/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071030.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 30, 2007, Vol. 11, No. 257 Headlines ADAPTEC INC: Inks Settlement Agreement with Steel Partners AEGIS MORTGAGE: Taps Johnson Associates as Compensation Advisor AGILENT TECHNOLOGIES: Prices $600 Million of Senior Notes Offering ARINC INC: Credit Deterioration Cues S&P to Lower Rating to B ARLO VI: Moody's Reviews Ratings on 17 Notes and May Downgrade BANKALTANTIC BANCORP: Fitch Lowers Issuer Default Rating to BB BANC OF AMERICA: Fitch Cuts Rating on $5.9 Mil. Certificates to C BANC OF AMERICA: Fitch Junks Rating on Class-X-B-5 Certificates BANC OF AMERICA: Moody's Rates $38.8 Mil. Class L Certs. at Ba1 BFC SILVERTON: Moody's Junks Ratings on Two Note Classes BIOVAIL CORP: Moody's Withdraws Ba3 Corporate Family Rating CAMBER 6: Moody's Junks Rating on Mezzanine Credit Swap Notes CHERRY CREEK: Moody's Lowers Rating on Class B Notes to B2 CMS ENERGY: Paying Quarterly Dividends on Common & Preferred Stock COTT CORP: Posts $5.8 Mil. Net Loss in Quarter Ended Sept. 29 COUNTRYWIDE FINANCIAL: Posts $1.2 Billion Net Loss in 3rd Quarter COVENTRY HEALTH: Earns $168.7 Million in Quarter Ended Sept. 30 DAVID HONSE: Case Summary & Six Largest Unsecured Creditors DON QUIXOTE: Case Summary & 20 Largest Unsecured Creditors EMC MORTGAGE: Fitch Cuts Ratings on Two Cert. Classes to Low-B FEDDERS CORP: Notification Protocols for Securities Trading Okayed FIDELITY NATIONAL: Fitch Places Issuer Default Rating at BB FORD MOTOR: UAW Talks Intensifies After Chrysler Ratifies Pact FORSTER DRILLING: Posts $1.7 Mil. Net Loss in Qtr. Ended Aug. 31 FREEPORT-MCMORAN: Fitch Lifts Issuer Default Rating to BB+ GE COMMERCIAL: Fitch Affirms Low-B Ratings on Five Certificates GEMSTONE CDO: Moody's Junks Rating on $10.1 Mil. Class E Notes GEMSTONE CDO: Moody's Reviews Ba2 Rating on Class E Notes GMAC COMMERCIAL: Fitch Junks Ratings on Two Cert. Classes GREENBELT CT: Wants to Reject Gaithersburg Lease Pact w/ Guardian GREGG WARD: Case Summary & 19 Largest Unsecured Creditors HALO TECH: Court Okays Retention of Wallman as Special Counsel HALO TECH: Court Okays Retention of Del Conte Hyde as Accountant HARBOURVIEW CLO: Notes Redemption Cues S&P to Withdraw Ratings HARBORVIEW MORTGAGE: Fitch Junks Ratings on Two. Cert. Classes HARMAN INT'L: Earns $36.5 Million in 1st Quarter Ended Sept. 30 HEALTH MANAGEMENT: Earns $30.5 Million in Quarter Ended Sept. 30 HORIZON LINES: Earns $1.6 Million in Third Quarter Ended Sept. 23 HYDRO SPA: Committee Wants to Employ Foley & Lardner as Counsel HYDRO SPA: Court OKs GlassRatner as Committee's Financial Advisors HYDRO SPA: Wants to Hire Oscher Consulting as Forensic Accountants INDEPENDENCE VII: Moody's Junks Ratings on Two Note Classes ENERGY AND INDUSTRIAL: S&P Rates $375 Million Term Loan at BB INDYMAC BANK: Fitch Junks Ratings on Two Certificate Classes IVY LANE: Moody's Cuts $25 Mil. Class C Notes' Rating to B2 IXIS ABS: Moody's Cuts Ratings on Two Note Classes to Low-B JOPINDAR HARIKA: Voluntary Chapter 11 Case Summary JORGE NEUKIRCHEN: Case Summary & 12 Largest Unsecured Creditors KENT FUNDING: Moody's Reviews Ba1 Rating on Class E Notes KITTY HAWK: To Cease Scheduled Network Air & Ground Operations KLEROS REAL: Moody's Cuts $26 Mil. Class D Notes' Rating to B1 KLEROS REAL: Moody's Junks Rating on $15 Mil. Class E Notes LA PALOMA: Weak Performance Prompts S&P's Rating Downgrade to B+ LEBARON DRYWALL: Wants Exclusive Plan-Filing Period Set to Nov. 12 LEXINGTON CAPITAL: Moody's Reviews Ratings and May Downgrade LIBERTAS PREFERRED: Moody's Reviews Ba1 Rating on Class G Notes LINEAR TECH: Sept. 30 Balance Sheet Upside-Down by $1.97 Billion LONGSHORE CDO: Moody's Junks Rating on $7.5MM Preference Shares LONGSHORE CDO: Moody's Reviews Ba2 Rating on $9MM Income Notes LONGSTREET CDO: Moody's Cuts Ratings on Four Notes to Low-B LYNX 2002-1: S&P Affirms Junk Rating on Class D Notes MARCUS WARE: Case Summary & Nine Largest Unsecured Creditors MASTEC INC: Inks $12.6 Million Wage and Hour Lawsuit Settlement MERCURY CDO: Moody's Cuts Rating on $10MM Class D Notes to Ba3 MIDORI CDO: Moody's Reviews Ratings and May Downgrade MKP CBO: Moody's Junks Ratings on Two Note Classes ML-CFC COMMERCIAL: S&P Puts Low-B Ratings on Six Cert. Classes MONTAUK POINT: Moody's Lowers Ratings on Two Notes to Low-B MONTAUK POINT: Moody's Reviews Ba1 Rating on $4MM Class G Notes MONTROSE HARBOR: Moody's Junks Ratings on Two Note Classes MORGAN STANLEY: Fitch Holds Low-B Ratings on Three Certificates MOVIE GALLERY: Notified by Ernst & Young of Accounting Issues MOVIE GALLERY: Wants to Restrict Equity Trades to Protect NOLs N-45 FIRST: Fitch Holds BB+ Rating on CDN$3.7 Mil. Class E Notes NORTH COVE: Moody's Cuts Ratings on Two Note Classes to Low-B OCEAN DOVE: Atlantic Oceanfront Inn to Be Sold for $400,000 ONE TWO: Case Summary & 20 Largest Unsecured Creditors OTTIMO FUNDING: S&P Junks Rating on Extendible CP Notes POPE & TALBOT: Files for Protection Under CCAA PRIVA INC: Court Approves Sale of Assets to Fiberlinks Textiles RALEYS TOWN: Case Summary & Six Largest Unsecured Creditors REGENCY ENERGY: Seeks Candidates for Independent Director Posts RESIDENTIAL ACCREDITED: Fitch Takes Rating Actions on 10 Deals RIDGEWAY COURT: Moody's Cuts Class C Notes' Rating to Ba3 RIVIERA TOOL: Secured Lender Forecloses All Assets and Rights RSC HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $73.2 Million SAIL DEALS: Moody's Takes Rating Actions on 21 Certificates SALEM CAPITAL: Case Summary & 14 Largest Unsecured Creditors SALOMON BROTHERS: Moody's Holds Caa2 Rating on Class N Certs. SANTA FE: S&P Lowers Bond's Rating to BB and Says Outlook is Neg. SCO Group: Court OKs $36 Million Sale of Unix to JGD Management SEAGATE TECHNOLOGY: Earns $355 Million in Quarter Ended Sept. 28 SHAW COMMS: Earns CDN$136 Million in 4th Quarter Ended Aug. 31 SOLAR TRUST: Moody's Affirms Low-B Ratings on Four Certificates SPECTRX INC: June 30 Balance Sheet Upside-Down by $2.7 Million STARWOOD HOTELS: Earns $129 Million in 3rd Qtr. Ended Sept. 30 STATIC RESIDENTIAL: Moody's Junks Ratings on Two Note Classes STELCO INC: Shareholders Approve Acquisition by U.S. Steel STEVEN DUDLEY: Case Summary & 20 Largest Unsecured Creditors SWEET TRADITIONS: Court Gives Final Nod on $700,000 DIP Financing TEPPCO PARTNERS: Earns $47.6 Million in 3rd Quarter Ended Sept. 30 TESORO CORP: Tender Offering Cues Moody's Developing Outlook TORO ABS: Moody's Cuts Ratings on Two Note Classes to Low-B TRIAD FINANCIAL: Moody's Reviews Ratings and May Downgrade US CMBS: Fitch Takes Rating Actions on Small Balance Bonds VERTICAL ABS: Moody's Lowers Rating on Class B Notes to Ba2 VISTA HOSPITAL: Plan Admin. Wants to Make Final Distribution VISTA HOSPITAL: Plan Administrator Wants Escrow Funds Released WELLS FARGO: Fitch Holds and Cuts Ratings on $81.7 Mil. Certs. WEST TRADE: Moody's Cuts Ratings on Two Note Classes to Low-B WHEELING-PITTSBURGH: Esmark Merger Consideration Set on Nov. 27 WHITLATCH & CO: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7 WILD WEST: Can Borrow Up to $200,000 from Bank Lender's DIP Fund WILD WEST: Obtains Court Approval to Hire Rides-4-U as Broker WILTON PRODUCTS: S&P Holds 'B-' Corporate Credit Rating * Howard Brod Brownstein Joins National Philanthropic's Board * Moody's Lowers Ratings on 31 Credit Linked Notes * S&P Lowers Ratings on 377 Classes of NIM Securities * Large Companies with Insolvent Balance Sheets ********* ADAPTEC INC: Inks Settlement Agreement with Steel Partners ---------------------------------------------------------- Adaptec Inc. and Steel Partners II L.P. have entered into a settlement agreement. Under the terms of the settlement, the company has agreed to nominate and solicit proxies for three Steel Partners representatives for election at its upcoming 2007 Annual Meeting of Stockholders on Dec. 13, 2007, to join what will become a nine-member board. Steel Partners has agreed to withdraw its preliminary proxy statement containing its opposing slate of nominees and to end its proxy solicitation. The company agreed to expand its board of directors from eight to nine members. Current directors Judith M. O'Brien and Charles J. Robel will not stand for re-election. Upon election at the annual meeting, Steel Partners' nominees: (i) John Mutch will be appointed to the company's audit committee; (ii) John J. Quicke will be appointed to the compensation committee; and (iii) Jack L. Howard will be appointed to the nominating and governance committee. "We are pleased to reach an agreement with Steel Partners that allows us to work together to deliver value to the company's stockholders, while continuing to provide quality solutions to its customers," S. "Sundi" Sundaresh, president and CEO of Adaptec, said. "We want to thank Charles and Judith for their expertise and dedication while serving on Adaptec's board of directors until the stockholder meeting." "We are delighted to have reached a settlement with Adaptec on these important matters, Jack Howard stated. "We look forward to working together with Sundi and the rest of the board to increase value for all stockholders." About Steel Partners II L.P. Headquartered in New York, Steel Partners II L.P. is a private investment partnership. The company owns approximately 15% of Adaptec Inc.'s outstanding shares. About Adaptec Inc. Based in Milpitas, California, Adaptec Inc. (NASDAQ: ADPT) -- http://www.adaptec.com/-- provides storage solutions that move, manage, and protect critical data and digital content. Adaptec's software and hardware-based solutions are delivered through Original Equipment Manufacturers and channel partners to provide storage connectivity, data protection, and networked storage to enterprises, government organizations, medium and small businesses worldwide. * * * Moody's Investor Services placed Adaptec Inc.'s long term corporate family rating at 'B1' and equity linked rating at 'B3' in April 2001. The ratings still hold to date with a negative outlook. AEGIS MORTGAGE: Taps Johnson Associates as Compensation Advisor --------------------------------------------------------------- Aegis Mortgage Corp. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Johnson Associates, Inc., as compensation advisor nunc pro tunc to Oct. 5, 2007. The Debtors say that JAI will perform the advisory and other services in connection with their proposal to implement an incentive plan for employees. As previously reported, to motivate the employees whose services are necessary to achieve their objectives of selling or returning $595 million in mortgage loans, and transfer rights to service loans of approximately $3.6 billion, the Debtors structured an incentive plan, under which the participating employees will only be paid if they meet the objective and certain benchmarks. In that light, the Debtors have tasked JAI to: (a) perform an analysis of the proposed incentive plan; (b) provide expert testimony, at one or more depositions and hearings related to the cases regarding the incentive plan, and any modifications to the plan; and (c) other advisory services that the Debtors may deem necessary. JAI will be paid on an hourly basis, plus reimbursement of actual expenses and other charges incurred by the firm. The professionals who will provide the services and their rates are: Professional Hourly Rate ------------ ----------- Jeff Visithpanich $300 Alan Johnson $575 Staff and Associates $155 to $300 Jeff Visithpanich, principal of JAI, in New York, assures the Court that the firm is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Court. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119). Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsels to the Debtors. According to schedules filed with the Court, the Debtors have total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan expires on Dec. 11, 2007. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its lead counsel and Landis Rath & Cobb LLP as its Delaware counsel. Aegis Bankruptcy News, Issue No. 9, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AGILENT TECHNOLOGIES: Prices $600 Million of Senior Notes Offering ------------------------------------------------------------------ Agilent Technologies Inc. disclosed the pricing of its senior notes in an aggregate principal amount of $600 million, in an underwritten, registered public offering. The senior notes will mature in November 2017 and will bear interest at an annual rate of 6.5%. The offering closed on Oct. 29, 2007, subject to customary closing conditions. Agilent intends to use the net proceeds from the offering for general corporate purposes, which may include repurchases of its outstanding shares of common stock, acquisitions, working capital and capital expenditures. Citi Markets & Banking and J.P. Morgan Securities Inc. acted as joint lead book-running managers for the offering. Banc of America Securities LLC, Credit Suisse, Lehman Brothers and Utendahl Capital Markets L.P. acted as co-managers. Copies of the prospectus supplement and the accompanying prospectus relating to the offering can be obtained from: Citigroup Global Markets Inc. Prospectus Department Brooklyn Army Terminal 140 58th Street, 8th Floor Brooklyn, NY 11220 Telephone +1 877 858 5407 and J. P. Morgan Securities Inc. Attn: Investment Grade Syndicate Desk 270 Park Avenue New York, NY 10017 Telephone +1 212 834 4533 Based in Santa Clara, California, Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/-- is a measurement company serving communications, electronics, life sciences and chemical analysis industries. The company's 19,000 employees serve customers in more than 110 countries. * * * As reported in the Troubled Company Reporter on Oct. 26, 2007, Moody's Investors Service assigned a Ba1 rating to Agilent Technologies, Inc.'s proposed offering of $500 million senior notes due 2017 and affirmed its existing ratings and stable outlook. ARINC INC: Credit Deterioration Cues S&P to Lower Rating to B ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on ARINC Inc., including lowering the corporate credit rating to 'B' from 'BB'. The ratings are removed from CreditWatch, where they were placed with negative implications on July 5, 2007. The outlook is stable. At the same time, Standard & Poor's withdrew its bank loan and recovery ratings on the company's existing $230 million credit facility, which was repaid. "The three-notch downgrade reflects a significant deterioration in credit protection measures due to the large amount of debt used to finance the just-completed acquisition of ARINC by the Carlyle Group," said Standard & Poor's credit analyst Christopher DeNicolo. The acquisition was financed with proceeds from a new credit facility and equity contributed by Carlyle and management. ARINC was owned mostly by six large U.S. airlines. Although debt to capital will only increase modestly, to about 75% from 70%, because of the sizable equity contribution, S&P expect lease-adjusted debt to EBITDA to increase to 6.5x-7x in the near term from around 3.5x in 2006. Cash flow protection measures will also be much weaker, with funds from operations to debt declining to below 10% from 28% and EBITDA interest coverage falling to 1.5x-2x from 3.6x. S&P expect the company to use modest free cash flows to reduce debt, which should result in a steady improvement in credit protection measures. However, these measures are likely to remain weak for the next few years. The ratings are supported somewhat by the company's leading position in niche markets and adequate profitability and liquidity. Annapolis, Maryland-based ARINC is a leading provider of engineering services to the U.S. military and other government agencies (59% of 2006 revenues), mission-critical communications and IT services to the global aviation industry (24%), and communications and information systems for airports and surface transportation systems (17%). ARINC networks carry global air- ground messages between commercial aircraft and airline operations centers. Other commercial transportation products include airport check-in and boarding systems, flight display and information systems, commuter rail control and information systems, and private digital networks and ground communications systems. Key growth areas include a web-based service for business jet owners to arrange in-flight and ground services and an on-board broadband service for business jets. Leverage will be quite high following the acquisition by Carlyle, but steady demand and acceptable operating performance should result in revenue and earnings growth. Leverage should gradually decline as excess cash flows are used to reduce debt. Nonetheless, credit protection measures will likely remain weak, but appropriate for the rating, for the next few years. Although not likely in the near term, S&P could revise the outlook to positive if debt leverage declines faster than expected. Conversely, S&P could revise the outlook to negative if credit protection measures fail to improve as expected or if leverage increases to fund acquisitions or dividends. ARLO VI: Moody's Reviews Ratings on 17 Notes and May Downgrade -------------------------------------------------------------- Moody's Investors Service placed these notes issued out of the Arlo VI program on review for possible downgrade: Issuer: ARLO VI Limited 2006-3 (SABS) Class Description: -- $ 10,000,000 Initial Tranche Notional Amount Credit Default Swap with Barclays Bank plc Prior Rating: A3 Current Rating: A3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: Issuer: ARLO VI Limited 2006-4 (SABS) Class Description: -- $15,000,000 Variable Secured Limited Recourse Credit- Linked Notes due 2040 Prior Rating: Aa3 Current Rating: Baa1, on review for possible downgrade Issuer: ARLO VI Limited 2006-5 (SABS) Class Description: -- $15,000,000 Variable Secured Limited Recourse Credit- Linked Notes due 2040 Prior Rating: A2 Current Rating: Ba1, on review for possible downgrade Issuer: ARLO VI Limited 2006-6 (SABS) Class Description: -- $10,000,000 Variable Secured Limited Recourse Credit- Linked Notes due 2040 Prior Rating: A3 Current Rating: Ba2, on review for possible downgrade Issuer: ARLO VI Limited Series 2006-8 (SABS) Class Descriptions: -- $10,000,000 Class A Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: A1 Current Rating: B2, on review for possible downgrade -- $12,500,000 Class B Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: Baa2 Current Rating: B3, on review for possible downgrade Issuer: ARLO VI Limited Series 2006-9 (SABS) Class Descriptions: -- $10,000,000 Class A Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: A1 Current Rating: Ba1, on review for possible downgrade -- $12,500,000 Class B Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: A2 Current Rating: Ba3, on review for possible downgrade Issuer: ARLO VI Limited Series 2006-10 (SABS) Class Descriptions: -- $10,000,000 Class A Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: A1 Current Rating: Ba1, on review for possible downgrade -- $12,500,000 Class B Variable Secured Limited Recourse Credit-Linked Notes due 2046 Prior Rating: A2 Current Rating: Ba2, on review for possible downgrade Issuer: Pampelonne Mezz Swap A Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Aa3 Current Rating: B2, on review for possible downgrade Issuer: Pampelonne Mezz Swap B Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Aa3 Current Rating: Baa3, on review for possible downgrade Issuer: Pampelonne Mezz Swap C1 Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Aa3 Current Rating: Ba2, on review for possible downgrade Issuer: Pampelonne Mezz Swap C2 Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: A3 Current Rating: B2, on review for possible downgrade Issuer: Pampelonne Mezz Swap D1 Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Aa3 Current Rating: B3, on review for possible downgrade Issuer: Pampelonne Mezz Swap D2 Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Baa1 Current Rating: Caa1, on review for possible downgrade Issuer: Pampelonne Mezz Swap E Class Description: -- $12,500,000 Initial Tranche Notional Amount Credit Default Swap Prior Rating: Aa3 Current Rating: Baa3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. BANKALTANTIC BANCORP: Fitch Lowers Issuer Default Rating to BB -------------------------------------------------------------- Fitch Ratings downgraded BankAltantic Bancorp. and its subsidiaries. Fitch revised the Rating Outlook to Negative from Stable. -- Issuer Default Rating downgraded to 'BB' from 'BB+'; -- Individual rating downgraded to 'C/D' from 'C'. These ratings of BBX are affirmed: -- Short-term IDR affirmed at 'B'; -- Support Rating affirmed at '5'; -- Support Floor affirmed at 'NF'. The downgrades reflect BBX's continued weak operating performance and the rapid credit deterioration, particularly evident in the sharp rise in NPAs in 3Q07. BBX reported a $29.6 million net loss for the third-quarter driven mainly by the significant rise in provisions, impairment charges to land and margin compression. The company is geographically concentrated in Florida. About 17% of the portfolio is construction and land development, of which 65% has been identified as potentially exposed residential building softness in the local market. Non-performers dramatically rose more than seven-fold to $165.4 million at Sept. 30, 2007 from $21.8 million at June 30, 2007 relating to eleven loans within the land acquisition & development, construction and builder loan portfolios. The NPA ratio rose to 3.74% at Sept. 30, 2007 compared to 0.94% for June 30, 2007. Provision for loan losses increased to $48.9 million compared to $4.9 million in the second-quarter. BBX also recognized a net charge-offs of $11.3 million for the period. In addition, $90 million of classified assets are related to land acquisition & development, construction and builder land loans. The Rating Outlook revision to Negative reflects Fitch's expectation the BBX will continue to experience prolonged earnings and credit pressures given the Outlook for the Florida real estate sector. The holding company maintains sufficient liquidity with $213 million available at Sept. 30, 2007, which covers near and intermediate term obligations by a comfortable margin. The company's capital position remains 'well capitalized' as defined by the regulators, augmented by a considerable level of trust- preferred securities. Fitch downgraded these ratings for BankAtlantic FSB: -- Long-term deposits to downgraded 'BB+' from 'BBB-'; -- IDR downgraded to 'BB' from 'BB+'; -- Short-term deposits downgraded to 'B' from 'F3'; -- Individual downgraded to 'C/D' from 'C'' Fitch affirmed these ratings for BankAtlantic FSB: -- Short-term IDR at 'B'; -- Support Rating at '5'; -- Support Floor at 'NF'. BANC OF AMERICA: Fitch Cuts Rating on $5.9 Mil. Certificates to C ----------------------------------------------------------------- Fitch Ratings downgraded Banc of America Commercial Mortgage Inc.'s commercial mortgage pass-through certificates, series 2001- 1, as: -- $5.9 million class O to 'C/DR6' from 'CCC/DR2'. Fitch also upgraded these class: -- $19 million class G to 'AA' from 'AA-'. Additionally, Fitch affirmed these classes: -- $467.6 million class A-2 at 'AAA'; -- $44.3 million class A-2F at 'AAA'; -- Interest-only class X at 'AAA'; -- $35.6 million class B at 'AAA'; -- $21.3 million class C at 'AAA'; -- $19 million class D at 'AAA'; -- $9.5 million class E at 'AAA'; -- $9.5 million class F at 'AAA'; -- $14.2 million class H at 'A-'; -- $13.3 million class J at 'BBB'; -- $23.5 million class K at 'BB'; -- $2.1 million class L at 'BB-'; -- $5.5 million class M at 'B+'; -- $6.8 million class N at 'B-/DR1'. Fitch does not rate the $4.1 million class P certificates. Class A-1 has paid in full. The downgrades are due to increased loss expectations on the specially serviced loans. The rating upgrade is the result of additional defeasance since Fitch's last rating action. Four loans (15%) have defeased since Fitch's last rating action. As of the October 2007 distribution date, the pool's aggregate balance has decreased 26% to $701.2 million from $948.1 million at issuance. 38 loans (34.4%) have defeased since issuance. Currently, four assets (3.3%) are in special servicing. The two largest specially serviced assets (2.2%) are multi-family properties in Columbia, Missouri and are both current. The properties are suffering cash flow problems and were transferred to special servicing due to imminent default. The third largest specially serviced asset (0.7%) is a retail shopping center in Arabi, Louisiana. The property suffered heavy damage due to Hurricane Katrina. The special servicer is currently marketing the property. Fitch expected losses are anticipated to fully deplete the unrated class P and impact class O. Fitch has designated 19 loans (16.1%) as Fitch Loans of Concern. These include the specially serviced loans and those loans with low cash flow and occupancy. The largest Fitch Loan of Concern, which is the fifth largest loan (2.4%) in the pool, is an office property in Phoenix, Arizona, which has been performing poorly since 2003 due to occupancy issues and a competitive market. The loan remains current, and occupancy has increased to 82% as of year-end 2006 from 69% at YE 2005. 315 Park Avenue South (12.2%), the only shadow rated loan in the transaction, defeased in June 2007. BANC OF AMERICA: Fitch Junks Rating on Class-X-B-5 Certificates --------------------------------------------------------------- Fitch Ratings took these rating actions on Banc of America Funding Corporation mortgage pass-through certificates, series 2006-D: Series 2006-D Group 1: -- Classes 1-A-1 to 1-A-3 affirmed at 'AAA'; -- Class 1-M-1 affirmed at 'AA+'; -- Class 1-M-2, rated 'AA', placed on Rating Watch Negative; -- Class 1-M-3, rated 'A+', placed on Rating Watch Negative; -- Class 1-M-4 downgraded to 'BBB+' from 'A' and placed on Rating Watch Negative; -- Class 1-M-5 downgraded to 'BB' from 'BBB+' and placed on Rating Watch Negative; -- Class 1-M-6 downgraded to 'B' from 'BBB-'. Series 2006-D Groups 2, 3 & 4: -- Classes 2-A-1, 2-A-2, 2-A-R, 3-A-1, 3-A-2 and 4-A-1 to 4- A-4 affirmed at 'AAA'; -- Class X-B-1 affirmed at 'AA'; -- Class X-B-2 affirmed at 'A'; -- Class X-B-3 downgraded to 'BBB-' from 'BBB'; -- Class X-B-4 downgraded to 'B+' from 'BB'; -- Class X-B-5 downgraded to 'C/DR4' from 'B'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect about $612 million in outstanding certificates as of the September 2007 distribution date. The classes downgraded total about $11.4 million and the classes placed on Rating Watch Negative total about $18 million ($6 million of which were also downgraded and are included in the downgrades total). These rating actions reflect the deterioration of CE relative to future expected losses. The underlying collateral in the above pools consists of fully amortizing, adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Wells Fargo Bank N.A., currently rated 'RMS1' by Fitch, is the master servicer for these loans. These pools are 17 months seasoned. The pool factors (i.e., current mortgage loans outstanding as a percentage of the initial pool) are 68% and 86%, respectively, for Group 1 and Groups 2, 3 and 4. For Group 1, the overcollateralization was $1,900,820 versus a target of $2,115,786. The current CE for class 1-M-4 is 1.96% versus the original CE of 1.36%. The current CE for class 1-M-5 is 1.21% versus the original CE of 0.85%. The current CE for class 1-M-6 is 0.47% versus the original CE of 0.35%. The 90+ delinquencies are 11.29% of current collateral balance and included in these are foreclosures of 4.89% and real estate owned of 3.77%. The cumulative loss on this pool is 0.13% of the original collateral balance. For the crossed groups 2, 3 and 4, the current CE for class X-B-3 is 0.76% versus the original CE of 0.65%. The current CE for class X-B-4 is 0.47% versus the original CE of 0.40% and the current CE for class X-B-5 is 0.23% versus the original CE of 0.20%. The 90+ delinquencies are 0.66% of current collateral balance and consist entirely of loans in FC. This pool has not taken any losses so far. BANC OF AMERICA: Moody's Rates $38.8 Mil. Class L Certs. at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to securities issued by Banc of America Large Loan Trust 2007-BMB1. The provisional ratings issued on Oct. 2, 2007 have been replaced with these definitive ratings: -- Class A-1, $734,269,000, Rated Aaa -- Class A-2, $244,757,000, Rated Aaa -- Class A-1A, $406,500,000, Rated Aaa -- Class X, $1,726,512,500*, Rated Aaa -- Class B, $43,163,000, Rated Aa1 -- Class C, $43,163,000, Rated Aa2 -- Class D, $34,530,000, Rated Aa3 -- Class E, $30,214,000, Rated A1 -- Class F, $30,214,000, Rated A2 -- Class G, $30,214,000, Rated A3 -- Class H, $30,214,000, Rated Baa1 -- Class J, $30,214,000, Rated Baa2 -- Class K, $30,214,000, Rated Baa3 -- Class L, $38,846,500, Rated Ba1 -- Class FMH-1, $47,880,000, Rated Aa2 -- Class FMH-2, $45,620,000, Rated A2 * Approximate notional amount BFC SILVERTON: Moody's Junks Ratings on Two Note Classes -------------------------------------------------------- Moody's Investors Service placed these notes issued by BFC Silverton CDO Ltd. on review for possible downgrade: -- Up to $450,000,000 Class A-1 Senior Variable Funding Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- Up to $450,000,000 Class A-2 Senior Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $75,000,000 Class B-1 Senior Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $75,000,000 Class B-2 Senior Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $56,250,000 Class C Senior Floating Rate Notes Due 2046 Prior Rating: Aa2, on review for possible downgrade Current Rating: Ba1, on review for possible downgrade -- $30,000,000 Class D Floating Rate Deferrable Notes Due 2046 Prior Rating: A2, on review for possible downgrade Current Rating: B3, on review for possible downgrade -- $26,250,000 Class E Floating Rate Deferrable Notes Due 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: Caa3, on review for possible downgrade Moody's also announced that it has downgraded these notes: -- $7,500,000 Class F Floating Rate Deferrable Notes Due 2046 Prior Rating: Ba1, on review for possible downgrade Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS assets. BIOVAIL CORP: Moody's Withdraws Ba3 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service withdrew the ratings of Biovail Corporation. Moody's has withdrawn these ratings for Moody's business reasons. Moody's added that the ratings were withdrawn because this issuer has no rated debt outstanding. These ratings of Biovail Corporation have been withdrawn: -- Ba3 Corporate Family Rating -- Ba3 Probability of Default Rating Biovail's debt issues have no Moody's ratings. Biovail Corporation [NYSE:BVF] is a specialty pharmaceutical and drug delivery company involved in the development, manufacturing and commercialization of pharmaceutical products. The company reported about $450 million in revenue for the first six months of 2007. CAMBER 6: Moody's Junks Rating on Mezzanine Credit Swap Notes ------------------------------------------------------------- Moody's Investors Service downgraded and placed these notes issued by Camber 6 (CPIM II) unfunded Tranche on review for possible downgrade: -- Mezzanine Portfolio Credit Default Swap (Sub-Swap II) Prior Rating: Baa2 Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of ABS securities. CHERRY CREEK: Moody's Lowers Rating on Class B Notes to B2 ---------------------------------------------------------- Moody's Investors Service placed these notes issued by Cherry Creek CDO I, Ltd. on review for possible downgrade: -- $25,000,000 Class A2 Senior Floating Rate Notes Due May 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $16,000,000 Class A3 Deferrable Floating Rate Notes Due May 2046 Prior Rating: A2 Current Rating: A2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $16,000,000 Class B Deferrable Floating Rate Notes Due May 2046 Prior Rating: Baa2 on review for possible downgrade Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS assets. CMS ENERGY: Paying Quarterly Dividends on Common & Preferred Stock ------------------------------------------------------------------ The board of directors of CMS Energy has declared quarterly dividends on the company's common stock and its preferred stock. The dividend for the common stock (CUSIP: 125896100) is $0.05 per share. It is payable Nov. 30, 2007, to shareholders of record on Nov. 9, 2007. The dividend for the company's 4.50% cumulative convertible preferred stock, Series B (CUSIP: 125896878) is $0.5625 per share. It is payable Dec. 3, 2007 to shareholders of record on Nov. 15, 2007. Based in Michigan, CMS Energy --http://www.cmsenergy.com/-- (NYSE: CMS) is a company that has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation. * * * Moody's Investor Service placed CMS Energy's senior unsecured debt rating at 'Ba1' in June 2007. The rating still holds to date with a stable outlook. COTT CORP: Posts $5.8 Mil. Net Loss in Quarter Ended Sept. 29 ------------------------------------------------------------- Cott Corporation disclosed results for the third quarter ended Sept. 29, 2007. Net loss in the third quarter was $5.8 million, compared to net income of $6.6 million in the third quarter of 2006. Revenues in the quarter were $464.6 million, down 2.3% from $475.5 million in the third quarter of the prior fiscal year. Excluding the impact of foreign exchange, revenues declined 5% compared to the prior year period. The revenue decline was driven by North America. Third quarter gross margin was 9.8%, compared to 13.0% in the prior year third quarter. The decline was the result of high ingredient and packaging costs in the quarter, which were not offset by sufficient price increases, higher operating costs related to the transition of production out of recently closed plants, and the impact of the voluntary product recall in the U.K. Third quarter volume was 309.9 million eight-ounce equivalent cases, up 0.7% compared to the third quarter of 2006, with international growth being partially offset by declines in North America. The North American volume decline was primarily due to continued softness in the carbonated soft drink segment, the impact of price increases and increased promotional activity by national brands. Also impacting volume was unseasonably wet weather and a voluntary product recall related to the start-up of a second aseptic line, both in the U.K. Restructuring and asset impairment charges for the quarter amounted to $15.1 million pre-tax. This related to the previously announced closure of the plant in Wyomissing, Pennsylvania and office consolidations. "We are disappointed by our performance in the third quarter," Brent Willis, Cott's Chief Executive Officer, said. "As a result, we are focusing our efforts in North America on fewer, more impactful initiatives, including our new water strategy, selected new channel and product opportunities, and pricing actions that should further the North American business unit turnaround and reignite growth." Year-to-Date Performance On a year-to-date basis, volume was flat and revenue was down 1% compared to the same period in the prior year. North American volume and revenue declines were partially offset by gains in the International business unit, where there was continued growth despite operational issues in the U.K. When foreign exchange is excluded, revenue for the first nine months of 2007 declined 3%. Gross margin for the first nine months of 2007 was 11.6% compared to 13.6% in 2006, primarily due to higher ingredient and packaging costs. SG&A expenses decreased in the first nine months of the year to $116.5 million, compared to $129.4 million in the same period last year. Year-to-date operating income was $18.1 million, compared to $42.6 million in the first nine months of the prior year. Restructuring, asset impairments and other charges in the period were $24.4 million due to the Wyomissing plant closure and office consolidations, compared to $15 million in the prior year. Cott recorded an income tax benefit of $8.5 million for the nine months of 2007, compared to a provision of $4.4 million for the nine months of 2006. Net income in the first nine months of the year was $3.7 million, compared to $12.1 million in the first nine months of 2006. At Sept. 29, 2007, the company's balance sheet showed total assets of $1.2 billion and total liabilities of $721.0 million, resulting in a $510.4 million. About Cott Corp. Headquartered in Toronto, Ontario, Cott Corporation (NYSE: COT; TSX: BCB) -- http://www.cott.com/-- is a non-alcoholic beverage company and a retailer brand beverage supplier. The company commercializes its business in over 60 countries worldwide, with its principal markets being the United States, Canada, the United Kingdom and Mexico. Cott markets or supplies over 200 retailer and licensed brands, and company-owned brands including Cott, Royal Crown, Vintage, Vess and So Clear. Its products include carbonated soft drinks, sparkling and flavoured mineral waters, energy drinks, juices, juice drinks and smoothies, ready-to-drink teas, and other non-carbonated beverages. * * * As reported in the Troubled Company Reporter on Oct. 4, 2007, Standard & Poor's Ratings Services revised its CreditWatch implications on beverage provider Cott Corp. to negative from developing. The 'B+' long-term corporate credit rating and 'B-' subordinated debt rating were placed on CreditWatch developing on April 16, 2007, following Cott's decision to explore its possible participation in industry consolidation. The change in the CreditWatch placement results from Cott having made no significant progress in this regard, even though management continues to consider this option. COUNTRYWIDE FINANCIAL: Posts $1.2 Billion Net Loss in 3rd Quarter ----------------------------------------------------------------- Countrywide Financial Corporation reported a net loss of $1.2 billion for the third quarter ended Sept. 30, 2007, compared to net income of $648 million for the third quarter of 2006. "Countrywide's results for the third quarter of 2007 reflect the impact of unprecedented disruptions in the U.S. mortgage market and the global capital markets, as well as continued weakening in the housing market," said Angelo R. Mozilo, chairman and chief executive officer. "However, during the period we also laid the foundation for a return to profitability in the fourth quarter. Countrywide has responded decisively and taken the steps we believe are necessary to address the current challenging market environment. During the quarter, the company stabilized its liquidity, strengthened its capital position, significantly tightened its loan program and underwriting guidelines, and began the process of right-sizing operations for today's lower volume mortgage market. We have accelerated the integration of our mortgage banking operations into Countrywide Bank, a strategy which we believe provides a more stable and reliable funding model to support our core lending business. We believe the steps which we have taken position the company with the necessary capital and liquidity for our operating and growth needs, and will allow us to benefit from opportunities that result from industry consolidation. "The successful integration of our mortgage lending operations into Countrywide Bank and the resulting change in the funding strategy for our core business represents an important paradigm change for the company that will strengthen our business model, and provides the foundation for enhancing our competitiveness and reducing our risks going forward," Mozilo explained. "During September, Bank fundings approached 90% of total fundings. The Bank, which is presently the 3rd largest Federal Savings Bank in the nation, is strongly positioned for this transition with $8.9 billion or 7.3% of total Tier 1 capital at Sept. 30, 2007. Furthermore, the Bank's efficient and scalable deposit franchise is poised for growth from its current level of $60 billion in total deposits, with 150 financial centers open currently and expectations for total financial centers to exceed 200 by year- end." "The company's net loss for the third quarter, our first quarterly loss in 25 years, resulted primarily from three factors: inventory valuation adjustments caused by unprecedented disruption in the capital markets and the abrupt loss in demand for non- agency loans and securities; increased credit costs related to continued deterioration in the housing market; and restructuring charges resulting from Countrywide's expense reduction initiatives," said David Sambol, president and chief operating Officer. "For the most part, management views these charges to be either non-recurring in nature, or to represent significant increases to valuation adjustments for future losses not yet incurred and to reserves. "We view the third quarter of 2007 as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008," Sambol concluded. "Over the longer term, we believe that prospects for the U.S. housing and mortgage markets, as well as for Countrywide, remain very attractive." Significant Third Quarter Issues Inventory Valuation Adjustments During the quarter, disruption in the capital markets caused a severe lack of liquidity for non-agency loans and mortgage-backed securities which resulted in losses on the sale or writedowns of such loans and securities that aggregated to approximately $1.0 billion. Approximately $12 billion of non-agency loans were moved to the company's held-for-investment portfolio after their writedown. Credit-Related Costs Increased estimates of future defaults and charge-offs resulted in significant increases to credit costs during the third quarter of 2007. Higher estimates for future defaults and related losses were attributable to continued deterioration in housing market conditions, worsening delinquency trends, and the significant tightening of available credit which occurred during the third quarter and which is expected to further adversely impact credit performance. The revised expectations relative to future credit losses impacted third quarter results as follows: -- increased loan loss provisions on the HFI portfolio of $934 million, compared to $293 million last quarter and $38 million in the third quarter of 2006. The increase in provision during the quarter primarily relates to additional reserves provided for the company's junior lien home equity and pay option loans in the Banking Operations HFI portfolio. -- impairment of credit-sensitive residuals of $690 million, compared to impairment of $417 million last quarter and recovery of $27 million in the third quarter of 2006. Third quarter 2007 impairment includes $541 million for prime junior lien home equity residuals and $156 million for subprime and related residuals, offset by a recovery of $7 million on prime residual securities. -- increased provision for representations and warranties in the amount of $291 million, compared to $79 million last quarter and $41 million in the third quarter of 2006. This increase relates to increased expectations of future representation and warranty claims on loans sold or securitized resulting from higher levels of expected future defaults. Restructuring Charges Weakness in the housing market and tightening in the mortgage credit market are expected to substantially reduce industry and Countrywide origination volume in 2007 and 2008 relative to earlier volumes. As a result, during the third quarter Countrywide announced a plan to reduce headcount by 10,000 to 12,000 people before the end of 2007 in response to the expected decline in volume. The charge taken in the third quarter of 2007 related to the company's restructuring efforts was $57 million. Approximately $70 million to $90 million of additional restructuring charges will be recorded, primarily in the fourth quarter of 2007. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $209.23 billion in total assets, $193.98 billion in total liabilities, and $15.25 billion in total shareholders' equity. Dividend Declaration Countrywide's Board of Directors declared dividends of $785.42 per share on its Series B preferred stock and $0.15 per common share. The preferred stock dividend is payable on Nov. 15, 2007, and the common stock dividend is payable on Nov. 30, 2007, to common stock shareholders of record on Nov. 13, 2007. Management Outlook Management expects continued weakness in the housing markets in the near-term and absent declining interest rates, lower mortgage market origination volumes are anticipated for the remainder of 2007 and for 2008 as a result. Furthermore, the company expects its credit costs to remain at elevated levels through 2008 as a result of environmental conditions. Despite these expectations of continued industry challenges, management expects the company to be profitable in the fourth quarter of 2007 and in 2008. Longer term, management believes that changes that it has made in this quarter enhance the stability of the company and lessen the risks from further environmental disruptions. Management also believes that many opportunities will present themselves to the company as a result of the market transition taking place, and that the company is well positioned to capitalize on these opportunities. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. Bankruptcy Speculation Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco, raised the possibility that Countrywide might need to seek protection from creditors under chapter 11 in a research report entitled "Liquidity is the Achilles heel" distributed to Merrill Lynch clients. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," Mr. Bruce wrote. With $209 billion in assets and $194 billion in liabilities, Countrywide would be the largest chapter 11 filing in U.S. history by those measures. The company however gave banking customers reassurance that their money was safe. That company cited that it has assets of more than $100 billion; has investment-grade ratings from three major credit rating agencies; and credit woes currently hurting its lending business won't affect federally insured deposits. Countrywide also disclosed that it received a $2 billion strategic equity investment from Bank of America which was completed and funded Aug. 22, 2007. In September 2007, Countrywide completed more than 17,000 loan modifications and is on target to complete nearly 25,000 in 2007, in its ongoing effort to curb foreclosures. COVENTRY HEALTH: Earns $168.7 Million in Quarter Ended Sept. 30 --------------------------------------------------------------- Coventry Health Care Inc. reported operating results for the third quarter ended Sept. 30, 2007. The company reported net earnings of $168.7 million on operating revenues of $2.52 billion for the quarter ended Sept. 30, 2007. This compares with net earnings of $147.5 million on operating revenues of $1.91 billion for the same period last year. "I am pleased to present another quarter of impressive top and bottom line growth from our well-diversified portfolio of businesses," said Dale B. Wolf, chief executive officer of Coventry. "Seeking and seizing organic and acquisition opportunities should enable Coventry to grow operating revenue by more than 25% in 2007 and approaching 30% in 2008. This positions us well for another year of steady and reliable earnings growth in 2008." Third Quarter Highlights * Revenues up 32.1% from the prior year quarter * Commercial group risk organic enrollment growth of 15,000 members * Completed acquisition of certain group health insurance businesses from Mutual of Omaha on July 1, 2007 * Completed acquisition of Florida Health Plan Administrators LLC, owner of Vista Healthplans, on Sept. 10, 2007 * Expanded capacity and improved financing terms of the company's revolving credit facility * Placed $400.0 million of 7-year senior notes at a coupon rate of 6.30% * Successfully renewed participation in the Medicare Part D program resulting in an expected net membership gain in 2008 * Year-to-date GAAP cash flows from operations were $853.3 million, or 193% of net income. For the quarter, cash flows from operations as adjusted for the timing of Medicare-related payments were 258% of net income. At Sept. 30, 2007, the company's consolidated balance sheet showed $7.47 billion in total assets, $4.33 billion in total liabilities, and $3.14 billion in total shareholders' equity. About Coventry Health Headquartered in Bethesda, Maryland, Coventry Health Care Inc. (NYSE: CVH) -- http://www.cvty.com/-- is a diversified national managed healthcare company operating health plans, insurance companies, network rental and workers' compensation services companies. Through its commercial business, individual consumer & government business, and specialty business divisions, Coventry provides a full range of risk and fee-based managed care products and services to a broad cross section of individuals, employer and government-funded groups, government agencies, and other insurance carriers and administrators. * * * As reported in the Troubled Company Reporter on Aug. 24, 2007, Moody's Investors Service assigned a Ba1 senior unsecured debt rating to Coventry Health Care Inc.'s issuance of $300 million of new long term debt. Moody's also assigned a provisional senior unsecured debt rating of (P)Ba1 to Coventry's shelf registration. The outlook on the ratings is stable. DAVID HONSE: Case Summary & Six Largest Unsecured Creditors ----------------------------------------------------------- Debtor: David R. Honse, Esq. Donna M. Honse, Esq. 6620 Cheney Way Gainesville, VA 20155 Bankruptcy Case No.: 07-13200 Chapter 11 Petition Date: October 27, 2007 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Robert R. Weed, Esq. 7900 Sudley Road, Suite 409 Manassas, VA 20109 Tel: (703) 335-7793 Fax: (703) 369-2696 Total Assets: $778,895 Total Debts: $1,115,953 Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fairfax County Value of collateral: $698,549 Federal Credit Union $623,080 4201 Members Way Fairfax, VA 22030 Fairfax County $8,991 Employee Credit Union 4201 Members Way Fairfax, VA 22030 H.S.B.C/R.M.S.T.R. $6,108 P.O. Box 15524 Wilmington, DE 19850 Virginia Department Child $700 Support Enforcement G.E.M.B./J.C.P. $252 A.M.E.X. $149 DON QUIXOTE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Don Quixote Mobile Home Estates, Inc. 10333 Grouse Road El Paso, TX 79924-2725 Bankruptcy Case No.: 07-31341 Type of Business: The Debtor operates residential mobile home sites. Chapter 11 Petition Date: October 26, 2007 Court: Western District of Texas (El Paso) Judge: Leif M. Clark Debtor's Counsel: William F. Davis, Esq. 6709 Academy Northeast, Suite A Albuquerque, NM 87109 Tel: (505) 243-6129 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dream El Paso, L.L.C. loan $417,709 227 Santa Fe Southeast Los Lunas, NM 87031 Mary Fisk loan $236,924 1026 North 600 East Logan, UT 84341-2418 Keith Burns loan $150,000 1936 Curtis Salt Lake City, UT 84121 Lee Wheelhouse loan $136,387 JoAnn C. Whacott loan $67,228 El Paso Electric Co. utilities $28,228 El Paso Water utilities $17,543 Time Warner Cable utilities $9,598 Texas State Awning services $7,566 Quality Parts parts $7,566 Lowe's Companies, Inc. supplies $7,010 Beltran Electrical services $7,000 Lonny Hytrek reimbursement $5,000 for repairs State Farm Insurance insurance $4,737 El Paso Disposal sewer $3,006 Sun City Electric services $2,678 Mobile Home Supply supplies $2,000 A.T.&T. utilities $209 City of El Paso fees $203 Sprint utilities $116 EMC MORTGAGE: Fitch Cuts Ratings on Two Cert. Classes to Low-B -------------------------------------------------------------- Fitch Ratings took action on these EMC Mortgage Loan Trust transactions: Series 2001-A -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B affirmed at 'BBB-'. Series 2003-B -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BBB+' from 'A'; -- Class B downgraded 'B' from 'BBB'. Series 2004-A -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BBB+' from 'A'; -- Class B downgraded to 'BB' from 'BBB'. The aforementioned trusts consist of fixed rate and adjustable rate seasoned fixed rate, first and second liens secured primarily by one- to four-family residential properties, with the exception of a limited number of multifamily properties. The mortgage loans were acquired by EMC Mortgage Corporation from various institutions and include loans which had defaulted in the past and are re-performing or are performing under the provisions of a bankruptcy plan or a forbearance plan, or loans which are performing under the terms of the related original notes or such notes as modified. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect about $76.8 million of outstanding certificates. The classes with negative actions reflect the deterioration in the relationship of CE to future loss expectations and affects about $9.1 million of outstanding certificates. Over the past year, there were several months in which the series 2003-B collateral losses exceeded excess spread resulting in a decrease in the overcollateralization amount. The OC is also decreasing as a percentage which is putting negative pressure on the subordinate bonds. While the OC of Series 2004-A is currently at the target amount, several months prior to step-down and two months after step-down OC was below the target amount. Fitch expects this trend in OC decline to continue. The master servicer for this transaction, EMC Mortgage Corp., is a wholly owned subsidiary of The Bear Stearns Companies Inc. and is rated 'RPS1' for prime, Alt-A, and subprime products, rated 'RSS1' as a special servicer by Fitch, and rated 'RMS3' from master servicing. FEDDERS CORP: Notification Protocols for Securities Trading Okayed ------------------------------------------------------------------ The U. S. Bankruptcy Court for the District of Delaware has approved notification procedures that will enable Fedders Corporation to preserve certain potentially valuable tax attributes. The Court order requires any person or entity that currently is or becomes a Substantial Equityholder of Fedders Corporation securities to file with the Court and also notify the company and the company's Official Committee of Unsecured Creditors. A Substantial Equityholder is any person or entity that beneficially owns or seeks to own at least 1,328,799 shares, or approximately 4.5%, of Fedders common stock. The order also requires Substantial Equityholders to notify the Court, the company and the Committee 15 calendar days prior to selling or otherwise transferring Fedders common stock in order to allow for an objection to any proposed sale or transfer on the grounds such transfer may adversely affect the value of the company's tax loss carryforwards and/or other tax attributes. In addition, the order prohibits any sale or transfer of Fedders preferred shares by shareholders of any size during this time absent further court order. A full-text copy of the order is available for free at http://ResearchArchives.com/t/s?2495 Based in Liberty Corner, New Jersey and founded in 1896, Fedders Corporation (OTC: FJCC) -- http://www.fedders.com/-- manufactures air treatment products, including air conditioners, furnaces, air cleaners and humidifiers for residential, commercial and industrial markets. The company filed for Chapter 11 protection on Aug. 22, 2007 (Bankr. D. Del. Case No. 07-11182). Sixteen debtor-affiliates filed separate chapter 11 petitions. On Aug. 23, 2007, the Court consolidated the cases in Fedders North America's case (Bankr. D. Del. Case No. 07-11176). Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $186.3 million and total debts of $322.0 million. The Official Committee of Unsecured Creditors has selected Brown Rudnick Berlack Israels LLP as its counsel, Greenberg Traurig LLP as its Delaware counsel, and Lowenstein Sandler PC as its special litigation counsel and conflicts counsel. FIDELITY NATIONAL: Fitch Places Issuer Default Rating at BB ----------------------------------------------------------- Following Fidelity National Information Systems Inc.'s announcement of a plan to split the company into two segments, Fitch Ratings will reevaluate Fidelity's Issuer Default Rating and debt ratings once further clarity is available on the final capital structure and operating profile of each entity. Fitch currently rates Fidelity as: -- IDR 'BB'; -- $900 million secured revolving credit facility 'BB+'; -- $2.1 billion secured term loan A 'BB+'; -- $1.6 billion secured term loan B 'BB+'; -- 4.75% senior notes 'BB+'. The senior notes are equally and ratably secured with Fidelity's bank facility. The Rating Outlook is Stable. Fidelity expects to spin-off its Lender Processing segment into a separate public company, subject to final board approval, IRS rulings on the tax-free nature of the spin and other issues. Fitch believes that, based on initial information, both companies following the proposed spin-off would have roughly equivalent leverage (total debt / operating EBITDA) which currently estimates to be 3.5x. Fidelity expects that about $1.6 billion of its secured bank debt will essentially be transferred to the new company at the time of the spin-off although exact details are not yet finalized. Fitch anticipates reevaluating its ratings based on the final operating and financial profile, financial policies and management teams of each entity. FORD MOTOR: UAW Talks Intensifies After Chrysler Ratifies Pact -------------------------------------------------------------- The United Auto Workers union is now intent on labor talks with Ford Motor Company after Chrysler LLC ratified its four-year labor contract with the union over the weekend, several papers report. According to Poornima Gupta of Reuters citing a source familiar with the discussions, Ford and the UAW have reached a new set of terms for a labor contract, cutting thousands of jobs under a buyout program. If Ford could bargain cost savings from the UAW under their new contract, the carmaker is likely change its plans on closing six plants and displacing workers, Dee-Ann Durbin of The Associated Press writes. Sources say that among the Big Three automakers in the U.S., Ford has been slated by the UAW to be last in the line for labor talks because Ford has been struggling financially. At June 30, 2007, the company's balance sheet showed total assets of $279.2 billion, total liabilities of $279.9 billion, and minority interests of $1.2 billion, resulting in a $1.9 billion stockholders' deficit. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on July 30, 2007, Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, Moody's explained that the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. According to the rating agency, Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules, Moody's relates. In June 2007, S&P raised the Issue Rating on Ford's senior secured credit facilities to B+ from B. FORSTER DRILLING: Posts $1.7 Mil. Net Loss in Qtr. Ended Aug. 31 ---------------------------------------------------------------- Forster Drilling Corp. reported a net loss of $1.7 million on total revenues of $2.3 million for the third quarter ended Aug. 31, 2007, compared with a net loss of $2.7 million on total revenues of $1.2 million for the same period ended last year. The company's consolidated balance sheet showed $12.5 million in total assets, $10.4 million in total liabilities, and $2.1 million in total shareholders' equity. The company's consolidated balance sheet at Aug. 31, 2007, also showed strained liquidity with $520,562 in total current assets available to pay $9.0 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?2499 Going Concern Doubt John M. James CPA, in Houston, expressed substantial doubt about Forster Drilling Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Nov. 30, 2006. Mr. James pointed to the company's recurring losses from operations. About Forster Drilling Headquartered in Houston, Forster Drilling Corporation (OTC BB: FODL.OB) -- http://www.forsterdrilling.com/-- is engaged in in the refurbishing land drilling rigs and deploying them for use by oil and natural gas producers. Currently, the company provides contract land drilling services in New Mexico to two different oil and gas company customers. FREEPORT-MCMORAN: Fitch Lifts Issuer Default Rating to BB+ ---------------------------------------------------------- Fitch Ratings upgraded the Issuer Default Rating and debt ratings of Freeport-McMoRan Copper & Gold Inc. and its subsidiary, Phelps Dodge, as: FCX -- IDR to 'BB+' from 'BB'; -- $1 billion secured bank revolver to 'BBB-' from 'BB+'; -- Secured term loan A to 'BBB-' from 'BB+'; -- 6.875% secured notes due 2014 to 'BBB-' from 'BB+'; -- Unsecured notes due 2015 and 2017 to 'BB+' from 'BB'; -- 7% convertible notes due 2011 to 'BB+' from 'BB'; -- Convertible preferred stock to 'BB-' from 'B+'. Phelps Dodge -- 8.75% senior unsecured notes due 2011 to 'BB+' from 'BB'; -- 7.125% senior unsecured debentures due 2027 to 'BB+' from 'BB'; -- 9.50% senior unsecured notes due 2031 to 'BB+' from 'BB'; -- 6.125% senior unsecured notes due 2034 to 'BB+' from 'BB'. In addition, Fitch affirmed these rating on FCX: -- $500 million PT Freeport Indonesia/FCX Secured Bank Revolver at 'BBB-'. The Rating Outlook remains Positive. Fitch expects total debt to be $7.3 billion at year-end given repayment of bank debt through internally generated cash and the proceeds from the sale of its international wire and cable business. Strong metals prices should continue to drive earnings over the next 12-to-18 months resulting in leverage as measured by Total Debt/EBITDA of less than 1x. Fitch expects free cash flow to be more than sufficient to cover dividends and capital spending over the time period. An unexpected downturn in metals prices, a substantial shortfall in production or significant additional debt financing could trigger a downgrade of the ratings and/or Rating Outlook. The ratings reflect FCX's position as the world's second largest copper producer, its diversified operations and strong liquidity as well as the company's exposure to copper prices and its financial leverage. The outlook is for copper producers to continue to benefit from a strong pricing environment over the near term. GE COMMERCIAL: Fitch Affirms Low-B Ratings on Five Certificates --------------------------------------------------------------- Fitch Ratings upgraded GE Commercial Mortgage Corporation, series 2003-C2, as: -- $14.8 million class F to 'AA+' from 'AA'; -- $14.8 million class G to 'AA-'from 'A+'. Fitch also affirmed these classes: -- $17.6 million class A-1 at 'AAA'; -- $165.1 million class A-2 at 'AAA'; -- $54.3 million class A-3 at 'AAA'; -- $406.1 million class A-4 at 'AAA'; -- $271 million class A-1A at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $35.5 million class B at 'AAA'; -- $14.8 million class C at 'AAA'; -- $26.6 million class D at 'AAA'; -- $14.8 million class E at 'AAA'; -- $14.8 million class H at 'A-'; -- $19.2 million class J at 'BBB-'; -- $7.4 million class K at 'BB+'; -- $8.9 million class L at 'BB'; -- $4.4 million class M at 'B+'; -- $7.4 million class N at 'B'; -- $3.0 million class O at 'B-'; -- $2.4 million class BLVD-1 at 'A'; -- $2.5 million class BLVD-2 at 'A-'; -- $4.5 million class BLVD-3 at 'BBB+'; -- $3.5 million class BLVD-4 at 'BBB'; -- $8 million class BLVD-5 at 'BBB-'. Fitch does not rate the $19.3 million class P certificates. The upgrades are due to the defeasance of 12.8% since the last Fitch rating action. As of the October 2007 distribution date, the pool's aggregate certificate balance has decreased 5.6% to $1.14 billion from $1.21 billion at issuance. In total 30 (35%) loans have defeased, including four (14%) of the top 10 loans in the pool. Currently, three assets (1.6%) are in special servicing with losses projected on two (1%); the non-rated class P is sufficient to absorb the projected losses. The largest specially serviced asset (0.8%) is a real-estate owned multifamily property located in Houston, Texas. The special servicer is marketing the property for sale and occupancy as of September 2007 was 93%. The second largest specially serviced loan (0.5%) is an office property in Golden, Colorado. The loan has been corrected and scheduled for return to the master servicer. The third specially serviced loan (0.3%) is secured by a self- storage facility in New Orleans, Louisiana which sustained damage from hurricanes Katrina and Rita. The special servicer is working to stabilize the property. The deal has three shadow-rated loans and they maintain investment grade ratings. DDR Retail Portfolio (6.5%), the largest loan in the pool, and Wellbridge Portfolio (1.9%) have both fully defeased. The Boulevard Mall (5.8%) is secured by a 1.2 million sf regional mall in Las Vegas, Nevada, of which 587,170 sf represents collateral. The A note has been divided into two pari-passu notes, A-1 ($45.1 million) in this trust and A-2, which is securitized in GMAC 2003-C2. The B-Note, a $21 million non-pooled portion of the loan, is also in this trust and collateralizes classes BLVD-1 through BLVD-5. Total occupancy was 98.6% as of June 2007, up from 92.6% at issuance. GEMSTONE CDO: Moody's Junks Rating on $10.1 Mil. Class E Notes -------------------------------------------------------------- Moody's Investors Service placed these notes issued by Gemstone CDO V Ltd on review for possible downgrade: -- $152,200,000 Class A-2 Floating Rate Notes Due September 2046 Prior Rating: Aaa Current Rating: Aaa (on review for possible downgrade) -- $61,000,000 Class A-3 Floating Rate Notes Due September 2046 Prior Rating: Aaa Current Rating: Aaa (on review for possible downgrade) -- $50,000,000 Class A-4 Floating Rate Notes Due September 2046 Prior Rating: Aaa Current Rating: Aaa (on review for possible downgrade) In addition, Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $67,500,000 Class B Floating Rate notes Due September 2046 Prior Rating: Aa2 Current Rating: A2 (on review for possible downgrade) -- $21,700,000 Class C Floating Rate Deferrable Interest Notes Due September 2046 Prior Rating: A2 Current Rating: Ba3 (on review for possible downgrade) -- $37,400,000 Class D Floating Rate Deferrable Interest Notes September 2046 Prior Rating: Baa2 Current Rating: B3 (on review for possible downgrade) -- $10,100,000 Class E Floating Rate Deferrable Interest Notes September 2046 Prior Rating: Ba2 Current Rating: Caa3 (on review for possible downgrade) According to Moody's, the rating action reflects the deterioration in the credit quality of the transaction's underlying reference portfolio, consisting primarily of structured finance securities. GEMSTONE CDO: Moody's Reviews Ba2 Rating on Class E Notes --------------------------------------------------------- Moody's Investors Service placed these classes of notes issued by Gemstone CDO IV Ltd., on review for possible downgrade: -- Class A-3 Floating Rate Notes Due February 2041 Prior Rating: Aaa Current Rating: Aaa (on review for possible downgrade) -- Class B Floating Rate Notes Due February 2041 Prior Rating: Aa2 Current Rating: Aa2 (on review for possible downgrade) -- Class C Floating Rate Deferrable Interest Notes Due February 2041 Prior Rating: A2 Current Rating: A2 (on review for possible downgrade) -- Class D Floating Rate Deferrable Interest Notes February 2041 Prior Rating: Baa2 Current Rating: Baa2 (on review for possible downgrade) -- Class E Floating Rate Deferrable Interest Notes February 2041 Prior Rating: Ba2 Current Rating: Ba2 (on review for possible downgrade) According to Moody's, the rating action reflects the deterioration in the credit quality of the transaction's underlying reference portfolio, consisting primarily of structured finance securities. GMAC COMMERCIAL: Fitch Junks Ratings on Two Cert. Classes --------------------------------------------------------- Fitch Ratings downgraded and assigned distressed recovery ratings to GMAC's Commercial Mortgage Securities Inc.'s commercial mortgage pass-through certificates, series 1998-C1 as: -- $25.2 million class H to 'BB-' from 'BB+'; -- $14.4 million class J to 'B' from 'BB-'; -- $25.2 million class K to 'CCC/DR3' from 'B-' Rating Watch Evolving; -- $14.4 million class L to 'C/DR6' from 'CCC/DR2', Fitch also affirms these classes: -- $191.9 million class A-2 'AAA'; -- $28.8 million class B at 'AAA'; -- $64.7 million class C at 'AAA'; -- $75.5 million class D at 'AAA'. -- $68.3 million class E at 'AAA'; -- Interest only class X at 'AAA'; -- $43.1 million class F at 'A-'; -- $32.4 million class G at 'BBB'; Classes F, G, H, J, and K have also been removed from Rating Watch Evolving. The $10.8 million class M remains 'C/DR6'. Fitch does not rate the $8.1 million class N certificates. The downgrades of classes H, J, L, and K are the result of expected losses from the transactions' specially serviced loan, Senior Living Properties loan. The loan currently represents 30% of the outstanding transaction balance and is scheduled to mature in February 2008. As of the October 2007 distribution date, the pool's aggregate certificate balance has decreased 58.9% to $602.6.8 million from $1.438 billion at issuance. Of the original 181 loans, 81 remain outstanding in the pool, including 16 defeased loans (16.2%). The largest loan (22%) in the transaction, SLP is current and remains in special servicing. The borrowers filed for bankruptcy protection in May 2002. The loan was modified during bankruptcy to allow for the sale or refinance of the properties with the sale proceeds applied to the paydown the loan. The remaining collateral for the loan is 48 healthcare properties in Texas. The loan is also backed by a surety bond, which has been guaranteed by Centre Reinsurance. The surety bond will continue to make debt service payments until the loan's maturity in February 2008. The new management team installed in early 2006 has stabilized operations but has not returned the portfolio's performance to historic levels. Occupancy remains low, at slightly less than 60%. Fitch's loss expectations are based on the remaining proceeds of the surety bond and recent valuations of the remaining assets. Fitch expects classes M, N, and L to be depleted upon liquidation of the loan. GREENBELT CT: Wants to Reject Gaithersburg Lease Pact w/ Guardian ----------------------------------------------------------------- Greenbelt CT Imaging Center LLC asks the United States Bankruptcy Court for the District of Maryland for authority to reject its lease agreement with Guardian Realty Management Inc., effective as of Oct. 22, 2007, pursuant to Section 365 of the Bankruptcy Code. The Debtor is a party to a lease dated May 23, 2006, with Guardian Realty with respect to certain real property at 702 Russell Avenue, Gaithersburg, Maryland. The Debtor told the Court that it had leased the property with the intention of operating a facility out of the Gaithersburg location, but never installed imaging equipment and never took possession of the premises. The Debtor also told the Court that due to certain recent and unexpected changes in Medicare and private insurance reimbursement rates, the Debtor had ceased operations in three of its present locations and abandoned efforts to commence operations in the Gaithersburg location and a second other location. After a review of its executory contracts and leases, Debtor relates that it has determined that the rejection of the Gaithersburg lease is in the best interest of the Debtor and its estate and that the premises are not necessary for the Debtor's on-going business operations. Greenbelt, Maryland-based Greenbelt C.T. Imaging Center LLC provides medical laboratory and diagnostic services including computer tomography imaging and positron emission tomography. The Debtor filed for chapter 11 protection on Sept. 16, 2007 (Bankr. D. Md. Case No. 07-18958). Karen H. Moore, Esq. Paley, Rothman, Goldstein, Rosenberg, Eig & Cooper, Chartered represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for bankruptcy, it listed estimated assets and debts between $1 million to $100 million. GREGG WARD: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Gregg S Ward 5212 Vista De Olmo San Clemente, CA 92673 Bankruptcy Case No.: 07-13487 Chapter 11 Petition Date: October 23, 2007 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Christian M. Dillon, Esq. P.O.Box 3656 Dana Point, CA 92629 Tel: (949) 496-3933 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Litton Loan Servicing Deed of trust $532,000 Attn: Customer Care 4828 Loop Central Drive Value: Houston, TX 77081 $525,000 Net unsecured: $7,000 First Franklin 2nd deed of trust $200,000 P.O. Box 1838 Pittsburgh, PA 15230 Value: $900,000 Net unsecured: $140,000 Priority liens exist Norma Thompson Promissory note $80,000 17403 Vinwood Lane Yorba Linda, CA 92886 Orange County Tax Collector Property taxes $22,227 American Express Credit card $16,250 purchases IndyMac Bank Promissory note $12,000 Delia Delgado Judgment lien $11,000 Forster Highlands Comm Assn hoa dues $6,000 Paul Mcdonell Property taxes $4,941 TriLogy @ La Quinta HOA hoa dues $4,500 Capital One Credit card $4,400 purchases JC Penny Credit card $2,000 purchases Levitz Credit purchases $2,000 Bank of America Credit card $1,650 purchases Home Shopping Network Credit purchases $1,500 Wells Fargo Financial Bank Credit purchases $1,400 Orchard Credit purchases $1,000 Pay Pal Credit purchases $600 HSBC Credit card $550 purchases HALO TECH: Court Okays Retention of Wallman as Special Counsel -------------------------------------------------------------- The United States Bankruptcy Court for the District of Connecticut gave authority to Halo Technology Holdings Inc. and its debtor- affiliates to employ Wallman Law Firm LLC as their special litigation counsel. As reported in the Troubled Company Reporter on Oct. 16, 2007, the firm will perform services in connection with litigation matters including the case Halo Technology Holdings Inc. versus Randall Cooper et als pending in the U.S. District Court for the District of Connecticut. The Debtors agreed to pay Wallman's professionals at these rates for their services: Designation Hourly Rates ----------- ------------ Partners $425 Associates $300 The Debtors related that Wallman will also maintain a record of any actual and necessary cost and expenses incurred in connection with the legal services. The Debtors owed the firm approximately $82,000 for services rendered prior to bankruptcy filing. To the best of the Debtors' knowledge, the firm holds no interest adverse to the Debtors or their estates and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Wallman Law Firm LLC 184 Atlantic Street Stamford, CT 06901 Tel: (203) 348-4000 Fax: (203) 406-0587 Greenwich, Connecticut-based Halo Technology Holdings Inc. fka Warp Technology Holdings Inc. -- http://www.haloholdings.com/-- is a holding company whose subsidiaries operate enterprise software and information technology businesses. The company and its affiliates filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Conn. Lead Case No. 07-50480). Lawyers at Zeisler & Zeisler P.C. serve as the Debtors' counsel. The Official Committee of Unsecured Creditors selected the firm Pepe & Hazard LLP as its bankruptcy counsel. At March 31, 2007, the company reported total assets of $47,344,373 and total liabilities of $45,494,297. HALO TECH: Court Okays Retention of Del Conte Hyde as Accountant ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Connecticut gave authority to Halo Technology Holdings Inc. and its debtor- affiliates to employ Del Conte, Hyde, Annello & Schuch P.C. as their accountants. Del Conte Hyde is expected to assist the Debtors in the preparation of schedules, statement of financial affairs, debtor- in-possession operating reports and other requirements of the U.S. Trustee, preference analysis, and reconcilation of claims. As reported in the Troubled Company Reporter on Oct. 12, 2007, the firm's professionals bill: Designation Hourly Rates ----------- ------------ Partner/Director $225 Associates $125 The Debtor related that Del Conte Hyde will also seek reimbursement for actual and necessary out-of-pocket expenses in the rendition of its professional services. To the best of the Debtors' knowledge, the firm holds no interest adverse to the Debtors and their estates and is "disinterested" as the term is defined in the Section 101(14)of the Bankruptcy Code. Greenwich, Connecticut-based Halo Technology Holdings Inc. fka Warp Technology Holdings Inc. -- http://www.haloholdings.com/-- is a holding company whose subsidiaries operate enterprise software and information technology businesses. The company and its affiliates filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Conn. Lead Case No. 07-50480). Lawyers at Zeisler & Zeisler P.C. serve as the Debtors' counsel. The Official Committee of Unsecured Creditors selected the firm Pepe & Hazard LLP as its bankruptcy counsel. At March 31, 2007, the company reported total assets of $47,344,373 and total liabilities of $45,494,297. HARBOURVIEW CLO: Notes Redemption Cues S&P to Withdraw Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on the class A-1, A-2, B-1, B-2, C-1, C-2, D, E-1, E-2, and E-3 notes issued by Harbourview CLO IV Ltd., an arbitrage high-yield CLO transaction originated Jan. 15, 2002. The rating withdrawals follow the optional redemption of the notes pursuant to section 9.1 of the indenture. The redemption took place on the Oct. 25, 2007, payment date. Ratings Withdrawn Harbourview CLO IV Ltd. Rating Balance ------ ------- Class To From Original Current ----- -- ---- ------- ------- A-1 NR AAA $200,500,000 0.00 A-2 NR AAA $50,000,000 0.00 B-1 NR AA- $17,500,000 0.00 B-2 NR AA- $15,000,000 0.00 C-1 NR A- $8,000,000 0.00 C-2 NR A- $7,500,000 0.00 D NR BBB $10,000,000 0.00 E-1 NR BB $8,500,000 0.00 E-2 NR BB $3,000,000 0.00 E-3 NR BB $2,000,000 0.00 NR -- Not rated. HARBORVIEW MORTGAGE: Fitch Junks Ratings on Two. Cert. Classes -------------------------------------------------------------- Fitch Ratings affirmed $1.73 billion, downgraded $53.9 million and places $7.6 million on Rating Watch Negative from 2 Harborview Mortgage Loan Trust transactions: Series 2006-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'AA-'; -- Class B-4 affirmed at 'A+'; -- Class B-5 affirmed at 'A'; -- Class B-6 affirmed at 'A-'; -- Class B-7 downgraded to 'BBB' from 'A-'; -- Class B-8 downgraded to 'BBB-' from 'BBB+'; -- Class B-9 downgraded to 'BB' from 'BBB'; -- Class B-11 downgraded to 'CC/DR4' from 'B'. Series 2006-6 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 rated 'A' is placed on Rating Watch Negative; -- Class B-3 is downgraded to 'BBB-' from 'BBB' and removed from Rating Watch Negative; -- Class B-4 downgraded to 'B' from 'BB-'; -- Class B-5 downgraded to 'C/DR5' from 'CCC/DR2'. The affirmations affect about $1.73 billion in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The downgrades affect about $53.9 million of the outstanding certificates. The class placed on Rating Watch has a balance of about $7.6 million. The negative rating actions reflect deterioration in the relationship between CE and future loss expectations. As of the September 2007 distribution date about 6.03% and 4.94% of the pools are more than sixty days delinquent (including loans in Foreclosure, Real Estate Owned and Bankruptcy) for the 2006-4 and 2006-6 deals, respectively. The current subordination of the B-2 class, series 2006-6, placed on Rating Watch Negative is 2.98%. The 2006-4 and 2006-6 pools are seasoned 17 and 15 months and have a pool factor (current principal balance as a percentage of original) of about 72% and 75%, respectively. The collateral for the pools consist of adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. The mortgage loans were originated by Countrywide Home Loans Inc., Indymac Bank F.S.B., Downey Savings and Loan, HSBC Mortgage Corp., and Mellon Trust of New England. The loans are serviced by Countrywide Home Loans Servicing LP, rated 'RPS1' by Fitch for series 2006-4 and master serviced by Wells Fargo Bank, NA, rated 'RMS1' by Fitch for series 2006-6. Fitch will continue to closely monitor these transactions. If credit enhancement continues to deteriorate, further rating actions may be necessary. HARMAN INT'L: Earns $36.5 Million in 1st Quarter Ended Sept. 30 --------------------------------------------------------------- Harman International Industries Incorporated disclosed results for the first quarter ended Sept. 30, 2007. The company reported net income of $36.5 million for the quarter ended Sept. 30, 2007, compared with net income of $56.6 million for the same period ended Sept. 30, 2006. Excluding merger related costs of $4.7 million, net income was $41.2 million. Net sales for the three months were $947.0 million, a 15% increase compared to $825.5 million for the same period last year. All three divisions reported double-digit sales growth for the first quarter. Automotive net sales for the three months were $682.3 million compared to $601.0 million last year, an increase of 14%. Consumer net sales increased 28% from $93.1 million a year ago to $119.4 million this quarter. Professional net sales were $145.2 million compared to $131.4 million last year, an increase of 11%. Dr. Sidney Harman, executive chairman, and Dinesh Paliwal, vice chairman and chief executive officer, commented: "We achieved good results during the first quarter of fiscal 2008. Sales growth was strong due to the ramp up of an infotainment system for Chrysler and robust sales of personal navigation devices in Europe. Our initiative to develop cost saving strategies is underway and we expect to gain procurement, engineering and manufacturing efficiencies that will improve margins over the course of this fiscal year." At Sept. 30, 2007, the company's consolidated balance sheet showed $2.622 billion in total assets, $1.046 billion in total liabilities, and $1.576 billion in total shareholders' equity. About Harman International Headquartered in Washington, D.C., Harman International Industries Inc. (NYSE: HAR) -- http://www.harman.com/-- manufactures high- quality, high-fidelity audio products and electronic systems for the automotive, consumer and professional markets. * * * As reported in the Troubled Company Reporter on Oct. 24, 2007, Standard & Poor's Ratings Services revised its CreditWatch implications for the 'BB-' corporate credit rating on Harman International Industries Inc. to positive from developing. The revision reflects published reports that the merger agreement with KKR and GS Capital Partners, the private equity buyers that agreed to acquire Harman in April 2007, has been terminated without litigation or payment of a termination fee. Accordingly, S&P no longer expects to lower the rating on Harman. HEALTH MANAGEMENT: Earns $30.5 Million in Quarter Ended Sept. 30 ---------------------------------------------------------------- Health Management Associates Inc. disclosed consolidated financial results for the third quarter and nine months ended Sept. 30, 2007. For the quarter, HMA reported net income of $30.5 million; income from continuing operations of $20.1 million; net revenue of $1.070 billion; and earnings before interest, income taxes, depreciation, amortization, refinancing and debt modification costs and after minority interests of $151.6 million. On a same hospital basis from continuing operations, adjusted admissions increased 1.9%, net revenue per adjusted admission increased 4.6%, and net revenue increased 6.5%, all compared to the same quarter a year ago. Admissions decreased 0.4%, surgeries increased 1.2%, and emergency room visits increased 3.0%. Same hospitals refer to those owned and operated for one year or more. Same hospital EBITDA from continuing operations for the quarter was $168.4 million, with a margin of 16.0%. Provision for doubtful accounts, or bad debt expense, was $126.5 million for the quarter compared to $94.1 million for the same period a year ago, and $150.6 million for the second quarter ended June 30, 2007. As previously disclosed on July 31, 2007, HMA expects bad debt expense as a percent of net revenue to be approximately 12% for the balance of 2007. As a deliberate part of its operating strategy, HMA sold certain accounts receivable during the quarter that were over one year old that it had previously written off entirely from its balance sheet. Bad debt expense for the quarter was reduced by $16.0 million from the sale of these accounts receivable. Since February 2007, HMA has given a 60% discount to uninsured patients for non-elective services. Uninsured discounts for the quarter were $155.6 million compared to $153.3 million for the quarter ended June 30, 2007. Charity/indigent care writeoffs for the quarter were $19.2 million, compared to $156.9 million for the same period a year ago and $18.5 million for the second quarter. The sum of uninsured discounts, charity/indigent write-offs and bad debt expense, as a percentage of the sum of net revenue, uninsured discounts and charity/indigent write-offs, was 24.2% for the third quarter compared to 21.9% for the same quarter a year ago and 25.4% for the second quarter ended June 30, 2007. The second quarter included $39.0 million of additional bad debt expense related to a change in accounting estimate. During the third quarter, the company accounted for its two Arkansas-based hospitals as assets held-for-sale. Prior periods have been reclassified for these hospitals, as well as for two Virginia-based hospitals which the company sold during the third quarter. Pre-tax income from held-for-sale assets was approximately $17.1 million during the third quarter, which included a pre-tax gain of approximately $22.3 million from the sale of the two Virginia-based hospitals. Total net revenue from continuing operations for the quarter increased 8.2%, total admissions from continuing operations grew 0.4%, and total adjusted admissions from continuing operations grew 2.7%, in each case as compared to the same quarter a year ago, reflecting the opening of a new hospital in Naples, Florida, during the first quarter. For the nine months, HMA reported net revenue of $3.307 billion; EBITDA of $480.4 million; net income of $107.4 million; and income from continuing operations of $98.1 million. Cash flow from continuing operating activities for the nine month period was $241.2 million, after cash interest and cash tax payments aggregating $235.9 million. At Sept. 30, 2007, the company's consolidated balance sheet showed $4.642 billion in total assets, $4.527 billion in total liabilities, and $114.5 million in total shareholders' equity. About Health Management Associates Health Management Associates Inc. (NYSE: HMA) -- http://www.hma-corp.com/-- owns and operates general acute care hospitals in non-urban communities located throughout the United States. HMA operates 59 hospitals in 15 states with approximately 8,500 licensed beds. * * * As reported in the Troubled Company Reporter on Aug. 21, 2007, Moody's Investors Service revised Health Management Associates Inc.'s rating outlook to negative from stable. Moody's also affirmed HMA's existing ratings, including the Ba3 Corporate Family Rating. HORIZON LINES: Earns $1.6 Million in Third Quarter Ended Sept. 23 ----------------------------------------------------------------- Horizon Lines Inc. reported net income of $1.6 million on operating revenue of $321.1 million for the third quarter ended Sept. 23, 2007, compared to net income of $52.9 million on operating revenue of $304.7 million for the same period ended Sept. 24, 2006. After adjustment to exclude the non-recurring loss on extinguishment of debt in 2007 and secondary offering expenses in 2006, and to retroactively apply tonnage tax to 2006, adjusted net income was $20.7 million in 2007's third quarter, versus $20.2 million in the third quarter of 2006. Operating income in the third quarter of 2007 was $35.3 million, slightly better than the $35.2 million in 2006's third quarter. Absent non-recurring secondary offering expenses, adjusted operating income in the third quarter of 2006 would have been $36.0 million. Earnings before interest expense, taxes, depreciation and amortization was $12.8 million for the third quarter of 2007 compared to $51.0 million for the 2006 third quarter. Excluding the non-recurring loss on extinguishment of debt in 2007 and secondary offering expenses in 2006, adjusted EBITDA would have been $50.8 million in the third quarter of 2007 in contrast to $51.8 million for the third quarter of 2006. "Horizon Lines once again rose to the challenge and overcame a less than ideal operating environment, to deliver improved earnings in the third quarter of 2007," said Chuck Raymond, chairman, president and chief executive officer. "Volume softness, primarily caused by lingering difficult economic conditions in our Puerto Rico tradelane, was offset by unit revenue improvements, benefits derived from our Horizon EDGE process re-engineering and customer service program and tight controls on our costs. We closed on a refinancing of our capital structure in August that is generating significant benefits in terms of a lower cost of capital, improved cash flow, and enhanced flexibility and greater liquidity that will allow us to take advantage of future growth opportunities. In addition, we changed the structure of Horizon Lines into two separate transportation and logistics operations. This will allow us to stay focused on our core Jones Act transportation operations, while at the same time providing for future growth and development of our fully integrated logistics services. As the first step in growing our new logistics offering, we also acquired Aero Logistics during the quarter." At Sept. 23, 2007, the company's consolidated balance sheet showed $961.1 million in total assets, $814.7 million in total liabilities, and $146.4 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 23, 2007, are available for free at http://researcharchives.com/t/s?2498 About Horizon Lines Headquartered in Charlotte, North Carolina, Horizon Lines Inc. (NYSE: HRZ) -- http://www.horizon-lines.com/-- is a domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines LLC operates a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Logistics LLC offers customized logistics solutions to shippers from a suite of transportation and distribution management services designed by Aero Logistics, information technology developed by Horizon Services Group and intermodal trucking and warehousing services provided by Sea-Logix. * * * As reported in the Troubled Company Reporter on Aug. 9, 2007, Standard & Poor's Ratings Services assigned a 'BB+' rating and a '1' recovery rating to Horizon Lines Inc.'s (BB-/Stable/--) proposed senior secured first-lien credit facilities, consisting of a $250 million revolving credit facility and a $125 million term loan A; both facilities mature in 2012. HYDRO SPA: Committee Wants to Employ Foley & Lardner as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Hydro Spa Parts and Accessories, Inc.'s Chapter 11 case asks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Foley & Lardner LLP as its legal counsel. Foley & Lardner will: a) meet or confer with and provide the Committee with legal advice with respect to its statutory duties and powers in this bankruptcy case; b) represent and appear at hearings o9n behalf of the Committee in all matters requiring Committee participation, including cash collateral, sales, leases, litigation against insiders as necessary and appropriate; c) negotiate with counsel for the Debtor, secured creditors, equity holders, and executory contract parties on various matters; and d) perform other legal services as may be required by the Committee. Mark. J. Wolfson, Esq., a partner at Foley & Lardner, tells the Court that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Mark J. Wolfson, Esq. Partner $450 W. Keith Fendrick, Esq. Partner $425 Amanda Uliano, Esq. Associate $325 Lauren Valiente, Esq. Associate $250 Kevin M. Shuler, Esq. Associate $235 C. Victoria Knight, Esq. Associate $225 Jodi Almeida Paralegal $150 Mr. Wolfson assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Mr. Wolfson can be contacted at: Mark J. Wolfson, Esq. Foley & Lardner LLP 100 North Tampa Street Suite 2700 Tampa, FL 33602 Tel: (813) 229-2300 Fax: (813) 221-4210 http://www.foley.com/ About Hydro Spa Based in St. Petersburg, Florida, Hydro Spa Parts and Accessories, Inc. -- http://www.hydrospa.com/-- sells bathroom, hot tub, and spa equipment and accessories. The Debtor filed for Chapter 11 protection on Sept. 19, 2007 (Bankr. M.D. Fla. Case No. 07-08616). John A. Anthony, Esq., John I. Van Voris, Esq., and Stephenie M. Biernacki, Esq., at GrayRobinson, P.A., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $10,659,077, and total liabilities of $13,611,578. HYDRO SPA: Court OKs GlassRatner as Committee's Financial Advisors ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida gave authority to the Official Committee of Unsecured Creditors appointed in Hydro Spa Parts and Accessories, Inc.'s bankruptcy case, to employ GlassRatner Advisory & Capital Group, LLC, as its financial advisors. GlassRatner Advisory is expected to: a) perform an evaluation of the purchase price and terms of the proposed sale contract, including a valuation of the assets being sold at a "high level", to determine if the proposed purchase price is in a range of reasonable values; b) analyze whether sufficient marketing efforts have occurred in connection with the sale of assets, whether there is a number of potential buyers not solicited by the Debtor, and whether additional time for the asset sale beyond Nov. 2, 2007 will have a materially negative impact on the sales price relative to the likelihood of achieving a higher realized sales value; c) review and advise on cash collateral issues between now and the asset sale, including review of financial information and documentation; d) advise the Committee and Committee's counsel on the above matters; and e) testify at hearings as necessary. Thomas Santoro, a principal of GlassRanter Advisory, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Thomas Santoro $325 Margaret J. Smith, CPA $325 Staff and Senior Associates $135 - $175 Mr. Santoro assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About Hydro Spa Based in St. Petersburg, Florida, Hydro Spa Parts and Accessories, Inc. -- http://www.hydrospa.com/-- sells bathroom, hot tub, and spa equipment and accessories. The Debtor filed for Chapter 11 protection on Sept. 19, 2007 (Bankr. M.D. Fla. Case No. 07-08616). John A. Anthony, Esq., John I. Van Voris, Esq., and Stephenie M. Biernacki, Esq., at GrayRobinson, P.A., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $10,659,077, and total liabilities of $13,611,578. HYDRO SPA: Wants to Hire Oscher Consulting as Forensic Accountants ------------------------------------------------------------------ Hydro Spa Parts and Accessories, Inc. asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Oscher Consulting, P.A., as its forensic accountants. Gulf Coast Litigation Oscher Consulting will provide forensic accounting services to the Debtor as the Debtor pursues assets involved in a state court lawsuit. On November 2005, Gulf Coast Spa Manufacturers, Inc. initiated a "pre-emptive strike" state court action in the Circuit Court for the Sixth Judicial Circuit in Pinellas County, Florida (Case No. 05-007780-CI-13). At that time, the Debtor had demanded payment from Gulf Coast of a delinquent open account for approximately $2,100,000. The Debtor has since counterclaimed against Gulf Coast. On Oct. 3, 2007, the Debtor filed a notice of removal in its case, thus removing the Gulf Coast litigation to this current court. The Debtor says that the litigation is a "core proceeding" pursuant to Section 157(b)(2) of the U.S. Bankruptcy Code, and its corresponding account appears to be the second most valuable asset of the estate. The Debtor tells the Court that it requires the expert analysis and testimony of Oscher Consulting to debunk any excuses offered by Gulf Coast for non-payment of the account. Going Concern Assets On Oct. 2, 2007, the Debtor asked the Court to establish bidding procedures, in order to obtain authority from the Court to market and sell its going concern assets. These going concern assets are a bulk of its total assets approximately $10,657,077, based on its schedules. The Official Committee of Unsecured Creditors appointed in the Debtor's case objected to the request for bidding procedures, and as such, the Debtor saw the need to avail of the firm's expertise in forensic accounting to address the issues raised by the Committee. Insider Secured Claims The Debtor relates that, in its objection of the bidding procedures, the Committee and its counsel have made fairly obvious threats to initiate litigation against the Debtor's principals seeking to object to the secured insider claims, re-characterize those claims as equity, subordinate the secured insider claims, and pursue other comparable relief. The Debtor has diligently reviewed the loan and security documents evidencing the secured insider claims. However, the Debtor asserts that they still need the firm's services in order to clarify, expedite, and resolve the secured claims issue. Steven S. Oscher, managing director of Oscher Consulting, says that the Debtor proposes to compensate him at a rate of $340 per hour. Mr. Oscher assures the Court that the firm is disinterested, as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About Hydro Spa Based in St. Petersburg, Florida, Hydro Spa Parts and Accessories, Inc. -- http://www.hydrospa.com/-- sells bathroom, hot tub, and spa equipment and accessories. The Debtor filed for Chapter 11 protection on Sept. 19, 2007 (Bankr. M.D. Fla. Case No. 07-08616). John A. Anthony, Esq., John I. Van Voris, Esq., and Stephenie M. Biernacki, Esq., at GrayRobinson, P.A., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $10,659,077, and total liabilities of $13,611,578. INDEPENDENCE VII: Moody's Junks Ratings on Two Note Classes ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Independence VII CDO, Ltd. on review for possible downgrade: -- $360,000,000 Class A-1A First Priority Senior Secured Floating Rate Delayed Draw Notes due 2045 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $60,000,000 Class A-1B First Priority Senior Secured Floating Rate Notes due 2045 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $30,600,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2045 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $60,000,000 Class B Third Priority Senior Secured Floating Rate Notes due 2045 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $28,500,000 Class C Fourth Priority Senior Secured Floating Rate Notes due 2045 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $15,000,000 Class D Fifth Priority Mezzanine Deferrable Floating Rate Notes due 2045 Prior Rating: A3 Current Rating: Ba2, on review for possible downgrade -- $24,900,000 Class E Sixth Priority Mezzanine Deferrable Floating Rate Notes due 2045 Prior Rating: Baa2 Current Rating: Caa3, on review for possible downgrade Moody's has also announced that it has downgraded these notes: -- $5,400,000 Class F Seventh Priority Mezzanine Deferrable Floating Rate Notes due 2045 Prior Rating: Ba1, on review for possible downgrade Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of asset- backed securities and synthetic securities. ENERGY AND INDUSTRIAL: S&P Rates $375 Million Term Loan at BB ------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB-' issuer rating to Energy and Industrial Utilities Co. LLC, and also assigned its 'BB' issue rating to the company's $375 million term loan B due 2014 and $50 revolving credit facility due 2012. S&P also gave its 'B' rating to the $275 million senior unsecured notes due 2017, which the company will issue simultaneously with the secured facilities. The outlook is stable. The secured credit facilities have a recovery rating of '2', indicating 70% to 90% recovery prospects in the event of a default. EIUC was formed to hold interests in 15 projects: * Three operating coke batteries; * Three pulverized coal-injection projects; and * Nine projects that provide utility services such as steam, wastewater treatment, compressed air, and chilled water to automotive customers, as well as to the Detroit and Pittsburgh metropolitan airports. The projects are largely debt free, except for about $22 million of existing secured debt and about $32 million in capital leases. EIUC is 100% owned by EIUC Holdings LLC, which will be equally owned by DTE Energy Services, a nonregulated subsidiary of DTE Energy Co. (BBB/Stable/A-2) and CL Michigan Holdings LLC, an affiliate of GE Capital Corp. (AAA/Stable/A-1+), after the financing closes. Proceeds will be distributed to DTE Energy Services, who will continue to operate and manage the plants through a set of arms-length agreements. The outlook on EIUC is stable. S&P expect near-term ratings stability due to expected cash flow certainty from the contracted nature of the revenue stream, with limited exposure to commodity price volatility. "The likelihood of an upgrade is low, given the existing contracts, which offer limited upside potential," said Standard & Poor's credit analyst Chinelo Chidozie. "A downgrade could occur if there are significant problems with ongoing construction, or if the company's capital needs are significantly higher than expected due to operating problems," she continued. INDYMAC BANK: Fitch Junks Ratings on Two Certificate Classes ------------------------------------------------------------ Fitch Ratings took rating actions on these IndyMac Bank mortgage pass-through certificates: RAST 2006-A14CB -- Class A affirmed at 'AAA'; -- Class B-1 downgraded to 'AA-' from 'AA'; -- Class B-2 downgraded to 'BBB+' from 'A'; -- Class B-3 downgraded to 'BB' from 'BBB'; -- Class B-4 downgraded to 'B' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. RAST 2006-A16 -- Class A affirmed at 'AAA'; -- Class B-1 downgraded to 'AA-' from 'AA'; -- Class B-2 downgraded to 'BBB+' from 'A'; -- Class B-3 downgraded to 'BB+' from 'BBB'; -- Class B-4 downgraded to 'B' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. INDX 2006-AR39 -- Class A affirmed at 'AAA'; -- Class M-1, M-2, M-3 affirmed at 'AA+'; -- Class M-4, M-5 affirmed at 'AA'; -- Class M-6, M-7 affirmed at 'A+'; -- Class M8 affirmed at 'A-'; -- Class M9 affirmed at 'BBB-'. The affirmations affect about $1.49 billion in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The downgrades, affecting about $59.6 million of the outstanding certificates, reflect deterioration in the relationship between credit enhancement and expected losses. As of the September remittance date, the pool factor (current principal balance as a percentage of original) for the RAST 2006- A14CB is 93% and is 9 months seasoned. About 5.42% of the pool is more than 60 days delinquent. This includes foreclosures and real estate owned of 2.01% and 0.14% respectively. The B-5 bond currently has 0.48% of credit enhancement. The pool factor for the RAST 2006-A16 is 87% and the deal is 11 months seasoned. The 60+ delinquencies are 4.55% of the pool, which includes foreclosures and REO of 2.01% and 0.37% respectively. The B-5 bond has 0.4% of credit enhancement. IndyMac Bank, FSB, rated 'RPS2+' by Fitch, will act as a Servicer for the above transactions. IVY LANE: Moody's Cuts $25 Mil. Class C Notes' Rating to B2 ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Ivy Lane CDO Ltd. on review for possible downgrade: -- $350,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $50,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $36,000,000 Class A-3 Floating Rate Senior Secured Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $19,000,000 Class B Floating Rate Subordinate Securednotes Due 2046 Prior Rating: A2, on review for possible downgrade Current Rating: Ba1, on review for possible downgrade -- $25,000,000 Class C Floating Rate Junior Subordinate Secured Notes Due 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: B2, on review for possible downgrade According to Moody's the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. IXIS ABS: Moody's Cuts Ratings on Two Note Classes to Low-B ----------------------------------------------------------- Moody's Investors Service placed these notes issued by IXIS ABS CDO 2 LTD. on review for possible downgrade: -- $123,500,000 Class A-1 Senior Secured Funded Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $201,500,000 Class A-1 Senior Secured Unfunded Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $6,500,000 Class A-X Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $85,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $30,000,000 Class B Secured Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $21,000,000 Class C Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: A2, on review for possible downgrade Current Rating: Baa2, on review for possible downgrade -- $15,000,000 Class D Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: Ba2, on review for possible downgrade -- $4,000,000 Class E Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: Ba1, on review for possible downgrade Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. JOPINDAR HARIKA: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Jopindar Pal Harika 321 Red Oak Court Monroeville, PA 15146 Tel: (412) 225-8429 Bankruptcy Case No.: 07-26714 Chapter 11 Petition Date: October 25, 2007 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: P. William Bercik, Esq. 1040 Fifth Avenue Pittsburgh, PA 15219 Tel: (412) 471-4244 Fax: (412) 391-6344 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of his 20 largest unsecured creditors. JORGE NEUKIRCHEN: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Jorge D. Neukirchen Cinara A. Neukirchen 3260 Camino Colorados Lafayette, CA 94549 Bankruptcy Case No.: 07-43574 Chapter 11 Petition Date: October 25, 2007 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: David M. Sternberg, Esq. Sternberg and Coad-Hermelin 540 Lennon Lane Walnut Creek, CA 94598 Tel: (925) 946-1400 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 ------ --------------- ------------ Mercedes Benz Financial 2006 Mercedes Benz; $44,033 P.O. Box 9001921 Value of collateral: Louisville, KY 40290-1921 $39,350 American Express line of Credit $12,401 P.O. BOX 0001 Los Angeles CA 90096-001 Odilio And Amparo Velasquez Stipulated Judgment $10,000 c/o Andrew H. Wolff 11 Embarcadero West, Suite 133 Oakland CA 94607-4504 American Express Credit Card cash $3,236 advances Rosenthal, Morgan and Thomas Collection for $1,965 A.D.T./R.S.V.P. Security Reid L. Steinfeld Alta Bates Summit $1,342 Medical CTR-A Toyota Financial Services 2007 Toyota Camry $697 E.B.M.U.D. Water bill $558 P.G.& E Utilities Bill $513 Sonoma County Credit Service Creditor- Frederick $396 Wright, MD. Dish Network Television $272 American Express Revolving charge $187 KENT FUNDING: Moody's Reviews Ba1 Rating on Class E Notes --------------------------------------------------------- Moody's Investors Service placed these notes issued by Kent Funding II, Ltd. on review for possible downgrade: -- $51,700,000 Class B Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $16,700,000 Class C Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: A2 Current Rating: A2, on review for possible downgrade -- $8,250,000 Class D Floating Rate Deferrable Notes Due 2046 Prior Rating: Baa2 Current Rating: Baa2, on review for possible downgrade -- $3,100,000 Class E Floating Rate Deferrable Notes Due 2046 Prior Rating: Ba1 Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. KITTY HAWK: To Cease Scheduled Network Air & Ground Operations -------------------------------------------------------------- Kitty Hawk, Inc. and all of its wholly-owned subsidiaries will immediately cease all scheduled network air and ground operations. However, Kitty Hawk will continue to operate air cargo charter operations. Approximately 500 employees at Kitty Hawk will be affected by the ceasing of operations, and such employees were notified of their termination on Oct. 29, 2007. Kitty Hawk's financial condition has deteriorated significantly over the last year and the ceasing of network air and ground operations is necessitated by, among other things, a 25% decrease in year-over-year demand for its air product and a 15% year-over- year decrease in demand for its ground product. In conjunction with lower demand for Kitty Hawk's services, record high jet and diesel fuel prices have contributed to Kitty Hawk's inability to continue network air and ground operations. On Oct. 15, 2007, Kitty Hawk, Inc. and its wholly-owned subsidiaries filed voluntary petitions in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division in a continued effort to address significant financial challenges and identify a strategic or financial investor. Kitty Hawk has been unable to secure new sources of financing or a buyer for all or a portion of its assets after considerable and continuing efforts which commenced in early 2007. About Kitty Hawk Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) -- http://www.kittyhawkcompanies.com/-- is a holding company providing corporate planning and administrative services. It operates through its three wholly owned bankrupt subsidiaries, Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank. N.D. Tex. Case No. 00-42141). On Aug. 5, 2002, the Court confirmed the Debtor's Plan which became effective on Sept. 30, 2002. The Debtor, along with four affiliates, filed new voluntary chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos. 07-44536 to 07-44540). Gogi Malik, Esq., and Jason S. Brookner, Esq., at Andrews & Kurth, LLP, represent the Debtors. As of Aug. 31, 2007, the Kitty Hawk's balance sheet showed total assets of $40 million and total liabilities of $31 million. KLEROS REAL: Moody's Cuts $26 Mil. Class D Notes' Rating to B1 -------------------------------------------------------------- Moody's Investors Service placed these notes issued by Kleros Real Estate CDO I Ltd. on review for possible downgrade: Class Description: -- $900,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due October 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: Class Descriptions: -- $18,700,000 Class B Third Priority Senior Secured Floating Rate Notes Due October 2046 Prior Rating: Aa2, on review for possible downgrade Current Rating: A1, on review for possible downgrade -- $20,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due October 2046 Prior Rating: Aa3, on review for possible downgrade Current Rating: A2, on review for possible downgrade -- $26,000,000 Class D Fifth Priority Mezzanine Deferrable Fixed Rate Notes Due October 2046 Prior Rating: Ba1, on review for possible downgrade Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. KLEROS REAL: Moody's Junks Rating on $15 Mil. Class E Notes ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Kleros Real Estate CDO II, Ltd. on review for possible downgrade: -- $775,000,000 Class A-1A First Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $125,000,000 Class A-1B Notes Second Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: A1, on review for possible downgrade -- $23,000,000 Class A-2 Notes Third Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: A2, on review for possible downgrade -- $18,700,000 Class B Notes Fourth Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aa2, on review for possible downgrade Current Rating: Baa1, on review for possible downgrade -- $27,000,000 Class C Notes Fifth Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aa3, on review for possible downgrade Current Rating: Baa2, on review for possible downgrade -- $11,000,000 Class D Notes Sixth Priority Mezzanine Deferrable Floating Rate Notes due November 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: B1, on review for possible downgrade Moody's also said that it has downgraded these notes: -- $15,000,000 Class E Notes Seventh Priority Mezzanine Deferrable Fixed Rate Notes due November 2046 Prior Rating: Ba2, on review for possible downgrade Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. LA PALOMA: Weak Performance Prompts S&P's Rating Downgrade to B+ ---------------------------------------------------------------- Standard & Poor's Rating Services lowered its rating to 'B+' from 'BB-' on La Paloma Generating Co. LLC's $245.84 million secured first-lien term loan B due in 2012, its $65 million working- capital facility, and its $40 million synthetic letter of credit facility. In addition, Standard & Poor's lowered it rating to 'CCC+' from 'B-' on the issuer's second lien $155 million term loan C. The outlook is negative. "The lowered rating follows the project's weak financial performance due to heightened plant maintenance requirements since its inception," said Standard & Poor's credit analyst Leo Carrillo. "Despite a cash sweep mechanism for first lien debt, debt amortization is progressing very slowly and could lead to a larger refinancing burden when the debt matures in 2012. This reduces recovery prospects if refinancing cannot be executed successfully." The credit facilities are secured by priority liens on all assets of La Paloma, a ring-fenced special purpose entity that owns a 1,022 megawatt, combined cycle, gas-fired power plant located about 40 miles outside of Bakersfield, California. The plant has been in service since March 2003. LEBARON DRYWALL: Wants Exclusive Plan-Filing Period Set to Nov. 12 ------------------------------------------------------------------ LeBaron Drywall Inc. asks the United States Bankruptcy Court for the District of Alaska for permission to extend its exclusive periods to: a. file a Chapter 11 plan until Nov. 12, 2007; and b. solicit acceptances of that plan until Jan. 31, 2008. The Debtor's exclusive period to file a plan expired on Oct. 10, 2007. The Debtor tells the Court that it needs more time to complete the sale of its real property to Merit Homes Inc., which is expected to close on tomorrow, Wednesday, Oct. 31, 2007. As previously reported, the Court granted the agreement between the Debtor and John Tindall of Merit Homes in connection with the sale of the Debtor's real property -- identified as Tract C, The Terraces, according to Plat 2005-08, Anchorage Recording District -- to Merit Homes for $3,125,000. According to the Debtor, the closing of the sale will also determine the exact money to satisfy First National Bank's $2 million claim and certain cost to complete the improvements. Based in Anchorage, Alaska, LeBaron Drywall Inc. builds condominiums. The company filed for Chapter 11 protection on February 21, 2007 (Bankr. D. Alaska Case No. 07-00070). John C. Siemers, Esq., at Burr Pease & Kurtz, represents the Debtor in its restructuring efforts. Erik J. Leroy, Esq., serves as the Debtor's co-counsel. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it listed estimated assets of $18,955,000. LEXINGTON CAPITAL: Moody's Reviews Ratings and May Downgrade ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Lexington Capital Funding II Ltd. on review for possible downgrade: -- $17,050,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2046; Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $64,625,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2046; Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $19,800,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due 2046; Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade -- $24,200,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2046; Prior Rating: A2 Current Rating: Baa2, on review for possible downgrade -- $13,750,000 Class E Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2046; Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade -- $5,500,000 Class F Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2046; Prior Rating: Ba1 Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. LIBERTAS PREFERRED: Moody's Reviews Ba1 Rating on Class G Notes --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Libertas Preferred Funding I, Ltd. on review for possible downgrade: -- $66,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due December 2043 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $32,400,000 Class B Third Priority Senior Secured Floating Rate Notes Due December 2043 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $5,400,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due December 2043 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade -- $24,000,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due December 2043 Prior Rating: A2 Current Rating: A2, on review for possible downgrade -- $13,800,000 Class E Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due December 2043 Prior Rating: Baa2 Current Rating: Baa2, on review for possible downgrade -- $12,000,000 Class F Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due December 2043 Prior Rating: Baa3 Current Rating: Baa3, on review for possible downgrade -- $9,000,000 Class G Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due December 2043 Prior Rating: Ba1 Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of subprime RMBS securities. LINEAR TECH: Sept. 30 Balance Sheet Upside-Down by $1.97 Billion ---------------------------------------------------------------- Linear Technology Corporation's consolidated balance sheet at Sept. 30, 2007, showed $1.33 billion in total assets and $1.97 billion in total liabilities, resulting in a $635,929 total shareholders' deficit. Net income of $91.5 million for the first quarter of fiscal year 2008 of $91.5 million decreased $4.2 million or 4.4% from $95.7 million reported in the fourth quarter of fiscal year 2007 largely due to an increase in net interest expense and an increase in the provision for income taxes. Net income decreased $20.9 million or 18.6% from $112.4 million in the first quarter of fiscal year 2007. Revenue for the first quarter of fiscal year 2008 increased 5.0% to $281.5 million over the previous quarter revenue of $268.1 million and decreased 3.6% or $10.6 million from $292.1 million in the first quarter of fiscal year 2007. In April 2007, the company entered into a $3.0 billion accelerated share repurchase transaction funded by $1.3 billion of the company's own cash and $1.7 billion of convertible debt. As a result, the company's first quarter results had both a decrease in interest income and an increase in interest expense when compared to both last quarter and the first quarter of the prior fiscal year. The first quarter of fiscal year 2008 had higher interest expense than the fourth quarter of fiscal 2007 due to the fourth quarter having two months of accrued interest versus three months in the first quarter of fiscal year 2008. First quarter non-GAAP net income of $101.4 million decreased $8.5 million from $109.9 million in the fourth quarter and decreased $22.8 million from the first quarter of fiscal year 2007. The company's non-GAAP net income exclude charges related to stock-based compensation. According to Lothar Maier, chief executive officer, "This was a good September quarter for us. Revenue, EPS and cash generated from operations all increased and we had a positive book to bill ratio for the quarter. We are pleased with the results of the ASR which was partially responsible for the 11% increase in diluted EPS over the prior quarter which follows on a 12.5% sequential increase in diluted EPS in the quarter before that. "Looking ahead to the December quarter, growth will be impacted by the usual seasonal slowdown in our businesses. Consequently, we expect revenues and diluted EPS to increase in the 1% to 4% range from the September quarter just completed." About Linear Technology Headquartered in Milpitas, California, Linear Technology Corporation (NasdaqGS: LLTC) -- http://www.linear.com/-- is a manufacturer of high performance linear integrated circuits. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, and many other analog functions. Applications for Linear Technology's high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras, global positioning systems and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems. LONGSHORE CDO: Moody's Junks Rating on $7.5MM Preference Shares --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Longshore CDO Funding 2006-2, Ltd. on review for possible downgrade: -- $60,000,000 Class A-2 Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $42,000,000 Class B Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $8,000,000 Class C-1 Floating Rate Deferrable Interest Notes Due 2046 Prior Rating: A2 Current Rating: Ba1, on review for possible downgrade -- $5,000,000 Class C-2 Floating Rate Deferrable Interest Notes Due 2046 Prior Rating: A3 Current Rating: Ba3, on review for possible downgrade -- $7,500,000 Class D Floating Rate Deferrable Interest Notes Due 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: B1, on review for possible downgrade Moody's also announced that it has downgraded these notes: -- $7,500,000 Preference Shares Prior Rating: B1 Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. LONGSHORE CDO: Moody's Reviews Ba2 Rating on $9MM Income Notes -------------------------------------------------------------- Moody's Investors Service placed these notes issued by Longshore CDO Funding 2006-1 Ltd. on review for possible downgrade: -- $30,000,000 Class B Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $21,750,000 Class C Floating Rate Notes Due 2046 Prior Rating: A3 Current Rating: A3, on review for possible downgrade -- $6,750,000 Class D Floating Rate Deferrable Interest Notes Due 2046 Prior Rating: Baa2 Current Rating: Baa2, on review for possible downgrade -- $9,000,000 Income Notes Due 2046 Prior Rating: Ba2 Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. LONGSTREET CDO: Moody's Cuts Ratings on Four Notes to Low-B ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Longstreet CDO I, Ltd. on review for possible downgrade: -- $350,000,000 Class A-1 First Priority Senior Secured Delayed Draw Floating Rate Notes due November 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $55,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $27,000,000 Class B Third Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $5,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes due November 2046 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $20,000,000 Class D Fifth Priority Mezzanine Secured Floating Rate Notes due November 2046 Prior Rating: A2,on review for possible downgrade Current Rating: Ba1, on review for possible downgrade -- $10,000,000 Class E Sixth Priority Mezzanine Secured Floating Rate Notes due November 2046 Prior Rating: Baa2,on review for possible downgrade Current Rating: B1, on review for possible downgrade -- $10,000,000 Class F Seventh Priority Mezzanine Secured Floating Rate Notes due November 2046 Prior Rating: Baa3, on review for possible downgrade Current Rating: B1, on review for possible downgrade -- $8,000,000 Class G Eighth Priority Mezzanine Secured Floating Rate Notes due November 2046 Prior Rating: Ba1, on review for possible downgrade Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS and CDO Securities. LYNX 2002-1: S&P Affirms Junk Rating on Class D Notes ----------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class B and C notes issued by Lynx 2002-1 Ltd., an arbitrage collateralized debt obligation of asset-backed securities transaction collateralized primarily by commercial mortgage-backed securities and corporate high-yield CDOs, and removed them from CreditWatch with positive implications, where they were placed on May 14, 2007. At the same time, S&P affirmed the rating on the class A notes based on a financial guarantee insurance policy issued by MBIA Insurance Corp. and affirmed the rating on the class D notes based on the credit enhancement available to support the notes. The raised ratings reflect factors that have positively affected the credit enhancement available to support the class B and C notes since they were last upgraded on Sept. 14, 2006. Approximately $97.958 million has been paid down on the class A notes since the Sept. 14, 2006, rating action. This has increased the overcollateralization ratio of the class B notes to a current (as of the Sept. 28, 2007, trustee report) level of 201.57% from 152.70% at the time of the September 2006 rating action. Additionally, the overcollateralization ratio of the class C notes has improved to 111.84% from 105.80% at the time of the September 2006 rating action. Standard & Poor's also noted that the credit quality of the underlying portfolio has improved. The current weighted average rating of the portfolio is 'BBB', compared with 'BB' at the time of the September 2006 rating action. Ratings Raised and removed from Creditwatch Positive Lynx 2002-1 Ltd. Rating ------ Class To From Current balance ----- -- ---- -------------- B AAA AA+/Watch Pos $65,000,000 C BBB BB/Watch Pos $97,000,000 Ratings Affirmed Lynx 2002-1 Ltd. Class Rating Balance ----- ------ ------- A AAA $55,912,000 D CCC- $25,685,000 Industry Exposure* (%) ------------------ --- CMBS diversified 64.72 CDO 27.15 ABS commercial 6.10 REIT 2.03 * Based on the Sept. 28, 2007, trustee monthly report. MARCUS WARE: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Marcus D. Ware aka Marcus Derrell Ware 15 Royal Avenue Livingston, NJ 07039 Bankruptcy Case No.: 07-25701 Chapter 11 Petition Date: October 26, 2007 Court: District of New Jersey (Newark) Debtor's Counsel: Scott D. Sherman, Esq. Minion & Sherman 33 Clinton Road, Suite 202 West Caldwell, NJ 07006 Tel: (973) 882-2424 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Americas Servicing Co. Conventional Real $523,111 7485 New Horizon Way Estate Mortgage Frederick, MD 21703 Mortgage $51,954 Fremont Investment & L. Conventional Real $526,250 175 North Riverview Drive Estate Mortgage Anaheim, CA 92808 Wilshire Credit Corp. Conventional Real $365,512 1776 Southwest Madison Street Estate Mortgage Portland, OR 97205 Ocwen Federal Bank Conventional Real $169,973 Estate Mortgage Essex Div. Tele. Federal $8,670 Credit Union Wash Mutual/Providian Credit Card $2,910 Capital 1 Bk. Credit Card $2,115 Sears/C.B.S.D. Charge Account $779 W.F.N.N.B./Ltd. Charge Account $613 MASTEC INC: Inks $12.6 Million Wage and Hour Lawsuit Settlement --------------------------------------------------------------- MasTec Inc. has reached an agreement to settle its wage and hour lawsuit regarding the company's install to the home employees. The gross settlement of $12.6 million is subject to court approval and represents the maximum payout, assuming 100% opt-in by all potential members of the purported class. The lawsuit involving claims dating back as far as 2001 and covering current and former employees from California, Florida, Georgia, Maryland, New Jersey, New Mexico, North Carolina, South Carolina, Texas and Virginia, is similar to numerous class action lawsuits filed against others nationwide. While the company denies the allegations underlying the lawsuit, it has agreed to the settlement to avoid significant legal fees, the uncertainty of a jury trial, other expenses and management time that would have to be devoted to protracted litigation. The minimum payment under the agreement is approximately $3.8 million to the plaintiffs' attorneys and $750 thousand for the named plaintiffs who have already joined the lawsuit. Future opt-in rates are hard to predict, especially with the transient nature of this workforce. While difficult to estimate, the company expects actual payments to be less than the gross settlement amount, and the appropriate charge for financial statement purposes is currently being evaluated. As a result of this litigation, the company has instituted a number of procedures and safeguards to avoid being the target of such litigation in the future. For 2006 and 2007, the company estimates that it will spend over $20 million on outside legal fees and expenses, with the bulk of the expenditures related to old, legacy issues. In many cases, the company has made inadequate or unsatisfactory progress. As a result, MasTec's senior management disclosed a significant shift in strategy regarding its older legal cases and disputes. The shift in strategy is to accelerate closure of many of the older legal cases and disputes while protecting the economic interests of the company and its shareholders. Most of this legacy litigation relates to the years 2001 through 2005 and does not involve current customers. As a part of this change in legal strategy, the company expects to book significant additional charges and reserves for the quarter ended September 30. MasTec's current 2007 earnings guidance, specifically excluded the positive or negative impact of any legacy litigation. "We have re-assessed all of our major legal cases and disputes and decided to accelerate the closure of a number of cases," Jose Mas, MasTec's president and chief executive officer, noted. "With continued high legal costs for litigating these cases and the related drain on management time, we have concluded that it is in the best interest of the company to get a number of the older legal cases and disputes behind us." "In the last few years, we have significantly strengthened our management team, improved our portfolio of businesses and customers and improved our financial and operational controls," Mr. Mas continued. "As a result, our current business activities have generated dramatically less litigation than we once had. Therefore, when we get these older legal cases and disputes behind us over the next few months, we expect to enjoy a much lower level of expense for outside legal fees." "We have excellent opportunities with the customers and markets that we currently serve and intend to get our legacy litigation behind us so that we can focus on executing and growing our good business opportunities," Mr. Mas concluded. About MasTec Inc. Headquartered in Coral Gables, Florida, MasTec Inc. (NYSE: MTZ) -- http://www.mastec.com/-- is a specialty contractor operating mainly throughout the United States across a range of industries. The company's core activities are the building, installation, maintenance and upgrade of communication and utility infrastructure systems. * * * Moody's Investor Service placed MasTec Inc.'s probability of default rating at 'Ba3' in September 2006. The rating still dolds to date with a stable outlook. MERCURY CDO: Moody's Cuts Rating on $10MM Class D Notes to Ba3 -------------------------------------------------------------- Moody's Investors Service placed these notes issued by Mercury CDO III, Ltd. on review for possible downgrade: -- $30,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2048 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $40,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2048 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $13,500,000 Class C Fourth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: A2, on review for possible downgrade Current Rating: Baa3, on review for possible downgrade -- $10,000,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: Baa2, on review for possible downgrade Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. MIDORI CDO: Moody's Reviews Ratings and May Downgrade ----------------------------------------------------- Moody's Investors Service placed these notes issued by Midori CDO Ltd. on review for possible downgrade: -- $122,500,000 Class A-1 Secured Funded Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $202,500,000 Class A-1 Secured Unfunded Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $6,500,000 Class A-X Secured Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $81,500,000 Class A-2 Secured Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $28,000,000 Class B Secured Floating Rate Notes Due 2047 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $26,000,000 Class C Secured Floating Rate Deferrable Notes Due 2047 Prior Rating: A2 Current Rating: Baa3, on review for possible downgrade -- $14,000,000 Class D Secured Floating Rate Deferrable Notes Due 2047 Prior Rating: Baa2, on review for possible downgrade Current Rating: B2, on review for possible downgrade -- $5,500,000 Class E Secured Floating Rate Deferrable Notes Due 2047 Prior Rating: Baa3, on review for possible downgrade Current Rating: B3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS Securities and CDO Securities. MKP CBO: Moody's Junks Ratings on Two Note Classes -------------------------------------------------- Moody's Investors Service placed these notes issued by MKP CBO VI, Ltd. on review for possible downgrade: -- Class A-1 First Priority Senior Secured Floating Rate Notes due 2051 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- Class A-2 First Priority Senior Secured Floating Rate Notes due 2051 Prior Rating: Aaa, on review for possible downgrade Current Rating: A3, on review for possible downgrade -- Class B Third Priority Senior Secured Floating Rate Notes due 2051 Prior Rating: Aa2, on review for possible downgrade Current Rating: Ba1, on review for possible downgrade Moody's also announced that it has downgraded these notes: -- Class C Mezzanine Secured Deferrable Floating Rate Notes due 2051 Prior Rating: Ba2, on review for possible downgrade Current Rating: Ca -- Class D Mezzanine Secured Deferrable Floating Rate Notes due 2051 Prior Rating: B2, on review for possible downgrade Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. ML-CFC COMMERCIAL: S&P Puts Low-B Ratings on Six Cert. Classes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to ML-CFC Commercial Mortgage Trust 2007-9's $2.8 billion commercial mortgage pass-through certificates series 2007-9. The preliminary ratings are based on information as of Oct. 26, 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-SB, A-4, A-1A, AM, AM-A, AJ, AJ-A, B, C, D, E, F and XP are offered publicly. The remaining classes are offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.23x, a beginning LTV of 106.3%, and an ending LTV of 99.3%. Unless otherwise indicated, all calculations in this presale report, including weighted averages, do not include subordinate nontrust B notes. Preliminary Ratings Assigned ML-CFC Commercial Mortgage Trust 2007-9 Recommended Class Rating Amount credit support ----- ------ ------ ---------------- A-1 AAA $55,677,000 30.000% A-2 AAA $258,109,000 30.000% A-3 AAA $134,799,000 30.000% A-SB AAA $90,437,000 30.000% A-4 AAA $931,581,000 30.000% A-1A AAA $496,931,000 30.000% AM AAA $210,087,000 20.000% AM-A AAA $70,990,000 20.000% AJ AAA $168,068,000 12.000% AJ-A AAA $56,793,000 12.000% B AA+ $31,621,000 10.875% C AA $21,081,000 10.125% D AA- $28,107,000 9.125% E A+ $24,595,000 8.250% F A $24,594,000 7.375% XP AAA $2,744,716,000 N/A A-2FL AAA - 30.000% A-3FL AAA - 30.000% A-4FL AAA - 30.000% AM-FL AAA - 20.000% AJ-FL AAA - 12.000% G A- $28,107,000 6.375% H BBB+ $28,108,000 5.375% J BBB $24,594,000 4.500% K BBB- $31,621,000 3.375% L BB+ $14,054,000 2.875% M BB $10,541,000 2.500% N BB- $7,026,000 2.250% P B+ $14,054,000 1.750% Q B $3,514,000 1.625% S B- $10,540,000 1.250% T NR $35,135,146 0.000% XC* AAA $2,810,764,146 N/A * Interest-only class with a notional amount. N/A -- Not applicable. NR -- Not rated. MONTAUK POINT: Moody's Lowers Ratings on Two Notes to Low-B -----------------------------==---------------------------- Moody's Investors Service placed these notes issued by Montauk Point CDO II, Ltd. on review for possible downgrade: -- $340,000,000 Class A-1S Senior Secured Floating Rate Notes due 2046; Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $34,250,000 Class A-1J Senior Secured Floating Rate Notes due 2046; Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $50,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046; Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $15,000,000 Class A-3 Senior Secured Floating Rate Notes due 2046; Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $15,500,000 Class A-4 Secured Deferrable Floating Rate Notes due 2046; Prior Rating: A2 Current Rating: Baa2, on review for possible downgrade -- $20,500,000 Class B Secured Deferrable Floating Rate Notes due 2046; Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade -- $5,000,000 Class C Secured Deferrable Floating Rate Notes due 2046; Prior Rating: Ba2 Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS and CDO Securities. MONTAUK POINT: Moody's Reviews Ba1 Rating on $4MM Class G Notes --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Montauk Point Cdo, Ltd. on review for possible downgrade: -- $44,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2042 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $16,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due 2042 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade -- $11,400,000 Class D Fifth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2042 Prior Rating: A2 Current Rating: A2, on review for possible downgrade -- $11,400,000 Class E Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2042 Prior Rating: Baa2 Current Rating: Baa2, on review for possible downgrade -- $2,000,000 Class F Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2042 Prior Rating: Baa3 Current Rating: Baa3, on review for possible downgrade -- $4,000,000 Class G Eighth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2042 Prior Rating: Ba1 Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS securities. MONTROSE HARBOR: Moody's Junks Ratings on Two Note Classes ---------------------------------------------------------- Moody's Investors Service placed these notes issued by Montrose Harbor CDO I, Ltd. on review for possible downgrade: -- $342,500,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2051 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $52,500,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2051 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $35,000,000 Class B-1 Third Priority Secured Floating Rate Notes Due 2051 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $13,750,000 Class B-2 Fourth Priority Secured Floating Rate Notes Due 2051 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these class of notes: -- $14,500,000 Class C Fifth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2051 Prior Rating: A2 Current Rating: Caa1, on review for possible downgrade Moody's has also downgraded these class of notes: -- $21,250,000 Class D Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2051 Prior Rating: Baa2 Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. MORGAN STANLEY: Fitch Holds Low-B Ratings on Three Certificates --------------------------------------------------------------- Fitch took these rating actions for Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1999- LIFE 1, as: -- $2.7 million class N downgraded to 'C/DR6' from 'CC/DR4'. -- $4.5 million class M downgraded to 'B-/DR2' from 'B'. -- $13.4 million class E upgraded to 'AA' from 'AA-'; -- $7.4 million class F upgraded to 'A+' from 'A'; -- $1.5 million class G upgraded to 'A' from 'A-'. In addition, Fitch affirmed these classes: -- $63.8 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $20.8 million class B at 'AAA'; -- $23.8 million class C at 'AAA'; -- $8.9 million class D at 'AAA'; -- $10.4 million class H at 'BBB'; -- $7.4 million class J at 'BB+'; -- $4.5 million class K at 'BB'; -- $5.9 million class L at 'B+'; Class A-1 has been paid in full. The rating downgrades and the assignment of a distressed recovery rating are due to possible losses from the specially serviced loan. The rating upgrades reflect improved credit enhancement levels as a result of scheduled amortization, prepayment of six loans and the defeasance of an additional four loans (6%) since Fitch's last rating action. In total, twenty six loans (24.1%) have defeased. As of the October 2007 distribution report, the pool's aggregate certificate balance has been reduced by 20% to $475 million from $594.0 million at issuance. Currently there is one loan in special servicing, which is secured by a 55,000 sf office property in Charlotte, North Carolina. The loan was transferred to the special servicer due to imminent default and is now 60+ days delinquent. The property has been vacant since April 2005 and the Borrower has been advancing the debt service payments out of pocket since then. The special servicer is evaluating options and formulating workout strategy. Fitch has reviewed the shadow rating of the Edens & Avant loan portfolio (13.6%). At issuance, the portfolio was secured by 21 retail properties, anchored mostly by grocery and drug stores. Due to various property release and substitution activities, there are only 20 properties remaining in the portfolio, five of which have defeased. The loan maintains its investment-grade shadow rating due to stable performance. Occupancy as of Sept. 30, 2007 declined slightly to 87.5% from 90% at issuance. MOVIE GALLERY: Notified by Ernst & Young of Accounting Issues ------------------------------------------------------------- Movie Gallery Inc. and its debtor-affiliates' external auditor, Ernst & Young LLP, informed the Debtors on Oct. 13, 2007, of a potential accounting issue with respect to the manner in which the Debtors calculated and recorded its valuation allowance against deferred tax assets at the end of fiscal 2005 in connection with Movie Gallery's acquisition of Hollywood Video, Thomas D. Johnson, Jr., executive vice president, chief financial officer of Movie Gallery, disclosed in a regulatory filing with the Securities and Exchange Commission. In fiscal 2005, Mr. Johnson said, the Debtors may have inappropriately netted the deferred tax liability related to the Hollywood Video tradename against the Debtors' deferred tax assets. This possible accounting issue is still under review by Ernst & Young to determine, in its opinion, whether or not an accounting error occurred. According to Mr. Johnson, Movie Gallery has not yet had a chance to review Ernst & Young's findings given the very recent notification of the potential issue. If it is determined that an error did occur, Movie Gallery will evaluate the materiality of the matter in accordance with appropriate accounting pronouncements in determining whether a restatement of its financial statements is necessary, Mr. Johnson said. "It should be noted, however, that even if the potential issue is deemed to require restatement of previously issued financial statements, the Company believes that this is solely a noncash financial statement matter and, therefore, would have no impact on the Company's financial covenants and ratios, cash flows, tax returns or tax attributes (e.g., net operating losses)," he added. 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 Kurtzman 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. 4; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) MOVIE GALLERY: Wants to Restrict Equity Trades to Protect NOLs -------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia approved the notification and hearing procedures that must be satisfied before the trading or transfer of common stock of Movie Gallery, Inc. and its debtor-affiliates. The Debtors proposed the trading procedures to protect and preserve their valuable tax attributes, including net operating loss carryforwards and certain other tax and business credits. If no trading restrictions are imposed, the trading or transfers could severely limit or even eliminate the Debtors' ability to use their Tax Attributes including their NOLs, which could lead to significant negative consequences for the Debtors, their estates and the overall reorganization process, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, said. As of the date of bankruptcy, the Debtors had NOLs of roughly $450,000,000 and total Tax Attributes, including NOLs, of roughly $485,000,000. The Tax Attributes could translate into potential future tax savings for the Debtors of $195,000,000, based on a combined federal and state income tax rate of roughly 40%. "The NOLs are of significant value to the Debtors and their estates because the Debtors can carry forward their NOLs to offset their future taxable income for up to 20 taxable years, thereby reducing their future aggregate tax obligations," Mr. Cieri explained. "Such NOLs may also be utilized by the Debtors to offset any taxable income generated by transactions completed during the chapter 11 cases." According to Mr. Cieri, unrestricted trading of Common Stock could adversely affect the Debtors' NOLs if: (a) too many 5% or greater blocks of Common Stock are created; or (b) too many shares are added to or sold from the blocks such that, together with previous trading by 5% shareholders during the preceding three-year period, an ownership change within the meaning of Section 382 of the Internal Revenue Code of 1986 is triggered prior to emergence and outside the context of a confirmed chapter 11 plan. IRC Sections 39(a), 59(e), l72(b) and 904(c) permit corporations to carry forward Tax Attributes to offset future taxable income and tax liability, thereby significantly improving the corporations' liquidity in the future. IRC Section 382 limits the amount of taxable income that can be offset by a corporation's NOLs in taxable years -- or a portion thereof -- following an ownership change. An "ownership change" occurs if the percentage (by value) of the stock of a corporation owned by one or more 5% shareholders has increased by more than 50 percentage points over the lowest percentage of stock owned by such shareholders at any time during the three-year testing period ending on the date of the ownership change. "The problem facing the Debtors . . . is that if too many equity holders transfer their equity interests prior to the effective date of a chapter 11 plan, such transfers may trigger an ownership change," Mr. Cieri pointed out. The trading procedures allow the Debtors to closely monitor certain transfers of Common Stock so as to be in a position to act expeditiously to prevent those transfers, if necessary, with the purpose of preserving the NOLs, Mr. Cieri said. The Debtors expect the trading procedures to directly affect six entities that hold more than 1,500,000 shares of Common Stock and parties who are interested in purchasing sufficient Common Stock to result in that party becoming a holder of at least 1,500,000 shares. Roughly 33,000,000 shares of Movie Gallery common stock are outstanding as of Sept. 30, 2007. Pursuant to the trading procedures, any entity who currently is or becomes a Substantial Shareholder must submit a declaration of that status on or before the later of (i) 40 days after the date the Debtors circulate a notice of the Court's order approving the trading procedures and (ii) 10 days after becoming a Substantial Shareholder. Prior to effectuating any transfer of Common Stock that would result in an increase in the amount of Common Stock of which a Substantial Shareholder has Beneficial Ownership or would result in an entity becoming a Substantial Shareholder, the Substantial Shareholder must file an advance written declaration of the intended transfer of Common Stock. Prior to effectuating any transfer of Common Stock that would result in a decrease in the amount of Common Stock of which a Substantial Shareholder has Beneficial Ownership or would result in an entity ceasing to be a Substantial Shareholder, that Substantial Shareholder must file an advance written declaration of the intended transfer. The Debtors have 30 calendar days after receipt of a Declaration of Proposed Transfer to object to any proposed transfer of Common Stock on the grounds that the transfer might adversely affect the Debtors' ability to utilize their Tax Attributes. If the Debtors file an objection, the transaction would not be effective unless the objection is withdrawn by the Debtors or is approved by a final Court order that becomes nonappealable. If the Debtors do not object within the 30-day period, the transaction could proceed solely as set forth in the Declaration of Proposed Transfer. Further transactions must be the subject of additional notices in accordance with the procedures, with an additional 30-day waiting period for each Declaration of Proposed Transfer. A "Substantial Shareholder" is any entity that has Beneficial Ownership of at least 1,500,000 shares of Common Stock, representing approximately 4.5% of all issued and outstanding shares. "Beneficial Ownership" of Common Stock includes direct and indirect ownership -- that is, a holding company would be considered to beneficially own all shares owned or acquired by its subsidiaries -- ownership by that holder's family members and entities acting in concert with the holder to make a coordinated acquisition of stock and ownership of shares that the holder has an option to acquire. The Debtors will publish a copy of the Court Order in The Wall Street Journal and the Washington Post, submit a copy of the Order to Bloomberg Professional Service for potential publication by Bloomberg, and submit a copy of the Order with the Depository Trust Company for potential posting by the Depository Trust Company. The NOLs and Tax Credits are property of a debtor's estate and are entitled to court protection, Mr. Cieri argued. Courts have uniformly held that a debtor's NOLs constitute property of the estate under Section 541 of the Bankruptcy Code, Mr. Cieri pointed out, citing In re Prudential Lines, Inc., 107 B.R. 832 (Bankr. S.D.N.Y. 1989), aff'd, 119 B.R. 430 (S.D.N.Y. 1990), aff'd, 928 F.2d 565 (2d Cir. 1991), cert. denied 502 U.S. 821 (1991). In Prudential Lines, the U.S. Bankruptcy Court for the Southern District of New York enjoined a parent corporation from taking a worthless stock deduction with respect to its wholly owned debtor subsidiary on the grounds that allowing the parent to do so would destroy its debtor-subsidiary's NOLs. In issuing the injunction, the Prudential Lines court held that the "debtor's potential ability to utilize NOLs is property of an estate," and that "the taking of a worthless stock deduction is an exercise of control over a debtor's NOLs," and thus was properly subject to the automatic stay provisions under the Bankruptcy Code. Courts have granted protection with respect to non-NOL tax credits in other cases, Mr. Cieri added, citing In re Delta Air Lines, Inc., Case No. 05-17923 (Bankr. S.D.N.Y. Sept. 16, 2005). The Delta court held that NOL and tax credit carryforwards are property of the Debtors' estate. The Delta court approved notification procedures and restrictions on certain transfers of claims against and interests in the debtors to protect, among other things, $346,000,000 in non-NOL tax credits. 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 Kurtzman 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. _; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) N-45 FIRST: Fitch Holds BB+ Rating on CDN$3.7 Mil. Class E Notes ---------------------------------------------------------------- Fitch Ratings maintains the Rating Watch Positive designation on these classes of N-45 First CMBS Issuer Corporation, series 2003-3: -- CDN$47.6 million class B at 'AA'; -- CDN$31.4 million class C at 'A'. In addition, Fitch affirms these classes: -- CDN$85.4 million class A-1 at 'AAA'; -- CDN$228.5 million class A-2 at 'AAA'; -- Interest only class IO at 'AAA'; -- CDN$31.4 million class D at 'BBB-'; -- CDN$3.7 million class E at 'BB+'. Classes B and C remain on Rating Watch Positive due to continued amortization and stable to improved performance, as well as the January 2008 maturity of the Tour Bell Loan (30.8%). If the loan pays off at maturity, upgrades to classes B and C are possible. Since issuance, the deal has paid down 7.44% to its current balance of CDN$$428 million as of the Sept. 30, 2007 remittance period. The Place Bell loan is the largest in the transaction at 34.8% of the balance. Located in Ottawa, Ontario, Canada, the loan is secured by a 990,526-square foot class A office building built in 1971 and renovated in the late 1990s. The Place Bell loan is full recourse to the sponsor. As of February 2007, Place Bell was 96.1% occupied compared to 98.9% at issuance. Bell Canada (rated 'BB-' by Fitch), the largest tenant, at 48.6% of the net rentable area, is on a long-term lease until 2022. The year end 2006 Fitch stressed debt service coverage ratio was 1.47x compared to 1.36x at issuance. Fitch stressed debt service coverage ratios are calculated based on servicer provided net operating income less reserves and an additional vacancy adjustment, current loan balance and a stressed refinance constant. Fifth Avenue Place, the second-largest loan in the transaction at 34.4%, is secured by two 34-story office towers totaling 1.5 million square feet in downtown Calgary. About 48,000 sf of the properties consist of retail and storage space. The tenant base is concentrated in the oil and gas industry, such as Devon Estates (38.3%), which is owned by Imperial Oil Limited, Anadarko Canada (16.3%) (rated 'BBB-' by Fitch), and Enbridge, Inc. (9.5%). As of January 2007 occupancy was 99.6%, unchanged from issuance. The YE 2006 Fitch stressed DSCR improved to 2.14x from 1.49x at issuance. The final loan in the transaction is the Tour Bell loan at 30.8% of the pool. The Tour Bell loan is secured by two, 28-story office towers located in Montreal containing 975,661 sf of office space and 40,227 sf of connected underground retail space along with a 693-space parking facility. Of the retail space and parking, 79.2% and 63%, respectively, serve as collateral for the loan. The Tour Bell building houses Bell Canada's Canadian headquarters while the other tower is primarily occupied by National Bank of Canada's headquarters. As anticipated at issuance, Bell Canada exercised early termination rights on three portions of its space, known as Block A, Block B, and Block C totaling 410,302 sf (41% NRA). Bell Canada still occupies 631,860 sf (63% of NRA). Block A was leased to the National Bank of Canada and the International Civil Aviation Organization. Block B was leased to AON. As of July 2006, Block C space was also entirely leased to AON. As of January 2007, Tour Bell was 90.6% occupied as compared to 96% at issuance. The Fitch stressed DSCR was 1.34x compared to 1.29x at issuance. The improved performance is due to a stable to increasing net cash flow as a result of scheduled amortization and rent bumps. NORTH COVE: Moody's Cuts Ratings on Two Note Classes to Low-B ------------------------------------------------------------- Moody's Investors Service placed these notes issued by NORTH COVE CDO III, LTD. on review for possible downgrade: -- $74,000,000 Class B Second Priority Senior Secured Floating Rate Notes due March, 2045 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade -- $44,000,000 Class C Third Priority Senior Secured Floating Rate Notes due March, 2045 Prior Rating: A3 Current Rating: A3, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade the following notes: -- $27,000,000 Class D Fourth Priority Senior Secured Floating Rate Notes due March, 2045 Prior Rating: Baa2 Current Rating: B1, on review for possible downgrade -- $11,000,000 Class E Fifth Priority Secured Floating Rate Notes due March, 2045 Prior Rating: Ba1 Current Rating: B3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. OCEAN DOVE: Atlantic Oceanfront Inn to Be Sold for $400,000 ----------------------------------------------------------- Kenneth L. Hooper and Matthew A. Maciarello, the assignees for the foreclosure of Ocean Dove, LLC's assets, have disclosed that all of the company's real estate property in Worcester County, Maryland, will be sold in an auction. The assets to be sold include Parcels 7276, 7277, and 7326 on the Tenth Election District, Worcester County, Maryland, which is otherwise identified as the Atlantic Oceanfront Inn, improved by a five-story hotel. Pursuant to a certain UCC Security Agreement contained in the purchase money mortgage agreement between Ocean Dove and Wilmington Trust FSB, the company's secured creditor, Wilmington Trust will sell at the same public auction all of the company's right, title and interest in the personal property. The sale and public auction will be held on Wednesday, Nov. 7, 2007, at 1:00 p.m., at the Court House Entrance of the Circuit Court for Worcester County, Court House steps, One West Market Street, Snow Hill, Maryland. A deposit of $350,000 will be required of the purchaser of the real property, and a deposit of the lesser of $50,000 from the purchaser of the personal property. If the real and personal property are to be sold as a unit, the combined deposit will be $400,000. A complete description of the property, personal property, and the complete terms of sale can be obtained at: Alexander Gordon, IV, Esq. Counsel for Assignees 8615 Commerce Drive, Suite 1 Easton, MD 21601 Tel: (410) 822-3702 -- or -- Marshall Auction-Marketing Co., Inc. P.O. Box 3682 Salisbury, MD, 21802 Tel: (410) 835-0383 http://www.marshallauctions.com/ ONE TWO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: ONE TWO FOR YOU INC P.O. Box 552 Toa Baja, PR 00951-0552 Bankruptcy Case No.: 07-06195 Chapter 11 Petition Date: October 24, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Jaime Rodriguez Rodriguez, Esq. Rodriguez & Asociados P.O. Box 2477 Vega Baja, PR 00694 Tel: (787) 858-5324 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ RG Premier Bank of PR Credit line $198,532 P.O. Box 2510 Guaynabo, PR 00970-2510 LM Import & Export Inc Business debt $148,353 4805 Northwest 165th Street Hialeah, FL 33014 Dura-Kleen (USA) Inc. Business debt $110,860 458 East 101st Street Brooklyn, NY 11236 Ferrero Inc. Business debt $107,058 Department of Treasury Taxes $86,045 Ramallah Trading Co Inc Business debt $77,222 J & R Worldwide Inc Business debt $70,543 Golden Sheets Inc Business debt $61,538 Forever Beautiful Business debt $49,973 L P I Far East Inc Business debt $45,062 Mohamad A. Mohamad Business loan $44,863 S.S Dweck & Sons Inc Business debt $42,290 Santa Real Realty Inc Business debt $40,854 A.E.E Utility services $40,202 Alis Yuris Business debt $40,000 Las Piedras Realty Corp Business debt $38,290 Better Home Plastics Corp. Business debt $36,969 It's In The Bag LLC Business debt $34,298 Home Dynamix LLC Business debt $34,236 Capri S.E. Business debt $32,928 OTTIMO FUNDING: S&P Junks Rating on Extendible CP Notes ------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the extendible asset-backed commercial paper notes issued by Ottimo Funding Ltd. to 'C' from 'B'. The rating remains on CreditWatch with negative implications, where it was placed Aug. 14, 2007. The 'CCC' ratings on the series 2007-A and 2007-B mezzanine classes of the subordinated term notes and the series 2007-C subordinated term notes remain on CreditWatch negative and are not affected at this time. Ottimo Funding and the holders of the ABCP and subordinated notes had been operating under a series of forbearance agreements since Aug. 15, 2007, the most recent of which expired Oct. 16, 2007. In accordance with these agreements, the collateral agent was directed not to sell any noteholder collateral (which solely includes 'AAA' rated Alternative-A U.S. residential mortgage-backed securities) into the secondary market. The parties did not renew the forbearance agreement, and consequently the collateral agent has provided notice that it will commence an auction of the RMBS collateral, as provided for in Ottimo Funding's program documents, beginning Oct. 29, 2007, and concluding no later than 5:00 p.m. (New York time) on Nov. 1, 2007. Based on the most recently available servicer report, the market value prices on the RMBS in Ottimo Funding's portfolio, as quoted by independent pricing sources, indicate that the noteholders would likely experience a loss upon a collateral sale occurring in the near term. Standard & Poor's will take further rating actions, as appropriate, when details regarding the pending collateral sale become available. Rating Lowered and Remaining on Creditwatch Negative Ottimo Funding Ltd. Rating ------ Series To From ------ -- ---- Extendible CP notes C/Watch Neg B/Watch Neg Ratings Unchanged and Remaining on Creditwatch Negative Ottimo Funding Ltd. Series Rating ------ ------ 2007-A notes CCC/Watch Neg 2007-B notes CCC/Watch Neg 2007-C notes CCC/Watch Neg POPE & TALBOT: Files for Protection Under CCAA ---------------------------------------------- Pope & Talbot, Inc., yesterday said that in order to address its financial challenges and to support efforts to be a more efficient organization, the company and its U.S. and Canadian subsidiaries have applied for protection under the Companies' Creditors Arrangement Act of Canada. Pope & Talbot's Board of Directors, in a unanimous decision, directed the company to take this action as the best alternative for the long-term interests of the company, its employees, customers, creditors, business partners and other stakeholders. "We want to assure our customers and employee colleagues that Pope & Talbot is taking all available steps to allow its business to continue operating as a going concern," said Harold Stanton, President and CEO. "Our customers can continue to rely on Pope & Talbot to supply their critical business needs. This protection is a necessary and responsible step for the company at this time. Our customers and business partners want Pope & Talbot to succeed, not only because of our over 150-year heritage, but because of the value our company brings to the marketplace." Persistent record low demand for lumber, high priced pulp chips and sawdust, the appreciation of the Canadian dollar and the high cost of debt service have combined for an untenable business environment. Despite doing many things to preserve liquidity, Pope & Talbot has determined the best alternative is to seek protection and flexibility under the reorganization law in Canada, where its principal operating subsidiary is located, and therefore sought protection under the CCAA. The company will use the protections of the CCAA to provide additional time for it to continue its restructuring efforts, which include, but are not limited to, the sale of certain or all of the company's assets. Pope & Talbot expects to fund current operating needs, including wages, benefits and other operating expenses, with cash generated from daily operations while under CCAA protection. Pope & Talbot Inc. (Pink Sheets:PTBT) -- http://www.poptal.com/-- is a pulp and wood products business. The company, based in Portland, Oregon, was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the Company's products include the US, Europe, Canada, South America and the Pacific Rim. PRIVA INC: Court Approves Sale of Assets to Fiberlinks Textiles --------------------------------------------------------------- Priva Inc. has obtained an order from the Superior Court appointing RSM Richter Inc. as interim receiver to certain of its assets and authorizing the sale of the majority of its assets to Fiberlinks Textiles Inc. In addition, the Superior Court of Quebec authorized Priva to file articles of amendment to change its name. Richter is also the trustee pursuant to Priva's notice of intention to make a proposal to its creditors pursuant to the Bankruptcy and Insolvency Act. Fiberlinks Textiles Inc. is a private manufacturer and distributor of textile products. Headquartered in Montreal, Priva Inc. (TSX VENTURE: PIV) -- http://www.priva-inc.com/-- is a manufacturer, distributor and marketer of an assortment of absorbent, waterproof textile products sold to retailers in Canada, the U.S., the U.K., Australia and Spain, with export sales representing just about 67% of sales. Priva's products for adults are sold under the Priva and AmericareTM labels; children's products are marketed under the "SnoozyTM" and "Tidy TurtleTM" brand names and Priva's anti- allergen products are sold under the QuorumTM and Zip & Block labels. At June 30, 2007, Priva Inc.'s's balance sheet showed total assets of $3.12 million and total liabilities of $3.2 million, resulting to a shareholders' deficit of $0.08 million. RALEYS TOWN: Case Summary & Six Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Raleys Town & Country Market Inc. General Delivery Ridge, MD 20680 Bankruptcy Case No.: 07-20527 Chapter 11 Petition Date: October 24, 2007 Court: District of Maryland (Greenbelt) Debtor's Counsel: Dean Knowles, Esq. O'Brien, Young & Knowles LLP 5407 Water Street Suite 106 Upper Marlboro, MD 20772 Tel: (301) 952-7400 Fax: 301-952-7415 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's list of its Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Daniel & Anne Raley Loan purchase of $1,555,118 P.O Box 10 business Great Mills, MD 20634 Ramond & Margaret Raley Loan purchase of $1,555,118 P.O. Box 336 business Ridge, MD 20860 Bruce Raley Loan purchase of $1,555,118 P.O. Box 504 business Ridge, MD 20680 Maryland Bank & Trust Bank loan $319,610 Associated Wholesalers Inc Trade debt $0 St. Mary's County Government Taxes $0 REGENCY ENERGY: Seeks Candidates for Independent Director Posts --------------------------------------------------------------- The board of directors of Regency Energy Partners LP has identified qualified candidates to fill independent director posts and expects to name at least one to the board in the fourth quarter of 2007. Regency is required to have three independent directors under NASDAQ rules and must replace Robert W. Shower, who left the board for health reasons earlier this year. Regency currently has two independent directors, Dean Fuller, who plans to resign soon as his replacement is identified, and Otis Winters, chairman of Regency's audit committee, who will stay until after Regency files its annual report on form 10-K for 2007. Also, the board has searched for a chief executive officer to replace Jim Hunt, Regency's president and chief executive officer, upon his planned retirement in 2008. Regency is looking both internally and externally to fill the CEO position. "We were fortunate that three of the individuals responsible for Regency's early success - Jim Hunt, Dean Fuller and Otis Winters - were willing to see Regency through the transition to new general partner ownership," James F. Burgoyne, chairman of Regency's executive committee and a managing director at GE Energy Financial Services, said. "These gentlemen have postponed their departures from Regency until we find strong candidates to fill their shoes." "We are confident that the ongoing search for a replacement for Jim Hunt will identify highly qualified candidates within the timeframe Jim discussed with us when we acquired control of the general partnership," Mr. Burgoyne continued. "The board of directors is grateful to Jim for extending his stay with Regency until we find the ideal candidate, and we thank him for steering Regency through its early development as a Master Limited Partnership." About Regency Energy Headquartered in Dallas, Texas, Regency Energy Partners LP (Nasdaq: RGNC) -- http://www.regencyenergy.com/-- is a midstream energy partnership that gathers, processes, markets and transports natural gas and natural gas liquids. Regency's general partner is majority-owned by an affiliate of GE Energy Financial Services, a unit of GE (NYSE: GE). * * * As reported in the Troubled Company Reporter on Sept. 13, 2007, Moody's Investors Service upgraded Regency's corporate family rating to Ba3 from B1 and its senior unsecured notes, to B1 from B2. The rating outlook is stable. RESIDENTIAL ACCREDITED: Fitch Takes Rating Actions on 10 Deals -------------------------------------------------------------- Fitch Ratings took rating actions on these Residential Accredited Loans Inc. transactions: RALI, Series 2003-QS3: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 downgraded to 'B-/DR2' from 'B'. RALI, Series 2003-QS5: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'CCC/DR2'. RALI, Series 2003-QS12: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. RALI, Series 2005-QS6: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 downgraded to 'B+' from 'BB'; -- Class B-2 downgraded to 'CCC/DR2' from 'B'. RALI, Series 2005-QS8: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 downgraded to 'BB-' from 'BB'; -- Class B-2 downgraded to 'CCC/DR2' from 'B'. RALI, Series 2005-QS11: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 downgraded to 'CCC/DR2' from 'B'. RALI, Series 2005-QS13: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 downgraded to 'BBB-' from 'BBB'; -- Class B-1 downgraded to 'B+' from 'BB'; -- Class B-2 downgraded to 'CCC/DR2' from 'B'. RALI, Series 2006-QS3: -- Class A affirmed at 'AAA'; -- Class M-1 downgraded to at 'AA-' from 'AA', and placed on Rating Watch Negative; -- Class M-2 downgraded to 'BBB' from 'A', and placed on Rating Watch Negative; -- Class M-3 downgraded to 'B+' from 'BBB', and removed from Rating Watch Negative; -- Class B-1 downgraded to 'CCC/DR2' from 'BB-'; -- Class B-2 remains at 'C/DR5'. RALI, Series 2006-QS4: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BBB+' from 'A'; -- Class M-3 downgraded to 'BB-' from 'BBB', and removed from Rating Watch Negative; -- Class B-1 downgraded to 'CCC/DR2' from 'BB-'; -- Class B-2 remains at 'C/DR5'. RALI, Series 2006-QS9: -- Class A affirmed at 'AAA'; -- Class M-1 downgraded to 'AA-' from 'AA', and placed on Rating Watch Negative; -- Class M-2 downgraded to 'BBB+' from 'A', and placed on Rating Watch Negative; -- Class M-3 downgraded to 'BB-' from 'BBB', and removed from Rating Watch Negative; -- Class B-1 downgraded to 'CCC/DR2' from 'B+'; -- Class B-2 remains at 'C/DR5'. The collateral of the above transactions primarily consists of 30- and 15-year fixed-rate mortgage loans extended to Alt-A borrowers and are secured by first liens, primarily on one- to four-family residential properties. As of the September 2007 distribution date, the above transactions are seasoned from 14 (series 2006- QS9) to 55 (series 2003-QS3) months. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 28% (series 2003-QS3) to 78% (series 2006-QS9). The loans are master serviced by GMAC-RFC (rated 'RMS2' by Fitch). The affirmations, affecting about $2.7 billion of outstanding certificates, reflect a stable relationship between credit enhancement and future loss expectations. The downgrades, affecting about $113.1 million in outstanding certificates, and classes placed on Rating Watch Negative, affecting about $66 million of outstanding certificates, reflect deterioration in the relationship between CE and loss expectation. RIDGEWAY COURT: Moody's Cuts Class C Notes' Rating to Ba3 --------------------------------------------------------- Moody's Investors Service placed these notes issued by Ridgeway Court Funding I, Ltd. on review for possible downgrade: -- $160,000,000 Class A2 Senior Floating Rate Notes Due November 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $128,000,000 Class A3 Senior Floating Rate Notes Due November 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $46,000,000 Class A4 Senior Floating Rate Notes Due November 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded these notes: -- $35,000,000 Class B Deferrable Floating Rate Notes Due November 2046 Prior Rating: A3 Current Rating: Baa3, on review for possible downgrade -- $13,000,000 Class C Deferrable Floating Rate Notes Due November 2046 Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of residential mortgage-backed securities and ABS CDOs. RIVIERA TOOL: Secured Lender Forecloses All Assets and Rights ------------------------------------------------------------- All of the assets and intellectual property of Riviera Tool Company has been foreclosed on by its primary secured lender, Laurus Master Fund Ltd. The company said the foreclosure of assets follows an August 2007 demand notice issued by Laurus, after a default by the company on its loan agreements. Discussions between the company and Laurus to extend or refinance the company's existing credit agreement were unsuccessful. Pursuant to the foreclosure proceedings, in accordance with the Uniform Commercial Code, the company was released from certain indebtedness to Laurus in exchange for the surrender of the company's assets and intellectual property securing its obligations under the credit agreement. As a result of the Foreclosure Agreement, the company has no remaining operations and a de minimus amount of cash. The company said that after the foreclosure, Laurus sold the assets and intellectual property in an arms-length transaction to a privately held North American company, Riviera Tool LLC doing business in Michigan as Riviera Tool Acquisition LLC. The new owner intends to operate the company at its current facility in Grand Rapids. The majority of the company's 68 employees will be offered employment with the new owner. About Riviera Tool Based in Grand Rapids, Michigan, Riviera Tool Company (ASE: RTC) (OTC Pink Sheets: RIVT) -- http://www.rivieratool.com/-- designs and manufactures die systems for the production of underbody panels, inter-structural panels, outer body panels, and bumper systems. A majority of the company's sales are to DaimlerChrysler, General Motors Corporation, Mercedes-Benz, BMW and their tier one suppliers of sheet metal stamped parts and assemblies. Going Concern Doubt In November 2006, BDO Seidman LLP expressed substantial doubt about Riviera Tool Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and retained deficit. RSC HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $73.2 Million ----------------------------------------------------------------- RSC Holdings Inc. disclosed results of its third quarter ended Sept. 30, 2007. RSC Holding Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $3.55 billion in total assets and $3.63 billion in total liabilities, resulting in a $73.2 million total shareholders' deficit. The company reported net income of $47.5 million in the third quarter ended Sept. 30, 2007, compared with net income of $59.6 million in the same period last year. For the third quarter, total revenues were $462.0 million, up 8.0% from the $427.6 million reported for last year's third quarter. Rental revenues, which accounted for 89% of total revenues, grew 12.3% to $411.6 million from $366.4 million in the comparable year-ago period. Same store rental revenues increased 10.2% for the period. Sales of used equipment totaled $30.5 million, down from $38.6 million in the 2006 third quarter, reflective of the company's young and well-maintained fleet and the high rental demand from the non-residential construction and industrial markets. Sales of merchandise were $19.9 million compared to $22.6 million in the prior year quarter, consistent with the company's strategy to focus on higher-margin items that are more complementary to its core equipment rental operations. "RSC continues to deliver solid revenue growth and greater profitability," said Erik Olsson, president and chief executive officer. "Our third quarter revenue performance reflects our ability to anticipate and respond effectively to increased volume demand for rental equipment from our underlying markets. We believe that our disciplined business model is a competitive strength that enables RSC to maximize capital and operating efficiency, respond rapidly to shifts in demand and deliver excellent service to our customers," Mr. Olsson noted. In the third quarter, RSC expanded its footprint by opening five new locations, bringing the total number of RSC locations to 469. The company added 33 net new sales people in the period. Of the 88 net new sales people that have been added in the first nine months of 2007, 85% have been assigned to existing locations, supporting the company's same store sales growth strategy. Third quarter operating income increased 10.9% to $136.1 million compared to $122.8 million in the same quarter of 2006, and operating margin expanded to 29.5% from 28.7% in the prior year. Adjusted EBITDA increased 13.5% to $225.4 million in the third quarter compared to $198.6 million in the prior year, and adjusted EBITDA margin increased to 48.8% compared to 46.5% in the same quarter 2006. "We achieved significant gains in operating income in the third quarter, resulting from strong volume growth, effective cost control and efficient fleet management with an impressive fleet utilization rate of 74.6%, up from 73.1% in the prior year," noted Mr. Olsson. "At the end of the period, RSC's fleet age was 25 months, which we believe is the youngest in the industry, and which provides the company with important operating flexibility," Mr. Olsson said. In the third quarter, the company reduced total debt by $44.1 million to $2.702 billion, bringing the year-to-date debt reduction to $304.1 million including $230.7 million in IPO proceeds. Free cash flow for the third quarter was $58.3 million compared to $0.7 million for the previous year. Commenting on the outlook for the remainder of 2007, Mr. Olsson noted, "We believe that RSC is well-positioned to continue to outperform the industry. Approximately 94% of our revenues are derived from the non-residential construction and industrial markets with several sectors experiencing double digit growth this year, including power and energy, infrastructure, health care andeducation construction. These markets have been largely unaffected by the declining trends in the residential construction market that have persisted for the last 20 months. Within this environment, RSC enjoys important advantages with respect to fleet efficiency and customer service programs that enhance our competitive position," Mr. Olsson said. About RSC Based in Scottsdale, Arizona, RSC Holdings Inc., (NYSE: RRR) -- http://www.RSCrental.com/-- through RSC Equipment Rental, provides equipment rental in North America servicing the construction and industrial markets with an original equipment fleet cost of $2.7 billion. RSC offers equipment and service to customers through an integrated network of 469 rental locations across 39 states in the United States and in four Canadian provinces. SAIL DEALS: Moody's Takes Rating Actions on 21 Certificates ----------------------------------------------------------- Moody's Investors Service downgraded 17 certificates and placed on review for possible downgrade 4 certificates issued by Structured Asset Investment Loan Trust in 2004. The collateral backing each deal placed on review consists primarily of first-lien, subprime fixed and adjustable rate mortgage loans. The tranches being downgraded or reviewed have experienced a decrease in available credit enhancement and the recent pace of losses in the underlying collateral of each deal has eroded overcollateralization below its targeted level. This has caused the protection available to the subordinate bonds to be diminished given the current projected losses on the underlying pools. Complete rating actions are: Downgrades: Issuer: Structured Asset Investment Loan Trust 2004-1 -- Cl. M5, Downgraded to B1 from Baa2 -- Cl. M6, Downgraded to B1 from Baa3 -- Cl. M4, Downgraded to Ba2 from Baa1 Issuer: Structured Asset Investment Loan Trust 2004-3 -- Cl. M5, Downgraded to B3 from Baa2 Issuer: Structured Asset Investment Loan Trust 2004-4 -- Cl. M5, Downgraded to Baa3 from A3 -- Cl. M7, Downgraded to B3 from Baa2 -- Cl. M6, Downgraded to Ba3 from Baa1 -- Cl. M8, Downgraded to Caa1 from Baa3 Issuer: Structured Asset Investment Loan Trust 2004-5 -- Cl. B, Downgraded to B3 from Baa3 -- Cl. M8, Downgraded to Ba1 from Baa2 -- Cl. M7, Downgraded to Baa3 from Baa1 Issuer: Structured Asset Investment Loan Trust 2004-7 -- Cl. M7, Downgraded to B1 from Baa3 Issuer: Structured Asset Investment Loan Trust 2004-8 -- Cl. M9, Downgraded to B3 from Baa3 -- Cl. M8, Downgraded to Ba2 from Baa2 Issuer: Structured Asset Investment Loan Trust 2004-BNC1 -- Cl. M6, Downgraded to B1 from Baa2 -- Cl. M5, Downgraded to Ba2 from Baa1 -- Cl. B1, Downgraded to Caa1 from Ba1 Review for possible downgrade: Issuer: Structured Asset Investment Loan Trust 2004-9 -- Cl. M7, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Structured Asset Investment Loan Trust 2004-2 -- Cl. M4, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. M5, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. M6, Placed on Review for Possible Downgrade, currently Baa3 SALEM CAPITAL: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Salem Capital Group Inc. 1141 Breckenridge Ave. Lake Forest, IL 60045 Bankruptcy Case No.: 07-19825 Chapter 11 Petition Date: October 27, 2007 Court: Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: Brian L Shaw, Esq. Shaw Gussis Fishman Glantz Wolfson & Tow 321 North Clark Street Suite 800 Chicago, IL 60610 Tel: (312) 541-0151 Fax: (312) 980-388 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ The LauraLee K. Bell - 1993 Trust $29,000,000 c/o McDermott Will & Emery 227 West Monroe Street Chicago, IL 60606-5096 Lori Glattly $680,000 1141 Breckenridge Avenue Lake Forest, IL 60045 (Unknown secured) Parsons, Behle & Latimer $76,223 Attn: J. Thomas 201 South Main Street, Suite 1800, Salt Lake City, UT 84145-0898 Robert Brown, CPA $70,000 Cooper, White and Cooper $50,547 Dorsey & Whitney LLP $41,303 FagelHaber LLC c/o Stein & Rotman $28,583 Heritage Pacific Leasing $20,000 Markowitz, Herbold, Glade $12,236 & Mehlhaf, PC S A Burnthon LLC $9,553 The Medleh Group $8,454 Vengroff, Williams & Associates, Inc. $50.80 Dann and Meacham Unknown Hawaii Health Systems Corp Unknown SALOMON BROTHERS: Moody's Holds Caa2 Rating on Class N Certs. ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of 11 classes of Salomon Brothers Securities VII, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-C1 as: -- Class A-2, $402,572,726, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $35,665,000, affirmed at Aaa -- Class C, $30,315,000, affirmed at Aaa -- Class D, $10,700,000, upgraded to Aa1 from Aa2 -- Class E, $8,916,000, upgraded to Aa2 from Aa3 -- Class F, $14,266,000, upgraded to A2 from A3 -- Class G, $10,700,000, affirmed at Baa1 -- Class H, $14,266,000, affirmed at Ba1 -- Class J, $17,832,000, affirmed at Ba2 -- Class K, $5,350,000, affirmed at Ba3 -- Class L, $3,566,000, affirmed at B1 -- Class M, $7,133,000, affirmed at B3 -- Class N, $7,133,000, affirmed at Caa2 As of the Oct. 18, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 19.8% to $572.3 million from $713.3 million at securitization. The certificates are collateralized by 213 loans. The loans range in size from less than 1.0% to 4.6% of the pool, with the 10 largest loans representing 21.2% of the outstanding pool balance. Six loans have been liquidated from the trust resulting in aggregate realized losses of about $12 million. Sixty one loans, representing 32.8% of the pool balance, have defeased and are collateralized by U.S. Government securities. Forty five loans, representing 28.8% of the pool, are on the master servicer's watchlist. Two loans, representing 0.3% of the pool, is in special servicing. Moody's is not estimating any losses from the specially serviced loans currently. Moody's was provided with year-end 2006 operating results for 94% of the pool. Moody's loan to value ratio is 82.7%, compared to 79.3% at Moody's last full review in August 2006 and compared to 85.6% at securitization. Moody's is upgrading Classes D, E and F due to increased credit enhancement and an increased percentage of defeased loans. The top three loans represent 10.9% of the pool. The largest loan is the Putnam Building Loan ($26.1 million - 4.6%), which is secured by a 231,000 square foot office building, located in Norwood, Massachusetts, about 12.5 miles southwest of Boston. Built in 1978, the property is 100% net leased to Putnam Investments, a subsidiary of Marsh & McLennan Companies (Moody's senior unsecured rating Baa2; stable outlook) through July 2013. Moody's LTV is 87.4%, compared to 89.1% at last review and compared to 92.7% at securitization. The second largest loan group is a crossed collateralized pool consisting of the Los Cabos Villas and Jovanna Villas Loans ($22.1 million - 3.9%). The two apartment communities contain a total of 474 units and are located in North Las Vegas, Nevada. As of year- end 2006, the combined occupancy rate was 90%, compared to 94% at last review and compared to 96% at securitization. The overall performance of the portfolio has declined since last review due to decreased occupancy and rental revenue. Moody's LTV is 92.5%, compared to 90.7% at last review and compared to 85.7% at securitization. The third largest loan is Hasbrouck & Torview Apartments Loan ($13.6 million - 2.4%), which is secured by a nine-building, 373- unit garden apartment complex located in Garnerville, New York. Garnerville is in Rockland County about 35 miles north of New York City. As of year-end 2006, occupancy was 85%, compared to 93% at last review and compared to 97% at securitization. Performance has declined due to lower occupancy and increased expenses and capital costs. This loan is on the master servicer's watchlist due to low debt service coverage resulting from unusually high capital expenditures. Moody's LTV is 90.2%, compared to 83.0% at last review and compared to 85.7% at securitization. SANTA FE: S&P Lowers Bond's Rating to BB and Says Outlook is Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Santa Fe, N.M.'s educational facilities refunding and improvement revenue bonds series 2006, issued for the College of Santa Fe to 'BB' from 'BBB-'. The outlook is negative. "The rating action reflects the significant weakness in the college's financial reporting," said Standard & Poor's credit analyst Carlotta Mills. "This resulted from poor internal controls, a material $6.5 million downward restatement of unrestricted net assets for fiscal 2005, and a large adjusted operating deficit of $3 million in fiscal 2006." Fiscal 2007 results will not be ready until February 2008 and management indicates that there will be a similar material operating deficit. The college has considerable cash flow challenges and is due to run out of cash in February, although substantial steps are underway to prevent it. Proceeds of the 2006 bonds were primarily used to refund all outstanding debt and included $4 million of new money for campus upgrades; currently $1 million is not used and it may be used to pay down the debt. Debt service at that time was extended an additional seven years, maturing in 2036. Debt service is level with maximum annual debt service of $1.6 million occurring in 2010. Along with the college's 2006 bond issue of $24.335 million, it has a $6 million, 20-year loan. There is also a $2 million line of credit being used. SCO Group: Court OKs $36 Million Sale of Unix to JGD Management --------------------------------------------------------------- The SCO Group Inc. and its debtor-affiliates obtained approval from the U.S. Bankruptcy Court for the District of Delaware to publicly sell their Unix business to JGD Management Corp., dba York Capital Management or to any successful bidder. The Debtors and JGD have sign an asset purchase agreement which provided that apart from the Unix business, the Debtor will sell to JGD for a total consideration price of $36 million certain of their related claims in litigation, assumed liabilities and the Debtors' cross-license and related agreements pertaining to the Hipcheck product line and Me Inc. The agreement also provide financing to the Debtor, under Sections 363 and 364 of the U.S. Bankruptcy Code. JGD, pursuant to the agreement, will pay the Debtor the total price in cash and non-cash components consisting of $10 million cash payment, up to $10 million in the form of a litigation credit facility, up to $10 million in the form of a 20% interest in JGD's collection of favorable judgment from Linux litigation, and up to $6 million in the form of a revenue share agreement. In addition, under the agreement, JGD will post and earnest money deposit in the amount of 5% of the purchase price. The Debtors and JGD have agreed to a $50,000 reimbursement of JGD's purchase fees in connection with the consummation of the deal. If JGD is designated as a stalking horse bidder and is unsuccessful in the bid, the Debtor will pay JGD a $780,000 break- up fee, plus $300,000 alternative transaction expense reimbursement. The Debtors' revenues have been declining over the past several years and they do not have enough liquidity to sustain their operations. Hence, the Debtors must move quickly to realize the best price for their assets. The Court has scheduled a hearing on Nov. 6, 2007, at 11:00 a.m. for considering approval of the asset purchase agreement and the bidding procedures. The deadline for filing objections is Wednesday, November 1, at 4:00 p.m. The Debtors have asked the Court for approval of the transactions contemplated by the asset purchase agreement no later than Dec. 7, 2007. Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors. James O'Neill Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, is the Debtors' local counsel. Epiq Bankruptcy Solutions, LLC, acts as the Debtors' claims and noticing agent. An Official Committee of Unsecured Creditors has yet to be appointed in these cases by the Office of the United States Trustee. The Debtors' exclusive period to file a chapter 11 plan expires on March 12, 2008. The Debtors' schedules of assets and liabilities showed total assets of $9,549,519 and total liabilities of $3,018,489. SEAGATE TECHNOLOGY: Earns $355 Million in Quarter Ended Sept. 28 ---------------------------------------------------------------- Seagate Technology reported GAAP net income of $355 million on disc drive unit shipments of $47 million and revenue of $3.3 billion for the quarter ended Sept. 28, 2007. GAAP net income includes approximately $30 million of purchased intangibles amortization and other charges associated with the Maxtor and EVault acquisitions. Excluding these charges, non-GAAP net income was $385 million. Included in both GAAP and non-GAAP results are restructuring charges of approximately $5 million. "Our strong performance in the quarter reflects favorable industry conditions as well as the competitive strength of Seagate's unique platform and commitment to innovation," said Bill Watkins, Seagate chief executive officer. "The first fiscal quarter has historically been a strong one for Seagate, and this year, we benefited from unit demand greater than expected. We believe we are well positioned to continue driving year-over-year revenue growth, and these record quarterly results demonstrate the effectiveness of Seagate's business model." At Sept. 28, 2007, the company's consolidated balance sheet showed $10.065 billion in total assets, $5.185 billion in total liabilities, and $4.880 billion in total shareholders' equity. Business Outlook For the December quarter, Seagate expects to report revenue of $3.4 - $3.5 billion, and GAAP diluted net income per share of $0.66 - $0.70. Excluding approximately $26 million of purchased intangibles amortization and other charges associated with the Maxtor and EVault acquisitions, non-GAAP diluted net income per share for the December quarter is expected to fall within the range of $0.71 - $0.75. This guidance does not include the impact of any future acquisitions, stock repurchases or restructuring activities the company may undertake. Dividend and Stock Repurchase The company has declared a quarterly dividend of $0.10 per share to be paid on or before Nov. 16, 2007, to all common shareholders of record as of Nov. 2, 2007. During the quarter ended Sept. 28, 2007, the company took delivery of approximately 10.3 million of its common shares related to its share repurchase plan. The average price of the shares delivered to the company in the June quarter was $24.27. The company has authorization to purchase approximately $725 million of additional shares under the current stock repurchase program. About Seagate Headquartered in Scotts Valley, California, and registered in Cayman Islands, Seagate Technology (NYSE: STX) -- http://www.seagate.com/-- designs, manufactures and markets hard disc drives, and provides products for a wide-range of Enterprise, Desktop, Mobile Computing, Consumer Electronics and Branded Solutions. * * * Seagate Technology still carries Standard & Poor's BB+ long-term foreign issuer credit and long-term local issuer credit ratings. Outlook is stable. SHAW COMMS: Earns CDN$136 Million in 4th Quarter Ended Aug. 31 -------------------------------------------------------------- Shaw Communications Inc. disclosed results for the fourth quarter and fiscal year ended Aug. 31, 2007. Net income of CDN$136 million for the quarter ended Aug. 31, 2007, compared to CDN$210 million for the comparable quarter last year. Net income for the year was CDN$388 million compared to CDN$458 million last year. The current and comparable three and twelve month periods included non-operating items which included a gain on the sale of a portfolio investment in the third quarter of 2006, as well as tax recoveries related to reductions in enacted income tax rates in each of the first, third and fourth quarters of 2006 as well as the current quarter. Excluding the non-operating items, net income for the three and twelve month periods ended Aug. 31, 2007, would have been CDN$100 million and CDN$346 million compared to net income of CDN$60 million and CDN$212 million in the comparable periods. Consolidated service revenue of CDN$715 million and CDN$2.77 billion for the three and twelve month period improved 13.2% and 12.8%, respectively, over the comparable periods last year. Total service operating income before amortization of CDN$326 million and CDN$1.24 billion increased by 18.5% and 15.0% respectively, over the same periods in 2006. Funds flow from operations increased to CDN$273 million for the quarter and CDN$1.03 billion for the year compared to CDN$221 million and CDN$847 million in the same periods last year. During the quarter Digital Phone lines grew by 41,604 to 385,357. Internet and Digital customers increased by 29,857 to 1,451,756 and 15,709 to 763,140, respectively. Basic cable subscribers decreased by 2,057 to 2,226,841 and DTH customers were up 1,686 to 879,585. Free cash flow for the quarter was CDN$76 million bringing the annual total to CDN$356 million. This compares to CDN$55 million and CDN$265 million for the same periods last year, an improvement of CDN$21 million and CDN$91 million, respectively. The growth in free cash flow was primarily related to higher service operating income before amortization, partially offset by increased capital investment. Chief executive officer Jim Shaw commented, "Solid fourth quarter results conclude a year of significant accomplishments: Our service operating income before amortization grew 15% in fiscal 2007 and has grown in excess of 25% over the last two fiscal years. This pace has been driven by customer growth, value enhancements which support pricing, and the rapid penetration of Digital Phone. Despite tight labour markets, we have increased our workforce by over 1,500 employees over the last two years, to approximately 9,000 in total, in order to ensure that we deliver on our promise to provide exceptional customer service, which we believe remains a key differentiator. During the year, we reduced net debt and strengthened our credit metrics, repurchased over CDN$100 million of shares, and more than doubled our dividend rate. We lead the North American cable industry in dividend yield and currently rank in the top 30 high-yielding corporations included in the S&P/TSX 300 Index. Our shareholders were rewarded for this success with a total annual return of over 50% on their shares. Looking forward, we are off to a solid start in fiscal 2008 and our outlook for the year calls for continued earnings growth." Looking forward, Mr. Shaw noted: "For fiscal 2008, we expect service operating income before amortization to grow in an approximate range of 10% - 12%. Capital expenditures are forecasted to exceed CDN$650 million as we continue to invest to ensure our network will support and maintain our leading broadband business, grow telephony products and provide next generation services for our customers. We plan to manage capital expenditures in line with business growth in order to target free cash flow generation of CDN$450 million or better." Mr. Shaw continued, "Our Board of Directors has approved a 9% increase in the equivalent annual dividend rate to CDN$0.72 on Shaw's Class B Non-Voting Participating shares and CDN$0.7175 on Shaw's Class A Participating shares. This new rate represents an annual yield of approximately 2.8% based on the current trading price and will be effective commencing with the monthly dividend paid on Dec. 28, 2007. During the quarter, shareholders approved a two-for-one stock split of the company's outstanding Class A Participating Shares and Class B Non-Voting Participating Shares which became effective on July 30, 2007. During the quarter, Shaw repurchased 4,408,400 of its Class B Non- Voting Shares for cancellation for CDN$105 million. The company plans to renew its normal course issuer bid in early November. In closing, Mr. Shaw summarized: "As we head into our new fiscal year we look forward to what lies ahead and are confident that with our leading network infrastructure and the dedicated efforts of our employees we are ready to meet the challenge of a competitive market and deliver another year of solid results." At Aug. 31, 2007, the company's consolidated balance sheet showed CDN$8.164 billion in total assets, $6.170 billion in total liabilities, and $1.994 billion in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with CDN$590.2 million in total current assets available to pay $861.9 million in total current liabilities. About Shaw Communications Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR) -- http://www.shaw.ca/-- is a diversified communications company whose core business is providing broadband cable television, high- speed Internet, digital phone, telecommunications services (through Shaw Business Solutions) and satellite direct-to-home services (through Star Choice). The company serves 3.3 million customers, including almost 1.5 million Internet subscribers, through a reliable and extensive network, which comprises over 575,000 kilometres of fibre. * * * Shaw Communications Inc. still carries Moody's Investors Service Ba1 senior unsecured debt rating. SOLAR TRUST: Moody's Affirms Low-B Ratings on Four Certificates --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 11 classes of Solar Trust Commercial Mortgage Pass-Through Certificates, Series 2002-1 as: -- Class A-1, $51,479,956, affirmed at Aaa -- Class A-2, $127,959,000, affirmed at Aaa -- Class IO, Notional, affirmed at Aaa -- Class B, $8,665,000, affirmed at Aaa -- Class C, $7,999,000, affirmed at A1 -- Class D, $6,665,000, affirmed at Baa1 -- Class E, $2,667,000, affirmed at Baa2 -- Class F, $3,999,000, affirmed at Ba2 -- Class G, $1,333,000, affirmed at Ba3 -- Class H, $2,667,000, affirmed at B2 -- Class J, $665,000 affirmed at B3 As of the Oct. 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 18.2% to $218.1 million from $266.6 million at securitization. The certificates are collateralized by 54 loans, ranging in size from less than 1% to 8.5% of the pool, with the top 10 loans representing 54% of the pool. The pool consists of a shadow rated component, representing 16% of the pool, and a conduit component, representing 79.7% of the pool. Seven loans, representing 4.3% of the pool, have defeased and are collateralized with Canadian Government obligations. The pool has not experienced any losses to date and there are no loans currently in special servicing. Eleven loans, representing 23.9% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 92.9% of the pool. Moody's weighted average loan to value ratio is 72.8%, compared to 70.9% at Moody's last full review in March 2006 and compared to 76.7% at securitization. The largest shadow rated loan is the Hotel Novotel Loan ($18.4 million -- 8.5%), which is secured by a 262-room full service hotel located in downtown Toronto, Ontario. The collateral also includes a 440-car, three-level underground parking garage, and 25,000 square feet of office and retail space. The loan is 100% recourse to the borrower. Moody's current shadow rating is A2, the same as at last review and compared to A3 at securitization. The second shadow rated loan is the Chateaugay Centre Loan ($16.6 million - 7.6%), which is secured by a 211,000 square foot enclosed retail center located Chateaugay, Quebec, a submarket of Montreal. The center is anchored by Super C and Hart. Performance has improved due to increase in rental revenue and loan amortization. The loan is 50% recourse to the borrower. Moody's current shadow rating is Aa3, compared to Baa1 at last review and compared to Baa3 at securitization. The top three conduit loans represent 19.4% of the pool. The largest conduit loan is the Langley Gate Shopping Centre Loan ($15.8 million -- 7.2%), which is secured by a 152,000 square foot retail shopping center located in the Langley suburb of Vancouver, British Columbia. The loan is on the master servicer's watchlist due to three major lease expirations by March 2008. The major tenants are Sears (23% of GLA; lease expiration March 2008); Homesense (17% of GLA; lease expiration January 2013), Chapters (16% of GLA; lease expiration February 2008) and Petsmart (15% of GLA; lease expiration March 2008). The loan amortizes on a 300- month schedule. Moody's LTV is 83%, compared to 71.9% at last review and compared to 76.6% at securitization. The second largest conduit loan is the La Porte de Gatineau Loan ($13.6 million -- 6.3%), which is secured by a 155,000 square foot retail center located in Gatineau, Quebec. As of December 2006 the property was 100% occupied, compared to 93.5% at last review and compared to 92% at securitization. The loan amortizes on a 300-month schedule. Moody's LTV is 69%, compared to 83.3% at last review and compared to 91.5% at securitization. The third largest conduit loan is the Parkland Mall Loan ($13.6 million -- 6.2%), which is secured by a 268,000 square foot enclosed retail center located in Yorkton, Saskatchewan. The center is anchored by Zellers, The Bay and IGA. As of December 2006 the mall was 97% leased, essentially the same as at last review and compared to 96% at securitization. The loan is 100% recourse to the borrower and amortizes on a 300-month schedule. Moody's LTV is 79.5%, compared to 80.9% at last review and compared to 85.6% at securitization. SPECTRX INC: June 30 Balance Sheet Upside-Down by $2.7 Million -------------------------------------------------------------- SpectRx Inc.'s consolidated balance sheet at June 30, 2007, showed $2.1 million in total assets and $4.8 million in total liabilities, resulting in a $2.7 million total capital deficit. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $1.2 million in total current liabilities available to pay $3.1 million in total current liabilities. The company reported net income of $6.2 million on net revenue of $314,000 for the second quarter ended June 30, 2007, compared with a net loss of $1.5 million on net revenue of $85,000 for the same period last year. Net income for the three months ended June 30, 2007, included a gain from debt forgiveness of approximately $5.8 million, and a gain on sale of SimpleChoice of approximately $2.4 million. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?249a Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2007, Eisner LLP, in New York, expressed substantial doubt about SpectRx Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses, negative working capital position and capital deficit. The auditing firm also cited that the company is in default on payments due under its settlement with Abbott Laboratories Inc. regarding its redeemable preferred stock agreement. On June 5, 2007, the company and Abbott entered into a settlement and release thereby settling pending legal disputes. As a result, the company has dropped its lawsuit and patent infringement claims against Abbott and Abbott has forgiven approximately $5.8 million in debt it claimed was in default. The dispute arose from a research, development and license agreement. The research, development and license agreement was terminated in January 2003. Under the settlement, neither party admitted any liability or wrongdoing and agreed that no Party will make any settlement payment to the other. As of June 30, 2007, the company was past due on payments due under its bridge notes payable in the amount of $446,000. The company needs to raise additional capital during 2007. If capital cannot be raised, the company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection. About SpectRx Inc. SpectRx Inc. (OTCBB: SPRXE.OB) -- http://www.spectrx.com/-- is a medical technology company providing innovative detection, monitoring and treatment solutions for the diabetes and cancer markets. STARWOOD HOTELS: Earns $129 Million in 3rd Qtr. Ended Sept. 30 -------------------------------------------------------------- Starwood Hotels & Resorts Worldwide Inc. reported financial results for its third quarter ended Sept. 30, 2007. The company reported net income of 129 million for the third quarter ended Sept. 30, 2007, compared with net income of $155 million for the same period last year. Excluding special items, income from continuing operations was $143 million for the third quarter of 2007 compared to $148 million in 2006. Special items in 2007 net to a charge of $14 million and primarily due to losses on asset impairments. Special items in 2006 net to a $7 million benefit primarily due to one-time income tax benefits realized in connection with the sale of a portfolio of hotels offset in part by losses on asset dispositions. Excluding special items, the effective income tax rate in the third quarter of 2007 was 33.0% compared to 21.2% in the same period of 2006 due to non- recurring capital loss benefits generated in 2006 from the disposition of certain qualifying joint venture interests. Frits van Paasschen, chief executive officer, said, "Starwood reported yet another strong quarter driven by our strong brands, our large presence in the upper upscale and luxury segments, and our international platform, where system-wide REVPAR increased 13.9%. Our pipeline grew to almost 115,000 rooms in the quarter, creating a terrific opportunity for Starwood to continue to grow at above-industry growth rates. Despite the projected 2008 decline in our vacation ownership business, we expect 2008 to be another great year for the company, as our core hotel business continues to enjoy strong fundamentals. We also repurchased $544 million of our stock in the quarter, a record amount for Starwood." At Sept. 30, 2007, the company's consolidated balance sheet showed $9.452 billion in total assets, $6.824 billion in total liabilities, $26 million in minority interest, and $2.602 billion in total shareholders' equity. Asset Sales During the third quarter of 2007, the company entered into purchase and sale agreements for the sale of two wholly-owned hotels and recorded impairment losses totaling $21 million in connection with these sales. These sales, along with the sale of two additional hotels, are expected to be completed in the fourth quarter of 2007 for total cash proceeds of over $50 million. cThe company expects to complete the remainder of the previously announced asset sales in early 2008. Capital Gross capital spending during the quarter included approximately $54 million in renovations of hotel assets including The Phoenician in Scottsdale, Arizona, the W Los Angeles in Westwood, California, and the W San Francisco in San Francisco, and in construction capital at the new aloft and Element hotels under construction in Lexington, Mass., and the new aloft hotel in Philadelphia, Penn. Investment spending on gross vacation ownership interest inventory was $111 million, which was offset by cost of sales of $55 million associated with VOI sales during the quarter. The inventory spend included VOI construction at the Westin Ka'anapali Ocean Resort Villas North in Maui, the Westin Princeville Resort in Kauai, the Westin Lagunamar Resort in Cancun, and the Westin St. John Resort and Villas in the Virgin Islands. Share Repurchases During the third quarter of 2007, the company repurchased 9.2 million shares at a total cost of approximately $544 million. In the nine months ended Sept. 30, 2007, the company has repurchased approximately 19.2 million shares at a total cost of approximately $1.224 billion. At Sept. 30, 2007, approximately $156 million remained available under the company's previously approved share repurchase authorization. Starwood had approximately 201 million shares outstanding (including partnership units) at Sept. 30, 2007. Balance Sheet At Sept. 30, 2007, the company had total debt of $3.162 billion and cash and cash equivalents (including $227 million of restricted cash) of $408 million, or net debt of $2.754 billion, compared to net debt of $2.465 billion at the end of the second quarter of 2007. The increase in net debt at Sept. 30, 2007, is primarily due to the share repurchases discussed above. In September 2007, the company completed a $400 million senior debt offering. This debt has a fixed interest rate of 6.25% and matures in 2013. The proceeds from this debt offering were used to pay down the company's revolving credit facility. At Sept. 30, 2007, debt was approximately 46% fixed rate and 54% floating rate and its weighted average maturity was 4.5 years with a weighted average interest rate of 6.83%. The company had cash (including total restricted cash) and availability under domestic and international revolving credit facilities of approximately $2.196 billion. Availability under domestic and international revolving credit facilities, not including cash and cash equivalents, was $1.788 billion. Nine Months Results Net income was $396 million compared to $840 million in 2006. Excluding special items, income from continuing operations was $425 million compared to $408 million in 2006. Special items in 2007 net to a charge of $28 million primarily due to the accelerated depreciation of fixed assets at the Sheraton Bal Harbor. Special items in 2006 net to a $504 million benefit primarily due to significant one-time income tax benefits realized in connection with the sale of a portfolio of 33 hotels. Total company adjusted EBITDA, which was impacted by the sale of 49 hotels since the beginning of 2006, was $995 million compared to $926 million in 2006. About Starwood Hotels Headquartered in White Plains, New York, Starwood Hotels & Resorts Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the leading hotel and leisure companies in the world with approximately 900 properties in more than 100 countries and 155,000 employees at its owned and managed properties. Starwood(R) Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis(R), The Luxury Collection(R), W(R), Westin(R), Le Meridien(R), Sheraton(R), Four Points(R) by Sheraton, aloft(SM), and Element(SM). Starwood Hotels also owns Starwood Vacation Ownership Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. * * * As reported in the Troubled Company Reporter on Sept. 11, 2007, Moody's Investors Service assigned (P)Ba1, (P)Ba2 to the company's subordinated and preferred debt shelf, respectively. The rating outlook is stable. STATIC RESIDENTIAL: Moody's Junks Ratings on Two Note Classes ------------------------------------------------------------- Moody's Investors Service downgraded and placed on review for possible downgrade these notes issued by Static Residential CDO 2006-B Ltd.: -- $500,000,000 Class A-l(a) Floating Rate Notes, due 2037 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade Moody's also Downgrades and Places on review for possible downgrade these notes: -- $145,000,000 Class A-l(b) Floating Rate Notes, due 2037 Prior Rating: Aaa, on review for possible downgrade Current Rating: Baa1, on review for possible downgrade -- $110,000,000 Class A-2 Floating Rate Notes, due 2037 Prior Rating: Aaa, on review for possible downgrade Current Rating: Baa2, on review for possible downgrade -- $80,000,000 Class B-l Floating Rate Notes, due 2037 Prior Rating: Aa1, on review for possible downgrade Current Rating: Ba1, on review for possible downgrade -- $35,000,000 Class B-2 Deferrable Interest Floating Rate Notes, due 2037 Prior Rating: Aa3, on review for possible downgrade Current Rating: Ba3, on review for possible downgrade Moody's Downgrades these Notes: -- $40,000,000 Class C Deferrable Interest Floating Rate Notes, due 2037 Prior Rating: Ba1 Current Rating: Ca -- $40,000,000 Class D Deferrable Interest Floating Rate Notes, due 2037 Prior Rating: Ba3 Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of subprime RMBS securities. STELCO INC: Shareholders Approve Acquisition by U.S. Steel ---------------------------------------------------------- At the special meeting of shareholders held Oct. 26, 2007, the shareholders of Stelco Inc. approved the arrangement of the Corporation under section 192 of the Canada Business Corporations Act involving the acquisition by an indirect wholly-owned subsidiary of United States Steel Corporation of all of the common shares of Stelco. The Arrangement was approved by approximately 99.99% of the votes cast at the special meeting. Subject to the satisfaction of the remaining conditions to the Arrangement, including the final order of the Court at the hearing scheduled for today, Oct. 30, 2007, it is anticipated that the completion of the Arrangement will occur on or about Oct. 31, 2007. About Stelco Headquartered in Hamilton, Ontario, Stelco Inc. (TSX: STE) -- http://www.stelco.ca/ -- is one of Canada's largest steel companies. It is focused on its two Ontario-based integrated steel businesses located in Hamilton and in Nanticoke. These operations produce hot rolled, cold rolled, coated sheet and bar products. On April 1, 2006, Stelco Inc. emerged from CCAA restructuring. At Sept. 30, 2007, Stelco Inc.'s consolidated balance sheet showed total assets of $2.6 billion and total liabilities of $2.7 billion, resulting in a $64 million shareholders' deficit. STEVEN DUDLEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Steven J. Dudley dba Virginia's Steakhouse & Lodge 18044 CR 501 Bayfield, CO 81122 Bankruptcy Case No.: 07-22222 Chapter 11 Petition Date: October 24, 2007 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Lee M. Kutner, Esq. 303 East 17th Avenue Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Virginia Jackson Loan $161,834 P.O. Box 1652 Wickenburg, AZ 85358 The Brokerage, LLC Trade debt $45,000 10 Town Plaza #168 La Plata County Treasurer Taxes $9,309 P.O. Box 99 Durango, CO 81302 US Bank Trade debt $7,811 IRS-US Treasury Taxes $7,709 Bank of America Trade debt $6,425 Farm Bureau Financial Services Trade debt $5,232 Mesa Propane Restaurant Trade debt $5,045 GE Money Bank Trade debt $3,047 Capital One Trade debt $1,396 LaPlata Electric Trade debt $1,230 ASCAP Trade debt $1,092 Four Corners Distributing Trade debt $782 WCA Waste Corporation Trade debt $628 AT&T Trade debt $559 A & L Coors Trade debt $463 Southwestern Beverage Trade debt $338 Claude Decker Water Pipeline Trade debt $300 American Waste Removal Trade debt $260 B & F Welding Trade debt $228 SWEET TRADITIONS: Court Gives Final Nod on $700,000 DIP Financing ----------------------------------------------------------------- The Honorable Kathy A. Surratt-States of the U.S. Bankruptcy Court for the Eastern District of Illinois issued a final order granting the request of Sweet Traditions LLC and Sweet Traditions of Illinois LLC to obtain $700,000 in postpetition financing from Allied Capital Corp. The Court also gave the Debtors permission to use Allied's cash collateral. As adequate protection, the Debtors grant to Allied a continuing replacement lien and security interest in all postpetition property of the Debtors. As reported in the Troubled Company Reporter on Oct. 4, 2007, the Debtors' Official Committee of Unsecured Creditors opposed the entry of an order granting final approval of the Debtors' motion to obtain $700,000 in postpetition financing from Allied, stating that the agreement lacks clear and detailed explanation of some basic terms like nature of the facility as a revolving line or single advance, applicable interest rates, repayment of the facility, and maturity date. Additionally, the credit agreement prohibits the Debtors from engaging in any merger or consolidation with any entity, which provision, the Committee contends, would eliminate some potential options of the Debtors to reorganize the bankruptcy estate. About Sweet Traditions Saint Louis, Missouri-based Sweet Traditions, L.L.C. -- http://www.sweettraditions.com/-- and its debtor-affiliate, Sweet Traditions of Illinois, L.L.C., are franchisees of Krispy Kreme Doughnuts, Inc, which owns, operates and franchises specialty retail stores offering doughnuts. The Debtors filed for Chapter 11 bankruptcy protection on Sept. 4, 2007 (E.D. Missouri Case Nos. 07-45787 and 07-45789). David A. Warfield, Esq. and Laura Toledo, Esq. at Blackwell Sanders, L.L.P. represent the Debtors in their restructuring efforts. Jonathan Margolies, Esq. at Shughart Thomson & Kilroy, PC is counsel to the Debtors' Official Joint Committee of Unsecured Creditors. The Debtors' schedules disclosed total assets of $9,391,175 and total liabilities of $51,552,132. TEPPCO PARTNERS: Earns $47.6 Million in 3rd Quarter Ended Sept. 30 ------------------------------------------------------------------ TEPPCO Partners L.P. reported third quarter net income of $47.6 million, compared with net income of $41.1 million for the third quarter of 2006. Earnings before interest, taxes, depreciation and amortization increased to $114.4 million for the third quarter of 2007, an increase of 13% percent compared with $101.6 million for the third quarter of 2006. Net income for the nine months ended Sept. 30, 2007, was $233.6 million, compared with $145.5 million for the nine months ended Sept. 30, 2006. Net income for the nine months ended Sept. 30, 2007, includes a $59.6 million gain on the sale of TEPPCO's ownership interests in Mont Belvieu Storage Partners, L.P. and Mont Belvieu Venture LLC (collectively, MBSP), required by the Federal Trade Commission, and an $18.7 million gain on the sales of other assets, all of which occurred during the first quarter of 2007. Net income for the nine months ended Sept. 30, 2006, includes $19.3 million of gains on the sales of assets, primarily related to the sale of the Pioneer gas processing plant in March 2006. The 2006 period also included $1.5 million of income from the Pioneer plant, which was accounted for as discontinued operations prior to the sale. Income from continuing operations increased $107.5 million to $233.6 million for the first nine months of 2007, compared with $126.1 million for the same period in 2006. Excluding the gains on the sale of the interests in MBSP and other assets, income from continuing operations increased $30.6 million to $155.3 million for the first nine months of 2007, compared with $124.7 million for the first nine months of 2006. EBITDA from continuing operations was $420.6 million for the first nine months of 2007, compared with $298.5 million for the first nine months of 2006. EBITDA from continuing operations, excluding gains from the sale of MBSP and other assets, was $342.3 million for the first nine months of 2007, compared with $298.7 million for the first nine months of 2006. "I am pleased to report that each of our business segments reported increases in performance compared to the prior year third quarter, which led to overall record third quarter earnings for TEPPCO," said Jerry E. Thompson, president and chief executive officer of the general partner of TEPPCO. "This is our fifth consecutive quarter that we have reported a record. Increased transportation demand for diesel fuel and gasoline to the Midwest and continued volume growth on the Jonah Gas Gathering system were the largest contributors to our record performance for the third quarter." Thompson added, "Earlier this month, we were pleased to announce a second distribution increase in 2007 to our unitholders, bringing the annualized distribution rate to $2.78 per unit, which represents a 3% increase from the annualized distribution rate a year ago. We have some very exciting organic growth initiatives under way, including the Motiva products terminal in Port Arthur, new terminal construction in Boligee, Alabama and new tanks in Cushing, Oklahoma, as well as our ongoing expansions in the Jonah field. These projects, along with many smaller strategic organic projects and acquisitions, are key to increasing future distributable cash flow for TEPPCO. Our planned capital spending in 2007, including our cash contributions to the Jonah joint venture, remains on target with our previous estimate of approximately $460 million. Approximately $410 million of this amount is planned to be spent on organic growth projects that support our focus on generating stable, fee-based cash flows." Total debt outstanding at Sept. 30, 2007, was approximately $1.8 billion, with remaining liquidity of approximately $300 million under the partnership's $700 million credit facility. During the nine months ended Sept. 30, 2007, TEPPCO spent $122.3 million on revenue-generating projects in addition to $127.8 million of investment for its share of capital expenditures primarily related to the Jonah Phase V expansion, and $41.9 million on capital spending to maintain existing assets. At Sept. 30, 2007, the partnership's condensed balance sheet showed $4.467 billion in total assets, $3.137 billion in total liabilities, and $1.330 billion in total partners' capital. About TEPPCO Partners Headquartered in Houston, TEPPCO Partners L.P. (NYSE: TPP) -- http://www.teppco.com/-- is a publicly traded partnership with an enterprise value of approximately $5 billion, which conducts business through various subsidiary operating companies. TEPPCO owns and operates one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases in the United States; owns and operates petrochemical and natural gas liquid pipelines; is engaged in transportation, storage, gathering and marketing of crude oil; owns and operates natural gas gathering systems; and has ownership interests in Jonah Gas Gathering Company, Seaway Crude Pipeline Company, Centennial Pipeline LLC, and an undivided ownership interest in the Basin Pipeline. Texas Eastern Products Pipeline Company LLC, the general partner of TEPPCO Partners L.P., is owned by Enterprise GP Holdings L.P. (NYSE: EPE), which also owns the general partner of Enterprise Products Partners L.P. (NYSE: EPD). * * * Teppco Partners LP carries Fitch's 'BB+' Jr. Subordinated Debt rating which was assigned on Oct. 26, 2007. TESORO CORP: Tender Offering Cues Moody's Developing Outlook ------------------------------------------------------------ Moody's changed its outlook on Tesoro Corporation's ratings (Ba1 corporate family rating, Ba1 senior unsecured notes rating, and Baa1 senior secured credit facility rating) to developing from positive following Tracinda Corporation's announcement today that it is making a cash tender offer for an additional 16% of TSO's outstanding common stock at approximately a 12% premium from the prior closing price. Tracinda Corporation, of which Kirk Kerkorian is the sole shareholder, currently owns about 4% of TSO's outstanding shares. The change in outlook reflects the uncertainty regarding Tracinda's impact on the potential future direction of the company. The developing outlook considers the range of potential outcomes and the ramifications for the company's debt holders. The outlook indicates prospects in the near-to-medium term, depending on specific outcomes in that timeframe, of either a downgrade or a stable outlook, and also recognizes the prospect of a positive outlook if there is clear evidence that there is no change in strategy or financial policy. In resolving the developing outlook, Moody's expects to meet with management to gain greater clarity on management's plans and to better understand Tracinda's intention. Tesoro Corporation is headquartered in San Antonio, Texas. TORO ABS: Moody's Cuts Ratings on Two Note Classes to Low-B ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Toro ABS CDO II, Ltd. on review for possible downgrade: -- $56,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due June 2043 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $24,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due June 2043 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $7,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due June 2043 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade -- $9,000,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due June 2043 Prior Rating: A2 Current Rating: A2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $10,500,000 Class E Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due June 2043 Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade -- $4,000,000 Class F Seventh Priority Mezzanine Deferrable Floating Rate Notes Due June 2043 Prior Rating: Ba1 Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. TRIAD FINANCIAL: Moody's Reviews Ratings and May Downgrade ---------------------------------------------------------- Moody's Investors Service placed the ratings of Triad Financial Corp. (Corporate Family Rating B2, senior unsecured notes B3) under review for possible downgrade. The review for downgrade relates to the challenging funding and liquidity situation faced by the company, which derives the great majority of its funding from secured warehouse facilities and term securitization markets. Moody's notes that Triad's $750 million warehouse credit facility with Goldman, Sachs & Co. has a maturity date of Oct. 28, 2007. If this facility is not renewed, Triad would need to refinance outstandings under this facility via additional borrowing under the company's other warehouse facility, a $750 million facility from Citibank that matures April 29, 2009. This would leave limited availability under the Citibank facility and would compel Triad to execute a term ABS transaction in the near term to free up capacity under the Citibank warehouse facility to provide for funding of loan originations. Triad would also be compelled to replace the Goldman facility with a new facility from another bank or increase the frequency of its term ABS transactions. During its review Moody's will focus on Triad's near-term funding and liquidity profile, including, if necessary, its success in executing a term securitization transaction and in implementing a new warehouse credit facility. Moody's will also focus on the company's longer-term funding and liquidity strategy, as well as its prospects for strengthening its leverage profile, core profitability, and asset quality. Based in Huntington Beach, California, Triad is an auto finance company that operates primarily in the sub-prime segment of the market. The company had $4.3 billion in managed receivables as of June 30, 2007. US CMBS: Fitch Takes Rating Actions on Small Balance Bonds ---------------------------------------------------------- Following a review of various small balance U.S. CMBS transactions containing significant defaults, Fitch Ratings downgraded these small balance bonds: CBA Commercial Series 2005-1 -- $5.1 million class M-5 to 'BB' from 'BBB-'; CBAC Series 2006-1 -- $1.9 million class M-5 to 'B' from 'BB+'; LaSalle Commercial Mortgage Securities (LASL) Series 2006-MF2 -- $5 million class F to 'BB' from 'BBB-'; -- $5.6 million class G to 'BB-' from 'BB+'; -- $3.1 million class H to 'B' from 'BB'; -- $1.9 million class J to 'B-' from 'BB-'; -- $1.2 million class K to 'CCC/DR1' from 'B+'; -- $1.9 million class L to 'CC/DR3' from 'B'; -- $1.2 million class M to 'C/DR6' from B-'. LASL Series 2006-MF3 -- $6.9 million class G to 'BB' from 'BB+'; -- $2.5 million class H to 'BB-' from 'BB'; -- $1.9 million class J to 'B+' from 'BB-'; -- $1.2 million class K to 'B' from 'B+'; -- $2.5 million class L to 'B-' from 'B'; -- $1.2 million class M to 'CCC/DR1' from 'B-'. LASL Series 2006-MF4 -- $2.5 million class H to 'BB-' from 'BB'; -- $1.7 million class J to 'B+' from 'BB-'; -- $1.7 million class K to 'B' from 'B+'; -- $1.1 million class L to 'B-' from 'B'; -- $564,000 class M to 'CCC/DR1' from 'B-'. In addition, Fitch affirmed these classes: CBAC Series 2004-1 -- $27.5 million class A-1 at 'AAA'; -- $12 million class A-2 at 'AAA'; -- $6.5 million class A-3 at 'AAA'; -- Interest only class IO at 'AAA'; -- $2.9 million class M-1 'AAA'; -- $3.6 million class M-2 'AA+'; -- $3.7 million class M-3 at 'BBB+'; -- $770,000 class M-5 at 'BB'. CBAC Series 2005-1 -- $117.5 million class A at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $7.5 million class M-1 at 'AA'; -- $5.6 million class M-2 at 'A'; -- $2.7 million class M-3 at 'A-'; -- $3.8 million class M-4 at 'BBB+'. CBAC Series 2006-1 -- $119.1 million class A at 'AAA'; -- Interest only class X-1 at 'AAA'; -- $4.6 million class M-1 at 'AA'; -- $4.6 million class M-2 at 'A'; -- $5 million class M-3 at 'BBB'; -- $2.9 million class M-4 at 'BBB-'. CBAC Series 2006-2 -- $104.4 million class A at 'AAA'; -- Interest only class X-1 at 'AAA'; -- $3.8 million class M-1 at 'AA'; -- $4.9 million class M-2 at 'A-'; -- $2.8 million class M-3 at 'BBB'; -- $2.3 million class M-4 at 'BBB-'; -- $1.1 million class M-5 at 'BB+'. LASL Series 2006-MF2 -- $384.2 million class A-1 at 'AAA'; -- Interest only class X at 'AAA'; -- $8.7 million class B at 'AA'; -- $12.5 million class C at 'A'; -- $8.1 million class D at 'BBB+; -- $3.7 million class E at 'BBB'. LASL Series 2006-MF3 -- $403.1 million class A at 'AAA'; -- Interest only class X at 'AAA'; -- $8 million class B at 'AA'; -- $12.9 million class C at 'A'; -- $8 million class D at 'BBB+'; -- $3.7 million class E at 'BBB'; -- $4.9 million class F at 'BBB-'. LASL Series 2006-MF4 -- $378.5 million class A at 'AAA'; -- Interest only class X at 'AAA'; -- $7.9 million class B at 'AA'; -- $11.8 million class C at 'A'; -- $9 million class D at 'BBB+'; -- $2.3 million class E at 'BBB'; -- $4.5 million class F at 'BBB-' -- $7.9 million class G at 'BB+'. LASL Series 2007-MF5 -- $423.5 million class A at 'AAA'; -- Interest only class X at 'AAA'; -- $9.2 million class B at 'AA'; -- $13.4 million class C at 'A'; -- $8.5 million class D at 'BBB+'; -- $3 million class E at 'BBB'; -- $4.9 million class F at 'BBB-'; -- $7.3 million class G at 'BB+'; -- $2.4 million class H at 'BB'; -- $1.8 million class J at 'BB-'; -- $1.8 million class K at 'B+'; -- $1.2 million class L at 'B'; -- $610,000 class M at 'B-'. Fitch placed eight small balance CMBS deals 'Under Analysis' this month through its SMARTView process due to increasing delinquencies in these transactions. Delinquencies in small balance U.S. CMBS have been higher than expected, prompting Fitch to undertake a review of its small balance transactions that may be credit impaired. The actions here relate to all of the Fitch rated small balance transactions of these two issuers. In estimating loan losses, Fitch reviewed recent evaluations or appraisals provided by the special servicers, and applied haircuts to determine Fitch's expected loss. These losses were then applied to the individual transactions per the documents and new credit enhancement levels were calculated. The transactions are collateralized by small balance commercial loans secured by multifamily, retail, office, and mixed use properties. The loans are smaller than typical CMBS loans and in some instances are not structured as single purpose entities and are full recourse. A high proportion of the transactions have upcoming adjustable- rate mortage resets. VERTICAL ABS: Moody's Lowers Rating on Class B Notes to Ba2 ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Vertical ABS CDO 2006-1, Ltd. on review for possible downgrade: -- $56,000,000 Class A1 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $108,500,000 Class A2 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $31,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2046 Prior Rating: A2 Current Rating: Baa2, on review for possible downgrade -- $29,000,000 Class B Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. VISTA HOSPITAL: Plan Admin. Wants to Make Final Distribution ------------------------------------------------------------ Development Specialists, Inc., the plan administrator of Vista Hospital Systems, Inc. and its debtor-affiliates' liquidation, asks authority from the Honorable David N. Naugle of the U.S. Bankruptcy Court for the Central District of California to make a first and final pro rata distribution to holders of allowed unsecured claims asserted against the Debtors. The plan administrator also amended a list of scheduled claims reflecting pre-bankruptcy filing obligations under exectuory contracts or unexpired leases that were assumed by the Debtors and assigned to UHS Corona, Inc., the buyer of the Debtors' assets. Pursuant to the amendment, the plan administrator effectively deletes each of the scheduled claims and subsequently asks the Court to strike out the claims from the schedules. The plan administrator also asks the Court to disallow a list of scheduled claims, the holders of whom the plan administrator has obtained a default judgment against in a preference action. A hearing of the plan administrator's request will be held before Judge Naugle on Dec. 4, 2007, at 9:00 a.m., at the U.S. Bankruptcy Court, Courtroom 304, 3420 Twelfth Street, Riverside, California. Holders of claims objecting to the amendments must file their objections 14 days before the hearing date. VISTA HOSPITAL: Plan Administrator Wants Escrow Funds Released -------------------------------------------------------------- BETA Healthcare Group Risk Management Authority and Development Specialists, Inc., the plan administrator for Vista Hospital Systems, Inc. and its debtor-affiliates' liquidation, ask authority from the U.S. Bankruptcy Court for the Central District of California to release from escrow the balance of the reserve fund established to fund the Debtors' obligations to BETA, pursuant to the Debtors' second amended joint plan of liquidation. The hearing on the movant's request about the reserve fund will be held on Dec. 4, 2007, at 9:00 a.m., in Courtroom 304 of the U.S. Bankruptcy Court, 3420 Twelfth Street, Riverside, California. Objections to the request must file and serve a written statement of all reasons in opposition not less than 14 days before the hearing. WELLS FARGO: Fitch Holds and Cuts Ratings on $81.7 Mil. Certs. -------------------------------------------------------------- Fitch Ratings took these rating actions on Wells Fargo Home Equity asset-backed certificates. Affirmations total $1.13 billion and downgrades total $81.7 million. Break Loss percentages and Loss Coverage Ratios for each class is included with the rating actions as: Wells Fargo, series 2005-1 -- $220.8 million class A affirmed at 'AAA' (BL: 55.24, LCR: 10.69); -- $32 million class M-1 affirmed at 'AA+' (BL: 43.47, LCR: 8.41); -- $30.1 million class M-2 affirmed at 'AA+' (BL: 36.34, LCR: 7.03); -- $18.2 million class M-3 affirmed at 'AA' (BL: 17.17, LCR: 3.32); -- $15.7 million class M-4 affirmed at 'AA' (BL: 15.15, LCR: 2.93); -- $14.4 million class M-5 affirmed at 'AA-' (BL: 13.05, LCR: 2.55); -- $12.6 million class M-6 affirmed at 'A+' (BL: 10.86, LCR: 2.1); -- $12.6 million class M-7 affirmed at 'A' (BL: 9.50, LCR: 1.84); -- $8.8 million class M-8 affirmed at 'A-' (BL: 8.55, LCR: 1.65); -- $12.6 million class M-9 affirmed at 'BBB+' (BL: 7.19, LCR: 1.39); -- $12.6 million class M-10 downgraded to 'BBB-' from 'BBB' (BL: 5.89, LCR: 1.14); -- $7.5 million class M-11 downgraded to 'BB' from 'BBB-' (BL: 5.25, LCR: 1.02); -- $9.4 million class M-12 downgraded to 'BB-' from 'BB+' (BL: 4.74, LCR: 0.92); -- $5 million class M-13 downgraded to 'BB-' from 'BB' (BL: 4.69, LCR: 0.91). Deal Summary -- Originators: (100% Wells Fargo); -- 60+ day Delinquency: 18.68%; -- Realized Losses to date (% of Original Balance): 0.27%; -- Expected Remaining Losses (% of Current Balance): 5.17%; -- Cumulative Expected Losses (% of Original Balance): 2.02%. Wells Fargo, series 2005-2 -- $215.7 million class A affirmed at 'AAA' (BL: 45.93, LCR: 7.2); -- $22.7 million class M-1 affirmed at 'AA+' (BL: 38.97, LCR: 6.11); -- $15.7 million class M-2 affirmed at 'AA+' (BL: 34.75, LCR: 5.45); -- $15.3 million class M-3 affirmed at 'AA' (BL: 30.62, LCR: 4.8); -- $14.9 million class M-4 affirmed at 'AA' (BL: 26.59, LCR: 4.17); -- $9.2 million class M-5 affirmed at 'AA-' (BL: 23.03, LCR: 3.61); -- $13.5 million class M-6 affirmed at 'A+' (BL: 19.85, LCR: 3.11); -- $9.6 million class M-7 affirmed at 'A' (BL: 9.56, LCR: 1.5); -- $7.4 million class M-8 downgraded to 'BBB+' from 'A-' (BL: 8.54, LCR: 1.34); -- $8.7 million class M-9 downgraded to 'BBB-' from 'BBB+' (BL: 7.36, LCR: 1.15); -- $8.7 million class M-10 downgraded to 'BB' from 'BBB' (BL: 6.18, LCR: 0.97); -- $6.1 million class M-11 downgraded to 'B+' from 'BBB-' (BL: 5.37, LCR: 0.84); -- $8.7 million class M-12 downgraded to 'CC/DR2' from 'BB+'; -- $7.4 million class M-13 downgraded to 'CC/DR2' from 'BB'. Deal Summary -- Originators: (100% Wells Fargo); -- 60+ day Delinquency: 17.22%; -- Realized Losses to date (% of Original Balance): 0.30%; -- Expected Remaining Losses (% of Current Balance): 6.38%; -- Cumulative Expected Losses (% of Original Balance): 3.03%. Wells Fargo, series 2005-4 -- $435.6 million class A affirmed at 'AAA' (BL: 30.55, LCR: 6.97); Deal Summary -- Originators: (100% Wells Fargo); -- 60+ day Delinquency: 12.05%; -- Realized Losses to date (% of Original Balance): 0.20%; -- Expected Remaining Losses (% of Current Balance): 4.38; -- Cumulative Expected Losses (% of Original Balance): 3.08%. 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). WEST TRADE: Moody's Cuts Ratings on Two Note Classes to Low-B ------------------------------------------------------------- Moody's Investors Service placed these notes issued by West Trade Funding CDO I LTD. on review for possible downgrade: -- $60,000,000 Class A-2 Floating Rate Second Priority Senior Secured Notes Due 2044 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $52,500,000 Class B Floating Rate Third Priority Senior Secured Notes Due 2044 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $13,500,000 Class C Floating Rate Fourth Priority Senior Secured Deferrable Notes Due 2044 Prior Rating: A2 Current Rating: A2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $11,300,000 Class D Floating Rate Mezzanine Secured Deferrable Notes Due 2044 Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade -- $6,000,000 Class E Floating Rate Mezzanine Deferrable Notes Due 2044 Prior Rating: Ba1 Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. WHEELING-PITTSBURGH: Esmark Merger Consideration Set on Nov. 27 --------------------------------------------------------------- Wheeling-Pittsburgh Corporation has scheduled a special meeting of its stockholders to consider and vote upon the proposed business combination with Esmark Incorporated for Tuesday, November 27 at 9:00 am ET at: Hyatt Regency Hotel Pittsburgh International Airport 1111 Airport Boulevard Pittsburgh, PA 15231 This action follows the notice from the Securities and Exchange Commission that the registration statement relating to the combination was declared effective. The record date for merger vote eligibility is Oct. 3, 2007. The deadline for stockholders to make elections with respect to the type of consideration they receive in the combination will be 5:00 p.m., Pittsburgh time, on Nov. 15, 2007. In connection with the combination, each Wheeling-Pittsburgh stockholder as of the election deadline will have the option to elect to receive one of these for their shares of Wheeling- Pittsburgh common stock: 1) the right to elect to receive $20 per share in cash, a "put right"; 2) a share for share exchange in the parent company of Wheeling-Pittsburgh and Esmark after the combination plus a right to purchase newly issued shares of New Esmark common stock at $19 per share, a "purchase right"; or 3) a share for share exchange for New Esmark common stock. The deadline for stockholders electing put rights or purchase rights to exercise those rights will be 5:00 p.m., Pittsburgh time, Monday, Nov. 26, 2007, the day before the special meeting. The put rights and purchase rights remain subject to the caps. Wheeling-Pittsburgh and Esmark entered into a definitive merger agreement on March 16, 2007 which was amended on October 22 relative to the timing of purchase and put right elections. The combination is subject to customary closing conditions, including requisite approvals by the stockholders of both companies. The parties expect to close the proposed combination soon after the date of the Wheeling-Pittsburgh special meeting. About Esmark Incorporated Headquartered in Chicago Heights, Illinois, Esmark Incorporated -- http://www.esmark.com/-- is using steel to build its fortune. The company was formed in 2003 and has acquired steel companies located throughout the Eastern half of the US since then. Esmark's subsidiaries are mostly steel service centers like Electric Coating Technologies, Sun Steel, Century Steel, and Miami Valley Steel Service. The company also works closely with European steel-making giant Ferrostaal on a trading joint venture called United Steel Group. About Wheeling-Pittsburgh Corp. Based in Wheeling, West Virginia, Wheeling-Pittsburgh Corp. (NasdaqGM: WPSC) -- http://www.wpsc.com/-- is a steel company engaged in the making, processing and fabrication of steel and steel products using both integrated and electric arc furnace technology. The company manufactures and sells hot rolled, cold rolled, galvanized, pre-painted and tin mill sheet products. The company also produces a variety of steel products including roll formed corrugated roofing, roof deck, floor deck, bridgeform and other products used by the construction, highway and agricultural markets. Going Concern Doubt PricewaterhouseCoopers LLP, in Pittsburgh, expressed substantial doubt about Wheeling Pittsburgh Corp.'s ability to continue as a going concern on Aug. 9, 2007, in its report on the consolidated financial statements included it the company's 10K/A for the year ended Dec. 31, 2006. The auditing firm reported that the company has suffered losses from operations and had negative operating cash flows in the first half of 2007. WHITLATCH & CO: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7 ----------------------------------------------------------------- Haboo G. Fokkena, U.S. Trustee for Region 9, asks U.S. Bankruptcy Court for the Northern District of Ohio to convert Whitlatch & Co.'s Chapter 11 case into a Chapter 7 proceeding, or, in the alternative, dismiss the Debtor's Chapter 11 case. The Trustee tells the Court that the Debtor has terminated all employees and is no longer operating its business. The Debtor has no potential source of funds from which it may be able to resume operations. Without any operating funds to maintain the Debtor's properties, the value of the estate is diminishing and the Debtor has no likelihood of rehabilitating. On Oct. 23, 2007, the Court stated that the Debtor's use of cash collateral, which was granted on an interim basis on Oct. 9, 2007, was no longer needed. The Court is set to hear the U.S. Trustee's request at 9:30 a.m. on Nov. 15, 2007, at 260 Fed Building in Akron, Ohio. Objections are due by Nov. 12, 2007. Headquartered in Twinsberg, Ohio, Whitlatch & Co. -- http://www.whitlatch.com/-- builds homes and condominiums and sells them through independent third-party contractors, primarily Realty One. Currently, the company is building new homes in five planned residential communities in Cuyohoga, Lorain and Summit Counties. Each community is financed by a separate bank under mortgage development and construction loans. The company filed for chapter 11 protection on Sept. 14, 2007 (Bankr. N.D. Ohio Case No. 07-52975). James W. Ehrman, Esq., at Kohrman Jackson & Krantz, PLL represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $13,445,997 and total debts of $11,561,613. WILD WEST: Can Borrow Up to $200,000 from Bank Lender's DIP Fund ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas raised Wild West World LLC's borrowing limit to $200,000 in a stipulated order amending an initial financing order entered on Aug. 27, 2007. The Court had previously given the Debtor approval to borrow up to $100,000 in postpetition financing from First National Bank of Southern Kansas and its loan participants. The Debtor had asked the Court to amend its initial financing order and raise the debt limit in order to have more funds for the continued administration of its estate. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WILD WEST: Obtains Court Approval to Hire Rides-4-U as Broker ------------------------------------------------------------- U.S. Bankruptcy Court for the District of Kansas gave Wild West World LLC authority to hire Rides-4-U Inc. as its broker. Rides-4-U will assist the Debtor in the sale of about 24 rides located within the Debtor's amusement park. The broker will receive compensation of 10% commission for its services. No retainer will be paid to the broker. The Bank of Blue Valley had previously filed a limited objection with the Court indicating that the Debtor and the broker had historical relationship with the bank. BBV also indicated intention to hire Rides-4-U to liquidate its assets. Hence, the Court rules that BBV may separately hire Rides-4-U for the sale of BBV's assets in a subsequent employment. However, the subsequent employment will not preclude the Debtor from seeking, or BBV opposing, an assessment of administrative claims for the sale of BBV's collateral within the Debtor's facility. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WILTON PRODUCTS: S&P Holds 'B-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to Woodbridge, Illinois-based Wilton Products Inc.'s (formerly known as UCG Paper Crafts Inc.) proposed $765 million senior secured bank facility. At the same time, Standard & Poor's affirmed its 'B-' corporate credit rating on Wilton Products. Wilton Products is the combined operating company that includes EK Success Ltd., Wilton Industries, and Dimensions. The outlook remains stable. The new facility consists of a $65 million revolver, $445 million first-lien term loan, and a $255 million second-lien term loan. The first-lien facilities are rated 'B+' (two notches higher than the 'B-' corporate credit rating) with a recovery rating of '1', indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default. The second-lien facility is rated 'B-' with a recovery rating of '4', indicating that lenders can expect average (30%-50%) recovery in the event of a payment default. The ratings reflects Wilton Products' high leverage, its participation in a highly fragmented and low barrier-to-entry industry, vulnerability to fads, and integration risk," said Standard & Poor's credit analyst Bea Chiem. "Somewhat offsetting these factors are the company's leading market positions in the crafts and specialty housewares industry." Net proceeds from the new bank facilities, along with approximately $126 million in additional preferred equity, will be used in part to finance Wilton Products' acquisition of Wilton Industries and Dimensions. * Howard Brod Brownstein Joins National Philanthropic's Board ------------------------------------------------------------- Howard Brod Brownstein was elected to the board of directors of the National Philanthropic Trust. Howard Brownstein has served on the board of directors and chaired the audit committee of Special Metals Corporation, a nickel alloy producer, and on the board of Magnatrax Corporation, a manufacturer of metal buildings. Mr. Brownstein is a Certified Turnaround Professional and serves on the international board of directors of the Turnaround Management Association, and its executive and audit committees, and won TMA's "Outstanding Individual Contribution" award in 2007. He is also a member of the board of the American Bankruptcy Institute and co-chairs its Mid Atlantic region. He is the vice president - International of the Association of Certified Turnaround Professionals and serves on its board. Mr. Brownstein is a frequent speaker at professional and educational programs, including at Harvard Business School, Villanova Law School, Northeastern University, the American Bankruptcy Institute, the American Bar Association, and TMA. He has authored over 30 articles, and has served on the editorial board of The Journal of Corporate Renewal, and currently serves as a Contributing Editor of abfJournal. Howard Brownstein is a graduate of Harvard University, where he obtained J.D. and M.B.A. degrees, and of the University of Pennsylvania, where he obtained B.S. and B.A. degrees from the Wharton School and the College of Arts and Sciences. Mr. Brownstein is admitted to the bars of Pennsylvania, Massachusetts and Florida, but does not actively practice law. He also served in the U.S. Air Force Reserve attaining the rank of First Lieutenant in the Medical Service Corps. Mr. Brownstein is a principal of NachmanHaysBrownstein Inc. -- http://www.nhbteam.com/-- one of the country's leading corporate renewal firms, which has been included among the "Top Twelve Turnaround Firms" in Turnarounds & Workouts for the past twelve consecutive years. He has principal responsibility for the firm's transactional activities and for the marketing of its services to clients. About National Philanthropic Trust Based in Jenkintown, Pennsylvania, the National Philanthropic Trust -- http://www.nptrust.org/-- is an independent public charity dedicated to increasing philanthropy in the society. NPT creates individual philanthropic solutions for each donor that best serve their specific interests, goals and needs. NPT currently manages more than $660 million in charitable assets. Since its inception in 1996, NPT has raised over $1.2 billion in charitable contributions, and made more than 22,500 grants to charities throughout the United States and overseas, totaling over $630 million. NPT is led by a national board of trustees and a team of professionals with more than 100 years of philanthropic experience. NPT offers donors a variety of giving options including donor advised funds, supporting organizations, specialized field of interest funds, and pooled income funds. NPT also provides fee-based services for donors including educational seminars, family meetings, site visits, and research to leverage and enhance their giving. * Moody's Lowers Ratings on 31 Credit Linked Notes -------------------------------------------------- Moody's downgraded the ratings of 31 credit linked notes and 2 credit default swaps with respect to which the Reference Obligations are TABX.HE or ABX.HE. The downgrades cover transactions that were identified as ABX.HE 07-1, ABX.HE 06-2, ABX.HE 06-1, or TABX.HE 07-1 06-2 trades. The above ABX and TABX indices are static and are 100% exposed to subprime residential mortgage backed securities issued in 2005 and 2006 originally rated low investment grade. The negative rating actions affect securities totaling $1,088.949 million and EUR85 Million. Previously, $782.899 million and EUR85 million of these securities were rated Aaa. Moody's rating actions reflect additional downgrades and review for possible downgrades in the underlying subprime RMBS announced on Oct. 11, 2007. As a result of rating actions taken by Moody's on Oct. 11, 2007, 95% of the ABX.HE 07-1 BBB and BBB- Reference Obligations, and 90% of the ABX.HE 06-2 BBB and BBB- Reference Obligations, are negatively affected. On average, the ABX.HE 07-1 BBB and BBB - Reference Obligations have been downgraded about 7 notches from their previous ratings while the ABX.HE 06-2 Reference Obligations have been downgraded about 4 notches from their previous ratings. Combining these results, currently 35% of the TABX.HE 07-1 06-2 BBB Reference Obligations, and 25% of the TABX.HE 07-1 06-2 BBB- Reference Obligations are rated Caa1 or below while 17.5% of the TABX.HE 07-1 06-2 BBB Reference Obligations and 20% of the TABX.HE 07-1 06-2 BBB- Reference Obligations continue to be on review for possible downgrade. Taking into account Moody's notching convention for Reference Obligations on review for possible downgrade, Moody's Weighted Average Rating Factor (WARF) for TABX.HE 07-1 06-2 BBB is at 3856 while the WARF for TABX.HE 07-1 06-2 BBB- is at 5132. Moody's Investors Service reported that it has downgraded these notes: i. Transactions referencing TABX.HE 07-1 06-2: Notes and Class Description: -- Ixion plc 2007 Series 21 $20,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2045 Prior Rating: Aaa, on review for possible downgrade Current Rating: B2 -- Ixion plc 2007 Series 22 $100,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: Ba3 -- Ixion plc 2007 Series 23 $85,625,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: Ba3 -- Ixion plc 2007 Series 24 EUR20,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: Ba3 -- Ixion plc 2007 Series 25 $50,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2046 Prior Rating: Aa1, on review for possible downgrade Current Rating: Caa1 -- Ixion plc 2007 Series 26 $70,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2045 Prior Rating: Aaa Current Rating: Ba1 -- Ixion plc 2007 Series 27 $47,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Securitized Product of Restructured Collateral Limited SPC, Series 2007-1 TABXSPOKE (07-1 40-100) Segregated Portfolio $15,000,000 Class A Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Credit Default Swap Reference Number NE7JS $15,000,000 Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Credit Default Swap Reference Number CN098112 $30,000,000 Due 2046 Prior Rating: Aaa Current Rating: Ba1 -- Rutland Rated Investment Series 43 $10,000,000 Credit Linked Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Rutland Rated Investment Series 50 $20,000,000 Credit Linked Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-I Segregated Portfolio $100,000,000 Floating Rate Notes Due 2046 Prior Rating: Aa1 Current Rating: Caa1 -- Coliseum SPC, TACLs 2007-II Segregated Portfolio $25,000,000 Floating Rate Notes Due 2038 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-III Segregated Portfolio $37,500,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-III Segregated Portfolio $1,974,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Coliseum SPC, TACLs 2007-IV Segregated Portfolio $30,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Ba1 -- Coliseum SPC, TACLs 2007-IV Segregated Portfolio $1,600,000 Subordinated Notes Due 2046 Prior Rating: Aa2 Current Rating: Caa1 -- Coliseum SPC, TACLs 2007-V Segregated Portfolio $20,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-V Segregated Portfolio $1,100,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Coliseum SPC, TACLs 2007-VI Segregated Portfolio $40,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-VI Segregated Portfolio $2,200,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Cloverie plc Series 2007-12 EUR30,000,000 Class A Notes Due 2010 Prior Rating: Aaa Current Rating: Ba3 -- Cloverie plc Series 2007-13 EUR35,000,000 Class A Notes Due 2010 Prior Rating: Aaa Current Rating: Ba3 ii. Transactions referencing ABX.HE 06-2 and ABX.HE 06-1: Notes and Class Description: -- Calculus MABS Resecuritization Trust, $12,500,000 Series 2007-1 Units Due 2046 Prior Rating: Aaa Current Rating: Baa1 -- Calculus MABS Resecuritization Trust, $125,000,000 Series 2007-2 Units Due 2046 Prior Rating: Aaa Current Rating: Baa1 -- Coliseum SPC, Ballista 2007-II Segregated Portfolio $20,000,000 Floating Rate Notes Due 2046 Prior Rating: Aa1 Current Rating: Ba3 -- Coliseum SPC, Ballista 2007-III Segregated Portfolio $8,000,000 Floating Rate Notes Due 2046 Prior Rating: A3 Current Rating: Caa2 -- Ixion plc 2006-7 Series 9 USD 72,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2038 Prior Rating: Aa3 Current Rating: B1 -- Ixion plc 2006-7 Series 11 $10,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2038 Prior Rating: Baa2 Current Rating: Caa3 -- Restructured Asset Certificates with Enhanced Returns, Series 2006-20AT $40,500,000 Variable Certificate Due 2046 Prior Rating: A1 Current Rating: B3 iii. Transactions referencing ABX.HE 07-1, ABX.HE 06-2 and ABX.HE 06-1: Notes and Class Description: -- Coliseum SPC acting for the account of Neapolitan 2007-I Segregated Portfolio Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: A1 -- Coliseum SPC acting for the account of Neapolitan 2007-I Segregated Portfolio Subordinated Notes Due 2046 Prior Rating: Aa2 Current Rating: A3 (07-1 40-100) Segregated Portfolio $15,000,000 Class A Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Credit Default Swap Reference Number NE7JS $15,000,000 Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Credit Default Swap Reference Number CN098112 $30,000,000 Due 2046 Prior Rating: Aaa Current Rating: Ba1 -- Rutland Rated Investment Series 43 $10,000,000 Credit Linked Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Rutland Rated Investment Series 50 $20,000,000 Credit Linked Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-I Segregated Portfolio $100,000,000 Floating Rate Notes Due 2046 Prior Rating: Aa1 Current Rating: Caa1 -- Coliseum SPC, TACLs 2007-II Segregated Portfolio $25,000,000 Floating Rate Notes Due 2038 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-III Segregated Portfolio $37,500,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-III Segregated Portfolio $1,974,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Coliseum SPC, TACLs 2007-IV Segregated Portfolio $30,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Ba1 -- Coliseum SPC, TACLs 2007-IV Segregated Portfolio $1,600,000 Subordinated Notes Due 2046 Prior Rating: Aa2 Current Rating: Caa1 -- Coliseum SPC, TACLs 2007-V Segregated Portfolio $20,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-V Segregated Portfolio $1,100,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Coliseum SPC, TACLs 2007-VI Segregated Portfolio $40,000,000 Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa3 -- Coliseum SPC, TACLs 2007-VI Segregated Portfolio $2,200,000 Subordinated Notes Due 2046 Prior Rating: Aaa Current Rating: Ba3 -- Cloverie plc Series 2007-12 EUR30,000,000 Class A Notes Due 2010 Prior Rating: Aaa Current Rating: Ba3 -- Cloverie plc Series 2007-13 EUR35,000,000 Class A Notes Due 2010 Prior Rating: Aaa Current Rating: Ba3 ii. Transactions referencing ABX.HE 06-2 and ABX.HE 06-1: Notes and Class Description: -- Calculus MABS Resecuritization Trust, $12,500,000 Series 2007-1 Units Due 2046 Prior Rating: Aaa Current Rating: Baa1 -- Calculus MABS Resecuritization Trust, $125,000,000 Series 2007-2 Units Due 2046 Prior Rating: Aaa Current Rating: Baa1 -- Coliseum SPC, Ballista 2007-II Segregated Portfolio $20,000,000 Floating Rate Notes Due 2046 Prior Rating: Aa1 Current Rating: Ba3 -- Coliseum SPC, Ballista 2007-III Segregated Portfolio $8,000,000 Floating Rate Notes Due 2046 Prior Rating: A3 Current Rating: Caa2 -- Ixion plc 2006-7 Series 9 USD 72,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2038 Prior Rating: Aa3 Current Rating: B1 -- Ixion plc 2006-7 Series 11 $10,000,000 Floating Rate Portfolio Credit Linked Secured Notes Due 2038 Prior Rating: Baa2 Current Rating: Caa3 -- Restructured Asset Certificates with Enhanced Returns, Series 2006-20AT $40,500,000 Variable Certificate Due 2046 Prior Rating: A1 Current Rating: B3 iii. Transactions referencing ABX.HE 07-1, ABX.HE 06-2 and ABX.HE 06-1: Notes and Class Description: -- Coliseum SPC acting for the account of Neapolitan 2007-I Segregated Portfolio Class I Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: A1 -- Coliseum SPC acting for the account of Neapolitan 2007-I Segregated Portfolio Subordinated Notes Due 2046 Prior Rating: Aa2 Current Rating: A3 * S&P Lowers Ratings on 377 Classes of NIM Securities ----------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 377 classes of U.S. net interest margin securities backed by U.S. subprime mortgage securities. The respective NIMS were structured from underlying subprime mortgage transactions issued from the beginning of January 2005 through the end of December 2006 and on which rating actions were taken on Oct. 15, 2007, and Oct. 18, 2007. The primary source of payments to NIMS is the difference between the interest payments collected on the mortgages in the underlying transactions and the interest owed to the related RMBS, together with prepayment penalties and potential payments from derivative contracts. The current levels of delinquencies and losses occurring in the subprime mortgage market have significantly reduced the levels of excess interest available to some of the NIMS. Unlike the underlying securitization, a NIMS transaction does not benefit from or contain overcollateralization. These rating actions affect a total of 201 U.S. subprime RMBS NIMS transactions. The 377 downgraded classes have a current balance of $2.64 billion, which represents 45.52% of the approximately $5.80 billion currently outstanding in U.S. NIMS backed by U.S. subprime mortgage securities rated by Standard & Poor's from the beginning of January 2005 through the end of December 2006. During the same period, the original total balance of U.S. NIMS backed by all types of residential mortgage securities issued in the non-agency market was more than $21.58 billion, while the current balance is approximately $6.40 billion. The downgrades on 94 classes from 51 NIMS transactions represent repeat rating actions. Approximately 62.28% of the downgraded NIMS classes, as a percentage of the total $2.64 billion in downgraded NIMS securities, were rated 'BBB' or below prior to these rating actions. The resulting ratings associated with the downgraded classes, as a percentage of the total $2.64 billion in downgraded securities, are: Rating (%) ------ --- BB 2.14 BB- 1.61 B+ 7.22 B 19.89 B- 24.07 CCC 45.08 NIMS are generally short-term instruments with average tenures of less than 36 months. For the NIMS that are currently outstanding, the average NIMS balance remaining, as a percentage of the initial NIMS balance, is as follows by issuance quarter: Quarter (%) ------- --- First quarter 2005 5.45 Second quarter 2005 9.12 Third quarter 2005 14.25 Fourth quarter 2005 28.90 First quarter 2006 35.86 Second quarter 2006 40.53 Third quarter 2006 45.71 Fourth quarter 2006 53.84 These NIMS rating actions follow the subprime rating actions taken on Oct. 15, 2007, and Oct. 18, 2007, which are described in Ratings Lowered On 402 First-Lien Subprime U.S. RMBS Classes From 1Q-3Q Of 2005, and Ratings Cut On 1,413 1st-Lien Subprime RMBS Classes From Fourth-Quarter 2005 And 2006 Vintages, respectively. Losses on the underlying U.S. subprime mortgage collateral and securities, and the expected timing of them, have a direct effect on the expected cash flows to the NIMS transactions. Once the overcollateralization level for an underlying transaction falls below its target, excess spread available to the NIMS transaction is reduced or eliminated as the underlying transaction covers current and previous losses and rebuilds to its overcollateralization target. Impact on ABCP, SIVs, and CDOs Standard & Poor's has completed its global review of all its rated asset-backed commercial paper conduits with exposure to these downgraded U.S. NIMS classes and confirms that the ratings on these ABCP conduits are not adversely affected by these rating actions. Standard & Poor's has also completed its review of all S&P-rated SIV and SIV-lite structures with regard to exposure to these downgraded U.S. NIMS classes. This review shows that there is no exposure to the affected U.S. NIMS classes in any SIV or SIV-lite, and therefore, the ratings on SIVs and SIV-lites are not adversely affected by these rating actions. Standard & Poor's has also completed its global review of all S&P- rated CDO structures with regard to exposure to these downgraded U.S. NIMS classes. This review shows that there is no impact to the ratings on our publicly-rated CDO transactions. U.S. Subprime NIMS Surveillance Assumptions As performance continues to deteriorate for the underlying U.S. subprime mortgage securitizations, S&P have increased the severity of the surveillance assumptions S&P use to evaluate the ongoing creditworthiness for some of the underlying U.S. subprime transactions and hence, related NIMS transactions. S&P's previously described U.S. subprime mortgage surveillance assumptions as specified in 612 U.S. Subprime RMBS Classes Put On Watch Neg; Methodology Revisions Announced, have been adjusted based on S&P's more negative views on home prices, delays in liquidating real estate owned assets, and the impact of loan resets and loan modifications. Given S&P's revised U.S. subprime mortgage surveillance assumptions, many underlying transactions were stressed such that their overcollateralization levels fell below their targets quickly, thus limiting projected residual cash outflows to the NIMS. However, despite the growth in observed delinquency pipelines, losses continue to remain lower than projected for certain transactions and the respective NIMS may in fact receive some cash flow from excess spread for a certain period of time. Standard & Poor's reviewed the actual cash flows to the NIMS through the September 2007 remittance dates, evaluated the delinquency, foreclosure, and REO pipelines on the underlying transactions, and projected prepayment penalties and cap contract proceeds to them. S&P lowered the ratings to 'CCC' for classes that have experienced interest shortfalls and are not receiving excess spread from the underlying transactions. S&P also lowered ratings to 'CCC' on principal-only classes that S&P expect to experience material shortfalls at maturity. S&P lowered ratings to 'BB' and 'B' categories if interest shortfalls might occur in the future or if the NIMS may not receive full payments of principal. S&P affirmed ratings on NIMS classes that are bond-insured or are projected to pay in full under the stress scenario. S&P continue to review NIMS transactions that are backed by U.S. subprime and Alternative-A RMBS issued during 2005 and 2006 that are not affected by these rating actions. In onnection with the rating actions taken on Oct. 17, 2007, with respect to U.S. RMBS backed by first-lien subprime mortgage loans, first-lien Alt-A mortgage loans, and closed-end second-lien mortgage loans issued during the first half of 2007, the NIMS transactions related to these underlying transactions are being reviewed based on S&P's most recently updated rating assumptions for new issuances. S&P will be releasing the results of these reviews over the next few months, as the reviews are completed. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------ ------- Absolute Softwre ABT (1) 63 22 AFC Enterprises AFCE (31) 158 3 Alaska Comm Sys ALSK (23) 562 19 Apex Silver Mine SIL (131) 1,385 146 AthenaHealth Inc ATHN (18) 44 (2) Authentic Inc AUTH (4) 22 0 Bare Escentuals BARE (162) 196 68 Bearingpoint Inc BE (338) 1,836 133 Blount International BLT (89) 471 141 CableVision System CVC (5,064) 10,072 17 Carrols Restaurant TAST (18) 459 (36) Cell Therapeutic CTIC (85) 90 (21) Centennial Comm CYCL (1,078) 1,322 20 Cheniere Energy CQP (181) 1,935 145 Choice Hotels CHH (72) 332 (33) Cincinnati Bell CBB (744) 1,953 (2) Claymont Stell PLTE (41) 152 72 Compass Minerals CMP (49) 674 139 Corel Corp. CRE (20) 249 (31) Crown Holdings I CCK (386) 6,949 440 Crown Media HL CRWN (588) 749 63 CV Therapeutics CVTX (129) 308 226 Cyberonics CYBX (17) 135 (28) Dayton Superior DSUP (99) 337 95 Deluxe Corp DLX 0 1,410 (164) Denny's Corporation DENN (207) 439 (54) Domino's Pizza DPZ (1,434) 497 82 Dun & Bradstreet DNB (425) 1,418 (268) Einstein Noah Re BAGL (46) 136 (3) Emeritus Corp. ESC (111) 950 (62) Empire Resorts I NYNY (12) 71 10 Enzon Pharmaceutical ENZN (57) 355 166 Extendicare Real EXE-U (16) 1,331 146 Foamex Intl FMXI (257) 566 146 Ford Motor Co F (1,422) 287,939 (4,704) Gencorp Inc. GY (31) 1,082 74 General Motors GM (2,290) 186,527 (4,638) Graftech International GTI (4) 788 260 Healthsouth Corp. HLS (1,292) 2,402 (463) I2 Technologies ITWO (6) 195 39 ICO Global C-New ICOG (116) 628 146 IDEARC Inc IAR (8,575) 1,576 326 IMAX Corp IMX (64) 220 12 IMAX Corp IMAX (64) 220 12 Incyte Corp. INCY (120) 309 250 Indevus Pharma IDEV (75) 156 14 Intermune Inc ITMN (68) 241 181 ITC Deltacom Inc ITCD (49) 409 9 Koppers Holdings KOP (44) 699 196 Linear Tech Corp LLTC (636) 1,334 827 McMoran Exploration MMR (100) 1,807 (223) Mediacom Comm MCCC (120) 3,624 (278) National Cinemed NCMI (559) 446 40 Navisite Inc NAVI (14) 116 11 Neurochem Inc NRM (1) 116 79 Nexstar Broadcasting NXST (81) 704 (20) NPS Pharm Inc NPSP (226) 150 (107) ON Semiconductor ONNN (118) 1,428 322 PRG-Schultz Intl PRGX (63) 114 16 Primedia Inc PRM (426) 1,233 770 Protection One PONN (4) 678 (302) Qwest Communication Q (1,556) 20,389 (1,263) Radnet Inc. RDNT (49) 393 38 Ram Energy Resources RAME (1) 203 (8) Regal Entertainment RGC (96) 2677 (89) Riviera Holdings RIV (24) 443 28 RSC Holdings Inc RRR (129) 3,430 (202) Rural Cellular RCCC (602) 1,260 14 Sealy Corp. ZZ (128) 1,023 40 Sipex Corp SIPX (18) 44 2 Sirius Satellite SIRI (539) 1,688 (176) St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (167) 3,745 (62) Stelco Inc STE (108) 2,734 726 Town Sports Int. CLUB (12) 459 (52) Unisys Corp. UIS (2) 3,832 40 VMWare Inc-CL A VMW (138) 1,422 23 Voyager Learning VLCY (53) 917 (637) Weight Watchers WTW (991) 1,046 (85) Western Union WU (86) 5,328 945 Westmoreland Coal WLB (115) 764 (51) Worldspace Inc. WRSP (1,683) 424 (20) WR Grace & Co. GRA (390) 3,706 922 XM Satellite XMSR (597) 1,813 (153) Xoma Ltd XOMA (14) 68 23 ********* 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 ***