/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071022.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 22, 2007, Vol. 11, No. 250 Headlines 1031 TAX GROUP: U.S. Trustee Makes New Plea for Chap. 11 Trustee 1031 TAX GROUP: Joins Committee in Supporting U.S. Trustee's Plea ADVANCED MICRO: Posts $396 Million Net Loss in Qtr. Ended Sept. 29 AFV SOLUTIONS: Weaver & Martin Raises Going Concern Doubt ALLETE INC: Board Declares Quarterly Dividend of $0.41/Share AMERIRESOURCE TECH: BizAuctions Unit Gets New Contracts ASPEN EXECUTIVE: Wants to Hire Pachulski Stang as Counsel ASPEN EXECUTIVE: Taps R2 Advisors as Financial Advisors ATSI COMMUNICATIONS: Malone & Bailey Raises Going Concern Doubt AUTO UNDERWRITERS: Malone & Bailey Raises Going Concern Doubt AVADO BRANDS: Auction for Sale of Assets Scheduled on Nov. 14 AVADO BRANDS: Gets Final Approval to Use DDJ DIP Facility AVADO BRANDS: Has Until November 2 to File Schedules & Statement AVAYA INC: Earns $35 Million in Fourth Quarter Ended Sept. 30 BAUSCH & LOMB: Extends Debt Securities Tender Offers to Oct. 26 BEAR STEARNS: Moody's Rates Class II-A-3 Notes at Ba2 BLAST ENERGY: Judge Bohm Approves Amended Disclosure Statement BLAST ENERGY: Plan Confirmation Hearing Slated for November 14 BRIGGS & STRATTON: Posts $20.5 Million Net Loss in 1st Fiscal Qtr. BUILDING MATERIALS: S&P Puts 'BB' Rating Under Negative Watch CALLIDUS DEBT: Moody's Rates $13 Million Class D Notes at Ba2 CAPITAL ONE: Posts $81.6 Million Net Loss in Qtr. Ended Sept. 30 CBA COMMERCIAL: S&P Lowers Ratings on Three Certificate Classes CHRYSLER LLC: Four Union Locals Reject UAW-Chrysler Labor Pact CITRUS VALLEY: Moody's Affirms Ba1 Rating COGNIGEN NETWORKS: Ehrhardt Keefe Raises Going Concern Doubt COLLINS CASHWAY: Voluntary Chapter 11 Case Summary COLUMBIA AIRCRAFT: Wants to Hire Tonkon Torp as Bankruptcy Counsel CONSUMERS ASSOCIATION: Bankruptcy Likely if Forced to Pay Costs COPPER RIDGE: Case Summary & Eight Largest Unsecured Creditors COUNTRYWIDE FINANCIAL: CEO Faces SEC Inquiry on Sale of Shares COUNTRYWIDE FINANCIAL: Pension Plan Wants CEO Mozilo Replaced COUNTRYWIDE FINANCIAL: CtW Investment Wants Resignation of CEO CREDIT SUISSE: Moody's Holds Ratings on Three Class Certificates DELPHI CORP: Disclosure Statement Hearing Deferred to November 8 DELTA AIR: Earns $220 Million in Quarter Ended September 30 EDS CORP: Paying $0.05 per Share Dividend on December 10 FAIRCHILD SEMICONDUCTOR: Earns $20.3 Mil. in Qtr. Ended Sept. 30 GENERAL MOTORS: Global Third Quarter Sales Increase by 4% GENESIS CLO: Moody's Rates $40 Million Class E Notes at Ba2 GLOBAL CREDIT: S&P Lowers Rating on Preferred Shares to BB- HARRAH'S ENT: Mississippi Gaming Commission Okays Apollo Buyout HOLOGIC INC: Stockholders Give Nod to Cytyc Merger Deal INDIANAPOLIS DOWNS: Sells $425 Million Notes in Two-Part Deal INTEGRATED SECURITY: Weaver & Tidwell Raises Going Concern Doubt INTERNATIONAL PAPER: Board Okays Annual Election of Directors JOURNAL REGISTER: Earns $11.2 Million in Quarter Ended Sept. 30 KELLWOOD CO: Board Recommends Rejection of Sun Capital Proposal LAJITAS RESORT: Fails to Sell Assets at Auction LAWRENCE SHIERS: Voluntary Chapter 11 Case Summary LEVI STRAUSS: Completes $525MM Tender Offer of 12.25% Sr. Notes LSP BATESVILLE: S&P Holds 'B+' Rating on $326 Million Senior Notes MADISON PARK: Moody's Rates $17.5 Million Class E Notes at Ba2 MCCLATCHY CO: Reports Preliminary Earnings of $23.5MM in 3rd Qtr. MCNA CABLE: S&P Assigns 'B' Corporate Credit Rating MIAMI BEACH HEALTH: S&P Revises Outlook to Negative from Stable MOVIE GALLERY: Wants to Hire Kirkland & Ellis as Lead Counsel MOVIE GALLERY: Gets Interim OK to Use Lenders' Cash Collateral MOVIE GALLERY: Gets Interim Nod to Access $150 Mil. DIP Financing NATIONWIDE HEALTH: Prices $300 Million Offering of 6.25% Notes NETTIME SOLUTIONS: Semple Marchal Raises Going Concern Doubt NPS PHARMA: Completes 3% Convertible Notes Cash Tender Offering OCEAN BLUE: Section 341(a) Meeting Scheduled on November 5 OCEAN BLUE: Gets Interim Ok to Use Legg Mason's Cash Collateral OCEAN BLUE: Court Approves Rice Pugatch as Bankruptcy Counsel OWENS-ILLINOIS: Appoints Hugh H. Roberts as Director PALMRYA ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors PENN NATIONAL: Completes Purchase of Sanford-Orlando's Fla. Club PETROHAWK ENERGY: S&P Lifts Corporate Credit Rating to B+ from B PH GLATFELTER: Moody's Lowers Senior Unsecured Ratings to Ba2 PITTSFIELD WEAVING: Files Second Amended Disclosure Statement PNA GROUP: S&P Affirms Ratings and Revises Outlook to Negative REMY WORLDWIDE: Court Approves Kurtzman Carson as Noticing Agent REMY WORLDWIDE: Wants Until December 22 to File Schedules RH DONNELLEY: Unit's Offer to Purchase 10-7/8% Sr. Notes Expires ROWE COS: Opposes Conversion to Chapter 7 Liquidation Proceeding ROWE COS: Court Okays Stinson Morrison as Securities Counsel S-TRAN HOLDINGS: Exclusive Period Plan Filing Moved to December 3 SANDISK CORP: Earns $85 Million in Third Quarter Ended Sept. 30 SENTINEL MANAGEMENT: BoNY Agrees to Transfer Cash to Trustee SENTINEL MANAGEMENT: Earns $23 Million in September 2007 SOLUTIA INC: Court Approves Fifth Amended Disclosure Statement SOLUTIA INC: Court Sets November 29 Plan Confirmation Hearing SOUTH AVENUE SERVICE: Voluntary Chapter 11 Case Summary SPANSION INC: Posts $72 Million Net Loss in Quarter Ended Sept. 30 SPECTRUM FINANCIAL: Court Converts Case to Chapter 7 SPECTRUM FINANCIAL: Lane & Nach OK'd as Chap. 7 Trustee's Counsel SPECTRUM FINANCIAL: Creditors' Meeting Scheduled on December 18 TEMPUR-PEDIC INT'L: Earns $38.8 Million in Quarter Ended Sept. 30 TENNECO INC: Elects Dennis J. Letham to Board of Directors THORNBURG MORTGAGE: S&P Retains Negative Watch on 'B' Rating URS CORP: Glass Lewis Urges Washington Shareholders to OK Merger VENTURE IX: Moody's Rates $14 Million Class E notes at Ba2 VISTEON CORP: Inks MOU to Sell Swansea Facility to Linamar WENDY'S INT'L: Partners with Berjaya to Open 70 Units in Malaysia WESCO INTERNATIONAL: Earns $70 Million in Quarter Ended Sept. 30 WESTERN OIL: Completes $6.9 Billion Sale Pact with Marathon Oil WINDSWEPT: Holtz Rubenstein Reminick Raises Going Concern Doubt * BOND PRICING: For the Week of Oct. 15 - Oct. 19 2007 ********* 1031 TAX GROUP: U.S. Trustee Makes New Plea for Chap. 11 Trustee ---------------------------------------------------------------- Diana G. Adams, the United States Trustee for Region 2, has again filed a motion seeking the appointment of a chapter 11 trustee in The 1031 Tax Group LLC and its debtor-affiliates' cases or, in the alternative, conversion of the Debtors' cases into chapter 7. The U.S. Trustee's new request comes after more than two months since the U.S. Bankruptcy Court for the Southern District of New York denied her first request. The U.S. Trustee states that in denying her first motion, the Court gave great weight to the assertions of the Debtors and the Official Committee of Unsecured Creditors that a plan of reorganization in which there would be a meaningful distribution to creditors would be presented to the Court in the very near future. Unfortunately, the U.S. Trustee argues, even though the Court has repeatedly given the Debtors and the Creditors' Committee ample opportunities to pursue two alternative disclosure statements and plans, no plan of reorganization of the Debtors appears poised for consideration anytime soon. In his Aug. 13 memorandum opinion, Hon. Martin Glenn concluded that where a case has an active creditors committee functioning effectively and working well with the debtors, there is little benefit in appointing a trustee. Judge Glenn went on to say that as the Debtors' cases have unfolded, real progress has been made through the joint efforts of the Debtors' new management and the Committee. To the extent that the U.S. Trustee challenged the Debtors' ability to rehabilitate, Judge Glenn noted that the Debtors have worked diligently with the Committee to file a proposed joint disclosure statement and a plan that could provide creditors with close to full recovery of their claims. "This belies the assertion that the Debtors cannot reorganize," Judge Glenn opined. A hearing has been set at 10:00 a.m. tomorrow, Oct. 23, 2007, to consider the U.S. Trustee's request. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier, LLP, represents the Debtors in their restructuring efforts. David Y. Wolnerman, Esq., at Greenberg Traurig, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of over $100 million. 1031 TAX GROUP: Joins Committee in Supporting U.S. Trustee's Plea ----------------------------------------------------------------- The 1031 Tax Group LLC and its debtor-affiliates join the Official Committee of Unsecured Creditors in supporting the request of Diana G. Adams, the United States Trustee for Region 2, for an appointment of a chapter 11 trustee in their bankruptcy cases. Both the Debtors and the Committee, however, did not state any opposition nor consent to the U.S. Trustee's alternative request for conversion of the Debtors' chapter 11 cases into chapter 7. The Committee discloses that it has negotiated and procured a major achievement in the form of an agreement which provides, among other things, assets for creditor recoveries whether by the Debtors or by a Chapter 11 trustee. With regards to the current circumstances affecting the achievement of the agreement, and upon the understanding of the position of the Debtors, the Committee believes it is proper to appoint a chapter 11 trustee in the Debtors' cases. The Committee said it has communicated its proposed nominee to act as chapter 11 trustee to the U.S. Trustee. For their part, the Debtors said they do not believe they can file a confirmable plan of reorganization given the extremely difficult circumstances their cases currently face. Specifically, the Debtors noted, among others, that their estates have very few assets other than: (i) unsecured promissory notes from Edward H. Okun, the Debtors' owner, and entities directly or indirectly owned or controlled by Mr. Okun; (ii) a personal guaranty from Mr. Okun; (iii) some cash in accounts at Colorado Capital Bank, which cash has been subject to competing claims and litigation; and (iv) potential claims under fidelity and surety bond policies. In addition, the Debtors state that Mr. Okun's assets have regularly suffered from varying degrees of financial distress, including multiple threats of foreclosure by pre-existing secured creditors and that Mr. Okun as well as entities directly or indirectly owned or controlled by him have been subject to a multitude of claims by exchanger creditors seeking relief outside of the Bankruptcy Court. Furthermore, the Debtors tell the Court that the ongoing U.S. Attorney's investigation into Mr. Okun's dealings with the Debtors, coupled with the pre-petition seizure by the federal government of many of the Debtors' and the Okun Entities' corporate documents, created an entirely separate set of challenges. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier, LLP, represents the Debtors in their restructuring efforts. David Y. Wolnerman, Esq., at Greenberg Traurig, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of over $100 million. ADVANCED MICRO: Posts $396 Million Net Loss in Qtr. Ended Sept. 29 ------------------------------------------------------------------ Advanced Micro Devices Inc. reported results for its operations for the third quarter ended Sept. 29, 2007. In the third quarter, the company reported an operating loss of $226 million, and a net loss of $396 million. Third quarter results include a negative impact of $120 million due to ATI acquisition-related, integration and severance charges and impairment of assets. AMD reported third quarter 2007 revenue of $1.632 billion, an 18% increase compared to the second quarter of 2007 and a 23% improvement compared to the third quarter of 2006. In the second quarter of 2007, AMD reported revenue of $1.378 billion and an operating loss of $457 million. In the third quarter of 2006, AMD reported revenue of $1.328 billion and operating income of $121 million. "We are encouraged by the progress we made in our third quarter financial results. We delivered a strong revenue increase, gained 8 percentage points of gross margin and reduced our operating loss by more than half," said Robert J. Rivet, AMD's chief financial officer. "We sold a record number of microprocessors through our distribution channel and began revenue shipments of Quad-core AMD Opteron(TM) processors in the quarter. "Graphics segment revenue increased 29% sequentially, as customers increasingly adopted AMD's new ATI Radeon HD(TM) 2000 series of graphics processors." Third quarter charges of $120 million consisted of ATI acquisition-related, integration and severance charges of $78 million and asset impairments of $42 million associated with the company's ownership of Spansion Inc. common stock. Third quarter 2007 gross margin was 41%, compared to 33% in the second quarter of 2007 and 51% in the third quarter of 2006. The increase from the prior quarter was due to increased microprocessor unit shipments, manufacturing efficiencies, improved inventory management, and a richer product mix in the Computing Solutions and Graphics segments. Completes $1.5 Billion Convertible Debt Offering AMD completed a $1.5 billion convertible debt offering and used the net proceeds, together with available cash, to repay in full the $1.7 billion outstanding balance of the term loan used to acquire ATI. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $12.934 billion in total assets, $8.501 billion in total liabilities, $308 million in minority interest in consolidated subsidiaries, and $4.125 billion in total shareholders' equity. About Advanced Micro Headquartered in Sunnyvale, Calif., Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides processing solutions in the computing, graphics and consumer electronics markets. * * * As reported in the Troubled Company Reporter on Aug. 14, 2007, Standard & Poor's Ratings Services affirmed its B/Negative/-- corporate credit rating on Advanced Micro Devices Inc. At the same time, S&P assigned its 'B' rating to the company's $1.5 billion 5.75% senior convertible notes due 2012, and raised the rating on the company's existing senior unsecured debt to 'B' from 'B-', because the company no longer has secured debt in its capital structure. AFV SOLUTIONS: Weaver & Martin Raises Going Concern Doubt ----------------------------------------------------------- Kansas City, Mo.-based Weaver & Martin LLC raised substantial doubt about AFV Solutions, Inc. 's ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditing firm points to the company's losses from inception. The company posted a net loss of $3,621,460 on $111,800 of revenue for the year ended June 30, 2007, as compared with a net loss of $2,084,295 on $62,510 of revenue in the prior year. At June 30, 2007, the company's balance sheet showed $1,675,840 in total assets, $548,685 in total liabilities and $1,127,155 stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2457 About AFV Solutions AFV Solutions, Inc., (OTC BB:AFVS.OB) -- http://www.afvsolutions.com-- operates as an alternative fuel vehicle solutions provider in the United States. Its products primarily include propane, natural gas, and hydrogen and electrical conversion kits for trucks and automobiles, as well as industrial equipment. The company also distributes hybrid electric, compressed natural gas, and liquid petroleum gas buses; and alternative fuel parts and components. AFV Solutions was incorporated in 2002 as Juris Travel and changed its name to Bed and Biscuit Inns of America, Inc., on March 17, 2003. Further, the company changed its name to Dogs International on March 24, 2003 and to AFV Solutions, Inc., in 2005. The company is based in Irvine, California. ALLETE INC: Board Declares Quarterly Dividend of $0.41/Share ------------------------------------------------------------ ALLETE's board of directors declared a quarterly dividend of $0.41 per share of common stock. On an annual basis, the dividend is equivalent to $1.64 per share, unchanged from the previous quarter. The regular quarterly dividend on common stock is payable December 1 to shareholders of record at the close of business Nov. 15, 2007. Headquartered in Duluth, Minnesota, ALLETE Inc. (NYSE:ALE) -- http://www.allete.com/-- generates, transmits, distributes and markets electrical power for retail and wholesale customers in the Upper Midwest. ALLETE also owns a significant portfolio of real estate in Florida, and BNI Coal in North Dakota. * * * Moody's Investor Services rated ALLETE Inc.'s preferred stock at Ba1 on July 2001. The outlook is stable. AMERIRESOURCE TECH: BizAuctions Unit Gets New Contracts ------------------------------------------------------- BizAuctions Inc., AmeriResource Technologies Inc.' subsidiary, has landed and is working on several new contracts involving liquidation services for various commercial clients. "As shown in BizAuctions' steady and strong revenue increases, our business continues to grow in providing our eBay liquidation services," Delmar Janovec, CEO, noted. "BizAuctions is doing solid business and providing valuable services to its clients," Mr. Janovec concluded. "It is clear that American companies are in need of liquidation services, and we are aggressively targeting that market." BizAuctions will report the third quarter financial statements on Nov. 14, 2007. The company disclosed that BizAuctions' revenues have increased substantially over the last several quarters: Quarter Ended Revenue ------------- -------- 9/30/06 $192,097 12/31/06 $223,123 3/31/07 $326,906 6/30/07 $438,764 9/30/07 TBD -- New Record About BizAuctions BizAuctions Inc. (PINKSHEETS: BZCN) provides commercial eBay liquidation services for excess inventory, overstock items, and returns. The company's clients have included some of the United States' leading retail names at the forefront of their industries. About Ameriresource Technologies Headquartered in Las Vegas, AmeriResource Technologies Inc. (OTC BB: AMREE.OB) -- http://www.ameriresourcetechnologies.com/-- operates online auction drop-off locations that provide the general public to sell items on eBay. It provides software design and product development for businesses that sells items on eBay. AmeriResource also offers software and hardware system, and self- serve system called Point of Sales, which offers integrated system, including restaurant management tools/menus that offer various reports for inventory and labor control. The company was incorporated in 1989 as KLH Engineering Group Inc. and changed its name to AmeriResource Technologies Inc. in 1996. At June 30, 2007, AmeriResource Technologies Inc.'s consolidated balance sheet showed $1.2 million in total assets and $2.4 million in total liabilities, resulting in a $1.2 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2007, De Joya Griffith & Company LLP, in Las Vegas, expressed substantial doubt about AmeriResource Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statement as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations, negative working capital, and negative cash flows from operations. ASPEN EXECUTIVE: Wants to Hire Pachulski Stang as Counsel --------------------------------------------------------- Aspen Executive Air LLC asks the United States Bankruptcy Court for the District of Delaware for permission to employ Pachulski Stang Ziehl & Jones LLP as its counsel. As the Debtor's counsel, Pachulski Stang will: a. provide legal advice with respect to the Debtor's powers and duties as a debtor and debtor in possession in the continued operation of its business and management of its property; b. prepare on behalf of the Debtor necessary applications, motions, answers, orders, reports, and other legal papers; c. appear in Court on behalf of the Debtor and in order to protect the interests of the Debtor before the Court; d. prepare and pursue approval of a disclosure statement and confirmation of a plan; and e. perform all other legal services for the Debtor that may be necessary and proper in this case. The firm's professionals billing rates are: Professionals Hourly Rates ------------- ------------ Laura Davis Jones, Esq. $750 David M. Bertenthal, Esq. $550 Curtis A. Hehn, Esq. $375 Maria Bove, Esq. $395 Timothy P. Cairns, Esq. $350 Lynzy Olberholzer $175 Laura Davis Jones, Esq., a managing director of the firm, assures the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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). 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. ASPEN EXECUTIVE: Taps R2 Advisors as Financial Advisors ------------------------------------------------------- Aspen Executive Air LLC asks the United States Bankruptcy Court for the District of Delaware for permission to employ R2 Advisors LLC as its financial advisor. R2 Advisors will: a. analyze the Debtor's business, operations, properties, financial condition, competition, forecast, and prospects; b. assist in financial valuation of the going concern operations of the Debtor; c. advice the Debtor on a proposed purchase price and form of consideration for the sale of its assets; d. assist the Debtor in developing, evaluating, structuring and negotiating the terms and conditions of a potential sale; e. assist the Debtor in the preparation of solicitation materials with respect to the sale; f. identify and contact selected qualified buyers and furnishing them, on behalf of the Debtor, with solicitation materials; g. assist the Debtor in arranging for potential buyers to conduct due diligence investigations; h. provide testimony before the Court, as required; i. provide valuation of the Debtor or its assets; and j. provide other financial advisory services with respect to the Debtor's financial issue as may be agreed from time to time between the firm and Debtor. Paper filed with the Court did not disclose the firm's professionals compensation rates. To the best of the Debtor's knowledge the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person as defined in Section 101(14) of the Bankruptcy Code. 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). 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. ATSI COMMUNICATIONS: Malone & Bailey Raises Going Concern Doubt ---------------------------------------------------------------- Malone & Bailey PC in Houston, Tex., raised substantial doubt about ATSI Communications, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended July 31, 2007. The auditing firm stated that ATSI has a working capital deficit, has suffered recurring losses from operations and has a stockholders' deficit. The company posted a net loss of $257,000 on $31,692,000 of total operating revenues for the year ended July 31, 2007, as compared with a net income of $947,000 on $14,696,000 total operating revenues in the prior year. At July 31, 2007, the company's balance sheet showed $2,584,000 in total assets and $2,826,000 in total liabilities, resulting in $242,000 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2456 About ATSI Communications ATSI Communications, Inc. -- http://www.atsi.net/-- (OTCBB: ATSX) operates through its two wholly owned subsidiaries, Digerati Networks, Inc., and Telefamilia Communications, Inc. Digerati Networks, Inc., is a premier global VoIP carrier serving rapidly expanding markets in Asia, Europe, the Middle East, and Latin America, with an emphasis on Mexico. Through Digerati's partnerships with established foreign carriers and network operators, interconnection and service agreements, and a NexTone powered VoIP network, ATSI believes it has clear advantages over its competition. Telefamilia Communications provides specialized retail communication services that include VoIP services to the high-growth Hispanic market in the United States. ATSI also owns a minority interest of a subsidiary in Mexico, ATSI Comunicaciones, S.A. de C.V., which operates under a 30-year government issued telecommunications license. AUTO UNDERWRITERS: Malone & Bailey Raises Going Concern Doubt --------------------------------------------------------------- Malone & Bailey PC raised substantial doubt about Auto Underwriters of America, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditing firm stated that Auto Underwriters has suffered recurring losses from operations and has a significant working capital deficiency. The company posted a net loss of $4,507,592 on $11,175,266 of total revenues for the year ended June 30, 2007, as compared with a net loss of $6,574,353 on $13,991,565 of total revenue in the prior year. The company has an accumulated deficit of $15,905,902 as of June 30, 2007. The company's total revenues decreased 2,823 for the year ended June 30, 2007 compared to the corresponding prior year principally as a result of limited inventory choices of its customers. It had insufficient inventory during the period because of capital constraints. The company has since secured two inventory floor plan financings and believes it now has sufficient inventory. The company's selling, general and administrative expenses increased by 67 for the year ended June 30, 2007 compared to the corresponding prior year. This increase was primarily attributable to additional administrative staffing in its Texas operations and increased general operating expenses. Selling, general and administrative expenses as a percentage of sales was 40% for the period ended June 30, 2007 compared to 33% for the same corresponding prior period. At June 30, 2007, the company's balance sheet showed $12,035,763 in total assets, $14,502,702 in total liabilities, resulting in $2,466,939 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2459 Senior Debt Auto Underwriters has an $11,000,000 senior debt revolving line of credit with Oak Rock Financial, LLC, bearing interest at the greater of prime + 7% or 15.25%. The LOC is secured by all of Auto Underwriters' assets and a personal validity guarantee by its President. The LOC matures March 31, 2008. At June 30, 2007, the balance of LOC was $10,047,045 of which Auto Underwriters had availability of approximately $913,930 under the facility. About Auto Underwriters Auto Underwriters of America, Inc., (OTC BB:ADWT.OB) -- http://www.autounderwriters.com-- engages in purchasing and servicing non-prime installment sales contracts originated by automobile dealers in the sale of new and used automobiles, and light trucks in the United States. It also provides financing programs to automobile dealers through its Web site, which allows the dealer to input various fields of information into an online financing application and obtain an automatic credit decision. In addition, the company purchases, reconditions, sells, and finances used vehicles from three dealerships in Houston, Texas that operate under the name Affordable Cars & Trucks. Auto Underwriters of America was incorporated in 1981 and is based in San Jose, California. AVADO BRANDS: Auction for Sale of Assets Scheduled on Nov. 14 ------------------------------------------------------------- The Honorable Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware approved the bidding procedure governing the sale of all assets of Avado Brands Inc. and its debtor-affiliates. As reported in the Troubled Company Reporter on Sept 6, 2007, the Debtors said that they plan to use the Chapter 11 process to complete an orderly sale of their assets, via section 363 of the Bankruptcy Code. The Court orders that all qualifying bid must be submitted by Nov. 7, 2007, to David T. Clark at Lane Berry & Co. Interested parties who wants to submit a competing offer must accompany that offer by a cash deposit in an amount equal to the greater of 5% of the value of the offer. The Debtors will conduct an auction on Nov. 14, 2007, to determine the highest and best offer at the law offices of Greenberg Traurig LLP. The Court will hold a hearing on Nov. 20, 2007, at 11:30 a.m., to consider approval of the Debtor's request. 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). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. Scott L Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and David B. Stratton, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. AVADO BRANDS: Gets Final Approval to Use DDJ DIP Facility --------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware gave Avado Brands Inc. and its debtor- affiliates authority, on a final basis, to access postpetition financing from DDJ Capital Management LLC offered to the Debtors. As reported in the Troubled Company Reporter on Oct. 11, 2007, the Debtors had obtained interim approval to borrow up to $24 million from the 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 disclosed 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 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). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. Scott L Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and David B. Stratton, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. AVADO BRANDS: Has Until November 2 to File Schedules & Statement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Nov. 2, 2007, Avado Brands and its debtor-affiliates' deadline to file their schedules of assets and liabilities and statement of financial affairs. The Debtors relate that the extension will provide sufficient time to collect and assemble all of the requisite financial data and other information needed to prepare all of the schedules and statements required by the Bankruptcy Rules. The Debtors tell the Court that they will complete the filing as they had begun working on the documents. 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). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. Scott L Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and David B. Stratton, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. AVAYA INC: Earns $35 Million in Fourth Quarter Ended Sept. 30 ------------------------------------------------------------- Avaya Inc. reported net income of $35 million for the fourth fiscal quarter of 2007. This compares with net income of $48 million for the fourth fiscal quarter of 2006. Non-GAAP net income was $87 million compared with non-GAAP net income for the fourth fiscal quarter of 2006 of $80 million. Avaya's fourth fiscal quarter 2007 revenues increased 4.8% to $1.429 billion compared to $1.364 billion in the same period last year. The company shipped a record number of IP lines and over one million IP lines for the sixth consecutive quarter. Sales of products increased 7.8%, including a 9.5% increase in converged voice applications revenues. Services revenues increased 5.4% and rental and managed services revenues declined 10.6%. U.S. revenues declined by 1.6%. The weaker U.S. dollar favorably impacted international regions, and accounted for a $39 million year-over-year revenue increase. EMEA and APAC revenues grew by 10.7% and 15.5%, respectively. Revenues in the Americas, non- U.S., grew by 25.3%. The company's gross margin increased to 47.4% for the fourth fiscal quarter of 2007 compared to 46.6% for the same period last year. Selling, general and administrative expenses were $39 million higher, and research and development expenses were relatively flat when compared to the same period last year. The company reported operating income for the fourth fiscal quarter of 2007 of $35 million and non-GAAP operating income of $139 million. In the fourth fiscal quarter of 2006, the company reported operating income of $75 million and non-GAAP operating income of $137 million. Operating income for the fourth quarter of fiscal 2007 includes $7 million of business restructuring charges and $97 million of merger-related costs, of which $90 million relates to the accelerated vesting of stock options and restricted stock units in connection with the acquisition of Avaya by affiliates of Silver Lake Partners and TPG Capital, two private equity firms. These amounts have been excluded in calculating non-GAAP operating income and non-GAAP net income for the fourth quarter of fiscal 2007. Avaya's effective tax rate was 32.7% for the fourth quarter of fiscal 2007. The provision for income taxes includes $21 million of favorable tax items which have been excluded in calculating non-GAAP net income. Avaya generated $228 million in operating cash flow during the fourth fiscal quarter of 2007 compared to $191 million in the fourth fiscal quarter of 2006. Avaya's cash balance at the end of the fourth quarter of fiscal 2007 was $1.270 billion, compared with $899 million as of Sept. 30, 2006. Fiscal Year 2007 Results Revenues for fiscal 2007 were $5.279 billion compared to $5.148 billion last year. The weaker U.S. dollar favorably impacted international regions, and accounted for the revenue increase. The company earned GAAP net income of $218 million for fiscal 2007, compared to net income of $201 million for fiscal 2006. Non-GAAP net income was $281 million for fiscal 2007 compared with $241 million for fiscal 2006. Fiscal 2007 GAAP operating income was $276 million compared to $263 million for fiscal 2006. Non-GAAP operating income for fiscal 2007 was $417 million compared to $367 million for fiscal 2006. Operating cash flow for fiscal 2007 was $637 million compared to $647 million for fiscal 2006. Update on Closing of Acquisition of Avaya Avaya also confirmed that the acquisition of the company by affiliates of Silver Lake Partners and TPG Capital is scheduled to close by the end of October. About Avaya Inc. Headquartered in Basking Ridge, New Jersey, Avaya Inc. (NYSE: AV) -- http://www.avaya.com/-- designs, builds and manages communications networks for more than one million businesses worldwide, including more than 90% of the FORTUNE 500(R). Avaya is a world leader in secure and reliable Internet Protocol telephony systems and communications software applications and services. Avaya has locations in Malaysia, Argentina and the United Kingdom. * * * As reported in the Troubled Company Reporter on June 7, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Basking Ridge, New Jersey-based Avaya Inc. two notches to 'B+', and placed the rating on CreditWatch with negative implications. BAUSCH & LOMB: Extends Debt Securities Tender Offers to Oct. 26 --------------------------------------------------------------- Bausch & Lomb is extending to 8:00 a.m., New York City time, on Oct. 26, 2007, the expiration date in regard to its offers to purchase its outstanding: (i) 6.95% Senior Notes due 2007; (ii) 5.90% Senior Notes due 2008; (iii) 6.56% Medium-Term Notes due 2026; (iv) 7.125% Debentures due 2028; (v) 2004 Senior Convertible Securities due 2023, and (vi) Floating Rate Convertible Senior Notes due 2023; all pursuant to its cash tender offers and consent solicitations for the Debt Securities and the Convertible Debt Securities. On Oct. 4, 2007, the company has received tenders and consents representing a majority in principal amount of each series of the Debt Securities and the consent payment deadline has passed and withdrawal rights have terminated with respect to the Debt Securities. All other terms and conditions of the tender offers and consent solicitations are unchanged. The tender offers and consent solicitations are subject to the satisfaction of certain conditions, including closing of the proposed merger between the company and an affiliate of Warburg Pincus LLC, which is expected to occur on or about Oct. 26, 2007. Citigroup Global Markets Inc., Banc of America Securities LLC, Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. are acting as dealer managers for the tender offers and consent solicitations. Questions regarding the transaction and the procedures for consenting may be directed to Citigroup Global Markets Inc. by telephone at (800) 558-3745 (toll-free), Banc of America Securities LLC by telephone at (888) 292-0070 (toll-free) for the Debt Securities and (888) 583-8900 x2200 (toll-free) for the Convertible Debt Securities, Credit Suisse Securities (USA) LLC by telephone at (212) 325-7596 (collect) or J.P. Morgan Securities Inc. by telephone at (212) 270-1477 (collect). Global Bondholder Services is the information agent for the tender offers and consent solicitations. Requests for documentation should be directed to Global Bondholder Services at (866) 540-1500 (toll-free). About Bausch & Lomb Headquartered in Rochester, New York, Bausch & Lomb Inc. (NYSE: BOL) -- http://www.bausch.com/-- develops, manufactures, and markets eye health products, including contact lenses, contact lens care solutions, and ophthalmic surgical and pharmaceutical products. The company is organized into three geographic segments: the Americas; Europe, Middle East, and Africa; and Asia (including operations in India, Australia, China, Hong Kong, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand). In Latin America, the company has operations in Brazil and Mexico. In Europe, the company maintains operations in Austria, Germany, the Netherlands, Spain, and the United Kingdom. * * * As reported in the Troubled Company Reporter on Oct. 18, 2007 Moody's Investors Service affirmed these ratings and updated LGD assessments of Bausch & Lomb's: (i) B2 corporate family rating; (ii) B2 probability of default rating; (iii) SGL-2 speculative grade liquidity rating; (iv) B1 rating (to LGD3/36% from LGD3/35%) on a $500 million senior secured revolver; (v) B1 rating (to LGD3/36% from LGD3/35%) on a $1,200 million U.S. senior secured term loan; (vi) B1 rating (to LGD3/36% from LGD3/35%) on a $300 million delayed draw term loan; and (vii) Caa1 rating (to LGD5/89% from LGD5/86%) on $650 million senior unsecured notes. The outlook for these ratings remains stable. BEAR STEARNS: Moody's Rates Class II-A-3 Notes at Ba2 ----------------------------------------------------- Moody's Investors Service assigned an A2, Baa2, and Ba2 rating to the Class II-A-1, Class II-A-2, and Class II-A-3 Bear Stearns Structured Products Inc. NIM Trust 2007-N7 notes, issued by CMO Holdings III Ltd. The assets of the issuing entity will consist of a 100% ownership interest in the Class I-B-IO Certificate from Bear Stearns Mortgage Funding Trust 2007-AR4, Mortgage Pass-Through Certificates, Series 2007-AR4. The cash flows available to repay the notes are most significantly impacted by the level of prepayments, as well as the timing and amount of losses on the underlying mortgage pool. Moody's applied various combinations of loss and prepayment scenarios to evaluate the adequacy of cash flows to fully amortize the rated notes. The Complete Ratings are: Issuer: CMO Holdings III Ltd. Bear Stearns Structured Products Inc. NIM Trust 2007-N7 Notes * Cl. II-A-1, Assigned A2 * Cl. II-A-2, Assigned Baa2 * Cl. II-A-3, Assigned Ba2 BLAST ENERGY: Judge Bohm Approves Amended Disclosure Statement -------------------------------------------------------------- The Honorable Jeff Bohm of the United States Bankruptcy Court for the Southern District of Texas has approved the adequacy of Blast Energy Services Inc. and Eagle Domestic Drilling Operations LLC's Disclosure Statement explaining their Amended Joint Chapter 11 Plan of Reorganization dated Oct. 5, 2007. Judge Bohm found that the Disclosure Statement contains "adequate information" as required by Section 1125 of the Bankruptcy Code. Treatment of Claims Under the Plan, Administrative Claims will be paid in full and in cash on the effective date. Each holder of Priority Tax Claims, if any, will be paid in equal annual installments of principal and interest. Class 1 Allowed Priority Claims, totaling approximately $40,000, are expected to recover 100% of their allowed claim amounts either in cash or through a lesser treatment agreed to in writing. Laurus Master Fund Ltd.'s secured claim will be fully satisfied by a) transfer of rigs pursuant to a settlement agreement and a related sale order and b) payment of $2,100,000 pursuant to a settlement agreement and a related sale order. Berg McAfee Companies LLC's $1,120,000 estimated secured claim will be fully satisfied by issuance to Berg McAfee of a new three year note in the amount of $1,120,000 with an annual interest rate of 8%, with interest payable at the end of the term in Reorganized Blast Common Stock, and with a principal conversion right exercisable at Berg McAfee's election. Other secured claims, will, at the Debtors' option, either: a) be paid in cash in full; b) receive, without representation or warranty, the collateral securing its claim; or c) receive a note, secured by a lien securing its allowed secured claim. Holders of Convenience Claims against both Debtors will receive, in full and final satisfaction of their claim, cash on the distribution date equal to 75% of the allowed claim amounts. Unsecured Claims against both Debtors are entitled to cash payments equal to: (a) 35% of the allowed claim amount; and (b) 65% of the allowed unsecured claim in the form of a junior secured note. Second Bridge LLC's 900,000 shares of Blast common stock will, on the effective date, be purchased by Reorganized Blast for $900. Each holder of Allowed Unsecured Directors' Claim will be converted to Blast common stock at the rate of $ 0.20 per share. This class of claims in the Plan was created at the request of the Official Committee of Unsecured Creditors and informally has been consented to by each member of the Debtors' Board of Directors. All interests in the Debtors will be retained by the holders in the current form. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071017232413 About Blast Energy Services Headquartered in Houston, Blast Energy Services and its debtor- affiliate Eagle Domestic Drilling Operations LLC -- http://www.blastenergyservices.com/-- owns and contracts land drilling rigs to third parties. The Debtor also provides services relating to drilling rig operations. Blast Energy owns and develops abrasive jetting intellectual property, technology and equipment providing downhole production enhancement and drilling solutions, and satellite broadband access for Internet, data, email, applications, VoIP and video streaming as energy industry management tools providing real-time supervisory control and data acquisition. The company filed for Chapter 11 protection on Jan. 19, 2007 (Bankr. S.D. Tex. Case No. 07-30424 and 07-30426). H. Rey Stroube, III, Esq., represent the Debtors. The Official Committee of Unsecured Creditors is represented by Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP. When the Debtor filed for protection from its creditors, it listed total assets of $63,500,851 and total debts of $51,019,486. BLAST ENERGY: Plan Confirmation Hearing Slated for November 14 -------------------------------------------------------------- The Honorable Jeff Bohm of the United States Bankruptcy Court for the Southern District of Texas will convene a hearing on Nov. 14, 2007, at 9:00 a.m., in Courtroom 600, to consider confirmation of Blast Energy Services Inc. and Eagle Domestic Drilling Operations LLC's Amended Chapter 11 Plan of Reorganization dated Oct. 5, 2007. Objections to the confirmation of the Plan, if any, are due on Nov. 7. About Blast Energy Services Headquartered in Houston, Blast Energy Services and its debtor- affiliate Eagle Domestic Drilling Operations LLC -- http://www.blastenergyservices.com/-- owns and contracts land drilling rigs to third parties. The Debtor also provides services relating to drilling rig operations. Blast Energy owns and develops abrasive jetting intellectual property, technology and equipment providing downhole production enhancement and drilling solutions, and satellite broadband access for Internet, data, email, applications, VoIP and video streaming as energy industry management tools providing real-time supervisory control and data acquisition. The company filed for Chapter 11 protection on Jan. 19, 2007 (Bankr. S.D. Tex. Case No. 07-30424 and 07-30426). H. Rey Stroube, III, Esq., represent the Debtors. The Official Committee of Unsecured Creditors is represented by Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP. When the Debtor filed for protection from its creditors, it listed total assets of $63,500,851 and total debts of $51,019,486. BRIGGS & STRATTON: Posts $20.5 Million Net Loss in 1st Fiscal Qtr. ------------------------------------------------------------------ Briggs & Stratton Corporation disclosed results of its operations for its first quarter ended September 2007. The company reported a net loss of $20.5 million on consolidated net sales of $366.7 million for the first fiscal quarter ended September 2007. Consolidated net sales increased $28.4 million or 8% from the prior year while the net loss increased $4.0 million from the same period a year ago. The $28.4 million consolidated net sales increase was the result of increased engine unit volume to external original equipment manufacturers and stronger shipments of lawn and garden equipment to independent dealers. The increase in the net loss of $4.0 million is primarily the result of expenses associated with the shutdown of the company's Rolla, Missouri engine manufacturing plant and expenses associated with the opening of the company's new lawn equipment plant in Newbern, Tennessee. Revolving Credit Facility Extended On July 12, 2007, the company entered into a $500 million amended and restated multicurrency credit agreement. The Amended Credit Agreement provides a revolving credit facility for up to $500 million in revolving loans, including up to $25 million in swing-line loans. The company used the proceeds of the Revolver to, among other things, pay off amounts outstanding under the company's Term Loan Agreement dated Feb. 11, 2005, with various financial institutions and retire the Senior Notes that were due in September 2007. The Revolver has a term of five years and all outstanding borrowings on the Revolver will be due and payable on July 12, 2012. Balance Sheet At the end of the first quarter ended September 2007, the company's consolidated balance sheet showed $1.89 billion in total assets, $1.07 billion in total liabilities, and $816.2 million in total shareholders' equity. About Briggs & Stratton Headquartered in Wauwatosa, Wisconsin, Briggs & Stratton Corp. (NYSE: BGG) -- http://briggsandstratton.com/ -- produces air- cooled gasoline engines for outdoor power equipment. The company's engines are incorporated into products as diverse as lawnmowers, generators, pressure washers, pumps and welders, as well as many industrial/commercial applications. These engines are primarily aluminum alloy gasoline engines ranging from 3 to 31 horsepower. Additionally, through its wholly owned subsidiary, Briggs & Stratton Power Products Group LLC, Briggs & Stratton designs, manufactures and markets generators, pressure washers, snow throwers, lawn and garden powered equipment and related accessories worldwide. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007, Standard & Poor's Ratings Services revised its outlook on Briggs & Stratton Corp. to negative from stable. At the same time, Standard & Poor's affirmed all existing ratings on the company, including the 'BB+' corporate credit rating. BUILDING MATERIALS: S&P Puts 'BB' Rating Under Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on San Francisco-based Building Materials Holding Corp., including the 'BB' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement follows a change-of-management initiative by Chapman Capital LLC, BMHC's largest shareholder. Chapman Capital announced that it is seeking the replacement of BMHC's chairman and CEO, Robert Mellor, by Stanley Wilson, president of BMHC subsidiary BMC West Corp. "This change could lead to unexpected changes in business strategies that neither support credit quality nor stay within our expectations at the current ratings," said Standard & Poor's credit analyst Andy Sookram. The CreditWatch listing also reflects the ongoing weakness in the U.S. housing industry and Standard & Poor's expectation that this downturn will last longer than previously expected. S&P will continue to monitor the ultimate outcome of the shareholder action. S&P will discuss with management its near- term strategic initiatives and the potential effect of the increasing external pressure by Chapman Capital. S&P will also discuss with management its business and financial outlook, considering the continued downturn in the housing market. After S&P complete its analysis, S&P could downgrade the company by more than one notch. CALLIDUS DEBT: Moody's Rates $13 Million Class D Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service has assigned these ratings to notes issued by Callidus Debt Partners CLO Fund VI, Ltd.: (1) Aaa to the $25,000,000 Class A-1D Delayed Draw Senior Secured Floating Rate Notes Due 2021; (2) Aaa to the $279,000,000 Class A-1T Senior Secured Floating Rate Notes Due 2021; (3) Aa2 to the $23,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2021; (4) A2 to the $17,500,000 Class B Senior Secured Deferrable Floating Rate Notes Due 2021; (5) Baa2 to the $20,500,000 Class C Senior Secured Deferrable Floating Rate Notes Due 2021; and (6) Ba2 to the $13,000,000 Class D Senior Secured Deferrable Floating Rate Notes Due 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of senior secured loans and high yield bonds due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Callidus Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CAPITAL ONE: Posts $81.6 Million Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Capital One Financial Corporation disclosed a net loss of $81.6 million for the third quarter of 2007. This compares to net income of $587.8 million for the third quarter of 2006 and income from continuing operations of $767.6 million for the second quarter of 2007. "Capital One remains focused on driving revenue growth, reducing costs, and effectively deploying capital to generate strong returns for our investors," said Richard D. Fairbank, Capital One's chairman and chief executive officer. "Our businesses are generating robust revenue margins, even as we continue to take a cautious approach to underwriting and managing credit risk in the current environment." Highlights of the quarter: -- announced the shutdown of GreenPoint Mortgage, which is largely complete. When the company announced the shutdown, it estimated total after-tax charges to be $860 million, whereas the total impact in the third quarter of 2007 was approximately $883 million due primarily to increased valuation adjustments. The company expects to incur approximately $23 million of additional after-tax charges associated with GreenPoint Mortgage in the fourth quarter of 2007 and into early 2008. -- executed $477.5 million of open market share repurchases in the quarter, and completed the $1.5 billion Accelerated Share Repurchase program that was launched in April. The company expects to complete the $3.0 billion share repurchase program in the fourth quarter with additional repurchases of $772.5 million. -- successfully executed $3.8 billion in funding transactions despite difficult capital market conditions. "Earnings from continuing operations in the third quarter grew 6.4% over the second quarter of 2007 driven by increased revenues which more than offset increased credit costs in the quarter," said Gary L. Perlin, Capital One's chief financial officer. "We also realized significant operating leverage. Continued cost discipline and capital management will be two key drivers of future shareholder returns." Total Company Results Total deposits at the end of the third quarter of $83.3 billion were down $2.3 billion from the second quarter of 2007 primarily as a result of the intended run-off of high cost brokered and public deposits. Managed loans held for investment from continuing operations increased from the previous quarter by $1.3 billion driven largely by the growth in Global Financial Services. Total managed revenue is up 8.0% relative to the second quarter of 2007 driven largely by revenue margin expansion in our U.S. Card sub-segment. The company expects 2008 revenue growth to be in- line or slightly higher than asset growth. Provision expense was up quarter over quarter and year over year, in anticipation of higher charge-offs over the next twelve months, primarily in U.S. Card and Auto Finance. The provision increase related to continuing operations of $124.2 million is net of a $91.4 million release in allowance associated with the integration of bank allowance methodologies. Without this methodology change, the allowance would have increased $215.6 million due primarily to a build in the National Lending segment. Operating expenses declined $35.2 million relative to the second quarter of 2007 driven by continued efficiency gains across the businesses. Looking forward, the company expects its operating efficiency ratio to be in the mid-forty percent range for the full year 2008. Balance Sheet At Sept. 30, 2007, Capital One Financial Corp.'s consolidated balance sheet showed $147.15 billion in total assets, $122.37 billion in total liabilities, and $24.78 billion in total shareholders' equity. About Capital One Headquartered in McLean, Virginia, Capital One Financial Corporation (NYSE: COF) -- http://www.capitalone.com/-- is a financial holding company, with 732 locations in New York, New Jersey, Connecticut, Texas and Louisiana. Its principal subsidiaries, Capital One Bank, Capital One Auto Finance Inc., and Capital One N.A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One's subsidiaries collectively had $83.3 billion in deposits and $146.4 billion in managed loans outstanding as of Sept. 30, 2007. * * * Capital One Financial Corp. and principal subsidiary Capital One Bank both carry Fitch's 'B' Individual Ratings, which were placed on March 20, 2007. Capital One Bank also carries Moody's Bank Financial Strength rating of 'C+', which was placed on March 2, 2007. CBA COMMERCIAL: S&P Lowers Ratings on Three Certificate Classes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of commercial mortgage pass-through certificates from CBA Commercial Assets' series 2006-1. Concurrently, S&P affirmed its ratings on six other classes from the same transaction. The lowered ratings reflect the unfavorable performance of the collateral and the expected erosion of credit support upon the resolution of the assets with the special servicer. Furthermore, the downgrade of class M-7 to 'CCC-' reflects its expectation that it will sustain a principal loss when one or more of the specially serviced assets are resolved. S&P will lower the rating to 'D' when this occurs. The affirmations reflect credit enhancement that provides adequate support through various stress scenarios. As of the Sept. 25, 2007, remittance report, 16 assets were with the special servicer, Litton Loan Servicing L.P. The assets are categorized as follows: two are 30 days delinquent (1.08%); one is 60 days delinquent (0.11%); four are 90-plus-days delinquent (2.00%); eight are categorized as foreclosures (4.28%); and one is listed as real estate owned (REO; 0.06%). As of the Sept. 25, 2007, remittance report, the collateral pool consisted of 263 loans with an aggregate principal balance of $144.4 million, compared with 316 loans with a balance of $166.8 million at issuance. The top 10 loans account for 16.2% of the collateral pool. The pool exhibits geographic concentration in California (18.7%) and Louisiana (10.1%). Property concentrations exist in multifamily (35.1%), office (23.4%), retail (19.7%), and mixed-use (15.6%). By balance, 23.4% of the loans were originated by New Century Financial. S&P downgraded New Century to 'D' on March 12, 2007. Standard & Poor's stressed loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered CBA Commercial Assets Commercial mortgage pass-through certificates series 2006-1 Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- M-5 BB+ BBB- 4.28 M-6 B BB 1.68 M-7 CCC- B 0.67 Ratings Affirmed CBA Commercial Assets Commercial mortgage pass-through certificates series 2006-1 Class Rating Credit enhancement ----- ------ ---------------- A AAA 17.42 M-1 AA+ 14.24 M-2 AA- 11.07 M-3 A- 7.60 M-4 BBB 5.58 X-1 AAA N/A N/A - Not applicable. CHRYSLER LLC: Four Union Locals Reject UAW-Chrysler Labor Pact -------------------------------------------------------------- Four large union locals, representing a majority vote of Chrysler's 45,000 union members, rejected the United Auto Workers union's pact with Chrysler LLC over the weekend, according to various reports. Locals from Delaware, Missouri and Ohio turned down the pact on Saturday while a Detroit local with 2,200 UAW members, vetoed it on Sunday. The UAW-Chrysler pact failed to be ratified by 54% of the members of the UAW Local 1183, in Newark, Delaware. About 79% production workers and 66% skilled trade workers of the 2,900-member Local 110 in Fenton, Missouri, turned down the pact. Union locals who vetoed the deal include the Detroit Axle plant, the St. Louis North pick up plant and a stamping plant in Twinsburg, Ohio. On the other hand, UAW Local 868 in Georgia, which represents just 94 members, accepted the labor contract. Approximately 78% members of Local 72, a union local with 800 workers in Kenosha, Wisconsin, voted yes, while 22% were against the deal. As reported in the Troubled Company Reporter on Oct. 19, 2007, Bill Parker, Chair of the 2007 UAW Chrysler National Negotiating Committee, who voted against the new tentative labor agreement between Chrysler LLC and the United Auto Workers union, released a minority report to the members of the UAW Chrysler Council, urging the Council to reject Chrysler's offer and let the Committee return to the bargaining table. As previously reported, the UAW Chrysler Council, which includes local union leaders from Chrysler LLC facilities throughout the U.S., voted overwhelmingly to recommend ratification of the tentative agreement reached on Oct. 10, 2007. Mr. Parker, however, disclosed that the National Negotiating Committee had a split vote on the contract. 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 (B/Negative/--), including 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. CITRUS VALLEY: Moody's Affirms Ba1 Rating ----------------------------------------- Moody's Investors Service has affirmed Citrus Valley Health Partners' Ba1 underlying rating affecting $85 million of outstanding Series 1998 Certificates of Participation issued through the California Statewide Communities Development Authority. The outlook remains stable. The Series 1998 COPs are insured by MBIA and carry the insurer's claims paying rating of Aaa. LEGAL SECURITY: The outstanding bonds are secured by a pledge of gross revenues of the obligated group which includes Citrus Valley Health Partners (the parent corporation), Citrus Valley Medical Center, and Foothill Presbyterian Hospital. The obligated group makes up the majority of the system's revenues and assets. INTEREST RATE DERIVATIVES: None STRENGTHS * Localized system consisting of three hospitals with contiguous service areas in the East San Gabriel Valley garnering a strong and stable 36% market share; remaining market share spread among numerous organizations with none larger than 6% * Seven months into fourth year of positive operating performance (though with a 1.1% operating margin in fiscal year 2006, margins remain thin) * Slow but steady strengthening of cash balances, with cash on hand through seven months of fiscal year (FY) 2007 (ending July 31) of 90 days, up from 46 days in FY 2003 * Despite softening cashflows, debt maintenance measures remain adequate due in part to light overall leverage, with a solid maximum annual debt service (MADS) coverage of 3.7 times in FY 2006 (down from 4.2 times in FY 2005), and a favorable debt to cash flow measure of 4.2 times (weakening from 3.6 times in FY 2005) CHALLENGES * High average age of plant of 18.6 years due to many years of deferred maintenance; very significant capital expenditures will be needed to make system seismic compliant * Difficult operating environment given state's unfunded mandates and hospital's high Medi-Cal exposure * Fifth consecutive year of declining outpatient surgery volumes * Sharp increase in labor expense in FY 2006 due to unionization of nurses at CVMC; continued labor cost escalation likely to place further pressure on earnings RECENT RESULTS/DEVELOPMENTS The rating update follows a review of CVHP's audited financial statements for FY 2006 ending December 31, and unaudited, management prepared financial statements for seven months FY 2007 ending July 31. CVHP enjoys a relatively stable and strong market position as the dominant healthcare provider in eastern San Gabriel valley, achieving a market leading 36% market share, with the remaining share splintered among numerous and more distant organizations primarily serving other communities. CVHP consists of Foothill Presbyterian Hospital located in Glendora and operating 105 beds, and Citrus Valley Medical Center, which in turn is made up of two hospitals: Queen of the Valley located in West Covina and operating 302 beds; and Inter-Community located in Covina and operating 167 beds. These three contiguous locations within a densely populated metropolitan region provide CVHP with brand strength and regional presence, while still achieving revenue diversification and smoother volume fluctuations, as demonstrated by the stable volumes system wide (though more widely fluctuating on the hospital level) over the last several years. In fiscal year 2006, CVHP achieved a third year of positive operating margins, but overall experienced declining performance, with operating income dropping from $8.7 million in FY 2005 to $3.7 in FY 2006 (2.7% and 1.1% operating margins, respectively), and operating cash flow declining from $24.5 million to $20.3 million (7.6% and 6.0%, respectively). A primary driver of this was a steep 9% increase in labor costs resulting in large part from the unionization of nurses at CVMC. While increasing salaries to more competitive levels has had the salutary consequence of lowering both nursing vacancy and turnover rates significantly, Moody's notes concern over management's ability to match expense increases with revenue increases going forward given CVHP's high exposure to Medi-Cal and Medicare (23% and 42% of gross revenues, respectively). Other operating challenges contributing to CVHP's slim margins include capacity constraints within certain service lines, continued restrictions on the transfer of patients to LA County USC Medical Center, and the continued decrease in the number of outpatient surgeries performed. Nevertheless, FY 2006 results were better than budget, which we believe is a testament to management's ability to effectively confront on-going operating challenges, and to continue to optimize both mission and cost. Despite the decrease in cashflow in FY 2006, debt measures remain solid, with MADS coverage in FY 2006 of 3.7 times (based on normalized investment returns at 6%) and debt to cash flow of 4.1 times. Moody's notes that the strength of these measures are in no small part due to CVHP's relatively light debt load, and accumulated deferred maintenance budget. Efforts to address these capital needs will likely place material stress on these measures. Nevertheless, liquidity has continued to grow, reaching a much improve cash on hand level of 84 days at FYE 2006, compared with 46 days at FYE 2003. Moody's believes CVHP's greatest challenge is indeed its future capital needs. Due to having postponed maintenance earlier this decade when CVHP was producing significant operating losses, current average age of plant is a very high 18.6 years. Furthermore, CVHP will need very significant capital investment to make all if its facilities seismic compliant; a tremendous undertaking that currently is beyond CVHP's available resources. Nevertheless, CVHP has begun again to invest in its capital plant. The system is nearing completion of an emergency room replacement project for the Foothill Campus that will address much of the seismic requirements for that campus. The total cost of the project will likely be approximately $15 million, well in excess of the $11 million originally estimated, $13 million of which has been fundraised. An additional $3 million project is likely to be launched early next year that would create 22 additional acute care beds at Queens medical center. Moody's feels these projects will help contribute to CVHP's sustainability, and demonstrate management's continued commitment to its service area. Outlook Despite CVHP's positive forward momentum, the outlook is stable and reflects the organization's numerous challenges, including its competitive operating environment, thin profit margins, and limited financial reserves. Moody's believes CVHP will be challenged to address its very large future capital needs. What could change the rating - Up Improvement in performance and significant growth of liquidity; identification of resources to address capital needs What could change the rating - Down Reversal of current trends with a deterioration of financial performance or liquidity position; loss in market share due to increased competitive pressures; material increase in debt without commensurate growth in cash flow KEY INDICATORS Assumptions & Adjustments: - Based on financial statements for Citrus Valley Health Partners, Inc. and Affiliates - First number reflects audit year ended December 31, 2005 - Second number reflects audit year ended December 31, 2006 - FY 2005 operating results adjusted to exclude $2.5 million of worker's compensation adjustment applicable to FY 2004 - Investment returns smoothed at 6% * Inpatient admissions: 32,001; 32,009 * Total operating revenues: $321.2 million; $339.4 million * Moody's-adjusted net revenue available for debt service: $28.5 million; $24.8 million * Total debt outstanding: $88.5 million; $85.4 million * Maximum annual debt service (MADS): $6.7 million; $6.7 million * MADS Coverage with reported investment income: 4.1 times; 3.7 times * Moody's-adjusted MADS Coverage with normalized investment income: 4.2 times; 3.7 times * Debt-to-cash flow: 3.6 times; 4.1 times * Days cash on hand: 79 days; 84 days * Cash-to-debt: 74%; 87% * Operating margin: 2.7%; 1.1% * Operating cash flow margin: 7.6%; 6.0% RATED DEBT (debt outstanding as of 12/31/2007) - Series 1998 Fixed Rate Certificate of Participation ($59.78 million outstanding) - rated Aaa, insured by MBIA - Series 1998 Variable Rate Certificate of Participation ($25.0 million outstanding) - rated Aaa, insured by MBIA COGNIGEN NETWORKS: Ehrhardt Keefe Raises Going Concern Doubt ------------------------------------------------------------- Ehrhardt Keefe Steiner & Hottman PC said that Cognigen Networks, Inc., has experienced circumstances, which raise substantial doubt about its ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The company posted a net loss of $680,228 on $5,619,892 of revenue for the year ended June 30, 2007, as compared with a net loss of $1,308,483 on $6,245,275 of revenue in the prior year. At June 30, 2007, the company's balance sheet showed $1,015,490 in total assets, $2,316,869 in total liabilities, resulting in $1,301,379 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2458 About Cognigen Networks Cognigen Networks, Inc., (OTC BB:CGNW.OB) -- http://www.cognigen.net-- operates as an Internet and relationship enabled marketer. It offers a range of telecommunication services and related technology products through its Web site, cognigen.net. The company offers domestic and international long distance telephone and personal communication services, as well as sells prepaid calling cards/pins, and paging, wireless communications, and computers and Internet-based telecommunications products. In addition, the company, through its wholly owned subsidiary, Cognigen Business Systems, Inc., provides integrated broadband voice, data, video, and management communication and control support services to the quick service retail industry through an integrated suite of services, known as Retail Technologies CO-Op. The company sells its own proprietary products and services through a network of independent agents; and sells third party or outside vendor products and services as an agent to customers and subscribers worldwide. Cognigen Networks is headquartered in Mountlake Terrace, Washington. COLLINS CASHWAY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Collins Cashway Lumber, Inc. 240 Barberry Place Loveland, CO 80537 Tel: (970) 669-0215 Bankruptcy Case No.: 07-21866 Type of Business: The Debtor sells exterior building materials in wholesale and building products and materials in retail. Chapter 11 Petition Date: October 18, 2007 Court: District of Colorado (Denver) Debtor's Counsel: Daniel J. Garfield, Esq. Michael J. Pankow, Esq. Brownstein, Hyatt, Farber, Schreck, P.C. 410 17th Street, 22nd Floor Denver, CO 80202 Tel: (303) 223-1100 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. COLUMBIA AIRCRAFT: Wants to Hire Tonkon Torp as Bankruptcy Counsel ------------------------------------------------------------------ Columbia Aircraft Manufacturing Corporation asks the U.S. Court for the District of Oregon for permission to employ Tonkon Torp LLP as its bankruptcy counsel. Tonkon Torp will: a. advise Debtor of its rights, powers, and duties as debtor and debtor-in-possession continuing to operate and manage its business and properties under Chapter 11 of the Bankruptcy Code; b. take all actions necessary to protect and preserve Debtor's bankruptcy estate, including the prosecution of actions on Debtor's behalf, the defense of any action commenced against Debtor, negotiations concerning all litigation in which Debtor is involved, objections to claims filed against Debtor in the bankruptcy case, and the compromise or settlement of claims; c. advise Debtor concerning, and prepare on behalf of Debtor, all necessary applications, motions, memoranda, responses, complaints, answers, orders, notices, reports and other papers, and review all financial and other reports required from Debtor as debtor-in-possession inc connection with administration of the Chapter 11 case; d. advise Debtor with respect to, and assist in the negotiation and documentation of, financing agreements, debt and cash collateral orders, and related transactions; e. review the nature and validity of any liens asserted against Debtor's property and advise Debtor concerning the enforceability of such liens; f. advise Debtor regarding (i) its ability to initiate actions to collect and recover property for the benefit of its estate; (ii) any potential property dispositions; and (iii) executory contract and unexpired lease assumptions, assignments and rejections, and lease restructuring and recharacterizations; g. negotiate with potential purchasers for the sale of all or substantially all of Debtor's assets for the highest and best price and seek approval of a sale in accordance with Section 363; h. negotiate with creditors concerning a plan of reorganization; prepare the plan of reorganization, disclosure statement and related documents; take the steps necessary to confirm and implement the plan of reorganization, including, if needed, negotiations for financing the plan; and i. provide such other legal advice or services as may be required in connection with this Chapter 11 case or the general operation and management of Debtor's business. The Debtor has agreed to pay Tonkon Torp at these rates: Professional Designation Hourly Rate ------------ ----------- ----------- Leon Simson, Esq. Of Counsel $400 Albert N. Kennedy, Esq. Partner $400 Timothy J. Conway, Esq. Partner $350 Ava L. Schoen, Esq. Associate $225 Laura Lindberg Paralegal $175 Leslie Hurd Legal Assistant $90 Nancy Kennedy Legal Assistant $90 To the best of Debtor's knowledge, Tonkon Torp is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be contacted at: Tonkon Torp LLP 1600 Pioneer Tower 888 Southwest Fifth Avenue Portland, OR 97204 Tel: 503 221-1440 Fax: 503 274-8779 http://www.tonkon.com/ Headquartered in Bend, Oregon, Columbia Aircraft Manufacturing Corporation -- http://www.flycolumbia.com/-- manufactures a variety of all-composite aircraft, including the Columbia 400 and employs approximately 440 people. The company filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. Ore. Case No. 07-33850). When the Debtors filed for protection from their creditors, they listed estimated assets and liabilities of $1 million to $100 million. The Debtor's list of its 20 largest unsecured creditors showed total aggregate claims of more than $50 million. CONSUMERS ASSOCIATION: Bankruptcy Likely if Forced to Pay Costs --------------------------------------------------------------- The Consumers' Association of Canada disclosed in its website on Oct. 17, 2007, that it is seeking leave to appeal to the Supreme Court of Canada a decision of the Appeals Court of British Columbia. The group alleges that Coca Cola, Pepsi and other beverage manufacturers have been imposing a private tax on consumers for the recycling of beverage containers. The Courts of British Columbia have held that the Government of British Columbia approved this private scheme of taxation. The consumer group is challenging the constitutionality of this scheme to raise funds levied by the beverage industry, which at present exceeds $200,000,000. The BC Court's decision requires both the Consumers Association of Canada and its President to pay for the beverage industry's legal costs associated with the Class Action lawsuit brought by the Association in 2005. "This decision, which was fully supported by all the major players in the beverage industry, will result in the bankruptcy of the Association if left to stand," said Mr. Bruce Cran, President of the Consumers Association of Canada. "Our non-profit, volunteer run, Association which has been the voice of Canadian Consumers for 60 years will be silenced" he added. The Consumers' Association of Canada -- http://www.consumer.ca/-- is an independent, non-profit volunteer organization, represents and informs consumers and advocates action on their behalf to improve the quality of life. COPPER RIDGE: Case Summary & Eight Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Copper Ridge, L.L.C. 170 West Shirley Avenue, Suite 101 Warrenton, VA 20186 Bankruptcy Case No.: 07-13033 Type of Business: The Debtor is engaged in the real estate business. Chapter 11 Petition Date: October 18, 2007 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Jennifer D. Larkin, Esq. Linowes & Blocher, L.L.P. 7200 Wisconsin Avenue, Suite 800 Bethesda, MD 20814 Tel: (301) 961-5205 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John T. Hazel, III G.S.T. Loan $324,021 Trust 170 West Shirley Avenue, Suite 101 Warrenton, VA 20186 Wiltse & Associates, Inc. Trade Debt $35,000 6893 Well House Drive Warrenton, VA 20187 Fraser Forbes Company Trade Debt $25,000 6862 Elm Street, Suite 820 Mc Lean, VA 22101 Real Trust Management, L.L.C. Trade Debt $20,000 Davis, Barrell, Will, Trade Debt $1,892 Lewellyn & Edward H.G.S., L.L.C. Trade Debt $1,865 Angler Development, L.L.C. Trade Debt $1,420 Angler Title, L.L.C. Trade Debt $20 COUNTRYWIDE FINANCIAL: CEO Faces SEC Inquiry on Sale of Shares -------------------------------------------------------------- The U.S. Securities and Exchange Commission has commenced an informal investigation on Countrywide Financial Corp.'s chief executive officer, Angelo R. Mozilo, Gretchen Morgenson of the New York Times reports. The SEC wants to look into Mr. Azilo's stock sales, Ms. Morgenson adds, citing a person briefed on the matter. Shareholders have been criticizing Mr. Mozilo on the timing of his sales which allowed him to earn more than $132 million prior to the dive in the company's stock price. Ms. Morgenson relates that Mr. Mozilo has been selling shares through prearranged selling programs since 2004. However, Mr. Mozilo put in a new program sometime in October 2006 and increased the number of shares that could be sold. When the price reached $40.50 in December 2006, Mr. Mozilo increased to 465,000 from 350,000 the number of shares to be sold each month. He then increased this again to 580,000 in February 2007 when the shares traded at $45.03, Ms. Morgenson adds. Company spokesman Rock Simon declined to say anything on the issue citing that it was a matter of company policy no to comment on communications with regulators, Ms. Morgenson relates. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services prime and nonprime loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. At July 31, 2007, Countrywide employed 61,586 workers, 34,326 of which originate loans. The company was founded in 1969. Bankruptcy Speculation Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco, raised the possibility that Countrywide might need to seek protection from creditors under chapter 11 in a research report entitled "Liquidity is the Achilles heel" distributed to Merrill Lynch clients. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," Mr. Bruce wrote. With $216 billion in assets and $202 billion in liabilities, Countrywide would be the largest chapter 11 filing in U.S. history by those measures. The company however gave banking customers reassurance that their money was safe. That company cited that it has assets of more than $100 billion; has investment-grade ratings from three major credit rating agencies; and credit woes currently hurting its lending business won't affect federally insured deposits. Countrywide also disclosed that it received a $2 billion strategic equity investment from Bank of America which was completed and funded Aug. 22, 2007. In September 2007, Countrywide completed more than 17,000 loan modifications and is on target to complete nearly 25,000 in 2007, in its ongoing effort to curb foreclosures. COUNTRYWIDE FINANCIAL: Pension Plan Wants CEO Mozilo Replaced ------------------------------------------------------------- The American Federation of State, County and Municipal Employees wants Countrywide Financial Corp. CEO Angelo R. Mozilo out, the Associated Press reports. The union-affiliated pension plan wants Mr. Mozilo replaced with two independent directors to the board, the AP adds citing a letter sent by the pension plan to the company's board of directors. The pension plan further wants the executive compensation committee replaced with persons who weren't involved in the committee's actions, the AP relates. Countrywide didn't return a call by the Associated Press last Oct. 20, 2007. About AFSCME The American Federation of State, County and Municipal Employees -- http://www.afscme.org/-- is the largest union for workers in the public service with 1.4 million members nationwide. AFSCME organizes for social and economic justice in the workplace and through political action and legislative advocacy. AFSCME represents a diverse group of service and health care workers in the public and private sectors including nurses, EMTs, bus drivers, child care providers, custodians and librarians. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services prime and nonprime loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. At July 31, 2007, Countrywide employed 61,586 workers, 34,326 of which originate loans. The company was founded in 1969. Bankruptcy Speculation Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco, raised the possibility that Countrywide might need to seek protection from creditors under chapter 11 in a research report entitled "Liquidity is the Achilles heel" distributed to Merrill Lynch clients. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," Mr. Bruce wrote. With $216 billion in assets and $202 billion in liabilities, Countrywide would be the largest chapter 11 filing in U.S. history by those measures. The company however gave banking customers reassurance that their money was safe. That company cited that it has assets of more than $100 billion; has investment-grade ratings from three major credit rating agencies; and credit woes currently hurting its lending business won't affect federally insured deposits. Countrywide also disclosed that it received a $2 billion strategic equity investment from Bank of America which was completed and funded Aug. 22, 2007. In September 2007, Countrywide completed more than 17,000 loan modifications and is on target to complete nearly 25,000 in 2007, in its ongoing effort to curb foreclosures. COUNTRYWIDE FINANCIAL: CtW Investment Wants Resignation of CEO -------------------------------------------------------------- CtW Investment Group has asked for the resignation of Countrywide Financial Corp. CEO Angelo R. Mozilo, James R. Hagerty and Joann S. Lublin of the Wall Street Journal reports, citing a draft of CtW's letter to the company's board. The letter, WSJ relates, cited the U.S. Securities and Exchange Commission's probe on Mr. Mozilo's selling of shares as well as the apparent "culture of non-compliance" which has led the company to litigation and further scrutiny by regulators. Further, Mr. Mozilo failed to provide the needed leadership in order for the company be free of the current mortgage crisis. According to Ctw legal counsel Brishen Rogers, Esq., WSJ says that CEO Mozilo has become a distraction. WSJ discloses that the company didn't give any comments while it wasn't able to contact Mr. Mozilo for any comments. About CtW Investment The CtW Investment Group -- http://www.ctwinvestmentgroup.com/-- works with pension funds sponsored by unions affiliated with Change to Win, a coalition of unions representing nearly 6 million members, to enhance long-term shareholder value through active ownership. These funds, together with public pension funds in which CtW union members participate, have about $1.4 trillion in assets and are substantial long-term shareholders of the 11 homebuilders. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services prime and nonprime loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. At July 31, 2007, Countrywide employed 61,586 workers, 34,326 of which originate loans. The company was founded in 1969. Bankruptcy Speculation Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco, raised the possibility that Countrywide might need to seek protection from creditors under chapter 11 in a research report entitled "Liquidity is the Achilles heel" distributed to Merrill Lynch clients. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," Mr. Bruce wrote. With $216 billion in assets and $202 billion in liabilities, Countrywide would be the largest chapter 11 filing in U.S. history by those measures. The company however gave banking customers reassurance that their money was safe. That company cited that it has assets of more than $100 billion; has investment-grade ratings from three major credit rating agencies; and credit woes currently hurting its lending business won't affect federally insured deposits. Countrywide also disclosed that it received a $2 billion strategic equity investment from Bank of America which was completed and funded Aug. 22, 2007. In September 2007, Countrywide completed more than 17,000 loan modifications and is on target to complete nearly 25,000 in 2007, in its ongoing effort to curb foreclosures. CREDIT SUISSE: Moody's Holds Ratings on Three Class Certificates ---------------------------------------------------------------- Moody's Investors Service confirmed the ratings of three classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-CND2: - Class L, $15,464,952, Floating, confirmed at Ba1 - Class M, $23,000,000, Floating, confirmed at B2 - Class N, $18,835,048, Floating, confirmed at Caa2 On Sept. 20, 2007 Moody's downgraded Classes H, J, K, L, M and N and left all Classes on review for further possible downgrade due to performance issues with The Manhattan House Loan ($450.0 million). The Manhattan House Loan paid off in full on October 9, 2007 and Moody's is therefore confirming Classes L, M and N. The pool's remaining loan is the Mizner Court at Broken Sound Loan ($57.3 million). The loan is secured by a 450-unit apartment complex located in Boca Raton, Florida. To date there have been no condominium sales and due to a significant deterioration in the condominium market in south Florida the borrower is operating the complex as a rental property. The loan matures on Nov. 9, 2007 and the borrower does not qualify for its 12-month extension option. DELPHI CORP: Disclosure Statement Hearing Deferred to November 8 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York rescheduled to Nov. 8, 2007, the hearing to consider the adequacy of the disclosure statement explaining Delphi Corp.'s plan of reorganization. The hearing commenced Oct. 3, 2007, and was initially slated to continue Oct. 25, 2007. Delphi sought adjournment of the Adequacy Hearing to permit the company to continue negotiating potential plan amendments with key stakeholders, make appropriate amendments to both its settlement with General Motors Corp. and the Equity Purchase Commitment Agreement, and continue discussions with potential exit lenders. Delphi will file a notice of changed pages to the Disclosure Statement on Oct. 29, 2007, including information regarding proposed amendments to the Disclosure Statement, the Plan, the GM settlement and the EPCA. Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Earns $220 Million in Quarter Ended September 30 ----------------------------------------------------------- Delta Air Lines Inc. reported results for the quarter ended Sept. 30, 2007. Net income for the September 2007 quarter was $220 million. Delta's pre-tax income of $363 million reflects a more than $430 million improvement over the pre-tax loss of $69 million excluding reorganization items in the third quarter of 2006. Strong revenue improvements and continued cost benefits from restructuring produced the more than 5 point improvement in Delta's operating margin to 8.7% in the September 2007 quarter compared to the September 2006 quarter. "I want to thank my Delta colleagues for their efforts in delivering strong improvements to our financial and operational performance," said Richard Anderson, Delta's chief executive officer. "As these results demonstrate, Delta has emerged as a leader in the airline industry and we intend to maintain that position. We have significant opportunities in front of us as our financial improvements, combined with the power of our people, route network and balance sheet, give us tremendous flexibility and strength as the industry continues to evolve." Network and Revenue Improvements The momentum of network and revenue management initiatives produced quarterly operating revenue of $5.2 billion for the September quarter, the highest in Delta's history. During this period, 35% of Delta's capacity operated in international markets, up from 24% in September 2005. During the same period, the percentage of Delta's capacity operating in domestic markets declined to 65% from 76%. Delta improved consolidated passenger unit revenue to 11.33 cents in the September 2007 quarter, an increase of 6% compared to the same period last year. Strengthened Balance Sheet As of Sept. 30, 2007, the company's balance sheet showed total assets of $32.7 billion and total liabilities of $23 billion, resulting in a $9.7 billion stockholders' equity. At Dec. 31, 2006, deficit was $13.5 billion. As of Sept. 30, 2007, Delta had $3.0 billion in cash, cash equivalents and short-term investments, of which $2.4 billion was unrestricted. Delta also has an additional $1 billion available under its undrawn revolving credit facility. Delta expects to end 2007 with $2.9 billion in unrestricted cash and short-term investments plus its fully available $1 billion revolver. Emergence-related Items For the September 2007 quarter, offsetting emergence-related items resulted in no change to pre-tax income. These items were the adoption of fresh start reporting, which increased pre-tax income by $50 million, combined with share-based compensation expense for emergence equity awards, which decreased pre-tax income by $50 million. In total, emergence related items increased consolidated PRASM by 0.16 cents and increased mainline non-fuel CASM by 0.21 cents. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 2007, the Court confirmed the Debtors' plan. (Delta Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 16, 2007, Fitch Ratings has initiated coverage of Delta Air Lines Inc. with the assignment of these debt ratings: issuer default rating 'B'; First-lien senior secured credit facilities 'BB/RR1'; and Second-lien secured credit facility (Term Loan B) 'B/RR4' As reported in the Troubled Company Reporter on May 2, 2007, Standard & Poor's Ratings Services raised its ratings on Delta Air Lines Inc. (B/Stable/--), including raising the corporate credit rating to 'B', with a stable outlook, from 'D', following the airline's emergence from Chapter 11 bankruptcy proceedings. EDS CORP: Paying $0.05 per Share Dividend on December 10 -------------------------------------------------------- The EDS Corp.'s board of directors declared a dividend on the common stock of EDS of $0.05 per share, payable Dec. 10, 2007, to shareholders of record as of the close of business Nov. 15, 2007. Based in Plano, Texas, Electronic Data System Corp. (NYSE: EDS) -- http://www.eds.com/-- is a global technology services company delivering business solutions to its clients. EDS founded the information technology outsourcing industry more than 40 years ago. EDS delivers a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. * * * Moody's placed EDS Corp.'s senior unsecured debt rating at 'Ba1' in July 2004, and its probability of default rating at 'Ba1' in September 2006. The outlook is positive. The ratings still hold to date. FAIRCHILD SEMICONDUCTOR: Earns $20.3 Mil. in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Fairchild Semiconductor disclosed results for the third quarter ended Sept. 30, 2007. Fairchild reported third quarter net income of $20.3 million compared to net income of $3.4 million in the prior quarter and net income of $25.1 million in the third quarter of 2006. Included in these results is a net $7.8 million charge related to potential litigation outcomes and $2.4 million related to restructuring actions to streamline the company's cost structure. Gross margin was 30.3%, 230 basis points higher sequentially and 40 basis points lower than in the third quarter of 2006. Fairchild reported third quarter sales of $426.8 million, up 4% from the prior quarter and 2% higher than the third quarter of 2006. Fairchild reported third quarter adjusted net income of $34.1 million, compared to adjusted net income of $17.7 million in the prior quarter and adjusted net income of $30.6 million in the third quarter of 2006. Adjusted net income excludes amortization of acquisition-related intangibles, purchase accounting charges and in-process R&D related to the acquisition of System General, restructuring and impairments, charges for potential litigation outcomes, net loss on the sale of the RF product line and net gain on the sale of the LED product line, associated net tax benefits of these items and other acquisition- related intangibles, and certain discrete tax benefits and charges. "We achieved sales at the high end of our third quarter guidance range on the strength of robust computing and handset demand as well as strong turns orders," said Mark Thompson, Fairchild's president and chief executive officer. "We delivered excellent earnings leverage on these increased sales through better gross margin and great operating expense controls. The Analog Product Group increased sales 9% sequentially due primarily to strong demand for analog switches and voltage regulators. We delivered these results even as we further improved internal and distribution channel inventory turns. End Markets and Channel Activity "We recorded excellent sales growth for our products that service the computing and handset markets while the other end markets were generally inline with seasonal expectations," said Thompson. "Order rates are quite healthy as we enter the fourth quarter providing us with an excellent starting backlog position. Distributor sell-through was up about 8% sequentially in the third quarter, setting a new record for the company, while our sales into the channel tracked below this level. Sales to our OEM customers were up more than 15% sequentially and we expect this channel to lead the company in growth again in the fourth quarter. Utilization and Lead Times "We reduced lead times in the quarter through enhancements to our order management system and effective inventory control," stated Thompson. "We improved our average lead times to 9 - 10 weeks in the third quarter and we believe we can maintain this level even as we increase sales and factory loadings again in the fourth quarter. Third Quarter Financials "We posted solid sales and margin gains in the third quarter while continuing our disciplined inventory management," said Mark Frey, Fairchild's executive vice president and chief financial officer. "We improved adjusted gross margin 190 basis points sequentially as we benefited from higher factory loadings, richer product mix and lower bonus accrual. We expect these factors to continue to drive gross margin expansion in the fourth quarter as well. Internal inventories were down slightly in the third quarter to about 74 days. Our distributors posted strong sell-through which drove a one week reduction in channel inventory to a record low as measured by days of sales. We reduced R&D and SG&A expenses again in the third quarter due to tight spending controls and lower bonus accrual. Net interest and other expenses were slightly better than forecast at $5.0 million. "Cash and marketable securities increased $3.2 million to $451.0 million in the third quarter which reflected cash flow from operations of $58.3 million and capital spending of $48.4 million," stated Frey. Fourth Quarter Guidance "We expect fourth quarter revenues to be up 1% to 3% and gross margin to be approximately 50 to 150 basis points higher sequentially," said Frey. "At the start of the fourth quarter, we had about 90% of this sales guidance booked and scheduled to ship. We expect R&D and SG&A spending to be approximately $86.0 - $88.0 million in the fourth quarter as we continue to exercise strict controls over spending. Net interest and other expenses are expected to be $5.0-$5.5 million for the fourth quarter. At Sept. 30, 2007, the company's consolidated balance sheet showed $2.12 billion in total assets, $930.3 million in total liabilities, $2.9 million in temporary equity - deferred stock units, and $1.19 billion in total shareholders' equity. About Fairchild Semiconductor Headquartered in South Portland, Maine, Fairchild Semiconductor (NYSE: FCS) -- http://www.fairchildsemi.com/-- provides leading- edge silicon and packaging technologies, manufacturing strength and system expertise. Fairchild is an application-driven, solution-based semiconductor supplier providing online design tools and design centers worldwide as part of its comprehensive Global Power Resource. * * * As reported in the Troubled Company Reporter on Oct. 11, 2007, 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. GENERAL MOTORS: Global Third Quarter Sales Increase by 4% --------------------------------------------------------- General Motors Corp. sold a record 2.38 million cars and trucks around the world in the third quarter of 2007, a 4% increase compared with last year, according to preliminary sales figures. GM also reported record sales outside the United States, marking the 21st consecutive quarter of year-over-year sales increases outside the U.S. "GM's record third quarter sales were driven by exceptionally strong demand in emerging markets and our improving competitiveness in developed markets. GM global sales of 7.06 million vehicles for the first nine months of the year reflects solid results and more than 2 percent growth. We're on track to have our second-best annual sales performance in our almost 100- year history," John Middlebrook, GM vice president, Global Sales, Service and Marketing Operations, said. "In the third quarter we experienced record sales around the globe including a 22% increase in Latin America, Africa and the Middle East -- an all-time quarterly record for that region -- and 16% growth in the Asia- Pacific region. We're also pleased to post a sales gain of 15% in Europe where we sold more than 523,600 vehicles and set a Q3 record." GM posted record third quarter sales in Europe with deliveries of 523,600 vehicles, up 15%. GM had the highest quarterly volume increase of the top-ten manufacturers in Europe. Growth in Russia led the increase with a record 65,700 vehicles sold, up 75%. GM's growth in Russia is also supported by the start of Opel Antara production in St. Petersburg. GM is on track to sell more than 200,000 vehicles in Russia this year. Chevrolet achieved record European sales of 113,000 vehicles, up 28%. Opel/Vauxhall grew volume more than 12 percent in Europe. Cadillac sales were up 61% and HUMMER sales were up 28% in the region. For the first nine months of the year, GM Europe regional sales are up more than 8% to 1.65 million vehicles. In North America, planned reductions in daily rental sales and softness in the U.S. market due to increasing fuel prices and concerns about housing, resulted in sales of 1.20 million vehicles, a decline of 6% compared with last year. Despite a competitive U.S. market for full-size pickups, GM continued to show pickup truck segment leadership in the quarter thanks to the North America Truck of the Year Chevrolet Silverado and all-new GMC Sierra. GM's mid-car and mid-utility crossover segments also saw retail sales gains on the strength of mid-cars Saturn Aura, Pontiac G6 and Chevrolet Impala, and mid-utility crossovers GMC Acadia, Saturn Outlook and Buick Enclave. The newly-launched 2008 Chevrolet Malibu is building momentum as dealer demand is taxing available supply. Chevrolet global sales of 1.18 million vehicles in the third quarter of 2007 were up more than 5% compared with a year ago. The brand grew by 46% in Asia-Pacific, 28% in Europe and 27% in Latin America, Africa and the Middle East. GMC sales in North America were up 8% in Q3, largely due to the popularity of the Acadia mid-utility crossover and all-new Sierra full-size pickup truck. Saturn sales for the first nine months of the year were up more than 13% due to the sales performance of three new vehicles, the Sky roadster, Aura mid-car and Outlook mid-utility crossover vehicle. 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 Oct. 18, 2007, Moody's Investors Service changed the outlook of General Motors Corporation's long-term-debt rating to positive from negative, and also raised the company's speculative grade liquidity rating to SGL-1 from SGL-3 following the company's announcement of the terms of its new contract with the UAW. GM's existing long-term ratings -- including B3 corporate family, Ba3 senior secured, and Caa1 senior unsecured -- are unchanged. The ratings of GMAC (senior rating of Ba1/Negative outlook) are also unaffected. As reported in the Troubled Company Reporter on Oct. 17, 2007, Standard & Poor's Ratings Services said that its long-term ratings on General Motors Corp. remain on CreditWatch with positive implications, where they were placed Sept. 26, 2007. S&P placed the ratings on CreditWatch when GM and its main union, the United Auto Workers, reached a tentative new labor contract. The UAW has since approved that contract, and GM discussed the contract's economics. S&P expect to resolve the CreditWatch listing by Oct. 31, 2007. 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. GENESIS CLO: Moody's Rates $40 Million Class E Notes at Ba2 ----------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Genesis CLO 2007-1 Ltd.: (1) Aaa to the $1,570,000,000 Class A Senior Secured Floating Rate Notes, Due 2014; (2) Aa2 to the $110,000,000 Class B Senior Secured Floating Rate Notes, Due 2014; (3) A2 to the $70,000,000 Class C Senior Secured Deferrable Floating Rate Notes, Due 2014; (4) Baa2 to the $50,000,000 Class D Secured Deferrable Floating Rate Notes, Due 2014; and (5) Ba2 to the $40,000,000 Class E Secured Deferrable Floating Rate Notes, Due 2014. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of senior secured loans and second lien loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Ore Hill Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GLOBAL CREDIT: S&P Lowers Rating on Preferred Shares to BB- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Global Credit Pref. Corp.'s preferred shares and removed them from CreditWatch with negative implications, where they were placed Sept. 11, 2007. The lowering of the ratings mirrors the lowering of the rating on the credit-linked note to which the preferred shares are linked. Ratings List Global Credit Pref Corp. Ratings Lowered and Removed from CreditWatch Negative To From -- ---- Preferred shares Global scale BB- BB/Watch Neg National scale P-3(Low) P-3/Watch Neg HARRAH'S ENT: Mississippi Gaming Commission Okays Apollo Buyout --------------------------------------------------------------- Harrah's Entertainment Inc. received approval from the Mississippi Gaming Commission for the proposed acquisition of Harrah's by affiliates of Apollo Management L.P. and TPG Capital. The transaction remains subject to approval by other jurisdictions in which Harrah's subsidiaries operate and other conditions to closing set forth in the agreement and plan of merger entered into on Dec. 19, 2006. "We're pleased by the review and approval of the Mississippi Gaming Commission for the proposed acquisition of Harrah's Entertainment," Gary Loveman, chairman, CEO and president of Harrah's Entertainment Inc., said. "Mississippi continues to be a key market for Harrah's as we are an integral part of the state's community. Our disclosed +$700 million development plan for the Margaritaville Casino Resort in Biloxi is a representative example of our commitment." "This transaction with Apollo Management and TPG Capital allows Harrah's to continue its emphasis on growth and in providing the best guest experience throughout our network of gaming destinations," Mr. Loveman added. About Apollo Management L.P. Based in New York, Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black. It also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. About TPG Capital Headquartered in Fort Worth, Texas, TPG Capital, also known as Texas Pacific Group - http://www.texaspacificgroup.com/-- has staked its claim on the buyout frontier. The company, which does not get involved in the day-to-day operations of the companies in which it invests, usually holds onto an investment for at least five years, although consistent moneymakers may be kept indefinitely. About Harrah's Entertainment Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.(NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. * * * Standard & Poor's placed Harrah's Entertainment Inc.'s long term foreign and local issuer credit ratings at "BB" in December 2006, which still hold this date. HOLOGIC INC: Stockholders Give Nod to Cytyc Merger Deal ------------------------------------------------------- Hologic Inc. disclosed that more than 90% of the shares approve the Hologic's merger transactions with Cytyc Corporation and more than 70% of the outstanding shares of Hologic were voted in favor of the transactions at the Hologic Special Meeting of Stockholders. "We are pleased and gratified by the strong support we have received from our stockholders," Jack Cumming, Hologic's chairman and chief executive officer, said. "We are excited about bringing together two well-respected industry leaders in the women's healthcare and diagnostics marketplace, and we are eager to begin working with our colleagues at Cytyc to realize the benefits this combination will bring to stockholders, employees, physicians and their patients" Mr. Cumming added. The transaction is expected to close early next week. Under the terms of the Agreement and Plan of Merger entered into on May 20, 2007, Cytyc stockholders will receive 0.52 of a share of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own for a total consideration of approximately $6.2 billion. About Cytyc Corporation Headquartered in Marlborough, Massachussetts, Cytyc Corporation (NASDAQ:CYTC) -- http://www.cytyc.com/-- is a diversified diagnostic and medical device company that designs, develops, manufactures and markets diagnostic and surgical products. The company's products cover a range of cancer and women's health applications, including cervical cancer screening, treatment of excessive menstrual bleeding, radiation treatment of early stage breast cancer, and radiation treatment of patients with malignant brain tumors. Cytyc operates in three segments: domestic diagnostic products, domestic surgical products and international. The company has operations in Canada, Europe, Australia and Hong Kong. About Hologic Inc. Headquartered in Bedford, Massachussetts, Hologic Inc. (NASDAQ:HOLX) -- http://www.hologic.com/-- develops, manufactures and supplies diagnostic and medical imaging systems primarily serving the healthcare needs of women. The company operates in three segments: mammography and breast care, osteoporosis assessment and others. * * * As reported in the Troubled Company Reporter on Sept. 14, 2007, Standard & Poor's Rating Services assigned its 'BB-' corporate credit rating to Hologic Inc. with a stable outlook. INDIANAPOLIS DOWNS: Sells $425 Million Notes in Two-Part Deal ------------------------------------------------------------- Indianapolis Downs, LLC and Indiana Downs Capital Corp., disclosed the sale of $425 million in a two-part debt deal in the 144a private placement market, Reuters reports citing market sources. The deal, originally planned at $395 million, was solely managed by Jefferies & Co. Indianapolis Downs, LLC is a private company that owns and operates Indiana Downs, a 180-acre pari-mutuel horse racing facility located about 25 miles southeast of Indianapolis, Indiana in Shelbyville, Indiana. Indianapolis Downs, LLC is majority owned by various Oliver Family Trusts through Oliver Racing, LLC. * * * As reported in the Troubled Company Reporter on Oct. 17, 2007, Moody's Investors Service assigned a B3 corporate family rating and stable rating outlook to Indianapolis Downs, LLC. Moody's also assigned a B3 (LGD-4, 58%) rating to the company's $370 million second lien senior secured guaranteed notes due 2012, a Caa2 (LGD-6, 94%) to the $50 million senior secured subordinated pay-in-kind (PIK) notes due 2013. The notes are being issued under Rule 144A under the Securities Act of 1933 and will not be registered under securities laws. Indiana Downs Capital Corp. is the co-issuer of the Notes. Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Indianapolis Downs LLC. The rating outlook is stable. At the same time, Standard & Poor's assigned its issue level and recovery ratings to the company's planned $420 million of secured notes, comprising $370 million senior secured notes due 2012 and $50 million senior subordinated payment-in-kind notes due 2013. The senior notes are rated 'B', with a recovery rating of '4', indicating that lenders can expect average recovery in the event of a payment default. The subordinated notes are rated 'CCC+', with a recovery rating of '6', indicating that lenders can expect negligible recovery in the event of a payment default. INTEGRATED SECURITY: Weaver & Tidwell Raises Going Concern Doubt ----------------------------------------------------------------- Weaver and Tidwell LLP raised substantial doubt about Integrated Security Systems, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's significant losses from operations. The company posted a net loss of $4,831,379 on $10,713,437 of net sales for the year ended June 30, 2007, as compared with a net loss of $4,208,981 on $12,278,165 net sales in the prior year. At June 30, 2007, the company's balance sheet showed $6,351,809 in total assets and $16,903,893 in total liabilities, resulting in $10,552,084 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2455 About Integrated Security Headquartered in Carrollton, Texas, Integrated Security Systems Inc. (OTCBB: IZZI) - http://www.integratedsecurity.com/-- is a technology company that provides products and services for homeland security needs. ISSI also designs, develops and markets safety equipment and security software to the commercial, industrial and governmental marketplaces. ISSI's Intelli-Site(R) provides users with a software solution that integrates existing subsystems from multiple vendors without incurring the additional costs associated with upgrades or replacement. ISSI designs, manufactures and distributes warning gates, lane changers, airport and navigational lighting and perimeter security gates and operators. ISSI conducts its design, development, manufacturing and distribution activities through three wholly owned subsidiaries: B&B ARMR, Intelli-Site Inc. and DoorTek Corporation. INTERNATIONAL PAPER: Board Okays Annual Election of Directors ------------------------------------------------------------- The board of directors of International Paper Co. has authorized an amendment to the company's certificate of incorporation to declassify the board of directors and to provide for the annual election of directors. The company's proxy statement will include a proposal to shareholders, recommended by the board, to approve the amendment at the 2008 annual shareholders' meeting. The directors of International Paper currently are elected by class to staggered three-year terms. If the amendment is approved, declassification will be phased in over a three-year period. Beginning with the 2011 annual meeting, all directors will be elected annually for one-year terms. The phased-in approach allows for a simplified transition under both New York law and the company's certificate of incorporation, and provides needed continuity throughout the company's transformation plan. "Our board of directors has reviewed these issues carefully and decided to begin instituting this change," said John Faraci, International Paper chairman and chief executive officer. "Over the past several years, the company considered the issue of annual director elections, and with the transformation plan well underway, we believe the timing is right to move forward." Separately, the board of directors also unanimously authorized an amendment to the company's certificate of incorporation to provide for the election of directors by majority vote, after a 2007 shareholder proposal, endorsed by the board, in favor of the change. The company's proxy statement will include a proposal to shareholders, recommended by the board, to approve this amendment at the 2008 annual shareholders' meeting. Details of these actions will be provided in the company's proxy statement, which will be sent to all shareholders in advance of the 2008 annual meeting. 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. JOURNAL REGISTER: Earns $11.2 Million in Quarter Ended Sept. 30 --------------------------------------------------------------- Journal Register Company reported Thursday net income of $11.2 million for the quarter ended Sept. 30, 2007, as compared to net income of $7.3 million for the quarter ended Sept. 24, 2006. The company's 2007 third quarter included a federal income tax benefit of $6.1 million related to a capital loss carry-back claim that will be received in the fourth quarter of 2007 and a beneficial net tax adjustment of approximately $1.8 million from a Michigan State tax law change. Net income from discontinued operations totaled $786,000 for the 2006 third quarter. Total revenues from continuing operations for the quarter ended Sept. 30, 2007, were $113.0 million, as compared to total revenues of $122.0 million for the prior year, a decrease of 7.4%. James W. Hall, Journal Register's chairman and chief executive officer effective November 1st, said, "In spite of a very challenging advertising environment, the company achieved a number of objectives during the quarter and was able to record improved if not satisfactory results. I am especially pleased to note that we continue to maintain circulation numbers while keeping our focus on cost control. Our investments in the online side of our business -- both in talent and in technical assets -- continue to develop according to plan and we are seeing positive results from those efforts. And although the direction of the economy is uncertain, our management team and employees are working hard to generate more revenue by improving our business model, integrating our print and online operations, and developing new and exciting products for our customers." Executive vice president and chief financial officer Julie A. Beck said, "While we are not satisfied with our overall performance, our results for the quarter are demonstrating some mild improvements. For example, categories such as retail and classified employment results are slightly better than the previous quarter, and our online business, while still a small percentage of our total business model, is producing satisfactory results. We are working hard on three objectives -- to revitalize revenue, to achieve long term growth and to enhance shareholder value." Advertising Revenue Total advertising revenues for the third quarter decreased 9.4% to $85.8 million as compared to the third quarter of 2006. Excluding the results of the company's Michigan cluster, total advertising revenues declined 7.9%. Online Revenue Total online revenue increased 23.1%, and was up in all six of the company's clusters. Online revenue accounted for 5.6% of total advertising revenue for the quarter. The Greater Philadelphia, Michigan, Greater Cleveland, New York Mid-Hudson and Capital Saratoga clusters showed significant double-digit gains, with retail and employment as the leading categories. The company's web sites generated 97.7 million page views, an increase of approximately 12.7% as compared to the prior year quarter. In September, the company reported approximately 4.0 million unique visits to its web sites. Expenses The company decreased total operating expenses by 5.9% in the third quarter. Its same store non-newsprint cash operating expenses were down 4.9% in the third quarter compared to the prior year. Excluding online investment, the company's non-newsprint cash operating expenses decreased 5.2%. Newsprint expense declined 16.6% for the quarter, reflecting a decrease in unit cost of approximately 7.6% and a decrease in consumption of approximately 9.8%. Debt and Other Financial Information Debt declined by approximately $8.4 million in the third quarter to $642.2 million, which reflects a decrease of $88.0 million since Dec. 31, 2006. The company's capital expenditures in the third quarter were $6.2 million, including $1.3 million in online investment and $3.5 million for costs in connection with the new Macomb press and mailroom facility, which became operational in July 2007. The company's overall effective interest rate was 6.6% for the third quarter, 3.8% after tax. In October, the company prepaid an additional $10.0 million on the Term A portion of the company's credit agreement, making the next payment due in the first quarter of 2009. Cash Dividends Consistent with the company's objectives of conservative cash management and prudent investment in revenue initiatives, the company also disclosed that it will eliminate its quarterly dividend until further notice. About Journal Register Based in Yardley, Pennsylvania, Journal Register Company (NYSE: JRC) -- http://www.journalregister.com/-- owns 22 daily newspapers and 346 non-daily publications. It operates 227 individual web sites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment web sites that can be accessed through the company's web site. All of the company's operations are clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 premier employment Web sites. * * * As reported in the Troubled Company Reporter on Oct. 4, 2007, Standard & Poor's Ratings Services lowered its corporate credit and senior secured debt ratings on Journal Register Co. to 'B+' from 'BB-'. The ratings were removed from CreditWatch, where they were placed with negative implications on June 29, 2007. The rating outlook is negative. KELLWOOD CO: Board Recommends Rejection of Sun Capital Proposal --------------------------------------------------------------- Kellwood Company's board of directors has unanimously determined that Sun Capital Securities Group LLC's unsolicited proposal is not in the best long-term interests of Kellwood and its shareholders. This decision comes after careful consideration of the unsolicited proposal of Sun Capital to pursue an acquisition of the company at a price of $21 per share, and taking into account the potential benefits that may be realized through the company's long-term strategic plan. Kellwood's board conducted a detailed review of the company's strategy for enhancing shareholder value. Their review included consultation with the company's independent financial advisor -- Banc of America Securities LLC. The board concluded that the unsolicited Sun Capital proposal significantly undervalues the strength of Kellwood's expanded portfolio of brands and the company's opportunities for sales and earnings growth. "Our board is committed to enhancing shareholder value, and the Sun Capital proposal is not consistent with this objective," Robert C. Skinner, Jr., chairman, president and chief executive officer, stated. "We continue to believe that executing our corporate strategy to reinvigorate our core business, expand our penetration into higher profile, better and above price point brands, connect more directly with consumers, and utilize our operating infrastructure more efficiently to fund our growth will deliver greater value to our shareholders. Our board is determined to enable all of its shareholders to participate in these future benefits resulting from the Company's sales and earnings growth strategy." About Kellwood Company Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD) -- http://www.kellwood.com/-- markets apparel and consumer soft goods. The company specializes in branded as well as private label products, and markets to all channels of distribution with product specific to a particular channel. * * * As reported in the Troubled Company Reporter on Oct. 9, 2007, Moody's Investors Service lowered its corporate family and probability of default ratings on Kellwood Company to Ba3 from Ba2, concluding the review for possible downgrade that commenced on Sept. 10, 2007. At the same time the ratings on the company's unsecured debentures were lowered to B1 from Ba3. The rating outlook is stable. LAJITAS RESORT: Fails to Sell Assets at Auction ----------------------------------------------- The sale of Lajitas Resort Ltd. failed to push through after one bidder walked out of the auction, the Associates Press reports citing Mark J. Petrocchi, Esq., at Goodrich Posnikoff Albertson & Petrocchi. As reported in the Troubled Company Reporter on Oct. 2, 2007, the Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas ordered the sale of the Debtor's assets at an auction set for October 18. The property, according to an earlier report by the AP, was appraised at around $16 million by Brewster County Appraisal. Mr. Petrocchi says, the AP adds, that the Debtor is currently looking for other options but didn't disclose what those options are. Based in Lajitas, Texas, Lajitas Resort, Ltd. -- http://www.lajitas.com/-- owns and operates a hotel with a private club and real estate/property division. The company and three of its affiliates filed for chapter 11 protection on July 2, 2007 (Bankr. W.D Tex. Case Nos. 07-70143 through 07-70146). Clay Roark, Esq., at Roark Law Firm, P.C.; and Kevin G. Herd, Esq., and Mark J. Petrocchi, Esq., at Goodrich Posnikoff Albertson & Petrocchi, represent the Debtors. Jackson Walker LLP represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Lajitas Resort disclosed total assets of $820,962 and total debts of $15,438,843. LAWRENCE SHIERS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Lawrence D. Shiers, Jr. 2220 Tanglewood Drive North Dighton, MA 02715 Bankruptcy Case No.: 07-16644 Chapter 11 Petition Date: October 18, 2007 Court: District of Massachusetts (Boston) Judge: Robert Somma Debtor's Counsel: J. Michael Freedberg, Esq. 14 May Street, Suite 1 Salem, MA 01970 Tel: (978) 766-2354 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. LEVI STRAUSS: Completes $525MM Tender Offer of 12.25% Sr. Notes --------------------------------------------------------------- Levi Strauss & Co. has completed its tender offer for any and all of its $525 million outstanding aggregate principal amount of 12.25% Senior Notes due 2012 and related consent solicitation. A total of $506.2 million of the outstanding aggregate principal amount of the Notes were tendered prior to the expiration date of midnight, New York City time, on Oct. 17, 2007. The company has accepted for purchase all Notes tendered pursuant to the tender offer and consent solicitation, resulting in a total payment of $563.7 million, including approximately $20 million in accrued and unpaid interest and $15.2 million in consent payments, to holders of the Notes. The company has retained Credit Suisse Securities (USA) LLC as a dealer manager and solicitation agent in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at 212-325-4951 (collect). About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is a branded apparel company. The company designs and markets jeans and jeans-related pants, casual and dress pants, tops, jackets and related accessories for men, women and children under its Levi's, Dockers and Levi Strauss Signature brands in markets around the world. Levi Strauss & Co. distributes its Levi's and Dockers products primarily through chain retailers and department stores in the United States, and through department stores, specialty retailers and franchised stores abroad. The company distributes its Levi Strauss Signature products through mass channel retailers in the United States and abroad. * * * As reported in the Troubled Company Reporter on Oct. 16, 2007 Fitch Ratings assigned a 'BB+' rating to Levi Strauss & Co.'s second amended and restated $750 million 5-year Asset-Based Revolving Credit Facility. The rating outlook is stable. Levi Strauss carries Fitch's BB- Issuer Default Rating; BB+ Bank Credit Facility rating; and BB- Senior Unsecured Notes rating. LSP BATESVILLE: S&P Holds 'B+' Rating on $326 Million Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' rating on LSP Batesville Funding Corp.'s $326 million senior secured notes. In addition, S&P revised the outlook on the notes to negative from stable. The notes consist of a $150 million tranche maturing 2014 ($89.6 million outstanding) and a $176 million tranche maturing 2025. The revised outlook is due to low margins caused by operational issues, including two forced outages, one in August on one of the two units contracted to J. Aron & Co., and the previous one on the unit contracted to the South Mississippi Electric Power Association in May. Lowered net revenues from J. Aron have also put pressures on gross margins. The project, a special-purpose entity, is an indirect, wholly owned subsidiary of LSP Energy L.P., which was formed to develop, design, build, finance, own, operate, and maintain an 837 MW, natural-gas-fired, combined-cycle plant in Batesville, Miss. "LSP Batesville was established to coissue the bonds with parent LSP Energy," said Standard & Poor's credit analyst Justin Martin. "Barring the two forced outages of 2007, the three units have performed at availability factors of 98% or higher," he continued. The outlook on LSP Batesville is negative. The outlook will be resolved when plant performance stabilizes over the next three to six months and coverage ratios return to levels of 1.1x to 1.2x. If reserve margins tighten in the region after the power-purchase agreements expire, the rating could be positively affected. MADISON PARK: Moody's Rates $17.5 Million Class E Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Madison Park Funding VI, Ltd.: (1) Aaa to the $302,500,000 Class A--1 Floating Rate Notes Due 2021; (2) Aaa to the $76,000,000 Class A--2 Floating Rate Notes Due 2021; (3) Aa2 to the $30,000,000 Class B Floating Rate Notes Due 2021; (4) A2 to the $28,500,000 Class C Deferrable Floating Rate Notes Due 2021; (5) Baa2 to the $18,000,000 Class D Deferrable Floating Rate Notes Due 2021; and (6) Ba2 to the $17,500,000 Class E Deferrable Floating Rate Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of mostly leveraged loans and high-yield bonds due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Credit Suisse Alternative Capital, Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. MCCLATCHY CO: Reports Preliminary Earnings of $23.5MM in 3rd Qtr. ----------------------------------------------------------------- The McClatchy Company disclosed last week preliminary earnings from continuing operations in the third quarter of 2007 of $23.5 million. Preliminary earnings do not include an anticipated non-cash charge to GAAP earnings for impairment of goodwill and long-lived assets. Income from continuing operations in the third quarter of 2006 was $52.6 million. Total net income in the 2006 third quarter was $51.8 million. Management noted that it is in the process of performing impairment testing of goodwill and other long-lived assets as of Sept. 30, 2007, due to the continuing challenging business conditions and the resulting weakness in the company's stock price as of the end of its third quarter. Upon completion of that testing, the company expects to record a non-cash impairment charge to GAAP earnings in its third quarter financial statements when it files its Form 10-Q with the Securities and Exchange Commission on or before Nov. 9, 2007. Revenues from continuing operations in the third quarter of 2007 were $540.3 million, down 9.2% from revenues from continuing operations of $595.1 million in 2006. Advertising revenues were $457.0 million, down 9.8% from advertising in 2006, and circulation revenues were $68.0 million, down 3.7%. The company benefited from continued strong cost reduction efforts in the 2007 quarter. Cash expenses were down 8.6% as the result of reduction in staffing levels, lower newsprint expense and continued vigilance in all other expenses. Total losses recorded from unconsolidated investments were $7.7 million compared to losses from unconsolidated investments in the third quarter of 2006 of $800,000. The 2007 losses were due primarily to the operating results of the company's newsprint investments and were partially offset by income from its internet investments. First Nine Months Results Income from continuing operations for the first nine months of 2007 was $72.5 million, before the expected non-cash write down of intangible assets. The company's total net income, including the results of discontinued operations, for the first nine months of 2007 was $67.7 million. Discontinued operations reflect the results of the (Minneapolis) Star Tribune newspaper which was sold on March 5, 2007. Earnings from continuing operations in the first nine months of 2006 were $106.6 million, including the gain on the sale of land. Earnings from discontinued operations in the first nine months of 2006 were $17.1 million. Total net income for the first nine months of 2006 was $123.7 million. Discontinued operations reflect the results of the (Minneapolis) Star Tribune newspaper which was sold on March 5, 2007, and the results of eight former Knight Ridder newspapers which were sold in the third quarter of 2006. Revenues from continuing operations in the first nine months of 2007 were $1.7 billion compared to $1.0 billion in 2006. The greater revenues primarily reflect the addition of the 20 former Knight Ridder newspapers acquired in the third quarter of 2006. Advertising revenues in 2007 totaled $1.4 billion and circulation revenues were $209.6 million. On a pro forma basis, including the 20 former Knight Ridder newspapers acquired in June 2006 and excluding the Star Tribune newspaper in the first nine months 2006, total revenues in 2007 would have been down 7.5%, with advertising revenues down 8.4%, and circulation revenues down 4.0%. Interest expense from continuing operations for the first nine months of 2007 includes $5.7 million related to $530 million in debt repaid from the proceeds of the sale of the Star Tribune on March 5, 2007. However, the operations of the Star Tribune were included in discontinued operations during the first two months of 2007. In addition, earnings from continuing operations in the 2007 period included the effect of an after-tax non-cash loss of $4.7 million related to a second quarter payment by the Seattle Times Company, in which the company is a 49.5% owner, relating to the settlement of litigation and amendment to a joint operating agreement with The Hearst Company. Total losses recorded from unconsolidated investments were $28.6 million compared to income from unconsolidated investments in the first nine months of 2006 of $81,000. Management's Comments Commenting on McClatchy's results, Gary Pruitt, chairman and chief executive officer, said, "The economic downturn led by real estate continued to impact our advertising revenues in the third quarter. Once again our Florida and California newspapers were disproportionately hurt-these two regions accounted for 68% of the decline in advertising revenues in the third quarter while accounting for only 33% of total company revenues. "Our advertising results were in line with management expectations, and we were able to mitigate the impact of the advertising decline on our income with strong cost controls in the quarter. Total cash expenses were down 8.6% in the third quarter and were down 9.1% through the first nine months. Through September 2007, operating cash flow was down just 2.3% from the first nine months of 2006 on a proforma basis. "Our outlook for the fourth quarter has been tempered by the continuing adverse effect of the real estate downturn and its impact on the economies in our local markets, particularly in California and Florida. It's clear the economies of these two markets and perhaps the country as a whole are experiencing a greater slowdown than many had anticipated just a few months ago- and McClatchy is feeling the effects more than most other newspaper companies given our significant operations in California and Florida. Accordingly, we expect the advertising revenue decline in the fourth quarter to be similar to that in the second and third quarters. We do not know when this downturn will end, and do not have visibility beyond the fourth quarter. Nonetheless, we believe that cyclical factors represent a significant portion of the current advertising downturn as evidenced by our operations in the California and Florida regions. Looking longer term, we like the prospects for these two regions. We will continue to focus on cost controls and will weather the downturn by remaining efficient and protecting cash flows as best we can. "The challenging business environment in the second half of 2007, coupled with the drag on our stock price, has resulted in our moving up our annual testing of goodwill and intangible assets for impairment. We are now testing for impairment at the end of the third quarter rather than waiting until the normal time for our testing at year-end. While we are early in our analysis, we expect the real estate downturn and its attendant effects on the local economies in which we operate, together with the additional amount of goodwill recorded under the accounting rules in the Knight Ridder acquisition, will result in an impairment charge. "We recognize that newspaper revenues have declined and that values have dropped. But McClatchy is a solidly profitable company that is rapidly paying down debt and re-engineering its operations to navigate through a changing environment for all media companies. The impairment at issue involves only non-cash accounting charges, and the simplest way to put that in perspective is to remember that nothing about it changes our operations or our ability to reduce debt." Pat Talamantes, McClatchy's chief financial officer, said, "Our operations continue to produce significant cash which we are using to pay down debt. In addition we completed the sale of land in San Jose, California and several smaller assets during the quarter and used the proceeds to reduce debt. Debt at the end of the third quarter was $2.58 billion, down approximately $98 million in the quarter and down $697.4 million since the end of 2006. We expect debt to be approximately $2.5 billion at the end of 2007, and we expect our debt balance at the end of 2008 to be approximately $2.0 billion." About The McClatchy Company Headquartered in Sacramento, Calif., The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 31 daily newspapers and approximately 50 non-dailies. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star- Telegram, The Kansas City Star, The Charlotte Observer, and The (Raleigh) News & Observer. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Standard & Poor's Ratings Services placed its ratings for The McClatchy Co., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. MCNA CABLE: S&P Assigns 'B' Corporate Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' corporate credit rating to Puerto Rico-based MCNA Cable Holdings LLC, parent company of San Juan Cable LLC. The outlook is negative. As of June 30, 2007, consolidated debt totaled about $446 million. At the same time, S&P lowered the ratings on Puerto Rico-based San Juan Cable LLC. The corporate credit rating was lowered to 'B' from 'B+', while the ratings on the first-lien bank facilities were lowered to 'BB-' from 'BB', and the second-lien bank loan rating was cut to 'CCC+' from 'B-'. The outlook is negative. Since the recovery prospects for San Juan Cable LLC's first- and second-lien bank facilities have not been adversely affected by the downgrade, the respective '1' and '6' recovery ratings remain unchanged. "The downgrade reflects San Juan Cable LLC's weakened business profile," said Standard & Poor's credit analyst Catherine Cosentino. Basic subscriber losses in the past two quarters were about 2.4% and 3.3%, respectively, on an annual basis, and S&P are concerned losses will continue through the remainder of 2007. The losses are largely attributable to increased competition from satellite TV providers DIRECTV and EchoStar, and some economic weakness in the region that's reflected in lower pay TV penetration of around 73%, versus about 85% in the U.S. mainland. The loss of basic subscribers suggests a more vulnerable business position and reduces the company's ability to increase revenue and operating cash flow from broadband and telephony expansion and reduce the aggressive leverage of 8.3x at the consolidated MCNA Cable. The ratings reflect high financial risk from aggressive acquisition-related debt usage, growing competition from satellite TV companies, small company size and lack of geographic revenue diversity, uncertain demand for advanced services, and competition from Telecomunicaciones de Puerto Rico Inc. for data services and, potentially, for video services in future. Tempering factors include revenue growth potential from bundled advanced services provided over San Juan Cable LLC's upgraded cable plant, the ability to offer more Spanish-language and local channels than satellite TV providers, high average revenue per user, and high system density and associated operating benefits. The cable system passes more than 337,000 homes and serves over 133,000 basic subscribers. MCNA Cable is controlled by financial sponsors MidOcean Partners L.P. and Crestview Partners L.P. MIAMI BEACH HEALTH: S&P Revises Outlook to Negative from Stable --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook to negative from stable on the 'BB+' rated Miami Beach Health Facilities Authority, Florida's $273.4 million series 2004, 2001A, and 1998 bonds issued on behalf of Mount Sinai Medical Center, reflecting concerns about deterioration in profitability and business position in the current fiscal year. Although management has responded quickly to reduce expenses, the magnitude of the current year's operating and volume losses make it difficult to implement an immediate turnaround. Management has also prudently put a major expansion project on hold while simultaneously pursuing the sale of Miami Heart Institute, which would provide funds for further strategic and operating initiatives. Standard & Poor's will continue to review the hospital's financial progress and future capital plans, both of which will dictate the future direction of this rating. The center's foundation has a long track record of success, which remains a positive rating factor. "The revised outlook reflects Mount Sinai's continued, although diminishing, losses from operations and a substantial erosion in the center's signature heart business," said Standard & Poor's credit analyst Cynthia Keller Macdonald. "Although management has clearly outlined its strategies to recapture business, the success of these measures may not be proven for a while." Mount Sinai's loss from operations excluding investment earnings in 2006--at negative $12.9 million--was higher than the approximately $7 million-$8 million losses posted in 2004 and 2005, but substantially less than the loss posted in 2003. While admissions and other volume measures largely improved in 2006, expense increases outpaced revenue increases, resulting in slightly weakened margins. The bottom line of $2.2 million was down from 2004 and 2005 and resulted in thin maximum annual debt service coverage of 1.95x with a relatively high debt burden of 4.75%. These results also include $10 million in operating support transferred from the foundation in each year. Year-to-date through six months ended June 30, 2007, Mount Sinai has lost $6.6 million from operations, which is below both budget and the prior year's performance. Mount Sinai Medical Center operates a 780-staffed-bed acute-care and research hospital in Miami Beach and is one of two academic medical centers in Miami-Dade County. MOVIE GALLERY: Wants to Hire Kirkland & Ellis as Lead Counsel ------------------------------------------------------------- Movie Gallery, Inc., and its debtor affiliates ask permission from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Kirkland & Ellis, LLP, as their lead counsel. Kirkland & Ellis will: (a) advise the Debtors-In-Possession with respect to their powers and duties in the continued management and operation of their business and properties; (b) advise and consult on the conduct, including all legal and administrative requirements of operating of the Chapter 11 cases; (c) attend meetings and negotiate with creditors' representatives and other parties-in-interest; (d) take all necessary action to protect and preserve the Debtors' estates, including (i) prosecute actions on the Debtors' behalf, (ii) defend any action commenced the Debtors, (iii) represent the Debtors' interests in negotiations concerning all litigation, including objections to claims filed against the Debtors' estates; (e) prepare all pleadings, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining postpetition financing; (g) advise the Debtors on any potential sale of assets; (h) appear before the Court and any appellate courts to represent the Debtors' interests; (i) consult with the Debtors regarding tax matters; (j) take necessary action on the Debtors' behalf, to negotiate, prepare and obtain a Chapter 11 Plan and all its related documents; (k) perform all other necessary or otherwise beneficial legal services including: * analyzing the Debtors' leases and contracts, and corresponding assumptions, rejections or assignments; * analyzing the validity of liens against the Debtors; and * advising the Debtors on corporate and litigation matters. Anup P. Sathy, Esq., a partner at Kirkland & Ellis, says that the firm's professionals will be paid based on its standard hourly rates: Designation Hourly Rate ----------- ----------- Partners $500 - $975 Of Counsel $380 - $870 Associates $275 - $595 Paraprofessionals $120 - $260 Kirkland professionals expected to assume primary responsibility and provide primary services to the Debtors are: (1) Richard M. Cieri (2) Anup Sathy, P.C. (3) Marc J. Carmel Mr. Sathy discloses that the firm received payments from the Debtors before the Petition Date: -- retainer fee of $100,000 in November 2006; -- retainer fee of $1,000,000 in June 2007. In March 2007, K&E invoiced the Debtors for $3,120 and returned $96,879. As of the Petition Date, the Debtors did not owe Kirkland & Ellis any amounts for prepetition legal services. Mr. Sathy assures the Court that his firm is a "disinterested person" as that term is defined is Section 101(14) of the Bankruptcy Code, and does not hold any adverse interest to the Debtors' estate. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) MOVIE GALLERY: Gets Interim OK to Use Lenders' Cash Collateral -------------------------------------------------------------- Movie Gallery Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to use Goldman Sachs Credit Partners L.P. and Wachovia Bank, N.A.'s cash collateral to pay its ongoing expenses and debts. Prior to the date of bankruptcy, the Debtors borrowed money under: 1) a First Lien Credit and Guaranty Agreement, dated Mar. 8, 2007, with Goldman Sachs Credit Partners L.P. as lead arranger and syndication agent; Wachovia Bank, National Association, as collateral agent and documentation agent; and certain lenders: Amount Outstanding Credit Facility As of Sept. 30, 2007 --------------- -------------------- $100,000,000 Revolving $100,000,000 loan facility $600,000,000 First lien $597,000,000 term loan facility $25,000,000 Synthetic $23,600,000 letter of credit facility As of the Petition Date, the First Lien debt was bearing interest at a daily rate, payable monthly, equal to a base rate plus 3.75% per annum for the revolving exposure, the base rate plus 4.75%, for term loans, and an Adjusted Eurodollar Rate plus 5.75% per annum, for synthetic letters of credit. The First Lien debt matures March 8, 2012. 2) A Second Lien Credit and Guaranty Agreement, dated March 8, 2007, with Goldman Sachs Credit Partners as lead arranger and syndication agent; Wells Fargo Bank, National Association, as successor administrative agent and collateral agent; and certain lenders. The Debtors' outstanding obligations total $175,000,000 as of Sept. 30, 2007, plus interest, fees and charges. The loan matures Sept. 8, 2012. As of the Petition Date, the Second Lien debt was in default. The aggregate $900,000,000 obtained under the Prepetition Loans was used by the Debtors to refinance an $829,900,000 credit facility entered into in 2005 in connection with Movie Gallery, Inc.'s acquisition of Hollywood Video, Inc. The 2005 facility had $754,900,000 outstanding at the time. On August 20, 2007, Movie Gallery elected to pay-in-kind 100% of the interest on the entire principal amount of the Second Lien debt commencing with the interest period after that date. As of the filing of bankruptcy, the First Lien debt is oversecured on a going-concern basis by perfected, valid, binding and non- avoidable first priority liens and security interests granted by the Debtors to or for the benefit of the First Lien Loan Parties upon all of the collateral existing as of the time immediately prior to the Petition Date and the related postpetition proceeds and products. The Collateral consists of all tangible and intangible real and personal property of the Debtors except for certain leasehold mortgages on stores and 35% of the equity interests owned in wholly owned non-domestic subsidiaries. The Collateral also secures the Second Lien debt, but the rights of the Second Lien Loan Parties in the Collateral are junior and subordinate to the rights of the First Lien Loan Parties in accordance with an Intercreditor Agreement dated March 8, 2007. According to William C. Kosturos, managing director at Alvarez & Marsal North America LLC, and chief restructuring officer of Movie Gallery, Inc., the Debtors require the use of cash on hand and amounts generated by the collection of accounts receivable, sales of inventory or other dispositions of the Prepetition Lenders' Collateral to pay present operating expenses, including payroll and vendors, and to ensure a continued supply of goods and services. Mr. Kosturos explained that because of the Debtors' recent financial distress, most of their key vendors have demanded cash in advance or cash on delivery payment terms. The Debtors require access to Cash Collateral to satisfy product delivery requirements to permit the Debtors to maintain adequate inventory during the holiday season, Mr. Kosturos pointed out. At a hearing on October 16, 2007, in Richmond, Virginia, the Honorable Douglas O. Tice, Jr., gave the Debtors interim authority to use the Prepetition Lenders' Cash Collateral through the earlier of: (a) the acceleration of the Debtors' obligations under their $150,000,000 DIP credit facility syndicated by Goldman Sachs Credit Partners as lead arranger, syndication agent, and documentation agent; and The Bank of New York as administrative agent and collateral agent; (b) the maturity date of the DIP Credit Agreement; and (c) the breach by the Debtors of their obligations to provide adequate protection to the Prepetition Lenders. Judge Tice granted the Prepetition Lenders replacement liens as adequate protection for, and solely to the extent of, any diminution in value of the Lenders' interest in the Cash Collateral resulting from (i) the priming of their liens upon and security interests in the Collateral by the liens and security interests granted to DIP Lenders, (ii) the use of the Collateral, (iii) the use, sale, lease, depreciation or other diminution in value of the Collateral and (iv) the imposition of the automatic stay. The Debtors will also pay for the Prepetition Lenders' legal costs. The adequate protection liens are subject to a carve-out for fees pursuant to 28 U.S.C. Section 1930(a)(6); fees payable to the clerk of the Bankruptcy Court; and bankruptcy professionals' fees and expenses, which will be capped at $7,000,000 in the event the Debtors default on their DIP loan obligations. Interested parties may initiate an action challenging the validity, priority, security, enforceability or amount of the Prepetition Lenders' liens. Any statutory committee of creditors will have 75 days after appointing its bankruptcy counsel to commence an adversary proceeding or other action. Other parties- in-interest have until Dec. 30, 2007. Judge Tice will hold a hearing on Nov. 6, 2007, at 2:00 p.m. to consider the Debtors' request on a final basis. Objections, if any, are due Oct. 30, 2007. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. An Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) MOVIE GALLERY: Gets Interim Nod to Access $150 Mil. DIP Financing ----------------------------------------------------------------- Movie Gallery, Inc. and its debtor-affiliates obtained authority from the Honorable Douglas O. Tice, Jr. of the U.S. Bankruptcy Court for the Eastern District of Virginia, to borrow, on an interim basis, up to $140,000,000 of their lenders' DIP Credit Facility within the next 30 days. The Debtors entered into a $150,000,000 Secured Super-Priority Debtor-in-Possession Credit and Guaranty Agreement, dated as of Oct. 16, 2007, with Goldman Sachs Credit Partners L.P. as lead arranger, syndication agent, and documentation agent; The Bank of New York as administrative agent and collateral agent; and a consortium of lenders. According to William C. Kosturos, managing director at Alvarez & Marsal North America LLC, and chief restructuring officer of Movie Gallery, Inc., the Debtors have an urgent need to obtain the DIP Financing for, among other things, continuing the operation of their business in an orderly manner, maintaining business relationships with vendors, suppliers and customers, paying employees and satisfying other working capital and operational needs. Mr. Kosturos pointed out that the Debtors' access to financing during this time, especially in light of their recent precarious financial position, will be key to the long-term success of their business and their overall ability to maximize value for all parties-in-interest. Mr. Kosturos noted that the fourth quarter, which includes the holiday season, is often the most important time of the year as it relates to the Debtors' profitability. Terms of $150-Mil. DIP Loan Facility The DIP Credit Facility consists of a $100,000,000 term loan and a $50,000,000 revolving loan and letter of credit facility. At the Borrower's option, a portion of the DIP Revolving Facility may be made available as swing line loans. Up to $7,500,000 of the DIP Revolving Facility may also be made available for the issuance of letters of credit. Movie Gallery will use the DIP loan proceeds to (a) refinance its $100,000,000 prepetition revolving loan facility with Goldman Sachs and Wachovia Bank, National Association; (b) pay certain other fees and expenses relating to the DIP Credit Agreement, (c) support the working capital and general corporate purposes of the Debtors and (d) make any other payments. Movie Gallery delivered a business plan and projected operating budget to Goldman Sachs on October 5, 2007. The DIP Facility will mature on the earlier of: (i) September 30, 2008; (ii) the effective date of a chapter 11 plan of reorganization or liquidation confirmed by the Court; and (iii) the date that all Loans will become due and payable in full, whether by acceleration or otherwise. At the Borrower's option, the DIP Revolving Facility may incur interest at a base rate plus 2.50% per annum plus the Applicable Case Milestone Margin then in effect, if any; or if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 3.50% per annum plus the Applicable Case Milestone Margin. Swing Line Loans will incur interest at the Base Rate plus 2.50% per annum plus the Applicable Case Milestone Margin. The DIP Term Facility will incur interest at the Base Rate plus 2.50% per annum plus the Applicable Case Milestone Margin; or if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 3.50% per annum plus the Applicable Case Milestone Margin. The "Applicable Case Milestone Margin" is: -- 0.75%, in the event the Debtors fail to file a chapter 11 plan of reorganization or liquidation and a related disclosure statement with the Bankruptcy Court on or prior to Jan. 15, 2008; or in the event an order approving the Debtors' disclosure statement is not entered by the Court on or prior to Mar. 1, 2008; -- 1.50%, in the event an order confirming the Debtors' Plan is not entered by Apr. 30, 2008; and -- 2.25%, in the event the effective date of the Debtors' Plan has not occurred on or prior to May 31, 2008. The DIP Obligations are secured by all of the assets of Movie Gallery's domestic subsidiaries, including claims and causes of actions under Chapter 5 of the Bankruptcy Code, and 65% of the Debtors' interests in their foreign subsidiaries. The DIP Obligations will have superpriority administrative expense status, subject to a carve-out for fees pursuant to 28 U.S.C. Section 1930(a)(6); fees payable to the clerk of the Bankruptcy Court; and bankruptcy professionals' fees and expenses, which will be capped at $7,000,000 in the event the Debtors default on their DIP loan obligations. The DIP Credit Agreement contains customary events of default. Movie Gallery covenants with the DIP Lenders not to permit its Consolidated Adjusted EBITDA as of the last day of any fiscal month, beginning with the fiscal month ending Nov. 4, 2007, for the immediately preceding 12-fiscal month period ending on that date, to be less than: Consolidated Fiscal Month Ending Adjusted EBITDA ------------------- --------------- November 4, 2007 $114,000,000 December 2, 2007 $108,000,000 January 6, 2008 $118,000,000 February 10, 2008 $110,000,000 March 9, 2008 $104,000,000 April 6, 2008 $108,000,000 May 11, 2008 $110,000,000 June 8, 2008 $120,000,000 July 6, 2008 $120,000,000 August 10, 2008 $120,000,000 September 7, 2008 $120,000,000 Beginning with the fiscal month ending November 4, 2007, the Borrower also will not permit (i) the Revolving Commitments less the Total Utilization of Revolving Commitments plus (ii) the aggregate amount of Cash in its cash deposit and concentration accounts, to be less than: Fiscal Month Ending Amount ------------------- ------ November 4, 2007 $13,000,000 December 2, 2007 $7,000,000 January 6, 2008 $61,000,000 February 10, 2008 $96,000,000 March 9, 2008 $57,000,000 April 6, 2008 $97,000,000 May 11, 2008 $79,000,000 June 8, 2008 $55,000,000 July 6, 2008 $39,000,000 August 10, 2008 $55,000,000 September 7, 2008 $43,000,000 Movie Gallery also covenants with the DIP Lenders not to incur Consolidated Capital Expenditures, as of the last day of any fiscal month, beginning with the fiscal month ending Nov. 4, 2007, for the immediately preceding 12-fiscal month period ending on that date, in excess of $20,000,000. Pursuant to the DIP Credit Agreement, Movie Gallery is required to pay a facility fee to Goldman Sachs; an acceptance fee and agency fee to Bank of New York; commitment fees and letter of credit fees to the Lenders under the Revolving Facility; and fronting fees to Wachovia Bank, which has pledged to issue letters of credit. Movie Gallery will also reimburse the DIP Lenders for their legal fees and expenses and provide the Lenders indemnification. Debtors Given Interim Authority to Use $140-Mil. Judge Tice commented, "The ability of [the] Debtors to continue their businesses and remain viable entities and thereafter reorganize under Chapter 11 of the Bankruptcy Code depends upon [the] Debtors' obtaining such financing from [the] DIP Lenders." Judge Tice will hold a hearing on Nov. 6, 2007, at 2:00 p.m. to consider the Debtors' request on a final basis. Objections, if any, are due Oct. 30, 2007. A full-text copy of the DIP Credit Agreement is available at no charge at http://researcharchives.com/t/s?245d About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. An Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) NATIONWIDE HEALTH: Prices $300 Million Offering of 6.25% Notes -------------------------------------------------------------- Nationwide Health Properties Inc. has priced its $300 million of 6.25% notes due Feb. 1, 2013, reflecting a $50 million increase from the initial offering size. The price to the investors for the notes was 99.941% of the principal amount for an effective yield of 6.266%. The net proceeds of the offering after deducting estimated underwriting discounts and other offering expenses will be approximately $297 million. NHP intends to use the net proceeds of the offering to repay amounts outstanding under its unsecured credit facility and for general corporate purposes. The company expected this offering close on Oct. 19, 2007, subject to customary closing conditions. The offering was underwritten by UBS Securities LLC, J.P. Morgan Securities Inc. and Banc of America Securities LLC as joint book- running managers. Calyon Securities (USA) Inc. and KeyBanc Capital Markets Inc., acted as senior co-managers and SunTrust Robinson Humphrey, Inc., Wells Fargo Securities LLC and Wachovia Capital Markets, LLC acted as co-managers. The offering of these notes will be made only by means of a prospectus and the related prospectus supplement, a copy of which may be obtained from: a) UBS Securities LLC Fixed Income Syndicate Department 677 Washington Boulevard Stamford, CT 06901 b) J.P. Morgan Securities Inc. National Statement Processing, Prospectus Library 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 c) Banc of America Securities LLC Prospectus Department 100 West 33rd Street, 3rd Floor New York, NY 10001 Headquartered in Newport Beach, California, Nationwide Health Properties Inc. -- http://www.nhp-reit.com/-- is a real estate investment trust that invests in senior housing and long-term care facilities. The Company has investments in 534 facilities in 43 states. * * * Nationwide Health Properties Inc. carries Moody's Investors Service's 'Ba1' Cumulative Preferred and 'Ba1' Non-cumulative Preferred ratings. NETTIME SOLUTIONS: Semple Marchal Raises Going Concern Doubt ------------------------------------------------------------- Phoenix, Ariz.-based Semple, Marchal & Cooper, LLP, raised substantial doubt about NETtime Solutions, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditing firm stated that the company has suffered recurring losses from operations and has a net capital deficiency. The company posted a net income of $140,436 on $5,377,207 of total revenues for the year ended June 30, 2007, as compared with a net loss of $1,945,735 on $ 6,716,150 total revenues in the prior year. At June 30, 2007, the company's balance sheet showed $1,602,708 in total assets and $3,230,311 in total liabilities, resulting in $1,835,238 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?245c About Nettime Solutions NETtime Solutions, Inc. , (OTC BB:NTMS.OB) -- http://www.nettimesolutions.com-- formerly called Time America, the company provides Web-based attendance monitoring software. Executives and managers can use its systems to track attendance and costs, enforce payroll policies, and manage benefits accruals. The company also provides hardware, including badge terminals and biometric punch clocks. Its services include implementation, support, and training. In 2007 the company sold its GENESIS, HourTrack, and TA7000 product lines, along with rights to the Time America name, to Synel Industries. NPS PHARMA: Completes 3% Convertible Notes Cash Tender Offering --------------------------------------------------------------- NPS Pharmaceuticals Inc. completed its cash tender offer for any and all of its outstanding 3% Convertible Notes due 2008. The tender offer expired at midnight, New York City time, on Oct. 17, 2007. As of the expiration date of the tender offer, $171.2 million principal amount of the notes, representing approximately 99.7% of the notes outstanding, had been validly tendered pursuant to the tender offer, all of which NPS Pharmaceuticals accepted for payment. Each holder who tendered notes on or before the expiration date will receive $987.50 in cash for each $1,000 of principal amount of notes tendered, plus accrued and unpaid interest up to, the date the notes are paid pursuant to the offer. After payment for the tendered notes, and earlier open market repurchases, there will be $598,000 principal amount of the notes remaining outstanding. Jefferies & Company, Inc. acted as Dealer Manager in connection with the tender offer. As a result of the repurchase of the convertible notes, NPS Pharmaceuticals expects to record a charge in the fourth quarter of 2007 of approximately $778,000 related to the write-off of deferred financing costs. Offsetting this charge will be a gain on early extinguishment of debt of approximately $1.3 million, net of the tender offer costs. About NPS Pharma Headquartered in Salt Lake City, Utah, NPS Pharmaceuticals Inc. (NASDAQ:NPSP) -- http://www.npsp.com/-- is a biopharmaceutical company focused on the development and commercialization of small molecule drugs and recombinant proteins. The company's portfolio of approved drugs and product candidates are for the treatment of bone and mineral disorders, gastrointestinal disorders and central nervous system disorders. Its product portfolio consists of one United States Food and Drug Administration approved product, another product candidate that has been granted marketing approval in Europe, and is the subject of an approvable letter from the FDA in response to a new drug application NPS Pharmaceuticals, Inc. filed in May 2005, a product candidate that is the subject of a pivotal Phase III clinical study, and other product candidates in various stages of clinical development and preclinical development. NPS Pharmaceuticals Inc. had $149.9 million in total assets, $375.9 million in total liabilities, and $226 million in total stockholders' deficit as of June 30, 2007. The company incurred a net loss for the second quarter of 2007 of $14.8 million, a 62% reduction from its net loss in the second quarter of 2006 of $39.3 million. For the six months ended June 30, 2007, the net loss was $36 million, a 54% reduction from the same period of the prior year of $77.6 million. The reduction in net loss reflects the 2006 and 2007 restructurings which called for aggressive expense reduction measures. OCEAN BLUE: Section 341(a) Meeting Scheduled on November 5 ---------------------------------------------------------- The United States Trustee for Region 21 will convene a meeting of creditors in Ocean Blue Leasehold Property LLC's chapter 11 bankruptcy case at 2:00 p.m. on Nov. 5, 2007, at 51 Southwest First Avenue, Room 1021 in Miami, Florida. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers an opportunity for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Chicago, Illinois, Ocean Blue Leasehold Property LLC owns and manages real estate. The company and three of its affiliates filed for Chapter 11 protection on Sept. 26, 2007 (Bankr. S.D. Fla. Lead Case No. 07-17999). When the Debtors filed for protection against its creditors, it estimated assets of $35,000,000 and debts of $23,464,750. OCEAN BLUE: Gets Interim Ok to Use Legg Mason's Cash Collateral --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida gave Ocean Blue Leasehold Property LLC and its debtor-affiliates interim permission to use cash collateral securing Legg Mason Real Estate CDO I Ltd. The Court declared that the Debtor may use the $20 million cash collateral to pay utilities, vendors, insurance and other expenses incidental to the operation of its business. However, the Court forbids the Debtor to exceed any line item on the revised budget by more than 7.5% of such line item, or incur a negative variance from aggregate net income by more than 7.5%. As adequate protection, the Debtor will turnover any and all rents collected between the Sept. 26, 2007 and Oct. 20, 2007 that exceed the monthly expenses set forth in the revised budget to Legg Mason by Oct. 31, 2007, and agrees that any rents paid directly to Legg Mason from tenants prior to the date of bankruptcy filing may be retained by Legg Mason. Legg Mason is also granted a replacement lien on and in all property owned, acquired or generated post-petition by the Debtor's continued operations to the same extent and priority, if any, and of the same kind and nature as Legg Mason had prior to the filing of the bankruptcy case effective as of the petition date. However, it excludes all causes of action including any and all proceeds of property recovered or transfers avoided by or on behalf of the Debtor, its estate or any subsequently appointed trustee. A final hearing is scheduled at 2:30 p.m., on Oct. 23, 2007. Headquartered in Chicago, Illinois, Ocean Blue Leasehold Property LLC owns and manages real estate. The company and three of its affiliates filed for Chapter 11 protection on Sept. 26, 2007 (Bankr. S.D. Fla. Lead Case No. 07-17999). When the Debtors filed for protection against its creditors, it estimated assets of $35,000,000 and debts of $23,464,750. OCEAN BLUE: Court Approves Rice Pugatch as Bankruptcy Counsel ------------------------------------------------------------- Ocean Blue Leasehold Property LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Rice Pugatch Robinson & Schiller P.A., as their counsel. As the Debtors' counsel, Rice Pugatch is expected to: a. advice the Debtors with respect to its powers and duties as debtor-in-possession and the continued management of their business operations; b. advice the Debtors with respect to their responsibilities in complying with the U.S. Trustee's operating guidelines and reporting requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, adversary proceedings and other legal documents necessary in the administration of the case; d. protect the interest of the Debtors in all matters pending before the Court; and e. represent the Debtors in negotiations with its creditors in the preparation of a plan. Papers filed with the Court did not disclose the firm's compensation rates. Chad P. Pugatch, Esq., an attorney of the firm, assures the Court that 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. Mr. Pugatch can be reached at: Chad P. Pugatch, Esq. Rice Pugatch Robinson & Schiller P.A. 101 Northeast Third Avenue, Suite 1800 Ft. Lauderdale, Florida 33301 Fax: (954) 462-8000 Tel: (305) 379-3121 http://www.rprslaw.com/ Headquartered in Chicago, Illinois, Ocean Blue Leasehold Property LLC owns and manages real estate. The company and three of its affiliates filed for Chapter 11 protection on Sept. 26, 2007 (Bankr. S.D. Fla. Lead Case No. 07-17999). When the Debtors filed for protection against its creditors, it estimated assets of $35,000,000 and debts of $23,464,750. OWENS-ILLINOIS: Appoints Hugh H. Roberts as Director ---------------------------------------------------- Owens-Illinois Inc. appointed Hugh H. Roberts to serve on the company's board of directors effective immediately. He will also serve as a member of the compensation committee. Mr. Roberts spent 32 years at Kraft Foods Inc., in sales, marketing, strategic planning and general management. He built strong global experience while serving Kraft Foods International as president of the Central & Eastern Europe, Middle East & Africa region and also as president of the Asia Pacific region. From 2004 to June 2007, Mr. Roberts served as president, Kraft International Commercial, an $11 billion unit of $34 billion Kraft Foods Inc. Mr. Roberts holds a bachelor's degree in economics and a master's degree in business administration from Harvard University in Cambridge, Mass. "We welcome Hugh to the O-I Board of Directors. His strong consumer marketing perspectives, clear understanding of O-I's customers and extensive international experience will be a great addition to the board as we move the organization into a more market-facing company," said Al Stroucken, O-I Chairman and CEO. About Owens-Illinois Based in Perrysburg, Ohio, Owens-Illinois Inc. (NYSE:OI) -- http://www.o-i.com/-- is a manufacturer of packaging products and glass containers with operations in Europe, North America, Asia Pacific and South America. The company is also a manufacturer of healthcare packaging, including plastic prescription containers and medical devices, and plastic closure systems, including tamper-evident caps and child-resistant closures, with operations in the United States, Mexico, Puerto Rico, Brazil, Hungary, Malaysia and Singapore. * * * In September 2006, Moody's placed the company's long-term corporate family rating and probability of default ratings at B2, and senior unsecured debt rating and preferred stock rating at Caa1. These ratings stoll hold to date. The outlook is stable. Standard & Poor's placed the company's long-term foreign and local issuer credits at BB- which still hold to date. The outlook is stable. Fitch placed the company's long-term issuer default rating at B, senior unsecured debt rating at B-, and preferred stock rating at CCC+. These ratings still hold to date. The outlook is positive. PALMRYA ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Palmrya Associates, L.L.C. P.O. Box 602 Mendon, NY 14506 Bankruptcy Case No.: 07-22616 Chapter 11 Petition Date: October 18, 2007 Court: Western District of New York (Rochester) Debtor's Counsel: Carl J. Schwartz, Jr. 131 Main Street, P.O. Box 681 Penn Yan, NY 14527 Tel: (315) 536-4223 Total Assets: $1,159,250 Total Debts: $1,689,250 Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ R. Harold Greenlee 36-36 Vine Street $300,000 82 Sawmill Drive Naples, NY 14512; Penfield, NY 14526 value of security: $200,000 Robert Houle Member Debt $250,000 P.O. Box 86 Contribution Mendon, NY 14506 Lawrence Hursh Member Debt $100,000 Contribution Martha Loes Member Debt $20,000 Contribution Randa Joy Member Debt $15,000 Contribution Joyce Francis Member Debt $15,000 Contribution Heinke Lillenstein Member Debt $10,000 Contribution Joan Bianchi Member Debt $10,000 Contribution Mark Lillenstein Member Debt $10,000 Contribution PENN NATIONAL: Completes Purchase of Sanford-Orlando's Fla. Club ---------------------------------------------------------------- Penn National Gaming Inc. has completed its purchase of the Sanford-Orlando Kennel Club in Longwood, Florida from Sanford- Orlando Kennel Club Inc. and Collins & Collins, after the approval by Florida's Department of Business and Professional Regulation. In connection with the transaction, Penn National also secured a right of first refusal with respect to a majority stake in the Sarasota Kennel Club in Sarasota, Florida. While financial details were not disclosed, the purchase price for the Sanford- Orlando Kennel Club provides for additional consideration for Penn National to the sellers based upon certain future regulatory developments. "The addition of Sanford-Orlando Kennel Club expands Penn National's portfolio of pari-mutuel operations to six facilities and is consistent with Penn National's long-term strategy to acquire properties that increase the scale and diversity of our operations," Peter M. Carlino, chief executive officer of Penn National commented. "We look forward to working with our track partners, the dog owners in Florida and the Sanford-Orlando community to continue delivering exciting racing content and a high-quality entertainment experience." About Kennel Club Located on approximately 26 acres in Longwood, Florida, the Sanford-Orlando Kennel Club features year-round greyhound racing, a simulcast wagering facility, a clubhouse lounge and two dining areas. Located in Sarasota, Florida, the Sarasota Kennel Club features year-round greyhound racing, a simulcast wagering facility, two dining options and the One-Eyed Jacks Card Room which features 24 poker tables. About Penn National Gaming Headquartered in Wyomissing, Pennsylvania, Penn National Gaming Inc. (PENN: Nasdaq) -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. * * * Moody's Investor Service placed Penn National Gaming Inc.'s long term corporate family and probability of default ratings at 'Ba2' in June 2007. The ratings still hold to date. PETROHAWK ENERGY: S&P Lifts Corporate Credit Rating to B+ from B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on independent exploration and production company Petrohawk Energy Corp. to 'B+' from 'B'. At the same time, S&P raised its senior unsecured issue ratings on Petrohawk to 'B' from 'B-'. The outlook is stable. Pro forma for recent asset sales of Houston, Texas-based Petrohawk should have $1.0 billion-$1.1 billion in long-term debt. "The upgrade followed a full review of the company and contemplated Petrohawk's recent strategic repositioning efforts," said Standard & Poor's credit analyst Jeffrey B. Morrison. These include the announced sale of the company's Gulf Coast division (representing about 19% of proved reserves and 30% of daily production) for proceeds of $825 million, an increasing focus on areas such as northern Louisiana and the Fayetteville Shale in the company's operations and capital spending, and the potential formation of a master limited partnership containing certain mature assets over the near-to-intermediate term. The rating action reflected underlying business risk profile improvement over recent periods, including favorable trends in internal reserve replacement, demonstrated organic production growth, and competitive finding and development costs relative to the company's similarly rated peer group. The ratings on Petrohawk reflect a historically acquisitive growth strategy, an aggressive near-term capital spending program, and high debt leverage. These weaknesses are partially tempered by constructive trends in production and reserve growth; a midsize, relatively low-risk base of onshore assets; significant hedging of production to protect cash flows from near-term commodity price volatility; and an experienced, though transaction-oriented, management team. Petrohawk was formed in May 2004 through the $60 million recapitalization of Beta Oil & Gas Inc. and has grown very rapidly over the past two years through several large transactions, including Wynn-Crosby Energy Inc. in November 2004, Proton Energy Corp. in February 2005, Mission Resources Corp. in July 2005, and most recently KCS Energy Inc. in 2006. PH GLATFELTER: Moody's Lowers Senior Unsecured Ratings to Ba2 ------------------------------------------------------------- Moody's Investors Service downgraded P.H. Glatfelter Company's senior unsecured ratings to Ba2 from Ba1. The rating downgrade reflects Moody's view that despite Glatfelter's improving operating performance, the challenging industry conditions are driving weaker than anticipated credit metrics for a Ba1 rating. The ratings outlook is stable. Most of Glatfelter's rating attributes deteriorated sharply in 2006 as the company completed two back--to-back debt financed acquisitions. The operational benefits and cash flow contributions from the company's Chillicothe acquisition were not promptly realized as a result of integration challenges. Moody's anticipates that as the integration efforts proceed and as the company pays down additional debt from announced timberland sales, leverage, coverage, and cash flow metrics will improve in the coming quarters and gravitate towards a Ba rating level. However, Moody's anticipates that the improved credit metrics will continue to lag those appropriate to support a Ba1 rating over the near-to- mid term. The Ba2 corporate family rating incorporates Moody's concern with the decreasing demand for certain products due to competition from other grades of paper and electronic substitution, the company's relatively small size, and the company's exposure to potential contingencies associated with environmental issues. The rating is supported by Glatfelter's strong market position in specialty paper markets and the debt reducing potential of the company's remaining timberland holdings. Headquartered in York, Pennsylvania, Glatfelter is a global manufacturer of specialty papers and engineered products. The company's North American based specialty papers business produces paper used for book publishing, envelope and lightweight printing and engineered products used for digital printing, graphics applications, signage and labeling. The company's European based long fiber and overlay papers business produces tea bags, coffee filters, laminate flooring and counter tops. Downgrades: Issuer: P. H. Glatfelter Company * Probability of Default Rating, Downgraded to Ba2 from Ba1 * Corporate Family Rating, Downgraded to Ba2 from Ba1 * Senior Unsecured Regular Bond/Debenture, Downgraded to a range of 57 - LGD4 to Ba2 from a range of 53 - LGD4 to Ba1 Outlook Actions: Issuer: P. H. Glatfelter Company * Outlook, Changed To Stable From Negative PITTSFIELD WEAVING: Files Second Amended Disclosure Statement ------------------------------------------------------------- Pittsfield Weaving Company filed on Oct. 9, 2007, its Second Amended Disclosure Statement explaining its Second Amended Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the District of New Hampshire. The plan is co-proposed by Action Group Inc. Overview of the Plan The Debtor proposes to repay classes of allowed creditors in full from available funds, which will be shared until the occurrence of a default and thereafter paid to the most senior classes until the default has been cured. The Debtor assumed and believes that the revenues derived from its continuing business operations and sheltered by the net operating loss carry-forwards in excess of $3,000,000, will be sufficient to fund the Plan. Treatment of Claims Under the Plan, CapitalSource Finance LLC's secured claims, which include claims on account of a $5,189,693 equipment and revolving loan, will be divided into a secured equipment loan and secured term Loan in the total amount of $3,500,000, the balance of which will be allowed and treated as a tier 3 claim in the general unsecured class. Payments for the Class 2 Secured Claims of Meredith Village Savings Bank will be funded by proceeds of Windwalker's rent payments. Meredith's claims include claims asserted against the Debtor by MVSB in its proof of claim in the amounts of: a) $296,734 on account of a loan made directly to the Debtor; and b) $1,536,689 on account of a loan made to Windwalker and guaranteed by the Debtor. New England National LLC's $70,000 secured claim will be paid in full, with interest. Other minor secured creditors will continue to receive monthly payments on their claims and retain the collateral securing those payments. Claims arising from unpaid portion of the wages, salaries and commissions due employees or the holders of claims of employees to the extent of any remaining priority claim attributable to these claims, will be paid in full on the effective date. Convenience Claims, which includes unsecured claims without priority asserted by creditors in amounts less than $500, will be paid 25% of their allowed claims on the effective date of the plan. Approximately $1,700,000 claims under the General Unsecured Claims Class are expected to be paid in full with interest over a 15-year period, while CapitalSource's $2,000,000 unsecured claim will be allowed following the conclusion of a transaction in which Action Group purchases from CapitalSource all if its claims. Subject to stock purchase options, equity holders will pledge their stock to the creditors agent as security for the payment of their financial liabilities and other obligations under the plan. About Pittsfield Weaving Based in Pittsfield, New Hampshire, Pittsfield Weaving Company -- http://www.pwcolabel.com/-- provides brand identification to the apparel and soft goods industries, and manufactures woven and printed labels and RFID/EADS solutions. The company filed it chapter 11 protection on Sept. 20, 2006 (Bankr. D. N.H. Case No. 06-11214). Williams S. Gannon, Esq., at William S. Gannon PLLC represent the Debtor in its restructuring efforts. Bruce A. Harwood, Esq., at Sheehan Phinney Bass + Green, PA serves as counsel to the Official Committee of Unsecured Creditors. Pittsfield Weaving estimated its assets and debts at $10 million to $50 million when it filed for protection from its creditors. PNA GROUP: S&P Affirms Ratings and Revises Outlook to Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on steel processor and distributor PNA Group Inc. to negative from stable, and affirmed its ratings on the company, including the 'B+' corporate credit rating. Total debt, including capitalized operating leases and tax-effected postretirement obligations, was $662.5 million as of June 30, 2007. "The outlook revision reflects the company's weaker-than-expected operating performance so far in 2007, resulting in lower-than- expected cash flow generation and higher debt," said Standard & Poor's credit analyst Anna Alemani. "As a result, credit measures have become somewhat weak for the current rating." Atlanta, Georgia-based PNA is a moderate-size distributor and processor of mainly flat and structural carbon steel products. Ratings reflect the company's volatile markets and cash flows, very aggressive debt leverage, thin margins, and operations in a fragmented and highly competitive industry. These risks are partially offset by a largely variable cost structure, a fair market position in geographic niches, countercyclical cash flows, and some insulation from steel price volatility afforded by tolling arrangements. REMY WORLDWIDE: Court Approves Kurtzman Carson as Noticing Agent ---------------------------------------------------------------- Remy Worldwide Holdings Inc. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants, LLC, as their official noticing agent nunc pro tunc Oct. 8, 2007. Remy Worldwide Holdings, Inc.'s Senior Vice-President and Chief Financial Officer Kerry A. Shiba related that although the Debtors have sought a deadline extension to file their schedules of assets and liabilities, they anticipate thousands of entities to whom certain notices, pleadings and other documents are required to be served. Mr. Shiba contended that the appointment of Kurtzman Carson as the Debtors' noticing agent will expedite the distribution of the notices, thereby relieving the Clerk of the Court of the administrative processing burden. As Kurtzman Carson has provided similar services in large Chapter 11 cases, and as a result of experience and cost-effective methods, the firm is eminently qualified to serve as the Debtors' Noticing Agent, Mr. Shiba asserted. As the Debtors' Noticing Agent, Kurtzman Carson is expected to: (a) notify all potential creditors of the filing of the Debtors' Chapter 11 cases and of the setting of the first meeting of the creditors, if any; (b) file affidavits of service for all mailings, including a copy of each notice, a list of persons to whom the notice is mailed, and the date mailed; (c) maintain an official copy of the Schedules, listing creditors and amounts owed; and (d) provide any other distribution services as are necessary and required. Kurtzman Carson will also be providing the Debtors with consulting services regarding noticing, claims management and reconciliation, plan solicitation, balloting, disbursements and any other services as may be agreed by the parties. The Debtors add that if necessary, despite the fact that the Debtors do not anticipate establishing a claims bar date in light of the "prepackaged" nature of their Chapter 11 cases, Kurtzman Carson may undertake claims-related duties, including: (a) docketing all claims filed and maintaining the Official Claim Register on behalf of the Court Clerk, and provide the Clerk with an exact duplicate of the Claims; (b) specify in the claims register for each claim docket: -- the Claim No. assigned, -- the date received, -- the name and address of the Claimant, -- the filed amount of the claim, if liquidated, and -- the allowed amount of the claim.; (c) record all transfers of claims and provide notices of those transfers as required, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; and (d) maintain the Official Mailing List for all entities who have filed proofs of claim. The Debtors will pay Kurtzman Carson for the firm's reasonable fees and expenses, in accordance with the firm's fee structure, upon the firm's submission on a monthly basis, of reasonably detailed invoices to the Debtors and the Informal Committee. James Le, Kurtzman Carson's chief operating officer, assured that Court that his firm is a "disinterested person" as defined under Section 101(14) of the Bankruptcy Code. Kurtzman Carson is not connected with the Debtors, their creditors, and other parties-in- interest, the U.S. Trustee, or any person employed by the U.S. Trustee, and that the firm does not hold or represent any interest adverse to the Debtors, their estates, or any class of creditors or equity interest holders, Mr. Le maintains. 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; Issue No. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REMY WORLDWIDE: Wants Until December 22 to File Schedules --------------------------------------------------------- Remy Worldwide Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their time to file Schedules and Statements for an additional 45 days, until Dec. 22, 2007. Under Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, a debtor is required to file a schedule of assets and liabilities; schedule of current income and expenditures; schedule of executory contract and unexpired leases; and statement of financial affairs within 15 days after the Petition Date. Under Rule 1007-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, that deadline is automatically extended to 30 days after the Petition Date if (i) the debtor has more than 200 creditors and (ii) the debtor's bankruptcy petition is accompanied by a list of all of the debtor's creditors and their addresses. In the event the Debtors' prepackaged plan of reorganization is confirmed prior to the filing deadline, the Debtors ask the Court to waive the requirement that the Schedules and Statements be filed. Due to the staffing constraints as a result of the numerous operational matters that the Debtors' legal and accounting staff are required to address in the early days of the Chapter 11 cases, the Debtors will not be in a position to complete the Schedules and Statements within the initial 30-day deadline, Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, the Debtors' proposed co-counsel, explains. Completing the Schedules and Statements will require the assembly and review of information from multiple locations throughout the world, Mr. Enos says. Mr. Enos also points out that production of the Schedules and Statements would likely be of little value given the expected short duration of the Chapter 11 cases. Mr. Enos notes that certain of the information to be included in the Schedules and Statements is available in the disclosure statement accompanying the Debtors' Plan. 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; Issue No. 3, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). RH DONNELLEY: Unit's Offer to Purchase 10-7/8% Sr. Notes Expires ---------------------------------------------------------------- R.H. Donnelley Inc., a subsidiary of R.H. Donnelley Corporation, disclosed that the offer to purchase and consent solicitation related to $600,000,000 aggregate principal amount of its 10-7/8% senior subordinated notes due 2012 expired on Oct. 17, 2007, at 8:00 a.m., New York City time. As of the expiration of the offer to purchase and consent solicitation, the company had received valid tenders of, and deliveries of consents related to, $599,922,000 aggregate principal amount of the Notes, representing 99.987% of the $600 million aggregate principal amount of the Notes, pursuant to the terms of the offer to purchase and consent solicitation. These amounts include the receipt by the company of valid tenders of, and deliveries of consents related to, $599,632,000 aggregate principal amount of the Notes at or prior to 5:00 p.m., New York City time, on Oct. 1, 2007, representing approximately 99.9% of the aggregate principal amount of the Notes outstanding. The company has accepted for purchase all notes validly tendered before 8:00 a.m., New York City time, on Oct. 17, 2007. The company executed a supplemental indenture relating to the Notes on Oct. 2, 2007, which became operative on Oct. 17, 2007. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/ -- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported in the Troubled Company Reporter on Oct. 4, 2007, Standard & Poor's Ratings Services affirmed its 'B' rating on R.H. Donnelley Corp.'s 8.875% senior notes due 2017 after the company's proposed $500 million add-on. The notes will be sold privately under Rule 144A of the Securities Act of 1933, and will include registration rights. Proceeds from this issue will be used to repay portions of Dex Media East Inc.'s and R.H. Donnelley Inc.'s senior secured debt, and to pay for related fees and expenses. Moody's Investors Service has assigned a B3 rating to R.H. Donnelley Corporation's proposed $500 million of additional series A-4 senior notes due 2017, and a Ba1 rating to Dex Media East LLC's proposed $1.2 billion senior secured credit facilities. Moody's also affirmed R.H. Donnelley Corporation's B1 corporate family rating. ROWE COS: Opposes Conversion to Chapter 7 Liquidation Proceeding ---------------------------------------------------------------- The Rowe Companies and its debtor-affiliates object to the U.S. Trustee's request to convert their Chapter 11 cases into Chapter 7 liquidation proceedings, arguing that they would lose more than $100,000 in payment for its stocks. Under the Debtors' plan of reorganization, American Communications and its designees would receive all of the Debtors' stock in return for payment of $180,000, of which $60,000 has already been paid. As reported in the Troubled Company Reporter on Sept. 24, 2007, W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, asked the U.S. Bankruptcy Court for the Eastern District of Virginia to convert the Debtors' chapter 11 cases to chapter 7. The U.S. Trustee argues that the Debtors failed to pay fees due to the U.S. Trustee for the first and second quarters of 2007. The Debtors also failed to file the required monthly operating reports for the months of January, June and July 2007. Further, the Trustee contended that the Debtors are no longer operating and didn't have any cash. The Trustee also related the Debtors provided no support for their belief that creditors will receive $120,000 new stock payment or any amount in Chapter 11 than under a Chapter 7 liquidation. However, the Debtors argue that if its case is converted to Chapter 7, American Communications would not pay the remaining $120,000, and priority and general unsecured creditors will receive no distribution. Chapter 11 administrative creditors would likely receive a small portion of their allowed claims. In addition, since the U.S. Trustee raises concerns about the level of professional fees that might be incurred by a liquidating trust, the Debtors point out that the proposed trustee of the liquidating trust will have a duty to keep those fees reasonable and at a level that will ensure payment of administrative claims. About The Rowe Companies Based in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/-- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The company and its two affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Alexander McDonald Laughlin, Esq., Dylan G. Trache, Esq., H. Jason Gold, Esq., Rebecca L. Saitta, Esq., and Valerie P. Morrison, Esq., at Wiley Rein LLP, represent the Debtors. Douglas M. Foley, Esq., Kenneth Michael Misken, Esq., and Sarah Beckett Boehm, Esq., at McGuireWoods LLP, represent the Official Committee of Unsecured Creditors of Rowe Furniture. In schedules submitted with the Court, The Rowe Companies listed total assets of $42,939,780 and total debts of $34,948,206; Rowe Furniture listed total assets of $66,431,812 and total debts of $46,486,046; and Storehouse, Inc. listed total assets of $33,090,987 and total debts of $109,777,822. ROWE COS: Court Okays Stinson Morrison as Securities Counsel ------------------------------------------------------------ The Rowe Companies and its debtor-affiliates obtained authority from the Honorable Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Stinson Morrison Hecker LLP as their securities counsel. Stinson Morrison is expected to: 1) assist the Debtors in complying with its obligations under the Court-approved equity investment and issuance of preferred stock, and the summary of terms and conditions for the proposed plan of reorganization; and 2) assist the Debtors in any securities matters related to the plan of reorganization and disclosure statement. The Debtors say that the firm has agreed to cap its compensation for their services at $20,000. The Debtors assure the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the U.S. Bankruptcy Court. About The Rowe Companies Based in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/-- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The company and its two affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Alexander McDonald Laughlin, Esq., Dylan G. Trache, Esq., H. Jason Gold, Esq., Rebecca L. Saitta, Esq., and Valerie P. Morrison, Esq., at Wiley Rein LLP, represent the Debtors. Douglas M. Foley, Esq., Kenneth Michael Misken, Esq., and Sarah Beckett Boehm, Esq., at McGuireWoods LLP, represent the Official Committee of Unsecured Creditors of Rowe Furniture. In schedules submitted with the Court, The Rowe Companies listed total assets of $42,939,780 and total debts of $34,948,206; Rowe Furniture listed total assets of $66,431,812 and total debts of $46,486,046; and Storehouse, Inc. listed total assets of $33,090,987 and total debts of $109,777,822. S-TRAN HOLDINGS: Exclusive Period Plan Filing Moved to December 3 ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware further extended S-Tran Holdings Inc. and its debtor-affiliates' exclusive periods to: a. file a Chapter 11 plan until Dec. 3, 2007; and b. solicit acceptances of that plan until Feb. 4, 2008. As reported in the Troubled Company Reporter on Sept. 26, 2007, the Debtors said that they needed more time to analyze information regarding potential asset recoveries, including, additional accounts receivables and other amounts. The Debtors disclosed that it filed a complaint with the Court against Protective Insurance Company seeking turnover of substantial amount of collateral. The Debtors also said that it received up to $800,000 from settlements of preference claims. The Debtors assured the Court that the extension is not to delay the administration of their cases and pressure their creditors to accept unsatisfactory plan. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Laura Davis Jones, Esq. at Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. Donald A. Workman, Esq., at Foley & Lardner LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. SANDISK CORP: Earns $85 Million in Third Quarter Ended Sept. 30 --------------------------------------------------------------- SanDisk(R) Corporation disclosed results for its third quarter ended Sept. 30, 2007. The company reported net income of $85 million for the third quarter of 2007, compared with net income of $28 million in the second quarter of 2007. Net income was $103 million in the third quarter of 2006. Excluding the impact of acquisition-related charges, stock compensation expense and the related tax effect, third quarter non-GAAP net income increased to $130 million, compared to second quarter 2007 non-GAAP net income of $72 million. Non-GAAP net income was $124 million in the third quarter of 2006. Third quarter revenue increased 38% on a year-over-year basis to $1.037 billion. "We are very pleased with our third quarter results. Demand was exceptionally strong in international retail, following our strategy to aggressively expand our business outside of North America. In the mobile phone market we sold a record 42 million units, reinforcing the enormous global opportunity which is unfolding. USB revenues also contributed significantly to our growth in the quarter," said Eli Harari, chairman and chief executive officer. "Gross margins and the pricing environment improved substantially and excellent execution at Fab 3 allowed us to respond to the surge in customer demand. We expect demand to remain strong through the fourth quarter holiday season although we may not be able to meet 100% of the demand." Product revenue was $919 million in the third quarter, up 36% year-over-year and 28% sequentially. License and royalty revenue for the third quarter was $119 million, up 52% year-over-year and 11% sequentially. Total megabytes sold in the third quarter increased 248% on a year-over-year basis and 54% from the second quarter of 2007. GAAP product gross margin in the third quarter was 24.3%, compared to 32.4% in the third quarter of 2006 and up from 16.2% in the second quarter of 2007. Non-GAAP product gross margin for the third quarter was 26.4% compared to 32.7% in the third quarter of 2006 and up from 19.0% in the second quarter of 2007. GAAP operating income for the third quarter of 2007 was $109 million compared to GAAP operating income of $128 million in the third quarter of 2006 and up from $14 million in the second quarter of 2007. Non-GAAP operating income was $162 million, or 16% of revenue, compared to non-GAAP operating income of $158 million, or 21% of revenue in the third quarter of 2006 and up from 9% in the second quarter of 2007. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $7.18 billion in total assets, $2.17 billion in total liabilities, $1.1 million in minority interest, and $5.01 billion in total shareholders' equity. About SanDisk Corp. Headquartered in Milpitas, Calif., SanDisk Corp. (NASDAQ: SNDK) -- http://www.sandisk.com/-- supplies flash data storage card products using its patented, high-density flash memory and controller technology. SanDisk has operations worldwide with more than half its sales outside the U.S. * * * As of Oct. 18, 2007, SanDisk Corp. still carries Standard & Poor's Ratings Services 'BB-' long-term foreign and local issuer credit ratings. SENTINEL MANAGEMENT: BoNY Agrees to Transfer Cash to Trustee ------------------------------------------------------------ The Bank of New York has agreed to turn over cash plus securities to Frederick Grede, the chapter 11 Trustee appointed to oversee the estate of Sentinel Management Group Inc., the Associated Press reports. The AP relates that as of Oct. 1, BoNY held cash totaling $22.4 million in three segregated accounts and securities in six accounts. BoNY had previously transferred around $300 million to the Debtor's clients prior to the bankruptcy filing. In documents filed with the U.S. Bankruptcy Court for the Northern District of Illinois, BoNY will transfer the cash and securities to "mirror" accounts set up under the chapter 11 trustee's name at JP Morgan Chase & Co., the AP adds. However, the stipulation entered by the trustee and BoNY doesn't prohibit the trustee from after BoNY on claims and causes of actions. A BoNY representative wasn't available for comment as of Oct. 17, 2007, the AP discloses. Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- is a full service firm offering a variety of security solutions. The company filed a voluntary chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd. represent the Debtor. Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represent the Official Committee of Unsecured Creditors. DLA Piper US LLP acts as the Committee's co- counsel. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. The Debtor's exclusive period to file a plan expires on Dec. 17, 2007. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Mr. Grede selected Catherine L. Steege, Esq., Christine L. Childers, Esq., and Vincent E. Lazar, Esq., at Jenner & Block LLP as his counsels. SENTINEL MANAGEMENT: Earns $23 Million in September 2007 -------------------------------------------------------- Frederick Grede, the chapter 11 trustee appointed to oversee the estate of Sentinel Management Group Inc., disclosed that the Debtor received $23 million in cash receipts for September 2007, the Chicago Tribune reports citing Bloomberg News. In a Summary of Cash Receipt and Disbursement for Filing Period Ending Sept. 30, 2007, filed with the U.S. Bankruptcy Court for the Northern District of Illinois, Mr. Grede said that majority of the Debtor's income came from interest on bonds in its portfolio. The report also shows, the Chicago Tribune adds, that the Debtor has cash on hand of $88.4 million. Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- is a full service firm offering a variety of security solutions. The company filed a voluntary chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd. represent the Debtor. Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represent the Official Committee of Unsecured Creditors. DLA Piper US LLP acts as the Committee's co- counsel. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. The Debtor's exclusive period to file a plan expires on Dec. 17, 2007. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Mr. Grede selected Catherine L. Steege, Esq., Christine L. Childers, Esq., and Vincent E. Lazar, Esq., at Jenner & Block LLP as his counsels. SOLUTIA INC: Court Approves Fifth Amended Disclosure Statement -------------------------------------------------------------- The Honorable Prudence Carter of the U.S. Bankruptcy Court for the Southern District of New York approved the Fifth Amended Disclosure Statement of Solutia Inc. and its debtor-affiliates as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. Judge Beatty found that each of the objections to the Disclosure Statement have either been (i) withdrawn or rendered moot by proposed modifications to the Disclosure Statement or (ii) overruled. In addition, the Debtors and Industrial Waste Area Generator Group II have agreed that the entry of the Disclosure Statement Order will be without prejudice to IWAG's rights to raise any and all issues at the Confirmation Hearing. Judge Beatty also determined that the solicitation procedures provide a fair and equitable voting process and are consistent with Section 1126. Ballots will be provided to holders of claims in Classes 3 (Senior Secured Note Claims), Class 5 (CPFilms Claims), Class 11 (Monsanto Claim), Class 12 (Noteholder Claims), Class 13 (General Unsecured Claims), Class 14 (Retiree Claim), Class 15 (Pharmacia Claims), Class 19 (Security Claims) and holders of Equity Interests entitled to Vote in Class 20 (Equity Interests) because those claims and interests are classified as being impaired by, and entitled to vote under, the Consensual Plan. The Ballots and Master Ballots for holders of claims in Class 3 will not be counted and will be disregarded for all purposes in the event that the Senior Secured Note Claims are determined to be unimpaired under the Plan. Pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure, the record date for purposes of determining which Holders of Claims and Equity Interests are entitled to receive Solicitation Packages and, where applicable, vote on the Amended Plan, will be Oct. 22, 2007. Only Holders of Claims and Equity Interests as of the Record Date will be entitled to vote to accept or reject the Plan, and where applicable, make any election set forth on the Ballot or participate in the Rights Offering. Judge Beatty ordered that all Ballots and Master Ballots cast on behalf of Beneficial Holders must be properly executed, completed and delivered to the Debtors, voting agent, Voting Agent Financial Balloting Group, LLC, no later than 5:00 p.m. on Nov. 26, 2007. The Debtors, subject to Court approval, will have the ability to extend in writing the Voting Deadline. Certification of Ballots will be filed no later than Nov. 28, 2007, at 2:00 p.m. Plan Confirmation Objection deadline is due Nov. 21, 2007, at 5:00 p.m. In the event that multiple objections to the Plan Confirmation are filed, the Debtors and any other party-in interest are authorized to file a single, omnibus reply to those objections. "With the disclosure statement approved, a fully consensual plan of reorganization in hand, and the confirmation hearing scheduled, we now have a clear path to emergence from Chapter 11," Jeffry N. Quinn, chairman, president and chief executive officer of Solutia, said in a press statement. The Debtors anticipate for their Plan to be effective by June 30, 2008. 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, and is continued to Oct. 19, 2007. (Solutia Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Court Sets November 29 Plan Confirmation Hearing ------------------------------------------------------------- The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York set Nov. 29, 2007, as the hearing date to consider confirmation of Solutia Inc. and its debtor-affiliates' Fifth Amended Plan of Reorganization. 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, and is continued to Oct. 19, 2007. (Solutia Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOUTH AVENUE SERVICE: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: South Avenue Service Station, Inc. 855 Baltimore Street Hanover, PA 17331 Bankruptcy Case No.: 07-03311 Type of Business: The Debtor owns and manages a service station. Chapter 11 Petition Date: October 18, 2007 Court: Middle District of Pennsylvania (Harrisburg) Debtor's Counsel: Markian R. Slobodian, Esq. 801 North Second Street Harrisburg, PA 17102 Tel: (717) 232-5180 Fax: (717) 232-6528 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. SPANSION INC: Posts $72 Million Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ Spansion Inc. disclosed last week results for its third quarter ended Sep. 30, 2007. For the third quarter of 2007, the company reported a net loss of $72 million, compared with a net loss of $67 million in the second quarter of 2007, which included a one- time gain on the sale of real estate. The company reported net sales of $611 million, compared to net sales of $609 million in the second quarter of 2007. Gross margin for the third quarter of 2007 rose slightly sequentially to 18%. Spansion reduced its operating loss to $59 million in the third quarter, a reduction of 9% compared to the second quarter of 2007. "ASPs have stabilized, reversing the steep decline we saw in the first half of the year and our book to bill is extremely strong at 1.3, driven by the wireless division," said Bertrand Cambou, president and chief executive officer, Spansion Inc. "The strong backlog is the result of the continued share gains of our 90nm MirrorBit(R) Flash memory solutions." The company's consumer, set top box and industrial division achieved sales of $294 million, up from $272 million in net sales in the second quarter of 2007. For the first time since the third quarter of 2006, the CSID division experienced a firming ASP per bit due to a more balanced supply and demand environment. Shipments of high density MirrorBit solutions increased again in the quarter. In the wireless solutions division, net sales for the third quarter declined sequentially from $338 million to $317 million due to a prior inventory build up in the Japanese handset market, resulting in a $40 million impact. Revenue in the WSD business outside Japan grew significantly, up by $20 million sequentially due to increased sales at the top five handset OEMs. Outside Japan, ASP per bit was firming. Worldwide unit shipments increased from 82 million to 96 million units in the third quarter. Spansion announced it has signed a definitive merger agreement to acquire Saifun Semiconductors Ltd to consolidate all MirrorBit IP, design and manufacturing expertise into a single company. The combination will enable Spansion to expand operating margins, diversify its product portfolio and drive the company's entry into new markets. Upon closing, Saifun will operate as a wholly owned subsidiary, responsible for driving the new IP licensing and royalty business for Spansion. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $3.80 billion in total assets, $2.14 billion in total liabilities and $1.66 billion in total stockholders' equity. Current Outlook The company expects net sales for the fourth quarter of 2007 to be in the range of $640 million to $700 million with growth in all major business segments. Gross margin for the fourth quarter 2007 is forecast to be approximately flat. Improving business performance will be offset by costs related to the accelerated production ramp of Spansion's 300mm, SP1 facility, starting in the fourth quarter. About Spansion Inc. Headquartered in Sunnyvale, California, Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- designs, develops, manufactures, markets and sells flash memory solutions for wireless, automotive, networking and consumer electronics applications. The company has European operations in France, Asia-Pacific facilities in Japan, China, Malaysia and Thailand, as well as sales offices in Latin American countries including Brazil and Mexico. * * * As of Oct. 18, 2007, Spansion Inc. still carries Moody's 'B3' long term corporate family rating last placed on Dec. 5, 2005. Outlook is Stable. SPECTRUM FINANCIAL: Court Converts Case to Chapter 7 ---------------------------------------------------- The Hon. Sarah Sharer Curley of the U.S. Bankruptcy Court for the District of Arizona in Phoenix converted Spectrum Financial Group, Inc.'s chapter 11 bankruptcy case to a chapter 7 liquidation proceeding. In its request to convert its case, the Debtor told the Court that based on current operations it believed that it had no reasonable likelihood of a successful reorganization. Court records show that Dale D. Ulrich has been appointed as the chapter 7 trustee. Headquartered in Scottsdale, Arizona, Spectrum Financial Group, Inc. -- http://www.sfg-bank.com/-- focuses on residential loans for consumers. The company filed for chapter 11 protection on Aug. 28, 2007 (Bankr. D. Ariz. Case No. 07-04265). Leslie R. Hendrix, Esq., Paul Sala, Esq., and Thomas H. Allen, Esq., at Allen, Sala & Bayne, PLC represent the Debtor. In schedules filed with the Court, the Debtor disclosed total assets of $13,398,526 and total debts of $55,372,150. SPECTRUM FINANCIAL: Lane & Nach OK'd as Chap. 7 Trustee's Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona gave Dale D. Ulrich, the chapter 7 trustee appointed for Spectrum Financial Group, Inc., permission to retain Lane & Nach, P.C., as his bankruptcy counsel. Lane & Nach is expected to: a. advise and consult with Trustee concerning questions arising in the conduct of the administration of the estate and concerning the Trustee's rights and remedies with regard to the estate's assets and the claims of secured, preferred and unsecured creditors and other parties in interest; b. appear for, prosecute, defend and represent the Trustee's interest in suits arising in or related to this case; c. investigate and prosecute preference and other actions arising under the Trustee's avoiding powers; d. assist in the preparation of pleadings, motions, notices and orders as are required for the orderly administration of this estate; and e. consult with and advise the Trustee in connection with the operation of or the termination of the operation of the business of the Debtor. The chapter 7 trustee tells the Court that attorneys of the firm bill between $150 to $295 per hour while paralegals charge between $50 to $100 per hour. To the best of the Trustee's knowledge, the firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Scottsdale, Arizona, Spectrum Financial Group, Inc. -- http://www.sfg-bank.com/-- focuses on residential loans for consumers. The company filed for chapter 11 protection on Aug. 28, 2007 (Bankr. D. Ariz. Case No. 07-04265). Leslie R. Hendrix, Esq., Paul Sala, Esq., and Thomas H. Allen, Esq., at Allen, Sala & Bayne, PLC represent the Debtor. In schedules filed with the Court, the Debtor disclosed total assets of $13,398,526 and total debts of $55,372,150. SPECTRUM FINANCIAL: Creditors' Meeting Scheduled on December 18 --------------------------------------------------------------- The U.S. Trustee for Region 14, will hold a meeting for Spectrum Financial Group, Inc.'s creditors on Dec. 18, 2007, 12:30 p.m., at the U.S. Trustee Meeting Room, Suite 102, 230 North First Avenue in Phoenix, Arizona. This is the first meeting of creditors after the Debtor's case was converted to chapter 7. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Scottsdale, Arizona, Spectrum Financial Group, Inc. -- http://www.sfg-bank.com/-- focuses on residential loans for consumers. The company filed for chapter 11 protection on Aug. 28, 2007 (Bankr. D. Ariz. Case No. 07-04265). Leslie R. Hendrix, Esq., Paul Sala, Esq., and Thomas H. Allen, Esq., at Allen, Sala & Bayne, PLC represent the Debtor. In schedules filed with the Court, the Debtor disclosed total assets of $13,398,526 and total debts of $55,372,150. TEMPUR-PEDIC INT'L: Earns $38.8 Million in Quarter Ended Sept. 30 ----------------------------------------------------------------- Tempur-Pedic International Inc. disclosed financial results for its third quarter ended Sept. 30, 2007. For the third quarter of 2007, the company reported net income of $38.8 million as compared to $28.9 million in the third quarter of 2006. This net income growth of 34% largely resulted from an increase in operating income. Net income results include stock- based compensation expense, which increased 46% to $1.7 million in the third quarter of 2007. Net sales rose 22% to $294.1 million in the third quarter of 2007 from $240.9 million in the third quarter of 2006. Retail sales increased 27% worldwide. Operating income increased 26% to $67.5 million in the third quarter of 2007 from $53.7 million in the third quarter of 2006. The increase was principally driven by incremental sales as well as modest operating expense leverage. Operating cash flow increased to $55.7 million in the third quarter of 2007 from $46.6 million in the third quarter of 2006. The increase was principally driven by net income growth. In addition, capital expenditures were $3.3 million in the third quarter of 2007, $2.3 million less than in the third quarter of 2006. The company achieved net sales and unit growth across all products and both geographic segments. Worldwide mattress revenue increased 22%. Worldwide mattress unit growth was 17% led by domestic mattress unit growth of 22%. Pillow sales rose 15% worldwide driven by unit growth of 12%. Domestic pillow units were especially strong, up 23%. President and chief executive officer H. Thomas Bryant commented, "Tempur-Pedic delivered outstanding results in the third quarter, with growth across all products and geographic segments. While Tempur-Pedic is already the industry leader for profitability, we believe our year to date financial results are consistent with our goal of ultimately becoming the worldwide bedding leader in terms of both sales and profitability. We are pleased with our year to date results and continue to see abundant opportunities to gain bedding market share around the globe. "In the third quarter, consumers continued to express their preference for our proprietary TEMPUR(R) material as we lead the technology shift away from innersprings. Mattress growth was balanced across our product line with excellent results from our existing product line as well as strong contribution from our recently introduced models. While the last several quarters have been challenging for the mattress industry, our sales team has exceeded our goals for slot growth, account productivity and market share gains. "Our operations team delivered excellent performance, producing more mattresses than in any other quarter in our history. As previously disclosed, U.S. retail demand exceeded our expectations during the third quarter, which resulted in some product shortages as certain key suppliers were not able to ramp their production as quickly as needed. We addressed this issue through a variety of actions, some of which modestly impacted our gross margins. We are pleased to now be running in a more optimal fashion, having largely eliminated shortages by the end of the quarter." Current Share Repurchase Authorization Completed and New Authorization Announced During the third quarter of 2007, the company purchased 6.6 million shares of its common stock at an average price of $30.48 for a total cost of $200.0 million. During 2007, the company has purchased 10.4 million shares of its common stock for a total cost of $300.0 million. The company announced that the Board of Directors has authorized a new share repurchase program of up to an incremental $300.0 million. Stock repurchases under this program may be made through open market transactions, negotiated purchases, or otherwise, at times and in such amounts as management and a committee of the Board deem appropriate. Chief financial officer Dale Williams stated, "We continue to view share repurchases as an excellent means to return value to shareholders over the long term. During the third quarter we completed the $200 million share repurchase program we announced on July 19, 2007. We currently anticipate substantial cash flow growth over the next several years and so we are pleased with the Board's decision to authorize a new buyback program." 2007 Financial Guidance The company currently expects net sales for 2007 to range from $1.105 billion to $1.115 billion, rather than $1.065 billion to $1.085 billion as contemplated by the company's prior guidance. This updated guidance reflects an increase of 17% to 18% compared to 2006 net sales of $945.0 million. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $773.8 million in total assets, $745.7 million in total liabilities, and $28.1 million in total shareholders' equity. About Tempur-Pedic Based in Lexington, Kentucky, Tempur-Pedic International Inc. (NYSE: TPX) -- http://www.tempurpedic.com/-- manufactures and distributes mattresses and pillows made from its proprietary TEMPUR(R) pressure-relieving material. The company's products are currently sold in over 70 countries under the TEMPUR(R) and Tempur-Pedic(R) brand names. * * * As of Oct. 18, 2007, Tempur-Pedic International Inc. still carries Standard & Poor's Ratings Services' BB long term foreign issuer credit and long term local issuer credit ratings. The outlook is positive. TENNECO INC: Elects Dennis J. Letham to Board of Directors ---------------------------------------------------------- Dennis J. Letham was elected to Tenneco Inc.'s board of directors, effective immediately. Mr. Letham is executive vice president, finance and chief financial officer of Anixter International Inc., a distributor of communications products, wire & cable products, fasteners and other small components for original equipment manufacturers. "We are pleased to add Dennis Letham to our board with his extensive financial background and global business experience," Gregg Sherrill, chairman and CEO, Tenneco, said. "We look forward to his contributions as we accelerate our growth globally and capitalize on opportunities to enhance shareholder value." Mr. Letham has more than 17 years experience as a chief financial officer and for the past 12 years, has overseen all of Anixter International's finance, accounting, tax and internal audit activities in the 49 countries in which the company operates. Prior to assuming his role as chief financial officer in 1995, Mr. Letham served as executive vice president and chief financial officer of Anixter Inc., the principal operating subsidiary of Anixter International Inc. He joined Anixter International in 1993. Previously, he had a ten-year career with National Intergroup Inc., where he held a number of senior financial management positions including senior vice president and chief financial officer. About Tenneco Inc. Based in Lake Forest, Illinois, Tenneco Inc., (NYSE: TEN) -- http://www.tenneco.com/-- manufactures automotive ride and emissions control products and systems for both the original equipment market and aftermarket. Brands include Monroe(R), Rancho(R), and Fric Rot ride control products and Walker(R) and Gillet emission control products. The company has operations in Argentina, Japan, and Germany, with its European operations headquartered in Brussels, Belgium. the company has approximately 19,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Fitch Ratings has placed Tenneco Inc.'s Issuer Default Ratings and securities ratings on Rating Watch Negative. Fitch confirmed these ratings: (i) IDR 'BB-'; (ii) Senior secured bank facility 'BB+'; (iii) Senior secured notes 'BB'; and (iv) Subordinated 'B'. THORNBURG MORTGAGE: S&P Retains Negative Watch on 'B' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'B' long-term counterparty credit rating on Thornburg Mortgage Inc. remains on CreditWatch Negative, where it was placed Aug. 10, 2007. This action follows Thornburg's release of third-quarter financial results, which reflected the impact of the credit crunch during that period. "While for the time being the worse appears to be over, there is likely to be continued pressure on financial parameters until debt financing markets stabilize," said Standard & Poor's credit analyst Adom Rosengarten. The ratings and CreditWatch status reflect the continued uncertainties that Thornburg faces with respect to funding and liquidity, as well as the dislocation in pricing of all mortgage assets. Recent asset sales have left Thornburg with a diminished capital base, and access to short-term funding continues to be difficult. To meet margin calls on its short-term funding, Thornburg sold $21.9 billion of adjustable-rate mortgage securities at a loss of $1.093 billion. This capital loss adds pressure to Thornburg's capital structure given the company's already high leverage and the challenges that Thornburg faces raising additional equity capital. With that said, S&P recognize some positive steps that Thornburg has taken. S&P feel that the company's decision to suspend the common dividend to retain liquidity is a responsible measure given the uncertainty of the funding markets. In addition, the company's reduced reliance on recourse funding due to the sale of assets lessens funding risk, and S&P are encouraged by the company's warehouse lines remaining in place and functioning. The CreditWatch Negative reflects the potential for further rating action if funding markets worsen again and the liquidity crunch continues. Future rating actions will depend on Thornburg's ability to maintain sufficient access to funding sources and limited exposure to recourse borrowings. If the company cannot securitize a significant portion of originations as a means of financing, or if asset quality does not hold up to its traditional high standards, the rating could be further lowered. If Thornburg is successful in securing ongoing funding and manages through its liquidity pressures, the outlook could move to stable. URS CORP: Glass Lewis Urges Washington Shareholders to OK Merger ---------------------------------------------------------------- Glass Lewis, an independent proxy advisory firm, recommended that Washington Group International Inc.'s stockholders vote in favor of the proposed acquisition by URS Corporation. Washington Group stockholders were urged to vote promptly so that their votes can be counted at Washington Group's Oct. 30, 2007, special meeting of stockholders. "Washington Group continued negotiating with URS for an extended period of time, resulting in an offer 17.6% higher than URS' initial bid," Glass Lewis stated. "Further, we see that the consideration represents an all-time historical high for Washington Group's closing stock price prior to the report. Based on these factors and given the unanimous support of the board, we believe the proposed merger is in the best interests of shareholders." "We are very pleased that Glass Lewis affirmed the unanimous recommendation of Washington Group's board of directors," said Stephen G. Hanks, president and chief executive officer of Washington Group. "Our board of directors continues to believe that the combination of Washington Group and URS represents a unique opportunity to create a single-source provider that can offer a full life cycle of planning, engineering, construction, environmental management, and operations and maintenance services." "As a combined company, we would have expanded capabilities and be even better positioned to penetrate important high-growth sectors," Mr. Hanks added. "In addition, our stockholders would have an approximately 32% equity interest in the combined company and thus have a significant share in the future growth of the combined company." Under the terms of the merger agreement dated May 28, 2007, Washington Group stockholders will receive $43.80 in cash and 0.772 shares of URS common stock for each Washington Group share. Washington Group noted that due to the equity component of the merger consideration, the implied value for Washington Group stockholders has increased by approximately $12 per share, or 15%, since the disclosure of the merger agreement. Stockholders of record as of the close of business on Sept. 21, 2007, will be entitled to vote on the proposed merger. "Since approval of the merger agreement requires the affirmative vote of a majority of all outstanding shares, the vote of every Washington Group stockholder is important and we encourage all stockholders to exercise their right to vote," Mr. Hanks said. Washington Group recommends that all of its stockholders vote "FOR" the proposed merger with URS, consistent with the recommendations of Washington Group's board. Stockholders who have questions about the merger or need assistance in submitting their proxies or voting their shares should contact Washington Group's proxy solicitor, MacKenzie Partners Inc., by calling 800-322-2885 (toll-free) or 212-929-5500 (collect). About Washington Group International Headquartered in Boise, Idaho, Washington Group International Inc. (NYSE:WNG) -- http://www.wgint.com/-- is an international provider of a range of design, engineering, construction, construction management, facilities and operations management, environmental remediation and mining services. The company has approximately 25,000 people at work around the world providing solutions in power, environmental management, defense, oil and gas processing, mining, industrial facilities, transportation and water resources. The company operates its business through six business units: Power, Infrastructure, Mining, Industrial/Process, Defense, and Energy and Environment. About URS Corporation Headquartered in San Francisco, California, URS Corporation (NYSE:URS)-- http://www.urscorp.com/-- is an engineering design services firm and a United States federal government contractor for systems engineering and technical assistance and operations and maintenance services. The company's business focuses primarily on providing fee-based professional and technical services in the engineering and construction services and defense markets, although the company performs some limited construction work. It operates through two divisions: the URS Division and the EG&G Division. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007, Standard & Poor's Ratings Services assigned its 'BB+' bank loan rating and '2' recovery rating to URS Corp.'s proposed $2.1 billion senior secured credit facilities, indicating expectations of substantial (70%-90%) recovery in the event of a payment default. The facilities are rated the same as the corporate credit rating on the company. As reported in the Troubled Company Reporter on Sept. 20, 2007, Moody's Investors Service assigned a provisional rating of (P)Ba1 to the proposed $2.1 million senior secured credit facility of URS Corporation, which will be used to finance its pending acquisition of Washington Group International Inc. VENTURE IX: Moody's Rates $14 Million Class E notes at Ba2 ---------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Venture IX CDO, Limited: (1) Aaa to the $370,000,000 Class A Senior Notes Due 2021; (2) Aa2 to the $35,000,000 Class B Senior Notes Due 2021; (3) A2 to the $25,000,000 Class C Deferrable Mezzanine Notes Due 2021; (4) Baa2 to the $16,000,000 Class D Deferrable Mezzanine Notes Due 2021; and (5) Ba2 to the $14,000,000 Class E Deferrable Junior Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Senior Secured Loans, Second Lien Loans and Senior Unsecured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. MJX Asset Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. VISTEON CORP: Inks MOU to Sell Swansea Facility to Linamar ---------------------------------------------------------- Visteon Corporation has signed a non-binding Memorandum of Understanding outlining the understanding and status of discussions regarding the sale of its Swansea, United Kingdom operation to Linamar Corporation. The proposed sale, which supports Visteon's three-year improvement plan, is subject to due diligence, certain third party agreements, definitive documentation, anti-trust clearance and corporate approvals. The proposed sale of the Swansea facility, which is Visteon's operation in the UK, will be a significant milestone in the company's plan to address non-core facilities and improve its financial performance. Visteon disclosed that Visteon UK Limited lost approximately $110 million on revenue of $540 million during 2006. "This transaction will represent another major step to achieve Visteon's profit improvement plan, while continuing to strengthen our global engineering and manufacturing footprint," Donald J. Stebbins, Visteon president and chief operating officer, said. "We are committed to working with our customers, employees, unions and Linamar to reach final agreements and bring the transaction to closure as quickly as possible." This action, which will complete the company's divestiture of its chassis business, builds on the progress already made in addressing its performance in the UK. Visteon previously exited its brake business, successfully transferred unprofitable business to lower cost countries, and significantly reduced its salaried workforce in the UK. As part of the proposed transaction, which is expected to be completed by year end, Visteon will transfer the manufacturing facility and associated assets, well as contracts and certain intellectual property rights. The 400 employees currently employed in the facility are also expected to transfer to the new owner. Other details of the MOU were not disclosed. "When finalized, this proposed transaction will provide a viable alternative to closure for the Swansea facility, while enabling Visteon to achieve its business objectives," said Steve Gawne, managing director of Visteon's UK operations. "The Swansea plant will be a strong strategic fit within Linamar's expanding driveline division." This proposed transaction also builds on Visteon's three-year improvement plan that was announced in 2006. As part of that plan, the company is addressing 30 underperforming and non- strategic operations, improving its base operations in efficiency and taking a number of steps to grow the business. The proposed sale of Swansea is the 20th action disclosed. The restructuring actions are expected to generate annual savings of approximately $400 million. The company has also achieved a number of other significant milestones, including addressing two-thirds of its restructuring items and significantly shifting its manufacturing and engineering footprints to cost-competitive countries. Nearly 60% of Visteon's hourly manufacturing personnel are now in lower cost countries, compared with 48% at the end of 2005. By 2009, Visteon plans to have 75% of its manufacturing personnel and half of its engineering workforce in cost-competitive countries. About Linamar Corporation Headquartered in Guelph, Ontario, Linamar Corporation (TSE:LNR) -- http://www.linamar.com/-- designs, develops and manufactures precision-machined components, modules and systems for engine, transmission, chassis and industrial markets. It has 36 manufacturing locations, research and development centers and sales offices in Canada, United States, Mexico, Germany, Hungary and Japan, Korea and China. The company is organized into six groups: Engine, Transmission, Chassis, Europe, Asia-Pacific and Industrial. About Visteon Corporation Based in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic, and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company's other corporate offices are in Shanghai, China; and Kerpen, Germany. The company has facilities in 26 countries and employs approximately 43,000 people. * * * In November 2006, Moody's Investor Service placed Visteon Corp.'s long term corporate family and probability of default ratings at 'B3'. The ratings still hold to date. WENDY'S INT'L: Partners with Berjaya to Open 70 Units in Malaysia ----------------------------------------------------------------- Wendy's International Inc. and Berjaya Corporation Berhad have signed a development agreement to build Wendy's restaurants in Malaysia. Berjaya, through its wholly-owned subsidiary, Nadi Klasik Sdn Bhd, has been granted the right to develop and operate Wendy's restaurants in Malaysia. Berjaya plans to open the first of these restaurants in Kuala Lumpur in late 2007 or early 2008 and will continue development in the Klang Valley region and other cities over the next 10 years. The new franchisee expects to open more than 70 Wendy's restaurants in Malaysia. "We are pleased to enter a franchise partnership with Berjaya, a company that is well respected in Asia and worldwide," said Dave Near, Wendy's chief operations officer. "Berjaya and its chairman and chief executive officer Tan Sri Dato' Seri Vincent Tan have a great deal of experience in successfully operating several well- known restaurant brands." "The inclusion of Wendy's brand into our Group's business is a strategic move that we had planned for some time. It complements the wide variety of businesses that we have," said Tan Sri Dato' Seri Vincent Tan. "To ensure success, we have included several well known and experienced people on the Board as well as in key management positions." This agreement is part of Wendy's plan to focus development efforts in key markets outside of North America. "We are taking a disciplined approach to growing our international business, preparing our support infrastructure, and conducting detailed market analyses before expanding into new markets," said James C. Hartenstein, Wendy's Senior Vice President of International. "This is a great opportunity to expand our Wendy's brand in Asia." Wendy's recently established an office in Hong Kong to serve franchise partners, suppliers and staff throughout the region, and prepare for expansion into new markets. Wendy's opened its first restaurant in Asia in 1980 and has approximately 150 restaurants in the Asia Pacific region. About Berjaya Corporation Based in Kuala Lumpur, Berjaya Corporation Berhad -- http://www.berjaya.com/-- is listed on the Malaysian Stock Exchange, Bursa Malaysia Securities Berhad with interests in property investment and development; vacation timeshare, hotels, resorts and recreation development; consumer marketing and direct selling; financial services and gaming. Berjaya has extensive experience in developing and managing quick service restaurants in Malaysia and currently operates the Starbucks and Kenny Rogers Roasters franchises there, as well as Borders Books stores. About Wendy's International Based in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/,http://www.wendys.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the Americas, Asia, the Pacific Rim, Europe and the Middle East. * * * As reported in the Troubled Company Reporter on June 21, 2007, Moody's Investors Service lowered all ratings of Wendy's International, Inc. and placed all ratings on review for further possible downgrade. Affected ratings include the company's Ba2 corporate family rating which was lowered to Ba3 and its (P)B1 preferred stock shelf rating which was lowered to (P)B2. Additionally, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Wendy's International Inc. to 'BB-' from 'BB+'. All ratings remain on CreditWatch with negative implications, where they were placed on April 26, 2007. WESCO INTERNATIONAL: Earns $70 Million in Quarter Ended Sept. 30 ---------------------------------------------------------------- WESCO International Inc. disclosed 2007 third quarter financial results. Net income for this quarter was $70 million versus $59 million in the comparable 2006 quarter. Third quarter net income includes approximately $10 million of favorable one-time benefits from foreign exchange gains and tax benefits, primarily the ability to now recognize prior years' state net operating losses. Consolidated net sales for the third quarter of 2007 were $1.546 billion compared to $1.343 billion in 2006, an increase of 15.1%. Included are sales from recent acquisitions totaling approximately $183 million. Gross margin for the quarter was 20.3% compared to 20.5% for the comparable 2006 quarter. Operating income for the current quarter totaled $109 million versus $100 million in last year's comparable quarter. Depreciation and amortization included in operating income was $9 million for 2007 compared to $7 million in 2006. Stephen A. Van Oss, senior vice president and chief financial officer, stated, "We performed well in the face of challenging end markets. Our operating results for the quarter were very strong and set records for the company in virtually every key financial category. These results reflect progress across a broad spectrum of performance improvement initiatives, particularly those dealing with margin protection and cost efficiency. We further improved our position as a low cost operator and recorded our best ever SG&A expense ratio for our core operations." Mr. Van Oss continued, "During the quarter, we purchased another 1.2 million shares for a total of 6.4 million shares purchased year to date, completing the $400 million program authorized in February of this year. Our balance sheet is in great shape. Our strong free cash flow of $75 million and ample liquidity has positioned the Company to execute on the new $400 million share repurchase program announced in September in a measured fashion while maintaining current levels of financing leverage." Year to Date Results Consolidated net sales for the nine months ended Sept. 30, 2007, were $4.514 billion versus $3.945 billion in last year's comparable period, a 14.4% increase. Sales from recent acquisitions for the first nine months totaled $524 million. Gross margin in the current nine-month period was 20.4% versus 20.3% last year and operating income totaled $295 million versus $272 million last year. Depreciation and amortization included in operating income was $27 million versus $19 million last year. Net income for the 2007 year-to-date period was $178 million versus $159 million last year. Roy W. Haley, chairman and chief executive officer, stated, "The macro-economic environment continues to provide opportunities for growth as we look out into the fourth quarter. We have added personnel to a variety of longer term sales and marketing initiatives, and these programs are beginning to yield positive results. We are early in this cycle of investment in vertical market segment initiatives and we expect to see new opportunities being converted into higher levels of sales performance over the next several quarters. Our base is strong, and we are very well positioned to improve our overall economic returns while delivering ongoing supply chain cost savings to our customers. We are focused on strong operational execution of the business as the principle driver of our performance." Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $2.878 billion in total assets, $2.317 billion in total liabilities, and $560.5 million in total stockholders' equity. About WESCO International Headquartered in pittsburgh, Pennsylvania, WESCO International, Inc., is a publicly traded Fortune 500 holding company, whose primary operating entity is WESCO Distribution Inc. WESCO Distribution distributes electrical construction products and electrical and industrial maintenance, repair and operating supplies. The company employs approximately 7,100 people, maintains relationships with over 26,000 suppliers, and serves more than 110,000 customers worldwide. WESCO operates seven automated distribution centers and approximately 400 branches in North America and selected international markets. * * * As of Oct. 18, 2007, WESCO International still carries Moody's 'Ba3' long term corporate family rating last placed on Sept. 20, 2005. Outlook is Positive. WESTERN OIL: Completes $6.9 Billion Sale Pact with Marathon Oil --------------------------------------------------------------- Marathon Oil Corporation has completed its acquisition of Western Oil Sands Inc. through a cash and securities transaction of approximately $5.8 billion, plus Western's outstanding debt valued at approximately $1.1 billion, for a total transaction value of $6.9 billion. Under the terms of the agreement, Western shareholders will receive CDN$3.8 billion in cash or $3.9 billion and shares of Marathon common stock or securities exchangeable for Marathon common stock aggregating to 34.3 million shares valued at $1.9 billion. Trading in Western common stock on the Toronto Stock Exchange will terminate on Oct. 19, 2007. "Marathon's acquisition of Western will enable us to realize our fully-integrated strategy to link oil sands production with heavy oil upgrade projects at our refineries, and thereby maximize both the recovery and value of these assets," Clarence P. Cazalot, Jr., president and CEO of Marathon said. "The world-class Athabasca Oil Sands Project provides access to total net resource of approximately 2 billion barrels of mineable bitumen while there is an additional 600 million net barrels of potential in-situ resource, together providing significant future growth opportunities." About Marathon Oil Headquartered in Houston, Texas, Marathon Oil Corp., through its subsidiaries, engages in the exploration, refining, and transportation of crude oil and petroleum products worldwide. The company has principal operations in the United States, Angola, Canada, Equatorial Guinea, Gabon, Indonesia, Ireland, Libya, Norway and the United Kingdom. About Western Oil Based in Calgary, Alberta, Western Oil Sands Inc. (TSE:WTO) (Other OTC: WTOIF.PK) -- http://www.westernoilsands.com/-- is engaged in exploiting the mining and in-situ recoverable bitumen reserves and resources found in oil sands deposits located in the Athabasca region of Alberta, including the Muskeg River Mine. The company holds a 20% undivided interest in the Athabasca Oil Sands Project located in the Athabasca region of northeastern Alberta. Shell Canada Limited and Chevron Canada Limited hold the remaining 60% and 20% interests. WesternZagros Limited, a wholly-owned subsidiary of Western, is pursuing conventional oil and gas exploration opportunities in the Federal Region of Kurdistan in Northern Iraq. * * * As reported in the Troubled Company Reporter on Aug. 2, 2007, Standard & Poor's Ratings Services placed its 'BB+' long-term corporate credit rating and its 'BBB' senior secured debt rating on Western Oil Sands Inc. on CreditWatch with positive implications. The action follows the diclosure that Marathon Oil Corp. (BBB+/Stable/A-2) will acquire all of Western's common shares outstanding for approximately CDN$6.6 billion, which includes CDN$736.1 million of indebtedness. WINDSWEPT: Holtz Rubenstein Reminick Raises Going Concern Doubt ---------------------------------------------------------------- Holtz Rubenstein Reminick LLP raised substantial doubt about Windswept Environmental Group, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's losses from operations, dependence on outside financing, and a stockholders' deficit. The company posted a net income of $8,787,728 on $10,365,528 of revenues for the year ended June 30, 2007, as compared with a net loss of $20,517,190 on $32,644,415 of revenues in the prior year. The decrease in revenue was primarily attributable to decreases of approximately $19,921,000 of revenue from work relating to hurricanes in fiscal 2006, $2,053,000 associated with asbestos, lead and mold remediation, and $965,000 for emergency soil and spill remediation. These decreases were partially offset by an increase of $538,000 in fire and flood remediation and $317,000 in training and air monitoring. While the company achieved significant revenues in fiscal 2006 from work associated with the aftermath of Hurricanes Katrina and Wilma, there were no hurricanes that reached the United States in fiscal 2007 and, accordingly, no hurricane-related work was performed by the company. Cost of revenues decreased $8,165,529, or 43.3%, to $10,712,428 or 103.3% of revenues for the fiscal year ended June 30, 2007 as compared with $18,877,957 or 57.8% of revenues for the fiscal year ended June 30, 2006. This decrease was primarily attributable to lower project manager and direct labor costs, including fringe benefits $(3,215,243), costs of subcontractors $(1,928,389) and supplies, materials and other direct costs $(3,364,347) due to no hurricane related work, partially offset by increased depreciation costs of $114,509. The company's gross profit decreased by $14,113,358 to a loss of $346,900 or 0.5% of total revenues for the fiscal year ended June 30, 2007, as compared to a profit of $13,766,458 or 42.2% of total revenues for the fiscal year ended June 30, 2006. The negative gross profit was due to substantial fixed direct costs that were not offset due to a large reduction in sales. The company's balance sheet at June 30, 2007, showed $12,364,778 in total assets and $13,449,515 in total liabilities, resulting in $1,084,737 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?245b About Windswept Environmental Group Based in Bay Shore, New York, Windswept Environmental Group Inc., through its wholly owned subsidiary, Trade-Winds Environmental Restoration, Inc. -- http://www.tradewindsenvironmental.com/-- provides a full array of emergency response, remediation, disaster restoration and commercial drying services to a broad range of clients. The company specializes in hazardous materials remediation, microbial remediation, testing, toxicology, training, wetlands restoration, wildlife and natural resources rehabilitation, asbestos and lead abatement, technical advisory services, restoration and site renovation services. * BOND PRICING: For the Week of Oct. 15 - Oct. 19 2007 ------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- Acme Metals Inc 12.500% 08/01/02 0 Allegiance Tel 11.750% 02/15/08 52 Amer & Forgn Pwr 5.000% 03/01/30 65 Amer Color Graph 10.000% 06/15/10 68 Ames Dept Stores 10.000% 04/15/06 0 Antigenics 5.250% 02/01/25 69 Archibald Candy 10.000% 11/01/07 0 Atherogenics Inc 1.500% 02/01/12 31 Atherogenics Inc 4.500% 03/01/11 47 Atlantic Coast 6.000% 02/15/34 4 Bank New England 8.750% 04/01/99 9 Bank New England 9.875% 09/15/99 5 BearingPoint Inc 2.750% 12/15/24 73 Beazer Homes USA 4.625% 06/15/24 75 Beazer Homes USA 6.500% 11/15/13 75 Beazer Homes USA 6.875% 07/15/15 74 Beyond.com 7.250% 12/01/03 0 Big City Radio 11.250% 03/15/05 0 Buffets Inc 12.500% 11/01/14 71 Burlington North 3.200% 01/01/45 54 Calpine Gener Co 11.500% 04/01/11 37 Clark Material 10.750% 11/12/06 0 Collins & Aikman 10.750% 12/31/11 1 Color Tile Inc 10.750% 12/15/01 0 Comprehensive Care 7.500% 04/15/10 60 CompuCredit 5.875% 11/30/35 75 Curagen Corp 4.000% 02/15/11 69 Dana Corp 9.000% 08/15/11 72 Decode Genetics 3.500% 04/15/11 69 Decode Genetics 3.500% 04/15/11 70 Delphi Corp 6.197% 11/15/33 61 Delphi Corp 8.250% 10/15/33 71 Delta Air Lines 8.000% 12/01/15 75 Delta Mills Inc 9.625% 09/01/07 15 Duquesne Light 6.250% 08/15/35 74 Dura Operating 8.625% 04/15/12 49 Dura Operating 9.000% 05/01/09 2 Dyersburg Corp 9.750% 09/01/07 0 E. Spire Comm Inc 10.625% 07/01/08 0 Eagle Food Centr 11.0005 04/15/05 0 Empire Gas Corp 9.000% 12/31/07 1 Encysive Pharma 2.500% 03/15/12 68 Epix Medical Inc 3.000% 06/15/24 74 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North Am 9.875% 03/01/14 16 Finova Group 7.500% 11/15/09 18 Ford Motor Co 6.375% 02/01/29 73 Ford Motor Co 6.625% 02/15/28 74 Ford Motor Co 6.625% 10/01/28 74 Ford Motor Co 7.125% 11/15/25 74 Ford Motor Co 7.400% 11/01/46 74 Ford Motor Co 7.700% 05/15/97 73 Gulf States STL 13.500% 04/15/03 0 Hines Nurseries 10.250% 10/01/11 72 HNG Internorth 9.625% 03/15/06 28 Ion Media 11.000% 07/31/13 75 Iridium LLC/CAP 10.875% 07/15/05 3 Iridium LLC/CAP 11.250% 07/15/05 3 Iridium LLC/CAP 13.000% 07/15/05 2 Iridium LLC/CAP 14.000% 07/15/05 3 K Hovnanian Entr 7.750% 05/15/13 73 K Mart Funding 8.800% 07/01/10 8 K Mart Funding 9.440% 07/01/18 3 Kaiser Aluminum 9.875% 02/15/02 0 Kaiser Aluminum 12.750% 02/01/03 6 Kellstrom Inds 5.750% 10/15/02 0 Kimball Hill Inc 10.500% 12/15/12 73 Kmart Corp 9.780% 01/05/20 0 Lehman Bros Holding 5.850% 11/08/30 73 Lehman Bros Holding 11.000% 10/25/17 72 Liberty Media 3.750% 02/15/30 59 Liberty Media 4.000% 11/15/29 65 Lifecare Holding 9.250% 08/15/13 70 LTV Corp 8.200% 09/15/07 0 McSaver Financl 7.400% 02/15/02 5 McSaver Financl 7.600% 08/01/07 5 McSaver Financl 7.875% 08/01/03 5 MediaNews Group 6.375% 04/01/14 73 Merisant Co 9.500% 07/15/13 75 MHS Holdings Co 16.875% 09/22/04 0 Movie Gallery 11.000% 05/01/12 34 Muzak LLC 9.875% 03/15/09 54 Neff Corp 10.000% 06/01/15 75 New Orl Grt N RR 5.000% 07/01/32 63 Northern Pacific RY 3.000% 01/01/47 51 Northern Pacific RY 3.000% 01/01/47 51 Northwest Steel & Wire 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 64 Oakwood Homes 7.875% 03/01/04 13 Oscient Pharma 3.500% 04/15/11 63 Oscient Pharma 3.500% 04/15/11 60 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 9 Pac-West Telecom 13.500% 02/01/09 3 Pac-West Telecom 13.500% 02/01/09 4 PCA LLC/PCA FIN 11.875% 08/01/09 6 Pegasus Satellite 13.500% 03/01/07 0 Piedmont Aviat 10.250% 01/15/49 0 Piedmont Aviat 10.250% 01/15/49 0 Pixelworks Inc 1.750% 05/15/24 74 Polaroid Corp 11.500% 02/15/06 0 Pope & Talbot 8.375% 06/01/13 46 Pope & Talbot 8.375% 06/01/13 46 Primus Telecom 3.750% 09/15/10 68 Primus Telecom 8.000% 01/15/14 67 Propex Fabrics 10.000% 12/01/12 74 Pulte Homes Inc 6.000% 02/15/35 75 Read-Rite Corp 6.500% 09/01/04 0 Rite Aid Corp. 6.875% 12/15/28 73 RJ Tower Corp. 12.000% 06/01/13 2 Rotech HealthCare 9.500% 04/01/12 64 Saint Acquisition 12.500% 05/15/17 68 ServiceMaster Co 7.100% 03/01/18 75 ServiceMaster Co 7.250% 03/01/38 69 ServiceMaster Co 7.450% 08/15/27 73 Scotia Pac Co 6.550% 01/20/07 50 SLM Corp 5.000% 06/15/28 72 SLM Corp 5.050% 03/15/23 74 SLM Corp 5.250% 12/15/28 71 SLM Corp 5.350% 06/15/28 73 SLM Corp 5.400% 03/15/23 73 SLM Corp 5.500% 06/15/29 72 SLM Corp 5.500% 06/15/29 71 SLM Corp 5.500% 06/15/29 72 SLM Corp 5.500% 03/15/30 72 SLM Corp 5.500% 03/15/30 70 SLM Corp 5.500% 06/15/30 71 SLM Corp 5.500% 12/15/30 71 SLM Corp 5.550% 06/15/25 71 SLM Corp 5.550% 03/15/28 75 SLM Corp 5.550% 03/15/29 73 SLM Corp 5.650% 03/15/29 74 SLM Corp 5.650% 03/15/29 71 SLM Corp 5.650% 12/15/29 72 SLM Corp 5.650% 12/15/29 74 SLM Corp 5.650% 09/15/30 74 SLM Corp 5.700% 03/15/29 74 SLM Corp 5.700% 03/15/29 73 SLM Corp 5.700% 03/15/30 70 SLM Corp 5.750% 03/15/29 74 SLM Corp 5.750% 03/15/29 74 SLM Corp 5.750% 06/15/29 73 SLM Corp 5.750% 09/15/29 73 SLM Corp 5.750% 09/15/29 73 SLM Corp 5.750% 12/15/29 70 SLM Corp 5.750% 03/15/30 73 SLM Corp 5.750% 03/15/30 73 SLM Corp 5.800% 12/15/29 71 SLM Corp 5.850% 09/15/29 74 SLM Corp 5.900% 09/15/29 72 SLM Corp 6.000% 06/15/26 75 SLM Corp 6.000% 09/15/29 74 SLM Corp 6.000% 09/15/29 75 SLM Corp 6.000% 12/15/31 71 SLM Corp 6.000% 12/15/31 73 Spacehab Inc 5.500% 10/15/10 56 Spansion Llc 2.250% 06/15/16 73 Standard Pac corp 6.250% 04/01/14 72 Standard Pac corp 7.750% 03/15/13 75 Standard Pacific 7.000% 08/15/15 72 Standard Pacific 9.250% 04/15/12 65 Stanley-Martin 9.750% 08/15/15 70 Tekni-Plex Inc 12.750% 06/15/10 71 Tenet Healthcare 6.875% 11/15/31 74 Times Mirror Co 6.610% 09/15/27 63 Times Mirror-New 7.500% 07/01/23 69 Tom's Foods Inc 10.500% 11/01/04 1 Tousa Inc 7.500% 03/15/11 24 Tousa Inc 7.500% 01/15/15 22 Tousa Inc 9.000% 07/01/10 63 Tousa Inc 9.000% 07/01/10 66 Tousa Inc 10.375% 07/01/12 26 Trans Mfg Oper 11.250% 05/01/09 50 TransTexas Gas 15.000% 03/15/05 0 Tribune Co 5.250% 08/15/15 70 True Temper 8.375% 09/15/11 56 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.350% 04/07/16 43 United Air Lines 10.020% 03/22/14 50 Universal Stand 8.250% 02/01/06 0 US Air Inc. 10.700% 01/01/49 0 US Air Inc. 10.800% 01/01/49 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insur Grp 8.750% 07/15/25 2 Vicorp Restaurant 10.500% 04/15/11 65 Wachovia Corp 9.250% 04/10/08 60 Wachovia Corp 12.500% 03/05/08 74 Wachovia Corp 15.500% 12/05/07 72 WCI Communities 6.625% 03/15/15 71 WCI Communities 7.875% 10/01/13 74 Weirton Steel 10.750% 06/01/05 0 Werner Holdings 10.000% 11/15/07 3 William Lyon 7.500% 02/15/14 65 William Lyon 7.625% 12/15/12 65 William Lyon 10.750% 04/01/13 74 Winstar Comm Inc 10.000% 03/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 Winstar Comm 14.000% 10/15/05 0 Wornick Co 10.875% 07/15/11 69 Ziff Davis Media 12.000% 08/12/09 56 ********* 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, 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 ***