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/raid1/www/Hosts/bankrupt/TCR_Public/071011.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 11, 2007, Vol. 11, No. 241 Headlines AES CORP: Fitch Rates %500 Mil. Senior Notes at BB AES CORP: Intends to Offer $500 Million of Senior Unsecured Notes AES CORP: Moody's Rates Proposed $500 Mil. Senior Notes at B1 AES CORP: S&P Holds 'BB-' Credit Rating with Stable Outlook AES IRONWOOD: Low Debt Ratio Cues S&P to Affirm 'B+' Rating AES RED: S&P Lifts Rating on $356 Million Secured Notes to BB- AMERICAN HOME: Best Bids for Broadhollow & Melville Loans Named AMERICAN HOME: Pact on ABN Construction Loans Sale Approved APPALACHIAN BUILDING: Files List of Largest Unsecured Creditors ARCHSTONE-SMITH: Completes $22.2 Billion Sale to Partnership ARCHSTONE-SMITH: S&P Cuts Rating to BB- and Removes Neg. Watch ARTESIAN POOLS: Files List of 20 Largest Unsecured Creditors ASPEN EXECUTIVE: Stops Operations to Finalize Likely Business Deal AURORA HOUSING: Moody's Affirms Ba2 Rating on $2.46 Mil. Bonds AVADO BRANDS: Committee Raises Concerns on DIP Financing Terms AVADO BRANDS: Gets Second Interim OK to Use DDJ Capital DIP Funds BEAR STEARNS: Fitch Holds BB+ Rating on $5.3MM Class H Certs. BROADHOLLOW FUNDING: S&P Junks Rating on Subordinated Notes CALPINE CORP: Files Fourth Amended Chapter 11 Plan CALPINE CORP: Judge Lifland Denies Equity Committee's Stay Request CALPINE CORP: Plan Confirmation Hearing Scheduled on December 18 CARAUSTAR IND: Posts $2.3 Mil. Net Loss in Quarter Ended June 30 CARDIMA INC: Reports Changes in Members of Board of Directors CATALINA MARKETING: Completes $1.7 Billion Sale to Equity Firm CATALINA MARKETING: High Leverage Cues S&P's "B+" Credit Rating CHOCTAW GEN: Low Operating Results Cue Moody's to Cut Ratings CHRYSLER LLC: Inks Tentative Pact on New Labor Contract with UAW COMPASS MINERALS: Steady Performance Cues S&P to Lift Ratings COPANO ENERGY: Earns $13.3 Million in Second Quarter Ended June 30 DURA AUTOMOTIVE: Noteholders Appeal Amendment to Backstop Deal E*TRADE FINANCIAL: Moody's Holds Ba2 Senior Debt Rating EMMIS COMMS: Earns $14.1 Million in Fiscal Quarter Ended Aug. 31 FAIRCHILD SEMICONDUCTOR: S&P Holds 'BB-' Corporate Credit Rating FOOT LOCKER: Poor Performance Prompts S&P to Cut Rating to BB FORD CREDIT: Moody's Rates Class D Notes at "(P)Ba2" FORD CREDIT: S&P Assigns 'BB' Rating on $42.7MM Class D Notes GAP INC: Inks Deal with Filipino Franchisee Rustan Group GENERAL MOTORS: GM-UAW 2007 National Labor Agreement Ratified GENESCO INC: Paying Preferred Stock Dividends on October 30 GMAC COMMERCIAL: Anticipated Losses Prompt S&P to Cut Ratings GMAC COMMERCIAL: S&P Lowers Ratings on Six Certificate Classes GOLDEN STATE: Case Summary & Four Largest Unsecured Creditors GUITAR CENTER: Completes $2.1 Billion Merger with Bain Capital GUITAR CENTER: Moody's Cuts Corporate Family Rating to B3 DEATH ROW: Asset Sale Uncertain Due to Pending Suits H&E EQUIPMENT: Earns $15.2 Million in Second Quarter Ended June 30 HANCOCK FABRICS: Expects to File Annual Report by End of October HANCOCK FABRICS: Landlords Want Cure Amounts Paid HANCOCK FABRICS: Wants to Assume "No-Consent" Unexpired Leases INT'L PAPER: Paying $0.25 per Share Quarterly Dividend on Dec. 14 INT'L PAPER: Lower Land Sales Earnings to Impact 3rd Qtr. Profits INTERNATIONAL PAPER: Earns $190 Million in Quarter Ended June 30 INVERNESS MEDICAL: Inks Pact Buying Panbio's Shares for $37 Mil. KAMP RE: S&P Retains Debt Rating Under Negative CreditWatch KMG LLC: Case Summary & Largest Unsecured Creditor KOOSHAREM CORP: S&P Rates $84 Million Term Loan at B+ LEVITZ HOME: Wants to Distribute Payments to Unsecured Creditors LOCKE CORP: Case Summary & Five Largest Unsecured Creditors MOBIUS ELR-01: Moody's Reviews Low-B Ratings on 3 Note Classes NATURE'S HARVEST: Case Summary & 20 Largest Unsecured Creditors NEIGHBOR'S KNOLL: Case Summary & Largest Unsecured Creditor NEIMAN MARCUS: S&P Lifts Corporate Credit Rating to BB- from B+ NORTH OAKLAND: Moody's Downgrades Bond Rating to B3 OCCULOGIX INC: Board Approves Exploring Strategic Alternatives OWEN AND OLLIE'S: Case Summary & 20 Largest Unsecured Creditors PEOPLE'S CHOICE: Wants Nod on Claims Settlement Procedures PLAINS EXPLORATION: Fir Tree Okays $3.6 Billion Pogo Purchase POGO PRODUCING: $3.6 Bil. Purchase by Plains Exploration Okayed QUALITY HOME: Selects Irell & Manella as Bankruptcy Counsel QUALITY HOME: Committee Taps Winston & Strawn as Counsel QUALITY HOME: Files Schedules of Assets and Liabilities QUANTA SERVICES: Earns $21.9 Million in Quarter Ended June 30 REAL ESTATE: Fitch Assigns Low-B Ratings on Six Note Classes REAL ESTATE PARTNERS: Case Summary & 182 Largest Unsec. Creditors REMY WORLDWIDE: Receives Court Approval on First-Day Motions RESI FINANCE: S&P Assigns Low-B Ratings on Six Note Classes RESIX FINANCE: S&P Puts Low-B Ratings on $46.6M. S. 2007-C Notes ROADHOUSE GRILL: Files for Bankruptcy Protection in Florida SCO GROUP: Taps Pachulski Stang as Bankruptcy Co-Counsel SEASONAL CONCEPTS: Case Summary & 20 Largest Unsecured Creditors SIDHER ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors SOLUTIA INC: Disclosure Statement Hearing Continued to October 17 SOLUTIA INC: Named as Co-Defendant in $685 Million Cancer Lawsuits SPHERIS INC: Posts $1.8 Million Net Loss in Quarter Ended June 30 STONE ENERGY: S&P Affirms "B-" Corporate Credit Rating SWIFT MASTER: Fitch Expects to Rate $9.9MM Class D Notes at BB+ SWIFT MASTER: S&P Rates $13.2 Million Class D Notes at BB SYMBION HEALTH: Moody's Reviews Ba1 Rating and May Downgrade TAYLOR BROTHERS: Case Summary & Seven Largest Unsecured Creditors THORNBURG MORTGAGE: Revises Estimates on Asset Sales and Losses TOUSA INC: S&P Revises Outlook to Negative from Developing TRANSLAND FINANCIAL: Bankruptcy Trial Adjourned to October 19 TUPPERWARE BRANDS: Inks New Credit Deal with Lower Interest Rate TXU CORP: Prices Cash Tender Offers for TCEH's Senior Notes TXU CORP: Completes TEF Merger, Changes Name to Energy Future TXU CORP: Moody's Places Corporate Family Rating at B2 TXU CORP: Planned Capitalization Cues S&P to Cut Rating to B- U.S. ENERGY: Posts $14.7 Mil. Net Loss in First Half Ended June 30 U.S. WIRELESS: Voluntary Chapter 11 Case Summary UNITED RENTALS: Fitch Holds BB- Issuer Default Rating UNIVERSAL FOODS: Panel Taps Schiff Hardin as Bankruptcy Counsel USI HOLDINGS: Fitch Withdraws B- Issuer Default Rating VESCOR DEVELOPMENT: Taps M. Norman as Chief Restructuring Officer VESCOR DEVELOPMENT: U.S. Trustee Questions Retention of CRO VONAGE HOLDINGS: Requests Rehearing of Verizon Patent Decision WILD WEST: Bank of Blue Valley Gets Approval to Seize Four Rides WILD WEST: Parks America Calls Off $12 Million Purchase WILD WEST: Receives Offers for Three Rides WR GRACE: Court Refuses to Appoint Examiner for Tersigni Probe * CRG Partners Adds Four New Partners * S&P Places 13 U.S. Synthetic CDO Tranche Under Negative Watch * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AES CORP: Fitch Rates %500 Mil. Senior Notes at BB -------------------------------------------------- Fitch Ratings assigned a 'BB/RR1' rating to AES Corporation's $500 million issue of senior unsecured notes due 2017. AES' long-term Issuer Default Rating is rated 'B+' by Fitch. The rating outlook is stable. Fitch views this transaction as the pre-funding of growth capital spending and debt refinancing. For high-yield issuers, Fitch believes that pre-funding can be prudent during times of uncertain capital market access. Fitch's rating is based on its expectation that AES will use the proceeds during the next two quarters to pay down debt and/or to invest in several different generation projects. The company has $415 million of debt maturing in 2008, and will complete several new projects that should create sufficient cash flows to offset the additional debt and interest expense and allow the company to maintain relatively stable credit metrics. The ratings of AES reflect the high degree of parent-company recourse debt, the structural subordination of that debt to project level debt, and the reliance on distributions from its subsidiaries for parent-company debt service. Offsetting, in part, the company's financial risk is the solid base of utility and contracted generation as well as the diversity of cash flow sources. The current Stable Rating Outlook reflects Fitch's expectation that credit metrics will stay within parameters for the current rating. AES is one of the world's largest global power companies, with 2006 revenues of $11.6 billion. With operations in 28 countries on five continents, the company is active in the generation, transmission and distribution of electricity. The company controls more than 42,000 mw of capacity. AES CORP: Intends to Offer $500 Million of Senior Unsecured Notes ----------------------------------------------------------------- The AES Corporation plans to offer approximately $500 million aggregate principal amount of senior unsecured notes due 2017 in a private placement. The senior notes will not be registered under the Securities Act of 1933, or any state securities laws. Therefore, the senior notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable securities laws. Headquartered in Arlington, Virginia, AES Corporation (NYSE: AES) -- http://www.aes.com/-- is a global power company. The company operates in South America, Europe, Africa, Asia and the Caribbean countries. Specifically, it also has operations in India. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. The company's Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. AES CORP: Moody's Rates Proposed $500 Mil. Senior Notes at B1 ------------------------------------------------------------- Moody's Investors Service assigned a B1 senior unsecured rating to The AES Corporation's proposed issuance of $500 million senior unsecured notes due 2017. In addition, Moody's has affirmed the ratings of AES, including the company's Corporate Family Rating at B1, its Probability of Default Rating at B1, its senior secured credit facilities at Ba1, its second priority senior secured notes at Ba3, its senior unsecured notes at B1 and its trust preferred securities at B3. The rating outlook for AES is stable. The rating affirmation reflects an expectation that AES will use proceeds from the proposed offering to fund new investment opportunities that are expected to provide appropriate returns. Furthermore, the rating affirmation acknowledges the company's success in restructuring existing businesses and investing in new electric generation projects that, in the near-term, are expected to generate incremental cash flows. These efforts, which include the restructuring of AES's businesses in Brazil, the elimination of a cash trap at its Brazilian holding company plus the construction and commercial operation of approximately 350 megawatts of United States-based wind generation, have been funded without incremental recourse debt. As a result of the above, and in combination with increased distribution from several existing subsidiaries, the aggregate amount of subsidiary distributions to AES in 2008 is expected to exceed the estimated $1 billion received in each of 2005 and 2006. Moody's notes that the historical results include distributions from C.A. La Electricidad De Caracas, which AES recently sold to Petroleos de Venezuela S.A. Furthermore, the expected commercial operation of various generating stations currently under construction beginning 2009/2010 should further improve the level of subsidiary distributions. That being said, the proposed senior unsecured offering will constrain upward movement in AES's current rating levels over the near-to-intermediate term. The ratings could be pressured should the expected increase in subsidiary distributions not materialize. Rating assigned: The AES Corporation: -- $500 million of new senior unsecured notes, B1 (LGD4, 57%) Ratings affirmed/LGD assessments revised: The AES Corporation: -- Corporate Family Rating -- B1 -- Probability of Default Rating -- B1 -- Senior secured credit facilities -- Ba1 (LGD1, 3%) from (LGD, 2%) -- Second priority senior secured notes -- Ba3 (LGD3, 41%) from (LGD3, 40%) -- Senior unsecured notes -- B1 (LGD4, 57%) from (LGD4, 55%) AES Trust III and AES Trust VII: -- Convertible trust preferred securities -- B3 (LGD6, 94%) from (LGD6, 93%) The AES Corporation is a global power company with generation and distribution assets in Europe, Asia, Latin America, Africa and the United States. AES CORP: S&P Holds 'BB-' Credit Rating with Stable Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on the diversified energy company, AES Corp., following its annual review of the company. The outlook is stable. S&P also assigned its 'B' rating to the company's $500 million senior unsecured notes due 2017. At the same time, Standard & Poor's raised the rating on AES' $1.8 billion second-lien senior secured debt to 'BB+' from 'BB-', two notches above the corporate credit rating. Standard & Poor's also assigned a recovery rating of '1' to the second-lien senior secured debt, indicating the expectation of very high (90%-100%) recovery in a payment default scenario. The first-lien senior secured debt is unrated. All other debt ratings were affirmed. As of June 30, 2007, Arlington, Virginia-based AES had about $4.7 billion of recourse debt and trust-preferred securities, reflecting its reliance on substantive distributions from jurisdictions with considerable regulatory and operating uncertainties and its exposure to merchant power markets, most notably through its AES Eastern Energy L.P. (BB+/Stable/--) subsidiary. The ratings on AES reflect the need for large expenditures for growth, which are partly serviced by residual distributions from project investments and dividends from operating subsidiaries, and the continuing need for financing that should be funded in a credit-neutral manner. S&P believe that the significant investment requirements, which will likely entail leverage, will slow the favorable credit momentum of the past two years. Partly mitigating these weaknesses are benefits of regional and operational diversification, which help to reduce the company's exposure to any one regulatory regime or commodity. The stable outlook on AES reflects our expectation of consistent performance over the next 18 months to 24 months. "We believe that as a result of large investment needs, the positive credit momentum has eased and further debt reduction is unlikely," noted Standard & Poor's credit analyst Aneesh Prabhu. "We could revise the outlook to negative if cash flow distributions deteriorate as a result of substantial investments that do not generate expected distributions, or if project-level financing results in lower distributions," he continued. Substantial loss of distributions from major contributors could also affect credit quality. AES IRONWOOD: Low Debt Ratio Cues S&P to Affirm 'B+' Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' debt rating on AES Ironwood LLC's $308 million senior secured notes. S&P also assigned a recovery rating of '3' to the senior secured bonds, indicating the expectation of meaningful (50% to 70%) recovery in the event of a payment default. The rating action on Ironwood's debt reflects the application of Standard & Poor's enhanced recovery rating scale and issue rating framework, and does not reflect a change in S&P's opinion of the company's default risk as reflected by the corporate credit rating. The ratings on Ironwood reflect a historically low debt service coverage ratio, a history of disputes with the offtaker, and merchant risk during the last four years of the bond term. If the project can achieve superior operating and financial performance, its rating would still be constrained at the rating of its offtaker because in the absence of the power-purchase agreement, the project would operate under merchant conditions and may be unable to service its debt. Ironwood is a 705-MW combined-cycle, natural-gas-fired generating station in South Lebanon Township, Pennsylvania, that sells its entire capacity and energy to Williams Power Co. Inc. (formerly known as Williams Energy Trading and Marketing Co.), a subsidiary of The Williams Cos. Inc. (Williams; BB+/Stable/NR), through a 20-year PPA. The stable outlook reflects Standard & Poor's view of continued moderate performance, with the DSCR above 1x for the foreseeable future. Sustained operating problems could affect capacity revenue, which would negatively affect the rating or outlook. Improving market conditions which result in better financial performance could lead to a positive outlook and higher ratings. AES RED: S&P Lifts Rating on $356 Million Secured Notes to BB- -------------------------------------------------------------- Standard & Poor's Ratings Services raised its debt rating on AES Red Oak LLC's $356 million senior secured notes to 'BB-' from 'B+'. S&P also assigned the senior secured bonds a recovery rating of '2', indicating the expectation of substantial (70% to 90%) recovery in the event of a payment default scenario. The rating action on Red Oak's debt reflects the application of Standard & Poor's enhanced recovery rating scale and issue rating framework and does not reflect a change in S&P's opinion of the company's default risk as reflected by the corporate credit rating. Red Oak is a combined-cycle, natural gas-fired generation station in Middlesex County, New Jersey with a nameplate capacity of 830 MW. It is 100% indirectly owned by The AES Corp. (AES; BB- /Stable/--), and sells its capacity and energy to Williams Power Co. Inc. (Williams Power; not rated) under a 20-year, power- purchase agreement. The Williams Cos. Inc. (Williams; BB+/Watch Pos/--) guarantees Williams Power's obligations under the PPA. AES Sayreville LLC (not rated), a wholly owned subsidiary of Red Oak, operates the project. The stable outlook on Red Oak reflects Standard & Poor's view of expected improvement in dispatch factor leading to improvement in financial performance. "The rating on Red Oak could be raised, if the company can achieve the expected improvement," noted Standard & Poor's credit analyst Aneesh Prabhu. "Although less likely, a negative outlook or lower rating could follow an adverse litigation outcome with Raytheon Co., or if the facility's operating performance worsens," he continued. AMERICAN HOME: Best Bids for Broadhollow & Melville Loans Named --------------------------------------------------------------- On Sept. 26, 2007, an auction was held at the offices of Young Conaway Stargatt & Taylor, LLP, for the sale of loans owned by Broadhollow Funding LLC and Melville Funding LLC. Broadhollow and Melville are non-Debtor, special purpose entities sponsored by American Home Mortgage Investment Corp. to fund a portion of its prime mortgage origination. Loans up for auction include approximately 5,700 whole mortgage loans with an aggregate unpaid principal balance of approximately $1,620,000,000. At the conclusion of the auction, the bids submitted by these entities constitute the highest and otherwise best bids: Mortgage Loan Successful Bidder ------------- ----------------- Broadhollow Non-Performing loans Citibank, N.A. Melville Non-Performing Loans Citibank, N.A. Broadhollow Agency Eligible Lehman Brothers Bank, FSB Performing Loans Broadhollow Non-Agency Eligible Lehman Brothers Bank, FSB Performing Loans Melville Agency Eligible JPMorgan Acquisition Corp. Performing Loans Melville Non-Agency Eligible JPMorgan Acquisition Corp. Performing Loans American Home sought authority from the U.S. Bankruptcy Court for the District of Delaware to sell the Loans in August 2007. According to American Home, the Loans do not constitute property of the bankruptcy estate under Section 541 of the Bankruptcy Code. The company explained that its interest in Broadhollow and Melville extend to any residual value remaining after the (i) sale of the Loans, and (ii) payment in full of the secured liquidity notes issued by Broadhollow and Melville, which are secured by mortgage loans that Broadhollow and Melville purchased from time to time pursuant to certain mortgage loan purchase and servicing agreements among Broadhollow, Melville, American Home and certain of its debtor-affiliates. 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 Aug. 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 represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' 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. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 10, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Pact on ABN Construction Loans Sale Approved ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the stipulation American Home Mortgage Investment Corp. and its debtor-affiliates entered into with ABN AMRO Bank N.V. regarding marketing and sale of certain construction loans and servicing rights. Certain of the Debtors are parties to a master repurchase agreement on February 28, 2007, wherein ABN MRA Debtors are the sellers, AHM Servicing Inc., is the servicer, and ABN as the agent, and other related agreements. Pursuant to the agreements and during a five-month period before Aug. 6, 2007, ABN purchased from ABN MRA Debtors 430 residential construction loans for $222,000,000. As of July 31, 2007, the mortgagors owed $145,000,000 in connection with advances made to them under the ABN Construction Loans. Up to $77,000,000 in additional advances were available to be drawn by the mortgagors to fund the completion of construction projects. Before the Debtors' bankruptcy filing, ABN delivered to the Debtors notices of events of default under the Agreements. In August 2007, the Debtors obtained the Court's approval of a stipulation permitting ABN to fund certain additional mortgagor advances by the Debtors and authorizing and directing ABN to make servicing payments to the Debtors for continued postpetition servicing of the ABN Construction Loans. The Debtors have sought to maximize the value of their estates and have asked the Court for authority to establish sale procedures and approve the sale of construction loans and related servicing rights. To avoid a costly dispute that could impede the sale of the construction loans and related servicing to which ABN is a party, the parties wish to compromise and settle the controversy between them. The Debtors and ABN have agreed to these terms: -- the Debtors' marketing and sale of the ABN Construction Loans and the rights to service the Loans in accordance with the proposed auction protocol submitted to the Court; -- the treatment to be accorded to the proceeds of any sale; and -- the payment of $700,000 and other consideration by ABN to the Debtors relating to disposition of the ABN Construction Loans and related servicing rights to a third party. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, notes that the Stipulation, provides the Debtors with $700,000 regardless of the outcome of the sale and clears an obstacle on their path to a successful sale of their construction loans. By agreeing to the terms of the Stipulation, the Debtors, according to Mr. Patton, are able to avoid the commencement of a costly and contentious dispute with ABN AMRO. 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 Aug. 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 represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' 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. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 10, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). APPALACHIAN BUILDING: Files List of Largest Unsecured Creditors --------------------------------------------------------------- Appalachian Building Components Inc. filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee a list of its 21 largest unsecured creditors. Entity Claim Amount ------ ------------ Sunset Forest Products, Inc. $101,398 P.O. Box 9 Mountain City, TN 37683 Mitek Industries, Inc. $77,149 4399 Collections Center Chicago, IL 60693 Robbins $42,669 P.O. Box 17939 Tampa, FL 33683 Farmers State Bank $30,612 Secured value: $625,000 American Lumber $15,536 East Coast Lumber Co. $14,181 OFC Capital $10,023 American International Group $9,870 BB&T of NC Business Loan Center $6,119 Secured value: $20,000 Johnson County Trustee $5,574 Citibusiness Card $4,269 TCI Tire Centers $3,596 Lazy Day Services $2,469 Talladega Machinery & Supply $1,898 The Tomahawk, Inc. $1,696 L&L Lumber, Inc. $1,439 GPM Mechanical & Welding $1,439 Roan Valley Market $1,277 Advanced Communications $1,225 NMHG Financial Services $543 Boone Rentals, Inc. $366 Appalachian Building Components Inc. LLC is based in Mountain City, Tennessee. The company manufactures engineered wood products. The Debtor filed for chapter 11 protection on Aug. 17, 2007 (Bankr. E.D. Ten. Case No. 07-51126). Fred M. Leonard, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $1,263,894 and total debts of $1,647,881. ARCHSTONE-SMITH: Completes $22.2 Billion Sale to Partnership ------------------------------------------------------------ Archstone-Smith Trust has closed its sale to a partnership sponsored by affiliates of Tishman Speyer Real Estate Venture VII, L.P. and Lehman Brothers Holdings Inc. in a transaction valued at approximately $22.2 billion, including Archstone-Smith's outstanding debt. The transaction is being financed by equity provided by Tishman Speyer, and debt and equity capital provided and arranged by Lehman Brothers Holdings Inc., Banc of America Strategic Ventures, Inc., Barclays Capital and their respective affiliates. Pursuant to the merger, holders of Archstone-Smith's common shares will receive cash consideration of $60.75 per share, without interest and less applicable withholding taxes, for each share issued and outstanding immediately prior to the effective time of the merger. In addition, in connection with the merger of Archstone-Smith Operating Trust with an affiliate of the partnership sponsored by affiliates of Tishman Speyer Real Estate Venture VII, L.P. and Lehman Brothers Holdings Inc., holders of Archstone-Smith Operating Trust's Class A-1 common units will receive one newly issued Series O preferred unit of Archstone- Smith Operating Trust or, if they so elected, a cash payment equal to $60.75, without interest and less applicable withholding taxes, for each Class A-1 common unit that they own, or a combination of Series O preferred units and the cash consideration. As a result of the completion of the merger, Archstone-Smith has applied to delist its common shares from the New York Stock Exchange. "This transaction with Tishman Speyer and Lehman Brothers is a powerful combination of real estate assets, management, and expertise that will greatly benefit all parties," R. Scot Sellers, who will remain chief executive officer, said. "As the rental market continues to strengthen, the Archstone-Smith apartment portfolio is well-positioned to create tremendous long-term value. I would like to thank our fantastic associates in the United States and Europe, who have worked so hard to help us achieve so much together. We are looking forward to working closely together to accomplish even more as we move forward." "We're delighted to have acquired a portfolio of residential rental properties that is unparalleled both in its quality and scope," Rob Speyer, President of Tishman Speyer, said. "Archstone-Smith has been the premiere organization in its market for many years, and we look forward to being in business with its exceptional team of professionals." "Our partnership with Tishman Speyer brings together two firms with long track records of creating value in real estate," Mark Walsh, managing director and global head of real estate for Lehman Brothers, said. "We are excited about the closing of this transaction and the opportunity to help Archstone-Smith manage its first-class collection of properties." In addition, on Oct. 5, 2007, Archstone-Smith Operating Trust issued notices of redemption to redeem all of its outstanding: a) 4.861% Notes due 2007, b) 6-7/8% Notes due 2008, c) 3.00% Notes due 2008, d) 7.55% Notes due 2008, e) 6.95% Notes due 2008, f) 7% Notes due 2009, g) 7-5/8% Notes due 2009, h) 7.15% Notes due 2010, i) 7.65% Notes due 2010, j) 5-1/4% Notes due 2010, k) 6-1/2% Notes due 2012, l) 7.20% Notes due 2013, m) 7-1/2% Notes due 2014, n) 5-5/8% Notes due 2014, o) 5-1/4% Notes due 2015, p) 5-1/4% Notes due 2015, q) 8.10% Notes due 2015, r) 7.90% Notes due 2016, s) 5-3/4% Notes due 2016, t) 8.15% Notes due 2016, u) 8.05% Notes due 2017, v) 7.25% Notes due 2009, and w) 7.86% Notes due 2017. It is expected that these notes will be redeemed on Nov. 5, 2007. Additionally, Lehman Brothers has secured the participation of Fannie Mae and Freddie Mac in the transaction. Fannie Mae purchased a $7.1 billion credit facility which is secured by 105 multifamily properties that were part of the transaction, and Freddie Mac executed a $1.8 billion structured transaction that provided new financing for 32 multifamily properties across the country and approved assumption of an additional 15 properties. "Fannie Mae is pleased to serve as a constant and reliable source of liquidity in today's ever-changing capital markets," David Worley, senior vice president of risk management at Fannie Mae, said. "This is a great example of Freddie Mac's capacity to effectively and quickly serve as a reliable source of funding in all market environments," Mitchell Kiffe, vice president of multifamily sourcing for Freddie Mac, added. About Tishman Speyer Headquartered in New York City, Tishman Speyer Real Estate Venture VII, L.P. -- http://www.tishmanspeyer.com/-- owns, develops, operates and funds first class real estate in the world. The company is known for such signature Class-A properties as New York's Rockefeller Center and the Chrysler Center, Berlin's Sony Center, Frankfurt's MesseTurm, CBX Tower in Paris, and Torre Norte in Sao Paolo, Brazil. About Lehman Brothers Headquartered in New York City, Lehman Brothers Holdings Inc. (ticker symbol: LEH) -– http://www.lehman.com/-- finances corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The firm has regional headquarters in London and Tokyo and operates in a network of offices around the world. About Archstone-Smith Headquartered in Englewood, Colorado, Archstone-Smith Trust (NYSE: ASN) -– http://www.archstonesmith.com/-- operates and invests in apartments. The company's portfolio is concentrated in many of the most desirable neighborhoods in the Washington, D.C. metropolitan area, Southern California, the San Francisco Bay Area, the New York metropolitan area, Seattle and Boston. Through its two brands, Archstone and Charles E. Smith, Archstone-Smith strives to provide great apartments and great service to its customers—backed by unconditional service guarantees. As of October 5, 2007, the company owned or had an ownership position in 359 communities, representing 87,667 units, including units under construction. ARCHSTONE-SMITH: S&P Cuts Rating to BB- and Removes Neg. Watch -------------------------------------------------------------- Standard & Poor's Ratings Services took these rating actions affecting Archstone-Smith Operating Trust and Archstone-Smith Trust after the Oct. 5, 2007, close of the company's leveraged acquisition by a partnership sponsored by Tishman Speyer Real Estate Venture VII L.P. (not rated) and Lehman Bros. Holdings Inc. (A+/Stable/A-1) for approximately $23.3 billion: -- S&P lowered its corporate credit ratings on Archstone and the REIT to 'BB-' from 'BBB+' and removed them from CreditWatch with negative implications, where they were placed on May 30, 2007, and then withdrew the rating on the REIT; -- S&P withdrew the ratings assigned to Archstone's $2.3 billion of senior unsecured notes; -- The 'BBB+' rating on the exchangeable notes remains on CreditWatch negative; -- S&P lowered the preferred stock rating to 'B-' from 'BBB' and then withdrew it; and -- S&P assigned Archstone's new parent entities, Tishman Speyer Archstone-Smith Multifamily Guarantor L.P. and Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor LLC, 'BB-' CCRs. "The 'BB-' corporate credit rating reflects an aggressive financial profile resulting from the recently completed go-private transaction," explained Standard & Poor's credit analyst George Skoufis. "The pro forma capital structure is more highly leveraged, the apartment assets are entirely secured, and debt protection measures are very weak. Furthermore, development will play a greater role in the company's growth." The weaker financial profile is partly offset by the good quality and above-average historical operating performance of Archstone's portfolio, as well as the fact that Archstone's seasoned management team is expected to remain in place to manage the platform. The outlook is stable, reflecting the high quality and solid performance of the portfolio and an experienced management team that has a solid track record of creating value through asset recycling and development. The existing interest reserve provides support for the weak debt service coverage at the current rating level. However, Standard & Poor's would lower the ratings if it appears that the company will be unable to achieve sufficient asset sales to repay the bank debt and alleviate the debt burden, or if the company is unable to pull back development activity if the operating environment deteriorates. Positive rating momentum is unlikely in the near term; however, debt repayment that results in a stronger overall financial profile, particularly debt service requirements that are comfortably covered by operating cash flow, would drive future positive rating momentum. ARTESIAN POOLS: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------ Artesian Pools LLC filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee a list of its 20 largest unsecured creditors. Entity Claim Amount ------ ------------ MSC Engineered $393,206 Materials & S.G. 2200 East Pratt Elk Grove, IL 60007 Continuous Colour $282,406 Coat Ltd. 1430 Martin Grove Road Rexdale, ON M9W 4Y1 Coilplus-Pennsylvania, Inc. $196,644 5135 Bleigh Avenue Philadelphia, PA 19136-4202 Donald V. Biase, Chapter 7 $94,520 Trustee Innvative Plastic Solutions $93,907 Regal Plastics $92,453 Royal Moulding Limited $68,713 American Express $57,050 Service Transport, Inc. $46,176 BRT Extrusions Inc. $46,150 Alcoa Inc. $43,086 Texas Mgt. Div. of Houston $40,614 D & S Tool Development Co. $35,847 Harold R. Heinrich, Inc. $35,232 American Express LOC $34,503 Fred Blanchard $31,473 Partners-in-Plastics $30,334 Ken-Mac Metals $29,949 Arbor Metals L.P. $29,334 Prior Coated Metals $28,121 Headquartered in Baltimore, Maryland, Artesian Pools LLC -- http://www.swiartesian.com/-- designs and manufactures swimming pools for families. The company offers ground and above ground pools with extruded aluminum fences and pre-carpeted decks in round and oval sizes. It sells its products through dealers worldwide. The Debtor filed for chapter 11 protection on Aug. 20, 2007 (Bankr. E.D. Ten. Case No. 07-13442). Jerrold D. Farinash, Esq. of Kennedy, Koontz & Farinash represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $3,528,203 and total debts of $4,685,074. ASPEN EXECUTIVE: Stops Operations to Finalize Likely Business Deal ------------------------------------------------------------------ John Gallaher, CEO of Aspen Executive Air LLC aka AEXJet, said that the company is closing its operations for two weeks, AINonline reports citing an e-mail sent to employees on Oct. 5, 2007. The report adds that the move was done in order to finalize a possible business combination with an unidentified operator. AINonline relates, citing Mr. Gallaher, that the company has been unable to meet expectations. When the company filed for bankruptcy, CEO Gallaher previously said that the company would continue its operations. However, the report discloses, due to unanticipated operational constraints, it was decided that the best option was to cease operations temporarily. Based in Basalt, Colorado, Aspen Executive Air LLC, aka AEXJet -- http://www.aexjet.com/-- is a private jet travel company. The company filed for chapter 11 protection on Sept. 14, 2007 (Bankr. D. Del. Case No. 07-11341). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor. When the Debtor filed for protection form its creditors, it listed assets and debts between $1 million and $100 million. The Debtor's list of 20 largest unsecured creditors showed claims of more than $20 million. AURORA HOUSING: Moody's Affirms Ba2 Rating on $2.46 Mil. Bonds -------------------------------------------------------------- Moody's Investors Service affirmed the rating on $2.46 million of outstanding Aurora Housing and Redevelopment Authority's Multi- family Housing Revenue Bonds, (Irongate Apartment Section 8 Assisted Project) at Ba2. The outlook on the rating has been revised to negative. The revised rating outlook at the Ba2 rating level is based on the property's strained financial condition. Irongate Apartments is a small 78 unit Section 8 subsidized property for the elderly and families in Aurora, Minnesota (Duluth MSA). Audited 2006 financial statements for the 78-unit property demonstrate the deteriorating debt service coverage level of 1.09x (excluding reserve for replacements expense), primarily due to increasing maintenance expenses. The project's recent occupancy level has decreased to about 85% from 93% average in 2006. In addition, Irongate's one bedroom contract rents equate to 147% of HUD Fair Market Rent for the Duluth MSA, so it is unlikely that the project will raise rents in the near future. Due to continuing vacancy challenges and increasing expenses, the property still faces financial stress. The Surplus Account continues to have a zero balance, although the Reserve and Replacement Account totaled approximately $81,520 (or $1,045 per unit). The outlook on the bonds has been revised to negative from stable. Given the fact that the bond maturity and HAP expiration (which are co-terminous) do not end until October 2019, it is likely that the property will continue facing financial challenges unless there is a substantial long-term increase in occupancy level and a reduction of maintenance expenditures over the next few years. Key Statistics (as of Dec. 31, 2006 audited financial statements) Recent Occupancy: 85% (average 93% in 2006) HAP expiration: Oct. 15, 2019 Debt Maturity: Oct. 1, 2019 1 bedroom Contract Rent as % of HUD FMR: 147% Debt Service Coverage: 1.09x (excluding reserve for replacements expense) Reserve and Replacement per unit: $1,045 Surplus Fund per unit: $0 AVADO BRANDS: Committee Raises Concerns on DIP Financing Terms -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Avado Brands Inc. and its debtor-affiliates' chapter 11 cases informed the U.S. Bankruptcy Court for the District of Delaware that it has begun discussions with the Debtors regarding their request to obtain postpetition financing from DDJ Capital Management LLC. The Committee further tells the Court that it is also commencing discussions with the lenders regarding these issues. The Committee relates that based on its initial discussion with Debtors' chief financial officer and preliminary review on the budget, it is concerned that the Debtors' 5% weekly variance cushion may not provide sufficient protection from minor forecasting errors. In addition, the Committee believes that the $150,000 post-default carve-out is insufficient and should be increased. Additionally, the Committee points out that the proposed interest rates for the DDJ debtor-in-possession financing at 18% non- default rate and 20.5% default rate appear relatively high. However, the Committee says that presently, it doesn't object to the second interim order issued by the Court since it understands the Debtors' need for financing. The Committee hopes that its concerns will be resolved prior to the October 16 final hearing on the Debtors' motion to obtain DDJ DIP financing. 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). 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. About 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. The Official Committee of Unsecured Creditors retains Otterbourg, Steindler, Houston & Rosen PC and Pepper Hamilton LLP as its co-counsel and BDO Seidman LLP and Trenwith Group LLC as its financial advisors. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. AVADO BRANDS: Gets Second Interim OK to Use DDJ Capital DIP Funds ----------------------------------------------------------------- Avado Brands Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to obtain additional postpetition financing from the $67 million loan DDJ Capital Management LLC offered to the Debtors. The Debtors previously obtained interim approval to borrow up to $24 million from DDJ DIP Facility. The DIP facility bears a cash interest at 18% per annum, payable monthly, calculated on an actual 360-day basis. 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 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 lien on substantially all of their assets. However, the Debtors relate that the pre-petition agent and lenders have consented that the DIP liens be granted priority over the pre-petition liens. The Court has set a hearing for considering final approval to the Debtors' DIP financing request on Oct. 16, 2007. The Bank of New York will serve as sub-administrative agent for DDJ. 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). 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. About 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. BEAR STEARNS: Fitch Holds BB+ Rating on $5.3MM Class H Certs. ------------------------------------------------------------- Fitch Ratings upgrades one class of Bear Stearns Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 1998-C1, as: -- $32.2 million class D to 'AAA' from 'AA+'; In addition, Fitch affirms these classes: -- $22.8 million class A-1 at 'AAA'; -- $408.3 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $35.7 million class B at 'AAA'; -- $32.2 million class C at 'AAA'; -- $8.9 million class E at 'AA-'; -- $12.5 million class F at 'A-'; -- $5.3 million class H at 'BB+' Fitch does not rate classes G, I or J. Class K has been reduced to zero due to realized losses. The upgrades reflect increased credit enhancement levels due to prepayments, scheduled amortization as well as defeasance since the last Fitch ratings action. An additional five loans (7.9%) have defeased. In total, fifty-one loans (40.4%) have defeased to date. As of the September 2007 distribution date, the pool reduced 21% to $564.9 million from $714.7 million at issuance. Currently, one loan (1%), secured by an enclosed mall in St. Johnsbury, VT is in special servicing. A preliminary appraisal value indicates substantial equity in the property. However, occupancy remains low at 56% and leasing efforts are on-going. Fitch will continue to monitor the performance of this property. BROADHOLLOW FUNDING: S&P Junks Rating on Subordinated Notes ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'A-1+' rating on the secured liquidity notes issued by Broadhollow Funding LLC following their full repayment. At the same time, S&P lowered its ratings on the subordinated notes from Broadhollow's series 2004-A and 2005-A to 'CCC' from 'BBB' and left them on CreditWatch negative, where they were placed Aug. 6, 2007. According to Broadhollow's program documents, the Aug. 6, 2007, bankruptcy filing of American Home Mortgage Investment Corp. triggered a program termination event that precludes Broadhollow from purchasing additional residential mortgage loans from AHM and from issuing new SLNs. On Aug. 7, 2007, Broadhollow's outstanding SLNs were extended for 120 days pursuant to the program documentation that provided for the SLN extension under these circumstances. The inability to issue new SLNs, together with the extension of the outstanding SLNs, required Broadhollow to begin liquidating its portfolio in order to repay the outstanding SLNs. An auction was completed Sept. 27, 2007, and all of the loans were sold except for 37 performing loans with an outstanding principal balance of approximately $8.5 million. These loans are expected to be sold within the next two weeks. Funds on deposit in the reserve account, proceeds from the loan sales, and payments under the market value swaps for both performing loans and nonperforming loans are the sources of repayment of the SLNs and subordinated notes. The sales proceeds include the proceeds received through the repayment of a secured inter-company variable-funding note issued by Broadhollow's affiliate, Melville Funding LLC. Broadhollow SLNs Repaid in Full; Rating Withdrawn Standard & Poor's affirmed its 'A-1+' rating on Broadhollow's SLNs on Aug 6, 2007, following AHM's bankruptcy filing. S&P affirmed its 'A-1+' ratings on Broadhollow's SLNs again on Aug. 14, 2007. Standard & Poor's has withdrawn its rating on Broadhollow's SLNs because they were paid in full. The proceeds from the recent auction of the portfolio of loans, payments received by swap counterparties on performing loans, and amounts on deposit in the reserve account were sufficient to retire all outstanding principal and interest due on Broadhollow's SLNs. Broadhollow's Subordinated Notes Downgraded S&P first placed its ratings on Broadhollow's subordinated notes on CreditWatch negative on Aug. 6, 2007, following AHM's bankruptcy filing. At that time, S&P's rating action reflected the uncertainty concerning the extent to which the reduced operating structure of AHM would affect its servicing operations and affect the performance of the portfolio. Following AHM's Aug. 6, 2007, bankruptcy filing, delinquencies in Broadhollow's portfolio increased significantly. This increase in loan delinquencies, coupled with the current market environment for pricing of nonperforming loans, has substantially increased the risk to the subordinated noteholders. The subordinated notes are susceptible to these increased risks because the market value swaps do not cover credit-related deterioration in the price of delinquent and defaulted loans. The downgrades of the subordinated notes from series 2004-A and 2005-A reflect discussions with Broadhollow's program administrator and the depositary regarding the amount of cash received from the sale of the loans and from the swap counterparties with respect to performing loans, as well as amounts expected to be received from the sale of the remaining loans and from the swap counterparties with respect to nonperforming loans (payments for which are due on Oct. 10, 2007). It is expected that the total amount of available funds will be insufficient to pay the subordinated notes in full after repayment of the SLNs. Standard & Poor's will continue to monitor the situation and will take appropriate rating actions, if any, as matters further develop. Rating Withdrawn Broadhollow Funding LLC SLNs Rating ------ To From -- ---- NR A-1+ Ratings Lowered and Remain on CNegative Broadhollow Funding LLC Variable-rate subordinated notes series 2004-A Rating ------ To From -- ---- CCC/Watch Neg BBB/Watch Neg Broadhollow Funding LLC Variable-rate subordinated notes series 2005-A Rating ------ To From -- ---- CCC/Watch Neg BBB/Watch Neg CALPINE CORP: Files Fourth Amended Chapter 11 Plan -------------------------------------------------- A day after the entry of the Disclosure Statement Order, Calpine Corp. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York their Fourth Amended Joint Plan of Reorganization and an accompanying Disclosure Statement to incorporate the views of certain creditors regarding the treatment of Claims under the Plan, as well as their views on other Plan provisions. Gregory L. Doody, Calpine's Executive Vice President, General Counsel, and Secretary, stated that the Fourth Amended Plan and Disclosure Statement, as cleaned up for inclusion in the Plan Solicitation Package, retain substantially all of the terms under the Court-approved Disclosure Statement. Mr. Doody relates in the Court filing that, under the Fourth Amended Plan, certain creditors disagreed with using the Federal Judgment Rate as the postpetition rate of interest for rejection damages claimholders. Those Creditors asserted that contract or state law rate of interest should be used for calculating the postpetition interest because the Federal Judgment Rate may, in certain instances, be less than the contract or state law rate that may otherwise apply to the rejection damages claims, and thus reduce the total postpetition interest that claimholders may recover under the Plan. According to Mr. Doody, Quadrangle Master Funding, Ltd., believes that the proposed Plan treats the Class of General Note Claims more favorably than the Class of General Unsecured Claims because the Plan (i) provides for payment of postpetition interest on General Note Claims at contract rate, and (ii) allows for partial distributions on General Note Claims where part of that Claim is Disputed, while General Unsecured Claims receive postpetition interest at the Federal Judgment Rate, and may not receive partial distributions if a part of that Claim is Disputed. The Debtors, however, believe that the proposed claims treatment is consistent with applicable law, provides for administrative and distribution conveniences that are appropriate and necessary under the circumstances, and comports with due process. To the extent the Holder of an Allowed General Unsecured Claim in Class C-8 receives postpetition interest on its Allowed Claim at the Federal Judgment Rate under the Plan, the recovery to that Holder will be different than the recovery to Holders of Allowed General Note Claims in Class C-2, which will include postpetition interest at the contract rate, as determined by the Court, Mr. Doody says. Manufacturers & Traders Trust, as Indenture Trustee for 7.75% Contingent Convertible Notes Due 2015, believes that the proposed Plan inappropriately provides that Court oversight regarding certain Claims and related matters is eliminated after the Plan is confirmed, and that the Debtors are improperly vested with broad discretion to alter Creditors' rights. The Debtors assert that the Plan is proper and comports with applicable law. The 7.75% Convertible Noteholders also believe that Holders of Interests may not obtain any recovery under the Plan until after all Holders of Allowed Unsecured Claims have received and retained payment in full. The Debtors and the Official Committee of Unsecured Creditors reserve their rights with respect to the 7.75% Convertible Noteholders' contention. The 4.0% Convertible Noteholders, the 4.75% Convertible Noteholders, the 7.75% Convertible Noteholders, and the 6% Convertible Noteholders each has asserted a claim for damages arising from the premature abrogation of the conversion right contained in their respective indentures. The Convertible Noteholders also asserted claims arising under alleged breach of contract. In the Fourth Amended Plan, the 7.75% Convertible Noteholders estimate their Conversion Right Claim to range from approximately $140,200,000 to $578,400,000 and assert that they are entitled to a $110,500,000 claim for breach of the "no-call" provisions of their indenture. The 6% Convertible Noteholders, on the other hand, estimate their Conversion Right Claim to range from approximately $124,700,000 to $544,100,000. The Convertible Noteholders assert that, to the extent that their Conversion Right Claims are subject to subordination under Section 510(b), their Conversion Right Claims should be classified as Subordinated Debt Securities Claims under the Plan. However, the Debtors insist that the Conversion Right Claims would be classified as Subordinated Equity Securities Claims under the Plan if those Claims were Allowed at all. The Convertible Noteholders further assert that certain amounts in excess of principal, interest, and indenture trustee fees arising under the indentures were improperly disallowed. The 7.75% Convertible Noteholders and the 6% Convertible Noteholders' estimate involves several judgments and assumptions regarding various changeable factors, like stock price, the treasury rate and volatility, Mr. Doody notes. Their estimates reflects, among other things, the use of a significant rate of volatility, the high end estimate of New Calpine TEV, and the low end of the Debtors' claims estimates. Mr. Doody maintains that the estimate will not, in any way, be binding on the 6% Convertible Noteholders or any of their representatives, consultants, or experts, nor be deemed to be a waiver or estoppel of any of the rights of the 6% Convertible Noteholders and the 7.75% Convertible Noteholders or their professionals to assert or testify to a greater claim amount. Mr. Doody adds that the estimate does not constitute the acceptance or acquiescence by the Debtors, the Creditors Committee, the Equity Committee, or any party-in-interest to any assertions or any methodology utilized by the 6% Convertible Noteholders or the 7.75% Convertible Noteholders. Certain Creditors who allege that the Debtors are responsible for a forest fire that started at the Debtors' Geysers facility in 2004 -- the Geyser Fire Victims -- believe that certain provisions of the Plan do not comply with the requirements for Confirmation and unduly prejudice them and others who may have access to the Debtors' liability insurance. The victims also complain that the Plan provide improper discretion in the estimation of Claims and the Plan permit premature expungement of Claims potentially covered by insurance and may unduly hinder parties' ability to litigate with insurance carriers. The Debtors disagree with the Geyser Fire Victims' interpretations of the Plan. Both parties reserve their rights with respect to these matters, including the rights to support or oppose Plan Confirmation. Hawaii Structural Ironworkers Pension Trust Fund, on behalf of a class of common stock purchases, who filed a litigation in a California state court against the Debtors, believes that the Hawaii Class ultimately may hold both Allowed Interests and Allowed Subordinated Equity Securities Claims. Pursuant to the Fourth Amended Plan, Allowed Claims in Class 1E-2 and Allowed Interests in Class 1E-1 will receive the same treatment in accordance with Section 510(b). The Debtors estimate the Subordinated Equity Securities Claims in the amount of $0. The Hawaii Class believes that the Subordinated Equity Securities Claims have substantial value, in excess of $60,000,000, which may be satisfied either by applicable insurance or New Calpine Common Stock. Thus, the Hawaii Class believes that the ultimate value of the Class E-2 Subordinated Equity Securities Claims may have a significant impact on the recovery to holders of Allowed Class E- 1 Interests. The Debtors reserve their rights with respect to the views of the Hawaii Class in the Hawaii Litigation. A full-text copy of the Debtors' Fourth Amended Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?242a A full-text copy of the Debtors' Fourth Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?242b 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 and its affiliates 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 Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). 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. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On September 25, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. (Calpine Bankruptcy News, Issue No. 64, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Judge Lifland Denies Equity Committee's Stay Request ------------------------------------------------------------------ The Hon. Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York, at an October 4 hearing, refused to put off a creditor's vote on Calpine Corp. and its debtor-affiliates Amended Plan pending the appeal, finding that the Official Committee of Equity Security Holders ignored the reality of the Chapter 11 process. The Equity Committee had argued that the Disclosure Statement does not provide adequate disclosure because the Debtors have not provided a "firm" projected enterprise value of the reorganized entity. The panel believes that creditors should not be voting on information that will change. The Equity Committee insisted that Calpine is acting improperly by planning to revise the projected value for the reorganized company just 10 days before the Voting Deadline. "Ultimately, it's the [Bankruptcy] court that's going to make the determination of valuation," Judge Lifland said at the hearing, according to Bloomberg News. "I want to give all of you somewhat of a reality check." In his four-page memorandum decision and order, Judge Lifland determined that the parties apparently anticipate a valuation fight at the confirmation hearing -- that is, a battle of the experts, with each constituency free to argue for a higher or lower valuation. Without full consensus to confirmation of the Debtors' proposed Plan, the Bankruptcy Court will then determine the Debtors' enterprise value based on the evidence presented at the Confirmation Hearing regardless of the Debtors' and Miller Buckfire & Co.'s own views on valuation. A balancing of the harms also clearly favors the Debtors and the creditor constituencies as articulated in their responses to the Stay Motion, Judge Lifland ruled. A delay of the Confirmation process may seriously jeopardize the Debtors' ability to emerge from Chapter 11 within the timeframe to maintain their $8,000,000,000 favorable exit financing intact. Judge Lifland relates that, should the current commitment expire, the Debtors would incur up to $800,000,000 in additional interest expense. Judge Lifland notes that there is a real possibility that the amount of exit financing the Debtors currently have lined up and require to implement their Plan would not even be available to them under the current market conditions. Thus, he says, a delay would threaten harm to all parties-in-interest including the equity holders. Calpine's current Chapter 11 plan values the company at about $20,300,000,000, as estimated by Calpine's investment bank, Miller Buckfire & Co., in June. The company's valuation will be decided by Judge Lifland at a trial. Moreover, Judge Lifland points out that each month the Debtors remain in Chapter 11, they continue to accrue substantial administrative expenses and interest expense, approximately $70,000,000 a month. Judge Lifland also notes that the Equity Committee's arguments that they do not have enough information to inform their constituents ring hollow. Judge Lifland points out that the Equity Committee is armed with a full panoply of advisors and even proposed their own restructuring plan to the Debtors, which was ultimately rejected. Equity Committee's Seeks Leave to File Appeal from Disclosure Statement Order Previously, the Equity Committee sought leave from the Bankruptcy Court to file an appeal from the Disclosure Statement Order to the U.S. District Court for the Southern District of New York. On the Equity Committee's behalf, Gary Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson, LLP, in New York, asserted that valuation is the most critical data point used to analyze a Chapter 11 plan of reorganization, particularly a waterfall plan. In fact, he said, the purpose of a disclosure statement is to inform equity holders and claimants, as fully as possible, about the probable financial results of acceptance or rejection of a particular plan. Without valuation information, a disclosure statement is not adequate because it lacks the most basic information necessary for investors to make informed decisions regarding a Chapter 11 plan, Mr. Kaplan maintained. The Debtors' proposal to change valuation on November 20, which is 10 days before the Voting Deadline, would result in claim and interest holders having, at most, 10 days to cast their ballots in an informed manner -- 10 days that include the Thanksgiving holiday during which many Americans travel, Mr. Kaplan pointed out. In creating the "time crunch," Mr. Kaplan asserted that the Debtors have, for all intents and purposes, improperly truncated the confirmation objection period to just 10 days, thereby violating Rule 2002 of the Federal Rules of the Bankruptcy Procedure and the creditors' constitutionally protected due process rights. Rule 2002 requires 25 days' notice of the objection deadline to a Chapter 11 plan, Mr. Kaplan noted. Mr. Kaplan contends that neither the Debtors' Plan nor their Disclosure Statement explain how they intend to disseminate the change in valuation to ensure that the tens of thousands of claim and interest holders who are voting on the Plan receive the new valuation in sufficient time before the Voting Deadline. Equity Committee's Appeal In their appeal, the Equity Committee asked the U.S. District Court for the Southern District of New York to determine whether: (1) the Debtors' Disclosure Statement, which provides that the valuation will be changed just days before the November 30, 3007 Voting Deadline, provides adequate information to claim and interest holders; (2) the "truncated" confirmation objection deadline notice complies with Rule 2002(b) of the Federal Rules of Bankruptcy Procedure and due process; (3) the truncated solicitation period complies with due process; and (4) the means of providing notice of the late-changed valuation to stakeholders is sufficient and complies with due process. The Equity Committee previously sought leave from the Bankruptcy Court to file an appeal from the Disclosure Statement Order, and also asked the Bankruptcy Court to enforce a stay of that order pending the Appeal. Gary Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson, LLP, in New York, had asserted, on the the Equity Committee's behalf, that a change of the Debtors' valuation just days before the November 30, 2007, Voting Deadline will cause confusion among the creditors and will impact the investing public. The valuation issue calls into question whether the Disclosure Statement had "adequate information," Mr. Kaplan said. Debtors & Creditors Committee Respond to Stay Request The Debtors and the Official Committee of Unsecured Creditors had asked the Court to deny the Equity Committee's request to enforce a stay of the Disclosure Statement Order pending the Appeal. The Debtors and Creditors Committee argued that the Equity Committee will not prevail on appeal because it has not shown, and cannot show, that the issue is an "exceptional" case for which interlocutory appeal is warranted. Debtors' counsel, Jeffrey S. Powell, Esq., at Kirkland & Ellis, LLP, in New York, pointed out that the Equity Committee does not identify any controlling question of law for which there is a substantial ground for difference of opinion because the issues the Equity Committee raises involve fact-specific inquiries that must be addressed on a case-by-case basis and, therefore, are not suitable for interlocutory appellate review. Moreover, Mr. Powell asserted that, even if an interlocutory appeal were permitted, that the Equity Committee's arguments fail on their merits and were properly rejected by the Bankruptcy Court for reasons explained at the September 25 Disclosure Statement hearing. The Creditors Committee also pointed out that the Equity Committee has not sought authority from the District Court to appeal from the Disclosure Statement Order, thus a stay is procedurally improper. In addition, the Debtors and the Creditors Committee contended that the Equity Committee has not demonstrated that denying a stay would cause it irreparable harm. The Equity Committee's purported concerns that shareholders might not receive the updated version or might be confused by the Disclosure Statement are unsupported by an affidavit or citation to record evidence and are too speculative, Mr. Powell further asserts. The Debtors and the Creditors Committee insisted that the Equity Committee will not suffer irreparable injury absent a stay, but that a stay will cause substantial injury to the Debtors and their stakeholders. By delaying the Plan solicitation, the stay will derail the confirmation process and pose grave risks that the Debtors will not be able to emerge from Chapter 11 before their financing commitments expire on January 31, 2008, Mr. Powell points out. The Debtors maintain that their Chapter 11 case must keep moving forward so it can emerge from bankruptcy by January 31 and preserve about $8,000,000,000 in exit financing. The Unofficial Committee of Second Lien Debtholders supports the Debtors' contentions. 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 and its affiliates 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 Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). 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. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On September 25, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. (Calpine Bankruptcy News, Issue No. 64 Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Plan Confirmation Hearing Scheduled on December 18 ---------------------------------------------------------------- The Hon. Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York set a hearing on Dec. 18, 2007, to consider confirmation of the Chapter 11 Plan of Reorganization filed by Calpine Corp. and its debtor-affiliates. Judge Lifland also said that the Confirmation Hearing will continue on December 19 and 20 and 27, 2007, and may be continued from time to time without further notice other than adjournments announced in open court. Judge Lifland, on September 26 issued a formal written order approving the Disclosure Statement with respect to the Joint Plan of Reorganization filed by Calpine Corp. and its debtor- affiliates. Judge Lifland found that the Disclosure Statement, as amended, complies with all aspects of Section 1125 of the Bankruptcy Code and Rule 3017-1(a) of the Local Rules of Bankruptcy Practice and Procedures of the Bankruptcy Court for the Southern District of New York. The judge specifically found that the Disclosure Statement contains "adequate information" as defined under Section 1125(a). As part of the order approving the Disclosure Statement, Judge Lifland also approved the schedule for the voting, tabulation and confirmation process of the Plan: October 5, 2007 - Deadline to send Solicitation Packages - Service of all written discovery October 19, 2007 - Service of written responses and objections to written discovery October 26, 2007 - Start of all document productions November 8, 2007 - Service of all third party subpoenas - Depositions of fact witnesses November 12, 2007 - Designation of all expert witnesses November 19, 2007 - Exchange of expert reports November 20, 2007 - Depositions of expert witnesses - Exchange of preliminary witness lists November 22, 2007 - Service of all deposition notices November 30, 2007 - Voting and Plan Objection Deadline December 10, 2007 - Completion of all discovery December 11, 2007 - Exchange of exhibit lists and final witness lists - Exchange of deposition designations December 12, 2007 - Deadline to file voting certification December 14, 2007 - Exchange of objections to deposition designations and counter-designations December 17, 2007 - Exchange of objections to counter- designations M&T Bank Wants Confirmation Hearing Moved to Jan. 7 M&T Bank, in a separate Court filing, asked Judge Lifland to move the scheduled December 27 Plan Confirmation Hearing to Jan. 7, 2008. Representing M&T Bank, Martin Bienenstock, Esq., at Weil, Gotshal & Manges, LLP, in New York, told Judge Lifland that December 27 is smack in the middle of the winter breaks of the children of the parties-in-interest and their professionals involved in the Debtors' bankruptcy cases. Mr. Bienenstock said that the winter breaks are the only times they can be with their children. 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 and its affiliates 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 Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). 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. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On September 25, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. (Calpine Bankruptcy News, Issue No. 64 Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CARAUSTAR IND: Posts $2.3 Mil. Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- Caraustar Industries Inc. reported a net loss of $2.3 million for the second quarter ended June 30, 2007, compared with a net loss of $15.8 million for the same period last year. Loss from continuing operations for the second quarter 2007 was $2.3 million, compared to loss from continuing operations of $15.7 million for the same quarter last year. The second quarter 2007 and 2006 results included pretax restructuring and impairment costs of approximately $3.7 million and $15.8 million, respectively. The second quarter 2007 loss from continuing operations was impacted by noncash asset write-offs of $1.0 million related to the sale of the company's Mooresville, North Carolina converting location and $700,000 in severance and unemployment taxes. Sales for the second quarter ended June 30, 2007, were $235.6 million, a decrease of 10.3% compared to sales of $262.7 million for the same quarter in 2006. Included in the second quarter 2006 sales were $21.4 million related to the company's Rittman, Ohio and Sprague, Connecticut coated recycled paperboard operations, both of which were exited in 2006. Sales for the six-month period ended June 30, 2007, were $468.4 million, a decrease of 11.0% compared to sales of $526.6 million for the same period in 2006. Loss from continuing operations for the six-month period ended June 30, 2007, was $11.3 million, compared to a gain from continuing operations of $65.8 million for the same period last year. Income from continuing operations for the first half of 2006 included a gain of $135.2 million on the sale of the company's 50% interest in its Standard Gypsum joint venture and a cost of $18.8 million associated with the redemption of its senior subordinated notes. The six-month periods ended 2007 and 2006 results included pretax restructuring and impairment costs of approximately $9.5 million and $20.6 million, respectively. Michael J. Keough, president and chief executive officer of Caraustar, commented, "Caraustar's second quarter results improved considerably over first quarter 2007 and year-over-year. Additionally, our mill system operated at 96.6% of capacity versus 93.1% in the first quarter 2007 and 96.0% in the second quarter 2006. We were able to sell out the entire capacity of our PBL joint venture mill in the second quarter 2007, and the mill continues to run full with a product mix of approximately half facing paper and half containerboard. During the quarter, we were able to achieve a high percentage of the original $50 per ton price increase announced in March, and energy costs were down $11 per ton versus the second quarter last year. Operating results, however, were adversely impacted by company and industry volume shortfalls coupled with a $38 per ton increase in recovered fiber costs. Fiber costs decreased in April and May but began to climb again in June. We expect continued volatility in the cost of fiber given the increased international consumption, primarily by China. "Our transformation process continued as we further refined our business portfolio through the sale of our Mooresville, North Carolina converting facility, which produced games and picture frames. Our comprehensive initiative to reduce SG&A, including the closure of underperforming assets, led to a $6.4 million reduction in costs versus the second quarter last year. The percent of SG&A to sales declined from 12.6% to 11.3%. "As stated last quarter, we were able to increase liquidity despite volume declines that led to lower operating results, and we expect to further improve liquidity in the third quarter. We remain committed to achieving overall improvements in volume, sales and cost reductions." Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $631.4 million in total assets, $482.0 million in total liabilities, and $149.4 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?2427 Liquidity The company ended the quarter with a cash balance of $2.3 million compared to $1.0 million at Dec. 31, 2006. For the six month periods ended June 30, 2007, and 2006, the company used $12.2 million and $3.6 million, respectively, of cash in operating activities. The increase in cash used from operations versus 2006 was primarily due to lower operating results. Capital expenditures decreased year-to-date to $11.6 million in 2007 from $15.8 million in 2006. As of June 30, 2007, the company had $60.2 million in borrowings outstanding under its $135.0 million senior secured credit facility and had $15.7 million in letters of credit outstanding. As of June 30, 2007, the company had availability under the revolver portion of the Senior Credit Facility of $24.4 million. About Caraustar Industries Headquartered in Austell, Georgia, Caraustar Industries Inc. (NasdaqGM: CSAR) -- http://www.caraustar.com/-- is one of the world's largest integrated manufacturers of converted recycled paperboard. Caraustar serves the four principal recycled boxboard product end-use markets: tubes, cores and composite cans; folding cartons; gypsum facing paper and specialty paperboard products. * * * As reported in the Troubled Company Reporter on Sept. 10, 2007, Standard & Poor's Ratings Services affirmed its ratings on Caraustar Industries Inc., including its 'B+' corporate credit rating, and removed the ratings from CreditWatch where they were placed with negative implications on May 9, 2007. CARDIMA INC: Reports Changes in Members of Board of Directors ------------------------------------------------------------- Cardima Inc. disclosed the resignation of directors and appointment of new board members pursuant to resolutions passed in the company's board meeting held on Oct. 5, 2007. On Oct. 5, 2007, Tina Sim and Andrew Lee, for personal reasons, tendered their resignations from the directors of the company and were accepted by the board. The board expressed their appreciation for Ms. Sim and Mr. Lee's valuable contribution to the company. Subsequently, Dr. Richard Gaston and Dr. Eric Chan were nominated and were approved by the company's board to fill the vacancies created by the resignations of Ms. Sim and Mr. Lee. The board also appointed Dr. Eric Chan, senior vice president, product development, as the chief technology officer of the company effective Oct. 5, 2007. Dr. Richard Gaston retired in 2006 from clinical practice as a board-certified cardiologist. From 1981 to 2006, Dr. Gaston practiced as a cardiologist in Petaluma, California and played a role in establishing a state-of-the-art intensive care unit at Petaluma Valley Hospital in the 1980s. >From 1997 to 2003, Dr. Gaston also was the biotechnology and pharmaceutical analyst of AmeriCal Securities in San Francisco, California with a prominent role in selling Imatron Inc. to GE Healthcare. From 1977 to 1979, Dr. Gaston worked as an Internist in the San Rafael Medical Group, San Rafael, California. From 1974 to 1977, Dr. Gaston was an Internist with the United States Air Force in Anchorage, Alaska. Dr. Gaston received an A.B. in Psychology from Stanford University, M.D. from University of Michigan, Internship and Medical Residency from University of Utah and Cardiology Fellowship from Michigan State University. "During my more than 30 years of medical practice, atrial fibrillation remained one of the most difficult to manage cardiology maladies," Dr. Gaston commented. "Advancements in most other subspecialties have far outpaced AF arrhythmia management, where ineffective and often toxic anti-arrhythmic drug therapy is combined with anticoagulation, frequent electro-cardioversions, emergency room visits and hospitalizations." "Cardima is a leader in addressing this inadequacy with its state- of-the-art ablation systems, and it has been a privilege for me to work with the company over the past several years and follow the company's progress," Dr. Gaston further commented. "I am happy to join the board and work to further advance the technology and improve options for patients afflicted with cardiac arrhythmias." Dr. Eric Chan, co-inventor of Cardima's INTELLITEMP(R) Energy Management System, the Surgical Ablation Probe with Stabilization Sheath, and the REVELATION(R) Helix catheter, has been the company's senior vice president of product development since February 2007. >From June 1998 to January 2007, Dr. Chan was the company's vice president, product development. He was the director of engineering and vice-president of engineering at Arrhythmia Research Technology Inc. from April 1991 to May 1998, where he directed the development of computerized cardiac electrophysiology and catheter lab systems, digital Holter and high-resolution ECG systems. Dr. Chan received a B.S.E.E. from Purdue University, and both the M.S.E. and Ph.D. degrees in Biomedical Engineering from the University of Texas at Austin. He also completed the Global Bio- Executive Program at the University of California, Berkeley, Haas School of Business. He has several patents pertaining to inventions used in the diagnosis and treatment of cardiac arrhythmias, and more than 30 peer-reviewed publications, including a book chapter on cardiac ablation. He is a senior member of the Institute of Electrical and Electronic Engineers, and an elected Fellow of the European Society of Cardiology. "I am honored to be appointed Cardima's chief technology officer, and on being nominated to the board," Dr. Chan commented. "Cardima is at the forefront of technological innovation, in developing, manufacturing and marketing new systems to treat cardiac arrhythmias. It has been my privilege to work with exemplary physicians and surgeons at hospitals throughout the world, in developing devices and systems to fulfill unmet clinical needs. I am very enthusiastic about, and committed to growing the adoption of our ablation products worldwide." About Cardima Inc. Headquartered in Fremont, California, Cardima Inc. (OTC BB: CRDM.OB) -- http://www.cardima.com/-- has developed the PATHFINDER(R) series of diagnostic catheters, the REVELATION(R) series ablation system and the Surgical Ablation System for the diagnosis and treatment of tachycardias. The REVELATION(R) series with the INTELLITEMP energy management system was developed for the treatment of atrial fibrillation originating in the pulmonary veins of the heart and received CE mark approval in Europe. The Surgical Ablation System with an INTELLITEMP received a 510(K) approval in the U.S. by the FDA. The PATHFINDER and the REVELATION family of devices are intended for use in the Electro- physiology market and the Surgical Ablation System for use in the surgical market. * * * Marc Lumer & Company, in San Francisco, expressed substantial doubt about Cardima Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations. Cardima Inc.'s consolidated balance sheet at June 30, 2007, showed $3 million in total assets and $18.3 million in total liabilities, resulting in a $15.3 million total stockholders' deficit. CATALINA MARKETING: Completes $1.7 Billion Sale to Equity Firm -------------------------------------------------------------- Catalina Marketing Corporation disclosed the completion of the acquisition of Catalina by entities affiliated with Hellman & Friedman LLC, a private equity investment firm. On April 17, 2007, Catalina entered into a definitive agreement to be acquired by affiliates of Hellman & Friedman in a transaction valued at approximately $1.7 billion. Under terms of the agreement, Catalina shareholders will receive $32.50 per share in cash, without interest, for each share of Catalina common stock held. "We believe Catalina Marketing is in a great position to focus on future growth initiatives and strategic opportunities as a private company," Dick Buell, chief executive officer of Catalina Marketing, said. "With the financial support of Hellman & Friedman, we are confident that we can accomplish the future plans we have set forth. H&F has extensive knowledge of the marketing and technology arena that will help us continue to build on our established, strong foundation and move the company into the next chapter of growth and development." Catalina stock will cease to trade on the New York Stock Exchange at market close today, and will no longer be listed. Catalina has appointed Mellon Investor Services LLC as its paying agent, and, as soon as practicable, will mail a letter of transmittal and instructions to all Catalina shareholders of record. The letter of transmittal and instructions will contain information regarding how to surrender Catalina common stock in exchange for the merger consideration. Shareholders of record should be in receipt of the letter of transmittal before surrendering their shares. Shareholders who hold shares through a bank or broker will not have to take any action to have their shares converted into cash as such conversions will be handled by the bank or broker. About Hellman & Friedman LLC Hellman & Friedman LLC is a private equity investment firm with offices in San Francisco, New York and London. The Firm focuses on investing in superior business franchises and serving as a value-added partner to management in select industries including media and marketing services, financial services, professional services, asset management, software and information services, and energy. Since its founding in 1984, the Firm has raised and, through its affiliated funds, managed over $16 billion of committed capital and is currently investing its sixth partnership, Hellman & Friedman Capital Partners VI, L.P., with over $8 billion of committed capital. About Catalina Marketing Corporation Based in St. Petersburg, Forida, Catalina Marketing Corporation -- http://www.catalinamarketing.com/-- offers an array of behavior- based promotional messaging, loyalty programs and direct-to- patient information. Personally identifiable data that may be collected from the company's targeted marketing programs, as well as its research programs, are never sold or provided to any outside party without the express permission of the consumer. CATALINA MARKETING: High Leverage Cues S&P's "B+" Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Catalina Marketing Corp. The rating outlook is negative. At the same time, Standard & Poor's assigned its issue-level and recovery ratings to the company's $760 million senior secured facility, consisting of a $100 million revolving credit and a $660 million senior secured term loan. The loan rating is 'BB-' and the recovery rating is '2', reflecting the expectation for substantial (70% to 90%) recovery in the event of a payment default. In addition, Standard & Poor's assigned its 'B-' rating to Catalina's proposed $330 million senior unsecured PIK toggle bridge loan and $160 million subordinated bridge loan. This debt is rated two notches lower than the 'B+' corporate credit rating, reflecting the amount of secured debt in the capital structure. "The 'B+' corporate credit rating reflects high leverage, limited levels of expected debt repayment over the intermediate term due to a growth strategy reliant upon high levels of capital investment, a competitive consumer promotion marketplace, and the company's customer base of powerful consumer products companies," said Standard & Poor's credit analyst Emile Courtney. "These factors are only partly offset by Catalina's high margins and good levels of operating cash flow generation, relatively high barriers in its markets due to the company's installed base of customers and retailers, a good market position due to lack of direct competition in its U.S.- based point-of-sale marketing communications segment, and high customer renewal rates." The company's purchase by Hellman & Friedman Capital Partners VI L.P., a private equity firm, for $1.7 billion resulted in high leverage levels. H&F funded the purchase with proceeds from the senior credit facility and the unsecured and subordinated bridge loans, existing cash balances at Catalina, and a $516 million equity contribution. Catalina plans to refinance the senior unsecured PIK toggle and subordinated bridge loans, which each have initial maturity dates one year after close. In the absence of refinancing, the bridge loans convert into permanent capital and the interest rates increase starting six months after closing, to a maximum of 10.5% for the senior unsecured loan and 11.625% for the subordinated loan. Pro forma EBITDA interest coverage is expected to be weak for the rating at 1.7x at the end of 2007, which includes 100% cash interest expense on the PIK toggle loan, although the issuer has the option to pay 50% or 100% of interest expense in additional notes. CHOCTAW GEN: Low Operating Results Cue Moody's to Cut Ratings ------------------------------------------------------------- Moody's Investors Service downgraded the senior secured rating of Choctaw Generation Limited Partnership's Series A and Series B Pass Through Trust Certificates to Ba1 from Baa3. The outlook is negative. The rating action concludes the review for possible downgrade that was initiated on July 11, 2007. The downgrade reflects the consistently lower than expected operating results of the project over the past 15 to 18 months with the twelve month trailing fixed charge coverage ratio declining from over 1.35x in previous years to about 1.19x at fiscal year end 2006 reflecting several forced outage events that included a transformer failure and boiler tube leaks during peak operating months. These events further exacerbated lower turbine efficiency resulting from persistently higher than expected heat rates associated with the project's steam turbine, which dampened the fixed charge coverage ratio from levels ranging between 1.4x and 1.5x as originally anticipated for the Project. Choctaw's heat rate has been averaging about 11,400 Btu/kWh versus the 10,200 Btu/kWh level that was originally anticipated, resulting in lower efficiency and higher fuel costs. The Project is currently pursuing legal action against the steam turbine manufacturer to address the design deficiencies which are causing the higher than anticipated heat rate levels. However, the outcome of the litigation is unpredictable and the case is unlikely to be concluded this year, unless a settlement is reached. The cash flows have also been adversely impacted by higher overhead expenses related to the litigation against the turbine manufacturer and increased cash expenses related to higher costs of procuring SO2 credits from what was envisioned initially. The cumulative impact of the series of recent forced outages have resulted in a payment penalty under the terms of the Project's PPA with Tennessee Valley Authority, which further weakened the coverage ratio to about 1.03x at the end of the 2nd quarter 2007. However, the adverse cash flow impact from the PPA penalty provision is expected to be partially reversed due to improved performance during the summer peak months. Moody's anticipates that a degree of operational efficiency can be achieved when the Project undergoes its major maintenance overhaul in the latter half of 2008. However, the rating incorporates Moody's view that the improvement in its fixed charge coverage ratio to originally anticipated levels of 1.4x to 1.5x may not be achievable even if the turbine issue is resolved. The negative outlook reflects Moody's expectation that the Project's fixed charge coverage ratio could continue to remain depressed below a 1.2x level until the Project undergoes its major maintenance overhaul during the second half of 2008. The negative outlook incorporates the Project's continued vulnerability to forced outage events that could significantly impact coverage ratios until the major maintenance overhaul can be performed and the turbine design issues are addressed. However, the Ba1 rating incorporates Moody's expectation of continued financial and operational support for the Project by the sponsor, Suez Energy North America. The rating could be downgraded if the ongoing dispute with Toshiba is not resolved over the next six to nine months or if there were to be an unfavorable resolution or settlement for the Project. The rating could be further pressured downward if Moody's determines that the fixed charge coverage ratio could remain below 1.3x over the longer term. Choctaw Generation Limited Partnership is a 440 MW lignite fired power generation facility located in Choctaw County, Mississippi. The Project sells its power to Tennessee Valley Authority (rated Aaa) under a long term power purchase agreement through 2032. CGLP is indirectly wholly owned by Suez Energy North America Inc, a subsidiary of Suez S.A. (rated A2 under review for upgrade). CHRYSLER LLC: Inks Tentative Pact on New Labor Contract with UAW ---------------------------------------------------------------- Tom LaSorda, Vice Chairman and President of Chrysler LLC disclosed that the company and the United Auto Workers union have reached a tentative agreement on a new national labor contract, covering approximately 45,000 represented employees. The agreement is subject to UAW member ratification. The tentative agreement includes a memorandum of understanding to establish an independent retiree health care trust, as well as other changes to the national agreement. Following ratification, implementation of the memorandum of understanding is subject to approval by the courts and satisfactory review of accounting treatment with the Securities Exchange Commission. The national agreement is consistent with the economic pattern, and balances the needs of its employees and company by providing a framework to improve its long-term manufacturing competitiveness. At this time, both parties cannot discuss specifics of the agreement pending a ratification vote -- an internal UAW process. As reported in the Troubled Company Reporter on Oct. 9, 2007, Chrysler has until 11 a.m., Oct. 10, 2007, to close its contract negotiations with the UAW, otherwise union members will hold a strike against the company. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * On Oct. 1, 2007, Standard & Poor's Ratings Services placed its corporate credit ratings on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC on CreditWatch with positive implications. As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC's (B/Negative/--) $10 billion senior secured first-lien term loan facility due 2013, following various changes to terms and conditions prior to closing. The $10 billion first-lien term loan now consists of a $5 billion "first-out" tranche and a $5 billion "second-out" tranche, so the aggregate amount of first-lien debt remains unchanged. Accordingly, S&P assigned a 'BB-' rating to the $5 billion "first- out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's $2 billion senior secured, second lien term loan in connection with Monday's closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. COMPASS MINERALS: Steady Performance Cues S&P to Lift Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Compass Minerals Group Inc. and its holding company, Compass Minerals International Inc., including raising its corporate credit rating to 'BB-' from 'B+'. In addition, Standard & Poor's assigned a 'BB' rating and '2' recovery rating to the company's proposed $130 million term loan B-2. At the same time, the 'BB' rating on the company's existing senior secured bank credit facility was affirmed. However, the recovery rating was revised to '2' from '1', indicating the expectation of substantial (70%-90%) recovery in the event of a payment default. The outlook is stable. "The upgrade reflects the combination of the company's continued steady operating performance and improved financial profile, as well as the recent announcement that it plans to refinance its high-coupon discount notes due 2012," said Standard & Poor's credit analyst Anna Alemani. The Overlook, Park, Kansas-based company is funding the $130 million in cash needed for the tender offer by exercising the accordion feature of the existing senior secured credit facility. Total debt (pro forma for the transaction and adjusted for operating leases and postretirement obligations) was about $600 million as of June 30, 2007. Compass Minerals is the second-largest producer of salt in North America and the largest in the U.K. In addition, it is the largest North American producer of sulfate of potash fertilizer, a niche market that generates about 17% of revenues. "We expect the company to maintain its current level of operating and financial performance and to refinance its remaining high coupon discount notes at significantly lower rates," Ms. Alemani said. "In addition, the recession-resistant characteristics and nondiscretionary nature of the company's products support ratings stability. We could revise the outlook to negative, or potentially downgrade the company if its leverage increases because of increased margin pressure or it sustains volumes at a lower level because of milder weather conditions and greater-than- expected spending levels that weaken its overall performance." COPANO ENERGY: Earns $13.3 Million in Second Quarter Ended June 30 ------------------------------------------------------------------ Copano Energy LLC reported that its net income decreased by 30% to $13.3 million for the second quarter ended June 30, 2007, compared to net income of $18.9 million for the second quarter of 2006. The decline in net income is the result of non-cash amortization expense related to the company's hedging program and expenses associated with a potential acquisition that was not consummated. Revenue for the second quarter of 2007 increased 34% to $281.7 million compared with $209.6 million for the second quarter of last year. Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the second quarter of 2007 were $29.5 million compared with $34.3 million for the second quarter of 2006. Revenue increased 16% to $492.7 million compared with $423.6 million in the first half of last year. Net income decreased by 16% to $22.0 million for the six months ended June 30, 2007, compared to net income of $26.3 million for the six months ended June 30, 2006. EBITDA for the six months ended June 30, 2007, was $52.8 million compared with $57.6 million for the six months ended June 30, 2006. "We are pleased that during the second quarter, Copano continued to achieve strong volume growth in both our Mid-Continent and Texas Gulf Coast regions," said John Eckel, chairman and chief executive officer of Copano. "Our reported results were held back by increased non-cash hedging amortization totaling $5.2 million for the quarter and the write-off of approximately $2.7 million of charges and expenses incurred in connection with a potential acquisition that was not consummated including additional non-cash charges for associated hedges of approximately $1.8 million." Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $1.00 billion in total assets, $516.8 million in total liabilities, and $486.4 million in total members' 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?242d About Copano Energy Headquartered in Houston, Texas, Copano Energy LLC (Nasdaq: CPNO) -- http://www.copanoenergy.com/-- is a midstream natural gas company with natural gas gathering, intrastate pipeline and natural gas processing assets in the Texas Gulf Coast region and in Central and Eastern Oklahoma. * * * Copano Energy carries Standard & Poor's Ratings Services' 'BB-' corporate credit rating. DURA AUTOMOTIVE: Noteholders Appeal Amendment to Backstop Deal -------------------------------------------------------------- Certain beneficial holders of senior subordinated notes due May 2009, issued by Dura Operating Corp., took an appeal to the U.S. District Court for Delaware from Bankruptcy Judge Kevin J. Carey's order approving an amendment to the Amended Backstop Rights Purchase Agreement, dated as of August 13, 2007, between DURA Automotive Systems, Inc., and Pacificor LLC. The amendment provides that Pacificor's commitment to buy unsold shares of reorganized DURA common stock is conditioned upon DURA emerging as a private company once it exits Chapter 11. Pacificor has committed to buy the unsold portion of the 39.3% to 42.6% of DURA shares to be offered to holders of 8.625% senior unsecured notes due April 2012. As a substantial holder of the senior notes, Pacificor will get a share of the 57.4% to 60.7% of the reorganized company allotted to that class of debt under DURA's Joint Plan of Reorganization. The 9% Noteholders, which will be paid nothing under the Plan, have already appealed the first version of the Backstop Agreement. The Agreement and the rights offering, which is expected to raise $140,000,000 to $160,000,000, are incorporated in the Plan which will be sent for approval to senior noteholders and certain general unsecured claimants until November 15, 2007. The 9% Noteholders and owners of existing common stock of DURA, which will also receive 0% recovery on their interests, will not be entitled to vote on the Plan. Should the District Court overturn the Bankruptcy Court's order on the Backstop Agreement, the Debtors may not be able to achieve its target of emerging from bankruptcy by the end of 2007. DURA said that absent the Backstop Deal, the Plan will be rendered infeasible. DURA had also said that each month of delay in its exit from Chapter 11 results in significant lost new business awards. 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 expired on Sept. 30, 2007. (Dura Automotive Bankruptcy News, Issue No. 31, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). E*TRADE FINANCIAL: Moody's Holds Ba2 Senior Debt Rating ------------------------------------------------------- Moody's Investors Service affirmed the ratings of E*TRADE Financial Corporation (Senior debt at Ba2) and its lead thrift subsidiary, E*TRADE Bank (LT deposits at Baa3). The rating outlook remains positive. Moody's views the current Ba2 rating as well positioned within the context of the firm's operating performance and the likely downside effect of turbulent mortgage markets. The continuation of the positive rating outlook suggests that should E*TRADE successfully manage through the current challenges facing US mortgage markets, upward rating potential would likely emerge. E*TRADE's credit metrics compare favorably to its current Ba2 rating. The company has reduced its outstanding acquisition debt over time, cashflows have grown, and cashflow leverage has declined. Moody's said that it believes that E*TRADE should be adequately positioned to weather the mortgage-market downturn and absorb higher credit costs from its mortgage portfolio. E*TRADE's $32 billion loan book is weighted towards the upper end of the credit spectrum, which has aided asset quality performance relative to broad industry benchmarks. Moody's increased loss expectations for E*TRADE are associated predominantly with the higher CLTV buckets of the firm's $12.4 billion home equity portfolio, and non-agency backed structured securities. The rating agency added that although credit losses and securities impairments are expected to rise through 2008, a range of scenarios result in E*TRADE's credit profile remaining at least consistent with its current Ba2 rating. The rating agency noted that E*TRADE operates a dual-component business model and balance sheet strategy that includes: 1. a $34 billion client driven, core funded component, and 2. a $23 billion wholesale asset/funding component. The essence of the company's wholesale strategy has been to deploy short-term market funding to arbitrage and lock in (via swaps) a small spread on high-quality assets. Almost all of E*TRADE's MBS portfolio is Aaa, US agency-backed paper (Fannie Maes and Ginnie Maes). Moody's estimates that the wholesale component of E*TRADE's business is only a modest contributor to the company's profitability and cashflow generation, while increasing roll-over funding risk and potential asset impairment. E*TRADE's liqudity position remains sound. Client cash and deposit flows have been positive, and secured funding availability and advance levels for agency collateral have remained stable through recent market turbulence. E*TRADE's access to a $23 billion ($13.4 billion available) collateralized credit line from the FHLB is a key alternate liquidity source that adequately backstops the current wholesale strategy. E*TRADE plans to wind down the wholesale component of its strategy over the next 18-24 months in a deliberate fashion via portfolio run-off and opportunistic asset reductions. Moody's said that it would view a successful shift to a core-funded, retail balance sheet as a credit positive. The rating agency also noted that E*TRADE's inability to execute a meaningful shift in the asset and funding mix over time would likely result in the rating outlook being changed to stable. The last rating action on E*TRADE was on June 6, 2006, when Moody's upgraded the senior unsecured rating of E*TRADE Financial to Ba2 from B1 and long term deposit rating of E*TRADE's thrift subsidiary, E*TRADE Bank, to Baa3 from Ba2. The positive rating outlook was reiterated as part of the rating action. E*TRADE Financial Corporation provides internet-based retail brokerage and banking services through its operating subsidiaries. The company reported $503 million in pre-tax profit for the first six months of 2007. EMMIS COMMS: Earns $14.1 Million in Fiscal Quarter Ended Aug. 31 ---------------------------------------------------------------- Emmis Communications Corp. disclosed last week results for its second fiscal quarter ended Aug. 31, 2007. The company reported net income of $14.1 million for the second fiscal quarter ended Aug. 31, 2007, compared with net income of $112.3 million for the same period ended Aug. 31, 2006. For the second fiscal quarter, net revenue was $96.4 million, compared to $99.9 million for the same quarter of the prior year, a decrease of 3.5%. The decrease related primarily to revenue declines at Emmis' New York and Los Angeles radio stations. For the second quarter, radio net revenues decreased 6.0%, while publishing net revenues increased 6.0%. For the second quarter, operating income was $16.5 million, compared to $22.1 million for the same quarter of the prior year. Emmis' station operating income for the second quarter was $26.4 million, compared to $34.4 million for the same quarter of the prior year. Station operating income, which is not a measure of liquidity or of performance in accordance with GAAP, is defined by the company as revenues net of agency commissions and station operating expenses, excluding non-cash compensation. "We're pleased that our radio ratings have generally improved, and we anticipate better sales performance from our new national-sales rep Katz Media Group," said Jeff Smulyan, Emmis chairman and chief executive officer. "That said, expected weakness in our radio division persisted. Our results were in line with our guidance for the quarter, and we continue to face a challenging market environment." Balance Sheet At Aug. 31, 2007, the company's consolidated balance sheet showed $1.17 billion in total assets, $755.2 million in total liabilities, $143.7 million in Series A cumulative convertible preferred stock, and $267.3 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Aug. 31, 2007, are available for free at http://researcharchives.com/t/s?2428 Sale of KGMB-TV and Acquisition of Orange Coast On June 4, 2007, Emmis closed on its sale of KGMB-TV in Honolulu to HITV Operating Co Inc. for $40.0 million in cash. Emmis used a portion of the proceeds to repay outstanding debt obligations. In connection with the sale, Emmis recorded a gain on sale of $10.4 million, net of tax, in its quarter ended Aug. 31, 2007, which is included in discontinued operations. On July 25, 2007, Emmis completed its acquisition of Orange Coast Kommunications Inc., whose sole business is the publication of Orange Coast Magazine, for $6.8 million in cash including acquisition costs of $200,000. Subsequent Event On Aug. 8, 2007, Emmis' Board of Directors authorized a share repurchase program pursuant to which Emmis is authorized to purchase up to an aggregate value of $50 million of its outstanding Class A common stock. To date, the company has repurchased 2.2 million shares for $13.8 million. About Emmis Communications Based in Indianapolis, Indiana, Emmis Communications Corporation (NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 21 FM and 2 AM domestic radio stations serving New York, Los Angeles and Chicago as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind. Emmis also owns a radio network, international radio stations, regional and specialty magazines, an interactive business and ancillary businesses in broadcast sales. * * * Emmis Communications Corporation's series A cumulative convertible preferred debt carries Moody's Investors Service B2, LGD6 rating, suggesting creditors will experience a 99% loss in the event of defaults. Emmis Communications also carries Moody's Ba3 PDR rating. FAIRCHILD SEMICONDUCTOR: S&P Holds 'BB-' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Fairchild Semiconductor International Inc. to positive from stable and affirmed the 'BB-' corporate credit rating on the company. The action recognizes Fairchild's reduced earnings volatility through the business cycle and expectations that its acquisition practices will be more moderate going forward. "Ratings continue to reflect the company's moderate profitability and good position in the volatile power semiconductor market," said Standard & Poor's credit analyst Bruce Hyman. Fairchild makes a wide variety of logic, power, and specialty analog chips for computer, communications, and industrial markets. The company had debt and capitalized operating leases of $627 million at June 30, 2007. Capital expenditures totaled $123 million for the four quarters ended June 30, 2007, consistent with management's goal to maintain these expenditures at 6%-8% of sales. Debt is moderate for the rating level, now about 2.5x EBITDA, providing financial flexibility to meet growth objectives. FOOT LOCKER: Poor Performance Prompts S&P to Cut Rating to BB ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on New York City-based Foot Locker Inc. to 'BB' from 'BB+'. S&P have removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 18, 2006. The outlook is negative. "The downgrade reflects recent poor operating performance," explained Standard & Poor's credit analyst David Kuntz, "and our expectation that these trends may not soon reverse." He also noted the likelihood that Foot Locker will not meet its fixed- charge covenant in the second half of 2007. "We expect operating performance to remain weak through the remainder of 2007 and into early 2008," said Mr. Kuntz. The company has taken significant markdowns to clear out inventory, which should position its balance sheet well going forward. "However," he added, "we remain concerned over the length and severity of the downturn in the athletic shoe segment." FORD CREDIT: Moody's Rates Class D Notes at "(P)Ba2" ---------------------------------------------------- Moody's Investors Service assigned provisional ratings to the notes to be issued by Ford Credit Auto Receivables 2007-B Owner Trust. The complete rating actions are: Issuer: Ford Credit Auto Receivables 2007-B Owner Trust -- A-1 Notes, rated (P) Prime-1 -- A-2a Notes, rated (P) Aaa -- A-3a Notes, rated (P) Aaa -- A-4a Notes, rated (P) Aaa -- B Notes, rated (P) A1 -- C Notes, rated (P) Baa1 -- D Notes, rated (P) Ba2 Moody's said the ratings are based on the quality of the underlying auto loans and their expected performance, the strength of the structure, the availability of excess spread over the life of the transaction, and the experience of Ford Motor Credit Company as servicer. FORD CREDIT: S&P Assigns 'BB' Rating on $42.7MM Class D Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Ford Credit Auto Owner Trust 2007-B's $2.18 billion asset-backed notes series 2007-B. The preliminary ratings are based on information as of Oct. 9, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The characteristics of the pool being securitized; -- The credit enhancement in the form of subordination, cash, and excess spread that is augmented through the yield supplement overcollateralization amount; -- Ford Motor Credit Co.'s extensive securitization performance history; -- The timely interest and principal payments made under stressed cash flow modeling scenarios appropriate to the rating categories; and -- The sound legal structure. Preliminary Ratings Assigned Ford Credit Auto Owner Trust 2007-B Class Rating Type Interest Amount Legal final rate maturity ----- ------ ---- ------- ------ ----------- A-1 A-1+ Senior Fixed $538,000,000 Oct. 15, 2008 A-2A AAA Senior Fixed $751,200,000** June 15, 2010 A-2B AAA Senior Floating $751,200,000** June 15, 2010 A-3A AAA Senior Fixed $563,000,000*** Nov. 15, 2011 A-3B AAA Senior Floating $563,000,000*** Nov. 15, 2011 A-4A AAA Senior Fixed $178,000,000**** July 15, 2012 A-4B AAA Senior Floating $178,000,000**** July 15, 2012 C BBB+ Sub Fixed $42,700,000 May 15, 2013 B A+ Sub Fixed $64,100,000 Nov. 15, 2012 D BB Sub Fixed $42,700,00 April 15, 2014 * The actual size of these tranches will be determined on the pricing date. ** Class A-2A and A-2B will combine to total $751.20 million. *** Class A-3A and A-3B will combine to total $563.00 million. **** Class A-4A and A-4B will combine to total $178.00 million. GAP INC: Inks Deal with Filipino Franchisee Rustan Group -------------------------------------------------------- Gap Inc. disclosed a franchise agreement to introduce the Gap and Banana Republic brands to the Philippines. Over the next five years, Gap Inc.'s franchise partner –- Rustan Group of Companies –- plans to open a combined total of approximately eight Gap stores and four Banana Republic stores throughout the Philippines. The first Gap store is expected to open by the end of this year, and the first Banana Republic stores by spring 2008. All stores are scheduled to be open by 2012. "The Philippines represents a natural market for Gap Inc. to expand its international presence," Ron Young, senior vice president of international strategic alliances for Gap Inc., said. "The country has a strong, steadily growing economy, and consumers in this market have a great interest in iconic apparel brands such as ours." Gap Inc. will leverage the Rustan Group's local operational expertise, and will provide access to Gap and Banana Republic's clothing and accessories. In addition, the Rustan Group of Companies will hold exclusive rights to operate Gap and Banana Republic stores in the Philippines, will purchase merchandise from Gap Inc. or suppliers designated by Gap Inc., and must adhere to Gap Inc.'s quality standards to preserve the reputation of the Gap and Banana Republic brands. "We're pleased to have forged a relationship with such an excellent local partner," Mr. Young continued. "In addition to strong operational expertise and a deep understanding of their local customer base, the Rustan Group of Companies has a track record of successfully introducing well-known fashion and apparel brands to international markets." Gap Inc. (NYSE: GPS) -- http://www.gapinc.com/-- is an international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Forth & Towne and Piperlime brand names. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Southeast Asia and the Middle East. * * * The company continues to carry Fitch's BB+ Issuer Default Rating. The company also carries Standard & Poor's Ratings Services' BB+ corporate credit rating. GENERAL MOTORS: GM-UAW 2007 National Labor Agreement Ratified ------------------------------------------------------------- General Motors Corp. confirmed that its UAW-represented employees have ratified the GM-UAW 2007 national labor agreement. As reported in the Troubled Company Reporter on Sept. 27, 2007, GM and the UAW reached a tentative agreement on Wednesday, Sept. 26, after more than two months of bargaining. The new four-year agreement covers approximately 74,000 hourly employees located in more than 80 U.S. facilities. "We are very pleased that our UAW-represented employees have ratified the new labor contract," Rick Wagoner, GM CEO and Chairman of the Board, said. "I especially thank UAW President Ron Gettelfinger and Vice President Cal Rapson, as well as the members of the GM and UAW negotiating teams, for their hard work in reaching an innovative agreement that effectively addresses the needs of our employees and retirees, while providing a basis for improved competitiveness that will support future U.S. investments." GM intends to file a current report on Form 8-K with the Securities and Exchange Commission within the next four business days that will outline the key terms of the healthcare agreement. In addition, an analyst and media conference call is scheduled for Monday, Oct. 15, 2007 at 9:30 a.m. Eastern Daylight Time. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world 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 Sept. 28, 2007, Fitch Ratings has affirmed and removed the Issuer Default Rating and debt ratings of General Motors from Rating Watch Negative following the announcement that GM has reached an agreement on a new contract with the United Auto Workers. Fitch currently rates GM as: IDR 'B'; Senior secured 'BB/RR1'; and Senior unsecured 'B- /RR5'. GM's Rating Outlook is Negative. As reported in Troubled Company Reporter on Sept. 26, 2007, Moody's Investors Service is maintaining its current ratings of General Motors Corporation -- B3 Corporate Family, Caa1 senior unsecured and Ba3 senior secured, and Negative Outlook following the announcement of a strike against the company by the United Auto Workers Union. Following the decision of the United Auto Workers union to go out on strike against General Motors Corp., Fitch Ratings placed General Motors Corporation's 'B' issuer default rating, 'BB/RR1' senior secured debt rating; and 'B-/RR5' senior unsecured debt rating on Rating Watch Negative. GENESCO INC: Paying Preferred Stock Dividends on October 30 ----------------------------------------------------------- The board of directors of Genesco Inc. has declared dividends on the various classes of its preferred stock for the quarter ending Nov. 3, 2007, payable on Oct. 30, 2007, to shareholders of record on Oct. 15, 2007. The rates are: -- Subordinated serial preferred stock: Series 1 - $0.575 per share Series 3 - $1.1875 per share Series 4 - $1.1875 per share -- Subordinated cumulative preferred stock: $0.375 per share Based in Nashville, Tennessee, Genesco Inc. (NYSE: GCO) -- http://www.genesco.com/-- is a specialty retailer of footwear, headwear and accessories in more than 1,900 retail stores in the U.S. and Canada, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head Quarters and Cap Connection. The company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services said that its ratings on specialty Genesco Inc. remain on CreditWatch with developing implications, after reports that it has rejected Foot Locker Inc.'s conditional bid to acquire Genesco for approximately $1.3 billion ($51 per share)in cash. GMAC COMMERCIAL: Anticipated Losses Prompt S&P to Cut Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes of commercial mortgage pass-through certificates from GMAC Commercial Mortgage Securities Inc.'s series 2005-C1. At the same time, S&P affirmed its ratings on 16 other classes from this series. The lowered ratings reflect the anticipated principal losses and credit support erosion upon the eventual resolution of the 10th- and 17th-largest loan exposures in the pool, which are both delinquent and with the special servicer. The downgrades also reflect the expected interest shortfalls related to the appraisal reduction amounts in effect on the loans. The affirmations reflect credit enhancement levels that provide adequate support in various stress scenarios. Details concerning the 10th- and 17th-largest assets, which contributed significantly to the downgrades, are: Two Detroit Center Garage is the largest loan exposure with the special servicer and the 10th largest loan exposure in the pool with a total exposure of $25.6 million (2%). The loan was transferred to the special servicer in March 2007 due to imminent default and is 90-plus-days delinquent. The loan is secured by a 1,007-space, 336,000-sq.-ft. parking garage, built in 2002 in Detroit, Michigan. The garage is one of three parking garages that services Detroit's central business district, including the Comerica Tower, a 1 million-sq.-ft. office building. The subject property has suffered a significant loss in business due to increased office vacancy in the immediate area, which has decreased monthly income. The subject has also lost transient business to competitors. Based on a June 2007 appraisal that valued the property at $11 million, an ARA totaling $16.6 million is in effect. San Marcos Apartments has a total exposure of $21.3 million (1%). In addition, a B note totaling $2 million is held outside of the trust. The trust collateral consists of a 258-unit, 696-bedroom student housing apartment complex, built in 2001, in San Marcos, Texas, approximately 45 miles northeast of San Antonio. The property provides housing for students attending Texas A&M State University, which is approximately one mile away. The loan was transferred to the special servicer in March 2006 due to payment default, and became real estate owned in November 2006. The most recent appraisal, dated Sept. 16, 2006, valued the property at $18.5 million. An ARA totaling $8 million is in effect. As of Sept. 10, 2007, the collateral pool consisted of 86 loans and two REO assets with an aggregate balance of $1.5 billion, compared with 91 loans totaling $1.6 billion at issuance. Excluding the defeased loans ($192.5 million, 13%), the master servicer, Capmark Finance Inc., reported financial information for 97% of the pool. Eighty-eight percent of the servicer-reported information was full-year 2006 financial data. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.52x for the pool, compared with 1.51x at issuance. There are six assets totaling $83.4 million with the special servicer, also Capmark, including the two aforementioned assets that are REO and one loan exposure that is 90-plus-days delinquent. The remaining loans in the pool are current. Two ARAs totaling $24.5 million are in effect on two of the delinquent assets that were discussed above. The trust has not experienced any losses to date. The top 10 loans secured by real estate have an aggregate outstanding balance of $618.8 million (40%) and a weighted average DSC of 1.61x, up from 1.44x at issuance. The fifth-, sixth-, and seventh-largest loans were placed on the watchlist subsequent to the September remittance date, primarily due to tenant lease roll and vacancy. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. Two properties were characterized as "excellent" and the remaining collateral was characterized as "good." The remaining four assets with the special servicer are: -- College Station Apartments has a total exposure of $19.9 million (1%). In addition, a B note totaling $2 million is held outside of the trust. The collateral consists of a 240-unit multifamily property, built in 2000 in College Station, Texas, approximately 96 miles northwest of Houston. The loan was transferred to Capmark in March 2006 due to payment default and became REO in November 2006. The property was sold on Sept. 5, 2007, with no loss to the trust. -- The fourth-largest loan exposure with Capmark, Westland Colonial Village Apartments ($10.9 million), is secured by a 303-unit multifamily property in Detroit. The loan was transferred to Capmark in November 2006 due to nonmonetary default, which included failure to provide certified annual financial statements and the recording of a mechanics lien. A discounted payoff was made on Sept. 20, 2007. A loss to the trust of approximately $860,000 is expected. -- The remaining two loan exposures, Raleigh Boulevard Plaza ($4.9 million) and Walgreens (Berkeley Heights) ($2.6 million), have the same managing member and were transferred to the special servicer in June 2006 after the New Jersey State court removed the managing member of the respective borrowers and appointed a fiscal agent to liquidate the collateral. The Raleigh Boulevard Plaza collateral consists of a 79,232-sq.-ft. anchored-retail property built in 1989 in Raleigh, North Carolina. The Walgreens (Berkely Heights) collateral is a ground lease for a 15,254-sq.-ft. retail site newly constructed by Walgreens in Berkely Heights, New Jersey. No significant losses are expected on either asset at this time. There are 15 loans with an aggregate balance of $174.5 million on the master servicer's watchlist as of the Sept. 10, 2007 remittance date, primarily due to issues pertaining to low DSC and/or occupancy. Subsequent to the remittance date, 3301 Buffalo Drive ($57.8 million, 4%), One Riverway Office ($56.1 million, 4%), and City Center Square ($43 million, 3%), representing the fifth-, sixth-, and seventh-largest loans in the pool, were placed on the watchlist due to lease roll and/or tenant vacancy. The respective occupancies declined to 62%, 80%, and 58% from 96%, 93%, and 82% at issuance. 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 lowered and affirmed ratings. Ratings Lowered GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2005-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- H BB+ BBB- 3.51% J BB BB+ 3.12% K B BB 2.73% L B- BB- 2.21% M CCC+ B+ 1.95% N CCC B 1.69% O CCC- B- 1.43% Ratings Affirmed GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2005-C1 Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 31.17% A-1A AAA 31.17% A-2 AAA 31.17% A-3 AAA 31.17% A-4 AAA 31.17% A-5 AAA 31.17% A-M AAA 20.78% A-J AAA 12.47% B AA 10.26% C AA- 9.48% D A 7.92% E A- 6.88% F BBB+ 5.84% G BBB 4.81% X-1 AAA N/A X-2 AAA N/A N/A — Not applicable. GMAC COMMERCIAL: S&P Lowers Ratings on Six Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of commercial mortgage pass-through certificates from GMAC Commercial Mortgage Securities Inc.'s series 2004-C3. At the same time, S&P affirmed its ratings on 15 classes from this series. The downgrades reflect anticipated credit support erosion upon the eventual resolution of the former fifth-largest loan exposure, which is now REO and with the special servicer. The lowered ratings also reflect liquidity concerns stemming from an appraisal reduction amount that has been applied to the assets. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The Nashville Multifamily Portfolio assets represent the fifth- largest exposure in the transaction, with a total exposure of more than $53.9 million. The loans were transferred to the special servicer in May 2006 due to imminent default. An ARA of $18.4 million was applied to the loans in late-August 2006. In addition to the appraisals completed in August 2006, Standard & Poor's reviewed appraisals completed in May 2007 for three of the four properties. The appraised values in the most recent appraisals indicated a loss that was less severe than that suggested by the August 2006 reports. Occupancy has improved at three of the four properties, and they are expected to be listed for sale in the near future. The other property, Altamont Pointe Apartments, was listed for sale earlier this year and has received multiple bids. A final buyer is expected to be selected soon. As of the Sept. 10, 2007, remittance report, the collateral pool consisted of 92 loans with an aggregate trust balance of $1.220 billion, compared with 92 loans totaling $1.251 billion at issuance. The master servicer, Capmark Finance Inc., reported financial information for 95% of the nondefeased loans. Ninety- four percent of the servicer-provided information was full-year 2006 data. Using this information, Standard & Poor's calculated a weighted average debt service coverage of 1.73x, up from 1.63x at issuance. All of the loans in the pool are current, and in addition to the REO assets, there is one loan with the special servicer, CWCapital Asset Management LLC. To date, the trust has not experienced any principal losses. The top 11 exposures secured by real estate have an aggregate outstanding balance of $565.9 million (46%) and a weighted average DSC of 1.89x, up from 1.84x at issuance. This calculation excludes the fifth-largest asset, which is with the special servicer. Standard & Poor's reviewed property inspections provided by the master servicer for 10 of the assets underlying the top 11 exposures. One property was characterized as "fair," two properties were characterized as "excellent," and the remaining collateral was characterized as "good." Credit characteristics for the Houston Center loan and the Union Station loan are consistent with those of investment-grade obligations. Details of the loans are: -- The largest exposure in the pool, the Houston Center, has a trust balance of $150.0 million (12%) and a whole-loan balance of $269.7 million. The pari passu, interest-only loan is secured by the fee interest in a 3.0 million-sq.-ft. office property in Houston, Texas. The loan appears on the master servicer's watchlist because of a small fire that damaged the 16th floor of Tower 2 on July 31, 2007. The damage is being repaired, and the loan will be removed from the watchlist when the repairs are completed. Occupancy was 86% as of June 30, 2007, down from 91% at issuance, and for the year ended Dec. 31, 2006, the DSC was 2.02x. Standard & Poor's adjusted net cash flow is comparable to its level at issuance. -- The second-largest exposure in the pool, the Union Station, has a balance of $57.6 million (12%). The loan is secured by the leasehold interest in a 383,350- sq.-ft. retail and office property in Washington, D.C. The collateral is part of the Union Station train station, which serves as the main commuter hub for the Washington, D.C., area and is one of the largest tourist attractions in the city. For the year ended Dec. 31, 2006, the DSC was 2.17x and occupancy was 99%. Standard & Poor's adjusted NCF for this loan is down 12% from its level at issuance. The remaining specially serviced asset is the North Houston Medical Plaza loan, which is secured by an 85,471-sq.-ft. medical office property in Houston, Texas, with an unpaid principal balance of $9.1 million and additional advances, including interest thereon, totaling $44,069. The loan was transferred to the special servicer in November 2006 due to imminent default. Occupancy was 63% as of March 31, 2007, and the loan is currently under a forbearance agreement. In addition to the Houston Center loan, there are 17 other loans totaling $126.5 million (10%) on the watchlist. These loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2004-C3 Rating ------ Class To From Credit enhancement ----- -- ---- ----------------- H BB- BB 3.46% J B B+ 3.21% K B- B 2.69% L CCC+ B- 2.31% M CCC CCC+ 1.92% N CCC- CCC 1.67% Ratings Affirmed GMAC Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2004-C3 Class Rating Credit enhancement ----- ------ ---------------- A-1A AAA 20.51% A-2 AAA 20.51% A-3 AAA 20.51% A-4 AAA 20.51% A-AB AAA 20.51% A-5 AAA 20.51% A-J AAA 13.72% B AA 11.15% C AA- 10.00% D A 8.33% E A- 7.31% F BBB+ 6.06% G BBB 5.135 X-1 AAA N/A X-2 AAA N/A N/A — Not applicable. GOLDEN STATE: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Golden State Development, LLC 8011 Washington Boulevard Roseville, CA 95678 Bankruptcy Case No.: 07-28343 Chapter 11 Petition Date: October 9, 2007 Court: Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: G. Dave Teja, Esq. 409 A Center Street Yuba City, CA 95991-4520 Tel: (530) 673-1383 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Temecula Valley Bank Secured Bank Loan $5,106,848 27710 Jefferson Avenue Suite A-100 Temecula, CA 92593 Winning Hit LLC Trade Debt $400,000 1420 East Roseville Parkway Suite 140-190 Roseville, CA 95661 Orchard Fresh, LLC Trade Debt $142,500 1420 East Roseville Parkway Suite 140-190 Roseville, CA 95661 Charles & Caroline Lofton Secured Bank Loan $82,500 15064 U Bet Road Grassvalley, CA GUITAR CENTER: Completes $2.1 Billion Merger with Bain Capital -------------------------------------------------------------- Guitar Center Inc. completed its merger with affiliates of Bain Capital Partners, LLC. As reported in the Troubled Company Reporter on June 29, 2007, Guitar Center entered into a merger agreement with affiliates of Bain Capital which called for Guitar Center stockholders to receive $63.00 in cash, without interest, for each share of Guitar Center common stock held. The transaction was approved by Guitar Center's stockholders on Sept. 18, 2007. The total transaction is valued at approximately $2.1 billion, including the assumption of debt. As a result of this transaction, Guitar Center's common stock will cease to trade on Nasdaq at market close today, Oct. 9, 2007, and will thereafter be delisted. Stockholders who hold shares of Guitar Center's common stock through a bank or broker will not have to take any action to have their shares converted into cash, since these conversions will be handled by the bank or broker. As soon as practicable, Mellon Investor Services, LLC, the paying agent appointed for the transaction, will send information to all Guitar Center stockholders of record, explaining how they can surrender their shares of Guitar Center common stock in exchange for $63.00 per share in cash, without interest. Stockholders of record should wait to receive this information before surrendering their shares. About Bain Capital Partners Bain Capital Partners, LLC -- http://www.baincapital.com/-- is a global private investment firm. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 240 companies around the world, including such leading retailers and consumer companies as Toys "R" Us, Michaels Stores, Burger King, Warner Music Group, Burlington Coat Factory, Dunkinâ€™ Brands, Shopperâ€™s Drug Mart, Dollarama and Staples. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Hong Kong, Shanghai, and Tokyo. About Guitar Center Guitar Center Inc. -- http://www.guitarcenter.com/-- (Nasdaq GS: GTRC) is the leading United States retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment. The company's retail store subsidiary presently operates more than 210 Guitar Center stores across the United States. In addition, its Music & Arts division operates more than 95 stores specializing in band instruments for sale and rental, serving teachers, band directors, college professors and students. The company is also the largest direct response retailer of musical instruments in the United States through its wholly owned subsidiary, Musician's Friend, Inc., and its catalogs and websites, including http://www.musiciansfriend.com/ http://www.guitarcenter.com/ http://www.wwbw.com/and http://www.music123.com/ GUITAR CENTER: Moody's Cuts Corporate Family Rating to B3 --------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Guitar Center Inc. to B3 from Ba2. The corporate family rating was moved to VH AcquisitionCo Inc. from Guitar Center Inc. Moody's also rated Guitar Center's proposed secured term loan at B2 (LGD-3, 41%), the senior notes at Caa1 (LGD-4, 60%), the holding company senior notes at Caa2 (LGD-6, 90%), and assigned a SGL-3 liquidity rating. Moody's does not rate the proposed $375 million secured revolving credit facility. The downgrade and the rating assignments are prompted by the use of proceeds from the new debt, together with common equity from the new owner Bain, to finance the leveraged buyout of the company for total consideration of about $2.2 billion. This rating action concludes the review for downgrade that commenced on June 27, 2007. Ratings/assessments assigned are: -- $650 million secured term loan at B2 (LGD 3, 41%); -- $375 million 8-year senior notes at Caa1 (LGD 4, 60%); -- $375 million 8.5-year holding company notes at Caa2 (LGD 6, 90%); -- Speculative Grade Liquidity rating at SGL-3; -- Probability-of-default rating at B3 Ratings lowered is: -- Corporate family rating to B3 from Ba2 Moody's does not rate the proposed $375 million secured revolving credit facility. The corporate family rating assignment of B3 reflects the balance of certain strong qualitative rating drivers with weak quantitative attributes. In particular, driving down the rating are the weak post-transaction credit metrics reflecting high leverage, low fixed charge coverage, and limited free cash flow. Also constraining the rating are the company's aggressive financial policy, in which forward financial flexibility is being severely diminished for the benefit of pre-transaction shareholders, and the substantial seasonality of revenue and cash flow. Partially offsetting these risks are Moody's expectation that the company will generate modest levels of discretionary cash flow and repay debt ahead of schedule, the company's leading market position in musical instrument sales and rental, and Moody's belief that sales would hold up reasonably well in a recession. Guitar Center Inc, with headquarters in Westlake Village, California, is the largest musical instrument retailer with 309 stores and a direct response segment. It operates three distinct musical retail businesses -- Guitar Center, Music & Arts, and Musician's Friend (its direct response subsidiary). Revenue for the twelve months ending June 30, 2007 was about $2.2 billion. DEATH ROW: Asset Sale Uncertain Due to Pending Suits ---------------------------------------------------- The sale of Death Row Records Inc. has been held up since likely buyers are still unsure as to what assets the Debtor really holds, Peter Lauria of the New York Post reports. The Post, citing sources, says that the Debtor was already attempting to find a stalking-horse bidder in order to start the sale process. However, two suits are currently pending which could delay the auction. As reported in the Troubled Company Reporter on July 27, 2007, Afeni Shakur, mother of the late rapper Tupac Shakur, filed an adversary complaint with the U.S. Bankruptcy Court for the Central District of California against the Debtor in hopes of halting the Debtor from including unreleased songs of Tupac in a bankruptcy sale. As reported in the Troubled Company Reporter on Aug. 22, 2007, Andre "Dr. Dre" Young filed a suit against the Debtor citing that he owns the rights to his 1992 album "The Chronic." R. Todd Neilson, the chapter 11 trustee overseeing the Debtor's estates, is however in talks with Ms. Shakur on her claim and hopes to reach an agreement soon, the Post adds citing Mr. Neilson's counsel Ronald L. Leibow, Esq., at Kaye Scholer. The Posts, citing sources, discloses that the two possible buyers are Evergreen Copyrights and Koch Records. Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as Chapter 11 Trustee for the Debtors' estate. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. H&E EQUIPMENT: Earns $15.2 Million in Second Quarter Ended June 30 ------------------------------------------------------------------ H&E Equipment Services Inc. reported that its net income decreased to $15.2 million for the second quarter ended June 30, 2007, from net income of $19.8 million in the second quarter of last year. Total second quarter revenues increased $30.6 million to $233.1 million from $202.5 million in the second quarter of 2006. New equipment sales were $78.5 million compared with $56.9 million, reflecting an increase of $21.6 million, or 38.0%. The company reported income from operations of $32.9 million compared to $35.0 million in the second quarter of last year, reflecting a decrease of $2.1 million, or 6.0%. Total gross profit for the second quarter of 2007 was $71.2 million compared with $68.3 million for the second quarter of 2006, reflecting an increase of $2.9 million, or 4.2%. Second quarter gross profit margin decreased to 30.5% from 33.7% for the second quarter of 2006, primarily as a result of revenue mix and lower time utilization. "We are pleased with our top line growth, achieving record quarterly revenue during the second quarter. Demand for new equipment, especially cranes, was extremely strong, which had a negative effect on our consolidated margins as this component of our business generates lower margins than our other segments. This shift in revenue mix, combined with record year-over-year comps, impacted our bottom line performance for the quarter as compared to a year ago," said John Engquist, H&E Equipment Services' president and chief executive officer. "Dollar utilization was 41.5% for the quarter compared to 42.2% a year ago. Our returns were negatively impacted by softness in time utilization early in the quarter, partly due to the completion of hurricane related work in Florida. Our time utilization returned to normal levels in the second half of the quarter due to strong demand in our other markets. We are also seeing increased spending in Coastal Louisiana as a result of Hurricane Katrina and expect this spending to accelerate in the third and fourth quarters. We remain encouraged about the trends in the non- residential construction markets we serve and our outlook for both the near and long term." "Our revenue growth for the quarter was primarily the result of a 38.0% increase in new equipment sales. Even with the softness in utilization during the first part of the quarter, rental revenues grew 8.7% and our combined parts and service revenues reflected growth of 12.7%," commented Leslie Magee, H&E Equipment Services' chief financial officer. "Our gross margin remained strong at 30.5% compared to 33.7% a year ago when we posted record top and bottom line growth. The majority of the decline in gross margin is attributable to the combination of revenue mix and lower utilization of our rental fleet. Sequentially, gross margin decreased slightly from 31.3% in the first quarter of this year, which is also a result of continued growth in new equipment sales," said Ms. Magee. "Overall, we remain positive about the current trends in our business and we expect the trend in revenue mix to continue for the remainder of the year." Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $833.4 million in total assets, $570.2 million in total liabilities, and $263.2 million 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?242f About H&E Equipment Based in Baton Rouge, Louisiana, H&E Equipment Services Inc. (NASDAQ: HEES) -- http://www.he-equipment.com/-- is an integrated equipment service company in the United States focused on heavy construction and industrial equipment. The company rents, sells and provides parts and service support for four core categories of specialized equipment: hi-lift or aerial platform equipment, cranes, earthmoving equipment and industrial lift trucks. It is engaged in five principal business activities in these equipment categories: equipment rental, new equipment sales, used equipment sales, parts sales, and repair and maintenance services. H&E Equipment Services serves more than 27,700 customers in the United States, in the West Coast, Intermountain, Southwest, Gulf Coast, West Coast and Southeast regions. * * * Moody's Investor Services placed H&E Equipment Services Inc.'s senior secured debt and probability of default ratings at 'B1' in Sept. 2006. These ratings hold to this date. HANCOCK FABRICS: Expects to File Annual Report by End of October --------------------------------------------------------------- Hancock Fabrics Inc. and debtor-affiliates anticipate being in a position to file a Form 10-K with the Securities and Exchange Commission by or about the end of October 2007, Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnel, LLP, in Wilmington, Delaware, informs the U.S. Bankruptcy Court for the District of Delaware. To allow the Debtors to provide updated financial information to equity holders, as well as creditors and other stakeholders, and to potential investors, they need PricewaterhouseCoopers, LLC's reports regarding the Debtors' balance sheet at Jan. 28, 2006, and the income statements, cash flows and changes in shareholder equity for the fiscal years ended Jan. 28, 2006, and Jan. 30, 2005, Mr. Dehney explains. Mr. Dehney tells the Court that based on the Debtors' communications with PwC, the Debtors understand that PwC will require approximately one week to process the reports at a minimal cost to the Debtors of approximately $10,000 to $12,000. Obtaining a predecessor auditor's consent to use prior issued reports is a common practice, says Mr. Dehney. Accordingly, and at the Debtors' behest, the Court authorizes the Debtors to obtain PwC's consent to the use of PwC reports, and pay PwC the consent fee that the parties have agreed on. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. The Court extended the Debtors' exclusive period to file a Chapter 11 Plan to Feb. 28, 2008. (Hancock Fabric Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Landlords Want Cure Amounts Paid ------------------------------------------------- Several landlords ask the U.S. Bankruptcy Court for the District of Delaware to condition Hancock Fabrics Inc. and debtor- affiliates' assumption of any lease on the payment of these cure amounts: Landlord Cure Amount -------- ----------- Synergy Center, Ltd. $126,226 Centro Watt Operating Partnership 3, LLP 63,914 Land Fair Properties, LLC 46,453 Lightman South Lake Co., LLC 37,792 Central Heights, Ltd. 32,505 Regency Office Partnership, L.P. 30,097 CH Realty/Gaitherstowne, LLC 28,524 Corner Associates, L.P. 26,619 Thornton Lane, L.P. 26,308 Oh Retail 26,400 Michael J. Brabo 25,487 Centro Bradley SPE 5, LLC 24,545 Kmart Corporation 24,004 WP Realty 15,578 KRC Kirkwood 803, Inc. 10,464 The Price Reit, Inc. 9,965 CH Realty III/Battelefield, LLC 9,288 Regency Centers, L.P. 8,386 Glenwood Cross Country Company, LLC and Redland-Branson Development, Inc. ask the Court to deny the Debtors' request to assume certain leases in its entirety. Glenwood asserts that the Glenwood Lease expired on Jan. 31, 2006, and the Debtors failed to extend the lease term. Redland, for its part, asserts that the Debtors fail to show adequate assurance of future performance. Redland further asserts that the Debtors should pay a $31,777 cure amount. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. The Court extended the Debtors' exclusive period to file a Chapter 11 Plan to Feb. 28, 2008. (Hancock Fabric Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Wants to Assume "No-Consent" Unexpired Leases -------------------------------------------------------------- Hancock Fabrics Inc. and debtor-affiliates ask authority from the U.S. Bankruptcy Court for the District of Delaware for authority to assume unexpired leases of nonresidential property for which they have not received a written consent to an extension of the deadline to assume or reject under Section 365(d)(4) of the Bankruptcy Code by Oct. 17, 2007. The Debtors have obtained written consents for a further extension of time to assume or reject certain of their leases from a substantial number of landlords and continue to negotiate with other landlords, Thomas F. Driscoll III, Esq., at Morris, Nichols, Arsht & Tunnel, LLP, in Wilmington, Delaware, tells the Court. The Debtors expect to assume, at most, approximately 100 leases, Mr. Driscoll adds. Mr. Driscoll notes that the Debtors lease virtually all of the properties in which they operate retail fabric stores. "The Debtors intend to cure any defaults under the leases and believe adequate assurance of future performance exists based upon the Debtors' ample liquidity under their debtor-in-financing facilities and cash flow from ongoing operations," Mr. Driscoll says. The Debtors have obtained $122,500,000 in DIP financing and currently enjoy in excess of $50,000,000 in availability, says Mr. Driscoll. The Debtors have also paid rent on time, except for rent for March 2007, and certain other monetary costs and charges. "The Debtors are seeking to assume only those Lease for which they do not have written consent," Mr. Driscoll clarifies. A schedule of these Leases is available for free at: http://ResearchArchives.com/t/s?242e At the hearing on the request, the Debtors will provide the Court with an updated list of those Lease which the Debtors intend to assume if written consent to the extension of the deadline is not obtained, Mr. Driscoll says. The Debtors, hence, ask the Court to allow them to submit an updated list of those lease for which landlords have signed written extensions and a list of those Lease which the Debtors are assuming on or before October 17. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. The Court extended the Debtors' exclusive period to file a Chapter 11 Plan to Feb. 28, 2008. (Hancock Fabric Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). INT'L PAPER: Paying $0.25 per Share Quarterly Dividend on Dec. 14 ----------------------------------------------------------------- International Paper declared a regular quarterly dividend of $0.25 per share for the period from Oct. 1, 2007, to Dec. 31, 2007, inclusive, on its common stock. This dividend is payable on Dec. 14, 2007, to holders of record at the close of business on Nov. 16, 2007. The company also declared a regular quarterly dividend of $1 per share for the period from Oct. 1, 2007, to Dec. 31, 2007, inclusive, on its preferred stock. This dividend is also payable on Dec. 14, 2007, to holders of record at the close of business on Nov. 16, 2007. Headquartered in Stamford, Connecticut, International Paper Co. (NYSE: IP) -- http://www.internationalpaper.com/-- is an uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia and North Africa. International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. * * * In December 2005, Moody's Investors Service placed International Paper Co.'s senior subordinate rating at 'Ba1'. The rating still holds to date with a stable outlook. INT'L PAPER: Lower Land Sales Earnings to Impact 3rd Qtr. Profits ----------------------------------------------------------------- International Paper disclosed Tuesday that third-quarter earnings will be less than analysts' consensus estimates due to lower land sales than previously estimated in the quarter. While the company previously estimated that third-quarter land sales earnings would be approximately $110 million to $140 million, it now expects third-quarter land sales earnings of approximately $100 million and full-year 2007 land sales earnings in the range of $450 million to $500 million. Separately, the company announced that fourth-quarter earnings from its recently completed 50:50 joint venture with Ilim Group will be included in International Paper's first-quarter 2008 financial statements; thereafter, the company will continue to report the joint venture results on a one-quarter lag. Headquartered in Stamford, Connecticut, International Paper Co. (NYSE: IP) -- http://www.internationalpaper.com/-- is an uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia and North Africa. International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. * * * In December 2005, Moody's Investors Service placed International Paper Co.'s senior subordinate rating at 'Ba1'. The rating still holds to date with a stable outlook. INTERNATIONAL PAPER: Earns $190 Million in Quarter Ended June 30 ---------------------------------------------------------------- International Paper reported second-quarter 2007 net earnings of $190 million compared with net earnings of $83 million in the second quarter of 2006. Earnings from continuing operations and before special items in the second quarter of 2007 were $223 million, compared with $145 million in the second quarter a year ago. Quarterly net sales were $5.3 billion, down slightly from $5.7 billion in the second quarter of 2006, primarily reflecting 2006 sales from the U.S. coated papers business, which was sold in August 2006. Industry segment operating profits rose to $572 million for the 2007 second quarter versus $552 million in the second quarter of 2006. The increase reflects continued strong average price realizations and solid manufacturing operations. "We had a solid second quarter, our best since 2000," said International Paper chairman and chief executive officer John Faraci. "We're seeing continued margin expansion quarter-to- quarter, because of solid operations improvement, improved pricing and stable volumes. In our business outside North America, demand for papers and packaging continues to grow. Earnings were impacted somewhat by higher raw material costs, planned maintenance outage costs, and expenses at our Pensacola, Fla., mill related to maintenance and the conversion of a paper machine to lightweight linerboard production; however, those factors were offset by ongoing results of profit-improvement initiatives." Commenting on the third quarter of 2007, Faraci said, "We expect somewhat stronger earnings from continuing operations, with continued cost reduction and pricing improvement in some markets, including pulp and packaging, as well as higher land sales. Input costs will remain high, but we anticipate continued operations improvement and cost reduction across our global manufacturing base, as well as lower mill maintenance shutdown expenses in the quarter." The effective tax rate from continuing operations and before special items for the second quarter of 2007 was 29%, compared with a tax rate of 34% in the second quarter of 2006. The 2007 second-quarter rate includes $7 million of benefits related to tax audit settlements and other matters during the quarter. Discontinued Operations Discontinued operations for the 2007 second quarter include pre- tax charges of $11 million for adjustments related to the previously sold wood products and beverage packaging businesses, and the second-quarter operating losses of these businesses. Discontinued operations for the 2006 second quarter included a $16 million pre-tax charge to reduce the carrying value of the kraft papers business to its estimated fair value, and the second- quarter operating results of the kraft papers, wood products, beverage packaging and Brazilian coated papers businesses. Special Items Special items in the second quarter of 2007 consisted of a $26 million pre-tax charge for organizational restructuring programs associated with the company's transformation plan, including $17 million of accelerated depreciation expense for long-lived assets being removed from service, and a pre-tax gain of $1 million, for adjustments to estimated losses on sales of businesses previously sold. Special items in the second quarter of 2006 included a pre-tax charge of $53 million consisting of $49 million for severance and other charges associated with the company's transformation plan and a $4 million pre-tax charge for legal settlements, a pre-tax credit of $62 million for gains on sales of U.S. forestlands included in the transformation plan, and a pre-tax loss of $137 million on sales and impairments of businesses held for sale. Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $23.15 billion in total assets, $15.31 billion in total liabilities, $242 million in minority interest, and $7.60 billion 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?2429 About International Paper Headquartered in Stamford, Connecticut, International Paper Co. (NYSE: IP) -- http://www.internationalpaper.com/-- is an uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia and North Africa. International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. * * * In December 2005, Moody's Investors Service placed International Paper Co.'s senior subordinate rating at 'Ba1'. The rating still holds to date with a stable outlook. INVERNESS MEDICAL: Inks Pact Buying Panbio's Shares for $37 Mil. ---------------------------------------------------------------- Inverness Medical Innovations has entered into a Scheme Implementation Agreement with Panbio Ltd., under which Inverness proposed to acquire all of the issued shares in Panbio for AUD0.65 cash per share. The proposed Scheme, which values the issued share capital of Panbio at approximately AUD41 million, or approximately $37 million, is subject to approval by Panbio shareholders at a meeting expected to be held in December 2007, well as various other conditions. Panbio's position in the dengue fever diagnostic market will help Inverness to achieve its goal of promoting personal health worldwide by responding to the spread of the disease throughout South America and elsewhere. Inverness' existing Australian professional diagnostics business is based in Brisbane, Australia. About Panbio Ltd. Headquartered in Brisbane, Australia, PanBio Limited (Public, ASX:PBO) -- http://www.panbio.com.au/-- is a diagnostics company. The company develops, manufactures and markets human medical diagnostic tests with a primary focus on infectious disease. Panbio's products are used in the diagnosis of over 30 disease states. Its activities are organized into two business segments: Diagnostics and Advanced Technologies. The Diagnostics segment develops, manufactures and sells products to detect infectious diseases in humans. This segment sells products worldwide, including Australia/New Zealand, Asia, North America, Latin America and Europe. The Advanced Technologies segment conducts research and development activities predominantly in Australia. Its wholly owned subsidiaries include Panbio Holdings Inc. and Panbio Inc. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * Moody's placed Inverness Medical's subordinated debt rating at 'Caa1' as well as the company's long term corporate family and probability of default ratings at 'B2' in June 2007. The ratings still hold to date with a stable outlook. KAMP RE: S&P Retains Debt Rating Under Negative CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CC' senior secured debt rating on KAMP RE 2005 Ltd.'s $190 million floating- rate principal-at-risk notes are remaining on CreditWatch with negative implications, where it was placed on Oct. 13, 2005. The notes are due to mature on Dec. 14, 2007. Swiss Reinsurance America Corp. has until Dec. 10, 2007, to file an extension notice with, among others, Zurich American Insurance Co. and KAMP RE 2005 Ltd. Since the last update on this rating, there have been no significant developments. "We will continue to monitor the transaction for any developments and will issue updates or take ratings actions as appropriate," said Standard & Poor's credit analyst Gary Martucci. The notes continue to pay a spread over LIBOR of 0.10%, and the outstanding principal amount has not yet been reduced. KMG LLC: Case Summary & Largest Unsecured Creditor -------------------------------------------------- Debtor: KMG, LLC 4105 Rust Road Fairfax, VA 22030 Bankruptcy Case No.: 07-12898 Type of Business: The Debtor's member, Koger Management Group Inc., filed for Chapter 11 protection on July 26, 2007 (Bankr. E.D. Va. Case No. 07-11947). The Debtor group provides management services to condominiums, housing clusters, planned unit developments, etc. Chapter 11 Petition Date: October 9, 2007 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Thomas P. Gorman, Esq. Tyler, Bartl, Gorman & Ramsdell, PLC 700 South Washington Street, Suite 216 Alexandria, VA 22314 Tel: (703) 549-5010 Fax: (703) 549-5011 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Koger Management Group, Inc. Inter business $339,995 4105 Rust Road Transfers Fairfax, VA 22030 KOOSHAREM CORP: S&P Rates $84 Million Term Loan at B+ ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan and '2' recovery ratings to staffing company Koosharem Corp.'s (B/Stable/--) $84 million first-lien term loan due 2014. Proceeds have been used to fund the October 2007 acquisition of Tandem Staffing Solutions Inc., which will lower the contribution from California to below half of revenues. Pro forma for the $84 million accordion facility, the first-lien facilities consist of a $50 million revolving credit facility due 2012 and $334 million of term loans due 2014. The first-lien bank loan facilities retain the rating of 'B+', one notch above the corporate credit rating on Koosharem, with a recovery rating of '2', indicating S&P's expectation of substantial (70%-90%) recovery of principal in the event of a payment default. The company's $100 million second-lien term loan due 2014 is rated CCC+, with a recovery rating of '6', indicating our expectation of negligible (0%-10%) recovery of principal in the event of a payment default. LEVITZ HOME: Wants to Distribute Payments to Unsecured Creditors ---------------------------------------------------------------- Levitz Home Furnishings Inc., its debtor-affiliates, and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the Southern District of New York to: a) approve their proposed procedures for distribution of trust funds to unsecured creditors; and b) dismiss the Debtors' Chapter 11 cases afterwards. Based on approximately $580,000 in current trust funds, the Debtors and the Committee anticipate a pro rata distribution of less than 0.3% but not less than $25 to 2,250 unsecured claim holders. The Trust Funds is a carveout of certain funds which Prentice Capital Management LP agreed to provide the Debtors. Prentice Capital is a secured lender under a Court-approved $80 million debtor-in-possession financing agreement entered into by the Debtors, Prentice Capital, and General Electric Capital Corporation in October 2005. Prentice Capital, which continues to hold an unsatisfied claim of approximately $11.25 million under the DIP Facility, was also the sole bidder and purchaser of substantially all of the Debtors' assets. To facilitate the claims resolution process and the distribution, the Debtors and the Committee seek the appointment of Walker Truesdell & Associates as trustee of the Funds. The firm was retained by the Debtors in March 2006 to facilitate in the winddown process of their business. The Debtors and the Committee also request that Walker Truesdell be permitted to utilize up to $70,000 from the Trust Funds to pay reasonable expenses incurred. Holders of unsecured claims identified as unliquidated, contingent, or disputed, must file a proof of claim or other written response and any supporting documentation with Walker Truesdell on or before Dec. 14, 2007. Furthermore, unable to effectuate a plan of reorganization, and with nothing left to reorganize, the Debtors and the Committee seek dismissal of the Debtors' bankruptcy cases after filing of a notice of distribution. The Court is set to consider the request at an Oct. 23, 2007 hearing. Objections, if any, to the motion, are due tomorrow, Oct. 12, at 4:00 p.m. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- was in the business of retailing furniture in the United States. The company and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). On Dec. 21, 2006, six of the cases were dismissed. The remaining debtors are Levitz Home Furnishings Inc.; Levitz Furniture Company of the Midwest Inc.; Levitz Furniture Company of Washington Inc.; Levitz Furniture Corporation; Levitz Furniture LLC; Seaman Furniture Company Inc.; and Seaman Furniture Company of Pennsylvania, Inc. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represent the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. LOCKE CORP: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------- Debtor: The Locke Corporation 4701 Steinbeck, Apartment 8 Ames, IA 50014 Bankruptcy Case No.: 07-03410 Chapter 11 Petition Date: October 8, 2007 Court: Southern District of Iowa (Des Moines) Judge: Lee M. Jackwig Debtor's Counsel: Jerrold Wanek, Esq. Garten & Wanek 835 Insurance Exchange Building 505 Fifth Avenue Des Moines, IA 50309 Tel: (515) 243-1249 Fax: (515) 244-4471 Total Assets: $845,830 Total Debts: $1,041,706 Debtor's list of its Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Midwest One Bank $81,643 116 West Main Street Ottumwa, IA 52501 Libertyville Savings Bank Mortgage $27,164 P.O. Box 744 Secured: Fairfield, IA 52556-0744 $90,000 Iowa State Bank and Trust Mortgage $25,000 55 South 4th Street Fairfield, IA 52556 Wapello County Treasurer $10,000 City of Ottumwa $5,100 Secured: $4,900 MOBIUS ELR-01: Moody's Reviews Low-B Ratings on 3 Note Classes -------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade three classes of notes issued by J.P.Morgan Trust Australia Limited as trustee for the Mobius ELR-01 Trust. Moody's has at the same time affirmed the Aaa ratings assigned to the Class A notes of the Mobius ELR-01 Trust. The complete rating actions are: -- AUD74.08 million Class A Notes, rated Aaa, affirmed -- AUD30.32 million Class B Notes, rated Baa1, placed on review for possible downgrade -- AUD3.51 million Class C Notes, rated Ba2, placed on review for possible downgrade -- AUD6.11 million Class D Notes, rated B2, placed on review for possible downgrade The notes are backed by small-ticket equipment leases from four Australian originators. Mobius Financial Services Pty Limited, a specialist Australian white-labelling and servicing company, acts as the Master Servicer and Manager of the transaction. The rating actions follow a deterioration in the performance of the underlying receivables pool, with the cumulative level of charge off reaching over AUD 8 million in September 2007. Moody's notes that the higher-than-expected levels of default of the underlying assets are offset by the level of excess spread available to mitigate charge-offs and the reserving mechanisms forming part of the structure of the transaction. In addition, Moody's notes that a large number of receivables has been found not to comply with the eligibility criteria. In accordance with the transaction documentation, Mobius Financial Services has to date repurchased a total of AUD 3.1 million of receivables. It has also identified further ineligible leases which are currently in process of being repurchased. Moody's has requested additional information with regard to the repurchase process and the reasons for ineligibility, and is currently reviewing the approach taken to mitigating the risk of ineligibility. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have significant effect on yield to investors. Moody's ratings are subject to revision, suspension or withdrawal at any time at our absolute discretion. The ratings are expressions of opinion and not recommendations to purchase, sell or hold securities. NATURE'S HARVEST: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Nature's Harvest Market and Deli, Inc. 1021 North MacDill Avenue Tampa, FL 33607 Bankruptcy Case No.: 07-09454 Type of Business: The Debtor is a family owned natural foods grocery store serving the Tampa Bay area for 20 years. See http://www.naturesharvestmarket.com/ Chapter 11 Petition Date: October 9, 2007 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Russell M. Blain, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tree of Life South East $86,478 Department AT 40091 Atlanta, GA 31192 United Natural Foods Atlanta $50,049 P.O. Box 706 Keene, NH 03431 Hilton Honors $21,580 Platinum Credit Card P.O. Box 360002 Fort Lauderdale, FL 33336 Fresh Foods Distributors, Inc. $13,108 Global Organics Specialty Source $11,833 Don Green Poultry, Inc. $10,134 CITIBusiness $9,879 Cedars Mediterranean Food, Inc. $8,522 American Express Business Capital Line $8,087 Home Depot Credit Services $8,087 Ocean Grown Farms $7,176 Tree of Life, Inc. $6,474 Capital Contractors $6,421 Bluebonnet Nutrition Corporation $5,967 Employer Management Solutions $5,915 Glaser Farms $5,219 Office Depot $5,057 Frontier Naturals $4,599 Renew Life, Inc. $4,000 Green Gold Premium Herbs, Inc. $3,729 NEIGHBOR'S KNOLL: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Neighbor's Knoll, LLC 3026 East Farm Road 188 Ozark, MO 65721 Bankruptcy Case No.: 07-61457 Chapter 11 Petition Date: October 9, 2007 Court: Western District of Missouri (Springfield) Debtor's Counsel: Danny R. Nelson, Esq. Lathrop & Gage, LLC P.O. Box 4288 Springfield, MO 65808 Tel: (417) 575-5900 Fax: (417) 886-9126 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ ESC Engineers and Site Engineering $7,490 Architects, Inc. 1922 North Broadway Springfield, MO 65803 NEIMAN MARCUS: S&P Lifts Corporate Credit Rating to BB- from B+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating, on The Neiman Marcus Group Inc. and removed them from CreditWatch, where they were listed with positive implication on March 22, 2007. S&P raised the corporate credit rating to 'BB-' from 'B+' and the senior unsecured and subordinated ratings to 'B' from 'B-'. Furthermore, Standard & Poor's raised the rating on the company's senior secured term loan and 7.125% debentures due 2028 to 'BB+', two notches higher than the corporate credit rating on Neiman Marcus. S&P also raised the recovery rating on the senior secured debt from '2' to '1', indicating the expectation for very high (90%-100%) recovery. The outlook is stable. "The rating change for Neiman Marcus recognizes the very substantial progress the company has made in improving sales, margins, and EBITDA, and the resulting positive impact this has had on credit protection measures," said Standard & Poor's credit analyst Gerald A. Hirschberg. NORTH OAKLAND: Moody's Downgrades Bond Rating to B3 --------------------------------------------------- Moody's Investors Service downgraded the bond rating of North Oakland Medical Center to B3 from B1. The rating is removed from Watchlist for possible downgrade. The two-notch downgrade and negative outlook reflect NOMC's continued decline in operating performance in fiscal year 2006 and through eight months interim FY 2007 as well as NOMC's significant decline in unrestricted liquidity. Legal Security The bonds are a general obligation of NOMC and a debt service reserve fund is in place. NOMC is the only member of the obligated group. Interest Rate Derivatives: None Strengths *New senior management team, most of whom had significant senior level experience at a prominent, highly rated health system *New strategic alignments with Aa2-rated, multi-state Trinity Health System's St. Joseph Mercy Oakland (St. Joseph), which also is located in Pontiac, MI *Favorable progress made with union negotiations over the past three months *Oakland County (general obligation bonds rated Aaa) is a wealthy county, which offsets weak demographic characteristics in the City of Pontiac somewhat Challenges *The City of Pontiac, MI is an economically weak service area with stagnant population trends and a median income level well below state and national averages *In-town competition from two additional acute care hospitals - 19,000-admission St. Joseph and 6,000-admission, Ba1-rated Pontiac Osteopathic Hospital (which recently announced plans to join A1- rated McLaren Health Care) - in a market that may not be able to sustain three viable acute care facilities in the long-term *Multi-year declines in inpatient and surgical volumes contributing to multiple years of operating losses and very weak operating results in unaudited FY 2006 (-1% operating cash flow margin) *Liquidity measures deteriorated significantly in FY 2007 due to poor cash flow generation and NOMC's decision to pay off a $4 million line of credit. As of Aug. 31, 2007, NOMC's cash on hand and cash-to-debt measured very thin 18.2 days (annualized) and 10.9%, respectively *NOMC has yet to secure waivers from bond holders as a result of poor operating performance in FY 2006. Management plans to meet with bond holders in the coming weeks in their ongoing efforts to secure the waivers Recent Developments/Results NOMC's trend of poor operating performance continues in interim FY 2007, which is a key credit concern. Through eight months FY 2007, NOMC recorded an operating loss of -$9 million (-13.9% operating loss margin) and negative operating cash flow of -$4.0 million (-6.3% operating cash flow margin). This level of performance is weaker than the already thin performance recorded in FY 2006. In unaudited FY 2006, NOMC recorded an operating loss of $9.5 million (-8.2% margin) and negative operating cash flow of -$1.2 million (-1% operating cash flow margin). Assuming this trend continues through year-end 2007, FY 2007 will represent the eleventh consecutive year of operating loss. The continued weakening of operating results in FY 2006 and through eight months FY 2007 is due to a number of factors, including: (a) a sharp decline in inpatient admissions (-8% in 2006, -24% in 2007) and surgical volumes (-27% in 2006, -22% in 2007); (b) an increase in premium labor; and (c) about $429,000 in "separation agreement" expenses associated with the severance packages of recently departed former NOMC senior management staff. Moody's notes that the decrease in patient volumes is due, in part, to NOMC's new management team decision to eliminate 11 employed physician contracts as well as NOMC's collaborative effort with Trinity Health's St. Joseph Mercy Oakland to move NOMC's obstetrics and neonatal intensive care unit to the St. Joseph campus, which resulted in operating disruptions in summer 2007. As a result of current operating struggles, NOMC's debt ratios are very weak. Based on FY 2006 results, debt-to-cash flow weakened to -19.6 times (due to negative cash flow generation) and peak debt service coverage decreased to a very weak 0.1 times in FY 2006. NOMC's cash position weakened considerably in FY 2007, which is a key credit risk. At unaudited fiscal year end (FYE) 2006, NOMC's unrestricted cash and investments measured $14.0 million (a decline from $17.4 million at FYE 2005). As a result, cash on hand decreased to a modest 43 days and cash-to-debt measured a thin 26% at FYE 2006. Moody's notes that about $4.3 million of liquidity at FYE 2006 (and $4 million at FYE 2005) was pledged as collateral for a line of credit (which NOMC decided to pay off in August 2007); excluding this from liquidity calculations, cash on hand and cash-to-debt at FYE 2006 would measure 30 days and 18%, respectively. Unrestricted cash continues to decline in interim FY 2007, measuring $5.3 million at Aug. 31, 2007, translating to very weak 18.2 days cash on hand (annualized) and 11% cash-to-debt. The decline in liquidity in FY 2007 is due to continued negative operating cash flow as well as NOMC's decision in August to pay off the line of credit (which measured $4 million at July 31, 2007). NOMC's current liquidity position is a material credit concern. Moody's notes that as part of NOMC's collaborative efforts with St. Joseph, NOMC is expected to sell licensed beds to St. Joseph. As part of this transaction, NOMC is planning to receive $5 million from Trinity Health. NOMC management expects to receive about $2 million by FYE 2007 and the remaining $3 million in early FY 2008, which should help to minimize continued liquidity decline at NOMC over the coming months. The sale of the licensed beds must receive certificate of need approval. NOMC violated debt service coverage covenants as a result of the poor performance in FY 2006. While NOMC management continues to communicate with bond holders to seek waivers for the covenant violations, NOMC has yet to secure these waivers. Failure to do so could result in material credit distress. NOMC's CEO has been with the organization since June 2006. Since that time, the new CEO has replaced virtually all of NOMC's senior management team. Most of the new senior staff, including the CEO, held management positions with the prominent Aa3-rated William Beaumont Hospitals system in suburban Detroit. Moody's views the new management team as a credit positive for NOMC. Nevertheless, the new management team faces considerable challenges to improve performance at NOMC. Key turnaround initiatives include: (a) recent agreement to collaborate on key services with St. Joseph, which eliminate redundancies in the Pontiac market, such as NOMC moving all pediatric and newborn delivery services to St. Joseph; (b) NOMC will convert its old pediatric unit to a secure medical unit in an agreement with the Oakland County Sheriff Department; (c) labor cost savings, such as benefit cost reductions, reduced paid time off, and the elimination of approximately 130 full-time equivalent positions; and (d) enhancement of radiation therapy, inpatient and outpatient diagnostic, and surgical services. The costs associated with these turnaround efforts contributed to NOMC's poor operating results and liquidity decline in FY 2006 and interim FY 2007. Outlook The negative outlook reflects NOMC's ongoing operating challenges and our concern regarding NOMC's very thin liquidity position. What could change the rating -- Up Significant and sustained improvement in operating performance; material improvement in liquidity ratios; stability in volumes; demonstration of an ability to reinvest in the facility's physical plant to remain competitive; successful renegotiation of collective bargaining agreements What could change the rating -- Down Continued operating losses; an increase in debt; continued decline in liquidity; inability to receive waivers from bond holders Key Indicators Assumptions & Adjustments: -- Based on Pontiac General Hospital and Medical Center, Inc. (d/b/a North Oakland Medical Centers) -- First number reflects audited FY 2005 for the year ended Dec. 31, 2005 -- Second number reflects unaudited FY 2006 for the year ended Dec. 31, 2006 -- Investment returns reclassified as non-operating revenue and smoothed at 6% *Inpatient admissions: 8,325; 7,642 *Total operating revenues: $123.9 million; $114.9 million *Moody's-adjusted net revenues available for debt service: $4.6 million; $382,000 *Total debt outstanding: $55.4 million; $54.1 million *Maximum annual debt service (MADS): $4.8 million; $4.8 million *MADS Coverage with reported investment income: 1.09 times; -0.05 times *Moody's-adjusted MADS Coverage with normalized investment income: 0.97 times; 0.08 times *Debt-to-cash flow: 50.2 times; -19.6 times *Days cash on hand: 50.8 days; 42.8 days *Cash-to-debt: 31.4%; 25.9% *Operating margin: -4.9%; -8.2% *Operating cash flow margin: 2.2%; -1.0% Rated debt: Issued through Pontiac Hospital Finance Authority: -- Series 1993 Revenue Bonds, rated B3 OCCULOGIX INC: Board Approves Exploring Strategic Alternatives -------------------------------------------------------------- OccuLogix Inc.'s board of directors has authorized the company's management and advisors to explore the full range of strategic alternatives available to enhance shareholder value. The alternatives may include: -- raising of capital through the sale of securities; -- one or more strategic alliances and the combination; -- sale or merger of all or part of the company. OccuLogix stated that there can be no assurance that the exploration of strategic alternatives will result in a transaction. The company does not intend to disclose developments with respect to the exploration of strategic alternatives unless its board has approved a specific transaction. Headquartered in Mississauga, Ontario, OccuLogix Inc. (TSX: OC) (NasdaqGM: OCCX) -- http://www.occulogix.com/-- is an ophthalmic therapeutic company in the business of commercializing innovative treatments for age-related eye diseases, including age-related macular degeneration, or AMD, and glaucoma. Going Concern Doubt Ernst & Young LLP, in Toronto, Canada, expressed substantial doubt about OccuLogix Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses. OWEN AND OLLIE'S: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Owen and Ollie's Restaurant & Pub LLC 91 Mill Street, Unit 1 Dracut, MA 01826 Bankruptcy Case No.: 07-43720 Type of Business: The Debtor operates an Irish-themed restaurant. See http://owenandollies.com/ Chapter 11 Petition Date: October 9, 2007 Court: District of Massachusetts (Worcester) Debtor's Counsel: Stuart M. Holber, Esq. 21 Wingate Street, Suite 101 Haverhill, MA 01832 Tel: (978) 372-1171 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Frank J. Gorman Trade Debt $327,323 Gorman Management 1105 Lakeview Avenue Dracut, MA 01826 Harry F. Gorman Trade Debt $110,000 23 F Street Dracut, MA 01826 Friend Lumber Company Trade Debt $54,995 261 Lowell Road Hudson, NH 03051 Trimark United East Inc. Trade Debt $41,069 Massachusetts Department of Meals Tax $36,377 Revenue Hallsmith Sysco Food Service Trade Debt $20,999 Leading Seafoods Trade Debt $19,784 NMAC Bankruptcy Filing Lease $14,375 Internal Revenue Service 941 Taxes $11,035 National Grid Processing Center Trade Debt $10,320 Blue Cross Blue Shield of MA Insurance $8,840 Lowell Provision Co. Inc. Trade Debt $7,079 Merrimack Valley Distributors Trade Debt $6,520 United Liquors Inc. Trade Debt $5,475 Coca-Cola Bottling Trade Debt $5,214 Horizon Beverage Trade Debt $5,176 Kristine Gorman Trade Debt $4,500 General Linen Co. Trade Debt $3,814 D.J. Readon Company Inc. Trade Debt $3,467 RD Weis Companies Trade Debt $3,417 PEOPLE'S CHOICE: Wants Nod on Claims Settlement Procedures ---------------------------------------------------------- People's Choice Financial Corp. and its debtor-affiliates relate that approximately 750 claims aggregating $300,000,000, have been filed in their Chapter 11 cases. The Debtors, the Official Committee of Unsecured Creditors and their professionals have begun reviewing the claims and determining which of the claims are objectionable. In an attempt to save the estates, and therefore the creditors, the time and expense of bringing formal objections to the Objectionable Claims, the Debtors are contacting the claimants of the Objectionable Claims and attempting to reach settlements with those claimants. Once the settlements are reached, however, the Debtors are faced with the need to obtain the Court's approval of each settlement, a process that could cost the estates as much time and money as preparing, filing and prosecuting an objection to each Objectionable Claim, Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, notes. The Debtors ask the U.S. Bankruptcy Court for the Central District of California to approve certain procedures to streamline the approval of the settlements of Objectionable Claims. The Proposed Claim Settlement Procedures will save the Debtors, Creditors Committee and the Court a considerable amount of time in dealing with many of the Objectionable Claims and will save the estates a substantial amount of money in that the cost of preparing motions for approval of each settlement of an Objectionable Claim will be avoided, Mr. Dulberg says. Mr. Dulberg sets forth the Proposed Claim Settlement Procedures: (a) The Debtors or the Creditors Committee, as applicable, and the holder of the Objectionable Claim will enter into a stipulation outlining the grounds for the claim, the grounds for the objection and the terms of the settlement; (b) The Debtors or the Creditors Committee, as applicable, will file and serve notice of any settlement on the United States Trustee; counsel to the Debtors; counsel to the Creditors Committee; any creditors whose Objectionable Claims are affected by the settlements under Notice; and persons who have requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. The Notice can relate to one or more stipulations and will contain a list of the stipulations affected by the Notice, including the claimants' names, the numbers of claims being settled, the deadline by which objections to any stipulations must be filed and served, and the names and addresses of the service parties. Copies of the stipulations referred to in the Notice will be attached to the Notice; (c) The Notice Parties will have 20 days after the date of service of the Notice to object to any stipulation attached to the Notice; (d) If no objection to a stipulation is timely filed and served, the Debtors or the Creditors Committee, as applicable, will file a Declaration of Non-Opposition related to that stipulation, and the stipulation will be deemed approved without further notice, hearing or order of the Court; and (e) If any of the Notice Parties object to any proposed stipulation, the Debtors or the Creditors Committee, as applicable, will obtain a hearing date on the stipulation and objection, send notice of the hearing to the affected claimant, the objecting party, the U.S. Trustee, counsel to the Debtors, and counsel to the Creditors Committee. The Court, after the hearing, will determine whether the settlement should be approved. About People's Choice Headquartered in Irvine, California, People's Choice Financial Corp. -- http://www.pchl.com/-- is a residential mortgage banking company, through its subsidiaries, originates, sells, securitizes and services primarily single-family, non-prime, residential mortgage loans. The company and two of its affiliates, People's Choice Home Loan, Inc., and People's Choice Funding, Inc., filed for chapter 11 protection on March 20, 2007 (Bankr. C.D. Calif. Case No. 07-10772). J. Rudy Freeman, Esq., at Pachulski, Stang, Ziehl & Jones, L.L.P., represents the Debtors. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. In its schedules filed with the Court, People's Choice disclosed total assets of $806,776,901 and total liabilities of $105,772,386. The Debtors' exclusive period to file a chapter 11 plan expires on Nov. 6, 2007. The Debtors however have asked the Court to extend that deadline to November 30. (People's Choice Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PLAINS EXPLORATION: Fir Tree Okays $3.6 Billion Pogo Purchase ------------------------------------------------------------- Fir Tree Partners, a shareholder in Plains Exploration Company, has agreed to support PXP's proposed acquisition of Pogo Producing Company. As reported in the Troubled Company Reporter on Sept. 11, 2007, Fir Tree had planned to vote against the PXP's proposal to buy Pogo Producing for $3.6 billion. Fir Tree's Board of Directors indicated in a letter to PXP CEO & President James C. Flores that their decision is based upon detailed financial analysis which suggests that a termination of the transaction could result in PXP's share price appreciating by 70% or more over the ensuing year. The Board also declared that large scale share repurchases are a much more efficient use of shareholder capital given the extreme decline in PXP's share price that was sparked by the announcement of the PPP deal and the negative natural gas price environment which makes PPP a less attractive/less valuable asset. Fir Tree Partners will vote its shares in support of the acquisition proposal based on PXP's continued commitment to implement, following the acquisition, its proven asset rationalization program combined with an ongoing significant share repurchase program and evaluate the necessary steps to achieve MLP valuations by forming a master limited partnership or using the MLP market to unlock value for shareholders. "After a number of constructive conversations, we are pleased to have come to an amicable resolution regarding the Pogo acquisition and look forward to Plains Exploration's implementation of these post-acquisition measures," Andrew Fredman of Fir Tree Partners said. "We believe these measures are the most effective steps to creating value for shareholders. In light of Plains Exploration's commitments, we are happy to support the Pogo acquisition and plan to vote our shares in favor of it. Jim Flores and his management team have demonstrated a superb long-term record of value creation and we believe that the articulated strategy will help ensure that their superior record continues forward." "We appreciate Fir Tree's support of the Pogo acquisition, which will enable PXP to continue its stated course of action of increasing shareholder value," James Flores of Plains Exploration said. About Pogo Producing Headquartered in Houston, Texas, Pogo Producing Company (NYSE: PPP) -- http://www.pogoproducing.com/-- explores for, develops and produces oil and natural gas. Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. About Plains Exploration & Production Headquartered in Houston, Plains Exploration & Production Co. (NYSE: PXP) - http://www.plainsxp.com/-- is an independent oil and gas company primarily engaged in the upstream activities of acquiring, developing, exploiting, exploring and producing oil and gas in its core areas of operation: onshore and offshore California, Colorado and the Gulf Coast region of the United States. * * * As reported in the Troubled Company Reporter on July 20, 2007, Standard & Poor's Ratings Services affirmed the 'BB' corporate credit rating on independent oil and gas company Plains Exploration & Production Co. The outlook remains stable. POGO PRODUCING: $3.6 Bil. Purchase by Plains Exploration Okayed --------------------------------------------------------------- Fir Tree Partners, a shareholder in Plains Exploration Company, has agreed to support PXP's proposed acquisition of Pogo Producing Company. As reported in the Troubled Company Reporter on Sept. 11, 2007, Fir Tree had planned to vote against the PXP's proposal to buy Pogo Producing for $3.6 billion. Fir Tree's Board of Directors indicated in a letter to PXP CEO & President James C. Flores that their decision is based upon detailed financial analysis which suggests that a termination of the transaction could result in PXP's share price appreciating by 70% or more over the ensuing year. The Board also declared that large scale share repurchases are a much more efficient use of shareholder capital given the extreme decline in PXP's share price that was sparked by the announcement of the PPP deal and the negative natural gas price environment which makes PPP a less attractive/less valuable asset. Fir Tree Partners will vote its shares in support of the acquisition proposal based on PXP's continued commitment to implement, following the acquisition, its proven asset rationalization program combined with an ongoing significant share repurchase program and evaluate the necessary steps to achieve MLP valuations by forming a master limited partnership or using the MLP market to unlock value for shareholders. "After a number of constructive conversations, we are pleased to have come to an amicable resolution regarding the Pogo acquisition and look forward to Plains Exploration's implementation of these post-acquisition measures," Andrew Fredman of Fir Tree Partners said. "We believe these measures are the most effective steps to creating value for shareholders. In light of Plains Exploration's commitments, we are happy to support the Pogo acquisition and plan to vote our shares in favor of it. Jim Flores and his management team have demonstrated a superb long-term record of value creation and we believe that the articulated strategy will help ensure that their superior record continues forward." "We appreciate Fir Tree's support of the Pogo acquisition, which will enable PXP to continue its stated course of action of increasing shareholder value," James Flores of Plains Exploration said. About Plains Exploration & Production Headquartered in Houston, Plains Exploration & Production Co. (NYSE: PXP) - http://www.plainsxp.com/-- is an independent oil and gas company primarily engaged in the upstream activities of acquiring, developing, exploiting, exploring and producing oil and gas in its core areas of operation: onshore and offshore California, Colorado and the Gulf Coast region of the United States. About Pogo Producing Headquartered in Houston, Texas, Pogo Producing Company (NYSE: PPP) -- http://www.pogoproducing.com/-- explores for, develops and produces oil and natural gas. Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. * * * As reported in the Troubled Company Reporter on May 31, 2007, Standard & Poor's Ratings Services said that its 'BB' corporate credit rating on Pogo Producing Co. remains on CreditWatch with developing implications following the company's announcement that it is selling its Canadian oil- and gas-producing subsidiary for $2 billion. QUALITY HOME: Selects Irell & Manella as Bankruptcy Counsel ----------------------------------------------------------- Quality Home Loans and its debtor-affiliates ask the U.S. Bankruptcy Court for the Central District of California for authority to employ Irell & Manella LLP as their reorganization counsel. Irell & Manella will: a. advise the Debtors regarding their powers and duties as debtors-in-possession in the continued management and operation of its affairs and properties; b. represent the Debtors in proceedings or hearings before the Court involving matters of bankruptcy law; c. attend meetings and negotiate with representatives of the Debtors' creditors and other parties-in-interest; d. take necessary actions to protect and preserve the Debtors' estate, including the prosecution of actions on the Debtors' behalf, the defense of any action commenced against the Debtors, negotiate on the Debtors' behalf with respect to all litigation involving the Debtors, and object to claims filed against the Debtors' estate; e. prepare all motions, applications, answers, orders, reports, and papers on behalf of the Debtors that are necessary to the administration of the case; f. represent the Debtors in connection with any proceedings relating to any potential sale of assets; g. advise and assist the Debtors in connection with the confirmation and consummation of any proposed plan of reorganization; and h. perform other typical services as counsel to the Debtors in the case. The Debtors will pay the firm on at its customary hourly rates. Prior to bankruptcy filing, the Debtors paid the firm a $100,000 retainer. The firm rendered prepetition services to the Debtor in the amount of $11,000. The remaining $89,000 retainer funds is held by the firm in escrow. To the best of the Debtors' knowledge, the firm has no interest materially adverse to the Debtors' estate or of any class of creditors or equity shareholders. The firm can be reached at: William N. Nobel, Esq. Mike D. Neue, Esq. Irell & Manella LLP 840 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Tel: (949) 760-0991 Fax: (949) 760-5200 http://www.irell.com/ Headquartered in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). QUALITY HOME: Committee Taps Winston & Strawn as Counsel -------------------------------------------------------- The Official Committee of Unsecured Creditors in Quality Home Loans and its debtor-affiliates' bankruptcy cases asks the U.S. Bankruptcy Court for the Central District of California for permission to retain Winston & Strawn LLP as its counsel effective as of Sept. 6, 2007. The firm will: a. provide legal advice to the Committee with respect to its duties and powers in the case; b. consult with the Committee and the Debtors concerning the administration of the case; c. assist the Committee in its investigation of the acts, conduct, assets, liabilities, postpetition financing, and financial condition of the Debtors, operation of the Debtors' business, the desirability of continuing or selling the business or assets, and other matters relevant to the case or the formulation of a plan; d. assist the Committee in the evaluation of claims against the Debtors' estate, including analysis of and possible objections to the validity, priority, amount, subordination, or avoidance of claims and transfers of property in consideration of the claims; e. assist the Committee in participating in the information of a plan, including the Committee's communications with unsecured creditors concerning the plan and the collecting and filing with the Court of acceptances or rejections to the plan; f. assist the Committee with any effort to request the appointment of a trustee or examiner; g. advise and represent the Committee in connection with administrative and substantive matters arising in the case, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; h. appear before the Court, any other federal court, state court or appellate court; and i. perform other legal services as may be required and which are in the interests of the unsecured creditors. The customary hourly rates of Winston are: Designation Hourly Rate ----------- ----------- Partner $405-$845 Associate $200-$590 Legal Assistant $135-$285 The Committee assures the Court that the firm does not hold or represent any interest adverse to the Debtors or the estate. The firm can be reached at: Eric. E. Sagerman, Esq. David L. Wilson III, Esq. Winston & Strawn LLP 333 South Grand Avenue Los Angeles, CA 90071 Tel: (213) 615-1829 Fax: (213) 615-1750 http://www.winston.com/ Headquartered in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). QUALITY HOME: Files Schedules of Assets and Liabilities ------------------------------------------------------- Quality Home Loans and its debtor-affiliates submitted to the U.S. Bankruptcy Court for the Central District of California their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,509,000 B. Personal Property 117,810,336 C. Property Claimed as 0 Exempt D. Creditors Holding $162,958,749 Secured Claims E. Creditors Holding 555,871 Unsecured Priority Claims F. Creditors Holding 13,528,855 Unsecured Non-priority Claims ----------- ----------- TOTAL $130,319,336 $177,043,476 Headquartered in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). QUANTA SERVICES: Earns $21.9 Million in Quarter Ended June 30 ------------------------------------------------------------- Quanta Services Inc. reported net income of $21.9 million for the second quarter ended June 30,2007, compared to net income of $17.7 million in the second quarter of 2006. Revenues in the second quarter of 2007 were $557.6 million compared to revenues of $514.0 million in the second quarter of 2006. Revenues for the first six months of 2007 were $1.13 billion compared to $1.01 billion for the first half of 2006. For the first six months of 2007, the company reported net income of $53.1 million, compared to net income of $25.5 million in the first six months of last year. Excluding the positive effect of a settlement of a multi-year audit with the Internal Revenue Service during the first quarter of 2007, adjusted net income was $37.7 million for the first six months of 2007. "Our strong quarter, including 13% internal revenue growth from electric power and gas customers, reflects continued elevated spending by these customers. We are pleased with the results we achieved during the quarter despite experiencing extremely wet weather that hampered our performance in the South Central U.S.," said John R. Colson, chairman and chief executive officer of Quanta Services. "With backlog up $170 million or 13% compared to the second quarter of last year, we believe the future presents exciting growth opportunities for Quanta. We are in a strong position to support our customers as they focus on the delivery of reliable electric power and next-generation telecommunications services." Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $1.68 billion in total assets, $873.6 million in total liabilities, and $808.8 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?2425 Outlook Quanta expects revenues for the third quarter of 2007 to range between $595 million and $615 million. These estimates include approximately $25 million of anticipated emergency restoration revenues for the third quarter of 2007. About Quanta Services Headquartered in Houston, Texas, Quanta Services Inc. (NYSE: PWR) -- http://www.quantaservices.com/-- provides specialized contracting services, delivering end-to-end network solutions for electric power, gas, telecommunications and cable television industries. The company's comprehensive services include designing, installing, repairing and maintaining network infrastructure nationwide. * * * As reported in the Troubled Company Reporter on Sept. 14, 2007, 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. The ratings outlook is stable. As reported in the Troubled Company Reporter on Sept. 7, 2007, Standard & Poor's Ratings Services raised its corporate credit rating on Quanta Services Inc. by one notch to 'BB' from 'BB-' after the completion of the company's all-stock acquisition of competitor Infrasource Inc. S&P also raised the ratings on Quanta's 3.75% convertible subordinated notes and 4.5% convertible subordinated debentures by one notch, to 'B+'. All ratings were removed from CreditWatch, where they were originally placed with positive implications on March 19, 2007. The outlook is stable. REAL ESTATE: Fitch Assigns Low-B Ratings on Six Note Classes ------------------------------------------------------------ Fitch assigns these ratings to the notes issued by Real Estate Synthetic Investment Finance Limited Partnership 2007-C and RESI Finance DE Corporation 2007-C: -- $10,077,260,991 class A risk band 'AAA'; -- $150,406,881 class B1 risk band 'AA-'; -- $15,559,332 class B2 risk band 'AA-'; -- $31,118,665 class B3 risk band'A'; -- $10,372,889 class B4 risk band 'A-'; -- $23,857,643 class B5 risk band 'BBB-'; -- $7,261,000 class B6 floating rate notes, due September 2049 'BBB-'; -- $10,372,000 class B7 floating rate notes, due September 2049 'BB+'; -- $8,299,000 class B8 floating rate notes, due September 2049 'BB'; -- $7,261,000 class B9 floating rate notes, due September 2049 'BB'; -- $10,373,000 class B10 floating rate notes, due September 2049 'B+'; -- $5,186,000 class B11 floating rate notes, due September 2049 'B'; -- $5,187,000 class B12 floating rate notes, due September 2049 'B-' REAL ESTATE PARTNERS: Case Summary & 182 Largest Unsec. Creditors ----------------------------------------------------------------- Lead Debtor: Real Estate Partners, Inc. dba Coldwell Banker Commercial R.E.P. 2569 McCabe Way, 2nd Floor Irvine, CA 92614 Bankruptcy Case No.: 07-13239 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Real Estate Partners Unit Investment, B.T. 07-13240 II Real Estate Partners Unit Investment, B.T. 07-13241 I Real Estate Partners Income Fund III, B.T. 07-13242 Real Estate Partners Income Fund I, L.L.C. 07-13243 Real Estate Partners Growth Fund, B.T. 07-13244 Real Estate Partners Income Fund II, 07-13245 L.L.C. Real Estate Partners Equity Fund, B.T. 07-13246 Type of business: The Debtors are privately-owned operators and developers of multifamily housing across the US. See http://www.realestatepartnersinc.com/ Chapter 11 Petition Date: October 8, 2007 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtors' Counsel: Marc J. Winthrop, Esq. Winthrop Couchot, P.A. 660 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Tel: (949) 720-4100 Estimated Assets Estimated Debts ---------------- --------------- Real Estate Partners, Inc. 1 Million to 1 Million to 100 Million 100 Million Real Estate Partners Unit 1 Million to 1 Million to Investment, B.T. II 100 Million 100 Million Real Estate Partners Unit 1 Million to 1 Million to Investment, B.T. I 100 Million 100 Million Real Estate Partners 1 Million to 1 Million to Income Fund III, BT 100 Million 100 Million Real Estate Partners 1 Million to 1 Million to Income Fund I, L.L.C. 100 Million 100 Million Real Estate Partners 1 Million to 1 Million to Growth Fund, B.T. 100 Million 100 Million Real Estate Partners 1 Million to 1 Million to Income Fund II, L.L.C. 100 Million 100 Million Real Estate Partners 1 Million to 100,000 to Equity Fund, B.T. 100 Million 1 Million A. Real Estate Partners, Inc's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ R.E.I.S., Inc. trade $10,000 530 5th Avenue, 5th Floor New York, NY 10036 Ikon Financial Services trade $3,244 Western District P.O. Box 7420 Pasadena, CA 91109-7420 Barry, Gardner & Kincannon professional $3,221 4400 MacArthur Boulevard, services Suite 700 Newport Beach, CA 92260 TelePacific Communications utility $1,848 Cox Communications utility $1,779 Filter Fresh trade $1,109 Quill Corp. trade $407 A.T.&T. utility $245 X.O. Communications utility $230 D.H.L. Express trade $137 Orange County Telephone Co. utility $130 CapitalOne trade $107 National Registered Agents, trade $105 Inc. B. Real Estate Partners Unit Investment, BT II's 24 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stephen & Carol Baker monies invested $0 9928 Spirehaven Dallas, TX 75238 Dean Briggs (Lincoln Trust monies invested $0 F.B.O.) P.O. Box 140537 Garden City, ID 83714 James Campione (First Trust monies invested $0 F.B.O.) P.O. Box 1342 Springfield, VA 22151 Donald C. Cross monies invested $0 Richard Drennan (First Trust monies invested $0 F.B.O.) Gary W. & Judele W. Havener monies invested $0 John L. Ilko, Jr. (First Trust monies invested $0 F.B.O.) Mike McGrath (First Trust monies invested $0 F.B.O.) A.P. Regnier (First Trust monies invested $0 F.B.O.) Charles A. Shields (First monies invested $0 Trust F.B.O.) Steve Woodward (First Trust monies invested $0 F.B.O.) Edward Eure (First Trust monies invested $0 F.B.O.) Robert J. & Deborah C. monies invested $0 Dorsch Susan Humphreys (First monies invested $0 Trust F.B.O.) David Danforth monies invested $0 Richard Jr. & Winifred M. monies invested $0 Elmore Family Trust Joseph L. Greene, Jr. monies invested $0 (First Trust F.B.O.) Keith W. Hein monies invested $0 Larry E. Juhl monies invested $0 Kirby Family Trust, The monies invested $0 Brad & Cindy Larsen monies invested $0 Ronald W. Turner (First monies invested $0 Trust F.B.O.) Sherry L. Ward (First Trust monies invested $0 F.B.O.) C. Real Estate Partners Unit Investment, BT I's 26 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ K.&.L. Invested monies invested $0 Attention: Corporate Officer 3800 Powell Lane P.H.-30 Falls Church, VA 22041 Richard C. Lang monies invested $0 431 Steele Denver, CO 80206 Sun Holdings, L.L.C. monies invested $0 Attention: Corporate Officer 353 East Canyon View Drive Farmington, NM 87401 Scott Deemter (First Trust monies invested $0 F.B.O.) William Edwards Revocable monies invested $0 Living Trust Rick Ellison monies invested $0 Rickey E. Hartman monies invested $0 Bruce A. Kahn (First Trust monies invested $0 F.B.O.) Stephen S. Strunk (First monies invested $0 Trust F.B.O.) Derek Vanhoose monies invested $0 Russell N. Osnes monies invested $0 Robert Pfeffer (Firs Trust monies invested $0 F.B.O.) Harold A. Klinesmith (First monies invested $0 Trust F.B.O.) Dan & Lawanda Murri monies invested $0 Larry W. Asbury monies invested $0 Fay-J Durrant (First Trust monies invested $0 F.B.O.) Bruce Gorecki (First Trust monies invested $0 F.B.O.) Hochberg Gamma Invesments monies invested $0 Trust John William Lemons (First monies invested $0 Trust F.B.O.) Guy R. Rodgers (First Trust monies invested $0 F.B.O.) David E. Ross, Jr. Revocable monies invested $0 Trust Stuart & Donna Shoengold monies invested $0 David Ten Brink (First Trust monies invested $0 F.B.O.) Tim Walsh (First Trust monies invested $0 F.B.O.) Robert N. Wanty (First Trust monies invested $0 F.B.O.) Michael H. Williams monies invested $0 Brian R. Workman monies invested $0 D. Real Estate Partners Income Fund III, BT's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tom Arlt monies invested $0 1775 North Martin Luther King Boulevard Las Vegas, NV 89106 Zach Cohen monies invested $0 38294 Pelton Road Willoughby, OH 44094 Hochberg Holding, L.P. monies invested $0 Attention: Managing Partner 317 Ocean Boulevard Golden Beach, FL 33160 Charles H. Summers monies invested $0 Stephen J, Woodward monies invested $0 Russell N. Osnes monies invested $0 Jon M. Tellefson monies invested $0 Lucia V. Batten monies invested $0 Darren Wayne Brazeal monies invested $0 Paul K. Carlson monies invested $0 Larry Cassady monies invested $0 Dolores (Ann) D'Ercole monies invested $0 David Danforth monies invested $0 Donald & Deborah O. Jones monies invested $0 Kaper II, Inc. monies invested $0 Kent Mercer monies invested $0 Thomas N. Nowotny monies invested $0 Oasis Worldwide, Inc. monies invested $0 Guy R. Rodgers monies invested $0 James R. Smith monies invested $0 Phil L. & Vera Williams monies invested $0 E. Real Estate Partners Income Fund I, LLC's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John & Linda Evans monies invested $0 1630 Williams Highway, Suite 186 Grants Pass, OR 97527 Lucia V.B. Batten Trust monies invested $0 Attention: Authorized Agent 1815 Ginny Lane Williamsport, PA 17701 Joseph Barnes monies invested $0 8 North Street Milford, CT 06460 Bradley & Cindy Larsen monies invested $0 Loving Trust Glysann, L.L.C. monies invested $0 Ross L. Heimbach (I.R.A. monies invested $0 Resources F.B.O.) Leon Jensen (First Trust monies invested $0 F.B.O.) Robert M. Jepson monies invested $0 StarQuest Enterprises, L.L.C. monies invested $0 John Tellefson monies invested $0 Marc & Lita Watson monies invested $0 Carl Wheat (Cal Fed Bank monies invested $0 F.B.O.) Bjerke Family Trust monies invested $0 Rosemary Reiland monies invested $0 Richard Simpson monies invested $0 Evan & Marilyn Ritchie monies invested $0 Todd A. & Cathy S. Schmidt monies invested $0 David & Maureen Siegner monies invested $0 Curtis W. Wilkinson (I.R.A. monies invested $0 Resources F.B.O.) F. Real Estate Partners Growth Fund, BT's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Earl Leiffer monies invested $0 1211 Royal Oaks Drive Winter Springs, FL 32708 Chad Dueker monies invested $0 3452 East Foothill Boulevard, Suite 125 Pasadena, CA 91107 Martin Harrison monies invested $0 6402 Crystal Point Missouri City, TX 77459 Robert Hinton monies invested $0 Troy Pelton monies invested $0 Judith Sommer monies invested $0 Trevor Holte monies invested $0 Weber monies invested $0 Lucky Investment monies invested $0 Aggressive Investments monies invested $0 Jolin Invesments monies invested $0 Roger Blazic monies invested $0 Jim Bunch monies invested $0 Kevin Falkner monies invested $0 Gayle Hannett monies invested $0 Jack Jelsema monies invested $0 Gary Jorgenson monies invested $0 Robert Morris monies invested $0 Scott Ohara monies invested $0 Stephen Parker monies invested $0 William Persohn monies invested $0 G. Real Estate Partners Income Fund II, LLC's 26 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hochberg Holdings, L.P. monies invested $0 Attention: Managing Partner 317 Ocean Boulevard Golden Beach, FL 33160 Bruce A. Kahn (First Trust monies invested $0 F.B.O.) R.R.1 Box 24 Rochester, MN 55904 Lucia V.B. Batten Rev. Trust monies invested $0 Attention: Authorized Agent 1815 Ginny Lane Williamsport, PA 17701 Mullett Co., The monies invested $0 Ken Schroeder monies invested $0 Stephen S. Strunk monies invested $0 William Edwards Revocable monies invested $0 Living Trust Willaim Sterk monies invested $0 Michael William Evans monies invested $0 Larry W. Ashbury monies invested $0 Darren Wayne Brazeal monies invested $0 Thomas Jensen (First Trust monies invested $0 F.B.O.) John E. Michelsen Family monies invested $0 Trust Eric Johnson (First Trust monies invested $0 F.B.O. Douglas C. & Kim L. Jones monies invested $0 Larry Jones monies invested $0 Mark Kyle (First Trust monies invested $0 F.B.O.) Kent Mercer monies invested $0 Gary Michelsen monies invested $0 Brian R. Workman (First Trust monies invested $0 F.B.O.) Delores D'Ercole (First Trust monies invested $0 F.B.O.) Ronald Hackel (First Trust monies invested $0 F.B.O.) Lee Lanphier (First Trust monies invested $0 F.B.O.) Terry & Stuart Neal monies invested $0 Rosemary Reiland monies invested $0 John Tellefson monies invested $0 H. Real Estate Partners Equity Fund, BT's 32 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Earl M. Leiffer monies invested $0 1211 Royal Oak Drive Winter Springs, FL 32708 Universal Alloy Profit monies invested $0 Sharing Plan Attention: Authorized Agent 6402 Crystal Point Missouri City, TX 77459 David H. Stewart (Fiserv monies invested $0 F.B.O.) 1708 Del Norte Grants, NM 87020 David Adams monies invested $0 Dean Anderson monies invested $0 Richard W. Barton monies invested $0 Roger D. & Mary J. Bergeson monies invested $0 Richard Blazejewsk monies invested $0 Todd Burmeister (Fiserv monies invested $0 F.B.O.) Carlton Group, Inc. monies invested $0 Dennis Cink monies invested $0 Robert J. Etzel monies invested $0 Henry Garth monies invested $0 Austin Allen Hall monies invested $0 John L. Hannett (First Trust monies invested $0 F.B.O.) Randy H. Hinson monies invested $0 Leland Huttner monies invested $0 Gary & Lora Jorgenson monies invested $0 Robert Lee King monies invested $0 Paul MacDonald monies invested $0 Mike McGrath monies invested $0 David C. Nelson monies invested $0 Marc Romanelli (Charles monies invested $0 Schwab F.B.O.) Roy Stark monies invested $0 David L. Stone monies invested $0 Mark S. Thorburn (First monies invested $0 Trust F.B.O.) Daniel & Virginia Todd monies invested $0 Marvin H. Tucker (First monies invested $0 Trust F.B.O.) Arland & Arlene Vander Leest monies invested $0 Weber Water Service monies invested $0 W.R. (Rick) White (Fiserv monies invested $0 F.B.O.) Mike Wickenheiser monies invested $0 REMY WORLDWIDE: Receives Court Approval on First-Day Motions ------------------------------------------------------------ Remy Worldwide Holdings, Inc., has received Bankruptcy Court approval of its first-day motions to, among other things, pay employee wages and benefits without interruption and continue to pay trade creditors and suppliers in the ordinary course of business. As reported in the Troubled Company Reporter on Oct. 10, 2007, in response to the overwhelming support received from its noteholders for its prepackaged plan of reorganization, the Company filed voluntary petitions for itself and its domestic subsidiaries under chapter 11 of the U.S. Bankruptcy Code to seek confirmation of the plan. DIP Facility The Court also granted interim approval of $160 million of Remy's $225 million debtor-in-possession facility, which was provided by Barclays Capital who acted as sole lead arranger. As previously reported, Barclays Capital had committed to provide DIP financing for up to $225 million and up to $330 million of long-term exit financing. Barclays Capital has syndicated both the DIP and the exit facilities together to coincide with Remy's prepackaged bankruptcy case. The closing of the DIP and exit loans are subject to certain closing conditions which are anticipated to be satisfied during the Chapter 11 process. A final DIP hearing has been scheduled for Nov. 7, 2007. "We are pleased with the swift approval of our "first-day motions" which will enable Remy to operate without interruption and continue to meet our normal business obligations during the plan confirmation process," John Weber, Chief Executive Officer, said. "With our first-day motions approved, we will continue to concentrate on running our business with the goal of emerging from chapter 11 within the next 60 days." The Court has scheduled a hearing to confirm Remy's prepackaged plan of reorganization for Nov. 20, 2007. About Remy Worldwide Based in Anderson, Indiana, Remy Worldwide Holdings Inc. acts as a holding company of all the outstanding capital stock of Remy International Inc. Remy International --http://www.remyinc.com/ -- manufactures, remanufactures and distributes Delco Remy brand heavy-duty systems and Remy brand starters and alternators, locomotive products and hybrid power technology. The company also provides a worldwide components core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy has operations in the United Kingdom, Mexico and Korea, among others. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 8, 2007 (Bankr. D. Del. Cases No. 07-11481 to 07-11509). Douglas P. Bartner, Esq., Fredric Sosnick, Esq., and Michael H. Torkin, Esq., at Shearman & Sterling LLP, represent the Debtors' in their restructuring efforts. Pauline K. Morgan, Esq., Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as co-counsels to the Debtors. The Debtors' claims agent is Kurtzman Carson Consultants LLC and their restructuring advisor is AlixPartners, LLC. At Sept. 30, 2006, Remy Worldwide's balance sheet showed total assets of $919,736,000 and total liabilities of $1,265,648,000. (Remy Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). RESI FINANCE: S&P Assigns Low-B Ratings on Six Note Classes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to RESI Finance Ltd. Partnership 2007-C/RESI Finance DE Corp. 2007-C's $53.939 million real estate synthetic investment notes series 2007-C. The ratings reflect: -- The credit enhancement levels; -- The transaction's shifting interest structure; -- The transaction's legal structure, which is designed to minimize potential losses to security holders caused by the issuer's insolvency; and -- The credit rating assigned to Bank of America N.A. based on its obligations according to the time deposit account and credit default swap agreements. Ratings Assigned RESI Finance Ltd. Partnership 2007-C/RESI Finance DE Corp. 2007-C Class Rating Amount ----- ------ ------ B6 BBB- $7,261,000 B7 BB+ $10,372,000 B8 BB $8,299,000 B9 BB- $7,261,000 B10 B+ $10,373,000 B11 B $5,186,000 B12 B- $5,187,000 RESIX FINANCE: S&P Puts Low-B Ratings on $46.6M. S. 2007-C Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to RESIX Finance Ltd.'s $46.678 million credit-linked notes series 2007-C. The ratings are based on the referenced ratings of RESI Finance L.P. 2007-C's credit enhancement levels and the transaction's legal structure, which is designed to minimize potential losses caused by the insolvency of the issuer. Ratings Assigned RESIX Finance Ltd. Class Rating Amount ----- ------ ------ B7 BB+ $10,372,000 B8 BB $8,299,000 B9 BB- $7,261,000 B10 B+ $10,373,000 B11 B $5,186,000 B12 B- $5,187,000 ROADHOUSE GRILL: Files for Bankruptcy Protection in Florida ----------------------------------------------------------- John Metz has placed Roadhouse Grill Inc. into bankruptcy, the Associated Press reports. The company, along with its affiliate R.H.G. Acquisition Corporation, filed voluntary chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of Florida. A copy of the company's case summary was published in yesterday's Troubled Company Reporter. Mr. Metz's investment arm, Willie's Roadhouse Grill LLC, bought Duffy's Holdings Inc.'s 85.5% stake in the company last week. Duffy's had earlier bought the company in May 2007 for $29 million. The company had closed 15 restaurants prior to filing for bankruptcy but Mr. Metz will continue the operations of the 38 remaining sites, AP adds citing Craig I. Kelley, Esq., at Kelley & Fulton, P.A. AP also discloses that Willie's Roadhouse plans to provide a $2 million funding for the company's bankruptcy proceedings. Based in West Paln Beach, Florida, Roadhouse Grill, Inc. -- (Other OTC: GRLL) -- http://www.roadhousegrill.com/-- owns and operates full-service, casual-dining restaurants located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New York, North Carolina, Ohio and South Carolina. The company and its affiliate, R.H.G. Acquisition Corporation, filed for chapter 11 protection on Oct. 8, 2007 (Bankr. S.D. Fla. Case Nos. 07-18410 and 07-18414). Craig I. Kelley, Esq., at Kelley & Fulton, P.A., represents the Debtors. At Jan. 28, 2007, Roadhouse Grill's consolidated balance sheet showed $22.1 million in total assets and $39.6 million in total liabilities. SCO GROUP: Taps Pachulski Stang as Bankruptcy Co-Counsel -------------------------------------------------------- The SCO Group Inc. and SCO Operations Inc. ask the United States Bankruptcy Court for the District of Delaware for authority to employ Pachulski Stang Ziehl & Jones LLP as their bankruptcy co-counsel, nunc pro tunc to Sept 14, 2007. Pachulski Stang is expected to: a) provide legal advise with respect to the Debtors' powers and duties as debtors in possession in the continued operation of their business and management of their property; b) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports, and other legal papers; c) appear in Court on behalf of the Debtors and in order to protect the interests of the Debtors before the Court; d) prepare and pursue confirmation of a plan and approval of a disclosure statement; and e) perform all other legal services for the Debtors that may be necessary and proper in these proceedings. The firm's professionals and their billing rates are: Professional Hourly Rate ------------ ----------- Laura Davis Jones, Esq. $750 James E. O'Neill, Esq. $475 Rachel L. Werkheiser, Esq. $375 Lynzy Oberholzer $175 Laura Davis Jones, Esq. an attorney of the firm, assures the Court that the firm does not hold any interest adverse to the Debtors and their estate, and that the firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. Ms. Jones can be reached at: Laura Davis Jones, Esq. Pachulski Stang Ziehl & Jones LLP 919 North market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware, 19899-8705 Tel.: (302) 652-4100 Fax.: (302) 652-4400 http://www.pszjlaw.com/ Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company and its affiliate filed for Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). James E. O'Neill, Esq. and Laura Davis Jones, Esq. of Pachulski, Stang, Ziehl & Jones LLP represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed to date in this case. As of Sept. 10, 2007, the Debtors' reported total assets of $14,800,000 and total debts of $7,500,000. SEASONAL CONCEPTS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Seasonal Concepts, Inc. fka Flowertown, Inc. fka Christmas on the Mall 975 Nathan Lane Minneapolis, MN 55441 Bankruptcy Case No.: 07-43618 Type of Business: The Debtor offers high quality outdoor patio furniture, casual furniture, accessories, BBQ grills and fire-pits at affordable prices. The Debtor's retail stores display more than 100 patio furniture dining and seating groups and indoor casual furniture collection. See http://www.seasonalconcepts.com/ Chapter 11 Petition Date: October 9, 2007 Court: District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Clinton E. Cutler, Esq. Ryan Murphy, Esq. Fredrikson & Byron, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Tel: (612) 492-7070 Fax: (612) 347-7077 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tropitone Goods/Services $937,358 5 Marconi Road Irvine, CA 92618 Woodard Inc./Lyon Shaw Goods/Services $777,364 168 North Clinton, Suite 300 Chicago, IL 60661 Carter Grandle Goods/Services $428,131 2150 Whitfield Avenue Sarasota, FL 34243-3925 Lane Venture Goods/Services $336,986 205 Workman P.O. Box 849 Conover, NC 28613 Meadowcraft/Arlington Goods/Services $331,585 4700 Pinson Valley Parkway Birmingham, AL 35215 Boto Co. Ltd. Goods/Services $307,776 8 Commercial Tower, 17th Floor 8 Sun Yip Street Chaiwan, Hong Kong Winston (BJ International) Good/Services $265,869 P.O. Box 868 Haleyville, AL 35565 Developers Diversified Realty Former Landlord $210,694 Ozburn-Hessey Logistics LLC Goods/Services $174,951 MD Management Inc. Former Landlord $123,825 Homecrest Industries Goods/Services $122,465 Classic Cushion & Umb Goods/Services $116,018 Alshouse Properties LLC Former Landlord $108,715 Greenfield International Goods/Services $105,865 Designs Ltd. Nall Valley LLC Former Landlord $105,498 Havertys Furniture Company Former Landlord $94,652 Santas Best Craft Ltd. Goods/Services $92,475 New River Goods/Services $84,097 Agio Goods/Services $83,750 Davis Real Estate Goods/Services $75,795 Services Group SIDHER ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sidher Enterprises, Inc. 3196 La Mantia Drive Yuba City, CA 95993 Bankruptcy Case No.: 07-28341 Type of Business: The Debtor is a real estate developer. It also offers car washing services. Chapter 11 Petition Date: October 9, 2007 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: G. Dave Teja, Esq. 409 A Center Street Yuba City, CA 95991-4520 Tel: (530) 673-1383 Total Assets: $5,050,000 Total Debts: $2,989,799 A. Debtor's list of its Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Capitol Valley Electric Trade Debt $38,086 Construction Specialties/ Trade Debt $56,348 Moore Drywall CSHQA Trade Debt $58,779 Newcastle Trade Debt $78,691 Now Builders, Inc. Trade Debt $76,304 Rutan Plumbing Trade Debt $35,668 Diamond Empire Properties, LLC Trade Debt $10,000 B. Debtor's list of its Two Largest Secured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Temecula Valley Bank Secured Bank Loan $5,106,848 27710 Jefferson Avenue Suite A-100 Temecula, CA 92593 Charles & Carline Lofton Secured Bank Loan $82,500 15094 U Bet Road Grassvalley, CA SOLUTIA INC: Disclosure Statement Hearing Continued to October 17 --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York has adjourned the hearing to consider the approval of Solutia Inc. and its debtor-affiliates' Disclosure Statement describing their Second Amended Plan of Reorganization until Oct. 17, 2007, at 2:30 p.m., in Courtroom 701. As previously reported, the Debtors filed their Second Amended Plan and related Second Amended Disclosure Statement in July 2007. Jeffry N. Quinn, chairman, president and chief executive officer of Solutia, Inc., stated that the Second Amended Plan, among other things, does not alter the material terms of the reallocation of Legacy Liabilities set forth in: (a) the Debtors' original Plan of Reorganization, filed February 14, 2006, or the First Amended Joint Plan of Reorganization, filed May 22, 2007; (b) the Relationship Agreement, which will be entered into between Solutia and Monsanto Company upon confirmation of the Plan; or (c) the Retiree Settlement Agreement, as amended among Solutia, the Official Committee of Unsecured Creditors, the Official Committee of Retirees and Monsanto. The Second Amended Plan also contemplates the potential distribution of warrants to equity holders who own above a certain threshold of Solutia common stock. Last week, Solutia announced that it has secured the full support of the Ad Hoc Committee of Solutia Noteholders, the Official Committee of Equity Security Holders, the Official Committee of Unsecured Creditors, Monsanto Company, Pharmacia Corporation, the Official Committee of Retirees, and the Ad Hoc Committee of Trade Creditors for a comprehensive settlement and consensual plan of reorganization in the Debtors' Chapter 11 cases. The revised plan will position Solutia to emerge from bankruptcy by the end of this year as a financially healthy organization well-positioned to create significant value for its stakeholders, said Mr. Quinn. Mr. Quinn recently said in a press statement that the revised plan will provide for about $250,000,000 of new investment in reorganized Solutia through a backstopped rights offering to certain creditors, as well as a reallocation of the legacy liabilities that Solutia assumed when it was spun off. It will also provide for a resolution of all the litigation between the settling parties including a potential appeal by Solutia noteholders, the adversary proceeding filed by current equity holders against Monsanto and Pharmacia, and related objections to the Monsanto and Pharmacia claims. Solutia will update its Plan and Disclosure Statement to reflect the terms of the settlement, and anticipates filing the documents with the Court within the next few days. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Disclosure Statement hearing began on July 10, 2007. (Solutia Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Named as Co-Defendant in $685 Million Cancer Lawsuits ------------------------------------------------------------------ Solutia Inc. was named as co-defendant in 77 cancer lawsuits, seeking $685,000,000 in total damages, over Monsanto Company's old plant in Nitro, Chris Dickerson at The West Virginia Record reported. The complaints, filed by Stuart Calwell, Esq., at The Calwell Practice PLLC, in Charleston, West Virginia, in Putnam Circuit Court, on October 1, 2007, also list Monsanto, Pharmacia Corporation, Akzo Nobel Inc., Flexsys America, and Apogee Coal Company, as defendants. According to the Complaints, the plaintiffs seek: (a) compensatory damages of $5,000,000 each to compensate them for past, present and future medical bills and pain and suffering, as well as 'mental anguish and loss of enjoyment of life"; (b) $300,000,000 in total punitive damages; and (c) certification of the cases as a class action. "We think the lawsuits have great merit," Mr. Dickerson quoted Mr. Calwell as saying. "The complaints speak for themselves." Under each complaint, the "plaintiffs allege the same series of occurrences involving the negligent and otherwise unlawful release of dioxin from properties owned and/or controlled by the defendants caused or significantly contributed to their cancer." Mr. Calwell's complaints detail the history of Nitro, the Old Monsanto plant, the Monsanto Company and the other defendant companies which are successors, Mr. Dickerson reported. "During the years that Monsanto was operating its trichlorophenol plant, it adopted an unlawful practice of disposing of dioxin waste materials by a continuous process of open 'pit' burning," the Complaints state. "This practice was largely denied by Monsanto whose representatives characterized the practice as an 'incineration process' when asked by regulatory authorities. "Further, the manufacturing process itself was dusty and Monsanto's dust control was haphazard." According to the Complaints, more than 3,000 pounds of a dioxin was released into the Nitro air because of that. Sampling showed levels of 2,200 parts per trillion, while U.S. Environmental Protection Agency standards require a level less than 4 parts per trillion, Mr. Dickerson said. Monsanto owned and operated the plant from 1934 to 2000, according to the complaints. The Nitro plant was operated by Monsanto until 1995 when the plant merged with Akzo Nobel, a Dutch company, and began operating as Flexsys America Inc. In 1997, Monsanto renamed a subsidiary as Solutia Inc. and the Nitro was distributed to Solutia. The plant closed in 2004. Specifically, the Complaints cite a 1949 incident in which a safety disc failed at the plant, exposing workers to a chemical cloud that caused 226 people to become ill, noted Mr. Dickerson. The dioxin in question, known as 2,4,5 trichlorophenoxyacidic acid or 2,4,5-T, was used by the military as part of the herbicide "Agent Orange" in Vietnam. The Complaints say production of the dioxin "continued 7 days a week 365 days a year from 1949 to approximately 1971 at the Monsanto Nitro plant." The Plaintiffs maintain that the Defendants knew or should have known the Nitro plant site was contaminated and dangerous. According to the Complaints, the Defendants "acted carelessly, negligently, recklessly and/or deliberately," according to The West Virginia Record. "The proposed class is made up of persons with one or more dioxin related cancers and who live or lived in the class defined area ... for at least two years during the period 1949 to the present and/or have attended school in the class defined area for at least two years and/or who have been employed in a building in the class defined area for two years or more," the Complaints state, adding that there are 12,503 residences in the area, the paper said. Earlier this year, nine families filed similar suits in Kanawha Circuit Court, asserting that the former Monsanto Company is responsible for personal injury and wrongful death by exposure to the dioxins or furans produced at the plant, the paper noted. Mr. Calwell told the paper that he has another pair of possible class-action lawsuits about property damage stemming from dioxin exposure in Nitro against Monsanto that are pending in Putnam Circuit Court, which suits were filed in December 2004, and are up for class certification later this month. According to a June 29, 2007 progress report on the Nitro facility, Solutia has indicated to the appropriate government agencies that it would continue on-site remediation activities. Demolition of the area began in June 2004 and was completed in June 2005. Solutia is presently evaluating the surface water management program for the Nitro facility. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Disclosure Statement hearing began on July 10, 2007. (Solutia Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SPHERIS INC: Posts $1.8 Million Net Loss in Quarter Ended June 30 ----------------------------------------------------------------- Spheris Inc. reported a net loss of $1.8 million during the second quarter ended June 30, 2007, compared with a net loss of $2.8 million during the same period in 2006. The decrease in net loss during the current year period was primarily due to improvements in operating income, off-set by higher interest expense associated with variable interest rates on the company's senior credit facilities. Net revenues for the second quarter of 2007 were $50.5 million compared with $52.3 million in the second quarter of 2006. The decrease in net revenues during the second quarter of 2007 from the prior-year period was primarily due to delayed implementations of signed new business. Operating income was $2.5 million during the second quarter of 2007 compared with $1.1 million during the prior-year period. The increase in operating income primarily reflects increased utilization of the company's global production capabilities, lower medical language specialist direct costs and decreased depreciation expense. Earnings before interest, taxes, depreciation and amortization were $8.0 million in the second quarter of 2007 compared with $7.6 million in the prior-year period. First Six Months of 2007 Net revenues for the first six months of 2007 were $102.9 million compared with $104.3 million in the first six months of 2006. Operating income was $4.6 million during the first six months of 2007 compared with $2.2 million during the prior-year period. EBITDA was $16.2 million in the first six months of 2007 compared with $15.3 million in the prior-year period. The company's net loss during the first six months of 2007 was $4.0 million compared with $5.7 million in the prior-year period. The decrease in net loss during the current period was primarily due to improvements in operating income, off-set by higher interest expense associated with variable interest rates on the company's senior credit facilities. Commenting on the results, Steven E. Simpson, president and chief executive officer of Spheris, stated, "The year over year EBITDA growth we achieved during the second quarter is clear evidence of the progress being made on our major strategic initiatives. Operational efficiencies resulting from increased utilization of our global resources, achievement of key technology milestones related to our Spheris Clarity(TM) platform, and further deployment of speech recognition to our customers continue to drive momentum in our business and position Spheris for long-term success." Simpson added, "As we have stated previously, although the main planks of our strategy are working well, we consider 2007 to be a building year and expect new revenue growth to accelerate in 2008 and beyond as customers in the clinical documentation industry begin to embrace our best-in-class blended offering of technology and services." At June 30, 2007, the company's consolidated balance sheet showed $312.8 million in total assets, $229.2 million in total liabilities, and $83.6 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?2426 Balance Sheet Highlights As of June 30, 2007, the outstanding indebtedness under the company's senior secured credit facilities was $73.3 million and the outstanding indebtedness under the company's senior subordinated notes was $125.0 million. On July 17, 2007, the company entered into a new financing agreement to replace the company's existing senior credit facility. In addition to providing additional financing flexibility, the refinancing was driven by more favorable margin rates on the interest elections available under the new facility and additional capacity for borrowings under the revolving loan portion of the new facility. Liquidity Highlights As of June 30, 2007, Spheris held $13.2 million in unrestricted cash and cash equivalents. During the first half of 2007, the company generated cash from operating activities of $9.4 million compared with $3.2 million of cash generated from operating activities during the first half of 2006. The $6.2 million increase over the prior-year period primarily reflects operating income improvements, improved collections on accounts receivable and the timing of interest payments on the Company's senior secured credit facilities. About Spheris Inc. 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. STONE ENERGY: S&P Affirms "B-" Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Service affirmed the ratings, including the 'B+' corporate credit rating, on exploration and production company Stone Energy Corp. and removed the ratings from CreditWatch, where they had been listed with negative implications since June 28, 2006. The outlook is negative. As of Aug. 2007, Lafayette, Louisiana-based Stone had $400 million in long-term debt, or $646 million when fully adjusted for operating leases and asset retirement obligations. The company recently completed the sale of substantially all of its Rocky Mountain assets to Newfield Exploration Co. "The affirmation followed a full review of the company and its announced strategic initiatives after its recent property sale," said Standard & Poor's credit analyst Jeffrey Morrison. The negative outlook incorporates S&P's continued concerns as to whether management can improve upon weak reserve replacement measures and elevated finding and development costs over the intermediate-to-longer term. The ratings on Stone reflect its small, geographically concentrated reserve base; the short, less-than-five-years' life of its proved developed producing reserves; very high F&D costs in core areas of operations; and participation in the highly cyclical and capital-intensive E&P segment of the oil and gas industry. Concerns are partially mitigated by enhanced near-term liquidity, favorable oil price trends, a two- to three-year inventory of low- risk exploitation projects from which to cull additional production, improved leverage metrics, and favorable cash margins. SWIFT MASTER: Fitch Expects to Rate $9.9MM Class D Notes at BB+ --------------------------------------------------------------- Fitch expects to rate SWIFT Master Auto Receivables Trust, series 2007-2 (SMART 2007-2), as: -- $750,000,000* Floating-Rate Class A Note 'AAA'; -- $69,100,000* Floating-Rate Class B Note 'A+'; -- $29,600,000* Floating-Rate Class C Note 'BBB+'; -- $9,900,000* Floating-Rate Class D Note 'BB+' The $128,242,105* Floating-Rate class E note is not rated by Fitch. *Subject to change. SWIFT MASTER: S&P Rates $13.2 Million Class D Notes at BB --------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to SWIFT Master Auto Receivables Trust's $1.145 billion floating-rate asset-backed notes series 2007-2. The preliminary ratings are based on information as of Oct. 9, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement in the form of subordination and the reserve fund; -- The enhancement triggers that increase the required reserve account amount; -- The collateral's credit quality and diversity; -- The concentration limits to maintain the collateral pool's dealer diversity; -- The sound legal structure; and -- The historical loss performance of similar collateral funded by earlier issuances. Preliminary Ratings Assigned SWIFT Master Auto Receivables Trust Class Rating Amount ----- ------ ------ A AAA $1,000,000,000 B A $92,100,000 C BBB $39,500,000 D BB $13,200,000 E NR $171,000,000 NR — Not rated. SYMBION HEALTH: Moody's Reviews Ba1 Rating and May Downgrade ------------------------------------------------------------ Moody's Investors Service reported that the Ba1 issuer rating on Symbion Health Limited remains on review for possible downgrade. This follows the announcement of the company's revised proposal to sell its Diagnostic assets to Healthscope and its Consumer and Pharmacy Services assets to a private equity consortium. "The rating review continues to reflect the uncertainty surrounding Symbion's financial and operating profiles going forward," says Peter Fullerton, a Moody's AVP/Analyst. The revised proposal incorporates a similar outcome to the original proposal previously presented to Symbion shareholders. This involves the effective sale or transfer (via script for script arrangements) of all of Symbion's assets to Healthscope and a private equity consortium. Should the revised proposal be implemented, the rated debt at the Symbion level is expected to be repaid. Symbion Health Limited, headquartered in Melbourne, is a diversified Australian domestic health care business. Most of its earnings are derived from the provision of pathology and diagnostic imaging services. The company also manufactures and markets vitamin and mineral supplements (consumer nutriceuticals). In addition, it operates a wholesale medical products distribution network, focusing on the distribution of prescription drugs to pharmacies and hospitals. TAYLOR BROTHERS: Case Summary & Seven Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Taylor Brothers, LLC 1021 North MacDill Avenue Tampa, FL 33607 Bankruptcy Case No.: 07-09455 Chapter 11 Petition Date: October 9, 2007 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Russell M. Blain, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Advanta Bank Corp. $25,082 P.O. Box 8088 Allentown, PA 18101-8088 John Miedema $10,000 5217 Southern Hills Drive Frisco, TX 75034-6857 Pender Newkirk & Co. $3,353 P.O. Box 172299 Tampa, FL 33672 Johnstone Supply $3,200 Superior Floor Care $1,900 Preston & Farley $613 Neil S. Schecht $600 THORNBURG MORTGAGE: Revises Estimates on Asset Sales and Losses --------------------------------------------------------------- Thornburg Mortgage Inc. disclosed adjustments and revisions to estimates that it had regarding certain financial developments that had taken place during the third quarter. First, the company estimated that it has sold approximately $22 billion of high quality ARM assets since Aug. 10, 2007, as opposed to the estimate of $20.4 billion in asset sales as of Aug. 17, 2007, or an additional $1.6 billion in asset sales, during the quarter. The company also has revised its estimated aggregate loss for the third quarter resulting from asset sales to $1.099 billion, as opposed to the loss estimate of $863 million, or an increase of $236 million in the estimated loss. The revision of the loss estimate is due to the receipt of actual sale price documentation for asset liquidations conducted by third-party financing counter-parties as opposed to those sales conducted by the company, and to additional asset sales that occurred after Aug. 17, 2007, well as a $6 million impairment charge on one mortgage-backed security backed by pay option ARMs. The realized losses on asset sales are capital losses for tax purposes and the impairment charge is an unrealized loss and thus not subject to tax. Accordingly, none of the entire $1.099 billion loss will reduce the amount of taxable income available for dividend distribution in 2007. The company believes that the current credit reserves on the company's balance sheet will be adequate to cover expected and potential future credit losses on its loan portfolio, as it has not experienced any material deterioration in the credit performance of its loan portfolio since July 31, 2007. The company estimates that delinquent loans will represent 0.27% of the loan portfolio as of Sept. 30, 2007, versus the estimate at Aug. 17, 2007, of 0.23% of the loan portfolio as of July 31, 2007. Second, the company has received revised market value prices for its securities portfolio as of Sept. 30, 2007, and expects that its accumulated other comprehensive loss will include a $286 million unrealized market value loss on its mortgage securities portfolio as compared to a $262 million market value loss estimated as of Aug. 17, 2007. However, based on the company's analysis of its mortgage securities portfolio, this unrealized market value loss is not expected to result in material actual credit losses. Third, the company expects to report an estimated $16 million loss on mortgage loans funded during the third quarter, which resulted from fundings made during September 2007, for which the mortgage interest rate had been locked for borrowers prior to August 2007, and which the company was committed to fund at the locked rate. It is expected that the lower market value reflected will result in higher yields on these loans, which are scheduled to be securitized in the fourth quarter. This loss on the pipeline was partially offset by an estimated $4.1 million gain on terminated hedging instruments. The resulting net loss totaled $11.9 million in the third quarter. "The global dislocation of the mortgage finance and credit markets this past summer has had a greater impact on our balance sheet than we initially estimated," Larry Goldstone, president and COO of Thornburg Mortgage, said. "However, we have begun to see a modest improvement in financing conditions since August. Despite the greater than reported losses, we believe we have adequate liquidity to support our current borrowings portfolio and excess capital to continue to fund new loans and to opportunistically purchase and finance other high-quality mortgage assets, provided market conditions do not deteriorate further." "As market conditions and financing terms continue their return to normalcy, we believe that the future profitability of the company will improve as we put the events of August and September 2007 behind us," Mr. Goldstone added. "It's important to note that the earlier loss estimates previously announced by the company were based on the best information available to us at the time," Mr. Goldstone concluded. "In many cases, where sales were conducted by counter parties instead of by us, we did not have sale price documentation and had to rely on our estimates of sale prices and the application of proceeds. We continue to collect from third parties the balance of the information needed to finalize these amounts, so there could be further changes to these estimates. Any additional changes will be reported in the company's third-quarter earnings release or in the company's Form 10-Q quarterly report for the third quarter." About Thornburg Mortgage Inc. Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single- family prime residential mortgage lender focused on the jumbo segment of the adjustable rate mortgage market. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on Sept. 20, 2007, Fitch Ratings assigned these ratings on Thornburg: (i) issuer default rating 'CCC'; (ii) senior unsecured notes 'CCC-/RR5'; (iii) unsecured subordinate notes 'CC/RR6'; and (iv) rreferred stock 'CC/RR6'. All ratings remain on Rating Watch Negative. TOUSA INC: S&P Revises Outlook to Negative from Developing ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on TOUSA Inc. to negative from developing. The previous developing outlook was assigned July 12 at the time of TOUSA's settlement with creditors of the company's EH/Transeastern LLC joint venture. As a result of recent public announcements by TOUSA and worsening market indicators, S&P believe that it is increasingly unlikely that the company will meet its debt reduction goals. In addition to the outlook revision, S&P affirmed all of its ratings on TOUSA. "The outlook revision reflects our expectation that continued weakness in TOUSA's core homebuilding markets will place further pressure on the company's stressed and highly leveraged balance sheet," said credit analyst Tom Taillon. Mr. Taillon said that earlier this month, TOUSA announced that it was suspending further public guidance in light of these challenging and unpredictable market conditions. "Additional factors, such as mortgage industry turmoil, weak sales and pricing trends, and continued negative buyer sentiment, make it less likely that TOUSA will be able to sell assets and achieve its debt-reduction goals within the initially targeted timeframe." The negative outlook reflects our expectation that a recovery in TOUSA's operating performance will lag that of the broader housing industry because of this company's significant exposure to oversupplied Florida housing markets. If the company and its advisors are unable to sufficiently reduce inventory, debt costs, and corporate overhead, S&P will lower its ratings on TOUSA. However, if the company is able to monetize assets and materially improve the capital structure, S&P would consider revising its outlook back to stable. TRANSLAND FINANCIAL: Bankruptcy Trial Adjourned to October 19 ------------------------------------------------------------- The trial for TransLand Financial Services Inc.'s involuntary chapter 11 bankruptcy, originally set for Oct. 3, 2007, was moved by the Hon. Arthur B. Briskman of the U.S. Bankruptcy Court for the Middle District of Florida to October 19, the American Bankruptcy Institute reports citing the Orlando Business Journal. According to the report, the trial was adjourned after Judge Briskman approved a request by creditors for continuance. Headquartered in Maitland, Florida, Transland Financial Services, Inc. -- See http://www.transland.com/-- is a full service mortgage lender. On Aug. 23, 2007, three creditors, Tier One Bank, Federal Trust Bank, and MidCountry Bank, filed an involuntary chapter 11 petition against the company (Bankr. M.D. Fla. Case No. 07-03834). The creditors say they are collectively owed in excess of $22 million by Transland. Lynn James Hinson, Esq., at Dean Mead Egerton, represents Tier One Bank. Jeffry R Jontz, Esq., at Swann & Hadley PA represents Federal Trust. Esther A. McKean, Esq., at Akerman Senterfitt represents MidCounty Bank. Roy S. Kobert, Esq., at Broad and Cassel, represents Transland. TUPPERWARE BRANDS: Inks New Credit Deal with Lower Interest Rate ---------------------------------------------------------------- Tupperware Brands Corporation has entered into a new secured agreement with improved terms with a group of banks. The new credit agreement includes a $200 million revolving facility and $600 million in term loans, replacing the current agreement that also had a $200 million revolving facility and $601 million of term loans outstanding as of the end of the company's second quarter. Similar to the previous agreement, it provides for floating rate borrowings but at a lower interest rate spread and with lower commitment fees. The company estimates that the improved terms will result in lower cash interest expense of approximately $20 million over the agreement's five-year term, in comparison with interest that would have been incurred under the previous agreement. Other terms, including the debt covenants under the new agreement are comparable with the previous agreement. In connection with the termination of the company's previous credit agreement, in its third quarter ending Sept. 29, 2007, it will record one-time costs of about $10 million, for the write off of deferred debt costs and the termination of floating-to-fixed interest rate swaps. J.P. Morgan Securities Inc. was the sole book runner and agent. J.P. Morgan Securities Inc. and Key Bank N.A. were the joint lead arrangers. Winston & Strawn LLP represents JPMorgan Chase Bank as agent in connection with an $800 million secured revolving credit facility for Tupperware. About Tupperware Tupperware Brands Corporation -- http://www.tupperware.com/-- is a global direct seller of premium, innovative products across multiple brands and categories through an independent sales force of approximately 1.9 million. Tupperware's product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through theTupperware brand and beauty and personal care products through its Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Swissgarde brands. Tupperware reported revenues of USUS$1.8 billion for the twelve months ended June 2007. The company has operations in Indonesia, Argentina, Australia, Bahamas, Brazil, China, France, Germany, Philippines, Spain, and Sweden, among others. * * * As reported in the Troubled Company Reporter on Sept. 19, 2007, Moody's Investors Service assigned a Ba1 rating to Tupperware Brands Corporation proposed senior secured credit facilities, consisting of a $200 million revolving credit facility and a $550 million term loan A, both due 2012. Moody's also affirmed the company's Ba2 corporate family rating and Ba3 probability of default rating, and changed the outlook to positive from stable. TXU CORP: Prices Cash Tender Offers for TCEH's Senior Notes ----------------------------------------------------------- TXU Corp. has determined the total consideration and tender offer consideration to be paid pursuant to its cash tender offers and related consent solicitations for the 4.80% Series O Senior Notes due 2009 of TXU Corp. and the 6.125% Senior Notes due 2008 and 7% Senior Notes due 2013 of Texas Competitive Electric Holdings Company LLC. The total consideration payable for Notes accepted for payment that were validly tendered with consents and not validly withdrawn at or prior to 5:00 p.m., New York City time, on Oct. 5, 2007, will be an amount equal to the total consideration for each $1,000 principal amount of Notes. The tender offer consideration payable for Notes accepted for payment that are validly tendered after the Consent Payment Deadline but at or prior to midnight, New York City time, on Oct. 23, 2007, will be an amount equal to the total consideration minus the $30 consent payment. In each case, holders whose Notes are accepted for payment in the tender offers will receive accrued and unpaid interest for such Notes from the last interest payment date to, the applicable payment date for Notes purchased in the tender offers. The pricing information for Tender Offers are: a) CUSIP No.: 90210VAD0 Issuer: TCEH Security: 6.125% Senior Notes due 2008 Applicable Spread: 37.5 bps Tender Offer Yield: 4.693% Total Consideration: $1,005.96 Consent Payment: $30 Tender Offer Consideration:$975.96 b) CUSIP No.: 873168AJ7 Issuer: TXU Corp Security: 4.80% Series 0 Senior Notes due 2009 Applicable Spread: 25 bps Tender Offer Yield: 4.373% Total Consideration: $1,008.43 Consent Payment: $30 Tender Offer Consideration: $978.43 c) CUSIP No.: 90210VAB4 Issuer: TCEH Security: 7% Series 0 Senior Notes due 2013 Applicable Spread: 50 bps Tender Offer Yield: 4.835% Total Consideration: $1,102.28 Consent Payment: $30 Tender Offer Consideration: $1,072.28 The tender offers and consent solicitations are subject to the satisfaction of certain conditions, including the proposed merger of TXU Corp. with Texas Energy Future Merger Sub Corp, a wholly- owned subsidiary of Texas Energy Future Holdings Limited Partnership having occurred or such merger occurring substantially concurrent with the initial payment date for the tender offers. TXU Corp. has retained Goldman, Sachs & Co. and Banc of America Securities LLC to act as the dealer managers for the tender offers and solicitation agents for the consent solicitations. Goldman, Sachs & Co. may be contacted at (212) 357-0775 (collect) or (877) 686-5059 (toll-free) and Banc of America Securities LLC may be contacted at (704) 388-9217 (collect) and (888) 292-0070 (toll-free). Requests for documentation may be directed to Global Bondholder Services Corporation, the Information Agent, which can be contacted at (212) 430-3774 (for banks and brokers only) or (866) 804-2200 (for all others toll- free). About TXU Corp. Headquartered in Dallas, Texas, TXU Corp. (NYSE: TXU) -- http://www.txucorp.com/-- is an energy holding company that manages a portfolio of competitive and regulated energy subsidiaries, primarily in Texas , including TXU Energy, Luminant, and Oncor. TXU Energy provides electricity and related services to 2.1 million electricity customers in Texas. Luminant has over 18,300 MW of generation in Texas , including 2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity. Oncor operates a distribution and transmission system in Texas , providing power to three million electric delivery points over more than 101,000 miles of distribution and 14,000 miles of transmission lines. TCEH is the holding company for TXU Corp.'s competitive businesses, Luminant and TXU Energy, and was formerly known as TXU Energy Company LLC. TXU CORP: Completes TEF Merger, Changes Name to Energy Future ------------------------------------------------------------- TXU Corp. completed its merger agreement with Texas Energy Future Holdings Limited Partnership. TEF is led by a group of investors including Kohlberg Kravis Roberts & Co., Texas Pacific Group and Goldman Sachs Capital Partners. TXU shareholders approved the merger at the company's Annual Meeting on Sept. 7, 2007. With the completion of the merger, TXU Corp. has changed its name to Energy Future Holdings Corp. Shares of TXU common stock, which are listed on the New York Stock Exchange and the Chicago Stock Exchange, ceased trading at close of market on Oct. 10, 2007, and will be delisted. Under the terms of the merger agreement, TXU shareholders are entitled to $69.25 in cash for each share of TXU common stock held. Lehman Brothers, Citigroup and Morgan Stanley became equity investors at closing. Completion of the merger agreement marks the final step in the transformation into a privately held company. In addition, the company is expected to achieve environmental performance in the industry and involvement and dialogue with environmental, government and community leaders. "Our investment horizon allows the board, management and employees to formulate and implement a long-term strategy to meet customer needs and to respond to the significant energy challenges in Texas," Marc Lipschultz of KKR, said. Since the Feb. 26, 2007, merger transaction disclosure, TEF's plans for the company's new direction have received support from consumer groups, environmental groups, labor unions, business leaders and elected officials from communities across Texas. "We have maintained open and productive dialogues with legislators, regulators, customers and consumer advocates," Michael MacDougall of TPG said. "Together, we are proud to be part of a transformation that will benefit -- and in fact already is benefiting -- customers and residents of the state of Texas." New Leadership With the close of the transaction, Donald L. Evans becomes non-executive chairman of Energy Future Holdings Corp. Mr. Evans served as U.S. Secretary of Commerce for four years under President George W. Bush. "We are excited about the opportunities that the completion of this merger provides," Mr. Evans said. "This transaction is not only good for TXU shareholders, but also for employees, customers and residents across the state of Texas. I look forward to working with management and employees to demonstrate our commitment to being a leading corporate citizen, to implementing stronger environmental policies and to providing reliable and affordable power." As non-executive chairman, Mr. Evans will lead the company's board of directors, which will include: -- William Reilly, chairman emeritus of the World Wildlife Fund and former EPA Administrator; -- Lyndon Olson, former U.S. Ambassador to Sweden; -- James Huffines, chairman of the Central Region Plains Capital Bank; and -- Kneeland Youngblood of Pharos Capital Group LLC. Former U.S. Secretary of State James A. Baker, III will serve as advisor to the company. "This company and its employees are ready for the next step, Tom Baker, vice-chairman of TXU Corp. who will transition to chairman emeritus of Energy Future Holdings Corp. "We look forward to implementing additional separation of our three businesses so each can focus on the distinct customers they serve." With the completion of the transaction, C. John Wilder has resigned as TXU Corp. chairman and CEO. Since his arrival in February 2004, Mr. Wilder led the company to substantial performance improvements including: outstanding shareholder returns; a successful business turnaround; and a major restructuring of the operations and growth program. "I am proud of what TXU has become and confident that the company is in good hands. Because of the hard work of TXU employees, these businesses are operating at safe, high-performance levels across many dimensions," Mr. Wilder said. "I'd like to thank John Wilder and the outgoing board of directors for their years of service to the company," Mr. Evans concluded. "They leave a company of outstanding men and women, dedicated to excellence in customer service and energy reliability. We wish the2.00cmm well in their future endeavors." Three Separate and Distinct Companies Energy Future Holdings Corp., a holding company, will continue the transition of its businesses into three separate and distinct business units with separate boards, management teams, and headquarters. Each business will operate independently under the leadership of a CEO: -- Jim Burke will serve as CEO of TXU Energy, a competitive electricity retailer; -- Mike Greene will serve as CEO of Luminant, a competitive power generation business, including mining, wholesale marketing and trading, and construction; and -- Bob Shapard will serve as CEO of Oncor, a regulated electric distribution and transmission business. To maintain smooth ongoing operations, current business unit management and organizational structures will remain in place at least through a transition period, which will be completed in the first half of 2008. Beyond the further separation of the three primary businesses, most employees will experience few differences in their day-to-day jobs. The transition will be seamless to customers. Headquarters for each of the three businesses will remain in the Dallas/Fort Worth area. Consumer and Environment Benefits As a result of the close of the transaction, TXU Energy will reduce retail prices by an additional 5%, resulting in a total 15% price reduction in 2007 for residential customers who had not chosen one of TXU Energy's lower-priced or environmentally friendly options. With this additional reduction TXU Energy will offer the lowest prices of any incumbent competitive retailer in Texas. The value of TXU Energy's lower prices, innovative range of products to meet customer needs, and focus on customer service have contributed to an increase in customer count over the past few months. TEF and TXU Energy have created TXU Energy Access, a comprehensive program representing a commitment of more than $150 million over 5 years to assist low-income customers. As part of the transaction, TEF made a range of commitments to strengthen environmental policies, make significant investments in alternative energy and institute corporate policies tied to climate stewardship. Those efforts helped earn the endorsement of Environmental Defense and the Natural Resources Defense Council. In keeping with the commitment to reduce the number of planned coal-fueled generation units from 11 to three, the eight air permit applications will be withdrawn by Luminant. The eight air permit applications were suspended shortly after the disclosure of the merger agreement. In addition, Energy Future Holdings Corp. will create a sustainable energy advisory board comprised of individuals who represent these interests: the environment; customers; Texas economic development; and ERCOT reliability standards. Board member William Reilly, chairman emeritus of the World Wildlife Fund and former administrator of the U.S. Environmental Protection Agency, will lead the effort to make climate stewardship central to corporate policies. Oncor's 20% Minority Stake In advance of the close of the transaction, Oncor and TEF reached an agreement in principle with the key parties that would resolve all outstanding issues in the Public Utility Commission of Texas review under Public Utility Regulatory Act Section 14.101 related to the change in control of Oncor. The agreement includes provisions under which the PUC would dismiss Oncor's pending rate case. The agreement is subject to approval by the PUC. After the close of the acquisition of TXU Corp. and TEF will sell a twenty percent stake in Oncor. Now that the acquisition is complete, the minority stake sale process will commence and is an important element of the investor group's plan. The sale of a twenty percent minority stake in Oncor has long been part of TEF's plan to enhance Oncor's independence and separation from TXU Corp., TXU Energy and Luminant. The purchaser of the twenty percent stake will not be affiliated with any of the companies owned by TXU Corp. or the parties involved in this transaction, and will have meaningful representation on the Oncor board of directors. In addition, Oncor plans to secure all of its existing long-term debt. This does not include the $800 million principal amount of floating rate senior notes that were redeemed upon completion of the merger as required by the terms of the notes. Oncor's $2 billion credit facility is also secured. Shareholder Information Shareholders of record of TXU Corp. common stock who have stock certificates will receive instructions and a letter of transmittal from Mellon Investor Services LLC, the disbursing agent for the merger, concerning how and where to forward stock certificates for exchange and payment. Shareholders of record whose shares are held in book entry form will receive a check from Mellon without needing to take any action. For shares held in "street name" through a broker, bank or other nominee, shareholders need not take any action to have shares exchanged for cash through the broker, bank or other nominee. For street name shareholders, questions about the receipt of compensation for shares should be directed to the appropriate broker, bank or other nominee. For all other questions regarding the exchange of TXU Corp. common stock shares, please call Mellon Investor Services LLC toll free at 1-877-277-9913. About Energy Future Holdings Headquartered in Dallas, Texas, Energy Future Holdings Corp. fka TXU Corp. (NYSE: TXU) -- http://www.txucorp.com/-- is an energy holding company that manages a portfolio of competitive and regulated energy subsidiaries, primarily in Texas , including TXU Energy, Luminant, and Oncor. TXU Energy provides electricity and related services to 2.1 million electricity customers in Texas. Luminant has over 18,300 MW of generation in Texas , including 2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity. Oncor operates a distribution and transmission system in Texas , providing power to three million electric delivery points over more than 101,000 miles of distribution and 14,000 miles of transmission lines. TCEH is the holding company for TXU Corp.'s competitive businesses, Luminant and TXU Energy, and was formerly known as TXU Energy Company LLC. TXU CORP: Moody's Places Corporate Family Rating at B2 ------------------------------------------------------ As a result of the proposed capital structure presented in the recent 8K filing by TXU Corp in connection with the leveraged buyout by KKR and TPG, Moody's Investors Service has downgraded the ratings for TXU and its subsidiaries and has assigned new Corporate Family Ratings, Probability of Default ratings and Loss Given Default assessments at both the TXU and Oncor Electric Delivery Company LLC entities. Moody's assigned a B2 CFR to TXU and a Ba1 CFR to Oncor. The CFR at TXU encompasses its wholly owned intermediate subsidiary holding company, TXU US Holdings as well as USH's wholly-owned subsidiary, Texas Competitive Electric Holdings. The B2 CFR also reflects the positive benefits of TXU's ownership in Oncor, the regulated electric transmission and distribution utility. Moody's ascribes a significant amount of credit enhancement associated with Oncor's proposed ring fencing provisions, which helped to support the rationale for assigning a separate CFR for this lower- risk regulated utility. These actions conclude the review for possible downgrade that was initiated on February 26th, 2007. Utilizing Moody's LGD methodology and the assigned Ba1 CFR for Oncor, the ratings for Oncor's existing senior unsecured notes have been downgraded to Ba1 from Baa2. In addition, a Ba1 rating has been assigned to Oncor's new $2 billion senior secured revolver. It is our expectation that Oncor's existing senior unsecured debt will be secured by the same collateral package securing the new revolver. Once Oncor's senior unsecured debt conforms as senior secured debt, the ratings on the conformed senior secured debt will also be rated Ba1. Essentially, because Oncor has a single class of debt, the ratings on the debt will match its CFR. Using the LGD methodology and the assigned B2 CFR for TXU, the ratings for TXU's existing senior unsecured debt have been downgraded to Caa1 from Ba1. In addition, Moody's has assigned a B3 rating to TXU's new senior unsecured (guaranteed) notes. The B3 rating for TXU's new senior unsecured (guaranteed) notes primarily reflects the value of an up-stream guarantee by Oncor. This up- stream guarantee is being made by Energy Future Intermediate Holding Company LLC, an intermediate, subsidiary holding company that is wholly-owned by TXU. Although this entity is outside of Oncor's proposed ring-fence structure, Moody's ascribes a significant amount of benefit to the guarantee based on our analysis of the likely value of Oncor in a default situation. The Baa3 Issuer Rating for TXU US Holdings has been withdrawn. Moody's has assigned a Caa1 rating to TXU US Holdings' senior secured facility bonds and senior unsecured debt. The ratings for these securities are the same at the Caa1 level because Moody's ascribes limited value to the collateral associated with the $78 million of secured facility bonds. The ratings for Texas Competitive Electric Holdings' existing senior unsecured PCRB's have been downgraded to Caa1 from Baa2. In addition, Moody's has assigned a Ba3 rating to TCEH's new $16.45 billion senior secured term loan B; $2.7 billion senior secured revolver; $1.250 billion senior secured Special LC Facility and $4.1 billion senior secured delayed draw term loan B. Moody's also assigned a B3 to TCEH's new $6.75 billion of senior unsecured notes. Moody's also assigned speculative grade liquidity ratings of SGL-3 to TXU and SGL-2 to Oncor. These liquidity ratings reflect the internal cash generation capabilities for the respective entities, the availability of external credit capacity, the headroom under the credit facilities' financial covenants and our view of alternate sources of liquidity. TXU's B2 CFR reflects our primary concern with the amount of debt being incurred at the company in relation to its sustainable cash flow generation over a long-term horizon. Moody's does not anticipate any meaningful debt reduction over the next few years, which raises concerns over the amount of cushion incorporated into the business plan. Moody's notes that over the near-term, the majority of TXU's holding company obligations will be serviced by the up-stream contributions of Oncor, which we view positively, but the relationship shifts more towards TCEH over the longer-term horizon. As a result, Moody's sees a strong correlation between the default probability of TCEH and the default probability of TXU, despite several structural mechanisms designed to keep the entities separate. The B2 CFR also reflects the attractive assets and businesses that TXU owns, most notably the about 8GW's of base-load coal and nuclear generation capacity. These assets are viewed as being structurally advantageous within the Electric Reliability Council of Texas, where power prices are predominately driven by natural gas prices. As a result, TXU's base-load generating facilities should be in a position to produce a significant amount of cash flow over the near-to intermediate time horizon. While Moody's remains concerned with the asset concentration within ERCOT, and the risks associated with an unexpected, lengthy outage at one of these base-load facilities, Moody's believes that TCEH has implemented reasonable mitigation efforts against many downside commodity price scenarios through its sizeable hedging program and hedging strategy. Moody's believes a majority of TXU's enterprise value is associated with its TCEH operations, so distress to TCEH's financial profile would represent a major rating driver behind our determination of distress at TXU. In addition, we note that TCEH's prospective key financial credit metrics are expected to converge with TXU's consolidated metrics, evidence that the entities are closely aligned. While Moody's acknowledges that there are provisions in the loan documents that are designed to insulate TCEH from adverse developments at TXU, we believe that these provisions do little to reduce TXU's dependence on TCEH. TXU has produced, on average, cash flow from operations of about $2.8 billion per year over the past 5-years and $3.2 billion per year over the past 3-years. These CFO amounts represented about 19% and 23% of TXU's consolidated adjusted total debt, respectively. Over the next 3-years, Moody's believes TXU and TCEH are likely to produce CFO as a percentage of adjusted total debt of about 4%, a roughly 80% reduction of the past 5 and 3-year averages, respectively. In Moody's opinion, the extreme leveraging of these cash flows (primarily derived by the more risky generation operations) severely reduces the cushion and flexibility to avoid a potential default if an unexpected or adverse event were to impact the company's businesses. This leverage of the cash flows in the face of the operating, strategic, financial and environmental challenges currently facing this industrial sector only serves to exacerbate this concern. Oncor's Ba1 CFR primarily reflects the significant value associated with the proposed ring fencing provisions that have been announced by TXU, our relatively constructive view of the Public Utility Commission of Texas and the financial profile of the company. Moody's observes that on a stand-alone basis, Oncor is arguably a solid investment grade entity. In addition, Moody's rating methodology for global regulated electric utilities (which is currently being updated) produces a rating for Oncor well within the Baa-rating category. Nevertheless, taking into consideration the upstream guarantee and our view regarding how much value will be extracted from Oncor for the benefit of its parent, lead us to conclude that a Ba1 CFR is the most appropriate rating at this time. Essentially, Moody's believes that TXU and TCEH's business and operating risk profiles, coupled with the new levels of leverage those businesses will incur, create a sufficient level of potential contagion risk that Oncor's otherwise investment grade status has been negatively impacted, regardless of the technical and legal provisions associated with the proposed ring-fencing. With respect to Oncor's financial profile, Moody's notes that Oncor has produced, on average, CFO of about $0.6 billion per year over the past 5-years and $0.7 billion per year over the past 3- years which represented about 14% and 16% of Oncor's consolidated adjusted total debt, respectively. The adjusted total debt balances include the Aaa-rated securitization debt that was issued in 2004 as well as the other standard adjustments Moody's applies to financial statements. Over the next 3-years, Moody's believes Oncor will likely produce CFO as a percentage of adjusted total debt of about 15%, which will continue to position the company for this metric well within the investment grade Baa ratings category. The rating outlooks for TXU, Oncor, TXU US Holdings and TCEH are stable given our expectation that the companies will perform operationally as well as financially within the assumption parameters provided by the new equity investors, new management team and new boards of directors throughout the TXU enterprise. These assumption parameters include a financial strategy that will produce cash flow to adjusted total debt ratios in the mid-teen's for Oncor and less than 5% for both TXU and TCEH, no meaningful extractions of cash from any TXU entity by the new equity investors, and a capital investment strategy that is primarily designed to maintain the operating performances and safety and reliability standards of the existing base-load fleet and electric T&D system. TXU Corp. is an energy company headquartered in Dallas, Texas. Ratings assigned: TXU Corp.: -- Corporate Family Rating at B2 -- Probability of Default rating at B2 -- Speculative Grade Liquidity rating at SGL-3 -- Senior unsecured (guaranteed) notes at B3 (LGD4, 69%) -- Senior unsecured (guaranteed) PIK notes at B3 (LGD4, 69%) Oncor Electric Delivery Company LLC: -- Corporate Family rating at Ba1 -- Probability of Default rating at Ba2 -- Speculative Grade Liquidity rating at SGL-2 -- Senior secured revolver at Ba1 (LGD3, 34%) Texas Competitive Electric Holdings: -- Senior secured revolver at Ba3 (LGD2, 29%) -- Senior secured LC facility at Ba3 (LGD2, 29%) -- Senior secured Term Loan B at Ba3 (LGD2, 29%) -- Senior secured delayed draw term loan B at Ba3 (LGD2, 29%) -- Senior unsecured (guaranteed) notes at B3 (LGD5, 76%) TXU CORP: Planned Capitalization Cues S&P to Cut Rating to B- ------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating of Dallas, Texas-based TXU Corp. and its unregulated subsidiaries to 'B-' from 'BB', based on the planned capitalization program for TXU by a group of acquirers led by Kolberg Kravis Roberts & Co. and TPG Inc. The downgrade reflects the addition of about $24.5 billion in senior secured debt and $6.75 billion in senior unsecured debt at key subsidiaries, the rollover of about $8 billion of existing debt at subsidiaries and TXU, and the addition of $4.5 billion senior unsecured debt at TXU. The rating on TXU is further negatively affected by the planned ring-fencing and legal provisions that the sponsors intend to structure around Oncor Electric Delivery Co. LLC, the company's regulated transmission and distribution subsidiary. The rating on Oncor is affirmed at 'BBB-', but is also placed on CreditWatch with developing implications to reflect these intentions. All ratings for the TXU companies are subject to receipt and review of final transaction documentation and legal opinions. The outlook on all entities except Oncor is stable. TXU provides electricity service in the Texas ERCOT market through two main units. These units include Texas Competitive Electric Holdings Co. LLC (TCEH; formerly TXU Energy Company LLC), which holds unregulated retail and wholesale generation operations that provide about three quarters of consolidated cash flow; and Oncor (formerly TXU Electric Delivery LLC), a regulated T&D company in North Texas serving about 3 million customers, which provides about 25% of consolidated cash flow. Another minor subsidiary, Energy Future Competitive Holdings Co. (EFCH; formerly US Holdings Co.), owns TCEH and is wholly owned by TXU. Post-acquisition, TXU will have about $40 billion in adjusted debt, compared with about $12 billion at present. The stable outlook for all entities, except Oncor, is supported by a favorable base load generation position, a substantial natural gas hedge position, and stable regulated cash flow. Strong demand growth for electricity also supports the stable outlook. "The ratings on TXU and its unregulated subsidiaries are unlikely to be raised in the near term, due to the potential for continuing high leverage and therefore significant refinancing risk in 2014," noted Standard & Poor's credit analyst Terry Pratt. "The ratings could be lowered if the companies take on additional debt or if the operational and retail performance falls below forecasts," he continued. U.S. ENERGY: Posts $14.7 Mil. Net Loss in First Half Ended June 30 ------------------------------------------------------------------ U.S. Energy Systems Inc. disclosed Tuesday that it filed with the Securities and Exchange Commission its report providing preliminary summary financial results for the first six months ended June 30, 2007. These results have not been reviewed or audited by the company's independent registered public accounting firm, and are subject to change prior to the filing of the company's Form 10-Qs for the first and second quarters of 2007. U.S. Energy Systems Inc. reported a net loss of $14.7 million on revenue of $13.7 million for the first six monhts ended June 30, 2007. At June 30, 2007, the company's consolidated balance sheet showed $284.7 million in total assets, $238.8 million in total liabilities, $13.6 million in minority interest, and $32.4 million in total shareholders' equity. About U.S. Energy Systems Headquartered in New York, U.S. Energy Systems Inc. (Nasdaq: USEY) -- http://www.useyinc.com/-- is an owner of green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company has a 100% interest in U.S. Energy Biogas Corp., which owns and operates 23 landfill gas to energy projects in the United States, 20 of which produce electricity and three of which sell landfill gas as an alternative to natural gas. The company also has a 100% interest in Plymouth Envirosystems Inc., which owns a 50% interest in Plymouth Cogeneration Limited Partnership. Plymouth Cogeneration Limited Partnership owns and operates a combined heat and power plant in Massachusetts that produces 1.2MWs of electricity and 7 MWs of heat. The company further has a 79% interest in GBGH, LLC, which owns energy assets and mineral rights in the United Kingdom including a 42MW gas-fired power plant and gas licenses for approximately 100,000 acres of onshore natural gas properties and mineral rights in North Yorkshire, England. GBGH is the parent company of UK Energy Systems LTD. Bankruptcy Warning As reported in the Troubled Company Reporter on Sept. 5, 2007, U.S. Energy Systems, Inc., on June 25, 2007, said that, absent a refinancing, the raising of additional capital or other financial restructuring, the company would be unable, as early as August 2007, to meet operating requirements and certain contractual obligations as they become due. In addition, the company further indicated that it had insufficient funds to make certain required capital contributions required under the UK financing arrangements between September and December of 2007. The failure to obtain such funds is likely to result in USEY filing for protection in the U.S. under Chapter 11 of the Bankruptcy Code and its UK subsidiaries being forced to enter bankruptcy administration in the UK. U.S. WIRELESS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: US Wireless Online, Inc. 9001 Shelbyville Road, Suite 120E Louisville, KY 40222 Tel: (502) 296-7622 Bankruptcy Case No.: 07-33539 Chapter 11 Petition Date: October 9, 2007 Court: Western District of Kentucky (Louisville) Debtor's Counsel: James K. Murphy, Esq. Lynch, Cox, Gilman & Mahan, P.S.C. 500 West Jefferson Street, Suite 2100 Louisville, KY 40202 Tel: (502) 589-4215 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. UNITED RENTALS: Fitch Holds BB- Issuer Default Rating ----------------------------------------------------- Fitch Ratings affirmed the long-term Issuer Default Rating at 'BB-' for United Rentals Inc and United Rentals (North America), Inc. Fitch removed all ratings from Rating Watch negative. The rating outlook is stable. About $2.6 billion in debt was affected by this action. The affirmation reflects Fitch's view that the proposed sale of URI to an affiliate of Cerberus Capital Management L.P. will not materially alter the long-term credit profile of the company. The affirmation removes prior concerns articulated by Fitch regarding potential rating downgrades as a result of the sale. In the event the sale does not proceed as planned, Fitch anticipates no further changes to the IDR. As part of the $7 billion transaction, substantially all outstanding debt will be repaid. New debt issuances are expected to reside at URNA and Fitch expects to assign specific debt level ratings at the closing of the transaction. While the acquisition will likely result in higher leverage and reduced fixed charge coverage in the short term, Fitch's rating includes the expectation that efficiencies will improve and leverage will moderate in a manner consistent with the assigned rating levels. Going forward, Fitch will evaluate the company's progress in creating operational efficiencies to improve cash flow and reduce debt. Positive rating drivers include the company's leadership position in the equipment rental industry, strong retail franchise, and favorable free cash flow trends. Fitch also feels post- acquisition liquidity is adequate for the rating. Fitch's rating concerns center on the company's exposure to seasonal and cyclical factors impacting the equipment rental segment. Fitch acknowledges that a greater than expected slowdown in economic growth or demand for rental equipment could impair the company's ability to reach its performance targets. Also, in the event that leverage is not reduced in line with Fitch's expectations, negative rating action could result. Additionally, Fitch will monitor the impact resulting from the execution of potential strategic changes under new ownership. Fitch affirmed these ratings and removed them from Rating Watch Negative. The rating outlook is stable: United Rentals Inc: -- Long-term Issuer Default Rating (IDR) 'BB-'; United Rentals (North America): -- Long-Term IDR 'BB-'. Fitch expects to assign these ratings at transaction close: United Rentals (North America): -- Long-term IDR 'BB-'; -- Senior unsecured debt 'B+'; -- First lien secured credit facility 'BB+'; -- Second lien secured notes 'BB-' Fitch expects to withdraw these ratings at transaction closing: United Rentals, (North America): -- Subordinated debt 'B' UNIVERSAL FOODS: Panel Taps Schiff Hardin as Bankruptcy Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Universal Food and Beverage Co. Inc. and its debtor-affiliates' bankruptcy cases asks the United States Bankruptcy Court for the Northern District of Illinois for authority to retain Schiff Hardin LLP as its bankruptcy counsel, nunc pro tunc to Sept. 20, 2007. Schiff Hardin will: a. administer the Chapter 11 case and oversight with respect to the Debtors' affairs including all issues arising from the Debtors, the Committee or this case; b. prepare on behalf of the Committee necessary applications, motions, memoranda, order, reports and other legal papers; c. appear in Court and at statutory meetings of creditors to represent the interest of the Committee; d. negotiate, formulate, draft and confirm of a plan of reorganization and matters related to the plan. e. investigate, if any, as the Committee may desire concerning, among other things, the assets, liabilities, financial condition, sale of any of the Debtors' business, and operating issues concering the Debtors' that may be relevant to this Chapter 11 case; f. communicate with the Committee's constituents and others at the direction of the Committee in furtherances of its responsibilities; and g. perform all of the Committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules and the performance of other services as are in the interest of those represented by the Committee. The compensation rates of the firm's professionals are: Designation Hourly Rate ----------- ----------- Partners $335-$630 Associates $230-$410 Legal Assistants $80-$240 To the best of the Committee's knowlegde the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Universal Food Universal Food & Beverage Company, Inc., manufactures and markets food and beverage products. The Debtor and its debtor-affiliates in Georgia and Virginia filed for Chapter 11 petitions on Aug. 31, 2007 (Bankr. N.D. Ill. Lead Case No. 07-15955). Barry A Chatz, Esq., and James A. Chatz, Esq., at Arnstein & Lehr LLP, represent the Debtors. An Official Committee of Unsecured Creditors has been appointed in this case. When they filed for protection from their creditors, the Debtors disclosed $0 assets but an aggregate of more than $20 million in debts. USI HOLDINGS: Fitch Withdraws B- Issuer Default Rating ------------------------------------------------------ Fitch Ratings withdrew the ratings of USI Holdings Corporation due to the lack of public information. In May 2007, USIH announced the completion of the acquisition of the company by GS Capital Partners, a private equity affiliate of Goldman, Sachs & Co. USIH common stock ceased trading on the Nasdaq Exchange and is no longer listed. Fitch will no longer provide rating coverage of USIH. Fitch has withdrawn these ratings: -- Issuer Default Rating (IDR) 'B-'; -- $210 million five-year secured term loan due March 24, 2011 to 'B/RR3'; -- $525 million seven-year senior secured term loan 'B/RR3'; -- $100 million six-year senior secured revolving credit facility 'B/RR3'; -- $225 million floating rate senior notes due Nov. 15, 2014 'B-/RR4'; -- $175 million 9.75% senior subordinated notes due May 15, 2015 'CCC+/RR5' VESCOR DEVELOPMENT: Taps M. Norman as Chief Restructuring Officer ----------------------------------------------------------------- Vescor Development LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Nevada for permission to employ Merril R. Norman, MBA, CPA as their chief restructuring officer. The Debtors deemed it best to hire a CRO since the Court had required the Debtors' affiliates, Vescor Development 3 LLC and two other affiliates which filed for chapter 11 protection last year, to retain a qualified CRO as a condition of plan confirmation. Mr. Norman will be primarily responsible for the Debtors' obligations and duties as debtors-in-possession in their cases. Also, Mr. Norman will manage, control and operate their business and to assist them in their restructuring efforts. Particularly, Mr. Norman will: a. develop and negotiate a financial restructuring plan to be filed in the bankruptcy case; b. develop and negotiate a plan of reorganization with, among others, the Debtors' creditors; c. interface with any committee of the Debtors' unsecured creditors, the U.S. Trustee and other interested parties; d. direct and interface with attorneys, managers, officers, employees, agents and other professionals of the Debtors and their affiliates; e. compile relevant financial information regarding the Debtors; f. execute documents and pleadings as the authorized representative of the Debtors; g. file all necessary and appropriate filings in the case, including, without limitation, monthly financial reports; h. manage the Debtors' financial and treasury functions; i. maintain, invest and distribute property of the estates of the Debtors; j. file objections to claims and compromise and settle claims; k. administer the property of the estates of the Debtors by managing, abandoning, enforcing, settling, compromising, collecting, or taking other action to maximize the value of the estates, including commencing, continuing or defending contested matters, adversary proceedings, litigation, arbitrations or mediations; l. develop and implement business proposals and budgets; m. supervise the preparation of the Debtors' financial statements, tax returns, filings with the U.S. Trustee and other filings required by governmental agencies; n. testify and make declarations on behalf of the Debtors; o. take actions and execute documents and pleadings; p. in the event Mr. Norman is terminated or resigns as CRO, work diligently and in good faith to effect a smooth, orderly and efficient transition on the Debtors' books, records and administration to the successor. The Debtors will pay Mr. Norman on a fixed hourly basis at $275 plus reimbursements of other charges. Other consultants who may help Mr. Norman are Mike Comarell and Mark Anderson, whose rates are $75 and $65 per hour, respectively. Mr. Norman holds a $20,000 retainer that the Debtors paid on Aug. 20, 2007. To the best of the Debtors' knowledge, Mr. Norman does not represent any interest adverse to the Debtors or their estates. About Vescor Development Henderson, Nevada-based Vescor Development LLC develops real estate. The company and its affiliates share common management and ownership. Apex MM serves as the Debtors' manager. The company and three of its affiliates, ADL 1 LLC, IDL 9 LLC and JDL 10 LLC, filed for chapter 11 bankruptcy protection on Aug. 20, 2007 (Bankr. D. Nev. Case Nos. 07-15210 through 07-15213). Laurel E. Davis, Esq. at Fennemore Craig, P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed total assets of $151,954,690 and total debts of $85,590,847. The company's affiliates, Vescor Development 3 LLC, BDL 2 LLC and EDL 5 LLC had filed for chapter 11 protection on Aug. 26, 2006 (Bankr. D. Nev. Lead Case No. 06-12094). Laurel E. Davis, Esq., at Lionel Sawyer & Collins serves as the Debtors' counsel. When Vescor filed for protection from its creditors, it listed total assets of $109,570,385 and total debts of $63,290,195. Vescor Development 3 and its debtor-affiliates delivered its reorganization plan and disclosure statement in January 2007, whereby they planned to pay its general unsecured creditors in full. That plan was confirmed on March 20, 2007. VESCOR DEVELOPMENT: U.S. Trustee Questions Retention of CRO ----------------------------------------------------------- Sara L. Kistler, the United States Trustee for Region 17, asks the U.S. Bankruptcy Court for the District of Nevada to deny Vescor Development LLC and its debtor-affiliates' request to employ Merill R. Norman, MBA, CPA as their chief restructuring officer. The U.S. Trustee relates that the CRO appointment lacks creditor consent because one of the Debtors' largest creditors objected to the retention. The U.S. Trustee also relates that the proposed CRO is subject to termination at will by the Debtors' prior management and will also serve as representative for the Debtors. In addition, the U.S. Trustee declares that the Debtors' case does not warrant the appointment of a CRO. Moreover, the U.S. Trustee questions whether the Debtors' recourse to retain a CRO is a means to avoid the appointment of a trustee. About Vescor Development Henderson, Nevada-based Vescor Development LLC develops real estate. The company and its affiliates share common management and ownership. Apex MM serves as the Debtors' manager. The company and three of its affiliates, ADL 1 LLC, IDL 9 LLC and JDL 10 LLC, filed for chapter 11 bankruptcy protection on Aug. 20, 2007 (Bankr. D. Nev. Case Nos. 07-15210 through 07-15213). Laurel E. Davis, Esq. at Fennemore Craig, P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed total assets of $151,954,690 and total debts of $85,590,847. The company's affiliates, Vescor Development 3 LLC, BDL 2 LLC and EDL 5 LLC had filed for chapter 11 protection on Aug. 26, 2006 (Bankr. D. Nev. Lead Case No. 06-12094). Laurel E. Davis, Esq., at Lionel Sawyer & Collins serves as the Debtors' counsel. When Vescor filed for protection from its creditors, it listed total assets of $109,570,385 and total debts of $63,290,195. Vescor Development 3 and its debtor-affiliates delivered its reorganization plan and disclosure statement in January 2007, whereby they planned to pay its general unsecured creditors in full. The Court confirmed that plan on March 20, 2007, with a condition to retain a qualified chief restructuring officer. VONAGE HOLDINGS: Requests Rehearing of Verizon Patent Decision -------------------------------------------------------------- Vonage Holdings Corp. has filed a motion for a review by the original three-judge panel or the full panel of the U.S. Court of Appeals for the Federal Circuit sitting en banc of the September 26 decision in its patent litigation with Verizon Communications Inc. En banc signifies a decision by the full court of all the appeals judges in jurisdictions where there is more than one three- or four-judge panel. As reported in the Troubled Company Reporter on Sept. 27, 2007, the U.S. Court of Appeals for the Federal Circuit partially remanded a March 8 jury verdict in the U.S. District Court in Alexandria, Virginia that the company infringed on three Verizon patents. The U.S. Court of Appeals for the Federal Circuit remanded the infringement verdict on the 880 patent and affirmed the verdict on one patent claim in each of the 574 and 711 patents. Further, the Court of Appeals vacated the entire award of $58 million in damages and the 5.5% royalty. The Court of Appeals remanded the case to the U.S. District Court and directed that the court retry those aspects of the original case. "This move represents the next logical step for Vonage in managing this litigation and continuing to move our business forward," Vonage Chief Legal Officer Sharon O'Leary said. "We recently settled our case with Sprint, and continue to explore all legal options available to put the Verizon litigation to rest." Verizon Litigation On June 12, 2006, Verizon filed a suit against Vonage and its subsidiary Vonage America Inc., with the U.S. District Court for the Eastern District of Virginia. Verizon alleged that the company infringed seven patents in connection with providing VoIP services and sought injunctive relief, compensatory and treble damages and attorneys' fees. Verizon dismissed its claims with respect to two of its patents prior to trial, which commenced on Feb. 21, 2007. After trial on the merits, a jury returned a verdict finding that the company infringed three of the patents-in-suit. The jury rejected Verizon's claim for willful infringement, treble damages, and attorneys' fees, and awarded compensatory damages in the amount of $58 million. The trial court subsequently indicated that it would award Verizon $1.6 million in prejudgment interest on the $58 million jury award. The trial court issued a permanent injunction with respect to the three patents the jury found to be infringed effective April 12, 2007. The trial court then permitted the company to continue to service existing customers pending appeal, subject to deposit into escrow of a 5.5% royalty on a quarterly basis. The trial court also ordered that the company may not use its technology that was found to be infringing to provide services to new customers. In addition, Vonage posted a $66 million bond to stay execution of the monetary judgment pending appeal. On April 6, 2007, the company brought the trial court's ruling to the Federal Circuit Court, which Court allowed Vonage to continue to sign up new customers while Vonage appeals the jury's decision. About Vonage Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with over 1.4 million subscriber lines as of February 8, 2006. Utilizing its voice over Internet protocol technology platform, the company offers feature-rich, low-cost communications services with a call quality comparable to traditional telephone services. While customers in the United States represent over 95% of its subscriber lines, Vonage continues to expand internationally, having launched its service in Canada in November 2004, and in the United Kingdom in May 2005. WILD WEST: Bank of Blue Valley Gets Approval to Seize Four Rides ---------------------------------------------------------------- Bank of Blue Valley obtained permission from the U.S. Bankruptcy Court for the District of Kansas to seize around $1 million worth of rides leased to Wild West World LLC, Bill Wilson of The Wichita Eagle reports. According to Mr. Wilson, the order was given after Parks America backed out from its planned purchase of the Debtor on Oct. 5, 2007. As reported in the Troubled Company Reporter on July 30, 2007, Bank of Blue Valley contended that the insurance of the rides have already lapsed. With the order, the bank now has authority to take hold of these rides: * a log flume; * a flipping action arm ride; * a Ferris wheel; and * a pirate ship. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WILD WEST: Parks America Calls Off $12 Million Purchase ------------------------------------------------------- Parks America Inc. has opted not to buy Wild West World, the Associated Press reports. However, Parks America still expressed intent on buying individual rides instead of the whole park, AP adds citing Gaye Tibbets, Esq., Parks America's counsel. AP relates that Parks America had offered $12 million and Wild West's officials expected an agreement to have been reached by Oct. 5, 2007. The deadline was originally set for September 28 but was extended by the Debtor and creditors in hopes of avoiding a liquidation. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WILD WEST: Receives Offers for Three Rides ------------------------------------------ Wild West World LLC asks the U.S. Bankruptcy Court for the District of Kansas for permission to sell three of its rides, Bill Wilson of The Wichita Eagle reports. Seabreeze Amusement Park has offered to buy the Sidewinder for $425,000 and the Himalaya for $250,000. Howard Young has offered $300,000 for the Fiesta Mexicana, the report adds. Mr. Wilson discloses, citing sources close to the case, that the Sidewinder and Fiesta Mexicana sale will likely involve some legal squabbling since the identity of the borrower for each ride is not clear. Mr. Wilson adds that the main question is how to divide the proceeds in the wake of the muddled contracts. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WR GRACE: Court Refuses to Appoint Examiner for Tersigni Probe -------------------------------------------------------------- The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware refused to appoint a Court examiner to probe on the bills paid by W.R. Grace & Co. and its debtor affiliates to L. Tersigni Consulting until the Office of the U.S. Trustee for Region 3 can explain why it took them 17 months to inform the Court of the investigation initiated by the Department of Justice on Loreto Tersigni and the Tersigni firm, Bloomberg News reports. At a September 24, 2007, hearing, Judge Fitzgerald noted that the U.S. Trustee's office was made aware of the Tersigni billing problems back in April 2006. Judge Fitzgerald asked David M. Klauder, Esq., counsel to the U.S. Trustee, at the hearing, whether an investigation has been conducted with respect to Mr. Tersigni and whether that investigation has been completed or is still ongoing. Mr. Klauder, however, refused to answer Judge Fitzgerald's questions and said that he was "instructed" not to comment about the matter. Mr. Klauder said that he has "stuff [he's] not permitted to divulge in open court . . ." "What I'm trying to find out is, why on earth I am not being permitted to be given information concerning matters that affect the administration of these estates, from the entity that is charged with supervising the administration of these estates," Judge Fitzgerald stated. The Court acknowledged that the U.S. Trustee is charged under the Bankruptcy Code with the task of "watch dogging" and monitoring entities under bankruptcy. "It appears that the watchdog needs watchdogging," Judge Fitzgerald said. Mr. Klauder told the Court that the intent for the U.S. Trustee's request was for an examiner to ultimately determine what causes of action exist for Grace with respect to the alleged fraudulent billing practices of the Tersigni firm. The Tersigni firm was retained by the Official Committee of Asbestos Personal Injury Claimants in Grace's bankruptcy case as its financial advisors in 2003. Judge Fitzgerald, during the hearing, expressed her concern on the additional expense Grace will likely incur if an examiner is appointed. A continued hearing for October 25 and 26, 2007, has been set for the examiner request. The judge further instructed Mr. Klauder to "find someone" permitted to comment on the Tersigni issues. About W.R. Grace Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C., represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. (W.R. Grace Bankruptcy News, Issue No. 140; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * CRG Partners Adds Four New Partners ------------------------------------- CRG Partners Group LLC appointed John Calabrese, Eric Danner, Bruce Erickson, and Michael Pinette as partners. "We are pleased to recognize Calabrese, Danner, Erickson and Pinette for their achievements and leadership, both within CRG Partners and the industry at large," said Scott Avila, Managing Partner. "The dedication and expertise of these professionals is a reflection of the firm's industry specialization and commitment to producing results for clients. All of us at CRG Partners congratulate and welcome them as partners." John Calabrese has more than 20 years of experience developing and implementing effective financial restructuring plans. Mr. Calabrese has a BS from the University of North Carolina at Chapel Hill. Eric Danner works in crisis management situations creating and implementing turnaround business plans, managing cash flows and performing mergers and acquisitions reviews. Mr. Danner holds both CPA and CIRA accreditations, and he currently serves on the AIRA Board of Directors. He holds a BA from Vassar College and an MBA from Boston University. Bruce Erickson has 20 years of experience working with companies in distress. Mr. Erickson heads CRG Partners' Wind-Down and Exit Management practice area and has led many of the firm's important bankruptcy, wind-down and liquidation engagements. Mr. Erickson holds a BS and an MBA from the University of New Hampshire and the designation of Certified Turnaround Professional. Michael Pinette has served as advisor to companies experiencing operational performance issues in a wide variety of manufacturing environments for more than 30 years. Mr. Pinette holds a BS from Lowell Technological Institute and an MBA from American International College. About CRG Partners Headquartered in New York, CRG Partners -- http://www.crgpartners.com-- serves distressed and underperforming middle-market companies internationally with an extensive portfolio of operational-improvement, financial- restructuring and crisis-management services. The company has offices in Atlanta; Bethesda; Boston; Charlotte; Chicago; Dallas; Los Angeles; New York; and Vienna, Austria. * S&P Places 13 U.S. Synthetic CDO Tranche Under Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed 13 U.S. synthetic CDO tranche ratings on CreditWatch with negative implications and 27 ratings on CreditWatch with positive implications. At the same time, S&P affirmed 24 U.S. synthetic CDO tranche ratings and removed them from CreditWatch negative, raised four ratings after an amendment to the reference portfolio, and withdrew four ratings after receiving notifications that the tranches had terminated. The CreditWatch negative placements reflect negative rating migration in the respective portfolios and synthetic rated overcollateralization ratios that had fallen below 100% as of the September month-end run. The classes with ratings placed on CreditWatch positive had SROC ratios that were above 100% at the next higher rating level during the month-end run. The 24 classes with ratings removed from CreditWatch negative had SROC ratios that were above 100% at their current rating levels during the month-end run. Ratings List Alison Synthetic Public Ltd. Co. Rating ------ Class To From ----- -- ---- B AA-/Watch Pos AA- C AA-/Watch Pos AA- D A-/Watch Pos A- Arch One Finance Ltd. Rating ------ Class To From ----- -- ---- Tranche BBB-/Watch Neg BBB- ARLO VI Ltd. Series 2006-2 (SABS) Rating ------ Class To From ----- -- ---- Notes A/Watch Neg A Calibre 2004-XI Ltd. Rating ------ Class To From ----- -- ---- Single Tranche AAA/Watch Neg AAA Crown City CDO 2005-1 Ltd. Rating ------ Class To From ----- -- ---- B AA AA/Watch Neg C A- A-/Watch Neg E-1 BB- BB-/Watch Neg E-2 BB- BB-/Watch Neg Crown City CDO 2005-2 Ltd. Rating ------ Class To From ----- -- ---- B-1 A+ A+/Watch Neg B-2 A+ A+/Watch Neg ELM B.V. Series 87 Rating ------ Class To From ----- -- ---- Tranche BBB+/Watch Neg BBB+ ELM B.V. Series 89 Rating ------ Class To From ----- -- ---- SecdCrL BBB+/Watch Neg BBB+ Herald Ltd. Series 15 Rating ------ Class To From ----- -- ---- Tranche B NR AA Herald Ltd. Series 21 – Oak Canyon Funding Tranche B Rating ------ Class To From ----- -- ---- Oak Canyon NR AAA High Grade Structured Credit 2004-1 Ltd. Rating ------ Class To From ----- -- ---- E A A/Watch Neg IDAHO TIERS Credit-Linked Trust Certificates Series 2004-8 Rating ------ Class To From ----- -- ---- A-2 A+/Watch Pos A+ Jupiter Finance Ltd. Series 2007-002 Rating ------ Class To From ----- -- ---- Port CrLkd AAA/Watch Neg AAA Kenmare 2005-I Ltd. Rating ------ Class To From ----- -- ---- Notes A-/Watch Neg A- Kiawah (New York) Trust Series 2007-1 Rating ------ Class To From ----- -- ----- Notes AA/Watch Neg AA Lunar Funding I Ltd. Series 9 Rating ------ Class To From ----- -- ---- A-1 NR AAA Maple 2004-1789 Rating ------ Class To From ----- -- ---- Tranche C AA AA/Watch Neg Momentum CDO (Europe) Ltd. Series 2007-1 Rating ------ Class To From ----- -- ---- 2007-1 BBB/Watch Neg BBB Morgan Stanley ACES SPC Series 2005-15 Rating ------ Class To From ----- -- ---- II Sec AA/Watch Pos AA III A A/Watch Pos A III B A/Watch Pos A Morgan Stanley ACES SPC Series 2005-16 Rating ------ Class To From ----- -- ---- Ser2005 A-/Watch Pos A- Morgan Stanley ACES SPC Series 2005-18 Rating ------ Class To From ----- -- ---- SFRN AA/Watch Pos AA Morgan Stanley ACES SPC Series 2005-21 Rating ------ Class To From ----- -- ---- A AA+ AA+/Watch Neg IA AA- AA-/Watch Neg IB AA- AA-/Watch Neg IC AA- AA-/Watch Neg II BBB+ BBB+/Watch Neg Morgan Stanley ACES SPC Series 2006-11 Rating ------ Class To From ----- -- ---- A AA+ AA+/Watch Neg Morgan Stanley ACES SPC Series 2006-12 Rating ------ Class To From ----- -- ---- I A- A-/Watch Neg Morgan Stanley ACES SPC Series 2006-15 Rating ------ Class To From ----- -- ---- IIA AA AA/Watch Neg IIB AA AA/Watch Neg Morgan Stanley ACES SPC Series 2006-22 Rating ------ Class To From ----- -- ---- II A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-27 Rating ------ Class To From ----- -- ---- A AA AA/Watch Neg Morgan Stanley ACES SPC Series 2006-37 Rating ------ Class To From ----- -- ---- II BBB+ BBB+/Watch Neg Morgan Stanley ACES SPC Series 2007-8 Rating ------ Class To From ----- -- ---- IIA AA-/Watch Neg AA- Morgan Stanley ACES SPC Series 2007-13 Rating ------ Class To From ----- -- ---- IIA AAA AA+ IIB AAA AA+ IIIA AA AA- IIIB AA AA- Morgan Stanley Managed ACES SPC Series 2007-10 Rating ------ Class To From ----- -- ---- IIIA AA/Watch Pos AA Morgan Stanley Managed ACES SPC Series 2007-15 Rating ------ Class To From ----- -- ---- IIA AA/Watch Pos AA Omega Capital Investments PLC Series 19 Rating ------ Class To From ----- -- ---- B-1E AA/Watch Pos AA B-1U AA/Watch Pos AA C-1E A/Watch Pos A C-1U A/Watch Pos A Omega Capital Investments II PLC Series 31 Rating ------ Class To From ----- -- ---- B-1A AA/Watch Pos AA B-1U AA/Watch Pos AA B-2J AA/Watch Pos AA C-1E A/Watch Pos A C-1U A/Watch Pos A C-1J A/Watch Pos A D-1E BBB/Watch Pos BBB D-1U BBB/Watch Pos BBB D-1J BBB/Watch Pos BBB Pallas IV CDO Ltd. Rating ------ Class To From ----- -- ---- Fltg Rt Nt AA/Watch Pos AA PARCS Master Trust Series 2007-6 Calvados Units Rating ------ Class To From ----- -- ---- Trust units A/Watch Neg A Prelude Europe CDO Ltd. Series 2006-1 Rating ------ Class To From ----- -- ---- Notes A- A-/Watch Neg SPGS SPC Series 2006-I Rating ------ Class To From ----- -- ---- Notes AAA/Watch Neg AAA Steers Credit Linked Trust, ML Tranche Rating ------ Class To From ----- -- ---- Sing Tran BBB-/Watch Pos BBB- Strata Trust, Series 2006-2 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA STRATA 2006-36 Ltd. Rating ------ Class To From ----- -- ---- Notes AA/Watch Pos AA Terra CDO SPC Ltd. Series 2007-1 Rating ------ Class To From ----- -- ---- A1 AA- AA-/Watch Neg Tribune Ltd. Series 14 - Maple 2004-66 Tranche D Rating ------ Class To From ----- -- ---- D NR A- Tribune Ltd. Series 18 – Maple 2004-1789 Tranche D1 Rating ------ Class To From ----- -- ---- Tranche D1 AA AA/Watch Neg Tribune Ltd. Series 19 – Maple 2004-1789 Tranche D2 Rating ------ Class To From ----- -- ---- Tranche D2 A- A-/Watch Neg * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Lawrence E. Ross Bankr. E.D. Ark. Case No. 07-15448 Chapter 11 Petition filed October 2, 2007 See http://bankrupt.com/misc/areb07-15448.pdf In Re William Hunter Phillips Bankr. S.D. Ala. Case No. 07-12829 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/alsb07-12829.pdf In Re Arizona Fine Properties, L.L.C. Bankr. D. Ariz. Case No. 07-05087 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/azb07-05087.pdf In Re Pavelic Holdings L.L.C. Bankr. C.D. Calif. Case No. 07-18755 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/cacb07-18755.pdf In Re Rent & Buy, Rente & Compre, Inc. Bankr. C.D. Calif. Case No. 07-18785 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/cacb07-18785.pdf In Re Ali Shahryarinejad Bankr. C.D. Calif. Case No. 07-13702 Chapter 11 Petition filed October 3, 2007 Filed as Pro Se In Re Preston Leon Howard Bankr. D. S.C. Case No. 07-05413 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/scb07-05413.pdf In Re Steven Lee Colvert Bankr. M.D. Tenn. Case No. 07-07281 Chapter 11 Petition filed October 3, 2007 See http://bankrupt.com/misc/tnmb07-07281.pdf In Re Real Estate Short Sales, Inc. Bankr. C.D. Calif. Case No. 07-18838 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/cacb07-18838.pdf In Re R.D.S. Venture, Inc. Bankr. S.D. Fla. Case No. 07-18325 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/flsb07-18325.pdf In Re Hoop Zone, L.L.C. Bankr. D. N.J. Case No. 07-24404 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/njb07-24404.pdf In Re Tim Keeler Transport, Inc. Bankr. E.D. Penn. Case No. 07-15851 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/paeb07-15851.pdf In Re Alexander Gigliotti Bankr. E.D. Penn. Case No. 07-21727 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/paeb07-21727.pdf In Re Gigliotti Iron Works, Inc. Bankr. E.D. Penn. Case No. 07-21728 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/paeb07-21728.pdf In Re Z.&B. Installations, Inc. Bankr. M.D. Penn. Case No. 07-03153 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/pamb07-03153.pdf In Re Marilyn S. Carson Bankr. M.D. Penn. Case No. 07-52594 Chapter 11 Petition filed October 4, 2007 See http://bankrupt.com/misc/pamb07-52594.pdf In Re Ralph J. Tullo, M.D., P.A. Bankr. M.D. Fla. Case No. 07-04772 Chapter 11 Petition filed October 4, 2007 Filed as Pro Se In Re Sandra Kay Banks Bankr. C.D. Calif. Case No. 07-18846 Chapter 11 Petition filed October 4, 2007 Filed as Pro Se In Re Bartholomew Andrew Butler Bankr. D. Md. Case No. 07-19739 Chapter 11 Petition filed October 4, 2007 Filed as Pro Se In Re Martin Trieu Tan Bankr. D. Mass. Case No. 07-16323 Chapter 11 Petition filed October 4, 2007 Filed as Pro Se In Re Toys by Troy, L.L.C. Bankr. D. Ariz. Case No. 07-05156 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/azb07-05156.pdf In Re North Star Electric Bankr. S.D. Ind. Case No. 07-09797 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/insb07-09797.pdf In Re Cereise White Snyder Bankr. E.D. Ky. Case No. 07-30440 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/kyeb07-30440.pdf In Re Mariner Excavation Services, L.L.C. Bankr. D. Md. Case No. 07-19803 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/mdb07-19803.pdf In Re Quicktruss, Inc. Bankr. D. N.M. Case No. 07-12477 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/nmb07-12477.pdf In Re Edwin L. Nicholas Bankr. N.D. Ohio Case No. 07-17551 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/ohnb07-17551.pdf In Re Linda Ann Schofield Bankr. D. Utah Case No. 07-24730 Chapter 11 Petition filed October 5, 2007 Filed as Pro Se In Re Beverly Lynn Trucking, Inc. Bankr. S.D. W.V. Case No. 07-50268 Chapter 11 Petition filed October 5, 2007 See http://bankrupt.com/misc/wv07-50268.pdf In Re Second Fitness, L.L.C. Bankr. N.D. Ind. Case No. 07-12853 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/innb07-12853.pdf In Re Unity Mortgage & Financial Services, Inc. Bankr. N.D. Ind. Case No. 07-22733 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/innb07-22733.pdf In Re Daniel Earl Gatewood Bankr. S.D. Ind. Case No. 07-09818 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/insb07-09818.pdf In Re "R" Wheels, Inc. Bankr. W.D. Mo. Case No. 07-43523 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/mowb07-43523.pdf In Re Cathleen L. Scott Bankr. W.D. Penn. Case No. 07-26343 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/pawb07-26343.pdf In Re Tennessee Automotive Group, L.L.C. Bankr. M.D. Tenn. Case No. 07-07353 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/tnmb07-07353.pdf In Re David B. Rivkin Bankr. M.D. Tenn. Case No. 07-07376 Chapter 11 Petition filed October 8, 2007 See http://bankrupt.com/misc/tnmb07-07376.pdf In Re David M. Kortan Bankr. N.D. Ill. Case No. 07-18547 Chapter 11 Petition filed October 9, 2007 See http://bankrupt.com/misc/ilnb07-18547.pdf In Re Full Moon Bistro, L.L.C. Bankr. W.D. La. Case No. 07-12713 Chapter 11 Petition filed October 9, 2007 See http://bankrupt.com/misc/lawb07-12713.pdf In Re Randolph Alfred Gamel Bankr. W.D. Miss. Case No. 07-61461 Chapter 11 Petition filed October 9, 2007 See http://bankrupt.com/misc/mowb07-61461.pdf In Re Teddy Lee Burns Bankr. E.D. N.C. Case No. 07-03777 Chapter 11 Petition filed October 9, 2007 Filed as Pro Se In Re (C.C.G.) Capital Consortium Group Bankr. D. S.C. Case No. 07-05542 Chapter 11 Petition filed October 9, 2007 Filed as Pro Se ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Joseph Medel C. Martirez, 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 ***