo term bonds due May 15, 2033 'BBB'; -- $310,380,000 turbo term bonds due May 15, 2039 'BBB'; -- $296,255,000 turbo term bonds due May 15, 2043 'BBB'. * The Children's Trust Fund (Puerto Rico), series 2005 -- $74,523,431 series 2005A capital appreciation bonds due May 15, 2050 'BBB-'; -- $33,686,016 series 2005B capital appreciation bonds due May 15, 2055 'BB'. * City of San Diego Tobacco Settlement Revenue Funding Corporation, series 2006 -- $105,400,000 series 2006 turbo term bonds due June 1, 2032 'BBB'. * District of Columbia Tobacco Settlement Financing Corporation, series 2001 -- $5,800,000 serial bonds due May 15, 2008 'BBB'; -- $6,285,000 serial bonds due May 15, 2009 'BBB'; -- $6,840,000 serial bonds due May 15, 2010 'BBB'; -- $7,140,000 serial bonds due May 15, 2011 'BBB'; -- $7,145,000 serial bonds due May 15, 2012 'BBB'; -- $8,030,000 serial bonds due May 15, 2013 'BBB'; -- $8,360,000 serial bonds due May 15, 2014 'BBB'; -- $114,855,000 turbo term bonds due May 15, 2024 'BBB'; -- $169,110,000 turbo term bonds due May 15, 2033 'BBB'; -- $187,540,000 turbo term bonds due May 15, 2040 'BBB'. * District of Columbia Tobacco Settlement Financing Corporation, series 2006 -- $145,481,196 series 2006A turbo capital appreciation bonds due June 15, 2046 'BBB'; -- $14,251,650 series 2006B turbo capital appreciation bonds due June 15, 2046 'BBB-'; -- $55,868,400 series 2006C turbo capital appreciation bonds due June 15, 2055 'BB'. * Erie Tobacco Asset Securitization Corporation (New York), series 2005: -- $30,330,000 series 2005A current interest bonds due June 1, 2031 'BBB'; -- $74,685,000 series 2005A current interest bonds due June 1, 2038 'BBB'; -- $111,480,000 series 2005A current interest bonds due June 1, 2045 'BBB'; -- $9,163,000 series 2005B first subordinate capital appreciation bonds due June 1, 2047 'BBB-'; -- $12,565,080 series 2005C second subordinate capital appreciation bonds due June 1, 2050 'BB'; -- $69,470,000 series 2005E taxable capital appreciation bonds due June 1, 2028 'BBB'. * Nassau County Tobacco Settlement Corporation (New York), series 2006: -- $42,645,000 series 2006A-1 taxable senior current interest bonds due June 1, 2021 'BBB'; -- $37,905,609 series 2006A-2 senior convertible bonds due June 1, 2026 'BBB'; -- $97,005,000 series 2006A-3 senior current interest bonds due June 1, 2035 'BBB'; -- $194,535,000 series 2006A-3 senior current interest bonds due June 1, 2046 'BBB'; -- $10,670,013 series 2006B first subordinate capital appreciation bonds due June 1, 2046 'BBB'; -- $9,867,332 series 2006C second subordinate capital appreciation bonds due June 1, 2046 'BBB-'; -- $37,604,290 series 2006D third subordinate capital appreciation bonds due June 1, 2060 'BB'. * Northern Tobacco Securitization Corporation (Alaska), series 2006: -- $117,510,000 series 2006A senior current interest turbo term bonds due June 1, 2023 'BBB'; -- $70,105,000 series 2006A senior current interest turbo term bonds due June 1, 2032 'BBB'; -- $212,270,000 series 2006A senior current interest turbo term bonds due June 1, 2046 'BBB'; -- $8,668,052 series 2006B first subordinate turbo capital appreciation bonds due June 1, 2046 'BBB'; -- $3,434,807 series 2006C second subordinate turbo capital appreciation bonds due June 1, 2046 'BBB-'. * New York Counties Tobacco Trust II (New York), series 2001 -- $975,000 serial bonds due June 1, 2008 'BBB'; -- $1,210,000 serial bonds due June 1, 2009 'BBB'; -- $1,325,000 serial bonds due June 1, 2010 'BBB'; -- $1,495,000 serial bonds due June 1, 2011 'BBB'; -- $1,665,000 serial bonds due June 1, 2012 'BBB'; -- $1,825,000 serial bonds due June 1, 2013 'BBB'; -- $1,940,000 serial bonds due June 1, 2014 'BBB'; -- $2,120,000 serial bonds due June 1, 2015 'BBB'; -- $2,425,000 serial bonds due June 1, 2016 'BBB'; -- $32,955,000 super sinker term bonds due June 1, 2025 'BBB'; -- $68,005,000 super sinker term bonds due June 1, 2035 'BBB'; -- $82,795,000 super sinker term bonds due June 1, 2043 'BBB'. * New York Counties Tobacco Trust III (New York), Tobacco Settlement Pass-Through Bonds, series 2003: -- $16,360,000 turbo term bonds due June 1, 2027 'BBB'; -- $15,175,000 turbo term bonds due June 1, 2033 'BBB'; -- $40,390,000 turbo term bonds due June 1, 2043 'BBB'. * New York Counties Tobacco Trust IV (New York), Tobacco Settlement Pass-Through Bonds, series 2005: -- $6,710,000 series 2005A turbo term bonds due June 1, 2021 'BBB'; -- $4,520,000 series 2005A turbo term bonds due June 1, 2026 'BBB'; -- $16,585,000 series 2005A turbo term bonds due June 1, 2038 'BBB'; -- $84,975,000 series 2005A turbo term bonds due June 1, 2042 'BBB'; -- $83,875,000 series 2005A turbo term bonds due June 1, 2045 'BBB'; -- $52,450,000 series 2005B taxable turbo term bonds due June 1, 2027 'BBB'; -- $124,400,000 series 2005C taxable turbo term bonds due June 1, 2041 'BBB'; -- $10,277,849 series 2005D first subordinate turbo capital appreciation bonds due June 1, 2050 'BBB-'; -- $14,073,539 series 2005E second subordinate turbo Capital appreciation bonds due June 1, 2055 'BB'; -- $124,400,000 series 2010A turbo term bonds due June 1, 2041 'BBB'. * New York Counties Tobacco Trust V (New York), Tobacco Settlement Pass-Through Bonds, series 2005: -- $50,605,433 series 2005 S1 turbo capital appreciation bonds due June 1, 2038 'BBB'; -- $43,529,858 series 2005 S2 turbo capital appreciation bonds due June 1, 2050 'BBB-'; -- $25,917,083 series 2005 S3 turbo capital appreciation bonds due June 1, 2055 'BB'. * Rockland Tobacco Asset Securitization Corporation (New York), series 2005: -- $13,084,280 series 2005A first subordinate capital appreciation bonds due Aug. 1, 2045 'BBB-'; -- $2,860,940 series 2005B second subordinate capital appreciation bonds due Aug. 1, 2050 'BB'. * Tobacco Settlement Financing Corporation (Louisiana), series 2001: -- $142,015,000 series 2001A taxable turbo term bonds due May 15, 2025 'BBB'; -- $230,390,000 series 2001B tax-exempt turbo term bonds due May 15, 2030 'BBB'; -- $689,405,000 series 2001B tax-exempt turbo term bonds due May 15, 2039 'BBB'. * Tobacco Settlement Financing Corporation (Rhode Island), series 2002: -- $109,770,000 series 2002A tax-exempt turbo term bonds due June 1, 2023 'BBB'; -- $168,260,000 series 2002A tax-exempt turbo term bonds due June 1, 2032 'BBB'; -- $371,700,000 series 2002A tax-exempt turbo term bonds due June 1, 2042 'BBB'; -- $19,645,000 series 2002B taxable turbo term bonds due June 1, 2012 'BBB'. * Tobacco Settlement Revenue Management Authority (South Carolina), series 2001: -- $62,370,000 series 2001A taxable turbo term bonds due May 15, 2016 'BBB'; -- $225,880,000 series 2001B tax-exempt turbo term bonds due May 15, 2022 'BBB'; -- $347,625,000 series 2001B tax-exempt turbo term bonds due May 15, 2028 'BBB'; -- $161,385,000 series 2001B tax-exempt turbo term bonds due May 15, 2030 'BBB'. * Tobacco Settlement Asset Securitization Corporation (TSASC) 1999 Indenture, (New York City), series 2006-1: -- $284,070,000 turbo term bonds due June 1, 2022 'BBB'; -- $137,765,000 turbo term bonds due June 1, 2026 'BBB'; -- $372,650,000 turbo term bonds due June 1, 2034 'BBB'; -- $599,025,000 turbo term bonds due June 1, 2042 'BBB'. * Tobacco Settlement Financing Corporation (US Virgin Islands), series 2006: -- $4,764,709 series 2006A subordinate turbo capital appreciation bonds due May 15, 2035, 'BBB'; -- $512,471 series 2006B subordinate turbo capital appreciation bonds due May 15, 2035, 'BBB-'; -- $867,690 series 2006C subordinate turbo capital appreciation bonds due May 15, 2035, 'BB'. * Westchester Tobacco Asset Securitization Corporation (New York), series 2005: -- $27,500,000 turbo term bonds due June 1, 2021 'BBB'; -- $24,100,000 turbo term bonds due June 1, 2026 'BBB'; -- $81,200,000 turbo term bonds due June 1, 2038 'BBB'; -- $81,700,000 turbo term bonds due June 1, 2045 'BBB'. * Moody's Takes Ratings Actions on Portfolio Credit Default Swap ---------------------------------------------------------------- Moody's Investors Service's took various rating actions on these Portfolio Credit Default Swap: Ptarmigan Peak Mezzanine Swap -- Class Description: $11,250,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consists primarily of structured finance securities. Grays Peak Mezzanine Swap -- Class Description: $11,250,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consists primarily of structured finance securities. Caribou Peak Mezzanine Swap -- Class Description: $11,250,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consists primarily of structured finance securities. Bison Peak Mezzanine Swap -- Class Description: $11,250,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B1 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consists primarily of structured finance securities. Augusta Peak Mezzanine Swap -- Class Description: $11,250,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consists primarily of structured finance securities. * S&P Places 48 US CDO Tranche Ratings Under Negative Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed 48 U.S. synthetic CDO tranche ratings on CreditWatch with negative implications and placed one rating on CreditWatch with positive implications. At the same time, S&P affirmed seven U.S. synthetic CDO tranche ratings and removed them from CreditWatch negative and lowered one additional rating. The CreditWatch negative placements reflect negative rating migration in the respective portfolios and synthetic rated overcollateralization (SROC) ratios that had fallen below 100% as of the August month-end run. The rating placed on CreditWatch positive had an SROC ratio that was above 100% at a higher rating level during the month-end run. The five ratings affirmed and removed from CreditWatch negative had SROC ratios that were above 100% at the current rating levels during the month-end run. Ratings List ABACUS 2007-AC1 Ltd. Rating ------ Class To From ----- -- ---- A-2 AAA/Watch Neg AAA ABSpoke 2005-IVA Ltd. Rating ------ Class To From ----- -- ---- ABSpoke 2005-IVA AAA/Watch Neg AAA Amadeus Repackaging 2007-I Ltd. Rating ------ Class To From ----- -- ---- Def Nts BB BBB ARLO VI Ltd. Series 2006-5 (SABS) Rating ------ Class To From ----- -- ---- Notes A+/Watch Neg A+ Credit Default Swap Swap Risk Rating - Protection Buyer, CDS Reference #Torino II Rating ------ Class To From ----- -- ---- Tranche AAsrb/Watch Neg AAsrb Eirles Two Ltd. Rating ------ Class To From ----- -- ----- Series 243 A/Watch Neg A Series 244 BBB/Watch Neg BBB Series 247 A/Watch Neg A Herald Ltd. Series 24 Rating ------ Class To From ----- -- ----0 24 AA/Watch Neg AA High Grade Structured Credit 2004-1 Ltd. Rating ------ Class To From ----- -- ---- E A/Watch Neg A Ixion PLC Series 4, 5, 6, & 7 Rating ------ Class To From ----- -- ---- 4 BBB/Watch Neg BBB 5 A/Watch Neg A 6 AA-/Watch Neg AA- 7 BBB/Watch Neg BBB Jefferson Valley CDO SPC Series 2006-1 Rating ------ Class To From ----- -- ---- A A/Watch Neg A B-1 BBB+/Watch Neg BBB+ B-2 BBB+/Watch Neg BBB+ Lorally CDO Ltd. Series 2006-1 Rating ------ Class To From ----- -- ----- Tranche B BBB+/Watch Neg BBB+ Magnolia Finance II PLC Series 2006-8F Rating ------ Class To From ----- -- ---- Series F BB+/Watch Neg BB+ Maple 2004-1789 Rating ------ Class To From ----- -- ---- Tranche C AA/Watch Neg AA Morgan Stanley ACES SPC Series 2005-25 Rating ------ Class To From ----- -- ---- ScFltRtNts A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-2 Rating ------ Class To From ----- -- ---- Secd Nts A/Watch Neg A Morgan Stanley ACES SPC Series 2006-3 Rating ------ Class To From ----- -- ---- III BB/Watch Neg BB Morgan Stanley ACES SPC Series 2006-6 Rating ------ Class To From ----- -- ---- Defrble Sec BBB/Watch Neg BBB Morgan Stanley ACES SPC Series 2006-7 Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA Morgan Stanley ACES SPC Series 2006-9 Rating ------ Class To From ----- -- ---- IA A+/Watch Neg A+ II BBB+/Watch Neg BBB+ Morgan Stanley ACES SPC Series 2006-10 Rating ------ Class To From ----- -- ---- II A+/Watch Neg A+ Morgan Stanley ACES SPC Series 2006-11 Rating ------ Class To From ----- -- ---- A AA+/Watch Neg AA+ IA AA+/Watch Neg AA+ IB AA+/Watch Neg AA+ Morgan Stanley ACES SPC Series 2006-12 Rating ------ Class To From ----- -- ---- I A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-16 Rating ------ Class To From ----- -- ---- IIA A+/Watch Neg A+ Morgan Stanley ACES SPC Series 2006-20 Rating ------ Class To From ----- -- ---- IA AAA/Watch Neg AAA Morgan Stanley ACES SPC Series 2006-21 Rating ------ Class To From ----- -- ---- IIA A+/Watch Neg A+ Morgan Stanley ACES SPC Series 2006-24 Rating ------ Class To From ----- -- ---- IA AAA/Watch Neg AAA II BBB/Watch Neg BBB Morgan Stanley ACES SPC Series 2006-26 Rating ------ Class To From ----- -- ---- IA AAA AAA/Watch Neg Morgan Stanley ACES SPC Series 2006-27 Rating ------ Class To From ----- -- ---- Class A AA/Watch Neg AA Morgan Stanley ACES SPC Series 2006-37 Rating ------ Class To From ----- -- ---- II BBB+/Watch Neg BBB+ Oban Trust Series 2005-2 Rating ------ Class To From ----- -- ---- A A-/Watch Neg A- Prelude Europe CDO Ltd. Series 2006-1 Rating ------ Class To From ----- -- ---- Notes A-/Watch Neg A- Prelude Europe CDO Ltd. Series 2006-2 Rating ------ Class To From ----- -- ---- Notes A-/Watch Neg A- Primus Managed PRISMs 2004-1 Ltd. Rating ------ Class To From ----- -- ---- A-F BBB+ BBB+/Watch Neg B-1L BBB+ BBB+/Watch Neg B-2L BBB BBB/Watch Neg REPACS Trust Series 2006 Mount Ventoux Rating ------ Class To From ----- -- ---- Debt Units A-/Watch Neg A- Rutland Rated Investments Bedford 2006-1 (Series 30) Rating ------ Class To From ----- -- ---- A3-L A A/Watch Neg A3-F A A/Watch Neg Rutland Rated Investments Delancey 2006-3 (Series 29) Rating ------ Class To From ----- -- ---- A-1L AA+/Watch Neg AA+ Rutland Rated Investments Rumson 2007-2 (Series 42) Rating ------ Class To From ----- -- ---- A1-L1 AAA AAA/Watch Neg STRATA Trust Series 2006-17 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA TIERS Derby Synthetic CDO Floating Rate Credit Linked Trust Series 2007-16 Rating ------ Class To From ----- -- ---- 2007-16 AA-/Watch Pos AA- TIERS Missouri Floating Rate Credit Linked Trust Series 2007-1 Rating ------ Class To From ----- -- ---- Certs AA-/Watch Neg AA- Toronto-Dominion Bank (The) CAD48,031,000 Portfolio Credit Linked Notes Rating ------ Class To From ----- -- ---- Porfolio CLN BB/Watch Neg BB Tribune Ltd. Series 26 Rating ------ Class To From ----- -- ---- Aspen B-2 BBB/Watch Neg BBB Tribune Ltd. Series 39 Rating ------ Class To From ----- -- ---- Tranche AA/Watch Neg AA * Buccino Just For Feet Testimony Results in $41.5 Mil. Payments ---------------------------------------------------------------- Buccino & Associates Inc. reported that its expert report and testimony in the Just For Feet case resulted in the largest out of pocket payment by outside directors in history. The former directors will pay $41.5 million, exceeding the combined payments of former directors in the WorldCom, Inc. and Enron cases. In addition to the $41.5 million, the trustee recovered $15 million from the estate of JFF's founder and $24 million from its outside auditors. Buccino was retained in 2003 as an expert witness for the Chapter 7 trustee and was engaged to perform forensic analysis, opine on corporate governance matters, evaluate Chapter 11 options, opine on insolvency issues, value the pro-forma reorganized company on a fair market operating basis, and, finally to determine financial damages. >From 1996 to 1999, earnings were overstated by tens of millions of dollars. In 1999 alone, pre-tax income was reported as $43 million; and, if properly stated would have been a loss in excess of $100 million. In November, 1999, JFF filed for Chapter 11 and in early 2000 the case was converted to a Chapter 7 and its assets auctioned. "Our selection as an expert witness in this case was based on our three decades of experience in working with financially distressed companies and their constituencies in both pre and post petition settings. It was our deep knowledge and understanding of insolvency issues and experience that allowed us to reach our conclusions and contribute to the outcome in this historical case," said Gerald P. Buccino, Chairman and CEO of Buccino & Associates, Inc. About Buccino & Associates Headquartered in New York, Buccino & Associates Inc. -- http://www.buccinoassociates.com/--provides advisory services to enhance cash flow and position companies for long-term profitability. The company's services include strategic and financial assessment of business operations; turnaround consulting; financial advisory services to lenders, creditors and other economic stakeholders; crisis and interim management; valuation; insolvency and reorganization services; corporate restructuring; forensic analysis; litigation support and expert testimony. * Chadbourne & Parke Files Pro Bono Suit to Up Judicial Salaries ---------------------------------------------------------------- Chadbourne & Parke LLP filed a pro bono lawsuit on behalf of four New York judges against Governor Eliot Spitzer, the New York Senate, the New York Assembly and the State of New York to force the state to raise judicial salaries and to award back pay through 2000. Chadbourne partners Thomas Bezanson and George Bundy Smith filed the suit in the state's Supreme Court in New York City on behalf of New York City Family Court Judge Susan Larabee, New York City Criminal Court Judge Patricia Nunez, New York City Civil Court Judge Geoffrey Wright and Cattaraugus County Family Court Judge Michael Nenno. The suit noted that the 2006-2007 state budget allocated $69.5 million for judicial salary increases, retroactive to April 1, 2005, but the funds have yet to be disbursed. The last pay increase for judges occurred in January 1999. "The state has failed to raise judges' salaries for eight years even as inflation has raised the cost of living," said Mr. Bezanson. "That violates Article 6, [Section] 25 of the New York State Constitution, which states that judges' compensation 'shall not be diminished during the term of office for which he or she was elected or appointed.'" Mr. Bezanson also asserted that linking judges' salaries to legislative salary increases and other unrelated legislative and executive initiatives "violates the separation of powers doctrine. Our constitution requires that the government consist of three co-equal branches. Under the current system, the judiciary is appallingly far from co-equal and has unfortunately become hostage to politics." George Bundy Smith, who served for 14 years as an Associate Judge on the New York Court of Appeals before retiring in September 2006, said that the failure to provide pay raises was "disgraceful," and a form of attack on an independent judiciary. "The concept of judicial independence goes back to the founding of our country," explained Mr. Smith. "By connecting judicial salaries to legislators' salaries and to political issues of the executive and legislative branches, the state undermines the independence of judges." The lawsuit asks for judges' salaries to be increased in accordance with the money allocated for that purpose in the 2006- 2007 state budget, and also for the payment of monetary damages and pre-judgment interest at nine percent per annum. About Chadbourne & Parke LLP Headquartered in New York City, Chadbourne & Parke LLP -- http://www.chadbourne.com/-- is a law firm that provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, and Latin America. The firm has offices in New York, Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg, Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent, Beijing, and a multinational partnership, Chadbourne & Parke, in London. * Prof. Joost Pauwelyn Joins King & Spalding as Senior Advisor -------------------------------------------------------------- Professor Joost Pauwelyn has joined King & Spalding's international trade practice as senior advisor. Mr. Pauwelyn is an expert on international economic law, particularly the law of the World Trade Organization and international investment law. "Professor Pauwelyn is recognized around the world as a leading academic and practitioner in the WTO area," Stephen Orava, a partner in King & Spalding's Washington, D.C. and London offices and co-leader of the firm's WTO practice, said. "The depth and breadth of his knowledge and experience enable him to develop real-world solutions to complex trade matters as well as creative and effective approaches to bringing and defending WTO disputes." Mr. Pauwelyn was formerly an official with the WTO's Legal Affairs Division and with the WTO Appellate Body Secretariat. Upon joining academia, he continued to advise governments and private entities as a consultant on WTO dispute settlement proceedings, trade negotiations and other trade and investment matters. His academic research and consultancy experience have focused on diverse areas, including market access for goods and services, subsidies, environment, health and safety, trade in energy and human rights. "Professor Pauwelyn is a valuable addition to our WTO practice group and expands the scope of our WTO expertise across areas of increasing importance to our clients, such as subsidies, climate change and trade restrictions linked to health and safety measures," Jorge Miranda, senior international trade advisor with King & Spalding and former WTO official, said. Mr. Pauwelyn continues his current position as a professor at the Graduate Institute of International Studies in Geneva, Switzerland. He joined the Graduate Institute after serving five years at Duke University School of Law as a tenured professor of law and director of the JD/LLM Program and the Duke/Geneva Institute in Transnational Law. Mr. Pauwelyn has also been a visiting professor at Georgetown University Law Center and formerly practiced law in the litigation department of De Bandt, Van Hecke & Lagae in Brussels. "King & Spalding has strong and successful WTO and international arbitration practices and has a commitment to build upon this success. I am very pleased to have the opportunity to join this talented team," Mr. Pauwelyn said. Mr. Pauwelyn received a Ph.D. in law from the University of Neuchƒtel, Switzerland, a Magister Juris from Oxford University, a master's degree in law from Catholic University of Leuven (Belgium), and a bachelor's degree in law from the University of Namur (Belgium). He was also an Erasmus Scholar at the University of London's Queen Mary and Westfield College. About King & Spalding King & Spalding LLP -- http://www.kslaw.com/-- is an international law firm with more than 800 lawyers in Atlanta, Dubai, Houston, London, New York, Riyadh (affiliated office) and Washington, D.C. The firm represents half of the Fortune 100. King & Spalding is into financial restructuring practices. It provides valuable knowledge and in-depth experience to virtually all facets of corporate reorganizations, in-court and out-of-court debt restructuring, bankruptcy and insolvency litigation, and distressed asset mergers and acquisitions. This practice is regularly retained in bankruptcy matters and workouts to represent debtors, trustees, creditors' committees, institutional lenders, other critical creditors and parties-in-interest, and potential acquirers of businesses and large assets. The Houston office of King & Spalding, with more than 100 lawyers, provides a variety of services to clients the world over. Chief among its practices are those focusing on litigation and transactional law, especially energy, international arbitration and Latin American matters. * BOOK REVIEW: Investing in Junk Bonds: Inside the High Yield Debt Market ------------------------------------------------------------- Authors: Edward I. Altman and Scott A. Nammacher Publisher: Beard Books Paperback: 272 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587981556/internetbankrupt Investing in Junk Bonds: Inside the High Yield Debt Market by Edward I. Altman and Scott A. Nammacher is an especially informative book for all new investors, but is just as useful for the seasoned professional. This is a reprint of one of the first comprehensive books on the rise and operation of the high yield debt market as illustrated by the "junk" bond. This classic volume is still relevant in today's challenging market. Among the concepts discussed are: expected yields; realized returns; default experience; market growth and size; credit quality trends; related mutual fund results and portfolio holdings; mergers/acquisitions and takeovers; new issue and issuer characteristics; underwriter strategies; and developing investment strategies, particularly using an objective credit model. ********* 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 R. 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 ***