/raid1/www/Hosts/bankrupt/TCR_Public/071025.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 25, 2007, Vol. 11, No. 253
Headlines
1031 TAX GROUP: Wants Asset Transfer Pact with Okun Approved
1031 TAX GROUP: U.S. Trustee, et al. Balk at Transfer Agreement
AAMES MORTGAGE: Poor Pool Performance Cues S&P to Cut Ratings
AK STEEL: Earns $108.4 Million in Third Quarter Ended Sept. 30
AK STEEL: S&P Puts B+ Corporate Credit Rating on Positive Watch
AMAZON.COM: Earns $80 Million in Third Quarter Ended Sept. 30
AMERIQUEST MORTGAGE: S&P Junks Ratings on Two Cert. Classes
BAUSCH & LOMB: Named Defendant in 573 Product Liability Suits
BEAR STEARNS: Fitch Affirms Low-B Ratings on Six Cert. Classes
BEAR STEARNS: S&P Affirms Low-B Ratings on Six Cert. Classes
BEAZER HOMES: Ups Consent Fee in Solicitation Offer to Bondholders
CABLEVISION SYSTEMS: Shares Fall 2% as Dolan's Offer Gets Trashed
CAPITAL TRUST: Moody's Holds Ba1 Senior 2003A Bonds' Rating
CASH TECH: August 31 Balance Sheet Upside-Down by $4 Million
CENTEX CORP: Posts $644 Million Net Loss in Quarter Ended Sept. 30
CERIDIAN CORP: Moody's Puts Corporate Family Rating at B3
CHRYSLER LLC: UAW Key Locals in Michigan Accept Labor Contract
CHUEY'S NUMERO: Case Summary & 16 Largest Unsecured Creditors
CIT HOME: S&P Junks Rating on 2002-1 Class BV Certificates
COLUMBUS MCKINNON: Earns $9.5 Million in Quarter Ended Sept. 30
CREDIT SUISSE: S&P Assigns Low-B Ratings on Six Cert. Classes
DIASYS CORP: Fiondella Milone Raises Going Concern Doubt
EMPIRE BEEF: Court Approves Hodgson Russ as Bankruptcy Counsel
EMPIRE BEEF: Court Okays Pachulski Stang as Committee's Counsel
ENESCO GROUP: Plan Confirmation Hearing Set for November 28
FAMILY ROOM: PMB Helin Donovan Raises Going Concern Doubt
FEDERAL FORGE: Administrative Claims Bar Date Set for December 17
FIRST FRANKLIN: Fitch Junks $5.2 Mil. Class B-2 Certs.' Rating
FIRST FRANKLIN: Fitch Takes Rating Actions on 43 Cert. Classes
FLEXTRONICS INT'L: Earns $121 Million in Quarter Ended Sept. 28
FORAOIS FUNDING: Moody's Junks $92.4 Million Sr. Certs.' Rating
FOREST GATE: Providence Resources Confirms Default is Resolved
GENERAL MOTORS: Mulls 1,000 Lay Offs at Lansing Delta Township
GSAMP TRUST: S&P Holds BB+ Rating on 2005-SD1 Class B-4 Certs.
IAP WORLDWIDE: Covenant Default Cues Moody's to Cut Ratings
INFE-HUMAN RESOURCES: Posts $362,055 Net Loss in 1st Quarter 2008
ISMAR SECURITY: Case Summary & 17 Largest Unsecured Creditors
IWT TESORO: Court Approves Focus Management as Financial Advisor
JAYS FOODS: Wants Approval on Sale Deal with Jay's Acquisition
JETBLUE AIRWAYS: Earns $23 Million in Third Quarter Ended Sept. 30
JOCKEYS' GUILD: Selects Stoll Keenon as Bankruptcy Counsel
JOCKEYS' GUILD: Wants Meyocks & O'Hara as Financial Advisor
JUNIPER NETWORKS: Earns $85.1 Million in Quarter Ended Sept. 30
LAJITAS RESORT: Asset Sale to Continue Despite Aborted Auction
LEVEL 3: Posts $174 Mil. Net Loss in Quarter Ended Sept. 30
LIBERTY TAX: Sept. 15 Balance Sheet Upside-Down by $27.2 Million
M FABRIKANT: Disclosure Statement Hearing Scheduled on Oct. 30
MARLENE DON: Voluntary Chapter 11 Case Summary
MERRILL LYNCH: Fitch Affirms B- Rating on Class G Certificates
MERVIN WAAGE: Case Summary & 12 Largest Unsecured Creditors
MORGAN STANLEY: Fitch Affirms Low-B Ratings on Five Certs.
MORGAN STANLEY: Fitch Holds BB- Rating on Class K Certificates
MOVIE GALLERY: Court Okays Kurtzman Carson as Claims Agent
MOVIE GALLERY: Court Okays Keen as Real Estate Consultants
MOVIE GALLERY: Can Employ Lazard Freres as Financial Advisor
MTI TECHNOLOGY: Can Access Cash Collateral until November 7
MTI TECHNOLOGY: Gets Nod to Access Up to $1 Mil. of DIP Financing
MTI TECHNOLOGY: Wants to Hire Omni Management as Claims Agent
NAVISTAR INT'L: UAW Members Rally over Unfair Labor Practices
NEW CENTURY: Asks Court to Set Dec. 14 as NCWC's General Bar Date
PACIFIC LUMBER: Judge Directs Urges Mediation for Unified Plan
PARAMOUNT RESOURCES: Loan Repayment Cues Moody's to Lift Rating
PEACHTREE RIDGE: Case Summary & 20 Largest Unsecured Creditors
PERSONA COMMS: Bragg Deal Cues Moody's to Withdraw Ratings
PLEASANT CARE: Lifehouse Consortium Wins in Bankruptcy Auction
QC HOLDINGS: Banks Agree to Waive Defaults Under Credit Agreement
SILGAN HOLDINGS: Moody's Affirms Ba2 Corporate Family Rating
SMJ INVESTMENTS: Case Summary & Eight Largest Unsecured Creditors
STATION CASINOS: S&P Holds BB- Corporate Credit Rating
STONE ENERGY: Moody's Lifts Senior Notes' Rating to Caa1
TUPPERWARE BRANDS: Earns $6.9 Million in Quarter Ended Sept. 29
TWEETER HOME: Can Assign Unexpired Leases to Tweeter Newco
TWEETER HOME: Can Assume & Assign 23 Contracts to Tweeter Newco
TWEETER HOME: Court Okays Rejection of 40 Executory Contracts
UNITED COMMUNITY: NYLB Makes $13.5MM Distribution to Policyholders
UNIVAR INC: S&P Places Corporate Credit Rating at B
UTSTARCOM INC: Receives Notice of Default from 7/8% Notes Trustee
VALLEY REALTY: Two Creditors Balk at Greenberg's Retention
WESTERN UNION: Sept. 30 Balance Sheet Upside-Down by $146.4 Mil.
WHOLE FOODS: FTC Wants Expedited Review on Closed Merger Deal
XEROX CORP: Denies Speculations on Lexmark International Bid
* S&P Cuts Ratings on 145 Tranches from 97 US Debt Deals
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
1031 TAX GROUP: Wants Asset Transfer Pact with Okun Approved
------------------------------------------------------------
The 1031 Tax Group LLC and its debtor-affiliates, along with the
Official Committee of Unsecured Creditors, ask the U.S. Bankruptcy
Court for the Southern District of New York to approve an
agreement, dated Oct. 11, 2007, providing for the transfer of
substantially all of Edward H. Okun's assets to the Debtors. Mr.
Okun is the owner of The 1031 Tax Group.
Under the agreement, the assets will be transferred either to the
Debtors' chief restructuring officer, Huron Consulting Services
LLC, or through a nominee entity designated by Huron.
The transfer, however, won't include:
-- two automobiles retained for Mr. Okun's personal use;
-- Mr. Okun's residence at 394 South Hibiscus Drive in Miami,
Florida;
-- Mr. Okun's residence at 39 and 49 Aaron Road in Wolfeboro,
New Hampshire; and
-- customary and usual contents of Mr. Okun's residences (but
excluding any property not of a personal nature).
The assets subject of the transfer are tied to a series of
unsecured promissory notes Mr. Okun had issued to the Debtors
during the course of the Debtors' business.
The aggregate principal amount of the notes is approximately
$130 million with approximately $18.8 million in accrued, unpaid
interest as of Sept. 30, 2007, which interest amount increases at
the approximate rate of $1.5 million per month.
According to the Debtors, the notes are among the few remaining
assets in their estate.
The Debtors contend that the agreement is the most efficient way
to achieve maximum creditor recovery and contemplate that the
operation and eventual liquidation of the assets would form the
structural underpinning of a plan of liquidation they may file
later.
Court records show that the hearing on this issue started on
October 23 and is going forward.
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). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E.
Fox, Esq., at Dreier LLP, represent the Debtors in their
restructuring efforts. Thomas J. Weber, Esq., Melanie L.
Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig,
LLP, represent the Official Committee of Unsecured Creditors. The
Debtors' operating report for the month ended Sept. 30, 2007,
showed net loss of $67,903 on $0 revenues. As of Sept. 30, 2007,
the Debtors had total assets of $164,231,012 and total liabilities
of $168,126,294, resulting in a total stockholders' deficit of
$3,895,282.
1031 TAX GROUP: U.S. Trustee, et al. Balk at Transfer Agreement
---------------------------------------------------------------
The United States Trustee for Region 2, the Ad Hoc Exchanger
Committee, Newton Bayard Limited Partnership, and certain
exchangers representing $3,636,000 of claims against The 1031
Tax Group LLC and its debtor-affiliates oppose an asset transfer
agreement, dated Oct. 11, 2007, entered into by the Debtors and
Edward H. Okun.
A) U.S. Trustee
The U.S. Trustee asks the U.S. Bankruptcy Court for the Southern
District of New York to deny the agreement arguing that it lacks
valuation of the assets subject of the transfer.
In addition, the U.S. Trustee notes that the agreement does not
state:
-- any remedy in the event of a default;
-- what happens if the agreement forms the basis for a plan of
reorganization;
-- the location of the assets;
-- specific assets Mr. Okun retains;
-- whether the Debtors have inventoried the assets;
-- what investigation has been done regarding the assets; and
-- whether Mr. Okun has turned over the documents required by
the agreement, or if he is already in breach of the
agreement.
Citing its renewed request for an appointment of a chapter 11
trustee in the Debtors' cases, the U.S. Trustee asserts that in
order for the Court and the creditors to make a fully informed
determination as to the value the transfer agreement, a trustee
must be appointed to conduct an investigation on the agreement.
B) Ad Hoc Exchanger Committee
The Ad Hoc Exchanger Committee supports the appointment of a
chapter 11 trustee and calls for deferment of any order approving
the transfer agreement until that trustee has made an independent
review and evaluation of the terms of the agreement.
Michael S. Fox, Esq., at Olshan Grundman Frome Rosenzweig &
Wolosky LLP, counsel to the Ad Hoc Committee, argues that doubts
exist whether Mr. Okun will abide by the terms of the agreement.
In fact, Mr. Fox says, Mr. Okun has already breached the agreement
in a material way by selling one of the airplanes subject for
conveyance.
To date, Mr. Fox notes, neither the Debtor nor the Official
Committee of Unsecured Creditors have taken action to remedy the
breach.
C) Newton Bayard
Representing Newton Bayard Limited Partnership, Joseph J. Koltun,
Esq., at Craig and Macauley Professional Corporation tells the
Court that the transfer agreement is trying to obtain assets from
Mr. Okun to fund a plan of liquidation that does not exist.
Mr. Koltun notes that at an Oct. 9, 2007 hearing, the Court heard
that approximately $60,000,000 of claims had objections to the
transfer agreement. Hence, Mr. Koltun argues, it is clear that
the Debtors and the Creditors' Committee do not have the support
of the creditor body necessary to approve a plan of reorganization
which incorporates the transfer agreement.
Newton Bayard holds a lien on certain of the Debtors' assets
pursuant to a prejudgment restraining order it obtained from
Superior Court of the State of Massachusetts in connection with
its efforts to recover approximately $4.3 million in exchange
funds deposited with AEC Exchange Company LLC, one of the Debtors.
The case is Newton Bayard Limited Partnership v. Okun, et al.,
Civil Action No. 07-2273 B.
D) Exchanger Parties
Seven exchanger parties lead by Sergio S. Alvarez and Margaret J.
Alvarez contend that without disclosure of the basic facts, there
is no way to determine whether the transfer agreement is in the
best interest of creditors.
"[N]on-committee creditors have the right to the information
weighed by the Creditors' Committee in deciding to support the
transfer agreement, subject to an appropriate confidentiality
requirement, and cannot be held hostage by the Creditors'
Committee's purposefully maintained superior knowledge, " counsel
to the exchangers Jeffrey Cohen, Esq., at Cohen & Associates P.C.
argues.
About The 1031 Tax Group LLC
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). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E.
Fox, Esq., at Dreier LLP, represent the Debtors in their
restructuring efforts. Thomas J. Weber, Esq., Melanie L.
Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig,
LLP, represent the Official Committee of Unsecured Creditors. The
Debtors' operating report for the month ended Sept. 30, 2007,
showed net loss of $67,903 on $0 revenues. As of Sept. 30, 2007,
the Debtors had total assets of $164,231,012 and total liabilities
of $168,126,294, resulting in a total stockholders' deficit of
$3,895,282.
AAMES MORTGAGE: Poor Pool Performance Cues S&P to Cut Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes from Aames Mortgage Trust 2003-1 and removed the ratings
on classes M4, M5, and M6 from CreditWatch with negative
implications. Concurrently, S&P affirmed the rating on class M1.
The downgrades of these classes reflect continuous adverse pool
performance. As of the September 2007 remittance period,
cumulative losses were $13.1 million, or 2.59% of the original
pool balance. Losses have consistently outpaced excess interest
in the past 12 months, by an average of 478%. Currently there is
no overcollateralization because it has been consistently eroded
by monthly losses. In addition, serious delinquencies (90-plus
days, foreclosures, and REOs) are currently at $8.88 million. The
deal has paid down to 13.50% of its original pool balance.
The affirmed rating on class M1 reflects adequate actual and
projected credit support percentages despite relatively high
delinquencies and losses.
O/C, excess spread, and subordination provide credit enhancement
for the classes in this transaction, except for the most
subordinate class, which has no subordination.
The collateral consists of 30-year, fixed- or adjustable-rate
subprime mortgage loans secured by first liens on one- to four-
family residential properties.
Ratings Lowered
Aames Mortgage Trust 2003-1
Rating
------
Class To From
----- -- ----
M2 BBB A
M3 BB A-
B D CCC
Ratings lowered and removed from CreditWatch negative
Aames Mortgage Trust 2003-1
Class To From
----- -- ----
M4 B BB+/Watch Neg
M5 B- BB/Watch Neg
M6 CCC B/Watch Neg
Rating Affirmed
Aames Mortgage Trust 2003-1
Class Rating
----- ------
M1 AA
AK STEEL: Earns $108.4 Million in Third Quarter Ended Sept. 30
--------------------------------------------------------------
AK Steel Holding Corp reported net income of $108.4 million for
the third quarter of 2007, compared to net income of $26.0 million
for the third quarter of 2006. The 2007 third-quarter results
include a non-cash tax credit of $11.8 million for the increase in
value of the company's deferred tax assets as the result of a
state tax law change. Results for third-quarter 2006 included a
$10.7 million after-tax charge related to the implementation of
labor agreements at the company's Zanesville, Ohio and Butler,
Pennsylvania operations, as well as a $3.0 million reduction in
the value of a deferred tax asset due to state tax law changes.
Net sales for the third quarter of 2007 were $1.72 billion on
shipments of 1,603,000 tons. Third-quarter 2007 sales and
shipments were approximately 11% and 5% higher, respectively, than
in the year-ago period.
The company's average selling price was $1,074 per ton in the
third quarter of 2007, approximately 5% higher than the $1,020 per
ton average price in the year-ago period.
Third-quarter 2007 operating profit was $163.5 million, or $102
per ton, compared to an operating profit of $55.1 million, or $36
per ton, in the third quarter of 2006. Adjusted third-quarter
2006 operating profit was $70.9 million, or $47 per ton, excluding
one-time, pre-tax labor contract charges of $15.8 million.
"AK Steel once again turned in world-class operating profit
exceeding $100 per ton," said James L. Wainscott, chairman,
president and chief executive officer of AK Steel.
"Notwithstanding somewhat softer market conditions for some
products during the quarter, the company's quarterly performance
continued to enhance shareholder value."
VEBA Settlement Reached With Middletown Works Retirees
On Oct. 8, 2007, AK Steel announced it had reached a settlement
agreement with a group of current retirees from its Middletown
Works wherein the company will fund a Voluntary Employees
Beneficiary Association health care trust with a total
contribution of $663 million over a three-year period. The
agreement is subject to approval by a U.S. District Court in
Cincinnati, which is expected to hold a hearing to consider the
settlement in the first quarter of 2008.
If the settlement is approved by the court, AK Steel will make an
initial trust contribution of $468 million, with three subsequent
annual contributions of $65 million each. It is anticipated that
the initial contribution will be made late in the first
quarter of 2008. In exchange for the funding of the VEBA trust,
all of AK Steel's healthcare and welfare obligations (OPEB) to the
retirees will transfer from AK Steel to the VEBA trust and
thereafter AK Steel will have no further liability with respect to
such OPEB obligations. The transfer will be effective upon
approval of the settlement by the court and all claims incurred by
the retirees for covered benefits after the effective date will be
the responsibility of the VEBA trust. As of June 30, 2007, AK
Steel's total OPEB liability was approximately $2.1 billion, of
which approximately one-half was related to the retirees covered
by the settlement agreement.
"We are pleased to have reached this settlement which will serve
the interests of both AK Steel and the Middletown Works retirees,"
said Mr. Wainscott.
Nine-Month Results
For the first nine months of 2007, AK Steel's net income was
$281.0 million, which included pre-tax, non-cash pension
curtailment charges totaling $39.8 million related to labor
agreements for the company's Mansfield and Middletown plants, as
well as an increase in the value of the company's deferred tax
assets due to state tax law changes, of approximately
$12.0 million. Excluding these items, net income in the first
nine months of 2007 was $293.9 million. In the comparable 2006
period, net income was $61.3 million, which included after-tax
charges of $16.4 million resulting from the implementation of new
labor agreements at the Butler and Zanesville operations, and the
reduction in the value of the company's deferred tax asset due to
state tax law changes.
Sales for the first nine months of 2007 were $5.31 billion,
compared to $4.49 billion in the first nine months of 2006.
Operating profit for the first nine months of 2007 was
$470.9 million, or $96 per ton shipped, compared to
$147.5 million, or $32 per ton on the same basis for the first
nine months of 2006. Excluding the pension curtailment charges,
operating profit in the first nine months of 2007 was
$510.7 million, or $104 per ton. Adjusted operating profit for
the first nine months of 2006 was $163.3 million, or $35 per ton,
and excluded the one-time charges of $15.8 million related to the
Butler and Zanesville labor contracts.
Balance Sheet
At Sept. 30, 2007, the company's consolidated balance sheet showed
$5.18 billion in total assets, $4.48 billion in total liabilities,
and $699.5 million in total shareholders' equity.
About AK Steel
West Chester, Ohio-based AK Steel Holding Corp.Corp. (NYSE: AKS)--
http://www.aksteel.com/-- produces flat-rolled carbon, stainless
and electrical steels, as well as tubular steel products for the
automotive, appliance, construction and manufacturing markets.
AK STEEL: S&P Puts B+ Corporate Credit Rating on Positive Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' corporate credit rating, on AK Steel Holding Corp. on
CreditWatch with positive implications.
The CreditWatch listing reflects the West Chester, Ohio-based
company's improved financial profile, currently favorable industry
conditions, and improved legacy cost position.
"Healthy demand for the company's value-added products,
particularly electrical steel, has allowed the company to generate
substantial free cash flow in recent quarters, which it has used
to repay debt and make pension contributions," said Standard &
Poor's credit analyst Marie Shmaruk.
AMAZON.COM: Earns $80 Million in Third Quarter Ended Sept. 30
-------------------------------------------------------------
Amazon.com Inc. disclosed Tuesday financial results for its third
quarter ended Sept. 30, 2007.
Net income increased 313% to $80 million in the third quarter,
compared with net income of $19 million in third quarter 2006.
Net sales increased 41% to $3.26 billion in the third quarter,
compared with $2.31 billion in third quarter 2006. Excluding the
$75 million favorable impact from year-over-year changes in
foreign exchange rates throughout the quarter, net sales grew 38%
compared with third quarter 2006.
Operating income increased 207% to $123 million in the third
quarter, compared with $40 million in third quarter 2006.
Operating cash flow was $1.0 billion for the trailing twelve
months, compared with $587 million for the trailing twelve months
ended Sept. 30, 2006. Free cash flow was $800 million for the
trailing twelve months, an increase of 118% compared with
$366 million for the trailing twelve months ended Sept. 30, 2006.
"Customers continue to respond to our low prices, our free
shipping, and the benefits of Amazon Prime. With our ever-
increasing selection, customers are now getting this unusual level
of service across many different product categories and with depth
of selection in each category," said Jeff Bezos, founder and chief
executive officer of Amazon.com. "In our view, putting customers
first is the only reliable way to create lasting value for
shareowners."
At Sept. 30, 2007, the company's consolidated balance sheet showed
$4.618 billion in total assets, $3.857 billion in total
liabilities, and $761 million in total shareholders' equity.
Fourth Quarter 2007 Guidance
Net sales are expected to be between $5.1 billion and
$5.45 billion, or to grow between 28% and 37% compared with fourth
quarter 2006.
Operating income is expected to be between $221 million and
$291 million, or grow between 12% and 48% compared with fourth
quarter 2006. This guidance includes $54 million primarily for
stock-based compensation and amortization of intangible assets,
and it assumes, among other things, that no additional intangible
assets are recorded and that there are no further revisions to
stock-based compensation estimates.
Full Year 2007 Expectations
Net sales are expected to be between $14.263 billion and
$14.613 billion, or to grow between 33% and 36% compared with
2006. Operating income is expected to be between $605 million and
$675 million, or grow between 56% and 74% compared with 2006.
This guidance includes $191 million primarily for stock-based
compensation and amortization of intangible assets, and it
assumes, among other things, that no additional intangible assets
are recorded and that there are no further revisions to stock-
based compensation estimates.
About Amazon.com
Headquartered in Seattle, Amazon.com Inc. (Nasdaq: AMZN) --
http://amazon.com/ -- is an American e-commerce company.
It was one of the first major companies to sell goods over the
Internet. Founded by Jeff Bezos in 1994, and launched in 1995,
Amazon.com began as an online bookstore, though it soon
diversified its product lines, adding VHSs, DVDs, music CDs, MP3s,
computer software, video games, electronics, apparel, furniture,
food, toys, and more.
* * *
As reported in the Troubled Company Reporter on Aug. 21, 2007,
Standard & Poor's Ratings Services changed its outlook on
Amazon.com to positive from stable. At the same time, Standard &
Poor's affirmed its 'BB' corporate credit rating on the company.
AMERIQUEST MORTGAGE: S&P Junks Ratings on Two Cert. Classes
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
classes of asset-backed pass-through certificates from Ameriquest
Mortgage Securities Inc.'s series 2003-8. Of the five lowered
ratings, S&P placed one on CreditWatch with negative implications
and removed the ratings on two classes from CreditWatch negative.
At the same time, S&P affirmed the ratings on five classes from
the same series.
The five downgrades reflect continuous adverse pool performance.
As of the September 2007 remittance period, cumulative losses were
1.71%, or $42.8 million. Losses have consistently outpaced excess
interest in the past 12 months. In the most recent six months,
losses have exceeded excess interest by an average of 202%, while
the 12-month average is 170%. Overcollateralization has currently
only reached half of its $12.5 million target. In addition,
serious delinquencies (90-plus days, foreclosures, and REOs) are
currently at $35.06 million. The deal has paid down to 14.83% of
its original pool balance.
S&P removed the ratings on classes MV-6 and MF-6 from CreditWatch
because they were lowered to 'CCC'. According to Standard &
Poor's surveillance practices, ratings lower than 'B-' on classes
of certificates or notes from RMBS transactions are not eligible
to be on CreditWatch negative.
The affirmed ratings reflect adequate actual and projected credit
support percentages despite relatively high delinquencies and
losses.
O/C, excess spread, and subordination provide credit enhancement
for these transactions, except for the most subordinate classes,
which have no subordination.
The collateral consists of 30-year, fixed- or adjustable-rate
subprime mortgage loans secured by first liens on one- to four-
family residential properties.
Ratings Lowered
Ameriquest Mortgage Securities Inc.
Asset-backed pass-through certificates series 2003-8
Rating
------
Class To From
----- -- ----
M-4 BB BBB+
M-5 B BBB
Rating Lowered and Placed on Creditwatch Negative
Ameriquest Mortgage Securities Inc.
Asset-backed pass-through certificates series 2003-8
Rating
------
Class To From
----- -- ----
M-3 BBB/Watch Neg A-
Ratings Lowered and Removed from Creditwatch Negative
Ameriquest Mortgage Securities Inc.
Asset-backed pass-through certificates series 2003-8
Rating
------
Class To From
----- -- ----
MV-6 CCC BB-/Watch Neg
MF-6 CCC BB-/Watch Neg
Ratings Affirmed
Ameriquest Mortgage Securities Inc.
Asset-backed pass-through certificates series 2003-8
Class Rating
----- ------
AV1 AAA
AV2 AAA
AF5 AAA
M-1 AA
M-2 A
BAUSCH & LOMB: Named Defendant in 573 Product Liability Suits
-------------------------------------------------------------
Bausch and Lomb Inc. disclosed that its has been named as a
defendant in approximately 573 product liability lawsuits pending
in various U.S. federal and state courts as well as certain other
non-U.S. jurisdictions. These include 550 individual actions
filed on behalf of individuals who claim they suffered personal
injury as a result of using a ReNu solution, and a federally filed
consolidated class action.
On Aug. 14, 2006, the Judicial Panel on Multidistrict Litigation
created a coordinated proceeding and transferred an initial set of
MoistureLoc product liability lawsuits to the Federal District
Court for the District of South Carolina.
On Jan. 2, 2007, the New York State Litigation Coordinating Panel
ordered the consolidation of cases filed in New York State, and
assigned the coordination responsibilities to the Supreme Court of
the State of New York, New York County before the Honorable Helen
Freedman of the Commercial Division of the New York County Supreme
Court.
On Oct. 11, 2007, the U.S. District Court for the District of
South Carolina granted B&L's motion to dismiss the consolidated
class action.
As of Oct. 16, 2007, 209 of the 225 cases filed in federal courts
have been transferred to the JPML. Also, 308 of the 344 cases
filed in state courts have been filed in the New York Consolidated
Proceeding.
These cases and claims involve complex legal and factual questions
relating to causation, scientific evidence, actual damages and
other matters. Litigation of this type is also inherently
unpredictable, particularly given that these matters are at an
early stage, there are many claimants and many of the claimants
seek unspecified damages. Accordingly, it is not possible at this
time to predict the outcome of these matters or to reasonably
estimate a range of possible loss.
While the company intends to vigorously defend these matters, it
could in future periods incur judgments or enter into settlements
that individually or in the aggregate could have a material
adverse effect on its results of operations and financial
condition in any such period.
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: Fitch Affirms Low-B Ratings on Six Cert. Classes
--------------------------------------------------------------
Fitch Ratings affirmed Bear Stearns Commercial Mortgage Securities
Trust's commercial mortgage pass-through certificates, series
2005-PWR7 as:
-- $23.8 million class A-1 at 'AAA';
-- $188 million class A-2 at 'AAA';
-- $106 million class A-AB at 'AAA';
-- $527.7 million class A-3 at 'AAA';
-- $85.7 million class A-J at 'AAA';
-- Interest-only class X-1 at 'AAA';
-- Interest-only class X-2 at 'AAA';
-- $33.7 million class B at 'AA';
-- $8.4 million class C at 'AA-';
-- $15.5 million class D at 'A';
-- $11.2 million class E at 'A-';
-- $11.2 million class F at 'BBB+';
-- $9.8 million class G at 'BBB';
-- $12.7 million class H at 'BBB-';
-- $4.2 million class J at 'BB+';
-- $4.2 million class K at 'BB';
-- $5.6 million class L at 'BB-';
-- $4.2 million class M at 'B+';
-- $1.4 million class N at 'B';
-- $2.8 million class P at 'B-'
Fitch does not rate the $14.1 million class Q certificates.
The rating affirmations reflect stable pool performance and
minimal pay down since Fitch's last rating action. As of the
October 2007 distribution date, the pool has paid down 4.8% to
$1.07 billion from $1.12 billion at issuance. To date, two loans
(2.7%) have been defeased.
There is currently one loan (0.5%) in special servicing which is
secured by a medical office in Boca Raton, Florida. The special
servicer is negotiating with the borrower while pursuing
foreclosure.
Fitch reviewed the shadow ratings of the following loans: 405 Park
Avenue (2.3%), 33 Route 304 (1.1%), Sam Moon Center II (1%), and
Visalia Medical Clinic (0.7%). Based on their stable to improved
performance since issuance all four loans maintain their
investment grade shadow ratings.
The largest shadow rated loan, 405 Park Avenue (2.3%), is
collateralized by a 156,614 square foot office property located in
the Plaza District in Midtown Manhattan. Major tenants include
Allied Irish Banks P.L.C., The Wicks Group of Companies and Rubin,
Bailin, Ortoli, Meyer & Baker LLP. As of Aug. 1, 2007, occupancy
has increased to 99.7% from 87.5% at issuance.
The second largest shadow rated loan, 33 Route 304, is a 120,292
sf retail and flex office property located in Nanuet, NY. Major
tenants include Bassett Furniture, Planet Fitness, La-Z-Boy
Furniture and Verizon. La-Z-Boy (15.6%) is expected to vacate
before the end of the year and the borrower is pursuing
replacement tenants. As of Dec. 31, 2006, occupancy has increased
to 100% from 88% at issuance.
BEAR STEARNS: S&P Affirms Low-B Ratings on Six Cert. Classes
------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the class
B commercial mortgage pass-through certificates from Bear Stearns
Commercial Mortgage Securities Trust 2004-TOP16 to 'AA+' from
'AA'. Concurrently, S&P affirmed the ratings on 19 other classes
from the same series.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
The upgrade also reflects the defeasance of 9% of the pool, as
well as increased credit support due to the reduction of 7% of the
trust balance from principal repayments. As of the Oct. 15, 2007,
remittance report, the trust collateral consisted of 121 mortgage
loans with an outstanding principal balance of $1.08 billion,
compared with 123 loans totaling $1.16 billion at issuance.
The master servicer, Wells Fargo Bank N.A., reported financial
information for 99% of the nondefeased loans in the pool. Ninety-
five percent of the servicer-reported information was full-year
2006 data. Based on this information, Standard & Poor's
calculated a weighted average debt service coverage of 1.93x,
compared with 1.99x at issuance. All of the loans in the pool are
current, and no loans are with the special servicer. The trust
has experienced no losses to date.
The top 10 exposures secured by real estate have an aggregate
outstanding balance of $430.4 million (40%). Year-end 2006
financial information was available for all but the fifth-largest
exposure. Based on this information, Standard & Poor's calculated
a weighted average DSC of 2.07x, up from 1.94x at issuance.
Financial information for the six months ended June 30, 2007 was
provided for the fifth-largest exposure, Hilton Old Town.
Standard & Poor's reviewed the property inspection reports
provided by Wells Fargo for the assets underlying the top 10
exposures, and all were reported to be in "good" condition.
Three of the top 10 exposures and eight additional exposures
exhibited credit characteristics consistent with those of
investment-grade obligations at issuance and continue to do so.
Details of the exposures greater than $10.0 million are:
-- The second-largest exposure in the pool, Jersey Gardens,
has a whole-loan A note balance of $156.5 million that is
split into two pari passu pieces, of which $75.9 million
makes up 7% of the trust balance. A 1.3 million-sq.-ft.
value-oriented regional mall in Elizabeth, New Jersey,
secures the loan. Standard & Poor's underwritten net
cash flow is up slightly since issuance. The master
servicer reported a DSC of 2.14x for the three months
ended March 31, 2007, and 99% occupancy as of May 2007.
-- The third-largest exposure in the pool, New Dominion
Technology Park ($63 million, 6%), is secured by a four-
story, 257,400-sq.-ft. class A office tower in Herndon,
Virginia. Wells Fargo reported a DSC of 2.19x as of the
year ended Dec. 31, 2006 and 100% occupancy as of July
2007. Standard & Poor's underwritten NCF is similar to
its level at issuance.
-- Hilton Old Town ($32.2 million, 3%), the fifth-largest
exposure in the pool, is secured by a seven-story, 241-
room full-service hotel in Alexandria, Virginia.
Reported DSC was 3.57x for the six months ended June 30,
2007, and occupancy was 75% as of August 2007.
Standard & Poor's underwritten NCF has increased 12%
since issuance.
-- Huntington Square Plaza ($19.2 million, 2%) is secured by
a 115,000-sq.-ft. retail property in East Northport, New
York. Reported year-end 2006 DSC was 2.63x and occupancy
was 100%. Standard & Poor's adjusted NCF was comparable
to its level at issuance.
-- A 222,500-sq.-ft. anchored retail center in Goleta,
California, secures the Fairview Center loan
($16.4 million, 2%). The master servicer reported a DSC
of 2.45x and 99% occupancy for the year ended
Dec. 31, 2006. Standard & Poor's underwritten NCF
increased 9% since issuance.
-- RBC Centura Bank portfolio roll-up ($10 million, 1%) is
secured by seven free-standing retail centers totaling
34,100 sq. ft. located in North Carolina, South Carolina,
and Florida. All of the properties are 100% occupied by
a single tenant, RBC Centura Bank (A/Positive/A-1) until
2013. Wells Fargo reported a DSC of 1.32x as of year-end
2006. Standard & Poor's adjusted NCF was comparable to
its level at issuance.
Wells Fargo reported a watchlist of 10 loans totaling
$31.9 million (3%). The loans are on the watchlist due to low
DSCs, low occupancies, and/or upcoming lease expirations.
Standard & Poor's stressed various assets in the mortgage pool as
part of its analysis, including those on the watchlist or
otherwise considered credit impaired. The resultant credit
enhancement levels adequately support the raised and affirmed
ratings.
Rating Raised
Bear Stearns
Commercial Mortgage Securities Trust 2004-TOP16
Commercial mortgage pass-through certificates
Rating
------
Class To From Credit enhancement (%)
---- -- ---- ---------------------
B AA+ AA 9.23
Ratings Affirmed
Bear Stearns
Commercial Mortgage Securities Trust 2004-TOP16
Commercial mortgage pass-through certificates
Class Rating Credit enhancement (%)
----- ------ ----------------------
A-2 AAA 11.10
A-3 AAA 11.10
A-4 AAA 11.10
A-5 AAA 11.10
A-6 AAA 11.10
C AA- 8.03
D A 6.82
E A- 5.35
F BBB+ 4.41
G BBB 3.34
H BBB- 2.41
J BB+ 2.14
K BB 1.74
L BB- 1.20
M B+ 1.07
N B 0.94
O B- 0.67
X-1 AAA N/A
X-2 AAA N/A
N/A - Not applicable.
BEAZER HOMES: Ups Consent Fee in Solicitation Offer to Bondholders
------------------------------------------------------------------
Beazer Homes USA raised the consent fee, Tuesday, for its
solicitation of consents from the holders of its $1.525 billion of
outstanding Senior Notes and Senior Convertible Notes, Forbes
reports.
Forbes relates that the company upped its offer to $12.50 for each
$1,000 principal amount of Notes. The company further extended
the deadline of the offer to 5:00 p.m., on Friday, Oct. 26, 2007.
As reported in the Troubled Company Reporter on Oct. 17, 2007, the
company is soliciting consents from its bondholders to approve
proposed amendments and a proposed waiver pursuant to the
indentures. The company had offered $5.00 per $1,000 of the
principal amount of Notes and initially set the deadline to 5:00
p.m., yesterday, Oct. 24, 2007.
Forbes further reports that the company is asking a waiver on
financial reporting through May 15, 2008, from bondholders.
Aside from the waiver on the reporting, Forbes adds, the company
also wants authority to invest up to $50 million in joint
ventures. Beazer also wants to amend the definition of permitted
liens that restricts its ability to incur more debt in excess of
$700 million. The company wants this definition amended until
after the company has managed to obtain a fixed charge coverage
ratio of at least 2.0 to 1.0 for four consecutive quarters, Forbes
relates.
Delayed Filing
As reported in the Troubled Company Reporter on Aug. 15, 2007, the
company disclosed that it was unable to file its Form 10-Q for the
period ended June 30, 2007, by the required deadline. The company
disclosed that its Audit Committee was conducting an independent
internal investigation of the company's mortgage origination
business and related matters.
Restatement
On Oct. 11, 2007, the company related that the Audit Committee
determined that it was necessary for the company to restate its
financial statements relating to fiscal years 2004 through 2006
and the interim periods of fiscal 2006 and fiscal 2007. The
restatement is expected to impact the financial results for fiscal
years 1999 through 2003 and the company expects that it will
reflect the impact of financial results for these prior years as a
part of the opening balances in the financial statements for the
restatement period.
Notices of Default
On Sept. 6, 2007, the company disclosed that it received purported
default notices from U.S. Bank National Association, the trustee
under the indentures governing Beazer's outstanding:
* 8-5/8% senior notes due May 2011;
* 8-3/8% senior notes due April 2012;
* 6-1/2% senior notes due November 2013;
* 6-7/8% senior notes due July 2015; and
* 8-1/8% senior notes due June 2016.
The notices alleged that the company is sin default under the
indentures because it has not yet filed with the Securities and
Exchange Commission and delivered to the trustee its Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2007.
The company had previously filed an action with the United States
District Court in Atlanta, Georgia against U.S. Bank seeking,
among other relief, a declaration from the court against the
trustee that the filing delay does not constitute a default under
the applicable indentures and that the delay will not give rise to
any right of acceleration on the part of the holders of the senior
notes.
Analyst Comments
Forbes adds that according to Gimme Credit analyst Vicki Bryan,
the flaw in the company's proposal is that it still refuses to
file its financial reports on the required deadline and continues
to assert that it is not in default due to failure in filing its
Form 10-Q for the period ended June 30, 2007.
The analyst further said, Forbes reports, that the bondholders
shouldn't rush themselves into accepting the company's proposal
but instead should push for stronger language in the indentures to
include specific dates as to when the financial reports can be
received.
About Beazer Homes
Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) --
http://www.beazer.com/-- is a single-family homebuilders with
operations in Arizona, California, Colorado, Delaware, Florida,
Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New
Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania,
South Carolina, Tennessee, Texas, Virginia and West Virginia and
also provides mortgage origination and title services to its
homebuyers.
* * *
As reported in the Troubled Company Reporter on Oct 16, 2007,
Fitch Ratings downgraded Beazer Homes USA Inc.'s Issuer Default
Rating to 'BB-' from 'BB'.
Standard & Poor's Ratings Services on the other hand, lowered its
corporate credit rating on Beazer Homes USA Inc. to 'B+' from
'BB-'.
CABLEVISION SYSTEMS: Shares Fall 2% as Dolan's Offer Gets Trashed
-----------------------------------------------------------------
The Dolan Family cash buyout offer of about $10.6 billion for
Cablevision Systems Corp. got rejected at yesterday's special
meeting as majority of the shareholders voted against the offer,
various reports say. Shares of the company dropped by around 2%
to about $31 per share following the disclosure of the voting
results, according the reports.
As reported in the Troubled Company Reporter on Oct. 19, 2007,
prior to the voting schedule, several of Cablevision Systems
Corporation's shareholders have expressed intention to vote
against the buyout saying that the Dolan's $36.26 per share offer
is too low. Among the opposing shareholders who had explicitly
expressed intent to vote against the Dolan offer are ClearBridge
Advisors, Mario J. Gabelli of Gamco Investors Inc., T. Rowe Price,
and Marathon Asset Management LLC.
However analyst Richard Greenfield at Pali Research says the
Dolans could make another offer once market conditions get better,
Yinka Adegoke at Reuters News relates.
Headquartered in Bethpage, New York, Cablevision Systems
Corporation (NYSE: CVC) -- http://www.cablevision.com/-- is an
entertainment and telecommunications company. Its cable
television operations serve more than 3 million households in the
New York metropolitan area. The company's advanced
telecommunications offerings include: Interactive Optimum digital
television, Optimum Online high-speed Internet, Optimum Voice
digital voice-over-cable, and its Optimum Lightpath integrated
business communications services.
At June 30, 2007, Cablevision Systems Corporation's balance sheet
showed a stockholders' deficit of $5 billion, compared to a
stockholders' deficit of $5.3 billion at Dec. 31, 2006.
CAPITAL TRUST: Moody's Holds Ba1 Senior 2003A Bonds' Rating
-----------------------------------------------------------
Moody's Investors Service affirmed the Ba1 (Senior Series 2003A)
and Ba2 (Subordinate Series 2003C) ratings on the Capital Trust
Agency's Multifamily Housing Revenue Bonds (American Opportunities
for Housing - Golf Villas, Rivermill and Village Square
Apartments). The bonds have been issued through the Capital Trust
Agency, Florida. This rating action affects $14,900,000 of Senior
Bonds and $970,000 of Subordinate Bonds outstanding. The outlook
on the bonds has been revised to negative.
Along with this transaction, the issuer also issued Senior Series
2003B bonds which have matured and Junior Subordinated Series
2003D bonds which are not rated by Moody's.
Legal Security
The bonds are secured by the revenues and mortgages from three
cross-collateralized properties - Golf Villas, Rivermill and
Village Square Apartments, as well as funds and investments
pledged to the trustee pursuant to the indenture as security for
the bonds. The Series A and B bonds have a first lien on all
program funds and are paid first in the monthly flow of funds.
The Subordinate Series C bonds are to be paid before the Junior
Subordinate Series D bonds.
A payment default on the Series C Subordinate and Series D Junior
Subordinate bonds can only trigger a default if the Series A and B
bonds are retired first. Excess funds can only be released
annually from the indenture if a 1.40 times debt service coverage
ratio is met for the Series A and B Senior bonds, 1.30 times for
the Series C Subordinate bonds and 1.10 for the Series D Junior
Subordinate bonds. The debt service reserve fund is set at
maximum annual debt service for the Series A and B bonds to
provide ample coverage in the event of liquidity difficulties.
Interest Rate Derivatives: None
Strengths
* Ability of the projects to maintain adequate debt service
coverage without tapping debt service reserves between
2004 and 2007 despite significant damage to the Golf
Villas property caused by Hurricane Ivan in 2004 and
Hurricane Dennis in 2005.
* An increase in debt service coverage to 1.40x as of the
Dec. 31, 2006 audit which has been maintained according to
un-audited 12 month financials as of Sept. 30, 2007.
However, debt service coverage has been volatile over
time. The coverage as of the Dec. 31, 2005 audit was 1.08
and 1 for Senior and Subordinate debt and the coverage as
of the Dec. 31, 2004 audit was 1.31 and 1.22 for the
Senior and Subordinate debt.
Challenges
* All three projects have had difficulty maintaining
occupancy. The Golf Villas, Rivermill and Village Square
projects reported physical occupancy of 84%, 87% and 84%
respectively and economical occupancy of 77%, 76% and 79%
respectively as of September 2007. All of these figures
represent a decline from higher occupancy levels as of
August 2006.
Outlook
The outlook on the bonds has been revised to negative as a result
of the recent decline in occupancy for the three projects.
What could change the rating - Up
Sustained, improved physical and economic occupancy rates and debt
service coverage levels over time.
What could change the rating - Down
A decrease in occupancy rates and/or debt service coverage levels.
CASH TECH: August 31 Balance Sheet Upside-Down by $4 Million
------------------------------------------------------------
Cash Technologies Inc.'s consolidated balance sheet at Aug. 31,
2007, showed $6.5 million in total assets, $10.6 million in total
liabilities, and $105,188 in minority interest, resulting in a
$4.0 million total stockholders' deficit.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $917,535 in total current assets
available to pay $9.4 million in total current liabilities.
The company reported a net loss of $10.8 million on net revenues
of $43,587 for the first quarter ended Aug. 31, 2007, compared
with a net loss of $1.2 million on net revenues of $34,592 for the
same period ended Aug. 31, 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?246f
Going Concern Doubt
As reported in the Troubled Company Reporter on Sept. 17, 2007,
Vasquez & Company LLP expressed substantial doubt about Cash
Technologies Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended May 31, 2007. The auditing firm noted that the company
has suffered significant recurring losses and is in immediate need
of substantial working capital to continue its business and
operations.
About Cash Technologies
Headquartered in Los Angeles, Cash Technologies Inc. (AMEX: TQ)
-- http://www.cashtechnologies.com/-- develops and markets
innovative data processing solutions in the healthcare and
financial services industries.
CENTEX CORP: Posts $644 Million Net Loss in Quarter Ended Sept. 30
------------------------------------------------------------------
Centex Corporation disclosed Tuesday financial results for its
fiscal second quarter ended Sept. 30, 2007.
The loss from continuing operations for the second quarter was
$644 million, down from earnings of $80 million, in the previous
year's fiscal second quarter.
Fiscal 2008's second quarter revenues were $2.22 billion, 21%
lower than the same quarter last year.
"Market conditions were extremely challenging during the quarter,
reflecting the serious disruptions in the credit and mortgage
markets that occurred during that period," said Tim Eller, Centex
Corporation chairman and chief executive officer. "In response,
we meaningfully reduced prices in order to improve affordability
for our home buyers. These actions were consistent with our
continued focus on selling homes and generating cash as we
structure for profitability."
Fiscal 2008's Home building second quarter revenues were
$2.11 billion, 21% lower than the same quarter last year mainly as
a result of a 14% decrease in closings to 7,350 homes. Home
building reported an operating loss of $953 million for the
quarter, after $983 million in impairments and other land charges.
Housing operating earnings (housing revenues less housing cost of
sales and SG&A) were $26 million, down from earnings of
$259 million in the previous year. The decrease is a result of
lower unit volume, an 8% decrease in the unit average sales price
and higher sales incentives.
For the current six months, Home building revenues were
$3.91 billion, 26% lower than the same period last year. The
reported homebuilding operating loss was $1.12 billion for the
six-month period this year versus earnings of $461 million in the
same period last year.
Financial services reported an operating loss of $54 million this
quarter, down from earnings of $26 million in the second quarter
of fiscal 2007, due principally to increased reserves for
potential future losses on its mortgage loan originations. CTX
Mortgage originated loans for 80% of Centex Homes' buyers during
the second quarter, equal to last year's second quarter.
Financial services' operating loss was $39 million for the six-
month period this year, down from earnings of $49 million in the
same period last year. Centex's Financial services operations
provide Centex home buyers with a streamlined home-closing and
settlement process.
At Sept. 30, 2007, the company's consolidated balance sheet showed
$10.970 billion in total assets, $6.710 billion in total
liabilities, $96 million in minority interest, and $4.164 billion
in total stockholders' equity.
About Centex Corporation
Headquartered in Dallas, Centex Corporation (NYSE: CTX) --
http://www.centex.com/-- is a home building company that operates
in major U.S. markets in 25 states. In addition to its home
building operations, the company's related business lines include
mortgage and financial services, home services and commercial
construction.
* * *
As reported in the Troubled Company Reporter on Oct. 15, 2007,
Moody's Investors Service lowered all of the ratings of Centex
Corporation and assigned the company a corporate family rating of
Ba1. The ratings were taken off review for downgrade where they
had been placed on August 22, 2007, and the outlook is negative.
CERIDIAN CORP: Moody's Puts Corporate Family Rating at B3
---------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating to
Ceridian Corporation related to its $5.2 billion acquisition by
Thomas H. Lee Partners L.P. and Fidelity National Financial, Inc.
In addition, Moody's assigned a B1 rating to its $2.55 billion
senior secured credit facilities ($2.25 billion term loan and $300
million revolving credit facility), a Caa2 rating to its $1
billion of senior unsecured notes (anticipated $600 million cash
pay and $400 million PIK toggle), and a Caa2 rating to its $300
million of senior subordinated notes.
Transaction capital sources also include about 1.6 billion of
equity (about $300 million of preferred equity and $1.3 billion of
common equity) from the equity sponsors. The transaction is
expected to close in the fourth quarter of calendar 2007. The
rating outlook is stable.
The B3 corporate family rating is constrained by the company's
high debt leverage associated with the leveraged buyout (including
debt to EBITDA leverage pro forma for the transaction of about 8x,
EBITDA less capital expenditures interest coverage of about 1.1x
and 1% free cash flow to debt), competition from larger U.S.
payroll processors with greater financial resources, its small
scale in international markets other than Canada, exposure to
economic cyclicality in both its human resources and
transportation card servicing (Comdata) businesses, and the
challenge to consolidate legacy payroll platforms, which has
hampered the company's operating profitability compared to payroll
peers.
The rating is supported by the company's leading position within
the U.S. long haul trucking payment processing market, good client
diversity, predictable recurring transaction based revenues, and
the high switching costs of its installed user base.
The factors cited in Moody's Global Business Services Industry
Rating Methodology map to a B2 corporate family rating-one notch
higher than the actual B3 corporate family rating. The one notch
differential reflects a heavy weighting placed on the company's
weak financial metrics and potential challenges from competitors
with greater financial resources in payroll services markets.
The company's senior secured bank facilities, issued by Ceridian
Corporation, a holding corporation, have guarantees from U.S.
operating subsidiaries, and an overall probability of default
rating of B3. The preferred and common equity contributions will
be issued at Foundations Holdings Inc, a holding company. The B1
rating and loss given default rating of LGD-3 (31%) assigned to
the senior secured credit facilities, which are secured by
tangible and intangible assets of the company excluding those held
in its trusts, reflects the priority position of these credit
facilities in the capital structure, including guarantees from
U.S. operating subsidiaries.
The Caa2 (LGD-5, 82%) rating on the senior unsecured debt and Caa2
(LGD-6, 95%) rating on senior subordinated debt reflect their
junior position within the capital structure. The guarantor
subsidiaries accounted for about 79% of total assets as of June
30, 2007. U.S. and Canadian payroll client fund assets are held
in trust and are not part of the debt security collateral or debt
guarantor group.
The SGL-2 liquidity rating reflects the company's sufficient
liquidity from internal and external sources. At closing, the
company will have full availability under an undrawn
$300 million revolving credit facility. At closing, the company
is also anticipated to have corporate cash balances of about $50
million and the company's Comdata accounts receivable
securitization will be terminated. The company is expected to
generate modest free cash flow for the fiscal year ending December
2008.
The stable rating outlook reflects Moody's expectation that the
company will achieve moderate EBITDA improvement over the next 12-
18 months (including about $50 million of cost savings achieved
through September 2007). A loss of payroll revenue market share
or decline in operating profitability could put downward pressure
on the ratings. Downward ratings pressure could also occur if
Moody's were to expect the company's free cash flow to be negative
on a sustained twelve month basis. The ratings could be upgraded
if Ceridian were to achieve continued revenue and profit growth
and its debt-to-EBITDA ratio were to decline below 7x on a
sustainable basis.
Ratings Assigned:
-- Corporate Family Rating B3
-- Probability of Default Rating B3
-- $300 million Senior Secured Revolving Credit Facility B1
(LGD 3, 31%)
-- $2.25 billion Senior Secured Term Loan B1 (LGD 3, 31%)
-- $600 million Senior Unsecured Notes Caa2 (LGD 5, 82%)
-- $400 million senior Unsecured PIK Toggle Notes Caa2 (LGD
5, 82%)
-- $300 million Senior Subordinated Notes Caa2 (LGD 6, 95%)
-- Speculative Grade Liquidity Rating SGL-2
Headquartered in Minneapolis, Minnesota, Ceridian Corporation is a
leading provider of human resources and transportation processing
services.
CHRYSLER LLC: UAW Key Locals in Michigan Accept Labor Contract
--------------------------------------------------------------
More than 9,000 United Auto Workers union members at four major
Chrysler LLC plants in Michigan, voted on Wednesday on a proposed
labor contract between the union and the carmaker, various papers
report.
Sources say that 78% of the union members at Chrysler's assembly
plant in Warren, Michigan, accepted the contract, and 86% of
workers at a metal stamping plant in Sterling Heights, Michigan,
voted yes. Both plants have a total of 5,200 workers. Results
from another stamping plant in Warren, and an assembly plant in
Sterling Heights were not yet available.
Meanwhile, back in Kokomo, Indiana, 78% of 751 union members at
Local 1166, a transmission-casing plant, vetoed the tentative
contract on Tuesday, Mike Ramsey of Bloomberg News reports citing
Jim Lederle, recording secretary for the local.
As reported in yesterday's Troubled Company Reporter, UAW Local
685, with 4,500 employees at three Chrysler LLC transmission
plants in Kokomo, Indiana, rejected the tentative labor contract
by a 72% margin.
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. 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.
A 600-member UAW local in Beldivere, Illinois, will cast their
votes on Friday, concluding the poll, according to Micheline
Maynard of the New York Times.
As previously reported, 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.
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.
CHUEY'S NUMERO: Case Summary & 16 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Chuey's Numero Uno, Inc.
dba Chuey's Restaurant and Cantina
1901 Main Street
San Diego, CA 92113-2129
Bankruptcy Case No.: 07-05903
Type of Business: The Debtor operates a restaurant.
Chapter 11 Petition Date: October 19, 2007
Court: Southern District of California (San Diego)
Judge: John J. Hargrove
Debtor's Counsel: Eric J. Siegler, Esq.
39825 Alta Murrieta Drive, Suite B-26
Murrieta, CA 92562
Tel: (951) 795-8795
Total Assets: $3,215,108
Total Debts: $2,967,447
Debtor's list of its 16 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
International City Bank Bank Loan $387,920
249 East Ocean Boulevard Secured:
Long Beach, CA 90802 $2,700,000
Unsecured:
$81,530
Wells Fargo - BDD Bank Loan $53,438
P.O. Box 53476
Phoenix, AZ 85072-9955
Schulman and Schulman Bank Loan $50,000
1551 4th Avenue, Suite 502
San Diego, CA 92101
Uniradio Trade Debt $10,400
Restaurant Depot Trade Debt $9,709
Martinez & Associates Trade Debt $8,288
G&G Provisions Trade Debt $8,225
Crest Beverage Trade Debt $7,802
Christine Holmer Trade Debt $6,940
Lupe Weinmann Trade Debt $5,451
Internal Revenue Service Trade Debt $4,991
San Diego Treasurer Trade Debt $4,368
Golden Eagle Insurance Trade Debt $3,129
State Board of Equalization Trade Debt $2,504
Employment Development Dept. Trade Debt $2,104
Heartland Meats Trade Debt $1,800
Gliko Contracting & Estimating Trade Debt $1,448
Pepsi-Cola Co. Trade Debt $1,440
Anheuser Busch Trade Debt $1,393
State Compensation Insurance Trade Debt $1,352
La Jolla Bank Bank Loan $2,393,610
Secured:
$2,700,000
Unsecured:
$0
CIT HOME: S&P Junks Rating on 2002-1 Class BV Certificates
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
BV home equity loan asset-backed certificates from CIT Home Equity
Loan Trust 2002-1 to 'CCC' from 'BB' and removed it from
CreditWatch, where it was placed with negative implications on May
23, 2007.
At the same time, S&P affirmed its ratings on nine classes from
this series and removed one of the affirmed ratings (on class BF)
from CreditWatch negative.
The downgrade of class BV reflects continuous adverse pool
performance in the adjustable-rate loan group. As of the
September 2007 remittance period, cumulative losses were
$9.02 million, or 4.35% of the original pool balance. Losses have
consistently outpaced excess interest in eight of the past 12
months. Currently, overcollateralization is only $703,611, which
is below its $2.06 million target. In addition, serious
delinquencies (90-plus days, foreclosures, and REOs) total $9.14
million.
S&P removed the rating on class BV from CreditWatch because it was
lowered to 'CCC'. According to Standard & Poor's surveillance
practices, ratings lower than 'B-' on classes of certificates or
notes from RMBS transactions are not eligible to be on CreditWatch
negative.
The affirmations and CreditWatch removal of class BF reflect
adequate actual and projected credit support percentages provided
by O/C, excess spread, and subordination, despite the
transaction's poor collateral performance.
The collateral consists of one fixed-rate collateral group and one
adjustable-rate collateral group. The underlying collateral
originally consisted of subprime fixed- and adjustable-rate first
and second liens on owner-occupied one- to four-family residential
properties.
Rating Lowered and Removed from Creditwatch Negative
CIT Home Equity Loan Trust 2002-1
Home equity loan asset-backed certificates
Rating
------
Class To From
----- -- ----
BV CCC BB/Watch Neg
Rating Affirmed and Removed from Creditwatch Negative
CIT Home Equity Loan Trust 2002-1
Home equity loan asset-backed certificates
Rating
------
Class To From
----- -- ----
BF B B/Watch Neg
Ratings Affirmed
CIT Home Equity Loan Trust 2002-1
Home equity loan asset-backed certificates
Class Rating
----- ------
AF-5 AAA
AF-6 AAA
AF-7 AAA
MF-1 AA
MF-2 AA
V AAA
MV-1 AA+
MV-2 A
COLUMBUS MCKINNON: Earns $9.5 Million in Quarter Ended Sept. 30
---------------------------------------------------------------
Columbus McKinnon Corporation disclosed Tuesday financial results
for its fiscal 2008 second quarter that ended on Sept. 30, 2007.
Net income was $9.5 million for the fiscal 2008 second quarter, a
13.7% increase from fiscal 2007 second quarter net income of
$8.3 million.
Operating margin improved 140 basis points to 12.6% on a 5.0%
increase in net sales to $151.4 million. The company's Products
segment, which represents 92.7% of total revenue, increased sales
by 8.7% to $140.3 million, more than offsetting the managed hold-
back of sales in the much smaller Solutions segment which declined
26.9% to $11.1 million.
Timothy T. Tevens, president and chief executive officer,
commented, "Strong performance from CMCO Europe along with solid
growth in domestic hoist, crane and chain sales continues to drive
our growth in fiscal 2008. We are generating significant levels
of cash from operations, enabling continued debt reduction which,
along with sales growth and favorable operating leverage, is
further enhancing Columbus McKinnon's profitability.
"During the quarter, we redeemed the remaining $22.1 million of
our 10% 2010 notes which will reduce our annual interest expense
going forward by about $2.2 million, with a favorable net effect
on future earnings of seven cents per diluted share. Excluding
the impact of refinancing costs from this redemption, pro forma
net income per share of $0.54 in this quarter reflects a 22.7%
increase over last year's second quarter net income per diluted
share."
Mr. Tevens added, "We are also encouraged to see further improved
results from the restructuring of our Univeyor business within the
Solutions segment. Gross margins measurably improved over the
prior year on much lower revenue, as we continued to focus on more
profitable products. Notably, the increased backlog in this
segment at quarter end is of higher margin product and systems
business. Additionally, we are seeing favorable market interest
in our latest proprietary product, the EmptiCon, a highly
innovative product that empties ocean-going shipping containers
faster and with fewer workers than conventional methods."
During the fiscal 2008 second quarter, the company recorded net
after-tax charges of $938,000 in financing costs associated with
the redemption of all remaining outstanding 10% Senior Secured
Notes Due 2010. Excluding the effect of these refinancing
charges, fiscal 2008 second quarter pro forma net income
was $10.4 million, a 25% increase from fiscal 2007.
Debt, net of cash, at Sept. 30, 2007, was $100.7 million, or 27.3%
of total capitalization, a $12.1 million reduction from
$112.8 million, or 30.8% of total capitalization, at the end of
the fiscal 2008 first quarter and a reduction of $51.2 million
from $151.9 million, or 40.4% of total capitalization, a year ago.
At the end of the fiscal 2008 second quarter, gross debt was
$154.3 million, or 36.6% of total capitalization, a $20.4 million
decrease from $174.7 million, or 40.8% of total capitalization at
the end of the fiscal 2008 first quarter and a reduction of
$21.8 million from $176.1 million, or 44.0% of total
capitalization a year ago.
The company's availability on its line of credit with its bank
group at Sept. 30, 2007, was $63.4 million. On Aug. 1, 2007, the
company redeemed the remaining $22.1 million of its outstanding
10% Senior Secured Notes Due 2010, using available cash on hand.
The Notes were redeemed at a price of 105% of the principal amount
thereof, plus accrued interest.
Capital expenditures for the second quarter of fiscal 2008 were
$2.4 million, consistent with the same period in fiscal 2007.
Capital spending is focused on new product development, the
purchase of productivity-enhancing equipment and capital
maintenance items at various manufacturing facilities. The
company anticipates capital spending to be approximately $11 to
$12 million in fiscal 2008.
First Half Fiscal 2008 Review
Net sales for the first half of fiscal 2008 were $299.5 million,
up 3.0%, or $8.6 million compared with the first half of fiscal
2007. Operating margin for the first half of fiscal 2008 was
12.5% compared with 11.6% for the first half of fiscal 2007,
representing 41% operating leverage. Net income was $19.0 million
for the first half of fiscal 2008 compared with the first half of
fiscal 2007 net income of $13.9 million.
Net cash provided by operations was $23.9 million for the fiscal
2008 first half, a 59.6% increase from $15.0 million in the fiscal
2007 first half when higher working capital requirements affected
cash generation. Working capital requirements, particularly
inventories, continued to utilize cash during fiscal 2008.
At Sept. 30, 2007, the company's consolidated balance sheet showed
$573.9 million in total assets, $306.3 million in total
liabilities, and $267.6 million in total stockholders' equity.
About Columbus McKinnon
Headquartered in Amherst, New York, Columbus McKinnon Corp.
(NasdaqGM: CMCO) -- http://www.cmworks.com/ -- designs,
manufactures and markets material handling products, systems and
services, which efficiently and ergonomically move, lift, position
or secure material. Key products include hoists, cranes, chain
and forged attachments.
* * *
As reported in the Troubled Company Reporter on Sept. 21, 2007,
Moody's Investors Service affirmed the 'B1' corporate family
rating of Columbus McKinnon Corporation.
CREDIT SUISSE: S&P Assigns Low-B Ratings on Six Cert. Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Credit Suisse Commercial Mortgage Trust Series 2007-
C5's $2.72 billion commercial mortgage pass-through certificates
series 2007-C5.
The preliminary ratings are based on information as of
Oct. 23, 2007. Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans. Classes A-1, A-2, A-3,
A-AB, A-4, A-1-A, A-M, A-J, B, and A-SP are currently being
offered publicly.
Standard & Poor's analysis determined that, on a weighted average
basis, the collateral pool has a debt service coverage of 1.18x, a
beginning LTV of 110.2%, and an ending LTV of 105.1%.
Preliminary Ratings Assigned
Credit Suisse Commercial Mortgage Trust Series 2007-C5
Recommended
Class Rating Amount($) credit support(%)
----- ------ --------- -----------------
A-1 AAA 33,000,000 30
A-2 AAA 315,000,000 30
A-3 AAA 161,000,000 30
A-AB AAA 65,083,000 30
A-4 AAA 851,000,000 30
A-1-A AAA 479,484,000 30
A-M AAA 272,081,000 20
A-J AAA 210,863,000 12.25
B AA+ 23,807,000 11.38
A-SP AAA N/A N/A
C AA 20,406,000 10.63
D AA- 34,010,000 9.38
E A+ 30,609,000 8.25
F A 13,604,000 7.75
G A- 40,813,000 6.25
H BBB+ 20,406,000 5.50
J BBB 30,609,000 4.38
K BBB- 23,807,000 3.50
L BB+ 10,203,000 3.13
M BB 10,203,000 2.75
N BB- 10,203,000 2.38
O B+ 17,005,000 1.75
P B 3,401,000 1.63
Q B- 10,203,000 1.25
S NR 34,010,685 0
A-X* AAA 2,720,810,685 N/A
* Interest-only class with a notional amount.
N/A -- Not applicable.
NR -- Not rated.
DIASYS CORP: Fiondella Milone Raises Going Concern Doubt
--------------------------------------------------------
Fiondella, Milone & LaSaracina LLP expressed substantial doubt
about the ability of DiaSys Corporation to continue as a going
concern after it audited the company's financial statements for
the fiscal year ended June 30, 2007. The auditing firm points to
company's recurring losses from operations, cash used by operating
activities, negative working capital, and accumulated deficit.
The company posted a $785,234 net loss on $1,678,154 of net sales
for the year ended June 30, 2007, as compared with a $1,047,794
net loss on $1,688,097 of net sales in the prior year.
At June 30, 2007, the company's balance sheet showed $2,488,871
in total assets, $1,679,567 in total liabilities and $809,304
stockholders' equity.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2474
About DiaSys Corp.
Headquartered in Waterbury, Connecticut, DiaSys Corporation
(OTC BB:DYXC.OB) -- http://www.diasys.com/-- designs, develops,
manufactures and distributes proprietary medical laboratory
equipment, consumables and infectious disease test-kits to
healthcare & veterinary laboratories worldwide. The Company
operates in Europe through its wholly owned subsidiary based in
Wokingham, England and through distributors in South America.
EMPIRE BEEF: Court Approves Hodgson Russ as Bankruptcy Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
gave Empire Beef Co., dba Empire Beef & Redistribution Company,
authority to employ Hodgson Russ LLP as its bankruptcy counsel.
As reported in the Troubled Company Reporter on Oct. 5, 2007,
Hodgson Russ is expected to:
a) advise the Debtor of its rights, powers and duties as
Debtor and Debtor-In-Possession continuing to operate
and manage its businesses and properties under
Chapter 11 of the Bankruptcy Code;
b) prepare, on behalf of the Debtor, any necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules and other documents, and
reviewing financial and other reports to be filed in
this chapter 11 case;
c) advise the Debtor concerning, and prepare responses to,
applications, motions, other pleadings, notices and
other papers that may be filed and served in this
chapter 11 case;
d) advise the Debtor with respect to, and assisting in the
negotiation and documentation of, financing agreements,
debt and cash collateral orders and related
transactions;
e) advise and counsel the Debtor with respect to the
contemplated sales of its assets and negotiating and
preparing the agreements, pleadings and other documents
related thereto;
f) review the nature and validity of any liens asserted
against the Debtor's property and advise the Debtor
concerning the enforceability of such liens;
g) advise the Debtor regarding its ability to initiate
actions to collect and recover property for the benefit
of its estates;
h) counsel the Debtor in connection with the formulation,
negotiation and promulgation of a plan or plans of
reorganization and related documents;
i) advise and assist the Debtor in connection with any
potential property dispositions;
j) advise the Debtor concerning executory contract and
unexpired lease assumptions, assignments and rejections
and lease restructurings and recharacterizations;
k) assist the Debtor in reviewing, estimating and resolving
claims asserted against the Debtor's estate;
l) commencing and conducting any and all litigation
necessary or appropriate to assert rights held by the
Debtor, protect assets of the Debtor's Chapter 11 estate
or otherwise further the goal of completing the Debtor's
successful reorganization;
m) provide general corporate, litigation, regulatory and
other nonbankruptcy services as requested by the Debtor;
n) appearing in Court on behalf of the Debtor as needed in
connection with the foregoing and otherwise; and
o) performing any other necessary or appropriate legal
services in connection with this Chapter 11 case for or
on behalf of the Debtor.
Hodgson Russ will bill the Debtor based on these rates:
Professionals Hourly Rate
------------- -----------
Garry M. Graber, Esq. $350
Janet Gabel, Esq. $295
Maureen Bass $190
Bonnie O'Malley $155
Lawyers $140 - $625
Paralegals $80 - $215
In addition, Hodgson Russ will charge for its travel time at an
amount equal to 1/2 of its customary hourly rates. The Debtor has
paid the firm a $100,000 retainer as security for the firm's fees
and disbursements.
In his affidavit, Garry M. Graber, Esq., Hodgson Russ partner,
assured the Court that his firm is disinterested as that term is
defined in Section 101(14) of the Bankruptcy Code.
Mr. Graber can be reached at:
Garry M. Graber, Esq.
Hodgson Russ LLP
1540 Broadway, 24th Floor
New York, NY 10036
Tel: (212) 751 4300
Fax: (212) 751 0928
http://www.hodgsonruss.com/
Headquartered in Rochester, New York, Empire Beef Co. --
http://www.empirebeef.com/-- ships six million pounds of beef,
pork, lamb, veal, seafood, poultry, cheese, processed meats, and
multiple food products per week to more than twenty states, the
Caribbean, and other international destinations. The meat are
purchased from packers like Hormel, JBS Swift, and Perdue Farms,
Empire Beef & Redistribution distributes packers' beef, cheese,
lamb, pork, poultry, seafood, and veal in a 20 state area of the
northeastern US. The firm also offers portion-controlled
marinated and flavor-enhanced fresh and frozen meat products for
foodservice companies as well as for retail sale. Empire has
portion-control facilities in New York and Pennsylvania.
The company filed for Chapter 11 protection on Sept. 6, 2007,
(Bankr. W. D. NY Case No. 07-22226). .When the Debtor filed for
protection from its creditors, it listed estimated assets between
$1 million to $100 million.
EMPIRE BEEF: Court Okays Pachulski Stang as Committee's Counsel
---------------------------------------------------------------
The United States Bankruptcy Court for the Western District of New
York gave the Official Committee of Unsecured Creditors in Empire
Beef Co., dba Empire Beef & Redistribution Company's bankruptcy
case, authority to retain Pachulski Stang Ziehl & Jones LLP, as
its counsel.
Pachulski Stang is expected to:
a. assist, advise and represent the Committee in its
consultations with the Debtor and other parties in interest
regarding the administration of this case;
b. assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities, investigating the extent
and validity of liens and participating in and reviewing any
proposed asset sales, any asset dispositions, financing
arrangements and cash collateral stipulations or
proceedings;
c. assist, advise and represent the Committee in any manner
relevant to reviewing and determining Debtor's rights and
obligations under leases and other executory contracts;
d. assist, advise and represent the Committee in connection
with any review of management, compensation issues, analysis
of retention or severance benefits, or other management
related issues;
e. assist, advise and represent the Committee in investigating
the acts, conduct, assets, liabilities and financial
condition of the Debtor, the operation of the Debtor's
businesses and the desirability of the continuance of any
portion of the business, and any other matters relevant to
this case or to the formulation of a plan;
f. assist, advise and represent the Committee in its
participation in the negotiation, formulation and drafting
of a plan of liquidation or reorganization;
g. provide advice to the Committee on the issues concerning the
appointment of a trustee or examiner under section 1104 of
the Bankruptcy Code;
h. assist, advise and represent the Committee in the
performance of all of its duties and powers under the
Bankruptcy Code and the Bankruptcy Rules and in the
performance of such other services as are in the interests
of those represented by the Committee; and
1. assist, advise and represent the Committee in the evaluation
of claims and on any litigation matters.
The firm's professionals compensation rates:
Professionals Hourly Rates
------------- ------------
Robert J. Feinstein, Esq. $750
Brad Godshall, Esq. $695
Beth Levine, Esq. $475
Jason Pomerantz, Esq. $475
Ban D. Scharf, Esq. $375
Designations Hourly Rates
------------ ------------
Shareholders $450-$795
Of-Counsel $350-$595
Associates $350-$375
Paralegals $145-$210
Robert J. Feinstein, Esq., an attorney of the firm, assures the
Court that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
Mr. Feinstein can be reached at:
Robert J. Feinstein, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Tel: (302) 652-4100
Fax: (302) 652-4400
http://www.pszjlaw.com/
Headquartered in Rochester, New York, Empire Beef Co. --
http://www.empirebeef.com/-- ships six million pounds of beef,
pork, lamb, veal, seafood, poultry, cheese, processed meats, and
multiple food products per week to more than twenty states, the
Caribbean, and other international destinations. The meat are
purchased from packers like Hormel, JBS Swift, and Perdue Farms,
Empire Beef & Redistribution distributes packers' beef, cheese,
lamb, pork, poultry, seafood, and veal in a 20 state area of the
northeastern US. The firm also offers portion-controlled
marinated and flavor-enhanced fresh and frozen meat products for
foodservice companies as well as for retail sale. Empire has
portion-control facilities in New York and Pennsylvania.
The company filed for Chapter 11 protection on Sept. 6, 2007,
(Bankr. W. D. NY Case No. 07-22226). .When the Debtor filed for
protection from its creditors, it listed estimated assets between
$1 million to $100 million.
ENESCO GROUP: Plan Confirmation Hearing Set for November 28
-----------------------------------------------------------
The Hon. A. Benjamin Goldgar of the U.S. Bankruptcy Court for the
Northern District of Illinois set a hearing at 1:30 p.m., on
Nov. 28, 2007, to consider confirmation of the Second Amended Plan
of Liquidation filed Enesco Group, Inc. and its debtor-affiliates.
Objections to the Plan, if any, are due November 19.
Judge Goldgar had given his conditional approval on the adequacy
of the Disclosure Statement explaining the Plan and has also set
November 19 as the last day to oppose the disclosure statement.
About Enesco Group
Based in Itasca, Illinois, Enesco Group, Inc. --
http://www.enesco.com/-- is a producer of giftware, and home
and garden decor products. Enesco's product lines include some
of the world's most recognizable brands, including Disney,
Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane,
Border Fine Arts, among others.
Enesco distributes products to a wide array of specialty gift
retailers, home decor boutiques and direct mail retailers, as
well as mass-market chains. The company serves markets
operating in Europe, particularly in the United Kingdom and
France, as well in the Asia Pacific in Australia and Hong Kong.
The company also has Latin-American operations in Mexico.
Enesco Group and its two affiliates, Enesco International Ltd.
and Gregg Manufacturing, Inc., filed for chapter 11 protection
on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565).
Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps,
Slate, Meagher & Flom LLP, represent the Debtors. Epiq Bankruptcy
Solutions, LLC, acts as the Debtors' claims and noticing agent.
In schedules of assets and debts filed with the Court, Enesco
disclosed total assets of $61,879,068 and total debts of
$231,510,180.
Chad H. Gettleman, Esq., and Brad A. Berish, Esq., at Adelman &
Gettleman, Ltd., represent the Official Committee of Unsecured
Creditors. William R. Baldiga, Esq., Jessica M. Paris, Esq., and
Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP; and
Thomas V. Askounis, Esq., at Askounis & Borst, PC, represent the
Ad Hoc Committee of Equity Security Holders.
FAMILY ROOM: PMB Helin Donovan Raises Going Concern Doubt
---------------------------------------------------------
PMB Helin Donovan LLP raised substantial doubt about the ability
of Family Room Entertainment Corporation to continue as a going
concern after it audited the company's financial statements for
the fiscal year ended June 30, 2007.
The auditor reported that the company experienced a significant
net loss in the year ending June 30, 2007, and generated negative
cash flows from operating activities, and as of June 30, 2007, has
an accumulated deficit of $23,275,354.
The company posted a $3,241,279 net loss on $1,603,345 of revenues
for the year ended June 30, 2007, as compared with a $1,301,676
net loss on $3,432,532 of net sales in the prior year.
At June 30, 2007, the company's balance sheet showed $7,414,375 in
total assets and $10,074,845 in total liabilities, resulting in
$2,660,470 stockholders' deficit.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2476
About Family Room
Family Room Entertainment Corp (OTC BB:FMLYE.OB) --
http://www.fmlyroom.com-- Family Room Entertainment Corporation,
together with its subsidiaries, operates in the motion picture
entertainment industry in the United States and Canada. It
develops and produces motion pictures; and provides production
related services. The company was founded in 1969. It was formerly
known as Cobb Resources Corporation and changed its name to Family
Room Entertainment Corporation in 2000. Family Room Entertainment
is headquartered in Beverly Hills, California.
FEDERAL FORGE: Administrative Claims Bar Date Set for December 17
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan set
Dec. 17, 2007, as the last day for all parties holding
administrative claims against Federal Forge Inc. and its debtor-
affiliates to file their proofs of claims.
Parties must submit their proofs of claims with the Court Clerk at
One Division Avenue, Northwest, Room 200 in Grand Rapids,
Michigan.
Information regarding administrative expense claims can be
obtained from:
Steven L. Rayman, Esq.
Rayman & Stone
141 East Michigan Avenue, Suite 301
Kalamazoo, MI 49007
Tel: (269) 345-5156
Headquartered in Lansing, Michigan, Federal Forge Inc.
-- http://www.durgam.com/-- is a supplier specializing in
nonsymetrical forgings. The Company filed for chapter 11
protection on Feb. 19, 2004 (Bankr. W.D. Mich. Case No. 04-01738).
Lawrence A. Lichtman, Esq., at Carson Fischer, PLC represents the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated debts and
assets of over $10 million.
FIRST FRANKLIN: Fitch Junks $5.2 Mil. Class B-2 Certs.' Rating
--------------------------------------------------------------
Fitch Ratings took these rating actions on First Franklin Mortgage
Loan Trust 2005-FFH2. Break Loss percentages and Loss Coverage
Ratios for each class is included with the rating actions as:
-- $64.1 million class A-1,A-2,A-3 affirmed at 'AAA' (BL:
73.35, LCR: 4.34)
-- $23.5 million class M-1 affirmed at 'AA+' (BL: 59.74,
LCR: 3.54)
-- $17.2 million class M-2 affirmed at 'AA' (BL: 49.21, LCR:
2.91)
-- $10.7 million class M-3 affirmed at 'AA-' (BL: 43.07,
LCR: 2.55)
-- $9.5 million class M-4 affirmed at 'A+' (BL: 37.51, LCR:
2.22)
-- $8.2 million class M-5 affirmed at 'A' (BL: 32.66, LCR:
1.93)
-- $8.2 million class M-6 affirmed at 'A-' (BL: 27.76, LCR:
1.64)
-- $7 million class M-7 affirmed at 'BBB+' (BL: 23.52, LCR:
1.39)
-- $6.5 million class M-8 downgraded to 'BBB-' from 'BBB'
(BL: 19.59, LCR: 1.16)
-- $2.7 million class M-9 downgraded to 'BB+' from 'BBB-'
(BL: 17.89, LCR: 1.06)
-- $4.5 million class B-1 downgraded to 'B' from 'BB+' (BL:
15.32, LCR: 0.91)
-- $5.2 million class B-2 downgraded to 'C' from 'BB' and
assigned a distressed recovery rating of 'DR5'
Deal Summary:
-- Originators: 100% First Franklin;
-- 60+ day Delinquency: 27.93%;
-- Realized Losses to date (% of Original Balance): 2.03%;
-- Expected Remaining Losses (% of Current Balance): 16.89%;
-- Cumulative Expected Losses (% of Original Balance):
7.93%.
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2006
and late 2005 with regard to continued poor loan performance and
home price weakness.
-- 'Downgrade Criteria for Recent Vintage U.S. Subprime
RMBS' (Aug. 8, 2007);
-- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria' (June
12 ,2007)
FIRST FRANKLIN: Fitch Takes Rating Actions on 43 Cert. Classes
--------------------------------------------------------------
Fitch Ratings affirmed 13 classes and downgraded 20 classes from
these rating actions on First Franklin Mortgage Loan trusts:
First Franklin Mortgage Loan Trust, Series 2002-FF1:
-- $22.4 million class IA-2, IIA-1 affirmed at 'AAA'
-- $4.2 million class M-1 affirmed at 'A'
-- $1.1 million class M-2 downgraded to 'BB+' from 'BBB'
-- $60,630 class M-3 downgraded to 'B' from 'BBB-'
First Franklin Mortgage Loan Trust, Series 2003-FF5:
-- $43.9 million class M-1 affirmed at 'AA'
-- $42.8 million class M-2 affirmed at 'A'
-- $2.8 million class M-3 downgraded to 'BB' from 'A-'
-- $2.3 million class M-4 downgraded to 'B' from 'BBB'
-- $1.8 million class M-5 downgraded to 'B-' from 'BB-' and
assigned a distressed recovery (DR) rating of 'DR1'
-- $0.8 million class M-6 downgraded to 'C' from 'B+' and
assigned a DR rating of 'DR4';
-- $1.2 million class B downgraded to 'C' from 'B' and
assigned a DR rating of 'DR6';
First Franklin Mortgage Loan Trust, Series 2004-FF1:
-- $47.7 million class M-1 affirmed at 'AA+'
-- $60.2 million class M-2 affirmed at 'A+'
-- $22 million class B-1 affirmed at 'A-'
-- $3.6 million class B-2 downgraded to 'BB' from 'BBB+'
-- $1.1 million class B-3 downgraded to 'B' from 'BBB-'
First Franklin Mortgage Loan Trust, Series 2004-FFH1:
-- $22.6 million class M-1 affirmed at 'AA+'
-- $23.8 million class M-2 downgraded to 'A+' from 'AA'
-- $15.6 million class M-3 downgraded to 'BBB-' from 'AA-'
and placed on Rating Watch Negative
-- $3.8 million class M-4 downgraded to 'B' from 'BBB' and
remains on Rating Watch Negative
-- $3.6 million class M-5 downgraded to 'B-' from 'BB' and
assigned a DR rating of 'DR2'
-- $3.3 million class M-6 downgraded to 'C' from 'BB-' and
assigned a DR rating of 'DR4';
-- $3.7 million class M-7 downgraded to 'C' from 'B' and
assigned a DR rating of 'DR6';
-- $3.3 million class M-8 remains at 'C' with a DR rating
revised from 'DR4' to 'DR6';
First Franklin Mortgage Loan Trust, Series 2004-FFH2:
-- $42.6 million class M-1 affirmed at 'AA+'
-- $42 million class M-2 affirmed at 'AA'
-- $25.2 million class M-3 affirmed at 'AA-'
-- $24 million class M-4 affirmed at 'A+'
-- $21.6 million class M-5 affirmed at 'A'
-- $9 million class M-6 downgraded to 'BBB-' from 'A-' and
placed on Rating Watch Negative
-- $6.5 million class M-7 downgraded to 'BB' from 'BBB+'
-- $6.8 million class M-8 downgraded to 'B' from 'BBB'
-- $7 million class M-9 downgraded to 'C' from 'BB+' and
assigned a DR rating of 'DR4';
-- $8 million class B-1 downgraded to 'C' from 'B' and
assigned a DR rating of 'DR6';
-- $4.9 million class B-2 remains at 'C' with a DR rating
revised from 'DR5' to 'DR6';
In addition, these classes are removed from Rating Watch Negative:
-- Class M-5 (from series 2004-FFH1)
-- Class M-6 (from series 2004-FFH1)
-- Class M-7 (from series 2004-FFH1)
The above trusts consist primarily of fixed and adjustable rate
first liens and fixed second liens extended to sub-prime borrowers
on primarily one- to four-family residential properties.
Currently the transactions are between 39 - 64 months seasoned.
The affirmations affect about $421.2 million in outstanding
certificates and reflect adequate relationships of credit
enhancement to future loss expectations. The downgrades reflect
the deterioration in the relationship of CE to future loss
expectations and affect $105.86 million in outstanding
certificates. The aforementioned transactions are generally
experiencing monthly losses greater than the available excess
spread, which has caused the overcollateralization amount to
decline below the target amount. In two transactions, the OC has
been completely exhausted. This decline in credit enhancement has
put negative pressure on the subordinate bonds.
Currently loans delinquent 60 days or more range between 15 - 34%.
The cumulative losses on these pools are between 0.69% and 3.1% of
their respective original collateral balances.
The mortgage loans are being serviced by various entities which
include Option One Mortgage Corp. ('RPS1 Rating Watch On' rated by
Fitch), Saxon Mortgage Securities Corp. ('RPS2+'), HomEq Servicing
Corp. ('RPS1') and Aurora Loan Services, Inc. ('RMS1-').
FLEXTRONICS INT'L: Earns $121 Million in Quarter Ended Sept. 28
---------------------------------------------------------------
Flextronics International Ltd. disclosed Tuesday results for its
second quarter ended Sept. 28, 2007.
The company reported GAAP net income of $121 million for the
second quarter ended Sept. 28, 2007, compared with GAAP net income
of $185 million for the same period ended Sept. 29, 2006.
Net sales increased from the year ago quarter by $855 million, or
18%, to $5.6 billion in the second quarter ended Sept. 28, 2007,
which is at the high end of the company's previously provided
revenue guidance of $5.3-$5.6 billion. For the second quarter
ended Sept. 28, 2007, adjusted net income increased 25% over the
year ago quarter to $146 million, compared to $117 million in the
year ago quarter.
Adjusted operating profit increased 20% from the year ago quarter
to a record $172 million in the second quarter ended Sept. 28,
2007, while adjusted operating margin increased sequentially 10
basis points to 3.1% from 3.0%. Operating cash flow was
$371 million in the second quarter ended Sept. 28, 2007, and
$516 million in the six-month period ended Sept. 28, 2007. Free
cash flow amounted to $297 million in the second quarter ended
Sept. 28, 2007, and $370 million in the six-month period ended
Sept. 28, 2007.
Mike McNamara, chief executive officer of Flextronics, stated, "We
continue to maintain a strong financial position with over$1
billion in cash, no short term debt maturities, and a record low
debt to capital leverage ratio of 19%. Inventory turns improved
to 8.0x while cash conversion cycle improved by two days
sequentially to an industry leading 11 days. We remain intensely
focused on generating a higher return on capital while growing our
business, as evidenced by our return on invested capital of 11.2%,
which increased 80 basis points from the previous quarter."
McNamara concluded by stating, "I am very proud of the dedication
and hard work of our employees and management across the globe in
making this a very successful quarter for Flextronics. We believe
we are executing very well on the controllable aspects of the
business, which should provide an excellent foundation to add the
capabilities of Solectron into the Flextronics framework."
At Sept. 28, 2007, the company's consolidated balance sheet showed
$13.36 billion in total assets, $6.91 billion in total
liabilities, and $6.45 billion in total shareholders' equity.
About Flextronics International
Headquartered in Singapore, Flextronics International Ltd.
(NasdaqGS: FLEX) -- http://www.flextronics.com/-- is an
Electronics Manufacturing Services provider focused on
delivering design, engineering and manufacturing services to
automotive, computing, consumer digital, industrial,
infrastructure, medical and mobile OEMs. Flextronics helps
customers design, build, ship, and service electronics products
through a network of facilities in over 30 countries on four
continents including Brazil, Mexico, Hungary, Sweden, United
Kingdom, among others.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2007,
Fitch Ratings has completed its review of Flextronics
International Ltd. following the company's acquisition of
Solectron Corp. and resolved Flextronics' Rating Watch Negative
status by affirming these ratings: Issuer Default Rating at 'BB+';
and Senior unsecured credit facility at 'BB+'.
Fitch also rated Flextronics' new senior unsecured Term B loan at
'BB+'. Additionally, Fitch has downgraded the rating on
Flextronics' senior subordinated notes from 'BB' to 'BB-'. The
Rating Outlook is Negative.
At the same time, Moody's Investors Service confirmed the ratings
of Flextronics International Ltd. with a negative outlook and
assigned a Ba1 rating to the company's new $1.75 billion delayed
draw unsecured term loan in response to the closing of the
Solectron acquisition.
The initial draw on the term loan ($1.1 billion) will finance the
cash portion of the merger consideration.
FORAOIS FUNDING: Moody's Junks $92.4 Million Sr. Certs.' Rating
---------------------------------------------------------------
Moody's Investors Service downgraded the rating on these
certificates issued by Foraois Funding Limited, a variable
leveraged super senior certificate issuer:
-- The $92,400,000 Variable Leveraged Super Senior
Certificates Due Aug. 13, 2038
Prior Rating: Caa2, on review for possible downgrade
Current Rating: Ca
Foraois issued certificates providing investors with a leveraged
exposure to the super senior portion of a CDO, whose underlying
reference portfolio is comprised of a variety of structured
finance securities, including RMBS, Home Equity Loans, CMBS and
CDO Securities. The initial leverage is the ratio of the super
senior tranche notional amount divided by the investor's initial
investment.
The transaction incorporates a trigger event that looks to the
total market value of the underlying reference portfolio. If a
trigger event occurs, the investors may decide to incur the mark-
to-market loss of the super senior tranche up to the initial
investment or increase the size of its investment, which will
reduce the leverage in the deal.
The rating downgrade reflects the continued, rapid deterioration
in the current market value of the reference portfolio. The
rating addresses the expected loss to the investors relative to
their initial investment and is based on an analysis of the credit
and market risks in the transaction as well as the certificates'
legal structure.
FOREST GATE: Providence Resources Confirms Default is Resolved
--------------------------------------------------------------
Forest Gate Resources Inc. reports that, in accordance with the
Joint Operating Agreement dated June 29, 2007, it has remedied the
Notice of Default pertaining to its Sept. 17, 2007 cash call from
Operator, Providence Resources Plc.
As of Oct 23, 2007, Providence Resources P.l.c. has officially
confirmed that Forest Gate Resources has remedied their default
and are currently up to date with all cash call payments.
Forest Gate had recently disclosed the closing of a $3 million
private placement that will fund their participation in the Celtic
Sea into 2008.
Forest Gate Resources Inc. is an international oil & gas
exploration company. The company is seeking to increase
shareholder value through participation and development of oil &
gas exploration and production projects in Ireland and Canada. The
Company's shares trade under the symbol FGT on the TSX Venture
Exchange.
GENERAL MOTORS: Mulls 1,000 Lay Offs at Lansing Delta Township
--------------------------------------------------------------
After last week's disclosure of a lay off program at its Hamtramck
assembly plant, General Motors Corp. said Monday that it will lay
off about 1,000 workers at its crossover plant in Lansing Delta
Township by year-end, the Associated Press reports.
The company intends to drop the third shift at the plant
consisting of 510 low-seniority full-time and 497 temporary
workers, the report says. The lay off program at the GM plant
that produces Buick Enclave, Saturn Outlook and GMC Acadia, is
only a "temporary measure" as GM tries to manage inventory,
according to GM spokesman Tom Wickham, the reports relates.
However, Mr. Wickham could not confirm a reinstatement of the
third shift, though he assures that the two remaining shifts are
enough to cover the current demand for vehicles.
The Troubled Company Reporter on Oct. 18, 2007, citing various
reports, said that General Motors will initiate a lay off program
in December 2007 at the Hamtramck assembly plant in Detroit,
Michigan, affects 767 workers.
Due to the decline in sales, the assembly plant, which employs
1,847 hourly workers and manufactures Buick Lucerne and Cadillac
DTS sedans, will be fusing two shifts into one on Dec. 14, 2007.
The plant currently produces 40 cars per hour over two shifts.
After Jan. 2, 2008, the plant will manufacture 56 cars per hour
over one shift, sources report, citing Mr. Wickham.
As reported in the Troubled Company Reporter on Sept. 27, 2007, GM
reached a labor deal with the United Auto Workers union, bringing
unprecedented job security with company commitments to invest in
new products for its existing U.S. facilities, as well as a
moratorium on plant closings and outsourcing of work over the life
of the agreement. The UAW also was able to secure a commitment to
hire 3,000 temporary workers into full-time, traditional
employment.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
* * *
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. The outlook is stable.
GSAMP TRUST: S&P Holds BB+ Rating on 2005-SD1 Class B-4 Certs.
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 47
classes of mortgage pass-through certificates from six GSAMP Trust
transactions.
The affirmations reflect stable collateral performance as of the
September 2007 remittance period. Current and projected credit
support percentages are sufficient to support the certificates at
their current rating levels. Cumulative losses for these
transactions range from 0.03% (series 2005-SEA2) to 3.03% (series
2005-SD2) of the original pool balances, and severe delinquencies
(90-plus days, foreclosures, and REOs) range from 1.05% (series
2005-SEA2) to 40.74% (series 2006-SD2) of the current pool
balances.
A combination of subordination, excess spread, and
overcollateralization provide credit support for these
transactions.
Ratings Affirmed
GSAMP Trust Mortgage pass-through certificates Series
Series Class Rating
----- ----- ------
2005-SD1 A AAA
2005-SD1 M-1 AA
2005-SD1 M-2 A+
2005-SD1 M-3 A-
2005-SD1 B-1 BBB+
2005-SD1 B-2, B-3 BBB-
2005-SD1 B-4 BB+
2005-SD2 A AAA
2005-SD2 M-1A, M-1B, M-2 AA
2005-SD2 M-3 A
2005-SD2 B-1, B-2 BBB+
2005-SD2 B-3, B-4 BBB-
2005-SEA2 A-1, A-2 AAA
2005-SEA2 M-1 AA+
2005-SEA2 M-2 AA-
2005-SEA2 B-1 BBB+
2005-SEA2 B-2 BBB-
2006-SD1 A-1, A-2 AAA
2006-SD1 M-1 AA
2006-SD1 M-2 A
2006-SD1 B-1 BBB+
2006-SD1 B-2 BBB
2006-SD1 B-3, B-4 BBB-
2006-SD2 A-1, A-2, A-3 AAA
2006-SD2 M-1 AA
2006-SD2 M-2 A+
2006-SD2 B-1 A
2006-SD2 B-2 A-
2006-SD2 B-3 BBB
2006-SD2 B-4 BBB-
2006-SD3 A AAA
2006-SD3 M-1 AA
2006-SD3 M-2 A
2006-SD3 B-1 A-
2006-SD3 B-2 BBB+
2006-SD3 B-3, B-4 BBB-
IAP WORLDWIDE: Covenant Default Cues Moody's to Cut Ratings
-----------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
and other instrument ratings of IAP Worldwide Services, Inc.
following its announcement that it had defaulted on its financial
covenants. The company has also been placed on review for further
downgrade.
Government funding delays have led to shortfalls in revenue and
operating cash flow such that IAP was in violation of financial
covenants under its secured credit facilities for the fiscal
second quarter ended June 30, 2007.
On Oct. 23, 2007, Moody's took these rating actions:
-- $75 million 1st lien revolver due 2010, lowered to B3
(LGD3, 35%) from B2 (LGD3, 34%)
-- $413 million 1st lien term loan due 2012, lowered to B3
(LGD3, 35%) from B2 (LGD3, 34%)
-- $120 million second lien term loan, lowered to Caa3
(LGD5, 84%) from Caa2 (LGD5, 84%)
-- Corporate Family Rating, lowered to Caa1 from B3
-- Probability of Default Rating, lowered to Caa1 from B3
The ratings have been placed on review for further downgrade.
The downgrade of IAP's Corporate Family Rating to Caa1 and
placement on review for further downgrade reflects the company's
default of its interest coverage and leverage covenants (as of
June 30, 2007) and the sustained deterioration in the company's
credit statistics caused by the delays in the funding of the
contract backlog. Bank negotiations are in progress to determine
whether an additional amendment to the credit agreement will be
granted and under what terms. The company's EBIT coverage of
interest expense remains weak at about 0.7 times while adjusted
(Moody's standard adjustments) debt to EBITDA has ballooned to
over 9 times.
The definitions of ratios under the company's credit agreement
have not been made public. In addition, the company has posted
three consecutive quarters of negative free cash flow and has a
limited cash balance. Although Moody's expects negotiations with
lenders to be concluded successfully, the possibility remains that
there will be limited cushion following any covenant revisions and
it remains unclear when the unfunded contract backlog will be
realized.
IAP Worldwide Services, Inc., headquartered in Cape Canaveral,
Florida, is a leading provider of facilities management,
contingency support, and technical services to U.S. military and
government agencies. IAP's revenue for the twelve months ended
June 30, 2007 amounted to about $946 million.
INFE-HUMAN RESOURCES: Posts $362,055 Net Loss in 1st Quarter 2008
-----------------------------------------------------------------
INFe-Human Resources Inc. reported a net loss of $362,055 on
revenues of $2.2 million for the first quarter ended Aug. 31,
2007, compared with a net loss of $102,736 on revenues of
$2.5 million for the same period ended Aug. 31, 2006.
At Aug. 31, 2007, the company's consolidated balance sheet showed
$3.5 million in total assets, $3.3 million in total liabilities,
and $219,290 in total shareholders' equity.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $1.1 million in total current
assets available to pay $2.9 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?2471
Going Concern Doubt
Miller, Ellin & Company LLP, in New York, epxressed substantial
doubt about INFe Human Resources Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Nov. 30, 2006. The auditing firm
pointed to the company's net losses for the years ended Nov. 30,
2006, and 2005, and the company's long term liabilities and
current operating expenses which are substantially in excess of
its working capital.
About INFe Human
INFe Human Resources Inc. (OTC BB: IFHR.OB) through its
subsidiaries, provides human resource administrative management,
executive compensation plans, and staffing services to client
companies in the United States.
Daniels Corporate Advisory Company Inc., the company's wholly
owned subsidiary, offers corporate financial consulting and
merchant banking.
ISMAR SECURITY: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Ismar Security Services & Academy, Inc.
P.O. Box 2815
Arecibo, PR 00613-2815
Bankruptcy Case No.: 07-06158
Chapter 11 Petition Date: October 22, 2007
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: Wigberto Lugo Mender, Esq.
Lugo Mender & Co.
Centro Internacional de Mercadeo
Road 165 Road, Torre 1, Suite 501
Guaynabo, PR 00968
Tel: (787) 707-0404
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Banco Popular de Puerto Rico $242,431
P.O. Box 362708
San Juan, PR 00936-2708
Israel Martinez $52,000
P.O. Box 2815
Arecibo, PR 00613-2815
Luis Cuevas Borrero $26,365
c/o LCDA Marilyn Rodas
Department of Labor
505 Avenue Munoz Rivera
San Juan, PR 00919
First Bank $24,749
Euroleasing $21,000
Progressive Finance $11,748
Eduardo Ruiz Aguilar $10,704
First Bank $20,655
Secured:
$13,795
Javier Hernandez CPA $5,000
Guatemala Reto S.A. $5,000
DaLage Lander $3,086
Wilfredo Nunez $1,483
David Morales Nieves $1,483
Bienvenido Parilla $1,439
Nora Ortiz Ayala $1,368
Miguel Nieves Roman $1,328
Moises Aviles $1,316
IWT TESORO: Court Approves Focus Management as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave I.W.T. Tesoro Corporation and its debtor-affiliates authority
to employ Focus Management Group, USA, Inc. as their financial
advisor.
As reported in the Troubled Company Reporter on Sept. 14, 2007,
Focus Management is expected to:
a. provide assistance in connection with the Debtors' Chapter
11 case;
b. review and validate, or if so requested, assist in the
preparation of the Debtors' business plans, cash flow
projections, restructuring programs, and other reports or
analyses prepared by the Debtors or its professionals in
order to advise the Debtors on the viability of the
continuing operations and the reasonableness of projections
and underlying assumptions;
c. review and analyze any restructuring plan to be presented to
the Debtors' provider of post-filing financing;
d. review, evaluate, assist and analyze the financial
ramifications of proposed transactions for which the Debtors
may seek Court approval, including DIP financing and cash
management compensation or retention and severance plans;
e. assist the Debtors, as may be requested, in communicating
with its customers, vendors, employees, and other
stakeholders in the Debtors' business regarding the status
of its bankruptcy case including the preparation of initial
communication materials and updates as necessary.
f. manage and coordinate information requested by Official
Committee of Unsecured Creditors or the legal and financial
advisors for any committee;
g. review, evaluate and analyze the Debtors' internally
prepared financial statements and related documentation, in
order to evaluate the performance of the Debtors as compared
to projected results on an ongoing basis;
h. review and analyze the development, evaluation and
documentation of any plan(s) of reorganization or strategic
transaction(s), including developing, structuring and
negotiating the terms and conditions of potential plan(s) or
strategic transaction(s) and the consideration that is to be
provided to unsecured creditors;
i. render testimony in connection with procedures (a) through
(i) above, as required, on behalf of the Debtors;
j. coordinate operations of the Debtors with their management
and counsel, and assist management with monitoring and
reporting to the Court and all interested parties;
k. provide other services, as requested by the Debtors and
agreed by Focus Management.
The Debtors proposed to pay Focus Management its customary hourly
rate ranging from $375 for senior consultants to $400 for managing
directors. These hourly rates are adjusted periodically.
To the best of the Debtors' knowledge, Focus Management has no
connection with the creditors or any other party in interest or
their attorneys.
The firm can be reached at:
FOCUS Management Group
5001 W. Lemon Street
Tampa, FL 33609-1103
Tel: (813) 281-0062
Fax: (813) 281-0063
http://www.focusmg.com/
I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, --
http://www.iwttesoro.com/-- is headquartered in New York City.
The company and its subsidiaries distribute building materials,
specifically hard floor and wall coverings. They are wholesalers
and do not sell directly to any end user. Their products consist
of ceramic, porcelain and natural stone floor, wall and decorative
tile. They import a majority of these products from suppliers and
manufacturers in Europe, South America, and the Near and Far East.
Their markets include the United States and Canada. They also
offer private label programs for branded retail sales customers,
buying groups, large homebuilders and home center store chains.
The Debtor and its debtor-affiliates, International Wholesale
Tile, Inc. and American Gres, Inc., filed for Chapter 11
bankruptcy protection on Sept. 6, 2007 (Bankr. S.D.N.Y. Lead Case
No. 07-12841). Dawn K. Arnold, Esq. and Jonathan S. Pasternak,
Esq. at Rattet, Pasternak & Gordon-Oliver, L.L.P. represent the
Debtors in their restructuring efforts. As of June 30, 2007, the
Debtors had total assets of $39,798,579 and total debts of
$47,940,983.
JAYS FOODS: Wants Approval on Sale Deal with Jay's Acquisition
--------------------------------------------------------------
Jays Foods Inc. and Select Snacks Inc. ask the U.S. Bankruptcy
Court for the Northern District of Illinois to approve an asset
and purchase agreement entered with Jay's Acquisition Inc.
Under the agreement, the Debtors will sell substantially all of
their assets to Jay's Acquisition for $24,850,000, subject to an
auction and upon Court approval. The Debtors also ask the Court
for authority to assume and assign leases and contracts in
connection with the sale.
The parties have also agreed that $1,650,000 of the purchase price
will be paid to satisfy claims asserted against the Debtors'
estates, exclusive of claims asserted by LaSalle Business Credit
LLC, which has waived its right to the proceeds.
In addition, the asset purchase agreement provides a due diligence
investigation period which expires on Nov. 9, 2007.
The Debtors tells the Court that the proposed bidder, Jay's
Acquisition, is a third party and not comprised of insiders of the
Debtors.
The assets involved in the agreement include brand names,
intellectual property and related rights, machinery and equipment,
and real property owned by the Debtors.
The Debtors continue to operate two manufacturing facilities.
Select owns a manufacturing facility at Jefferson, Indiana and
Jays owns a manufacturing facility at Chicago, Illinois.
Keystone Consulting Group Inc. is the Debtors' financial advisor.
As reported in the Troubled Company Reporter on Oct. 16, 2007,
citing Chicago Tribune, the Debtors planned to sell their assets
under bankruptcy protection. Jay's Acquisition, a prospective
buyer, had offered $24.8 million for the assets of Jays Foods and
Select Snacks, the report relates. The assets to be sold include
a plant located in Jefferson, Indiana, equipment at Chicago, the
Debtors' distribution system and the brands, Jeff Dunn, CEO of
Jays Foods parent company Ubiquity Brands, the report adds.
About Jays Foods
Chicago-based Jays Foods Inc. -- http://www.jaysfoods.com/--
wholesales confectionery products and manufactures snack chip
products. Jays Foods leases real property, and owns certain
equipment, in Chicago, Illinois where it operates a manufacturing
facility that makes snacks mostly under the Jays, O-KE-DOKE and
Krunchers brand names. Jays is 100% owned by Jays Holding
Company, Inc.
The company, then known as Jays Food LLC, first filed for chapter
11 protection on March 5, 2004 (Bankr. N.D. Ill. Case No. 04-
08681). David Missner, Esq., Marc I. Fenton, Esq. and Thomas
Zwartz, Esq. at Piper Rudnick LLP were counsels to the Debtor. In
the March 2004 case, a Section 363 sale took place and most of the
assets of former Jays Foods were sold to Jays Foods Acquisition
Inc., predecessor to Jays Foods Inc. The March 2004 case was
closed on or about March 9, 2007.
Select Snacks Inc., on the other hand, owns real property,
improvements and equipment in Jeffersonville, Indiana where it
operates a manufacturing facility that makes private label and co-
manufactured snacks for its customers. Select Snacks is 100%
owned by Select Snacks Holdings Company, Inc.
Both Select Holding and Jays Holding are 100% owned by Ubiquity
Brands LLC.
As of the Oct. 11, 2007, the Debtors had approximately 943
employees of which Select has 262 (211 union employees and, 51
non-union employees) and Jays has 681 total employees (236 union
employees and 445 non-union employees).
Jays Foods and Select Snacks filed voluntary chapter 11 petitions
on Oct. 11, 2007 (Bankr. N.D. Ill. Case Nos. 07-18768 and
07-18769). Mark K. Thomas, Esq., Brian I. Swett, Esq., Jeremy T.
Stillings, Esq., Myja K. Kjaer, Esq., at Winston & Strawn LLP,
represent the Debtors. When they sought protection from their
creditors, they listed assets and debts between $10 million and
$50 million.
JETBLUE AIRWAYS: Earns $23 Million in Third Quarter Ended Sept. 30
------------------------------------------------------------------
JetBlue Airways Corporation reported Tuesday its results for the
third quarter 2007.
Net income for the quarter was $23 million, compared with third
quarter 2006 net loss of $500,000.
Operating revenues for the quarter totaled $765 million,
representing growth of 21.9% over operating revenues of
$628 million in the third quarter of 2006.
Operating income for the quarter was $79 million, resulting in a
10.3% operating margin, compared to operating income of
$41 million and a 6.6% operating margin in the third quarter of
2006.
Pre-tax income for the quarter was $46 million, resulting in a
6.0% pre-tax margin, compared with pre-tax income of $1 million
and a 0.2% pre-tax margin in the year-ago period.
"We are very pleased with our strong performance this quarter,"
said Dave Barger, JetBlue's chief executive officer. "Thanks to
the dedication of our crewmembers, we continued to drive revenue
growth, productivity improvements and cost discipline. Our
crewmembers are the reason Conde Nast Traveler readers recently
named JetBlue best domestic airline for the sixth straight year."
During the third quarter, JetBlue achieved a completion factor of
98.9% of scheduled flights, compared to 99.6% in 2006. On-time
performance, defined by the U.S. Department of Transportation as
arrivals within 14 minutes of schedule, was 73.7% in the third
quarter compared to 74.6% in the same period in 2006. JetBlue
attained a load factor in the third quarter of 2007 of 82.0%, an
increase of 1.6 points on a capacity increase of 10.9% over the
third quarter of 2006.
"JetBlue's crewmembers continue to deliver exceptional customer
service, despite the operational challenges we continue to face in
the Northeast," said Russ Chew, JetBlue's president and chief
operating officer. "We are very proud of the efforts our
crewmembers made this quarter."
At Sept. 30, 2007, the company had total assets of $5.46 billion
and total stockholders' equity of $1.02 billion. Total debt was
$3.02 billion at Sept. 30, 2007.
Discontinued Operations
JetBlue also disclose Tuesday that it will discontinue operations
in Columbus, Ohio and Nashville, Tennessee, effective Jan. 6,
2008.
"We are taking the difficult but necessary step to discontinue
operations in these two markets," Mr. Barger said. "After more
than 12 months of service and a detailed review of traffic and
revenue trends in these two cities, we have decided to redeploy
our assets."
About JetBlue Airways Corp.
Headquartered in Forest Hills, New York, JetBlue Airways Corp.
(Nasdaq: JBLU) -- http://www.jetblue.com/-- provides passenger
air transportation services in the United States. As of Feb. 14,
2007, it operated approximately 502 daily flights serving 50
destinations in 21 states, Puerto Rico, Mexico, and the Caribbean;
and a fleet of 98 Airbus A320 aircraft and 23 EMBRAER 190
aircraft. The company also provides in-flight entertainment
systems for commercial aircraft, including live in-seat satellite
television, digital satellite radio, wireless aircraft data link
service, and cabin surveillance systems and Internet services,
through its wholly owned subsidiary, LiveTV LLC.
* * *
As reported in the Troubled Company Reporter on Aug. 14, 2007,
Fitch Ratings affirmed these debt ratings of JetBlue Airways
Corp.: (i) issuer default rating at 'B'; and (ii) senior unsecured
convertible notes at 'CCC' with a recovery rating of 'RR6'. The
rating outlook is stable.
JOCKEYS' GUILD: Selects Stoll Keenon as Bankruptcy Counsel
----------------------------------------------------------
Jockeys' Guild Inc. asks the U.S. Bankruptcy Court for the Western
District of Kentucky for permission to employ Stoll Keenon Ogden
PLLC as its bankruptcy counsel, nunc pro tunc to Oct. 12, 2007.
Stoll Keenon will render general representation of the Debtor in
its bankruptcy cases and perform all legal services for the Debtor
which may be necessary, except those to be performed by special
counsel which the Debtor will seek to employ.
The Debtor will pay the firm at its current hourly rates:
Designation Hourly Rate
----------- -----------
Member $225 - $370
Associate $170 - $220
Paralegal $60 - $115
Docket Administration $50
During the course of the case, the firm will invoice the debtor
every 30 days for services rendered along with charges and
disbursements incurred as a request for interim payments.
To the best of the Debtor's knowledge, Stoll Keenon does not hold
or represent an interest adverse to the Debtor or the estate.
The firm can be reached at:
Lea Pauley Goff, Esq.
Gregory D. Pavey, Esq.
Stoll Keenon Ogden PLLC
2000 P.N.C. Plaza, 500 West Jefferson Street
Louisville, KY 40202
Tel: (502) 333-6000
Fax: (502) 333-6099
http://www.skofirm.com/
Headquartered in Louisville, Kentucky, Jockeys' Guild Inc. --
http://www.jockeysguild.com/-- is a labor union based in
Monrovia, California, representing thoroughbred horse racing and
quarter horse professional jockeys.
The company filed for chapter 11 bankruptcy protection on Oct. 12,
2007 (Bankr. W.D. Ky. Case No. 07-33600) in hopes to solve
problems relating to its insurance through its bankruptcy filing.
When it filed for bankruptcy, the Debtor listed assets between
$100,000 and $1 million and debts between $1 million and
$100 million.
JOCKEYS' GUILD: Wants Meyocks & O'Hara as Financial Advisor
-----------------------------------------------------------
Jockeys' Guild Inc. asks the U.S. Bankruptcy Court for the Western
District of Kentucky for permission to employ Meyocks and O'Hara
Racing Enterprises Inc. as its financial advisor, nunc pro tunc to
Oct. 12, 2007.
Meyocks will represent the Debtor in negotiations with various
entities in the engine industry in obtaining financing and to
assist the Debtor by managing its day to day operations. Meyocks,
through its president, Terence Meyock, will also render consulting
and advisory services to the Debtor concerning necessary aspects
of the Debtor's operations. Specifically, Meyocks will:
a. represent the Debtor in negotiations with multiply horse
race track owners and individual horse racing tracks in
connection with obtaining compensation for jockey media
rights, generating monies for the Debtor's programs and
obtaining better and safer conditions for jockeys;
b. represent the Debtor in negotiations and discussions with
horsemen's organization, both nationally and in each state
where legal pari-mutuel horse racing occurs, to obtain
better compensation for jockeys, higher losing mount fees
and better and safer conditions for jockeys;
c. represent the Debtor in negotiations with the appropriate
parties concerning generating monies for the Debtor and its
members from the racing industry's use of its signal for
purposes like off-shore wagering and other revenue
generating purposes;
d. represent the Debtor in negotiations with individual and
corporate sponsors to generate income for the Debtor and its
members from product licensing and related endeavors;
e. represent the Debtor in efforts to generate funding for the
needs of temporarily and permanently disabled jockeys; and
f. oversee the office operations of the Debtor.
Meyocks will bill the Debtor $110,000 fee per year, payable in bi-
weekly installments. The fee will be reviewed by the Debtor's
board of directors every six months.
To the best of the Debtor's knowledge, Meyocks does not hold or
represent an interest adverse to the estate and is a
"disinterested person" under Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Terence Meyocks
President & National Manager
Meyocks and O'Hara Racing Enterprises Inc.
103 Wind Haven Drive, Suite 100
Nicholasville, KY 40356
Headquartered in Louisville, Kentucky, Jockeys' Guild Inc. --
http://www.jockeysguild.com/-- is a labor union based in
Monrovia, California, representing thoroughbred horse racing and
quarter horse professional jockeys.
The company filed for chapter 11 bankruptcy protection on Oct. 12,
2007 (Bankr. W.D. Ky. Case No. 07-33600) in hopes to solve
problems relating to its insurance through its bankruptcy filing.
When it filed for bankruptcy, the Debtor listed assets between
$100,000 and $1 million and debts between $1 million and
$100 million.
JUNIPER NETWORKS: Earns $85.1 Million in Quarter Ended Sept. 30
---------------------------------------------------------------
Juniper Networks Inc. reported Tuesday its results for the three
and nine months ended Sept. 30, 2007.
Net income on a GAAP basis for the third quarter of 2007 was
$85.1 million, compared with a GAAP net income of $58.3 million
for the third quarter of 2006.
Net income on a GAAP basis for the nine months ended Sept. 30,
2007, was $237.9 million, compared with a GAAP net loss of
$1.07 billion, including $1.28 billion of impairment charges, for
the same period last year.
Net revenues for the third quarter of 2007 were $735.0 million,
compared with $573.6 million for the third quarter of 2006, an
increase of 28%. Net revenues for the nine months ended Sept. 30,
2007 were $2.03 billion, compared with $1.71 billion for the same
period last year, an increase of 19%.
"We are pleased with both the results for the quarter and the
momentum we are seeing, which reflect confidence in Juniper to
address the high-performance networking requirements of our
customers," said Scott Kriens, Juniper Networks' chairman and
chief executive officer. "Our strategy and focus on the delivery
of high-performance networking, coupled with the ongoing
implementation of operational discipline across the company, adds
up to continuing opportunity for growth."
Net cash provided by operations for the third quarter of 2007 were
$193.2 million, compared to cash provided by operations of
$164.9 million for the same quarter of 2006. Net cash flows from
operations for the nine months ended Sept. 30, 2007, were
$549.9 million, compared to cash provided by operations of
$521.4 million for the same period in 2006.
Capital expenditures and depreciation during the third quarter of
2007 were $35.9 million and $26.5 million, respectively. Capital
expenditures and depreciation during the first nine months of 2007
were $111.0 million and $73.4 million, respectively.
"Our focus on execution has resulted in ongoing improvement in the
company's operating metrics," said Robyn Denholm, chief financial
officer of Juniper Networks. "While there is much work ahead to
be done, we expect our commitment to operational excellence and
strong financial management will position us well to achieve our
long-term business model goals."
At Sept. 30, 2007, the company's consolidated balance sheet showed
$6.50 billion in total assets, $1.34 billion in total liabilities,
and $5.16 billion in total shareholders' equity.
About Juniper Networks
Headquartered in Sunnyvale, California, Juniper Networks Inc.
(NasdaqGS: JNPR) -- http://www.juniper.net/-- offers a high-
performance network infrastructure that creates a responsive and
trusted environment for accelerating the deployment of services
and applications over a single network. This fuels high-
performance businesses.
* * *
Juniper Networks Inc. still carries Standard & Poor's BB long term
foreign issuer credit rating last placed on April 26, 2007.
Outlook is positive.
LAJITAS RESORT: Asset Sale to Continue Despite Aborted Auction
---------------------------------------------------------------
Mark J. Petrocchi, Esq., at Goodrich Posnikoff Albertson &
Petrocchi, confirmed that the sale of Lajitas Resort Ltd. will
continue despite an aborted auction, the Associated Press reports.
As reported in the Troubled Company Reporter on Oct. 22, 2007, the
sale of the Debtor's assets failed to push through after a bidder
walked out of the court-approved auction.
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 had ordered the sale of the Debtor's assets at
an auction set for October 18.
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.
LEVEL 3: Posts $174 Mil. Net Loss in Quarter Ended Sept. 30
-----------------------------------------------------------
Level 3 Communications, Inc. disclosed net loss of $174 million
for the third quarter 2007, compared to a net loss of
$202 million, for the second quarter 2007.
The company reported consolidated revenue of $1.061 billion for
the third quarter 2007, compared to consolidated revenue of
$1.052 billion for the second quarter 2007.
Consolidated Adjusted EBITDA increased to $215 million in the
third quarter 2007, compared to $193 million for the second
quarter 2007.
"While we continued to grow Core Communications Services revenues
and we did meet our guidance measures in the third quarter, the
company had difficulties with provisioning orders for its
services," James Q. Crowe, CEO of Level 3, said. "The breadth of
the problem was greater than we had earlier diagnosed, and we did
not increase provisioning capacity as we had expected. This
increase in provisioning capacity was necessary to meet the
revenue increases we had previously projected. As a result, we
are lowering our Consolidated Adjusted EBITDA guidance for the
full year 2007 and the full year 2008. We are disappointed by our
performance, particularly given the strength of the current
market. We believe we have identified the underlying causes of
our provisioning constraints, and we have begun to implement
additional changes. We are focused on correcting this issue as
quickly as possible."
Balance Sheet
At Sept. 30, 2007, the company's balance sheet showed
total assets of $10.314 billion and total liabilities of
$9.136 billion, resulting in a $1.178 billion stockholders'
equity. At Dec. 31, 2007, equity was $374 million.
Consolidated Cash Flow and Liquidity
During the third quarter 2007, Unlevered Cash Flow was positive
$76 million, versus negative $64 million for the previous quarter.
Consolidated Free Cash Flow for the third quarter 2007 was
negative $54 million, versus negative $141 million for the
previous quarter. Working capital was a source of cash in the
third quarter, and net cash interest expense for the third quarter
2007 was $130 million.
As of Sept. 30, 2007, the company had cash and marketable
securities of approximately $697 million.
Business Outlook
"Primarily due to the provisioning issues we have been
experiencing, we have lowered our Consolidated Adjusted EBITDA
guidance for both the full year 2007 and 2008," Sunit
Patel, CFO of Level 3, said. "Specifically, we have lowered
Consolidated Adjusted EBITDA guidance for the full year 2007 from
a range of $860 million to $920 million to a range of
$813 million to $833 million and for the full year 2008
from $1.15 billion to $1.3 billion to $950 million to
$1.1 billion.
"Our previously implied fourth quarter Core Communications
Services revenue and Consolidated Adjusted EBITDA guidance
required improvement in our provisioning capabilities. However,
our recurring services revenue did not grow as much as we expected
in the third quarter and that gap compounds in the fourth quarter.
Further, we did not see the growth in usage services, primarily
voice services that we had anticipated. Also, in anticipation of
revenue growth, we incurred network expenses that reduced our
gross margin performance."
The reduction in Consolidated Adjusted EBITDA guidance in 2008 is
primarily driven by: the annualized reduction in the fourth
quarter 2007 Consolidated Adjusted EBITDA and the decrease in the
rate of revenue growth in 2008. The high incremental margin
impact of the revenue reductions is evident in the guidance
change.
"At the low end of the 2008 range, the revised guidance assumes
the recent rate of sales and net installations will continue with
some minimal improvement in our provisioning throughput until we
begin to realize significant benefit from Project Unity in the
second half of 2008," Mr. Patel said. "The upper end of revised
guidance is predicated on achieving more significant improvements
in the rate of sales and net installations beginning later this
year. For 2007, assuming the guidance range for the fourth
quarter, the implied Core Communications Services annualized
revenue growth rate, is now 9 to 12% versus the 17% we had
originally projected."
"I am disappointed by our inability to increase our provisioning
productivity at the rate we had expected," Mr. Crowe said. "We
can and should do better. However, our overall market opportunity
is strong and growing. Our problems are not caused by demand,
pricing or our ability to market and sell our services. Our
ability to grow faster is in our own hands, and we realize the
urgency with which our provisioning problems must be addressed."
About Level 3
Headquartered in Broomfield, Colorado, Level 3 Communications Inc.
(Nasdaq: LVLT) -- http://www.level3.com/-- is an international
communications company. The company provides a comprehensive
suite of services over its broadband fiber optic network including
Internet Protocol services, broadband transport and infrastructure
services, colocation services, voice services and voice over IP
services.
* * *
As reported in the Troubled Company Reporter on Aug. 28, 2007,
Fitch has upgraded Level 3 Communications, Inc. (Nasdaq: LVLT) and
its wholly owned subsidiary Level 3 Financing, Inc.'s Issuer
Default Rating to 'B-' from 'CCC'.
LIBERTY TAX: Sept. 15 Balance Sheet Upside-Down by $27.2 Million
----------------------------------------------------------------
Liberty Tax Credit Plus LP's consolidated balance sheet at
Sept. 15, 2007, showed $43.5 million in total assets,
$71.2 million in total liabilities, and negative $557,186 in
minority interests, resulting in a $27.2 million total partners'
deficit.
The partnership reported a net loss of $571,279 on total revenues
of $2.6 million for the second quarter ended Sept. 15, 2007,
compared with net income of $6.0 million on total revenues of
$2.8 million for the same period ended Sept. 15, 2006.
Rental income decreased approximately 8% for the three months
ended Sept. 15, 2007, as compared to the corresponding period in
2006, primarily due to an increase in vacancies due to the
cancellation of a Section 8 contract at one Local Partnership and
a decrease in occupancy rates at two other Local Partnerships.
Results for the second quarter ended Sept. 15, 2006, includes
income - limited partners from discontinued operations of
$6.8 million, which includes a gain on sale of properties of
$8.7 million.
Full-text copies of the limited partnership's consolidated
financial statements for the quarter ended Sept. 15, 2007, are
available for free at http://researcharchives.com/t/s?2472
Going Concern Doubt
Weinberg Ciullo & Fazzari LLP, in New York, expressed substantial
doubt about the ability of two of Liberty Tax Credit Plus LP's
subsidiary partnerships to continue as a going concern after
auditing the limited partnership's consolidated financial
statements for the years ended March 15, 2007, and 2006. The
auditing firm reported that these subsidiary partnerships' net
losses aggregated $1.0 million in fiscal 2006, $491,638 in fiscal
2005 and $484,798 in fiscal 2004.
About Liberty Tax
Liberty Tax Credit Plus L.P. (Other OTC: XXLTC.PK) is a limited
partnership that invests in other limited partnerships, each of
which owns one or more leveraged low- and moderate-income
multifamily residential complexes that are eligible for the low-
income housing tax credit enacted in the Tax Reform Act of 1986,
and to a lesser extent, in local partnerships owning properties
that are eligible for the historic rehabilitation tax credit.
The Partnership's capital was originally invested in thirty-one
Local Partnerships. As of Sept. 15, 2007, the properties and the
related assets and liabilities of fifteen Local Partnerships and
the limited partnership interest in eight Local Partnerships were
sold. In addition, as of Sept. 15, 2007, the Partnership entered
into an agreement to sell its limited partnership interest in one
Local Partnership and one Local Partnership has entered into an
agreement to sell its property and the related assets and
liabilities.
M FABRIKANT: Disclosure Statement Hearing Scheduled on Oct. 30
--------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York will hold a hearing on Oct. 30, 2007, to consider
approval of the Disclosure Statement explaining the Chapter 11
Plan of Liquidation jointly filed by M. Fabrikant & Sons Inc., its
debtor-affiliate, Fabrikant-Leer International Ltd., the Official
Committee of Unsecured Creditors, and Wilmington Trust Company on
Sept. 27, 2007.
Objections to the approval of the Disclosure Statement are due
today, Oct. 25, 2007.
As reported in the Troubled Company Reporter on Oct. 4, 2007,
the Plan provides for the liquidation of the assets of the
Debtors' estates, including the investigation and prosecution of
certain causes of action, by two liquidating trusts to be formed
pursuant to the Plan and related liquidating trust agreements.
Plan Funding
On May 29, 2007, the Debtors obtained Court authority to sell
certain of their inventories to Surya Capital LLC for
$10.4 million and six remaining lots of assets to Wilmington for
$38.5 million.
The Surya and Wilmington asset sale agreements closed on June 1,
2007, and July 12, 2007, respectively.
The Debtors also obtained Court approval on July 10, 2007, to
sell two life insurance policies owned by MFS for Charles Fortgang
and Marjorie Fortgang. Each policy provided for a payment of
$4 million to MFS upon the death of each respective insured. MFS
paid annual premiums on the Charles Fortgang policy in the amount
of $136,922 per year, and on the Marjorie Fortgang policy in the
amount of $88,087 per year. The surrender value of each policy
was zero dollars on account of surrender charges that would have
to have been paid by the policy holder upon surrender of each
policy.
To capitalize on the policies, the Debtors hired Melville Capital,
a life settlement broker, to sell the policies. Melville had
estimated their value at approximately $1.3 million to
$1.75 million in the aggregate.
To date, no closing on the sale of the policies has taken place.
At first, Charles and Marjorie Fortgang, whose lives are insured
by the policies, refused to execute the necessary consents to
transfer the Debtors' interests in the policies to the prospective
purchaser. After negotiations among the Debtors, Charles and
Marjorie Fortgang, and the Plan Proponents, the Fortgangs agreed
to sign the necessary documentation only if the proceeds from the
sale of the policies are escrowed and that the Debtors, the
Committee and Wilmington agree not to pursue the funds in the
escrow before Sept. 15, 2007. In an effort to facilitate the sale
of the policies and to avoid costly and potentially protracted
litigation with the Fortgangs over the issue, the Debtors and the
Plan Proponents agreed to this arrangement.
Further, under the "sweep" provisions of the Court's final order
on the Debtors' use of their lenders' cash collateral, Wilmington
has collected numerous cash sweeps throughout the course of the
Debtors' cases aggregating approximately $33,000,000.
Treatment of Claims
Under the Plan, holders of Administrative Ex1pense Claims,
Priority Tax Claims, Professional Fee Claims, and Other Priority
Claims will receive payments in full, in cash.
Holders of Allowed Class 3 Claims will receive any of these
alternative treatments, at the election of a shared assets
trustee:
a) payment in full in cash;
b) unaltered legal, equitable and contractual rights to which
the claim entitles the holder;
c) treatment pursuant to Section 1124(2) of the Bankruptcy
Code; or
d) transfer and surrender of all collateral securing the
Claim.
Holders of Class 4 Unsecured Claims and Class 5 Unsecured Claims
will receive pro rata distribution from the proceeds of any and
all claims or causes of action of the Debtors, the estates, or the
Committee, against third parties.
Claims under both classes will also receive pro rata distribution
from the proceeds of any claims and causes of action of the
Debtors, the estates, or the Committee against the Debtors'
original lenders, which include ABN Amro Bank N.V., Antwerpse
Diamantbank N.V., and Bank of America, N.A.
Holders of Current Lender Claims will receive pro rata
distribution from the proceeds of any and all claims or causes
of action of the Debtors, the estates, or the Committee, against
third parties.
The current lenders are successors in interest to the original
lenders under an intercreditor agreement dated Jan. 13, 2006,
among the original lenders and JPMorgan Chase Bank, N.A. as
collateral agent.
The current lenders would ordinarily be entitled to assert a claim
for adequate protection arising out of the use of their cash
collateral throughout the course of the Debtors' cases. However,
the Plan settles the adequate protection claim by:
-- providing for priority payment in full of all professional
fees and expenses incurred by Wilmington, on behalf of the
Current Lenders, throughout the course of the Debtors'
cases; and
-- payment out of the net proceeds of a shared assets trust.
Class 6 Claims, which consists of all interests in any of the
Debtors, and all claims arising from rescission of a purchase or
sale of those interests, or for damages arising from a purchase or
sale, are not entitled to any distribution under the Plan.
A full-text copy of the Joint Chapter 11 Plan of Liquidation is
available for a fee at:
http://www.researcharchives.com/bin/download?id=071003212249
A full-text copy of the Disclosure Statement explaining that Joint
Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=071003212044
About M. Fabrikant
Headquartered in New York City, M. Fabrikant & Sons, Inc. --
http://www.fabrikant.com/-- sells diamonds and jewelries. The
company and its affiliate, Fabrikant-Leer International Ltd.,
filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y.
Lead Case No. 06-12737). Mitchel H. Perkiel, Esq., Lee W.
Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders LLP
represent the Debtors in their restructuring efforts. Alan Kolod,
Esq., Lawrence L. Ginsberg, Esq., and Christopher J. Caruso, Esq.,
at Moses & Singer LLP serve as counsel to the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they listed estimated assets and debts of
more than $100 million.
MARLENE DON: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Marlene Don LLC
9060 Heritage Bay Circle
Orlando, FL 32836
Bankruptcy Case No.: 07-05107
Chapter 11 Petition Date: October 19, 2007
Court: Middle District of Florida (Orlando)
Judge: Arthur B. Briskman
Debtor's Counsel: Donna Daniels, Esq.
Joyce, Don & Associates, Inc.
9060 Heritage Bay Circle
Orlando, FL 32836
Tel: (407) 574-4293
Total Assets: $5,000,000
Total Debts: $3,100,000
The Debtor did not file a list of its 20 largest unsecured
creditors.
MERRILL LYNCH: Fitch Affirms B- Rating on Class G Certificates
--------------------------------------------------------------
Fitch Ratings upgraded and removed one class from Ratings Watch
Positive of Merrill Lynch Mortgage Investors Inc.'s commercial
mortgage pass-through certificates, series 1996-C2 as:
-- $47.4 million class F to 'AA' from 'BBB+'.
In addition, Fitch affirms these classes:
-- Interest-only class IO at 'AAA';
-- $39.8 million class G at 'B-'
Fitch does not rate the $2.7 million class H. Classes A-1 through
E have paid in full.
As of the September 2007 distribution date, the pool's aggregate
certificate balance has decreased 92.2% to
$88.4 million from $1.1 billion at issuance. Realized losses to
date total $31.5 million.
Currently, one asset (2%) is in special servicing and is real
estate owned. The asset is collateralized by a retail property in
Cordele, Georgia. Fitch expected losses will be absorbed by the
non-rated class H upon liquidation.
The pool is increasingly concentrated, with 31 loans currently
remaining and high exposure to Florida (40.8%). However, 55.8% of
the pool is fully amortizing and the year-end 2006 weighted-
average debt service coverage ratio is 1.32 times.
Fitch has identified six loans (13.9%) as Fitch Loans of Concern,
which includes the specially serviced asset. The largest Loan of
Concern (4.4%) is secured by a 367-unit hotel property located in
Kissimmee, Florida that has declined in performance.
MERVIN WAAGE: Case Summary & 12 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mervin Bernard Waage
fdba Waage & Waage
8350 South Stemmons
Hickory Creek, TX 75065
Bankruptcy Case No.: 07-42439
Type of Business: The Debtor is a bankruptcy attorney.
Chapter 11 Petition Date: October 23, 2007
Court: Eastern District of Texas (Sherman)
Judge: Brenda T. Rhoades
Debtor's Counsel: Merv Bernard Waage, Esq.
8350 South Stemmons
Hickory Creek, TX 75065
Tel: (940) 497-4448
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chase Business Credit Card $59,906
Attention: Credit Bureau
Updates
P.O. Box 15919
Wilmington, DE 19850
Compass Bank Business Miscellaneous $40,067
P.O. Box 10566
Birmingham, AL 35296
Wells Fargo Business Credit Card $36,389
P.O. Box 348750
Sacramento, CA 95834
Bank of America Business Credit Card $29,584
Capital One Bank Business Credit Card $21,840
Internal Revenue Service Business Taxes $20,276
Sanger Bank Business Miscellaneous $20,000
Pitney Bowes Purchase Power Business Credit Card $19,999
G.E. Money Bank Business Credit Card $9,757
Discover Financial Business Credit Card $9,588
Idearc Media Corp. Business Miscellaneous $8,325
Gecap Financial Business Credit Card $5,664
MORGAN STANLEY: Fitch Affirms Low-B Ratings on Five Certs.
----------------------------------------------------------
Fitch Ratings upgraded Morgan Stanley Dean Witter Capital I Trust
2002-IQ2 commercial mortgage pass-through certificates, series
2002-IQ2, as:
-- $7.8 million class F to 'AA+' from 'AA';
-- $5.8 million class G to 'AA-' from 'A+'
In addition, Fitch affirms these classes:
-- $64.5 million class A-3 at 'AAA';
-- $262.3 million class A-4 at 'AAA';
-- Interest only class X-1 at 'AAA';
-- Interest only class X-2 at 'AAA';
-- $25.3 million class B at 'AAA';
-- $24.3 million class C at 'AAA';
-- $7.8 million class D at 'AAA';
-- $7.8 million class E at 'AAA';
-- $9.7 million class H at 'BBB';
-- $5.8 million class J at 'BB+';
-- $3.9 million class K at 'BB-';
-- $3.9 million class L at 'B+';
-- $2.9 million class M at 'B';
-- $2.9 million class N at 'B-'
Fitch does not rate the $4.8 million class O certificates. Classes
A-1 and A-2 have been paid in full.
The upgrades reflect 13.1% defeasance and 5.6% additional pay down
since Fitch's last rating action. As of the October 2007
distribution date, the pool's aggregate certificate balance has
decreased 43.5% to $439.7 million from $778.6 million at issuance.
Of the original 105 loans, 55 remain outstanding. Three loans
(25.1%) have defeased, including two (23.0%) shadow rated loans.
There are currently no delinquent or specially serviced loans.
The seventh largest loan in the pool (3.1%) which is secured by an
industrial warehouse property in Bensenville, Illinois, has
experienced a decline in performance due to increased expenses and
a soft rental market. The borrower is actively marketing the
vacant space. Fitch will continue to monitor the performance of
this loan.
Fitch reviewed the year-end 2006 operating statement analysis
report for the Woodfield Shopping Center loan (13.3%) which is
secured by a 2.2 million square foot mall located in Schaumburg,
IL. Based on stable to improved performance the loan maintains
its investment grade shadow rating. The loan consists of a $58.4
million portion of a pari passu A-note with a total outstanding
balance of $221.3 million. In-line occupancy as of March 30,
2007, has increased to 92% from 88% at issuance.
MORGAN STANLEY: Fitch Holds BB- Rating on Class K Certificates
--------------------------------------------------------------
Fitch Ratings upgraded Morgan Stanley Dean Witter Capital I Inc.,
commercial mortgage pass-through certificates, series 2000-LIFE1,
as:
-- $17.2 million class E to 'AA-' from 'A+'.
Fitch also assigned a Distressed Recovery rating as:
-- $13.8 million class L to 'B-/DR1' from 'B-'
In addition, Fitch affirmed these classes:
-- $381 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $22.4 million class B at 'AAA';
-- $25.9 million class C at 'AAA';
-- $8.6 million class D at 'AAA';
-- $6.9 million class F at 'A';
-- $13.8 million class H at 'BBB';
-- $6.9 million class J at 'BBB-';
-- $5.2 million class K at 'BB-'
The $1.7 million class G and the $2 million class M are not rated
by Fitch. Class A-1 has been paid in full.
The upgrade is due to increased credit enhancement levels as a
result of an additional 5.6% pay down since Fitch's last rating
action.
The assignment of 'DR1' to class L is due to potential future
losses and Fitch expected recoveries.
As of the October 2007 distribution date, the pool's aggregate
certificate balance has been reduced by about 26.6% to $505.4
million from $689 million at issuance. To date, 19 loans (18.7%)
have been defeased. There are currently no delinquent or
specially serviced loans. Of the remaining loans in the pool, 99
(94.1%) mature between now and year-end 2009.
MOVIE GALLERY: Court Okays Kurtzman Carson as Claims Agent
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave authority to Movie Gallery, Inc. and its debtor-affiliates to
employ Kurtzman Carson Consultants, LLC, as their notice, claims
and balloting agent.
The Debtors related that more than 100,000 potential creditors
must be given notice for various purposes. The Debtors determined
that as specialists in legal administration services, specializes
in noticing, claims processing, balloting, Kurtzman is equipped to
provide services in the Debtors' Chapter 11 cases.
Kurtzman Carson will perform the necessary administrative tasks to
operate Debtors' Chapter 11 cases effectively.
(1) For noticing functions, Kurtzman will:
(a) prepare and serve a variety of documents on behalf
of the Debtors, including:
* a notice of the commencement of the Debtors'
chapter 11 cases and the initial meeting of
creditors under Section 341(a) of the Bankruptcy
Code;
* a notice of any claims bar date;
* motions, applications and other requests for
relief and related documents;
* objections, responses and replies with respect to
requests for relief;
* hearing agendas;
* objections to claims;
* any disclosure statements, chapter 11 plans and
all related documents; and
* all document filings, hearings, and other
miscellaneous documents deemed necessary or
appropriate.
(b) maintain the notice lists in conformity with the
Debtors' proposed case management procedures.
(c) prepare for filing and file with the Clerk's Office a
certificate or affidavit of service in conformity with
Rule 5005-1 of the Local Bankruptcy Rules for the
Eastern District of Virginia that includes (i) an
organized list of persons on whom a document was
served, along with their addresses and (ii) the date
and manner of service.
(2) Kurtzman's claims administration duties include:
(a) maintaining official claims registers in the each of
by docketing all proofs of claim and proofs of
interest in a database that includes:
* the name and address, of the claimant or
interest holder and any agent, if appropriate;
* the date of Kurtzman's or the Court's receipt of
the claim;
* the claim number assigned; and
* the claim's asserted amount and classification.
(b) maintaining copies of all proofs of claim and proofs
of interest.
(c) updating the official claims registers in accordance
with Court orders.
(d) implementing necessary security measures to ensure the
completeness and integrity of the claims registers.
(e) transmitting to the Clerk's Office a copy of the
claims registers as requested.
(f) maintaining an up-to-date mailing list for all
entities that have filed proofs of claim or proofs of
interest and make the list available upon request to
the Clerk's Office or any party-in-interest.
(g) providing access to the public for examination of
copies of the claims.
(h) recording all transfers of claims pursuant to Rule
3001(e) of the Federal Rules of Bankruptcy
Procedure and, if directed to by the Court,
provide notice of the transfers.
(i) establishing a case Web site with case information,
including key dates, service lists and free access to
the case docket within three days of docketing.
(3) Kurtzman will act a as balloting agent, which may include:
(a) printing ballots and coordinating the mailing of
solicitation packages to all voting and non-voting
parties, and provide a certificate or affidavit of
service;
(b) establishing a toll-free "800" number to receive
questions regarding voting with respect to any
Chapter 11 Plan;
(c) receiving ballots at a post office box, inspecting
ballots for conformity to voting procedures, date
stamping and numbering ballots consecutively and
tabulating and certifying the results; and
(d) preparing voting reports by plan class, creditor or
shareholder, and amount for review and approval by the
Debtors and their counsel.
As agreed in an engagement letter, the firm will receive a
$100,000 retainer fee and will be reimbursed for necessary out-of-
pocket expenses. The Debtors will make an advance payment when
expenses exceed $10,000 monthly.
The Debtors will indemnify and hold the firm, its officers,
employees, and agents harmless of any losses, claims, damages
judgments, liabilities, and reasonable counsel fees and expenses,
resulting from actions taken by the firm in good faith.
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. The
U.S. Trustee for Region 4 appointed an Official Committee of
Unsecured Creditors in the Debtors' bankruptcy proceedings on
October 18.
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. 3 & 4;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Court Okays Keen as Real Estate Consultants
----------------------------------------------------------
Movie Gallery, Inc., and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ Keen Consultants and its wholly owned
subsidiary KPMG CF, as their real estate consultants during their
Chapter 11 cases.
KPMG CF Realty, LLC, has gained an excellent reputation in its
25-year experience in connection with the evaluation and
disposition of more than 20,300 properties representing
approximately 2,000,000,000 square feet of real estate across the
country, William C. Kosturos, managing director at Alvarez &
Marsal North America LLC, and chief restructuring officer of
Movie Gallery, Inc., related.
In October 2007, substantial assets of Keen Consultants, the real
estate division of KPMG Corporate Finance, LLC, was acquired by
KPMG. Keen's professionals have also accepted employment with
KPMG. Prior to the Chapter 11 cases, Mr. Kosturos said, Keen's
professionals performed real estate consulting services for the
Debtors. The addition of Keen to KPMG's team augments the
ability of the firm to provide real estate services.
Keen Consultants will provide these services to the Debtors:
(a) Disposition of Leased Properties
The Debtors will designate a list of Leased Properties
that are considered excess and disposable. Once a Leased
Property is ready to be marketed, Keen will have the right
to offer the Leased Property on an "exclusive right to
sell" basis, subject to exclusives already granted to
other vendors.
In addition, Keen's services may include:
-- reviewing documents relating to the Leased
Properties;
-- assisting the Debtors with due diligence;
-- developing a postpetition marketing strategy
designed to transfer the Leased Properties for the
highest or otherwise best price;
-- maintaining records;
-- meeting with the Debtors and their advisors;
-- resolving issues that arise in connection with the
Leased Properties transfers; and
-- providing expert witness testimony.
(b) Rejection Claims Related to Leased Properties
Keen will attempt to negotiate with the relevant landlord
for the waiver, release or negation of the Rejection
Claim.
(c) Renegotiation of Leased Properties
Upon the written notice and authorization from the
Debtors, Keen will administer a rent renegotiation program
and exclusively represent the Debtors in the negotiation
of Lease Modification Agreements.
As part of the rent renegotiation program, Keen's services
may include:
-- maintaining all lease information for each
Renegotiated Property in an organized and
clear manner; and
-- documenting all lease modification proposals and
working with the Debtors to establish negotiating
parameters, including rent reductions, lease term
modifications and other leasehold concessions.
(d) Evaluation Services
Upon the Debtors' determination, in their sole discretion,
that a formal real estate evaluation of certain properties
is appropriate, Keen will provide a written desktop
analysis report detailing the designated Evaluation
Properties' value or liability.
The analysis will be based upon the assumption that each
Evaluation Property will be marketed and disposed of in an
expedited fashion.
In addition, these reports will be based on a review of
the documents provided by the Debtors, an analysis of
current market conditions and Keen's professional
judgment.
For the disposition of Leased Properties, Keen will be paid:
* an amount that is the greater of $1,250 per Leased Property
and 3% of the Gross Proceeds; and
* $275 for each Leased Property rejected.
For Leased Properties for which the landlord agrees to waive,
release or negate, Keen will be paid an amount equal to the
greater of $1,250 per Leased Property, and 3% of the Gross
Proceeds.
In addition, upon consummation of the Debtors' plan or plans and
to the extent that calculation results in a positive amount, Keen
will be paid:
* a consummation fee equaling the difference between
compensation paid for completed transactions; and
* 3% of the dollar savings to the estate on account of the
transactions.
Keen will receive 3% of the gross proceeds for sold Owned
Properties.
For Keen's administration of the Rent Negotiation Program, the
firm will be paid:
* base compensation of $1,250 for a completed transaction upon
the initial payment, instead of the $275 fee per negotiated
property; and
* the difference between the $1,250 base compensation already
paid, and 3% of the net present value total rental
reductions savings from the transactions, upon the earlier
to occur of one year from the effective date of the lease
modification, and confirmation of the Debtors' Plans;
For evaluation services, the Debtors will agree on the amount to
be paid for each analysis report requested by the Debtors.
For litigation support and consulting services beyond the scope
of the Agreement, Keen's professionals will be paid based on
their hourly rates:
Designation Hourly Rate
----------- -----------
Chairman and President $550
Executive Vice President $475
Vice Presidents $385
Directors $520
Associates $200
Administrative Support and Researcher $125
The firm is authorized by the Debtors to maintain a $10,000
expense account, which was advanced to Keen upon the approval of
the firm's proposed marketing budget on October 8, 2007.
Keen's claims will be treated as administrative expenses, and
will be afforded priority status pursuant to Section 507(a) of
the Bankruptcy Code, and will be granted a carve-out pursuant to
Section 506(c) of the Bankruptcy Code for the payment without
further application to the Court.
Lorie Beers, a managing director of KPMG Corporate Finance and a
director of KPMG CF Realty, assures the Court that Keen is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code. The firm does not represent an interest
adverse to the Debtors' estates.
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. The
U.S. Trustee for Region 4 appointed an Official Committee of
Unsecured Creditors in the Debtors' bankruptcy proceedings on
October 18.
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. 3;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Can Employ Lazard Freres as Financial Advisor
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave authority to Movie Gallery, Inc., and its debtor affiliates
to employ Lazard, Freres & Co., LLC, as their investment banker
and financial advisors in their Chapter 11 cases.
Pursuant to an engagement letter with the Debtors, Lazard will
render advisory and investment banking services, including:
(a) reviewing and analyzing the Debtors' business, operations
and financial projections;
(b) evaluating the Debtors' potential debt capacity in light
of its projected cash flows;
(c) assisting in the determination of a capital structure
for the Debtors;
(d) assisting in the determination of a range of values for
the Debtors on a going concern basis;
(e) advising the Debtors on tactics and strategies for
negotiating with the Stakeholders;
(f) rendering financial advice to the Debtors and
participating in meetings or negotiations with the
Stakeholders and rating agencies or other appropriate
parties in connection with any Restructuring;
(g) advising the Debtors on the timing, nature and terms of
new securities, other consideration or other inducements
to be offered pursuant to the Restructuring;
(h) advising and assisting the Debtors in evaluating potential
financing transactions by the Debtors, and, subject to
Lazard's agreement to so act and, if requested by Lazard,
to execute appropriate agreements on behalf of the
Debtors, contacting potential sources of capital as the
Debtors may designate and assisting the Debtors in
implementing such a Financing;
(i) assisting the Debtors in preparing documentation within
Lazard's area of expertise that is required in connection
with the Restructuring;
(j) assisting the Debtors in identifying and evaluating
candidates for a potential Sale Transaction, advising the
Debtors in connection with negotiations and aiding in the
consummation of a Sale Transaction;
(k) attending meetings of the Movie Gallery, Inc.'s Board of
Directors and its committees with respect to matters on
which Lazard has been engaged to advise the Debtors;
(l) providing testimony, as necessary, with respect to matters
on which Lazard has been engaged to advise the Debtors in
any proceeding before the Bankruptcy Court; and
(m) providing the Debtors with other financial restructuring
advice.
Lazard will be paid based on this fee structure:
(1) A monthly fee of $175,000 payable on execution of the
Engagement Letter and on the first day of each month until
the earlier of the consummation of the Restructuring or
Sale Transaction or the termination of Lazard's
engagement.
(2) A consummation fee, payable upon the consummation of
either a Restructuring or Sale Transaction:
(i) $6,000,000, if the Restructuring or Sale
Transaction is effected through a pre-packaged or
pre-arranged plan where the plan is confirmed
within four months of the Debtors' filing for
bankruptcy; or
(ii) $5,000,000 if the Restructuring or Sale Transaction
is consummated otherwise.
(3) A stand-alone financing fee, payable upon the consummation
of any Stand-Alone Financing, equal to the applicable
percentages of the total gross proceeds of a Stand-Alone
Financing:
Security Issued Percentage Fee
--------------- --------------
Senior Secured Debt 1.00%
Secured Debt 1.75%
Subordinated Debt 2.25%
Convertible Debt 2.50%
Preferred or Convertible Stock 3.75%
Common Stock 4.25%
The firm will be reimbursed for all necessary, out-of-pocket
expenses.
To date, the Debtors have paid Lazard a prepetition fee of
$900,000, and $50,957 for reimbursement of expenses.
Pursuant to the parties' indemnification agreement, the Debtors
have agreed to indemnify, hold harmless and defend Lazard and
their affiliates and its directors, officers, members, employees,
agents and controlling persons.
David S. Kurtz, a managing director of Lazard, assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code. Lazard does not hold
any interests adverse to the Debtors' estates.
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. The
U.S. Trustee for Region 4 appointed an Official Committee of
Unsecured Creditors in the Debtors' bankruptcy proceedings on
October 18.
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. 3;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MTI TECHNOLOGY: Can Access Cash Collateral until November 7
-----------------------------------------------------------
The United States Bankruptcy Court for the Central District of
California approved M.T.I Technology Corp. authority to access, on
an interim basis, The Canopy Group Inc. and Wells Fargo Bank's
cash collateral until Nov. 7, 2007.
The Debtor tells the Court that Canopy and Wells Fargo holds a
security interest in substantially all of its assets. Canopy and
Wells Fargo are primary secured creditors of the Debtor.
The Debtor says that it needs to use the secured lenders' cash
collateral to finance working capital and other general corporate
purposes.
Under the terms of the Wells Fargo facility, the Debtor is in
default to date, and $1,711,670 remained outstanding in connection
with the facility as of Oct. 10, 2007. On the other hand, the
Debtor says that $5,190,546 plus interest and attorney's fees,
remained outstanding in connection with the Canopy facility as
of Oct. 9, 2007, .
The Debtor assures the Court that Canopy and Wells Fargo will
receive perfected junior security interest and liens as adequate
protection.
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq.,
at Clarkson, Gore & Marsella, A.P.L., represents the Debtor. The
U.S. Trustee has not appointed an Official Committee of Unsecured
Creditors to date in this case. When the Debtor filed for
protection against its creditors, it listed assets and debts at
$64,002,000.
MTI TECHNOLOGY: Gets Nod to Access Up to $1 Mil. of DIP Financing
-----------------------------------------------------------------
M.T.I Technology Corp. obtained authority from the Honorable
Erithe A. Smith of the United States Bankruptcy Court for the
Central District of California, to access, on an interim basis, up
to $1 million secured postpetition financing from its DIP lender's
credit facility.
The Debtor tells the Court that it entered into a $5 super-
priority debtor-in-possesion financing and security agreement,
dated as of Oct. 15, 2007, with Zinc Holdings LLC.
The Debtor explains that it has an urgent need to obtain the DIP
financing to finance working capital, capital expenditures and
other general corporate purposes.
Under the DIP facility agreement, a portion of the credit facility
may be made available up to 20% of the committed amount before
entry of a final order of the Court.
The DIP facility will mature on the earlier of:
a. Dec. 21, 2007;
b. the effective date of the Debtor's plan of reorganization;
and
c. the date a sale of one or more European entities, material
assets or receivables.
In addition, the DIP facility will incur interests at the base
rate of at least 3% per annum and the applicable rate of at least
2% per annum.
As adequate protection, the DIP lender will be entitled to a
super-priority claim to any and all administrative expenses
pursuant to Section 364(c)(1) of the Bankruptcy Code.
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq.,
at Clarkson, Gore & Marsella, A.P.L., represents the Debtor. The
Trustee has not appointed an Official Committee of Unsecured
Creditors to date in this case. When the Debtor filed for
protection against its creditors, it listed assets and debts at
$64,002,000.
MTI TECHNOLOGY: Wants to Hire Omni Management as Claims Agent
-------------------------------------------------------------
M.T.I. Technology Corp. asks the United States Bankruptcy Court
for the Central District of California for permission the employ
Omni Management Group LLC, as its claim, noticing and balloting
agent.
Omni Management will:
a. prepare and serve required notices and underlying motions
or applications, if applicable, in this Chapter 11 case,
including:
i. notice of the claims bar date;
ii. notice of objections to claims;
iii. notice of any hearings on a disclosure statement and
confirmation of a plan of reorganization; and
iv. other miscellaneous notices, motions and applications
to any entities, as the Debtor or the Court, may deem
necessary or appropriate for an orderly administration
of this Chapter 11 case;
b. file with the clerk's office a certificate or declaration of
services that includes a copy of the document involved, a
list of persons to whom the document was mailed and the date
and manner of mailing;
c. maintain copies of all proofs and proofs of interest filed;
d. maintain official claims registers, including, among other
things, the following information for each proof of claim or
proof of interest:
i. name and address of the claimant and any agent
thereof, if the proof of claim was filed by an agent;
ii. date received;
iii. claim number assigned; and
iv. asserted amount and classification of the claim.
e. assist the Debtor in the preparation of the "7 Day Package"
and all other reporting requirements for the United States
Trustee;
f. assist the Debtor with the creation and administration of a
claim database based upon a review of the claims againts the
Debtor's estate and the Debtor's books and records;
g. implement necessary security measures to ensure the
completeness and integrity of the claims registers;
h. transmit to the clerk's office a copy of the claims
registers on a weekly basis, unless requested by the clerk's
office on a more or less frequent basis; or, in the
alternative, make available the proof of claim docket on-
line to the clerk's office via the Omni claims system;
i. maintain an up-to-date mailing list for all entities that
have filed a proof of claims or proof of interest, which
list will be available upon request of a party in interest
or the clerk's office;
j. provide access to the public for examination of copies of
the proofs of claim or interest without charge during
regular business hours, as well as, provide online access to
copies of proofs of claim at no additional expense to
creditors and parties in interest;
k. record all transfers of claims pursuant to Bankruptcy Rule
3001(e) and provide notice of the transfers as required by
Bankruptcy Rule 3001(e);
l. comply with applicable federal, state, municipal, and local
statutes, ordinance, rules, regulations, orders and other
requirements;
m. provide temporary employees to process claims, as necessary;
n. provide other claims processing, noticing and related
administrative services as may be requested from time to
time byu the Debtor; and
o. comply with further conditions and requirements as the
clerk's office or the Court may at any time prescribe.
The Debtor tells the Court that it made a prepetition deposit of
$30,000 to the firm.
Robert L. Berger, the 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.
Mr. Berger can be reached at:
Robert L. Berger
Managing Director
Omni Management Group LLC
16501 Ventura Boulevard, Suite 440
Encino, California 91436
Tel: (818) 906-8300
Fax: (818) 783-2737
http://www.omnimgt.com/
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq.,
at Clarkson, Gore & Marsella, A.P.L., represents the Debtor. The
Trustee has not appointed an Official Committee of Unsecured
Creditors to date in this case. When the Debtor filed for
protection against its creditors, it listed assets and debts at
$64,002,000.
NAVISTAR INT'L: UAW Members Rally over Unfair Labor Practices
-------------------------------------------------------------
More than 4,000 UAW members at 11 local unions in six states went
on strike on Tuesday against International Truck and Engine,
Navistar International Corp.'s operating unit, in response to the
company's unfair labor practices.
"International Truck and Engine has shredded our agreement,
shipped our work out of the country, and trampled our nation's
labor laws," UAW President Ron Gettelfinger said. "When UAW
members are on strike for justice anywhere, they have the support
of UAW members everywhere -- and our entire union is standing
shoulder to shoulder with our members at ITE."
"Our bargaining committee came to these negotiations with every
intention of reaching an agreement," UAW Vice President General
Holiefield, who directs the union's Heavy Truck Department, said.
"But it takes two sides to reach a deal -- and it has
unfortunately become apparent that management at ITE is not yet
willing to work with us to negotiate a fair and equitable
contract."
The company has violated U.S. labor law, Mr. Holiefield said, by
making unilateral changes in the terms and conditions of
employment, ordering an illegal lockout at the company's assembly
plant in Springfield, Ohio, and by refusing to provide the UAW
bargaining team with information necessary for negotiations.
"ITE executives moved our work to Mexico and to non-union plants
in Texas, cancelled our supplemental unemployment benefits, and
ignored our job security program," Mr. Holiefield said.
The UAW has filed unfair labor practices regarding ITE's illegal
conduct with the U.S. National Labor Relations Board.
"We're prepared to return to the bargaining table at any time,"
Mr. Holiefield said. "If the company is willing to abide by the
law and respect our hard-working members at ITE, we believe we can
resolve our differences."
UAW members who went on strike include:
* members of UAW Local 98 at the ITE Indianapolis Engine
Plant;
* members of UAW Local 226 at Indianapolis Casting Corp.;
* members of UAW Local 2274, who are ITE clerical and
technical workers in Indianapolis;
* members of UAW Local 2911 at Fort Wayne Engineering;
* members of UAW Local 402 at the ITE Springfield Assembly
Plant in Springfield, Ohio;
* members of UAW Local 658, who are ITE clerical and
technical workers in Springfield, Ohio;
* members of UAW Local 6 at the ITE Engine Plant in Melrose
Park, Illinois;
* members of UAW Local 2293, who are clerical and technical
workers in Melrose Park;
* members of UAW Local 472 at the ITE Parts Distribution
Center in Atlanta;
* members of UAW Local 119 at the ITE PDC in Dallas; and
* members of UAW Local 187 at the ITE PDC in York,
Pennsylvania.
About Navistar International Corporation
Headquartered in Warrenville, Illinois, Navistar International
Corporation (Other OTC: NAVZ) -- http://www.Navistar.com/-- is a
holding company whose wholly owned subsidiaries produce
International(R) brand commercial trucks, MaxxForce brand diesel
engines, IC brand school and commercial buses, and Workhorse brand
chassis for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another wholly owned subsidiary offers
financing services.
* * *
As reported in the Troubled Company Reporter on Sept. 11, 2007,
Standard & Poor's Ratings Services said that its 'BB-' corporate
credit ratings on North American truck and diesel engine producer
Navistar International Corp. and subsidiary Navistar Financial
Corp. remain on CreditWatch with negative implications, where they
were placed on Jan. 17, 2006.
NEW CENTURY: Asks Court to Set Dec. 14 as NCWC's General Bar Date
-----------------------------------------------------------------
New Century Financial Corp., New Century TRS Holdings Inc., and
their direct and indirect subsidiaries ask the United States
Bankruptcy Court for the District of Delaware to establish:
-- Dec. 14, 2007, as the General Bar Date by which all
entities must file proofs of claim in the chapter 11 cases
of New Century Warehouse Corporation.
-- Jan. 31, 2008, as the Governmental Bar date.
The NCWC Bar Dates are applicable only to claims related to
NCWC's Chapter 11 Case. Any entity asserting claims against the
other Debtors must its file proof of claim in accordance with the
Bar Date for the particular Debtor.
The Debtors also ask that claims related to the rejection of
executory contracts and unexpired leases will be the later of the
NCWC General Bar Date and 30 days after the effective date of
rejection.
Furthermore, the Debtors want the Schedules Bar Date fixed at:
i) the later of the NCWC General Bar Date and
(ii) 30 days after the date that notice of the applicable
amendment, if any, to the NCWC Schedules is served on the
claimant.
NCWC, doing business as Access Holdings Corporation, is a
specialty finance company providing warehouse financing to the
middle market segment of the residential mortgage origination
industry.
Ad Hoc Committee Objects
The Ad Hoc Committee of Beneficiaries of the New Century Deferred
Compensation Plan and Supplemental Executive Retirement Savings
Plan oppose the Debtors' request to set NCWC's Bar Dates.
Joseph H. Huston, Esq., at Stevens & Lee, P.C., in Wilmington,
Delaware, tells the Court that the Ad Hoc Committee that the
Committee may file a class proof of claim with respect to a
$43,000,000 trust for employee salaries, bonuses, and
commissions.
The Ad Hoc Committee is plaintiff to an adversary proceeding
against the Debtors and other parties seeking relief in the
alleged violation of Employee Retirement Income Security Act
(ERISA) .
Pursuant to Rule 7023 of the Federal Rules of Bankruptcy
Procedure, which provides for a class action in adversary
proceedings, Mr. Huston contends that the Ad Hoc Committee is
entitled to file a proof of claim against NCWC.
Accordingly, the Ad Hoc Committee seeks to be exempted from
NCWC's Bar Dates, and to file a class claim following a final
judgment in the adversary proceeding.
* * *
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
The Debtors' exclusive period to file a plan expires on Nov. 28,
2007. (New Century Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
PACIFIC LUMBER: Judge Directs Urges Mediation for Unified Plan
--------------------------------------------------------------
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas, urged Pacific Lumber Company and
its debtor-affiliates to engage in mediation with their major
creditor constituencies to come up with a unified Chapter 11 plan,
according to Bloomberg News.
The Court heard arguments on October 23 from various parties on
whether an extension of Pacific Lumber's exclusive period to file
and solicit for a plan is warranted. Among the parties that
testified in Court were the Bank of New York Trust Co., as
indenture trustee for about $800 million of timber notes issued by
debtor affiliate Scotia Pacific Company, and PALCO's unsecured
creditors committee.
The Court noted that the Plan of Reorganization proposed by
Pacific Lumber and Scotia Pacific has drawn strong opposition from
certain parties and mediation might be the way for the PALCO
Debtors to take control of their bankruptcy proceedings.
"This is one of the few cases I've had a gut feeling would never
settle," Bloomberg quotes Judge Schmidt. "I don't think if I
lifted exclusivity it would settle, and I don't think if I kept
exclusivity it would keep people negotiating toward a
settlement."
"It would be a whole lot more valuable if you had somebody on
your side," Judge Schmidt told the Debtors, The Eureka Reporter
states in a separate report. The Indenture Trustee and the
Humboldt County Board of Supervisors strongly opposed the Pacific
Lumber Plan as not feasible. In response to the Plan, the County
passed an emergency ordinance that suspended the issuance of
building permits on Humboldt Timberland Production Zone land,
which include the Scotia timberlands.
The PALCO Debtors Plan contemplates for the continued operations
of Pacific Lumber and Scotia Pacific as a consolidated company and
the full repayment of all creditors. The Plan also details a
proposed sale of 6,600 acres of ancient redwood groves and the
proposed development of about 20,000 acres of land into
residential "trophy" properties referred to as the Redwood Ranch
Development. MAXXAM Group, Inc., the parent company of Pacific
Lumber, supports the Plan.
At the hearing, a witness for Scotia said the company's Plan
contemplates the sale of its redwood forests to former AOL Time
Warner Inc. Vice Chairman Ted Turner, Microsoft Corp. Chairman
Bill Gates and other wealthy people, Tiffany Kary of Bloomberg
News reports. Scotia appraisal expert Bill Mundy also said other
potential buyers include Robert Redford and Amazon.com Inc. Chief
Executive Officer Jeff Bezos, Bloomberg notes.
On the other hand, the Indenture Trustee, on behalf of the Timber
Noteholders, has proposed a competing plan, which contemplates a
liquidation of the Scotia timberlands within six months.
The Indenture Trustee stands by the estimate of its financial
advisor that the Scotia timberland assets are worth approximately
$450 million, less than one-third of the over $1.4 billion
valuation that the PALCO Debtors claim. In light of this, the
Indenture Trustee asserted that the Pacific Lumber Plan is
unrealistic, especially in relation to the proposed real estate
sales.
Although pleased that the PALCO Debtors intend to pay unsecured
creditors in full, the Unsecured Creditors Committee, for its
part, is concerned that certain aspects of the Pacific Lumber Plan
are not legally confirmable or economically feasible. "We're
interested in what is possible and what is rational," John D.
Fiero, Esq., of Pachulski Stang Ziehl & Jones, the creditors'
counsel, told Judge Schmidt, Bloomberg quotes.
The Creditors Committee favors mediation of the parties.
Judge Schmidt said at the hearing he had a judge in mind for the
mediation, The Eureka Reporter adds, but couldn't be sure if he
was available. The Court gave the parties until October 26 to
come up with the name of a mediator they agree upon.
About Pacific Lumber
Headquartered in Oakland, California, The Pacific Lumber Company -
- http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker
Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter
Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan,
Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific
Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia
Pacific's lead counsel. John F. Higgins, Esq., and James Matthew
Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-
counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.
When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335. (Scotia/Pacific Lumber Bankruptcy News, Issue
No. 29, http://bankrupt.com/newsstand/or 215/945-7000).
PARAMOUNT RESOURCES: Loan Repayment Cues Moody's to Lift Rating
---------------------------------------------------------------
Moody's Investors Service raised the rating for Paramount
Resources Ltd.'s senior secured notes to Caa1 (LGD 4, 56%) from
Caa2 (LGD 4, 60%). Moody's also affirmed Paramount's Caa1
corporate family rating and the Caa1 probability of default
rating. The outlook remains stable. Moody's is also withdrawing
the Caa1 (LGD 3, 47%) rating on the secured term loan that was
repaid.
The upgrade of the senior secured notes rating reflects the
repayment of the company's senior secured term loan and the
repurchase of some of its senior secured notes following the
company's sales of its oil sands assets. Under Moody's loss given
default methodology, the senior secured notes are now rated at the
CFR due to the lower amount of senior secured debt in the capital
structure.
Although total leverage has been reduced significantly and the
company had substantial cash balances exceeding $300 million at
June 30, 2007, leverage remains fairly high on proven developed
reserve basis of about $7.24/boe, which maps to the low single-B
range. Over the past couple of years, Paramount had a pattern of
outspending its cashflow for capital expenditure programs which if
continued, Moody's expects could utilize a meaningful portion of
the cash on hand while leverage will remain on the high end of the
single -- B range. In addition, Moody's notes that about $74
million of this debt reduction was in the form of repurchasing
some of its senior secured notes from the open market. These
notes have not been retired and are being held in a subsidiary of
Paramount and could be resold to the market at a later date to
raise capital if needed.
While recognizing the improvement in the leverage, the Caa1 CFR
continues to reflect the company's full-cycle costs which are
among the highest for the rated peer group and continue to result
in a less than 100% leveraged full cycle ratio. Driven largely by
a 3-year all sources finding and development cost of $31/Boe
($5/Mcf) and over $61/Boe ($10/Mcf) on a one-year measure pro
forma for the debt reduction, Paramount's total full cycle costs
are about $57/Boe ($9.50/Mcf).
In addition, the Caa1 considers the need to see a reversal of the
weak capital productivity and the weak organic reserve and
inconsistent production trends that has occurred over the past
three years. Furthermore, considering Paramount's high natural
gas leverage and the present weakness in the North American
natural gas markets coupled with possibility of royalty rate
increases by the Alberta government, Paramount's near term
profitability and cash on cash returns can be materially impaired.
On these measures, Paramount Resources ranks within the average
for the Caa peer group.
The stable outlook reflects the company's improved balance sheet
and financial flexibility which should provide Paramount with
increased opportunity to grow its production and reserve base at a
more sustainable cost structure. A positive outlook and/or an
upgrade would be considered upon the company demonstrating it has
stabilized production, has improved its cost structure to more
sustainable levels and is growing its reserve base without
increasing its leverage on the PD reserve base.
Paramount Resources Ltd. is headquartered in Calgary, Alberta,
Canada and is engaged in the acquisition and subsequent
exploration, development, operation and production of oil and gas
properties located Alberta, the Northwest Territories, British
Columbia, Montana, and North Dakota.
PEACHTREE RIDGE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Peachtree Ridge Mining Company, Inc.
824 East Euclid Avenue, Suite 100
Lexington, KY 40502
Bankruptcy Case No.: 07-30391
Chapter 11 Petition Date: October 20, 2007
Court: Southern District of West Virginia (Huntington)
Judge: Ronald G. Pearson
Debtor's Counsel: Stephen L. Thompson, Esq.
Barth & Thompson
P.O. Box 129
Charleston, WV 25321
Tel: (304) 342-7111
Fax: (304) 342-6215
Estimated Assets: Less than $10,000
Estimated Debts: $1 Million to $100 Million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
WV State Tax Department Severance Tax $1,811,530
Internal Auditing Division
P.O. Box 425
Charleston, WV 25322
Eastern Associated Coal Corp. Royalties $1,700,498
P.O. Box 1233
Charleston, WV 25324
Wolf Run Mining Company Trade Debt $637,847
c/o John P. Melick, Esq.
Jackson Kelly PLLC
P.O. Box 553
Charleston, WV 25322-0533
Vecillio & Grogan, Inc. Trade Debt $543,961
P.O. Box 2438
Beckley, WV 25802
Pocahontas Land Corp. Royalties & Taxes $476,460
P.O. Box 1517
Bluefield, WV 24701
Brickstreet Insurance Company Insurance $338,247
P.O. Box 11285
Charleston, WV 25339
Max Transport Trade Debt $226,350
Noe Enterprises LLC Trade Debt $215,892
WV State Tax Department Taxes $140,365
Hannon Electrical Co. Trade Debt $134,677
Bailey & Glasser LLP Legal Trade Debt $130,073
U.S. Treasury - Black Lung Trade Debt $109,656
Electro Quip Service Corp. Trade Debt $106,181
Eagle Mid Vol, LLC Trade Debt $100,000
AICCO Trade Debt $95,570
J&R Repair Trade Debt $88,911
Gauley Robertson Trade Debt $84,531
Mine Safety Health Admin. Trade Debt $60,033
Jones & Jordan Engineering Trade Debt $45,474
Auxier Welding, Inc. Trade Debt $39,862
PERSONA COMMS: Bragg Deal Cues Moody's to Withdraw Ratings
----------------------------------------------------------
Moody's withdrew all ratings of Persona Communications Corp.
following the acquisition of the company by Bragg Communications
Inc on Sept. 30, 2007 and concurrent repayment of all Persona's
rated debt obligations.
Outlook Actions:
Issuer: Persona Communications Corp.
-- Outlook, Changed To Rating Withdrawn From Stable
Withdrawals:
Issuer: Persona Communications Corp.
-- Probability of Default Rating, Withdrawn, previously
rated B2
-- Corporate Family Rating, Withdrawn, previously rated B2
-- 1st Lien Senior Secured Bank Credit Facility, Withdrawn,
previously rated Ba3, 31 - LGD3
-- 2nd Lien Senior Secured Bank Credit Facility, Withdrawn,
previously rated Caa1, 84 - LGD 5
Bragg is a privately held cable company based in Halifax, Nova
Scotia.
PLEASANT CARE: Lifehouse Consortium Wins in Bankruptcy Auction
--------------------------------------------------------------
LifeHouse Retirement Properties, Inc. expanded its geographical
footprint and presence in California by becoming the winning
bidder in the Pleasant Care 363 Bankruptcy Auction, closing on
five leasehold skilled nursing communities on July 31, 2007. The
"LifeHouse Consortium", including all the consortium partners,
jointly acquired approximately seventeen skilled nursing and three
assisted living facilities in the Pleasant Care Bankruptcy
Auction, which included a total of 2,680 beds and approximately
$135.7 million of revenue.
LifeHouse acquired five skilled nursing facilities in the
LifeHouse Consortium bid, including 966 beds, located in San
Diego, Bakersfield, Paradise, Riverside, and Vista, California.
This increases LifeHouse's healthcare services skilled nursing
portfolio to a total of 1,489 beds.
"This acquisition was a highly contested bankruptcy auction, which
further displayed the company's abilities to acquire
underperforming assets with solid upside potential, at a
significant discount," Mr. Rowan Farber, CEO of LifeHouse
Retirement Properties, Inc. explained. "LifeHouse led a large
consortium group in a complicated transaction, to successfully
purchase quality assets out of this type of bankruptcy process.
Most importantly, it provides LifeHouse the opportunity to improve
patient care and outcomes at these communities."
"We will work diligently to bring our unique patient-centered
model of care to the skilled nursing arena, as we continue to
create a new benchmark for quality care for this industry
segment," Mr. Lou Andriotti, COO of LifeHouse Retirement
Properties, Inc. added.
About Lifehouse
LifeHouse Retirement Properties, Inc. is focused on strategic
acquisitions of senior assisted & independent living and skilled
nursing communities in the U.S. The company's platform provides a
strong acquisition and operating team with significant experience
in healthcare, mergers & acquisitions, hospitality, real estate
and construction, particularly effective in turnaround operations
of under performing properties or entire business units. The
company has approximately 2,297 beds (1,489 skilled nursing beds
and 808 assisted and independent living units) and over 2,000
full-time equivalent employees.
About Pleasant Care
Based in La Canada, California, Pleasant Care Corporation --
http://www.pleasantcare.com/-- provide nursing home care. The
company and four of its affiliates filed for chapter 11 protection
on March 22, 2007 (Bankr. C.D. Calif. Lead Case No. 07-12312).
Ron Bender, Esq., Monica Y. Kim, Esq., and Jacqueline L.
Rodriguez, Esq., at Levene, Neale, Bender, Rankin & Brill LLP,
represent the Debtors. Samuel R. Maizel, Esq., at Pachulski Stang
Ziehl Young Jones & Weintraub LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed assets and
liabilities between $1 million and $100 million.
QC HOLDINGS: Banks Agree to Waive Defaults Under Credit Agreement
-----------------------------------------------------------------
QC Holdings, Inc., disclosed in a regulatory filing with the U.S.
Securities and Exchange Commission that on Oct. 17, 2007, it
executed a Second Amendment Agreement, dated as of Sept. 28, 2007,
with U.S. Bank National Association, as Agent, and the bank
lenders.
The bank lenders include:
* Bank Midwest, N.A.,
* Enterprise Bank & Trust,
* Bank of Oklahoma, N.A., and
* National City Bank.
The company, on Jan. 19, 2006, entered into a Credit Agreement
with U.S. Bank, as agent and arranger for the bank lenders, which
provides for a revolving line of credit, including provisions
permitting the issuance of letters of credit, in the aggregate
principal amount of up to $45 million.
The Second Amended Agreement amends the financial covenants that
affect the company's ability to repurchase shares of its common
stock and pay dividends on its stock. The banks also waived any
default under the credit agreement, prior to the amendment, as a
result of the company's repurchase of approximately $4.6 million
of its common stock in August 2007.
The credit agreement, as amended, contains financial covenants
related to EBITDA, total indebtedness, fixed charges and minimum
consolidated net worth. The obligations of the company under the
credit agreement are guaranteed by all the operating subsidiaries
of the company, and are secured by liens on substantially all of
the personal property of the company and its operating
subsidiaries. The Banks may accelerate the obligations of the
company under the credit agreement if there is a change in control
of the company, including an acquisition of 25% or more of the
equity securities of the Company by any person or group. The
credit facility matures on Jan. 19, 2009.
A full-text copy of the Second Amendment Agreement may be viewed
for free at http://ResearchArchives.com/t/s?2477
Headquartered in Overland Park, Kansas, QC Holdings, Inc. (NASDAQ:
QCCO) provides payday loans in the United States, operating 599
branches in 25 states at June 30, 2007. With more than 23 years
of operating experience in the retail consumer finance industry,
the company entered the payday loan market in 1992 and, since
1998, has grown from 48 branches to 599 branches through a
combination of de novo branches and acquisitions. During fiscal
2006, the company advanced approximately $1.1 billion to customers
through payday loans and reported total revenues of
$172.3 million.
SILGAN HOLDINGS: Moody's Affirms Ba2 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service affirmed the corporate family rating for
Silgan Holdings Inc. at Ba2, the ratings on Silgan's senior
secured first lien credit facilities at Ba2 and the subordinated
notes at B1. The outlook was affirmed at stable.
In affirming the Ba2 corporate family rating and stable outlook,
Moody's considered Silgan's maintenance of moderate financial
leverage, strong interest coverage and its solid competitive
position in a generally healthy industry. The company has a
longstanding customer base that faces barriers to switching
suppliers due to Silgan's dominant market position (50% share of
the U.S. market for food cans) in a predominantly consolidated
industry.
The ratings also benefit from Silgan's long-term contracts with
its major customers that allow for the pass-through of raw
material costs (primarily aluminum and steel). Although the ratio
of free cash flow to debt has declined in the twelve months ended
June 30, 2007, Moody's expects free cash flow generation to return
to historic levels in fiscal 2007. Adjusted free cash flow to debt
deteriorated as the company built their finished goods inventory
ahead of labor negotiations and temporarily increased capital
expenditures to expand their easy open end manufacturing capacity.
The ratings outlook is stable. As of the twelve months ended June
30, 2007, Silgan is weakly positioned in the rating category due
to one time increases in working capital and capital expenditures
which depressed free cash flow. However, free cash flow is
expected to improve to historic levels over the near term and the
company is expected to move solidly into the rating category.
Additionally, Silgan's acquisition strategy could also negatively
impact the outlook.
Moody's took these rating actions:
Issuer: Silgan Holdings Inc.
-- $450 million senior secured first lien revolver due 2011,
to Ba2 LGD3 40% from Ba2 LGD 3 41%
-- $345 million senior secured first lien term loan A due
2011, to Ba2 LGD3 40% from Ba2 LGD 3 41%
-- $44 million senior secured first lien term loan B due
2012, to Ba2 LGD3 40% from Ba2 LGD 3 41%
-- EUR200 million senior secured first lien term loan, to
Ba2 LGD3 40% from Ba2 LGD 3 41%
-- $200 million 6.75% senior subordinated notes due 2013, to
B1 LGD 6 94% from B1 LGD 6 93%
-- Affirmed corporate family rating at Ba2
-- Affirmed probability of default rating at Ba2
Issuer: Silgan Plastics Canada Inc.
-- CAD$90 million Canadian term loan due 2012, to Ba2 LGD3
40% from Ba2 LGD 3 41%
The outlook was affirmed at stable.
Headquartered in Stamford, Connecticut, Silgan Holdings Inc. is a
North American manufacturer of metal and plastic consumer goods
packaging products used in numerous industries including food,
personal care, healthcare, pharmaceutical, automotive, and
agricultural and chemical products. With the White Cap
acquisition, Silgan is also a leading global manufacturer of
metal, composite, and plastic vacuum closures for food and
beverage products. For the twelve months ended June 30, 2007,
Silgan's consolidated net revenue was about $2.8 billion.
SMJ INVESTMENTS: Case Summary & Eight Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: SMJ Investments, LLC
4505 Las Virgenes Road, Suite 210
Calabasas, CA 91302
Bankruptcy Case No.: 07-14039
Chapter 11 Petition Date: October 23, 2007
Court: Central District Of California (San Fernando Valley)
Judge: Kathleen Thompson
Debtor's Counsel: Lewis R. Landau, Esq.
23564 Calabasas Road, Suite 104
Calabasas, CA 91302
Tel: (888) 822-4340
Fax: (888) 822-4340
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its Eight Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Christopher A. Joseph and EIR Consultant $115,645
Associates
11849 West Olympic Boulevard
Suite 101
Los Angeles, CA 90064
Sukow Engineering Hydrology Work $562
21201 Victory Boulevard
Suite 215 Civil Eng'g. Work $28,744
Canoga Park, CA 91303
William Raff, Esq. Legal Services $19,750
4505 Las Virgenes Road
Suite 210
Calabasas, CA 91302
Construction Testing and Engineering $14,500
Engineering
Grimes Surveying & Mapping Inc. Aerial Survey & Map $11,041
L. Newman Design Group Landscape Architect $10,153
BSI Development, LLC Entitlement $4,000
Consultant
Gaines & Stacey, LLP Legal Services $1,622
STATION CASINOS: S&P Holds BB- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services kept its ratings, including the
'BB-' corporate credit rating, on Station Casinos Inc. on
CreditWatch with negative implications, where they were placed
Nov. 2, 2006.
As previously announced, S&P has determined that once potential
barriers to the company's pending LBO deal have been eliminated,
S&P will lower the existing ratings by one notch, bringing the
corporate credit rating to 'B+'. In turn, the rating on the
company's senior unsecured notes will be lowered to 'B' from 'B+',
and the rating on the subordinated notes will be lowered to 'B-'
from 'B'.
Approval of the National Indian Gaming Commission is the final
remaining regulatory approval that is needed following recent
approval by the Nevada Gaming Commission and a successful
shareholder vote in August 2007. The transaction is expected to
close in the near term. The rating outlook will be negative,
reflecting credit measures that will be weak even for the 'B+'
rating, due to the pending LBO by Fertitta Colony Partners LLC.
In addition, Standard & Poor's assigned its issue level and
recovery ratings to Station's proposed $900 million senior secured
financing, a portion of which will be used to fund the LBO. The
secured bank facilities, which comprise a $650 million revolving
credit facility and a $250 million term loan, are rated 'BB' (two
notches higher than the expected 'B+' post-LBO corporate credit
rating on the company), with a recovery rating of '1', indicating
that lenders can expect very high (90%-100%) recovery in the event
of a payment default. The senior secured debt ratings are not on
CreditWatch.
"In resolving the CreditWatch listing, S&P will monitor the
progress that the parties make toward closing the transaction,
specifically related to the approval of the National Indian Gaming
Commission," said Standard & Poor's credit analyst Ben Bubeck.
"Once this potential barrier to closing is eliminated, and
assuming that the terms of the transaction do not change
materially, S&P would expect to revise the ratings as previously
discussed."
STONE ENERGY: Moody's Lifts Senior Notes' Rating to Caa1
--------------------------------------------------------
Moody's Investors Service raised the senior subordinate notes
rating for Stone Energy Corp. to Caa1 (LGD 4, 62%) from Caa2 (LGD
5, 81%). Moody's also affirmed Stone's B3 corporate family rating
and the B3 probability of default rating. Simultaneously, Moody's
is upgrading Stone's speculative grade liquidity rating to SGL-2
from SGL-3. The outlook is also changed to stable from negative.
The upgrade of the senior subordinate notes rating reflects the
redemption of the senior unsecured floating rate notes. Under
Moody's loss given default methodology, the senior subordinated
notes are now rated only one notch below the CFR due to the lower
amount of senior debt in the capital structure.
The stable outlook reflects the greatly improved liquidity and
financial flexibility provided by the Rocky Mountain asset sale,
the production trends which appear to have at least stabilized,
the company's ongoing plans for capital spending to remain within
organic cash flow, and the reduced leverage on the proven
developed reserve base. In Moody's view, the combination of these
attributes provides the company with sufficient optionality to
pursue production and reserve growth. However, retention of the
stable outlook will be dependent upon the company reporting more
sustainable reserve replacement costs for 2007, that its reserve
replacement equals at least the majority of its production for the
year, and that production trends continue to remain at least
stable.
The B3 CFR continues to reflect reflects the company's relatively
modest scale compared to several years ago, its very high cost
structure (over $70/boe) which currently ranks among the highest
for the rated E&P peer group, and several years of very weak
capital productivity evidenced by rising reserve replacement costs
and low reserve replacement. All of these metrics currently fall
into the B3/Caa ranges. The B3 also reflects enhanced financial
flexibility with about $400 million of cash on the balance sheet
and the reduction of leverage. Pro forma for the Rockies sale,
the company's leverage on the proven developed reserves has
declined from about $8.94/boe ($1.49/mcfe) to about $7.54/boe
($1.26/mcfe) which ranks favorably to the B3 peer group.
While the Rockies divestiture provided liquidity, it further
reduced Stone's scale and placed its focus back in the short lived
Gulf of Mexico region, which carries a high reinvestment risk and
has not produced positive results for the company over the past
couple of years. This reinvestment risk is highlighted by the
company's ratio of proven developed reserves to production of only
4.5 years and only about 1.5 years on a proven developed producing
basis as the reserve base has a significant proven developed non-
producing component.
In addition, while production rates have been increasing over the
past six quarters, while the company is focusing on spending
within cash flow and the conversion of its proven developed not
producing reserves, Moody's believes the overall reserve base may
still show a decline for 2007 and its reserve replacement costs
will remain high (though improving). Further, the company has
announced a $100 million stock re-purchase program and is actively
pursuing acquisitions that it has stated could involve high
leveraged assets.
The upgrade of the speculative grade liquidity rating to SGL-2
considers Stone's significant cash balances, the plan to spend
within cash flow over the next four quarters (barring any
acquisitions), the full availability and the ample room under the
maintenance covenants under its senior secured revolving credit
facility which should ensure accessibility over ensuing four
quarters. The SGL-2 is tempered by the currently reduced
borrowing base under credit facility that was reduced to
$84 million after the sale of the Rocky Mountain assets, the
exposure of the borrowing base to re-determinations in the event
of weaker natural gas prices, and the inherent volatility of
commodity prices and possible production disruptions that would
impact cashflows.
Stone Energy Corporation is headquartered in Lafayette, Louisiana
is an independent oil and gas company engaged in the acquisition
and subsequent exploration, development, operation and production
of oil and gas properties located in the conventional shelf of the
GOM, the deep shelf of the GOM, and the deepwater of the GOM.
TUPPERWARE BRANDS: Earns $6.9 Million in Quarter Ended Sept. 29
---------------------------------------------------------------
Tupperware Brands disclosed Tuesday its third quarter 2007
results.
The company reported net income of $6.9 million on net sales of
$454.7 million for the 13 weeks ended Sept. 29, 2007, compared
with net income of $13.1 million on net sales of $394.9 million
for the 13 weeks ended Sept. 30, 2006.
GAAP net income for the 2007 period included the following one-
time charges (after tax):
-- costs associated with implementing new credit agreement of
$6.2 million
-- purchase accounting intangibles and goodwill impairment of
$9.7 million
-- acquired intangible asset amortization of $2.3 million
-- re-engineering and impairment charge expenses of
$1.8 million
-- gain from land sales of $3.4 million
-- tax benefit of $2.1 million versus $4.7 million benefit from
taxes in 2006
"Another quarter of strong sales and earnings reaffirms that our
strategic growth initiatives are making a significant positive
impact in the markets" said Rick Goings, chairman and chief
executive officer. "Overall our local currency sales increase was
10%, reflecting 20% higher sales in the emerging markets, which
accounted for 46% of sales. Sales in our established markets were
up slightly, reflecting significant increases by several
businesses, but a double-digit decrease in Germany," Goings
continued.
At Sept. 29, 2007, the company's consolidated balance sheet showed
$1.80 billion in total assets, $1.33 billion in total liabilities,
and $469.3 million in total shareholders' equity.
About Tupperware
Headquartered in Orlando, Florida, Tupperware Brands Corporation
(NYSE: TUP)-- http://www.tupperware.com/-- is a portfolio of
global direct selling companies, selling premium innovative
products across multiple brands and categories through an
independent sales force of 2.0 million. Product brands and
categories include design-centric preparation, storage and serving
solutions for the kitchen and home through the Tupperware brand
and beauty and personal care products for consumers through the
Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo
and Swissgarde brands.
* * *
As reported in the Troubled Company Reporter on Sept. 19, 2007,
Moody's Investors Service assigned a Ba1 rating to Tupperware
Brands Corporation proposed senior secured credit facilities,
consisting of a $200 million revolving credit facility and a
$550 million term loan A, both due 2012. Moody's also affirmed
the company's Ba2 corporate family rating and Ba3 probability of
default rating, and changed the outlook to positive from stable.
TWEETER HOME: Can Assign Unexpired Leases to Tweeter Newco
----------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware gave authority to Tweeter Home Entertainment
Group, Inc. and its debtor-affiliates to assume and assign certain
unexpired leases to Tweeter Newco, LLC, purchaser of substantially
all of the Debtors' assets.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom,
LLP, in Wilmington, Delaware, told the Court that pursuant to
a purchase agreement, Tweeter Newco acquired the right to
designate all of the Debtors' executory contracts, including
certain unexpired, non-residential real property leases.
According to Mr. Galardi, the Debtors have examined the costs
associated with their obligations to the unexpired leases, and
found that a a sale of the designation rights will generate
maximum benefit to their estates, creditors, and other parties-
in-interest.
Upon the payment of cure amounts or assumption of the
unexpired leases, all claims held by the lease parties will be
deemed released, including claims arising under Sections
503(b)(9) or 546(c) of the Bankruptcy Code, Mr. Galardi stated.
Mr. Galardi maintained that the assumption and assignment of the
Unexpired Leases is tailored to minimize the administrative
expenses and disruption to the lease parties and their
businesses.
A schedule of the unexpired leases is available for free at:
http://researcharchives.com/t/s?2478
Landlords Object to Lease Assignment
Ten landlords objected to the Debtors' motion to assume and
assign certain unexpired leases to Tweeter Newco, LLC:
* 109 Federal Road, LLC;
* Acadia Naamans Road, LLC;
* Almonessen Associates II, LLC;
* Centro Properties Group and Federal Realty Investment Trust;
* IMI Mount Pleasant, LLC;
* Patti Little Geneva, LLC;
* P.C. Associates;
* Streets of Buckhead Avenues Development Co. at Block F, LLC;
* Tanurb Marlton, LP and Scott Thomas Construction, Inc.; and
* University Shopping Center.
Eight landlords objected to the cure amounts set forth in the
debtors' motion, and asked the Court to deny the motion, unless
the Debtors cure the leases for their amounts:
Proposed
Landlord Cure Amount Asserted Amount
-------- ----------- ---------------
Federal Road $29,997 $57,059
Centro Properties and 20,342 41,497
Federal Realty 16,757 35,748
19,606 19,855
29,450 29,813
Patti Little Geneva 18,309 21,878
Almonessen Associates 15,453 19,029
Acadia Naamans 6,461 61,780
Tanurb Marlton and 0 356,577
Scott Thomas
P.C. Associates 0 18,517
University Shopping 0 63,817
Buckhead objected to the assumption and assignment of lease at
3131 Peachtree Road in Atlanta, Georgia, stating that Tweeter
Newco had not provided adequate assurance of payment to the
Landlords.
Similarly, IMI argued that the Debtors had failed to establish
that Tweeter Newco can provide the same level of financing and
operating benefits the landlords originally received.
Kathleen Campbell Davis, Esq., at Campbell & Levine, LLC, in
Wilmington, Delaware, told Judge Walsh that with respect to the
continued employment of Debtors' employees, the resignation of
the chief executive officer, as well as several operations
personnel, demonstrated the deficiencies with the adequate
assurances, with respect to the IMI Lease.
John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington,
Delaware, on behalf of Buckhead, requested for continuance of the
hearing to a later date, to allow adequate time for reasonable
discovery.
Tweeter Newco's Response to Adequate Assurance Issue
Tweeter Newco pointed out that to date, it had agreed with 60 of
the 75 Landlords on the amount of the required cure payment, and
expected to agree with the remaining 13 Landlords.
William P. Bowden, Esq., at Ashby & Geddes, P.A., in Wilmington,
Delaware, maintained that there is no dispute with respect to
Buckhead and IMI regarding the cure amount. Furthermore,
Buckhead had not filed specific objections, and the issues raised
by IMI were not material to the question of adequate assurance.
IMI, Mr. Bowden noted, had argued that Tweeter Newco is a newly
formed entity and does not yet have completed financial reports,
and therefore cannot have financial strength like the Debtors.
He asserted that the assumption and assignment of real property
leases have been authorized in numerous similar cases.
Moreover, Mr. Bowden stated that IMI's other arguments carry no
legal weight. Tweeter Newco had shown that its financial
condition and operational performance are at least similar to the
Debtors', Mr. Bowden maintained.
Court Approves Assignment of Unexpired Leases
Tweeter Newco will be responsible for all additional amounts due
under the unexpired leases, calculated in accordance with the
customary year-end reconciliation practice of the Lease Parties.
The Court has ordered that there will be no rent accelerations,
assignment fees, increases, or other fees charged to Tweeter
Newco as a result of the assumption and assignment. Upon payment
of the cure costs, the landlords are deemed to have waived all
claims against the Debtors.
Leases with respect to four stores are modified and amended as
agreed to between Tweeter Newco and the landlords:
Store No. Location Annual Rent
--------- -------- -----------
339 Greensboro, North Carolina $177,382
215 Lawrenceville, New Jersey 160,000
111 Newington, Connecticut 150,000
122 Salem, New Hampshire 71,000
Moreover, Judge Walsh has approved the assumption and assignment
of the Buckhead Lease, with a fixed cure amount of $56,667,
pursuant to an agreement between Tweeter Newco and Buckhead.
Judge Walsh also approved the stipulation resolving the cure
amounts with respect to The Lokoff Trust, and the assignment and
assumption of the lease for Store No. 203, having a $34,380 cure
amount.
In a letter to the counsel to the Debtors, IMI and Tweeter Newco,
Judge Walsh said that he has reviewed the IMI Lease and found
"interesting issues" in Sections 2(a) and (b) of the Lease.
Judge Walsh noted that Section 2(a) provides that the tenant may
not assign the lease or sublet the premises, without the consent
of the landlord.
Judge Walsh cited that in In re Service Merchandise Company,
Inc., 297 B.R. 675, 691-92 (Bankr. M.D.Tenn. 2002), the Tennessee
court has held, "when a lease provides that a lessor may not
unreasonably withhold its consent, it must be a commercially
reasonable withholding." The Tennessee court also enumerated
commercially reasonable standards, which include the financial
responsibility of the proposed assignee, the type of business to
be conducted, and whether it competes with the businesses o the
lessor or other tenants.
Accordingly, Judge Walsh held that, aside from Section 365 of the
Bankruptcy Code, the Debtors can assign the lease to Tweeter
Newco if it can provide adequate assurance of future performance,
and its tenancy will not otherwise be adverse to IMI's interest
more than the Debtors' current tenancy.
Judge Walsh believes that IMI can not reasonably withhold its
consent to the assignment of the Lease, and the argument that "a
lessor would be better off if the lease were terminated" is not a
reasonable denial of consent.
Moreover, Judge Walsh pointed out that under Section 2(b) of the
IMI Lease, the tenant may assign the lease or sublet the premises
without the landlord's consent, at any time during its term, to
any entity acquiring the tenant's stores in South Carolina, or to
any of the tenant's parent, subsidiary, or affiliate. Thus,
Judge Walsh said, IMI's consent is not needed for the assignment
of the IMI Lease.
Judge Walsh noted that the provisions of Sections 2(a) and (b)
are "very unusual for a commercial lease." He suggested that
Section 365 may be applied to give a lessor more rights than it
contracted for, or deprive a lessee of its rights by reason of
being a debtor in Chapter 11.
Judge Walsh maintained that he has not previously addressed this
type of issue, but he believes that it may be worth exploring.
Additionally, Judge Walsh said that if IMI's consent can not be
reasonably withheld, the Debtors can assume the lease and,
pursuant to Section 2(a) of the Lease, sublet the premises to
Tweeter Newco, thereby bypassing Section 365(b)(3)(A)'s provision
relating to "financial condition and operating performance."
After the subletting, the Debtor could, pursuant to Section 2(b)
of the Lease, assign the lease to a wholly owned subsidiary of
the Debtor and in an appropriate manner convey an interest to
Newco, Judge Walsh pointed out.
About Tweeter Home
Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products. Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors. Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent. As of Dec. 21, 2006,
Tweeter had total assets of $258,573,353 and total debts of
$190,417,285. The Court gave the Debtors until Feb. 6, 2008 to
file a plan of reorganization.
Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors. (Tweeter Bankruptcy
News, Issue No. 11 and 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
TWEETER HOME: Can Assume & Assign 23 Contracts to Tweeter Newco
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
permission to Tweeter Home Entertainment Group, Inc. to assume and
assign 23 vendor contracts to Tweeter Newco, LLC, and approved the
settlement agreement with respect to the treatment of certain
credits owed under the vendor contracts.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom,
LLP, in Wilmington, Delaware, told the Court that the Debtors
had disputed the ability of the Tweeter Newco to designate the
vendor contracts, which have cure amounts aggregating $546,000.
Mr. Galardi added that both parties disagreed over the respective
rights to approximately $3,300,000 in credits owed to the Debtors
by the vendors, consisting of amounts due for:
(i) reimbursement for returned, damaged and incorrectly
shipped goods, and warranty obligations assumed by the
Debtors; and
(ii) credits under various vendor incentive programs, which
the Debtors receive against future purchases.
After extensive negotiations, the Debtors and Tweeter Newco
resolved their disputes and agreed that:
(a) Tweeter Newco will pay $1,000,000 to the Debtors'
estates;
(b) the Debtors will assign all rights to the vendor credits
along with the assignment of the vendor contracts;
(c) the cure amounts paid by Tweeter Newco will not be
counted against any payment limits or other caps set
forth in the sale order and/or purchase agreement; and
(d) the Debtors will waive any claims against the non-Debtor
parties to the vendor contracts.
The vendor contracts to be assumed and assigned consist of six
deals with Pioneer Electronics USA, Inc., four deals with Yamaha
Electronics Corporation, USA., six deals with Sony Electronics
Inc., five deals with Samsung Electronics America, and one deal
each with Panasonic and Audioquest.
Mr. Galardi told the Court that the Debtors considered litigating
their disputes with Tweeter Newco. Although they believed they
were correct in their interpretations and will ultimately succeed
in litigation, the costs and expenses will be significant, and
will only cause unnecessary delay in these Chapter 11 Cases.
Tweeter Newco will pay $1,000,000 settlement amount to the
Debtors. The cure costs fixed by the Court are in full and final
satisfaction of all amounts due under the Vendor Contracts.
The cure amounts paid by Tweeter Newco will not be counted
against any payment limits or other caps set forth in the Sale
Order or the Purchase Agreement. The Debtors waive any claims
against the non-Debtor parties to the Vendor Contracts.
About Tweeter Home
Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products. Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors. Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent. As of Dec. 21, 2006,
Tweeter had total assets of $258,573,353 and total debts of
$190,417,285. The Court gave the Debtors until Feb. 6, 2008 to
file a plan of reorganization.
Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors. (Tweeter Bankruptcy
News, Issue No. 10 and 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
TWEETER HOME: Court Okays Rejection of 40 Executory Contracts
-------------------------------------------------------------
Tweeter Home Entertainment Group Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the District
of Delaware to reject 38 contracts with Swisher International, one
contract with Aquent Robohead, and one contract with High
Performance Learning, Inc.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom,
LLP, in Wilmington, Delaware, told the Court that the Debtors
have determined that the contracts are no longer beneficial to
them or their estates, and the costs in assuming the contracts
will be substantial and constitute an unnecessary drain on the
cash resources.
Mr. Galardi states that immediate rejection of the contracts is
in the best interests of the Debtors' estates, their creditors,
and other parties-in-interest, pursuant to Sections 105(a), 363
and 365(a) of the Bankruptcy Code.
Section 365(a) provides that a debtor may assume or reject any
executory contract or unexpired lease, subject to the Court's
approval, Mr. Galardi notes.
The Debtors are currently reviewing and evaluating other
executory contracts and unexpired leases, and reserve the right
to seek to assume or reject additional contracts and leases in
the future.
About Tweeter Home
Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products. Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors. Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent. As of Dec. 21, 2006,
Tweeter had total assets of $258,573,353 and total debts of
$190,417,285. The Court gave the Debtors until Feb. 6, 2008 to
file a plan of reorganization.
Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors. (Tweeter Bankruptcy
News, Issue No. 10 and 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
UNITED COMMUNITY: NYLB Makes $13.5MM Distribution to Policyholders
------------------------------------------------------------------
The New York Liquidation Bureau disclosed in its website that on
Oct. 18, 2007, it made a $13.5 million dividend distribution to
policyholder claimants of the United Community Insurance Company.
"We are pleased to announce the fifth dividend distribution for
the United Community estate," said Mark G. Peters, Special Deputy
Superintendent in Charge of the Bureau. "This $13.5 million
distribution brings the total distributions for the estate to
35%."
Since April 2, 2007, when the Bureau's new management took office
the Bureau has launched an intensive reform and housecleaning
effort, which includes evaluating the status of all estates in
receivership, identifying those in a position to apply for
dividend distributions, and aggressively working towards payment
of such distributions.
The dividend will soon be payable as a result of certain United
Community investments reaching maturity on Oct. 15, 2007. The
application for payment of dividends was approved at an Aug. 28,
2007 conference held before the liquidation court.
Conference participants included representatives of the insurance
guaranty funds principally affected by the United Community
insolvency proceeding and representatives of the National
Conference of Insurance Guaranty Funds. Securing approval for
this distribution was made possible by the hard work of Andrew A.
Alberti, agent for the Superintendent, who manages the day-to-day
activities of the United Community estate.
The distribution, up to 5% of total allowed policyholder claims,
is payable to policyholder-level claimants who possess allowed
claims as of June 30, 2007.
About the NYLB
The New York Liquidation Bureau -- http://www.nylb.org/-- is a
non-governmental entity, independent of the New York State
Insurance Department, which carries out the responsibilities of
the New York State Superintendent of Insurance in his role as
receiver, and acts on his behalf to discharge his statutory duties
to protect the interests of policyholders and creditors of
insurance companies that have been declared impaired or insolvent.
About the UCIC
United Community Insurance Company is a stock property/casualty
insurer. UCIC was among the companies controlled by the late
insurance magnate Albert Lawrence of Rexford. UCIC was put into
Rehabilitation on July 7, 1994 and ordered into liquidation on
Nov. 10, 1995.
UNIVAR INC: S&P Places Corporate Credit Rating at B
---------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Univar Inc., a wholly owned subsidiary of Univar
N.V. The outlook is stable.
At the same time, Standard & Poor's assigned ratings to the $1.25
billion senior secured term loans of Univar Inc., Univar U.K.
Holdings Ltd., and UlixesAcquisition B.V. The
$105 million U.S. term loan A, $170 million U.K. term loan A, and
$975 million term loan B are rated 'B+' (one notch higher than the
corporate credit rating) with a recovery rating of '2', indicating
that lenders can expect substantial recovery (70%-90%) in the
event of a payment default.
CVC Capital Partners, a private equity sponsor, is buying Univar.
Proceeds of the term loans, $510 million of borrowings under an
unrated asset-based revolving credit facility (including a $100
million first-in-last-out tranche),
$600 million senior subordinated notes, and common equity of
$1.191 billion contributed by the equity sponsor will be used to
finance the acquisition. The transaction is subject to approval
by the company's shareholders and is expected to close during the
third quarter of 2007.
The ratings on Univar reflect its highly leveraged capital
structure. In addition, Univar operates in a fragmented and
competitive industry with operating margin pressures. Continued
industry consolidation will most likely result in pressure for
further acquisition activity. These factors are offset by the
company's leading market positions; satisfactory product,
customer, supplier, and geographic diversity; and flexible cost
structure, with margin stability in downturns. Bellevue,
Washington-based Univar is a leading global chemical distributor
with annual sales of over $8 billion, pro forma for the April 2007
acquisition of CHEMCENTRAL.
UTSTARCOM INC: Receives Notice of Default from 7/8% Notes Trustee
-----------------------------------------------------------------
UTStarcom, Inc., disclosed that on Oct. 15, 2007, it received a
notice of default from U.S. Bank National Association, as
indenture trustee, pursuant to which the Trustee asserted that the
company was in default of certain obligations under the Indenture,
dated as of March 12, 2003, as amended by the First Supplemental
Indenture, dated Jan. 9, 2007, as further amended by the Second
Supplemental Indenture, dated July 26, 2007, between the company
and the Trustee with respect to the company's 7/8% Convertible
Subordinated Notes due 2008 (CUSIP Nos. 918076AA8 and 918076AB6).
The specific purported defaults referred to in the Notice of
Default are:
(1) the company's failure to file with the Securities and
Exchange Commission and provide copies to the Trustee of
its Quarterly Report on Form 10-Q for the fiscal quarter
ending March 31, 2007, and its Quarterly Report on Form
10-Q for the fiscal quarter ending June 30, 2007, as
required by the Indenture and the Trust Indenture Act and
(2) the company's failure to deliver to the Trustee the
officer's certificate of compliance of the company
required by the Indenture.
Pursuant to the Second Supplemental Indenture, any failure by the
company to comply with covenants in the Original Indenture as
amended by the First Supplemental Indenture relating to the filing
of reports required to be filed with the SEC under the Securities
Exchange Act of 1934, as amended and the furnishing of copies of
SEC Reports and the officer's certificate of compliance of the
company required by the Original Indenture to the Trustee before
5:30 p.m., New York City time, on October 15, 2007 would not
constitute a default under the Indenture. The Notice of Default
states that the Covenant Reversion Date provided for by the Second
Supplemental Indenture had passed and that the company's failure
to cure the purported defaults within 60 consecutive days after
the date of the Notice of Default, would constitute an "Event of
Default" under the Indenture.
The company previously reported in its Notifications of Late
Filing on Form 12b-25 filed on Nov. 11, 2006, March 2, 2007,
May 10, 2007, and Aug. 9, 2007 that the filing of its First
Quarter 2007 Form 10-Q and Second Quarter 2007 Form 10-Q, as well
as certain other SEC Reports that the company has now filed with
the SEC, had been delayed for the reasons stated therein.
Update
The company filed its First Quarter 2007 Form 10-Q with the SEC on
Oct. 17, 2007 and Second Quarter 2007 Form 10-Q on Oct. 19, 2007.
The company contends that as of Oct. 19, 2007, it has, prior to
the Demand Date set forth in the notice of default:
(i) filed all required reports with the SEC and furnished them
to the Trustee, and
(ii) delivered the officer's certificate of compliance required
by the Original Indenture to the Trustee.
Therefore, the company believes that that no Event of Default
under the Indenture occurred.
About UTStarcom
UTStarcom, Inc. -- http://www.utstar.com/-- (Nasdaq: UTSI)
provides IP-based, end-to-end networking solutions and
international service and support. The company sells its
broadband, wireless, and handset solutions to operators in both
emerging and established telecommunications markets around the
world. UTStarcom enables its customers to rapidly deploy revenue-
generating access services using their existing infrastructure,
while providing a migration path to cost-efficient, end-to-end IP
networks. Founded in 1991 and headquartered in Alameda,
California, the company has research and design operations in the
United States, China, Korea and India.
VALLEY REALTY: Two Creditors Balk at Greenberg's Retention
----------------------------------------------------------
Two creditors, Webber & Associates and Twelve Northwest LLC, in
Valley Realty Advisors LLC's chapter 11 cases submitted separate
motions to the U.S. Bankruptcy Court for the District of Arizona
opposing the Debtor's request to employ Greenberg Traurig LLP as
its general counsel.
Twelve Northwest informs the Court that it had previously asked
Greenberg Traurig to disclose its past representations in various
filings with the Court, which the law firm failed to do.
According to Twelve Northwest, Greenberg Traurig formerly
represented various related parties in Valley Realty's case,
including Stratera Portfolio Advisors LLC, the largest secured
creditor in the case.
Webber, on the other hand, relates that at the Section 341(a)
meeting of creditors, it was disclosed that the Debtor was
affiliated with various related entities in the case, including
Stratera Portfolio, Private Lenders Funding Group LLC, and Neptune
Capital Company LLC. Webber adds that perhaps Greenberg Traurig
could have represented other entities related in the case in
various respects. However, according to Webber, it does not
appear that Greenberg Traurig has disclosed prior or current
representation of those entities in its statements.
Hence, both Twelve Northwest and Webber ask that creditors and the
Court should provide an opportunity to review information after
full disclosure of Greenberg Traurig's prior representations.
Dale C.Schian, Esq., at Schian Walker PLC is counsel to Webber &
Associates and John J. Fries, Esq., at Ryley Carlock & Applewhite
is counsel to Twelve Northwest.
About Valley Realty
Phoenix, Arizona-based Valley Realty Advisors LLC filed for
Chapter 11 bankruptcy protection on Aug. 24, 2007 (Bankr. D. Ariz.
Case No. 07-04217). The Debtor listed total assets of $22,068,000
and total debts of $13,965,339 when it filed for bankruptcy.
WESTERN UNION: Sept. 30 Balance Sheet Upside-Down by $146.4 Mil.
----------------------------------------------------------------
The Western Union Company disclosed Tuesday financial results for
the third quarter ended Sept. 30, 2007.
At Sept. 30, 2007, the company's consolidated balance sheet showed
$5.69 billion in total assets and $5.83 billion in total
liabilities, resulting in a $146.4 million total stockholders'
deficit.
Net income was $216.3 million and was also impacted by $46 million
of incremental pretax interest expense, compared to the third
quarter of 2006.
Total revenues were $1.26 billion in the 2007 third quarter,
compared with total revenues of $1.14 billion in the same period
in 2006.
Total consumer-to-consumer revenue in the third quarter grew 10%
to $1.06 billion including $16 million from Euro translation, on
transaction growth of 15%. The segment benefited from improving
trends across its three business categories: international, Mexico
and domestic.
In the third quarter, operating income was $330.1 million and
operating income margin was 26% compared to 30% in last year's
third quarter. Both operating income and operating income margin
for third quarter 2007 were impacted by the $22 million non-cash
stock compensation expense and an additional $4 million of
incremental independent public company expenses.
Western Union president and chief executive officer Christina Gold
said, "I am pleased that we achieved third quarter performance
consistent with our expectations. Our consumer-to-consumer
segment posted strong performance driven by especially robust
results within our international business. Our Mexico business
continued to improve in a stable pricing environment and again
outperformed the market. We were further encouraged by improving
transaction trends in our domestic business."
Revenue in the consumer-to-business segment grew 14% to
$179.5 million in the quarter, including $17 million of revenue
from the December 2006 acquisition of Pago F cil.
During the third quarter, Western Union repurchased 15.3 million
shares for $300 million at an average cost of $19.59 per share.
The company has now repurchased a total of 29.2 million shares for
$601 million and has nearly $400 million remaining under its
board-authorized repurchase plan.
Non-Cash Charge for Accelerated Stock Compensation Expense
In the third quarter 2007, the company recognized a $22 million,
non-cash charge in accordance with FAS 123R accounting for stock-
based compensation resulting from the previously announced
acceleration of vesting in Western Union stock options and awards
granted to current Western Union employees prior to the spin-off
from First Data. Under the terms of the plan, vesting was
accelerated for these options and awards as a result of the change
of control that occurred when an affiliate of Kohlberg, Kravis,
Roberts & Co acquired First Data Corporation, Western Union's
former parent company, on Sept. 24, 2007.
About Western Union
Headquartered in Englewood, Colo., The Western Union Company
(NYSE: WU) -- http://www.westernunion.com/-- provides global
money transfer services. Together with its affiliates, Orlandi
Valuta, Vigo and Pago F cil, Western Union provides consumers with
fast, reliable and convenient ways to send and receive money
around the world, as well as send payments and purchase money
orders. It operates through a network of more than 320,000 Agent
locations in over 200 countries and territories.
WHOLE FOODS: FTC Wants Expedited Review on Closed Merger Deal
-------------------------------------------------------------
The Federal Trade Commission has put on appeal a federal-district-
court ruling in August that approved a $565 million merger
agreement between Whole Foods Market Inc. and Wild Oats Markets
Inc., David Kesmodel of The Wall Street Journal reports.
According to the Journal, the FTC is asking a Washington appellate
court to prohibit the companies from continuing to combine certain
operations, pending a full and expedited review of the deal in a
separate administrative-court proceeding.
Completed Buyout
As reported in the Troubled Company Reporter on Aug. 30, 2007,
Whole Foods Market purchased 84.1% of Wild Oats' outstanding
common stock in a cash tender offer of $18.50 per share and
approximately 12.7% of the outstanding shares of Wild Oats common
stock through a guaranteed delivery.
Whole Foods Market also assumed existing debt, net of cash,
totaling approximately $137 million.
Whole Foods Market has entered into a five-year $700 million
senior term loan agreement to fund the transaction, and has signed
a new five-year $250 million revolving credit agreement, which
will replace its existing $200 million revolver.
The transaction closed on August 28, WSJ says, citing a court
filing.
Long Battle with FTC
In August, the U.S. Court of Appeals for the District of Columbia
has denied the FTC's request for a stay to preclude the closing of
the merger pending the FTC's appeal and has dissolved the Aug. 20,
2007, administrative injunction, which had prevented the
transaction from going forward while the court considered the
FTC's motion.
On Feb. 21, 2007, Whole Foods Market entered into a merger
agreement with Wild Oats, pursuant to which Whole Foods Market,
through a wholly owned subsidiary, has commenced a tender offer to
purchase all of the outstanding shares of Wild Oats at a purchase
price of $18.50 per share in cash.
On June 6, 2007, the FTC filed a suit in the federal district
court to block the proposed acquisition on antitrust grounds and
seeking a temporary restraining order and preliminary injunction
pending a trial on the merits. Whole Foods Market and Wild Oats
consented to a temporary restraining order pending a hearing on
the preliminary injunction, which concluded on Aug. 1, 2007.
On Aug. 16, 2007, the U.S. District Court for the District of
Columbia denied the FTC's motion for a preliminary injunction. In
order to permit an orderly review by the District Court and the
Court of Appeals, Whole Foods and Wild Oats agreed not to
consummate the transaction until noon Monday, Aug. 20, 2007, in
order to permit the FTC to have an opportunity to request a stay
of the District Court's decision pending appeal.
On Aug. 17, 2007, the FTC filed with the District Court a motion
for a stay pending appeal, which was denied the same day. The FTC
also filed a motion with the U.S. Court of Appeals for the
District of Columbia for a stay pending appeal the District
Court's order.
On Aug. 20, 2007, the United States Court of Appeals for the
District of Columbia Circuit issued an administrative injunction
preventing the transaction from going forward, pending further
order of the Court of Appeals, in order to allow the court
sufficient opportunity to review the FTC's motion.
Meanwhile, WSJ relates that earlier this month, Whole Foods Market
filed a motion asking the appellate court to dismiss the case
as moot because the companies have already completed the
transaction.
The FTC responded Monday that an appeal is warranted, in part
because Whole Foods Market continues to operate many of the Wild
Oats stores separately, WSJ says.
About Wild Oats Markets
Headquartered in Boulder, Colorado, Wild Oats Markets Inc. --
http://www.wildoats.com/-- is a natural and organic foods
retailer in North America with annual sales of approximately
$1.2 billion. Wild Oats Markets was founded in Boulder, Colorado
in 1987. Wild Oats Markets currently operates 110 stores in 24
states and British Columbia, Canada under four banners: Wild Oats
Marketplace (nationwide), Henry's Farmers Market (Southern
California), Sun Harvest (Texas), and Capers Community Market
(British Columbia).
About Whole Foods Market
Founded in 1980 in Austin, Texas, Whole Foods Market, Inc.
(NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- was a
natural and organic foods supermarket. In fiscal year 2006,
the company had sales of $5.6 billion and had more than 190
stores in the United States, Canada, and the United Kingdom.
* * *
In September 2007, Moody's Investors Service downgraded Whole
Foods Market Inc.'s corporate family rating to Ba1 from Baa3
reflecting the deterioration in the company's debt protection
measures following the debt-financed acquisition of Wild Oats
Markets Inc. The rating outlook is stable.
In August 2007, Standard & Poor's Ratings Services lowered its
corporate credit rating on Whole Foods Market Inc. to 'BB+' from
'BBB-'. At the same time, S&P removed the ratings from
CreditWatch, where they were placed with negative implications on
Feb. 22, 2007. The action followed the company's acquisition of
Wild Oats Markets Inc. The outlook is negative.
XEROX CORP: Denies Speculations on Lexmark International Bid
------------------------------------------------------------
Xerox Corp. CEO Anne Mulcahy denies the speculation that the
company is eyeing Lexmark International Inc., stating that such an
acquisition will not enhance Xerox's shareholder value, David
Zielenziger of The Financial Times reports. Rather, Xerox aims to
acquire software, distribution and services,
FT relates that Lexmark is likely to consider a leverage buyout
after the company disclosed third-quarter revenue of $1.195
billion, down 3% compared to revenue of $1.235 billion last year.
The company also reported a restructuring plan which includes
closure of one of the company's inkjet supplies manufacturing
facilities in Mexico, and additional optimization measures at the
remaining inkjet facilities in Mexico, displacing approximately
1,650 positions by the end of 2008. In addition, shares dropped
32% over the past year.
Headquartered in Stamford, Connecticut, Xerox Corp. --
http://www.xerox.com/-- develops, manufactures, markets,
services and finances a range of document equipment, software,
solutions and services. Xerox operates in over 160 countries
worldwide and distributes products in the Western Hemisphere
through divisions, wholly owned subsidiaries and third-party
distributors. The company maintains operations in France,
Japan, Italy, Nicaragua, among others.
* * *
Standard & Poor's Ratings Services revised its rating outlook on
Xerox Corp. to positive from stable on May 2007. Ratings on the
company, including the 'BB+' long-term and 'B-1' short-term
corporate credit ratings, were affirmed. The ratings still hold
to date.
* S&P Cuts Ratings on 145 Tranches from 97 US Debt Deals
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 145
tranches from 97 U.S. synthetic collateralized debt obligation
transactions.
Additionally, S&P placed one tranche rating on CreditWatch with
negative implications because the rating on its underlying
reference obligation was placed on CreditWatch with negative
implications on Oct. 22, 2007.
The affected tranches have a total issuance amount of
$3.68 billion. These transactions are non-excess-spread synthetic
CDOs of asset-backed securities that reference structured finance
securities, including residential mortgage-backed securities.
Standard & Poor's lowered these CDO ratings following a review of
its rated synthetic CDO transactions that reference RMBS
securities that have experienced negative rating actions recently,
including the more than 3,500 classes of RMBS transactions that
were downgraded during the week of Oct. 15, 2007.
These RMBS downgrades affected various RMBS transactions
originated in 2005, 2006, and the first half of 2007 and are
backed by first-lien subprime mortgage loans, closed-end second-
lien mortgage loans, and first-lien Alternative-A (Alt-A) mortgage
loans. The deteriorating credit quality of these RMBS securities
has had a significant impact on mezzanine SF synthetic CDO
transactions, which are CDOs of ABS referencing primarily
mezzanine ('A+' rated and below) tranches of RMBS transactions and
other structured finance transactions. All 97 synthetic CDO
transactions with one or more ratings lowered today are mezzanine
SF CDOs.
About 97% of the CDO transactions affected by the downgrades were
originated in 2006 (49 of the 97 affected CDOs) or 2007 (45 of the
97 affected CDOs). The largest portion of downgrades affected
tranches rated in the 'BBB' category (34.5%), followed by tranches
rated in the 'A' category (29.0%) and the 'AAA' category (17.9%).
In total, the 145 lowered ratings account for about 4.5% of the
total U.S. non-excess-spread synthetic CDO classes currently rated
by Standard & Poor's.
In terms of issuance, the $3.68 billion in affected CDO tranches
represents about 1.5% of the total issuance amount of U.S. non-
excess-spread synthetic CDO tranches rated by Standard & Poor's.
The lowered ratings address Standard & Poor's rated U.S. non-
excess-spread synthetic CDO transactions.
Ratings on the company's U.S. cash flow and hybrid CDO
transactions have been addressed in a separate press release.
Distribution of Synthetic CDO Ratings Lowered
Rating No. of tranches lowered
------ -----------------------
AAA 26
AA+ 7
AA 7
AA- 5
A+ 22
A 10
A- 10
BBB+ 24
BBB 16
BBB- 10
BB+ 4
BB 1
BB- 3
----------------------
Total 145
Ratings List
Rating Transaction To From
------------------ -- ----
ABACUS 2005-1 CB1 Ltd. B AA-
AAABACUS 2005-1 CB1 Ltd. C A-
AABACUS 2005-1 CB1 Ltd. D BBB+
A-ABACUS 2005-1 CB1 Ltd. E-1 BBB BBB+
ABACUS 2005-1 CB1 Ltd. E-2 BBB- BBB
ABACUS 2005-1 CB1 Ltd. F BB+ BBB-
ABACUS 2005-1 CB1 Ltd. G B+ BB
ABACUS 2005-3, Ltd. D A- A
ABACUS 2006-11 Ltd. A-2 Ser 1 AA AA+
ABACUS 2006-11 Ltd. A-2 Ser 2 AA AA+
ABACUS 2006-11 Ltd. B BBB+ A+
ABACUS 2006-11 Ltd. C BBB- BBB+
ABACUS 2006-11 Ltd D BB- BBB-
ABACUS 2006-11 Ltd. B Ser 2 BBB+ A+
ABACUS 2006-12, Ltd. B AA+ AAA
ABACUS 2006-12, Ltd. C BBB+ A-
ABACUS 2006-12, Ltd. D BBB- BBB
ABACUS 2006-14, Ltd. A-2 BBB+ A+
ABACUS 2006-14, Ltd. B BBB- BBB+
ABACUS 2006-14, Ltd. C BB- BBB-
ABACUS 2006-14, Ltd. A-2 (Ser2) BBB+ A+
ABACUS 2006-15 Ltd. C Series 1 BBB+ A-
ABACUS 2006-15 Ltd. C Series 2 BBB+ A-
ABACUS 2006-15 Ltd. D Series 1 BBB- BBB
ABACUS 2006-15 Ltd. D Series 2 BBB- BBB
ABACUS 2006-8, Ltd. A-2 AA+ AAA
ABACUS 2006-8, Ltd. D BB+ BBB
ABACUS 2007-AC1, Ltd. A-1 AA+ AAA
ABACUS 2007-AC1, Ltd. A-2 BBB AA+
ABSpoke 2005-X Ltd. VFRN BBB+ A-
ABSpoke 2005-XII B Segregated Portfolio of SPGS SPC VFRN
A AAA
RLO VI Ltd. 2006-6 (SABS) Notes BBB BBB+
ARLO VI Ltd. 2006-4 (SABS) Notes A- A+
ARLO VI Ltd. 2006-10 (SABS) A BBB+ AA
RLO VI Ltd. 2006-10 (SABS) B BBB BBB+
ARLO VI Ltd. 2006-9 (SABS) A BBB+ AA
RLO VI Ltd. 2006-9 (SABS) B BBB BBB+
ARLO VI Ltd. 2006-8 (SABS) A BBB A-
ARLO VI Ltd. 2006-8 (SABS) B BBB- BBB+
ARLO VI Ltd. 2006-13 (SABS) Notes AA+ AAA
ARLO VII Ltd. 2007-1 (SABS) Notes AA AA+
Buchanan SPC 2006-II A2 A+ AA-
Buchanan SPC 2006-III A4 BBB+ A
Buchanan SPC 2006-IV B BB+ BBB-
Buchanan SPC 2006-I A1J AA AA+
Cookson SPC 2007-7 Notes B- BB-
Cookson SPC 2007-8 Notes B+ BBB-
Coriolanus Ltd. 39 Tranche BB+ BBB-
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 D2 BBBsrb BBB+srb
CreditDefault Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 E A-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 D1 A-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 A BBB+srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 B A-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 C1 A-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference # 804055 C2 BBBsrb BBB+srb
Credit Default Swap Swap Risk Rating-
Proctection Buyer, CDS Reference
# GRAYS PEAK Tranche Bsrb BB+srb
Credit Default Swap Swap Risk Rating-
Protection Buyer, CDS Reference
#CARIBOU PEAK Tranche B+srb BB+srb
Credit Default Swap Swap Risk Rating-
Proctection Buyer, CDS Reference
# AUGUSTA PEAK Tranche B+srb BB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# BISON PEAK Tranche B+srb BBB-srb
Credit Default Swap Swap Risk Rating -
Protecetion Buyer, CDS Reference
#PTARMIGAN PEAK Tranche Bsrb BB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 E2 BBB-srb BBB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 D2 BB+srb BBB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 E1 BBBsrb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 B2 Bbsrb BBB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 C1 BBB-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 C2 BB+srb BBB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 D1 BBB-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 A1 BBB-srb A+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 A2 BBsrb BBB+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, CDS Reference
# 826480 B1 BBB-srb A+srb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain II B Aasrb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain II A AA+srb AAAsrb
Credit Default Swap Swap Risk Rating -
Protection Buyer, Markov Chain I A AA+srb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain III A AA+srb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain II C AA-srb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain III C A+srb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain IV A AA+srb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain IV B Aasrb AAAsrb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain IV C AA-srb AA+srb
Credit Default Swap Swap Risk Rating -
Protection Buyer, Markov Chain I C A+srb AA+srb
Credit Default Swap Swap Risk Rating-
Protection Buyer, Markov Chain I B Aasrb AAAsrb
Credit Default Swap Swap Risk Rating -
Protection Buyer, Markov Chain III B AAsrb AAAsrb
Dallaglio CDO 2005-4 Ltd. B A AA
Eirles Two Ltd. Series 242 AA+ AAA
Eirles Two Ltd. Series 243 BBB+ A-
Eirles Two Ltd. Series 245 A+ AA-
Eirles Two Ltd. Series 247 BBB+ A-
Eirles Two Ltd. 251, 252, 261 Series 251 BBB- BBB Series
252 BB+ BBB-
Series 261 BBB- BBB+
Eirles Two Ltd. 257-259 & 264-266 Series 257 BBB+ A+
Series 259 BBB A
Series 258 BB+ BBB+ Series
265 BB+ BBB+ Series 264
BB BBB
Series 266 B+ BBB-
Ixion PLC 4,5,6, & 7 5 BBB+ A-
6 A A+
Ixion PLC 9 & 11 9 A- AA
11 BB+ BBB+
Ixion PLC 12 AND 15 Series 12 BB+ BBB
Series 15 BB+ BBB
Ixion PLC SYRAH 2006-11 SERIES 17 A AA-
Ixion PLC SYRAH 2006-11 SERIES 18 BBB+ A+
Ixion PLC SYRAH 2007-2 SERIES 19 BB+ BBB
Ixion PLC Matrix 2007-1 Series 20 A AA AAA
B BBB+ A+
C BBB A
D BBB A
E BBB- BBB+
F BBB- BBB+
G BB+ BBB
H AA AAA
I A- AA
Ixion PLC 23 Notes AA+ AAA
Ixion PLC 24 Notes AA+ AAA
Ixion PLC 25 Notes AA+ AAA
Ixion PLC 29 & 30 J BB+ BBB
K BB BBB-
Magnolia Finance II PLC 2007-1C Notes B+ BBB
Magnolia Finance II PLC 2007-3B1 Notes BBB+ AA
Magnolia Finance II PLC 2007-3A2 Notes AA AAA
Rutland Rated Investments
Millbrook 2006-4 (35) D BBB- BBB
Rutland Rated Investments
Millbrook 2006-4 (33) C BBB BBB+
Rutland Rated Investments
Millbrook 2007-1 (39) Notes A A+
Rutland Rated Investments
Millbrook 2007-1 (41) Notes A- A+
Rutland Rated Investments
TABX (50) Series 50 AA+ AAA
Series 2007-1 Federation A-1 Segregated
Portfolio of Securitized Product of
Restructured Collateral Limited SPC A-1 AA AAA
Series 2007-1 Federation A-1 Segregated
Portfolio of Securitized Product of
Restructured Collateral Limited SPC A-2 BBB+ A+
Series 2007-1 TABXSPOKE Segregated
Portfolio A AA+ AAA
SPGS SPC, acting for the account of
ABSpoke 2005-XII B Segregated Portfolio
2006-IIC Var Notes BBB+ A-
SPGS SPC, acting for the account of
ABSpoke 2005-XII B Segregated Portfolio
Jackson 2006-IIA Notes BBB BBB+
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-IA Notes AA AAA
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-I Notes AA+ AAA/Watch
Neg
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-II Notes A+ AA
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-III Notes A+ AA-
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-IV Notes A- A
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-V Notes BBB- BBB
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-VI A BBB- BBB
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-VII A-1 A+ AA-
SPGS SPC, acting for the account of
ABSpoke 2006-IA Segregated Portfolio
2006-VII A-2 A- A
Structured Investments Corporation III
Series 2007-2 Laguna Seca Notes 2007-2 BBB/Watch Neg BBB
UBS AG (Jersey Branch) 4344 Notes B BB-
USP SPC Jackson 2006-IIA Notes BBB BBB+
USP SPC Jackson 2006-III Notes BBB BBB+
USP SPC Jackson 2006-V Notes B+ BB-
USP SPC acting for the account of
Jackson 2006-II Segregated Portfolio
Jackson 2006-II Notes BBB BBB+
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent Chapter 11 cases filed with assets and liabilities below
$1,000,000:
In Re Jose A. Funes
Bankr. N.D. Calif. Case No. 07-53303
Chapter 11 Petition filed October 16, 2007
See http://bankrupt.com/misc/canb07-53303.pdf
In Re Lawn One, L.L.C.
Bankr. E.D. Ark. Case No. 07-15753
Chapter 11 Petition filed October 17, 2007
See http://bankrupt.com/misc/akeb071-5753.pdf
In Re Raymond William Sherwood
Bankr. D. Idaho Case No. 07-01619
Chapter 11 Petition filed October 17, 2007
See http://bankrupt.com/misc/idb07-01619.pdf
In Re Rancho Esquilago Estates, L.L.C.
Bankr. S.D. Calif. Case No. 07-05861
Chapter 11 Petition filed October 17, 2007
Filed as Pro Se
In Re Marguerite Holliday
Bankr. E.D. N.Y. Case No. 07-74128
Chapter 11 Petition filed October 17, 2007
Filed as Pro Se
In Re El Mariachi L.L.C.
Bankr. D. Conn. Case No. 07-32407
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/ctb07-32407.pdf
In Re Gary L. Gray
Bankr. N.D. Ill. Case No. 07-19255
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/ilnb07-19255.pdf
In Re Three Pols, L.L.C.
Bankr. D. Md. Case No. 07-20251
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/mdb07-20251.pdf
In Re D.K.A. Land Co., Inc.
Bankr. S.D. Miss. Case No. 07-03339
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/mssb07-03339.pdf
In Re Robert A. McCann
Bankr. W.D. Penn. Case No. 07-26538
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/pawb07-26538.pdf
In Re Latin American Roller Co.
Bankr. D. P.R. Case No. 07-06101
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/prb07-06101.pdf
In Re Springs Ranch, L.L.C.
Bankr. E.D. Calif. Case No. 07-28711
Chapter 11 Petition filed October 18, 2007
Filed as Pro Se
In Re Ricardo Emilio Mejia Santos
Bankr. D. P.R. Case No. 07-06074
Chapter 11 Petition filed October 18, 2007
Filed as Pro Se
In Re Timber Ridge, Inc.
Bankr. E.D. Tenn. Case No. 07-51472
Chapter 11 Petition filed October 18, 2007
See http://bankrupt.com/misc/tneb07-51472.pdf
In Re Western Photographic Service
Bankr. C.D. Calif. Case No. 07-13431
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/cacb07-13431.pdf
In Re Doyle David Moore
Bankr. E.D. Ky. Case No. 07-70488
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/kyeb07-70488.pdf
In Re Wilkerson Management, Inc.
Bankr. W.D. La. Case No. 07-51256
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/lawb07-51256.pdf
In Re Wendell Lee Tate
Bankr. M.D. Tenn. Case No. 07-07753
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/tnmb07-07753.pdf
In Re Jannetta Wells Company, Inc.
Bankr. E.D. Tex. Case No. 07-42423
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/txeb07-42423.pdf
In Re D.A.R. Inc.
Bankr. W.D. Wis. Case No. 07-14130
Chapter 11 Petition filed October 19, 2007
See http://bankrupt.com/misc/wiwb07-14130.pdf
In Re Roger's Borderwalk, Inc.
Bankr. N.D. N.Y. Case No. 07-12833
Chapter 11 Petition filed October 21, 2007
See http://bankrupt.com/misc/nynb07-12833.pdf
In Re Edward E. Nicholson
Bankr. N.D. Tex. Case No. 07-44608
Chapter 11 Petition filed October 21, 2007
See http://bankrupt.com/misc/txnb07-44608.pdf
In Re Brian Lombardino
Bankr. N.D. Ala. Case No. 07-82809
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/alnb07-82809.pdf
In Re P.G. Foods, L.L.C.
Bankr. D. Md. Case No. 07-20360
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/mdb07-20360.pdf
In Re Dida Sood Ganjoo
Bankr. D. Md. Case No. 07-20361
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/mdb07-20361.pdf
In Re Tech Electric of Minnesota, Inc.
Bankr. D. Minn. Case No. 07-33955
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/mnb07-33955.pdf
In Re Reese-Brooks Hospitality Industries, L.L.C.
Bankr. D. Minn. Case No. 07-33958
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/mnb07-33958.pdf
In Re Todd Sexton
Bankr. N.D. Oklahoma Case No. 07-12052
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/oknb07-12052.pdf
In Re 1147 Madison Avenue
Bankr. D. Conn. Case No. 07-50631
Chapter 11 Petition filed October 22, 2007
Filed as Pro Se
In Re Thomas Robert Sauer
Bankr. W.D. Penn. Case No. 07-26631
Chapter 11 Petition filed October 22, 2007
Filed as Pro Se
In Re LaTonija Monique Brown
Bankr. C.D. Calif. Case No. 07-16625
Chapter 11 Petition filed October 22, 2007
Filed as Pro Se
In Re I Liad Real Estate Group, L.L.C.
Bankr. S.D. Ind. Case No. 07-10347
Chapter 11 Petition filed October 22, 2007
Filed as Pro Se
In Re Couture Home, Inc.
Bankr. E.D. Va. Case No. 07-13073
Chapter 11 Petition filed October 22, 2007
See http://bankrupt.com/misc/vaeb07-13073.pdf
In Re Alicia R. Poquiz
Bankr. N.D. Calif. Case No. 07-43522
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/canb07-43522.pdf
In Re Giannoula Fusco
Bankr. D. Conn. Case No. 07-32446
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/ctb07-32446.pdf
In Re Best Window and Screen, Inc.
Bankr. S.D. Fla. Case No. 07-19030
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/flsb07-19030.pdf
In Re South Dixie Transport, Inc.
Bankr. S.D. Florida Case No. 07-18982
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/flsb07-18982.pdf
In Re Kisumbi Development, L.L.C.
Bankr. D. Md. Case No. 07-20410
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/mdb07-20410.pdf
In Re Funny Bone Comedy Club of Boise, L.L.C.
Bankr. E.D. Mo. Case No. 07-47017
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/mieb07-47017.pdf
In Re WiseWiz, L.L.C.
Bankr. S.D. N.Y. Case No. 07-13342
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/nysb07-13342.pdf
In Re J.H.M. Properties II, L.L.C.
Bankr. D. Ore. Case No. 07-34296
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/orb07-34296.pdf
In Re National Fulfillment, Inc.
Bankr. M.D. Tenn. Case No. 07-07844
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/tnmb07-07844.pdf
In Re Diamond Signs Wholesale, Inc.
Bankr. N.D. Tex. Case No. 07-35166
Chapter 11 Petition filed October 23, 2007
See http://bankrupt.com/misc/txnb07-35166.pdf
*********
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 ***