T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 2, 2007, Vol. 11, No. 260 Headlines 3XS LLC: Voluntary Chapter 11 Case Summary ABACUS 2006-14: Moody's Lowers Ratings on $30 Million Notes ABACUS 2006-14: Moody's Junks Rating on $36.6MM Class B Notes ABACUS 2006-14: Moody's Junks Rating on $20 Mil. Class C Notes ABACUS 2006-15: Moody's Cuts Rating on Class C Notes to Ba2 ABACUS 2006-15: Moody's Lowers Class C Notes Rating' to Ba2 ABACUS 2006-15: Moody's Lowers Class D Notes Rating' to B1 ABACUS 2006-15: Moody's Lowers $2.8 Million Notes Rating' to B1 AFFILIATED COMPUTER: Cerberus Withdraws Acquisition Offer AFFILIATED COMPUTER: Five Directors Resign on Chairman's Call ALCATEL-LUCENT: Posts EUR345 Mil. Net Loss in Qtr. Ended Sept. 30 ALERT CELLULAR: Exclusive Plan Filing Period Moved to Dec. 10 ANIXTER INT'L: Fitch Affirms BB+ Issuer Default Rating ART CDO: Moody's Reviews Ba2 Rating on $5 Mil. Class C Notes AURIGA CDO: Moody's Junks Ratings on Four Note Classes AUTOMOTIVE GLASS: Moody's Places Corporate Family Rating at B2 BEAZER HOMES: Amends Four-Year Revolving Credit Facility BELO CORP: Earns $18.7 Million in Quarter Ended September 30 BFC AJAX: Moody's Cuts Ratings on Two Note Classes to Low-B BIOSTEM INC: Buying Joyon Via 115 Million Stock Exchange Deal BROADRIDGE TRANSPORT: Case Summary & 15 Largest Unsec. Creditors CAIRN MEZZ: Moody's Lowers Ratings on Two Note Classes to Low-B CALPINE CORP: Quadrangle & JP Morgan Objects to Plan Confirmation CALPINE CORP: Contends Litigation is Premature & Unnecessary CAP CANA: Moody's Rates Proposed $500 Mil. Senior Notes at B3 CDC MORTGAGE: S&P Cuts Ratings on Four Cert. Classes to Low-B CHALLENGER POWERBOATS: Board OKs Reverse Split on Common Stock CHAMPION ENTERPRISES: Prices $160 Mil. Public Offering of Notes CHANCELLOR GROUP: Voluntary Chapter 11 Case Summary CHYPS CBO: Fitch Junks Ratings on Four Note Classes CHYPS CBO: Fitch Junks Ratings on Two Certificate Classes CITIGROUP MORTGAGE: Fitch Assigns Low-B Ratings on $6.6MM Notes CITIGROUP MORTGAGE: Fitch Takes Rating Actions on 14 Deals CITIMORTGAGE ALTERNATIVE: Fitch Junks Ratings on Two Certificates CITIGROUP MORTGAGE: S&P Junks Rating on 2003-HE4 Class M-7 Certs. COLLINS & AIKMAN: Fee Examiner Files Report COMMODORE CDO: Moody's Junks Ratings on Two Note Classes COMSTOCK HOMEBUILDING: S&P Withdraws B Corporate Credit Rating CONSECO INC: Posts $53.7 Million Net Loss in Qtr. Ended Sept. 30 CRDENTIA CORP: Acquiring Medical People for $750,000 in Cash CRESTED CORP: Special Stockholders Meeting Set for November 26 DAVIS & ASSOCIATES: Voluntary Chapter 11 Case Summary DRACO 2007-1: Moody's Junks Ratings on Two Note Classes FIDELITY NAT'L: Board Okays Lender Processing Services Spin-Off FIDELITY NATIONAL: Earns $245.3 Million in Third Quarter 2007 FHC HEALTH: Moody's Holds B2 Corporate Family Rating FORD CREDIT: Fitch Holds BB+ Rating on Class D Notes FORD MOTOR: UAW Contract Negotiations Continue FURLONG SYNTHETIC: Moody's Cuts Rating on Class B Notes to Ba1 GEMSTONE CDO: Moody's Junks Ratings on Two Note Classes GENERAL MOTORS: Investing $73 Million in Shreveport Assembly Plant GRANT PRIDECO: Selling Three Biz Units to Vallourec for $800 Mil. GSV-2 RESORT: Voluntary Chapter 11 Case Summary HALCYON SECURITIZED: Moody's Junks Rating on $4MM Class E Notes HALO TECHNOLOGY: U.S. Trustee Amends Creditors Panel Membership HALO TECH: Court Okays Pepe & Hazard as Committee's Bankr. Counsel HALO TECHNOLOGY: Committee Taps Weiser LLP as Financial Advisor HAMILTON GARDENS: Moody's Lowers Ratings on Two Notes to Low-B HAWAIIAN AIRLINES: Awarded $80 Million in Damages Against Mesa HEALTHTRONICS INC: Moody's Holds B1 Corporate Family Rating HEMOSOL CORP: Court Extends CCAA Protection Until November 30 HICKORY TREE: Case Summary & Four Largest Unsecured Creditors HIGDON FURNITURE: Case Summary & 20 Largest Unsecured Creditors HYDRO SPA: U.S. Trustee Wants Chapter 11 Trustee Appointed INNOVATIVE DESIGNS: Judge Dismisses Bankruptcy Case IRON MOUNTAIN: To Acquire Stratify for $158 Million Cash ISCHUS MEZZ: Moody's Junks Rating on $7 Mil. Class E Notes J. CREW: S&P Lifts Corporate Credit Rating to BB- JP MORGAN: Fitch Affirms and Downgrades Ratings on Five Deals KLEROS PREFERRED: Moody's Junks Rating on $6 Mil. Class E Notes LIBRA CDO: Moody's Cuts Rating on $52.5MM Class D Notes to B1 LINCOLN AVENUE: Moody's Lowers Ratings on Two Notes to Low-B LINEAR TECH: Sept. 30 Balance Sheet Upside-Down by $635 Million MACO STEEL: Section 341(a) Creditors Meeting Set for November 14 MACO STEEL: Court Okays Miller Johnson as Bankruptcy Counsel MAGNOLIA FINANCE: Moody's Cuts Rating on $4.25 Million Notes to B3 MAGNOLIA FINANCE: Moody's Junks Rating on $3 Million Notes MAGNOLIA FINANCE: Moody's Junks Rating on Series 2006-9F2 Notes MAYFLOWER CDO: Moody's Cuts Ratings on Two Notes to Low-B MECACHROME INT'L: S&P Revises Outlook to Negative from Stable MESABA AVIATION: Embraer Wants Nod on Contractual Default Rate MILLER PLATING: Voluntary Chapter 11 Case Summary MORGAN STANLEY: Fitch Assigns Low-B Ratings on $7.3MM Certificates MOVIE GALLERY: Can Walk Away from 212 Unexpired Store Leases MOVIE GALLERY: Landlords React to the Auction of 508 Stores Leases NETBANK INC: Files List of 20 Largest Unsecured Creditors NETBANK INC: Holland & Knight Approved as Bankruptcy Counsel NETBANK INC: Files Schedules of Assets and Liabilities NEUMANN HOMES: Files for Bankruptcy Protection in Illinois NEUMANN HOMES: Case Summary & 20 Largest Unsecured Creditors NEWLAND INT'L: Moody's Rates Proposed $220 Mil. Notes at Ba3 ODOM EXCAVATION: Section 341(a) Meeting Scheduled on November 19 OSG INC: S&P Places BB+ Corporate Credit Rating on Negative Watch OWENS CORNING: Completes $640 Mil. Buyout of Saint-Gobain's Biz PHARMED GROUP: Wants to Hire Berger Singerman as Counsel PYXIS ABS: Moody's Junks Ratings on Three Note Classes RAHWAY HOSPITAL: Moody's Affirms Series 1998 Bonds' Ba2 Rating REABLE THERAPEUTICS: S&P Holds B Corporate Credit Rating REAL ESTATE: Section 341(a) Meeting Scheduled for December 4 REAL ESTATE: Wants Until Nov. 20 to File Schedules and Statement REMY WORLDWIDE: Taps Greenberg Traurig as Special Counsel REMY WORLDWIDE: Wants to Hire Ernst & Young as Accountant RMS LEASING: Voluntary Chapter 11 Case Summary ROADHOUSE GRILL: Section 341(a) Creditors Meeting Set for Nov. 19 ROADHOUSE GRILL: Court Okays Kelley & Fulton as Bankruptcy Counsel ROADHOUSE GRILL: U.S. Trustee Appoints Members to Creditors Panel ROCKY ROBINSON: Court Gives Nod to Tyler Bartl as Counsel SAGITTARIUS CDO: S&P Puts Four Low-B Rated Notes on CreditWatch SEALY MATTRESS: S&P Rates $440 Million Senior Loans at BB+ SMURFIT-STONE: Solid Performance Prompts S&P to Lift Ratings SOLOMON DWEK: Case Summary & 253 Largest Unsecured Creditors SPX CORP: Earns $92.9 Million in Third Quarter Ended Sept. 30 SPX CORP: Inks Definitive Pact to Acquire APV from Invensys PLC SPX CORP: Fitch Affirms BB+ Issuer Default Rating STACK 2006-1: Moody's Junks Rating on $5 Mil. Class VII Notes STONEYBROOK TOWNHOMES: Case Summary & Five Largest Creditors SUSSER HOLDINGS: Prices $150MM Offering of 10-5/8% Sr. Notes TALLSHIPS FUNDING: Moody's Cuts Ratings on Two Notes to Low-B TARPON INDUSTRIES: Reduces Debt with Sale of Steelbank Unit TESORO PETROLEUM: Fitch Says Tracinda Offer Won't Affect Ratings THORPE INSULATION: Section 341(a) Creditors Meeting Set on Nov. 27 TOPANGA CDO: Moody's Lowers Ratings on Three Notes to Low-B UNITED RENTALS: Provides Update on Unit's Tender Offer VISTEON CORP: Sept. 30 Balance Sheet Upside-Down by $162 Million WACHOVIA AUTO: Fitch Affirms BB Rating on Class E Notes WELLMAN INC: S&P Junks Corporate Credit Rating WELLMAN INC: Poor Operating Results Cue Moody's to Junk Rating WENDY'S INT'L: Banks Propose "Highly Conditional" Financing WEST TRADE: Moody's Lowers Ratings on Two Notes to Low-B WETCO RESTAURANT: Section 341(a) Creditors Meeting Set for Nov. 20 WETCO RESTAURANT: Wants Tom St. Germain as Bankruptcy Counsel WILLIAMS SCOTSMAN: Moody's Withdraws B1 Corporate Family Rating WILLIAMS SCOTSMAN: Ristretto Deal Cues S&P to Withdraw Ratings WP EVENFLO: Moody's Affirms B2 Corporate Family Rating * BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in the Age of Wall Street ********* 3XS LLC: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 3XS, L.L.C. 4600 Mountain Home Ranch Road Calistoga, CA 94515 Bankruptcy Case No.: 07-11417 Chapter 11 Petition Date: October 31, 2007 Court: Northern District of California (Santa Rosa) Debtor's Counsel: John S. Morken, Sr., Esq. 760 Market Street, Suite 938 San Francisco, CA 94102 Tel: (415) 391-6140 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. ABACUS 2006-14: Moody's Lowers Ratings on $30 Million Notes ----------------------------------------------------------- Moody's downgraded and left on review for possible downgrade the following notes issued by ABACUS 2006-14, Ltd. Class Descriptions: -- $20,000,000 Class A-2 Variable Rate Notes, Due 2045 Prior Rating: Aa1 Current Rating: Ba3, on review for possible downgrade -- $10,000,000 Class A-2 Series 2 Variable Rate Notes, Due 2045 Prior Rating: Aa1 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. ABACUS 2006-14: Moody's Junks Rating on $36.6MM Class B Notes ------------------------------------------------------------- Moody's downgraded and left on review for possible downgrade these notes issued by ABACUS 2006-14, Ltd. Class Description: -- $36,684,375 Class B Variable Rate Notes, Due 2045 Prior Rating: Aa3, on review for possible downgrade Current Rating: Caa3, 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. ABACUS 2006-14: Moody's Junks Rating on $20 Mil. Class C Notes -------------------------------------------------------------- Moody's downgraded and left on review for possible downgrade the following notes issued by ABACUS 2006-14 Ltd. Class Description: -- $20,000,000 Class C Variable Rate Notes, Due 2045 Prior Rating: A2, on review for possible downgrade Current Rating: Caa3, 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. ABACUS 2006-15: Moody's Cuts Rating on Class C Notes to Ba2 ----------------------------------------------------------- Moody's Investors Service downgraded and left these notes issued by Abacus 2006-15 Ltd. (Class C) on review for possible downgrade: Class Description: -- $41,150,000 Class C Series 1 Variable Rate Notes Due 2045 Prior Rating: A3 Current Rating: Ba2, 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 asset- backed securities. ABACUS 2006-15: Moody's Lowers Class C Notes Rating' to Ba2 ----------------------------------------------------------- Moody's Investors Service downgraded and left these notes issued by Abacus 2006-15 Ltd. (Class C Series 2) on review for possible downgrade: Class Description: -- $2,850,000 Class C Series 2 Variable Rate Notes Due 2037 Prior Rating: A3 Current Rating: Ba2, 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 asset- backed securities. ABACUS 2006-15: Moody's Lowers Class D Notes Rating' to B1 ---------------------------------------------------------- Moody's Investors Service downgraded and placed these notes issued by Abacus 2006-15 Ltd. (Class D Series 1) on review for possible downgrade: Class Description: -- $14,650,000 Class D Series 1 Variable Rate Notes Due 2045 Prior Rating: Baa3 Current Rating: B1, 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 asset- backed securities. ABACUS 2006-15: Moody's Lowers $2.8 Million Notes Rating' to B1 --------------------------------------------------------------- Moody's Investors Service downgraded and left these notes issued by Abacus 2006-15, Ltd. (Class D Series 2) on review for possible downgrade: Class Description: -- $2,850,000 Class D Series 2 Variable Rate Notes Due 2037 Prior Rating: Baa3 Current Rating: B1, 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 asset- backed securities. AFFILIATED COMPUTER: Cerberus Withdraws Acquisition Offer --------------------------------------------------------- Affiliated Computer Services, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on Oct. 30, 2007, the Special Committee of its Board of Directors receive a letter from Cerberus Capital Management, L.P., stating that Cerberus was withdrawing its offer to acquire the company. In the letter, Cerberus said that although it believes that the company is an attractive investment opportunity, it had to withdraw its offer due to the continuation of poor conditions in the debt financing markets. Cerberus further said that had the company's Special Committee engaged with Cerberus and Mr. Darwin Deason, Chairman of the Board of ACS, on the schedule proposed in the original offer letter, the acquisition would been approved and closed months ago. Cerberus however stated that it market conditions change, it may consider proposing another transaction with ACS. Cerberus Offer As reported in the Troubled Company Reporter on March 23, 2007, the company confirmed that it received a proposal from Mr. Deason and Cerberus to acquire, for a cash purchase price of $59.25 per share, all of the outstanding shares of the company's common stock, other than certain shares and options held by Mr. Deason and members of the company's management team that would be rolled into equity securities of the acquiring entity in connection with the proposed transaction. Mr. Deason and Cerberus stated that their proposed price represented a premium of 15.5% over the closing price of the company's class A common stock on March 19, 2007, and an 18.3% premium over the 90-day average closing price. The proponents had anticipated to execute a merger agreement in early May 2007. In connection with their proposal, Mr. Deason and Cerberus entered into an Exclusivity Agreement, dated March 20, 2007, pursuant to which Mr. Deason agreed to work exclusively with Cerberus to negotiate an acquisition of the company. Citigroup Commitment Letter In order to further support their offer, Mr. Deason and Cerberus disclosed that they received a letter from Citigroup Global Markets Inc. stating that it is highly confident of its ability to raise the debt necessary to complete the transaction. Suspension of Exclusivity Agreement However, as reported in the Troubled Company Reporter on June 12, 2007, the company reached an agreement with Mr. Deason to suspend the Exclusivity Agreement between Mr. Deason and Cerberus. Lawsuit As reported in the Class Action Reporter on April 12, 2007, the company disclosed in a regulatory filing that it was facing two class actions filed in the Court of Chancery of the State of Delaware, New Castle County against the company and certain directors. The lawsuits were filed by purported shareholders opposed to a proposal to acquire the company presented by Mr. Deason and Cerberus. In each of the lawsuits, the plaintiff claims to be a shareholder of the company purporting to bring the action on behalf of all public shareholders of the company and alleges that the proposal is "inadequate and to have resulted from an unfair process." About Cerberus Capital Management Headquartered in New York City, and established in 1992, Cerberus Capital Management LP is one of the world's leading private investment firms with approximately $25 billion of capital under management in funds and accounts. Through its team of investment and operations professionals, Cerberus specializes in providing both financial resources and operational expertise to help transform its portfolio companies into industry leaders for long- term success and value creation. Cerberus has offices in Los Angeles, Chicago and Atlanta, well as advisory offices in London, Baan, Frankfurt, Tokyo, Osaka and Taipei. About Affiliated Computer Headquartered in Dallas, Affiliated Computer Services Inc. (NYSE: ACS) -- http://www.AffiliatedComputer-inc.com/ -- provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company has more than 58,000 employees supporting client operations in nearly 100 countries. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland, and Singapore. * * * Affiliated Computer Services currently carries Fitch Ratings' BB Issuer Default Rating. The company also carries Moody's Investors Service's long term rating of Ba2. AFFILIATED COMPUTER: Five Directors Resign on Chairman's Call ------------------------------------------------------------- Affiliated Computer Services Inc. chairman Darwin Deason has sent a letter asking five independent directors to resign saying that the Board of Directors has come under increasing shareholder criticism for its failure to consummate a transaction based on Cerberus Capital Management LP's offer. Specifically, Mr. Deason seeks resignation of Robert B. Holland, J. Livingston Kosberg, Dennis McCuistion, Joseph P. O'Neill, and Frank A. Rossi. "[T]hey clearly demonstrate that the Board has lost the trust and support of the Company's shareholders. It is in the shareholders' best interests to provide the Company with new strategic leadership," Mr. Deason argues. Mr. Deason went on to say that the Board, despite its efforts, has failed to produce any other bidders or superior strategic alternatives. Such failure to produce another bidder or superior strategic alternative has called into question the significant time and resources dedicated to the Board's repeat auction and extensive meetings to consider strategic alternatives, Mr. Deason avers. ACS Directors Respond The independent directors accepted Mr. Deason's call, saying that "the best way for us to discharge our fiduciary duties is to resign in favor of a new majority of independent directors." However, the five directors contended that from the outset, Mr. Deason has attempted to subvert the acquisition process in order to prevent superior alternatives to the Cerberus offer from being consummated. The directors also noted that they have engaged Mr. Deason and Cerberus in an effort to modify the proposal in a way that would make sense for all of the company's shareholders, including increasing the offer price, which Mr. Deason refused. Calling his move as "remarkable piece of bullying and thuggery," the directors argued that Mr. Deason have made it impossible for them to continue to effectively serve as directors of ACS. "We could fire you and the entire management team, but that would not help our shareholders, customers or employees," the directors avered. About Affiliated Computer Headquartered in Dallas, Affiliated Computer Services Inc. (NYSE: ACS) -- http://www.AffiliatedComputer-inc.com/ -- provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company has more than 58,000 employees supporting client operations in nearly 100 countries. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland, and Singapore. * * * Affiliated Computer Services currently carries Fitch Ratings' BB Issuer Default Rating. The company also carries Moody's Investors Service's long term rating of Ba2. ALCATEL-LUCENT: Posts EUR345 Mil. Net Loss in Qtr. Ended Sept. 30 ----------------------------------------------------------------- Alcatel-Lucent reported Wednesday results for the third quarter ended Sept. 30, 2007. For the quarter, reported net loss was EUR345 million, including the non-cash impact from purchase price allocation entries of EUR87 million following the merger with Lucent Technologies. The global Thales transaction has been closed during the second quarter 2007 and all activities which have been disposed of or contributed to Thales as of June 30, 2007, are not included in third quarter 2007 results. For the third quarter 2007, Alcatel-Lucent's reported revenues amounted to EUR4.350 billion, compared to a pro-forma EUR4.909 billion in the year-ago quarter, an 8% decrease at a constant Euro/US$ exchange rate, or an 11% decline at current rate. The reported gross profit was EUR1.487 billion, including the impacts from purchase price allocation entries of EUR1 million. Reported operating income was EUR74 million, including the impact from purchase price allocation entries of EUR144 million. The adjusted gross profit was EUR1.486 billion, 34.2% of sales, compared to an adjusted pro-forma gross profit of EUR1.925 billion in the year-ago quarter. Adjusted operating income was EUR70 million, 1.6% of sales, compared with an adjusted pro-forma operating income of EUR 430 million in the year-ago quarter. For the quarter, adjusted net loss was EUR258 million. The adjusted pro-forma net income was EUR532 million in the third quarter 2006. The net debt cash position was EUR 124 million as of Sept. 30, 2007, compared with EUR221 million as of June 30, 2007. Chief Executive Officer Pat Russo commented: "We believe that our strategy, our product portfolio and our expertise align with the long-term market drivers that will underpin the industry for the next several years, as networks migrate to all-IP based architecture. During the first nine months of operations as a single company, we strengthened our position in key strategic markets and technologies such as IP and mobile broadband required to position the company for long-term sustained growth. Having said that, and in spite of the promise of this industry and the long term benefits of the merger, we recognize that market conditions remain difficult, with continued pressure on revenues and margins due to intensified competition and some slowdown of spending in North America. These market conditions along with our commitment to transform the company for the long term lead us to put in place an aggressive three-part plan to improve profitability and reposition the business." The plan includes: - streamlining the core carrier business, accelerated product cost improvement with increased portfolio focus on IP transformation of wireline and wireless networks. - enhancing growth by developing an offensive strategy on sectors offering a strong growth potential, namely : -- high value added services and applications for the carrier markets -- solutions for the enterprise markets and industry and public sector. -- streamlining the organization into a simplified model with a focused management committee with clear accountabilities and ownership to quickly execute the plans. This plan will result in an acceleration of cost structure improvement, especially in support functions and other savings arising from the realigned and streamlined carrier business Group. The company expects that this plan will result in incremental savings of Euro 400 million in gross margin and comparable operating expenses by the end of year 2009. This implies an acceleration of our ongoing headcount targets into 2008 with incremental reductions of about 4,000 by 2009. Pat Russo further added: "These are difficult but necessary decisions, and we will manage these reductions with care. With this plan, the company is targeting gross margins in the high 30's and operating margins of 10% or better in the post integration phase beginning 2010." About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, China, Australia, Brunei and Cambodia. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * In September 2007, Standard & Poor's Ratings Services revised its outlook on Alcatel-Lucent and related entity Lucent Technologies Inc. to stable from positive. At the same time, the 'BB-' long- term corporate credit ratings on the group were affirmed. The 'B' short-term corporate credit rating on Alcatel-Lucent and 'B-1' short-term rating on Lucent Technologies were also affirmed. In April 2007, Fitch Ratings affirmed Alcatel-Lucent's ratings at Issuer Default 'BB' with a Stable Outlook, senior unsecured 'BB' and Short-term 'F2' and simultaneously withdrew them. In February 2007, Moody's Investor Services put a Ba2 rating on Alcatel's Corporate Family and Senior Debt ratings. Lucent carries also carries Moody's B1 Senior Debt rating and B2 Subordinated debt & trust preferred rating. ALERT CELLULAR: Exclusive Plan Filing Period Moved to Dec. 10 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District Of California in Santa Barbara has extended Alert Cellular LC's exclusive period to file a plan until Dec. 10, 2007, Bill Rochelle of Bloomberg News reports. Alert Cellular will have 60 days after that date to solicit acceptances of any plan it may file. The Debtor sought the extension on Oct. 5, 2007, to address remaining issues relating to its closure of 40 of its underperforming retail locations. W. Joseph Kautz, Alert Cellular's chief financial officer, told the Court that the Debtor has achieved significant milestones in its chapter 11 case, including: -- negotiation with its prepetition secured lender and other major parties-in-interest of terms governing cash collateral use on a final basis for the duration of the case; and -- elimination of over $2.2 million in prepetition debt. However, Mr. Kautz explained, the Debtor needs more time to file a plan because : a) it is "fine tuning" its final store mix which may require it to reject additional leases or licenses; b) it will have to negotiate with T-Mobile and Verizion business terms that will govern the Debtor's operations through the upcoming holiday retail season and beyond; and c) it needs to determine the size of its claim pool after the filing of its proposed claim bar date. On Oct. 9, 2007, the Court declined to sign an order approving a Nov. 30, 2007 general claims bar date proposed by the Debtor, stating that "counsel has not complied with Local Bankruptcy Rule 9013-1(g)." Headquartered in Carpinteria, California, Alert Cellular LC -- http://alertcellular.com/-- is an authorized wireless retailer for Verizon and T-Mobile. The company filed for chapter 11 protection on July 3, 2007 (Bankr. C.D. Calif. Case No. 07- 10918). Malhar S. Pagay, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP serve as the Debtor's counsel. The Official Committee of Unsecured Creditors selected Irell & Manella LLP as its counsel. When the Debtor filed for bankruptcy, it listed estimated assets and debts of $1 million to $100 million. ANIXTER INT'L: Fitch Affirms BB+ Issuer Default Rating ------------------------------------------------------ Fitch Ratings affirmed these ratings for Anixter International Inc. and its wholly owned operating subsidiary, Anixter Inc.: Anixter -- Issuer Default Rating 'BB+'; -- Senior unsecured debt 'BB-'. AI -- Issuer Default Rating 'BB+'; -- Senior unsecured notes 'BB+'; -- Senior unsecured bank credit facility at 'BB+'. Fitch's action affects about $800 million of public debt securities. The rating outlook is stable. The ratings and Outlook reflect these considerations: -- Fitch expects Anixter to demonstrate continued strong organic growth driven by solid end market demand and market share gains; -- Fitch believes that, although Anixter is operating near the peak of a typical business cycle, the company should be able to maintain its current profitability profile with EBITDA margins approximately 7% to 8% as additional operating efficiencies mitigate ongoing pricing pressure; -- Anixter will likely continue to make small acquisitions to complement growth in its OEM supply business as well as potential opportunistic acquisitions in its industrial wire and enterprise cabling businesses which in the past have been partially debt financed; -- Fitch expects Anixter will use free cash flow in excess of funds needed for acquisitions for additional share repurchase programs and/or one-time dividends; and -- Anixter's use of debt financing for acquisitions and other items is expected to, at times, temporarily increase the company's leverage ratio but Fitch expects the company to manage its balance sheet in the long term near its current leverage ratio (total debt/operating EBITDA) of 2.5x, or about 3x on an adjusted basis (total adjusted debt/operating EBITDAR) as well as a debt to total capitalization ratio near 50%. Anixter ratings are supported by: -- Strong diversification of products, suppliers, customers and geographic penetration adds stability to the financial profile by reducing operating volatility; and -- Anixter has established itself as a market leader in niche distribution markets, which has resulted in above average margins for a distributor. Rating concerns include: -- Anixter has historically been highly acquisitive with a portion of acquisitions being debt financed; and -- Anixter has a history of shareholder friendly actions coupled with Fitch's expectations that free cash flow in excess of investments in internal growth and acquisitions would be returned to shareholders rather than being used to reduce debt. Fitch believes Anixter's liquidity was sufficient and consisted of the following as of Sept. 30, 2007: i. about $46 million of cash and cash equivalents; ii. $450 million five-year revolving credit agreement maturing April 2012, of which, $216 million was available; iii. various other committed and uncommitted credit facilities totaling about $80 million with nominal amounts available; and iv. $225 million on-balance-sheet accounts receivable securitization program expiring September 2008, of which, about $170 million was available. Total debt as of Sept. 30, 2007 was $1 billion and included $55 million outstanding under Anixter's $225 million accounts receivable securitization program, $234 million outstanding under the $450 million revolving credit facility, $75 million outstanding under various other credit facilities, $200 million in 5.95% senior unsecured notes due February 2015, $163 million in 3.25% zero-coupon unsecured notes due July 2033 and $300 million in 1% convertible unsecured notes due February 2013. The 3.25% zero coupon notes and the 1% convertible notes are issued by Anixter International and are structurally subordinated to the remaining debt which is issued by Anixter Inc. Anixter Inc. is the operating company under the parent company of Anixter International. ART CDO: Moody's Reviews Ba2 Rating on $5 Mil. Class C Notes ------------------------------------------------------------ Moody's Investors Service placed these notes issued by ART CDO 2006-1, Ltd. on review for possible downgrade: Class Descriptions: -- $20,000,000 Class A2 Senior Floating Rate Notes Due August 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $10,000,000 Class A3 Deferrable Floating Rate Notes Due August 2046 Prior Rating: A2 Current Rating: A2, on review for possible downgrade -- $8,000,000 Class B Deferrable Floating Rate Notes Due August 2046 Prior Rating: Baa2 Current Rating: Baa2, on review for possible downgrade -- $5,000,000 Class C Deferrable Floating Rate Notes Due August 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. AURIGA CDO: Moody's Junks Ratings on Four Note Classes ------------------------------------------------------ Moody's Investors Service placed these notes issued by Auriga CDO Ltd. on review for possible downgrade: Class Descriptions: -- $975,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due January 2047 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: -- $97,500,000 Class A-2A Second Priority Senior Secured Floating Rate Notes due January 2047 Prior Rating: Aaa Current Rating: A2, on review for possible downgrade -- $48,000,000 Class A-2B Third Priority Senior Secured Floating Rate Notes due January 2047 Prior Rating: Aaa Current Rating: A3, on review for possible downgrade -- $64,500,000 Class B Fourth Priority Senior Secured Floating Rate Notes due January 2047 Prior Rating: Aa2 Current Rating: Baa2, on review for possible downgrade -- $63,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes due January 2047 Prior Rating: Aa3 Current Rating: Baa3, on review for possible downgrade -- $48,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: A2 Current Rating: Ba2, on review for possible downgrade -- $42,000,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: A3 Current Rating: Ba3, on review for possible downgrade -- $51,000,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: Baa2 Current Rating: Caa2, on review for possible downgrade Moody's also announced that it has downgraded these notes: -- $28,500,000 Class G Ninth Priority Mezzanine Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: Baa3 Current Rating: Ca -- $43,500,000 Class H Ninth Priority Junior Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: Baa3 Current Rating: C -- $22,500,000 Class I Ninth Priority Junior Secured Deferrable Floating Rate Notes due January 2047 Prior Rating: Ba2 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. AUTOMOTIVE GLASS: Moody's Places Corporate Family Rating at B2 -------------------------------------------------------------- Moody's Investors Service assigned ratings to Automotive Glass & Services: -- Corporate Family Rating, B2; -- senior secured asset based revolving credit, B1; -- senior secured first lien term loan, B1; and -- senior secured second lien term loan, Caa1. The rating outlook is stable. The new senior secured facilities will be used to finance the purchase of AG&S by affiliates of Platinum Equity LLC for $500 million. As part of the transaction, Platinum will contribute $156.5 million in equity. AG&S manufactures, fabricates and delivers glass products and solutions to automotive OEMs directly or through third party suppliers; manufactures replacement auto glass and distributes glass and related sundries to the glass replacement aftermarket; and provides a suite of software and services that manages the auto glass insurance claims process and inventory and work flow for glass retailers. The ratings reflect the company's high leverage, moderate interest coverage, and weak initial free cash flow generation following its purchase by Platinum. AG&S is a leading player in the market for OEM and aftermarket automotive glass. While the company does have exposure to Big-3 OEM build rates (about 48% of OEM revenues and 24% of totals revenues), its aftermarket and services activities provide important revenue streams that suggest more stable operating performance than other companies in the auto parts sector. Nevertheless, the company's ability to achieve expected results will be contingent on successful implementation of a multi-year restructuring initiative designed to improve the company's cost competitiveness. While the actions necessary to achieve this restructuring have been identified, implementation has only just begun. Moreover, the ratings consider that the company faces a near term scheduled rebuild of one of the float glass lines at its Meadville facility, which will involve a short term shutdown of the line. The large capital investment necessary to rebuild this line, coupled with restructuring costs, will constrain cash flow during the near term. The stable outlook reflects Moody's expectation that AG&S will maintain its leading positions in the automotive OEM and replacement glass markets over the intermediate term. The outlook also anticipates that the adverse effects of weak auto sales trends on the company's OEM volumes will be mitigated by the company's non-OEM businesses and planned ongoing restructuring efforts. Availability under the company's liquidity facility is expected to be sufficient to support these operating pressures and planned refurbishing expenditures at the company's Meadville facility. On a pro forma basis, initial leverage (using Moody's standard adjustments) is estimated to be 3.9x, and EBIT/Interest is estimated at 1.9x. However, the company is subject to certain cyclical industry risks, and sensitivity analysis indicates potential for metrics that are consistent with the B2 rating. Moreover, free cash flow in 2008 is expected to be negative given the planned capital expenditures at the company's Meadville facility. At closing, the combined company is expected to have about $59.8 million of availability under its new $75 million asset based revolving credit facility. A fixed charge covenant will not be applicable until availability falls to a level to be determined by closing. Ratings assigned: -- Corporate Family Rating, B2 -- Probability of Default, B2 -- $75 million senior secured asset based revolving credit facility, B1 (LGD3, 37%) -- $225 million senior secured first lien term loan, B1 (LGD3, 37%) -- $125 million senior secured second lien term loan, Caa1 (LGD5, 83%) Future events that have the potential to drive AG&S' outlook or ratings lower include: ongoing OEM production pressures which result in significantly lower revenues; market share losses in any of the company's segments; the inability of the company's restructuring efforts to offset OEM production pressures; significant deterioration in liquidity; or acquisitions requiring debt funding. Consideration for a lower rating could arise if any combination of these factors results in leverage approaching 5x, or EBIT/ interest coverage below 1.5x. Future events that have the potential to drive AG&S' outlook or ratings higher include: a sustained improvement in operating performance which results in Debt/EBITDA consistently below 3.8x, and EBIT/Interest consistently above 2x. Automotive Glass and Services manufactures, fabricates and delivers glass products and solutions to automotive OEMs directly or through third party suppliers; manufactures replacement auto glass and distributes glass and related sundries to the glass replacement aftermarket and; provides a suite of software and services that manages the auto glass insurance claim process and inventory and work flow for glass retailers. BEAZER HOMES: Amends Four-Year Revolving Credit Facility -------------------------------------------------------- Beazer Homes USA, Inc., amended its four-year revolving credit facility to provide that any adverse judgment entered in the company's Senior Notes Litigation would not result in an event of default if, to the extent such judgment has the effect of determining that there has been a default with respect to one or more tranches of Senior Notes based on the company's failure to make a filing with the U.S. Securities and Exchange Commission or deliver a copy of an SEC filing to the applicable trustees or denying a motion for preliminary injunction with respect to such a default, such defaults shall have been waived by the requisite holders of such applicable tranches of Senior Notes in accordance with the applicable Senior Indentures. In addition, the definition of Secured Borrowing Base was amended to provide that, in the event of any adverse judgment entered in the Company's Senior Notes Litigation, certain of the collateral advance rates will be lowered during the period commencing on the date on which any such adverse judgment shall have been entered in the Senior Notes Litigation until the delivery of restated financials. Restatements As reported in the Troubled Company Reporter on Oct. 12, 2007, the audit committee of Beazer Homes determined that it will be necessary for the company to restate its financial statements relating to fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007. Consent Solicitation As reported in the Troubled Company Reporter on Oct. 31, 2007, the company completed its solicitation of consents from the holders of its $1.525 billion of outstanding Senior Notes and Senior Convertible Notes to approve proposed amendments and a proposed waiver pursuant to the indentures under which the Notes were issued. Beazer received consents from holders of more than a majority of the aggregate principal amount of each series of the Notes. Beazer and the trustee have executed Supplemental Indentures amending the Indentures to effect the Proposed Amendments. The Supplemental Indentures amend the definition of Permitted Liens to restrict the ability of the Company to secure additional debt in excess of $700 million until the company has four consecutive fiscal quarters with a Consolidated Fixed Charge Coverage Ratio of at least 2 to 1, after which time the limit will revert to the previous level of 40% of Consolidated Tangible Assets, and amend the definition of Permitted Investments to enable the company to invest up to $50 million in joint ventures or unrestricted subsidiaries. In accordance with the Indentures, the amendments are binding on all holders, including non- consenting holders. The consents also provided Beazer with a waiver of any and all defaults under the Indentures that may have occurred or may occur on or prior to May 15, 2008, due to Beazer's failure to file or deliver reports or other information it would be required to file with the Securities and Exchange Commission. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) -- http://www.beazer.com/-- is a single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on Nov 1, 2007, Standard & Poor's Ratings Services ratings on Beazer Homes USA Inc. (B+/Watch Neg/--) will remain on CreditWatch with negative implications until the extent of pending restatements tied to its recently completed internal investigation are finalized and the company files all financial statements with the SEC. As reported in the Troubled Company Reporter on Oct 16, 2007, Fitch Ratings downgraded Beazer Homes USA Inc.'s Issuer Default Rating to 'BB-' from 'BB'. BELO CORP: Earns $18.7 Million in Quarter Ended September 30 ------------------------------------------------------------ Belo Corp. disclosed financial results for the quarter ended Sept. 30, 2007. For the three months ended Sept. 30, 2007, the company reported net earnings of $18,758,000 on net operating revenues of $364,349,000. This compares to net earnings on $19,218,000 on net operating revenues of $376,395,000 for the three months ended Sept. 30, 2006. For the nine months ended Sept. 30, 2007, the company's net earning also went to $70,631,000 from $79,177,000 for the nine months ended Sept. 20, 2006. Net operating revenue was $1,108,909,000 for the nine months ended Sept. 30, 2007, compared to $1,151,675,000 for the period ended Sept. 20, 2006. At Sept. 30, 2007, the company's balance sheet showed $3,541,234,000 in total assets and $1,563,349,000 in total shareholders' equity. Shareholders' equity stood at $1,527,148,000 at Dec. 31, 2006. A full-text copy of the company's financial report for the quarter ended Sept. 30, 2007, may be viewed for free at: http://ResearchArchives.com/t/s?24b6 About Belo Belo Corp. -- http://wwwbelo.com/-- is a media company with a diversified group of market-leading television, newspaper, cable and interactive media assets. The company operates in Texas, the Northwest, the Southwest, the Mid-Atlantic and Rhode Island. Belo owns 20 television stations, six of which are in the 15 largest U.S. broadcast markets. The company also owns or operates six cable news stations and manages one television station through a local marketing agreement. Belo's daily newspapers are The Dallas Morning News, The Providence Journal, The Press-Enterprise (Riverside, CA) and the Denton Record-Chronicle (Denton, TX). The company also publishes specialty publications targeting young adults, and the fast-growing Hispanic market, including Quick and Al Dia in Dallas/Fort Worth, and El D and La Prensa in Riverside. Belo operates more than 30 Web sites associated with its operating companies. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Moody's Investors Service downgraded Belo Corp.'s senior unsecured ratings to Ba1 from Baa3 and assigned the company a Ba1 Corporate Family rating and Ba1 Probability of Default rating. The downgrade reflects (1) Moody's expectation that Belo's free cash flow-to-debt has limited scope for improvement due to revenue pressure in the newspaper business and will remain below the 10% level that was anticipated in the Baa3 rating; and (2) Moody's belief that the company's reliance on a bank facility with a MAC clause to fund the significant $350 million November 2008 note maturity is a liquidity profile consistent with a speculative- grade rating. BFC AJAX: Moody's Cuts Ratings on Two Note Classes to Low-B ----------------------------------------------------------- Moody's Investors Service placed these notes issued by BFC Ajax CDO Ltd. on review for possible downgrade: Class Descriptions: -- $15,000,000 Class B Floating Rate Notes Due 2046 Prior Rating: Aa3 Current Rating: Aa3, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: -- $20,000,000 Class C Deferrable Floating Rate Notes Due 2046 Prior Rating: A2 Current Rating: Baa3, on review for possible downgrade -- $40,000,000 Class D Deferrable Floating Rate Notes Due 2046, Downgraded to Ba3 from Baa2; Placed Under Review for further Possible Downgrade Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade -- $40,000,000 Class E Deferrable Floating Rate Notes Due 2046 Prior Rating: Ba2 Current Rating: B2, on review for possible downgrade -- $10,000,000 Class X Deferrable Floating Rate Notes Due 2046 Prior Rating: A1 Current Rating: Baa2, 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. BIOSTEM INC: Buying Joyon Via 115 Million Stock Exchange Deal ------------------------------------------------------------- BioStem Inc. has entered into a definitive agreement to acquire Joyon Entertainment Inc. in exchange for 115,000,000 shares of the company's common stock, to be issued after giving effect to a one for forty reverse split of the company's common stock, well as the divestment of the company's subsidiaries, BH Holding Company Inc. and ABS Holding Company Inc. On Oct. 12, 2007, the company entered into a Stock Exchange Agreement with Joytoto Co. Ltd. and Joyon Entertainment Co. Ltd., to purchase 100% of the issued and outstanding capital stock of Joyon Entertainment Inc. In order to complete the acquisition of JEI, the company is required to secure a release of the company from the holders of the company's Senior Secured Convertible Debentures, well as effect the conversion of the company's Junior Convertible Secured Debentures. Accordingly, the company entered into an Agreement to Purchase Subsidiaries and Cancel Shares with Marc Ebersole, the company's CEO and Director, Christine Ebersole, a Director and employee, and Scott Schweber, a Director, well as the holders of the company's Senior Secured Convertible Debentures and the Company's Junior Convertible Debentures. According to the Subsidiary Purchase Agreement, Mr. Ebersole, Ms. Ebersole and Mr. Schweber will release the company from any and all claims they may have against the company and its lenders, and will tender to the company a total of 130 million shares of the company's common stock for cancellation. The company's Senior Secured Debenture Holder will release the company from its obligations under the Senior Debenture, and such obligations will remain obligations of the company's two subsidiaries, BH Holding and ABS Holding. The holders of the company's Junior Debentures, which are convertible into 17.35 million shares of common stock after giving effect to a one for forty reverse split, will convert their debentures into: i) 17,350,000 shares of common stock; ii) will be issued an additional 16,169,549 shares of common stock; and iii) will be issued warrants to purchase 21 million shares of common stock at an exercise price of $0.10 per share. Finally, the company will transfer 100% of the outstanding capital stock of its two operating subsidiaries, BH Holding and ABS Holding to the Management Shareholders and the holders of the company's Junior Convertible Debentures. The company has changed its name to Joytoto USA Inc., and completed a one for forty reverse split of the company's common stock, which became effective on Oct. 31, 2007. On Oct. 31, 2007, the company's common stock has commenced trading under the new symbol "JYTO." Immediately after the closing of the actions, Mr. Ebersole and Ms. Ebersole will resign as officers and directors of the company. Immediately prior to their resignations, they will appoint: -- Cho, Seong Yong as president, CEO and director; -- Cho, Seong Sam as CFO, vice president, secretary and director; -- Choi, Doo Ho, as COO and director; -- Um, San Yong as internal auditor. The new officers and directors of the company were designated by Joytoto Co. Ltd., which is the new controlling shareholder of the company as of Oct. 31, 2007. About Joyon Entertainment Inc. Joyon Entertainment Inc. is in the online games and electronics manufacturing businesses. About Biostem Headquartered in Atlanta, Georgia, Biostem Inc., fka National Parking Systems, Inc., provides parking and parking related services. Services include valet parking services which the company operates through its wholly owned subsidiary BH holding Company Inc and vehicle immobilization services which the company operates through its another wholly owned subsidiary ABS Holding Company Inc. At June 30, 2007, the company's balance sheet showed total assets of $.2 million and total liabilities of $1.8 million, resulting to s total stockholders' deficit of $1.6 million. Going Concern Doubt Meyler & Company LLC, expressed substantial doubt about BioStem Inc.'s ability to continue as a going concern after it audited the company's financial statements for fiscal year ended Dec. 31, 2006. The auditors pointed to the company's recurring net losses of $2,051,539 in 2006, $7,857,124 in 2005 and $5,200,418 in 2004; negative working capital of $1,338,517; and a stockholders' deficit of $1,242,540 at Dec. 31, 2006. BROADRIDGE TRANSPORT: Case Summary & 15 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Broadridge Transport, Inc. aka Broadridge Transportation, Inc. P.O. Box 316 Bishopville, SC 29010 Bankruptcy Case No.: 07-05948 Type of Business: The Debtor provides long-distance trucking services. Chapter 11 Petition Date: October 31, 2007 Court: District of South Carolina (Columbia) Judge: Helen E. Burris Debtor's Counsel: Reid B. Smith, Esq. Price Bird & Smith, P.A. 1712 Street Julian Place P.O. Box 5537 Columbia, SC 29250 Tel: (803) 779-2255 Fax: (803) 799-3131 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SC Department of Motor International Fuel $6,716 Vehicles Tax Agreement Motor Carrier Services P.O. Box 1498 Blythewood, SC 29016 Arthur Tire, Inc. Recap Tire $8,145 P.O. Box 1198 Purchases Roebuck, SC 29376 Columbia Freightliner $7,918 1450 Bluff Road Columbia, SC 29201 Bishopville Parts, Inc. Parts Purchases $2,453 Dilmar Oil Co. Oil & Grease Purchases $2,048 Blake & Ford, Inc. Office Supplies $1,876 Buster's Garage Wrecker Service $1,670 Consolidated Truck Parts, Inc. Parts Purchases $1,517 Transportation Cabinet Kentucky Weight $1,487 Division of Motor Carriers Distance Tax San-Glo Glass Tractor Repairs $937 Corporate Medical Services, Inc. $804 Vengroff Williams and Collection Account $640 Associates, Inc. Battery Specialists Parts Purchases $483 New Dixie Distributing Co. Truck Wash $462 Lube Industries, Inc. Oil & Grease Purchases $161 CAIRN MEZZ: Moody's Lowers Ratings on Two Note Classes to Low-B --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Cairn Mezz ABS CDO I PLC on review for possible downgrade: Class Descriptions: -- $55,000,000 Class II Senior Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $49,000,000 Class III Senior Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade -- $11,000,000 Class IV Senior 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: -- $13,000,000 Class V Mezzanine Floating Rate Deferrable Notes Due 2046 Prior Rating: A2 Current Rating: Baa2, on review for possible downgrade -- $20,500,000 Class VI Mezzanine Floating Rate Deferrable Notes Due 2046 Prior Rating: Baa2 Current Rating: Ba2, on review for possible downgrade -- $6,500,000 Class VII Mezzanine Floating Rate Deferrable 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. CALPINE CORP: Quadrangle & JP Morgan Objects to Plan Confirmation ----------------------------------------------------------------- Quadrangle Master Funding, Ltd., and JP Morgan Chase Bank, N.A., as assignee to Quadrangle's Claims, are holders of allowed general unsecured claims against Calpine Corp. and its affiliates, aggregating $85,000,000, exclusive of postpetition interest and other charges. The Debtors' proposed Plan of Reorganization contemplates payment of contract rate of postpetition interest to creditors in Classes A-3, B, C-2, C-3, and C-5. With respect to General Unsecured Claims, the Plan provides for "Interest Accrued After the Petition Date" at the Federal Judgment Rate of 4.34% unless the Debtors agree to a different rate or the Court directs otherwise. The Plan, however, fails to specify the standard to be used by the Debtors in reaching agreements with holders of General Unsecured Claims, Terence K. McLaughlin, Esq., at Willie Farr & Gallagher, LLP, in New York, asserts, in Quadrangle's behalf. He adds that the Plan is also silent as to whether the mere existence of a contract is sufficient for the U.S. Bankruptcy Court for the Southern District of New York to direct otherwise or if some other set of facts must be present before the Court can so rule. Mr. McLaughlin relates that the Power Purchase Agreement on which Quadrangle's Claims are based provides for the payment of interest, which will be calculated at a rate equal to 2% over the prime rate published in the "Money Rates" section of the Wall Street Journal, from the date on which payment became overdue to and until the payment is paid in full. The date that payments became overdue under the PPA was December 20, 2005, Mr. McLaughlin notes, and the prime rate as published in the Wall Street Journal on that date was 7.25%. Thus, he says, Quadrangle and JP Morgan's contractual rate of interest is 9.25%. Accordingly, Quadrangle and JP Morgan ask Judge Lifland to allow postpetition interest on their Claims at a 9.25% contract rate, to the extent that the interest is paid to other unsecured creditors under the Debtors' Plan. If the Debtors will contend that the existence of a contractual interest rate alone is insufficient, Quadrangle and JP Morgan asserts that contractual rate of interest is appropriate as a matter of law if the Debtors have a surplus, particularly if other classes are receiving a contractual rate of interest. "[N]o class of creditors should receive less than any other class where the sole beneficiaries of the discriminatory treatment are the shareholders," Mr. McLaughlin asserts. JP Morgan is represented by Lewis Kruger, Esq., at Stroock & Stroock & Lavan, LLP, in New York. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of the Plan is scheduled on Dec 18, 2007. (Calpine Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Contends Litigation is Premature & Unnecessary ------------------------------------------------------------ Calpine Corp. and its debtor-affiliates the U.S. Bankruptcy Court for the Southern District of NEw York to deny the request of the 7.75% Noteholders to establish a pre-confirmation timetable for the resolution of the contractual subordination dispute. Representing the Debtors, Edward O. Sassower, Esq., at Kirkland & Ellis, LLP, in New York, points out that litigation of the dispute at this stage of the Debtors' Chapter 11 cases is improper because it would "put the proverbial cart before the horse." Mr. Sassower contends that the Contractual Subordination Dispute could only become ripe if the Court determines that the Debtors' reorganized enterprise value is at an amount that is sufficient to pay unsecured creditors' claims for principal and prepetition interest in full, but insufficient to satisfy fully unsecured creditors' claims for postpetition interest. Any other valuation determination on the high- or low-end would moot out the now unripe Contractual Subordination Dispute, Mr. Sassower continues. A premature litigation, for which the parties-in-interest likely will seek reimbursement of attorneys' fees from the Debtors' estates, would be a needless waste of resources, Mr. Sassower asserts. Mr. Sassower further asserts that resolution of the Contractual Subordination Dispute at this time does not aid confirmation of the Debtors' Plan. The Plan specifically protects the rights of the parties with a stake in the Contractual Subordination Dispute, and confirmation of the Plan simply is not dependent on its outcome, if it ever needs to be decided. Mr. Sassower also notes that while the Debtors ultimately may not take a position on the merits of the potential inter creditor dispute, the state of the law on the "Rule of Explicitness" may not allow for resolution of the Contractual Subordination Dispute as rapidly as the 7.75% Noteholders seem to suggest. Moreover, the Unofficial Committee of Second Lien Debtholders, represented by Alan W. Kornberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, LLP, in New York, asserts that a determination of the subordination dispute would be unnecessary if certain contingencies occur, including: (a) if the Court were to conclude that the Debtors are required to pay postpetition default and compound interest, the dispute would be obviated without the need for any judicial intervention; (b) if the Debtors could amend their Plan to voluntarily pay the Second Lien Debtholders' claims, it would eliminate the dispute; (c) if the Second Lien Debtholders and the Debtors could reach a settlement concerning payment of the postpetition interest and default amounts; or (d) if the Debtors' Fourth Amended Plan of Reorganization could fail to secure the necessary votes for confirmation or otherwise be found unconformable. Wilmington Trust Company, as Indenture Trustee for the Second Lien Noteholders, supports the Second Lien Committee's position. Furthermore, in a separate filing, Davidson Kempner Capital Management, LLC; Highland Capital Management, LP; Jana Partners, LLC; and Longacre Fund Management, LLC; as substantial holders of Senior Debt, and the Bank of New York, as administrative agent under the Second Lien Term Loan Agreement, assert that litigation of the Subordination Dispute is lengthy and wasteful of estate resources. The Senior Unsecured Noteholders assert that the 7.75% Noteholders will not be prejudiced if the Court denies their request. The Senior Unsecured Noteholders note that the Debtors intend to hold in reserve the shares of New Calpine Common Stock that are implicated by the Subordination Dispute pending a final determination or settlement of the dispute. The Senior Noteholders tell Judge Lifland that they are agreeable to an expedited, post-confirmation litigation schedule. BNY, on the other hand, asserts that if the Court is nevertheless inclined to adjudicate the Subordination Dispute before determining the Debtors' enterprise value and the Second Lien Term Loan Lenders' right to collect default and compound interest from the Debtors, various provisions to the 7.75% Noteholders' proposed schedule would have to be negotiated and modified to provide that: * All parties who do not participate in the Contractual Subordination Dispute cannot be bound by any decision rendered in the dispute; * All parties who participate in the Contractual Subordination Dispute should have the ability to file an opening and reply brief; * The exact scope of what is to be decided as part of the Contractual Subordination Dispute needs to be expressly set forth; and * There needs to be an express reservation of rights for all parties who participate in the Contractual Subordination Dispute as pertains to the Plan or any other rights such parties may have as against the Debtors or other third parties. HSBC Bank USA, National Association, as successor indenture trustee on behalf of the holders of the 6.00% Convertible Notes Due 2014, reserve all of their rights with respect to the subordination provision contained in the 6% Indenture. HSBC contends that because the subordination provisions contained in the 6% Indenture may be similar in certain respects to the subordination provisions contained in the 7.75% Indenture, certain issues raised before the Court during the resolution of the Subordination Dispute may be analogous to issues that may be raised in connection with the resolution of a subordination dispute with respect to the 6% Indenture. Creditors Panel Wants Noteholders to Revise Dispute Resolution Process The Official Committee of Unsecured Creditors states that it does not object to the 7.75% Noteholders' request, and believes that the Subordination Dispute, if not settled, will need to be resolved by either the Court or another court of competent jurisdiction. The Creditors Committee, however, is concerned that schedule proposed by the Noteholders may interfere with the Debtors' confirmation process. Thus, the Creditors Committee asks Judge Lifland to direct the 7.75% Noteholders to modify their proposed inter-creditor dispute resolution process to ensure that it will not interfere with the Plan process or the Confirmation Hearing. 7.75% Noteholders Talk Back The 7.75% Noteholders, together with Manufacturers & Traders Trust Company, as successor Indenture Trustee, argue that the resolution of the Contractual Subordination Dispute now will simplify the overall Plan confirmation process by resolving an issue affecting the allocation of a significant amount of the reorganized Debtors' common stock under the Plan. The resolution of the Contractual Subordination Dispute in advance of the confirmation would eliminate uncertainty with respect to the treatment and recovery for some of the Debtors' largest creditor constituencies, the 7.75% Noteholders insist. Kristopher M. Hansen, Esq., at Strook & Stroock & Lavan, LLP, in New York, notes, on the 7.75% Noteholders' behalf, that in the bankruptcy case of Adelphia Communications Corp., Judge Gerber of the U.S. Bankruptcy Court of the Southern District of New York, permitted the Adelphia subordinated noteholders to resolve the subordination dispute in advance of the case's confirmation proceedings. Mr. Hansen points out that under the Debtors' proposed Plan, though the inter-creditor provisions of the Indenture survive confirmation, the indemnity and reimbursement provisions of the Indenture that inure to the benefit of M&T Bank will be canceled, leaving the Bank to litigate the Subordination Dispute without the full protections otherwise afforded to it under the Indenture. Deprived of those protections, the Noteholders face a skewed playing field vis-a-vis the Debtors, Mr. Hansen asserts. Mr. Hansen adds that the Objectors' argument that the dispute should await a Court ruling as to the determination of New Enterprise Value incorrectly assumes that the dispute will be rendered moot and the Senior Debtholders will not seek pay-over from the Noteholders in a scenario where the Court determines Calpine Corp.'s reorganized value either is at an amount that is "insufficient to pay all claims" or is sufficient to pay all creditors in full, including postpetition interest. Mr. Hansen notes that the Second Lien Debtholders have publicly and expressly stated that they intend to seek pay-over from the 7.75% and 6% Noteholders to the extent they do not recover default interest and compounded interest from the Debtors. Accordingly, the 7.75% Noteholders ask Judge Lifland to overrule all the Objections filed by the Debtors, et al. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of the Plan is scheduled on Dec 18, 2007. (Calpine Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CAP CANA: Moody's Rates Proposed $500 Mil. Senior Notes at B3 ------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Cap Cana, S.A.'s proposed $500 million senior secured notes due 2017. These notes will be secured by a first-priority lien on certain of the Cap Cana's property, and have a liquidation value of not less than 150% of the principal amounts of the notes and certain receivables. An escrow will be created by the trustee to manage the receivables from clients who are buying property in Cap Cana. These receivables are to be maintained at 125% of the issue amount. The notes are senior secured obligations of Cap Cana, and will rank equally in right of payment with all of the company's existing and futures senior secured indebtedness. The notes contain certain covenants which include restricted payments and incurrence of debt. In addition, the notes also include a fully funded six month debt service reserve for principal and interest, and a cash flow waterfall and related accounts to ensure that cash flow generated is used first to service debt during each payment period. These proposed notes are rated a notch lower than Cap Cana's existing $250 million senior secured debt, rated B2, because of differences in the underlying collateral," says Moody's analyst Philip Kibel. Cap Cana's proposed US$500 million secured notes are backed with a first priority lien on parcels of raw land within the project vs. already-sold and partially-built product, which backs the existing US$250 million notes. Furthermore, the $250 million notes are backed by 2x orderly liquidation value, and a higher percentage of actual receivables from existing sales, while the proposed notes have a lower collateralization of 1.5x, based on orderly liquidation value. The stable rating outlook reflects Moody's expectation that Cap Cana will maintain its conservative approach to leverage and stable earnings, while at least meeting its sales projections. Positive ratings movement would be difficult in the intermediate term, and would reflect the success of the maintenance of total leverage at current levels, and the demand for Cap Cana's product outpacing budgeted sales and revenues by 30%. A downgrade would reflect economic difficulties in the Dominican Republic, a natural disaster or other event that delays or damages the development, or sales demand for Cap Cana's housing and related property being less than anticipated by at a least 10%. This rating was assigned with a stable outlook: Cap Cana S.A. -- $500 million senior secured notes at B3 Cap Cana S.A., a privately owned company, is a corporation that was organized under the laws of the Dominican Republic. Its principal activity is the development, construction, operation and administration of a tourist and leisure resort community project known as Cap Cana. Cap Cana is being developed as a multi-use luxury Caribbean resort with world-class beaches, championship golf courses, yachting facilities and similar leisure amenities. The property consists of over 119.9 square kilometers of land, including an eight kilometer coastline and 3.5 kilometers of pristine beach. Cap Cana is located on the easternmost tip of the Dominican Republic, and is a few minutes drive from Punta Cana International Airport, which receives nonstop flights from large metropolitan centers in Europe, Canada and the USA. When fully developed, Cap Cana is expected to have six championship golf courses (three of which will be Nicklaus Signature courses, one of which was recently completed); one of the largest inland marinas in the Caribbean; several luxury hotels; over 10,000 housing units, including estate homes, villas and condominiums; numerous sports facilities, including golf, beach and yacht clubs; and a variety of high-end shops, restaurants, spas and entertainment complexes. Plans also include the development of a large ecological preserve. CDC MORTGAGE: S&P Cuts Ratings on Four Cert. Classes to Low-B ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of mortgage pass-through certificates from CDC Mortgage Capital Trust 2004-HE2. S&P removed two of the lowered ratings from CreditWatch with negative implications. Furthermore, S&P affirmed the 'AA' rating on class M-1 from this series. The lowered ratings reflect the deterioration of available credit support. The failure of excess interest to cover monthly losses has resulted in an overcollateralization deficiency of about $2.07 million, or 63% below its OC target, as of the Sept. 25, 2007, distribution date. During the previous six remittance periods, monthly losses have exceeded excess interest by about 3x. As of the September 2007 distribution period, this transaction was 39 months seasoned and had realized $7.21 million in cumulative losses. Total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) were 32.51% and 18.69% of the current pool balance, respectively. The affirmation on the M-1 class was based on a loss coverage percentage that is sufficient to maintain the current rating for this class. Credit enhancement for this transaction is derived from a combination of subordination, excess interest, and O/C. The collateral supporting these transactions consists of subprime pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered CDC Mortgage Capital Trust 2004-HE2 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- B-1 B BBB+ B-2 B- BBB M-2 BB A M-3 B+ A- Ratings Lowered and Removed from Creditwatch Negative CDC Mortgage Capital Trust 2004-HE2 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- B-3 CCC BB-/Watch Neg B-4 CCC B+/Watch Neg Ratings Affirmed CDC Mortgage Capital Trust 2004-HE2 Mortgage pass-through certificates Class Rating ----- ------ M-1 AA CHALLENGER POWERBOATS: Board OKs Reverse Split on Common Stock -------------------------------------------------------------- Challenger Powerboats Inc.'s board of directors has declared a reverse split of its common stock, at a one-for-twenty ratio, effective Oct. 31, 2007. After the reverse stock split, the company's common stock will trade under a new symbol CPBI on the OTC Bulletin Board. Based in Washington, Missouri, Challenger Powerboats Inc. (OTC:CPWB) - http://www.challengerpowerboats.com/-- designs and manufactures 'go fast' offshore racing boats, family sport cruisers, jet boats and water ski tow boats under the brands 'Challenger Powerboats', 'Sugar Sand' and 'Gekko', which target the recreational boating market. The company is a design-to- manufacturing organization, creating or licensing designs, and creating tooling, molds, and parts necessary to assemble its products in-house. The company markets its products through a dealer network comprising more than 100 dealers throughout the United States, Canada, Mexico, Europe, Australia, the Middle East and Japan. At June 30, 2007, Challenger Powerboats' balance sheet showed total assets of $7.4 million and $28.1 million in total liabilities, resulting on a $20.7 million total shareholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 2, 2007, Jaspers + Hall PC expressed substantial doubt about Challenger Powerboats Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and its difficulties in generating sufficient cash flow to meet its obligation and sustain its operations. CHAMPION ENTERPRISES: Prices $160 Mil. Public Offering of Notes --------------------------------------------------------------- Champion Enterprises Inc. has priced its public offering of convertible senior notes due 2037. The transaction was increased in size from the aggregate principal amount of $130 million to $160 million. The company has also granted to the underwriter of the offering an option to purchase up to an additional $20 million aggregate principal amount of notes solely to cover over-allotments. Credit Suisse Securities (USA) LLC is acting as the underwriter and sole bookrunning manager for the convertible notes offering. The notes will bear interest at a rate of 2.75% per year, payable on May 1 and Nov. 1, beginning on May 1, 2008. The notes will mature on Nov. 1, 2037. Holders of the notes may require the company to repurchase the notes if the company is involved in certain types of corporate transactions or other events constituting a fundamental change. Beginning in 2012 the company will have the right to redeem the notes, in whole or in part. Holders of the notes have the right to require the company to repurchase all or a portion of their notes on Nov. 1 of each of 2012, 2017, 2022, 2027 and 2032. The notes will be convertible, under certain circumstances, at the holder's option, at an initial conversion rate of 47.6954 shares of the company's common stock per $1,000 principal amount of notes, or an initial conversion price of approximately $20.97 per share of common stock, representing an 82% conversion premium based on the closing price of $11.52 per share of the company's common stock on Oct. 29, 2007, payable in common stock. The conversion rate and the conversion price will be subject to adjustment in certain events. The company intends to use approximately $97 million of the net proceeds of the notes offering to repurchase its notes due 2009 tendered in a tender offer, including the tender premium and any accrued interest thereon, repay no less than $8 million of the outstanding principal, plus accrued interest, under its term loan due 2012 and pay related fees and expenses. The remaining net proceeds of approximately $58 million, or approximately $78 million if the underwriters exercise their over- allotment option in full, will be used for general corporate purposes. Closing of the public offering of the notes is expected to occur on Nov. 2, 2007, and will be subject to the satisfaction of various customary closing conditions. Champion Enterprises, the underwriter or any dealer participating in the offering will arrange to send the prospectus and prospectus supplement if requested by calling Credit Suisse Securities (USA) LLC toll free at 1-800-221-1037 or Champion Enterprises, Inc. toll free at 1-888-603-0071. About Champion Enterprises Inc. Auburn Hills, Michigan-based Champion Enterprises Inc., (NYSE: CHB) -- http://www.championhomes.com/-- operates 32 manufacturing facilities in North America and the United Kingdom and works with over 3,000 independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. * * * Moody's Investor Service placed Champion Enterprises Inc.'s senior unsecured debt and probability of default ratings at 'B1' in September 2006. The ratings still hold to date with a negative outlook. CHANCELLOR GROUP: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Chancellor Group, Inc. P.O. Box 742 Pampa, TX 79066-0742 Bankruptcy Case No.: 07-20512 Type of Business: The Debtor acquires, explores and develops natural gas and oil properties. It further examines opportunities in the fields of power generation, minerals development and environmental engineering and remediation. Chapter 11 Petition Date: October 30, 2007 Court: Northern District of Texas (Amarillo) Judge: Robert L. Jones Debtor's Counsel: Bill Kinkead, Esq. 6937 Bell Street, Suite G Amarillo, TX 79109 Tel: (806) 353-2129 Fax: (806) 353-4370 Unaudited Consolidated Annual Financial Condition as of June 2007: Total Assets: $5,649,018 Total Debts: $6,228,336 The Debtor did not file a list of its 20 largest unsecured creditors. CHYPS CBO: Fitch Junks Ratings on Four Note Classes --------------------------------------------------- Fitch downgraded three classes of notes issued by CHYPS CBO 1997-1 Ltd., as: -- $21,047,114 class A-2A to 'C/DR5' from 'CCC/DR4'; -- $3,047,708 class A-2B to 'C/DR5' from 'CCC/DR4'; -- $57,100,000 class A-3 to 'C/DR6' from 'CC/DR5'. Additionally: -- $42,400,000 class B notes remain at 'C/DR5'. CHYPS 1997-1 is a collateralized debt obligation that closed Dec. 18, 1997 and is managed by Delaware Investment Advisers. CHYPS 1997-1 has a portfolio composed of high yield corporate bonds and emerging market assets. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. The transaction is severely undercollateralized due to the defaulting of a significant portion of assets in the portfolio. The class A overcollateralization ratio was reported at 24.7% as of the Oct. 2, 2007 trustee report. In addition, due to a lack of sufficient interest proceeds, principal proceeds are currently being used to cover interest shortfalls to the class A-3 and B notes, further reducing the par coverage for all classes of notes. Fitch expects the class A-2 notes to continue to receive some interest payments and minimal principal recovery, and for the class A-3 notes to receive some interest payments but no principal recovery. The class B notes benefit from a letter of credit provided by Dresdner Bank AG (rated 'A+/F1+' by Fitch) which can be drawn upon to make up for any interest shortfalls to these notes, or upon a principal shortfall to the class B notes at the deal's maturity in January 2010. About $9.7 million of this LOC remains available, which should be sufficient for full interest payments to the class B notes for the remainder of the transaction and for some principal recovery at maturity. The ratings on classes A-2 and A-3 address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. CHYPS CBO: Fitch Junks Ratings on Two Certificate Classes --------------------------------------------------------- Fitch downgraded two classes and affirmed one class of notes issued by CHYPS CBO 1999-1 Ltd (CHYPS 1999-1). These rating actions are effective immediately: -- $13,699,984 class A-2 notes affirmed at 'AAA'; -- $41,000,000 class A-3A notes downgraded to 'C/DR5' from 'CC/DR5'; -- $14,851,485 class A-3B notes downgraded to 'C/DR6' from 'CC/DR5'. CHYPS 1999-1 is a collateralized debt obligation that closed Jan. 7, 1999 and is managed by Delaware Investment Advisers. CHYPS 1999-1 has a portfolio composed of high yield corporate bonds. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. The transaction has experienced significant defaults in the underlying assets, which have led to the notes being severely undercollateralized, as evidenced by the class A overcollateralization ratio of 33.4% as of the Oct. 2, 2007 trustee report. There are currently insufficient interest proceeds available to make full interest payments to the class A-3 notes, leading to the use of principal proceeds to make up for this shortfall, which further reduces the par coverage available to the notes. Based on expected collateral performance and the magnitude of principal proceeds to pay interest on the notes in the future, Fitch believes the class A-2 notes may experience an ultimate principal shortfall. These notes, however, are insured for interest and principal by Financial Security Assurance Inc. (FSA; rated 'AAA' by Fitch), and therefore maintain their 'AAA' rating. The class A-3 notes will continue receiving some interest payments but are expected to receive minimal, if any, principal recovery by the maturity date. The class A-3A notes have a higher interest coupon than the class A-3B notes, explaining their higher distressed recovery prospects. The ratings on classes A-2 and A-3 address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. CITIGROUP MORTGAGE: Fitch Assigns Low-B Ratings on $6.6MM Notes --------------------------------------------------------------- Fitch rates Citigroup Mortgage Loan Trust Inc., mortgage pass- through certificates, series 2007-10 as: Group I: -- $201.2 million classes 1-A1A, 1-A1B and R 'AAA' (senior notes); -- $2.3 million class 1-B1 'AA'; -- $1.2 million class 1-B2 'A'; -- $517,000 class 1-B3 'BBB'. Group II: -- $611 million classes 2-A1A, 2-2AA, 2-A2A, 2-A2B, 2-12B, 2-A2IO, 2-A3A, 2-A3B, 2-A3IO, 2-A4A, 2-A4B, 2-A5A, 2-A5B, and 2-R 'AAA' (senior notes); -- $11.8 million class 2-B1 'AA'; -- $5.4 million class 2-B2 'A'; -- $2.5 million class 2-B3 'BBB'; -- $5.1 million non-offered class 2-B4 'BB'; -- $1.5 million non-offered class 2-B5 'B'. Group III: -- $262.7 million classes 3-1AA, 3-A1A, 3-A1B, 3-A1C, 3-1AB, 3-A1IO, 3-A2A, 3-A2B, 3-A3A, 3-A3B, 3R, and 3P 'AAA' (senior notes). The 'AAA' ratings on the Group 1 senior notes reflect the 2.70% subordination provided by the 1.15% class 1-B1, the 0.60% class 1- B2, the 0.25% class 1-B3, the 0.45% non-offered class 1-B4, the 0.15% non-offered class 1-B5 and the 0.10% non-offered class 1-B6. Classes 1-B4 through 1-B6 are not rated by Fitch. The 'AAA' ratings on the Group 2 senior notes reflect the 4.50% subordination provided by the 1.85% class 2-B1, the 0.85% class 2- B2, the 0.40% class 2-B3, the 0.80% non-offered class 2-B4, the 0.25% non-offered class 2-B5, the 0.35% non-offered class 2-B6 (not rated by Fitch). The 'AAA' ratings on the Group 3 senior notes reflect the 10.85% subordination provided by the 6.35% class 3-B1, the 1.10% class 3- B2, the 0.60% class 3-B3, the 0.85% non-offered class 3-B4, the 0.90% non-offered class 3-B5, the 1.05% non-offered class 3-B6. Classes 3-B1 through 3-B6 are not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the master servicing capabilities of CitiMortgage Inc. (rated 'RMS1' by Fitch Ratings). The transaction is secured by three groups of mortgage loans, which consist of about 2,331 conventional, one- to four-family, adjustable rate mortgage loans secured by first liens on residential real properties. The mortgage loans have and aggregate principal balance of about $1,141,379,050 as of Oct. 1, 2007. The three groups of mortgage loans are not cross- collateralized. The Group I mortgage loans have a final aggregate principal balance of about $206,824,470 as of the cut-off date (Oct. 1, 2007), an average balance of $544,275 a weighted average remaining term to maturity of 321 months, a weighted average original loan-to-value ratio of 68.02% and a weighted average coupon of 5.90%. The weighted average FICO credit score of the loans is 747. Owner occupied properties and second homes comprise 95.31% and 4.66% of the loans, respectively. The states that represent the largest geographic concentration are New Jersey (66.82%), Florida (11.87%) and Texas (7.77%). All other states represent less than 5% of the outstanding balance of the pool. The Group II mortgage loans have a final aggregate principal balance of about $639,880,492 as of the cut-off date (Oct. 1, 2007), an average balance of $544,116, a weighted average remaining term to maturity of 355 months, a weighted average original loan-to-value ratio of 75.63% and a weighted average coupon of 6.26%. The weighted average FICO credit score of the loans is 737. Owner occupied properties and second homes comprise 92.02% and 6.90% of the loans, respectively. The states that represent the largest geographic concentration are California (39.48%), Florida (11.08%), New Jersey (7.69%) and Georgia (5.08%). All other states represent less than 5% of the outstanding balance of the pool. The Group III mortgage loans have a final aggregate principal balance of about $294,674,087 as of the cut-off date (Oct. 1, 2007), an average balance of $380,225, a weighted average remaining term to maturity of 353 months, a weighted average original loan-to-value ratio of 77.03% and a weighted average coupon of 6.635%. The weighted average FICO credit score of the loans is 714. Owner occupied properties and second homes comprise 86.90% and 5.36% of the loans, respectively. The states that represent the largest geographic concentration are California (34.35%), Florida (11.76%), New York (6.45%), Illinois (5.62%), Virginia (5.13%) and Arizona (5.01%). All other states represent less than 5% of the outstanding balance of the pool. U.S. Bank National Association will serve as trustee. CITIGROUP MORTGAGE: Fitch Takes Rating Actions on 14 Deals ---------------------------------------------------------- Fitch Ratings took rating actions on these Citigroup Mortgage Loan Trust mortgage pass-through certificates: Series 2005-5 Group 1 -- Class I-A affirmed at 'AAA'. Series 2005-5 Group 2 -- Class II-A affirmed at 'AAA'. Series 2005-5 Group 3 -- Class III-A affirmed at 'AAA'; -- Class III-B-1 affirmed at 'AA'; -- Class III-B-2 affirmed at 'A'; -- Class III-B-3 downgraded to 'BBB-' from 'BBB'; -- Class III-B-4 downgraded to 'B' from 'BB'; -- Class III-B-5 downgraded to 'C/DR5' from 'B'. Series 2005-8 Group 1 -- Class I-A affirmed at 'AAA'; -- Class I-B-1 affirmed at 'AA'; -- Class I-B-2 affirmed at 'A'; -- Class I-B-3 affirmed at 'BBB'; -- Class I-B-4 downgraded to 'BB-' from 'BB'; -- Class I-B-5 downgraded to 'C/DR4' from 'B'. Series 2005-8 Group 3 -- Class III-A affirmed at 'AAA'; -- Class III-B-1 affirmed at 'AA'; -- Class III-B-2 affirmed at 'A'; -- Class III-B-3 affirmed at 'BBB'; -- Class III-B-4 affirmed at 'BB'; -- Class III-B-5 affirmed at 'B'. Series 2006-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 downgraded to 'B+' from 'BB'; -- Class B-5 downgraded to 'CC/DR4' from 'B'. Series 2006-AR2 Group 1 -- Class I-A affirmed at 'AAA'; -- Class I-B-1 affirmed at 'AA'; -- Class I-B-2 affirmed at 'A'; -- Class I-B-3 affirmed at 'BBB'; -- Class I-B-4 downgraded to 'B+' from 'BB'; -- Class I-B-5 downgraded to 'C/DR4' from 'B'. Series 2006-AR2 Group 2 -- Class II-A affirmed at 'AAA'; -- Class II-B-1 affirmed at 'AA'; -- Class II-B-2 affirmed at 'A'; -- Class II-B-3 affirmed at 'BBB'; -- Class II-B-4 affirmed at 'BB'; -- Class II-B-5 affirmed at 'B'. Series 2006-AR3 Group 1 -- Class I-A affirmed at 'AAA'; -- Class I-B-1 affirmed at 'AA'; -- Class I-B-2 affirmed at 'A'; --