T R O U B L E D C O M P A N Y R E P O R T E R Monday, November 5, 2007, Vol. 11, No. 262 Headlines AARDVARK ABS: Moody's Rates $44.5 Mil. Class C & D Notes at Low-B ACE CASH: Moody's Affirms Junk Rating on Senior Unsecured Notes ACXIOM CORP: Declares Quarterly Dividend of 6 Cents Per Share AFFILIATED COMPUTER: Earns $66.1 Million in Quarter Ended Sept. 30 AGRONOMICAL MANAGEMENT: Case Summary & 20 Largest Unsec. Creditors AIRTRAN HOLDINGS: Names Robert Fornaro as Chief Executive Officer AIRTRAN HOLDINGS: Earns $10.6 Mil. in Quarter Ended Sept. 30 AMERICAN HOME: Fitch Cuts Low-B Ratings on Classes II-M-4 & II-M-5 AMERIGROUP CORP: Unit Completes $12MM Buyout of Memphis Managed ARLO VI: Moody's Junks Rating on $10 Mil. Credit-Linked Notes ARLO VI: Moody's Junks Rating on Shark River-Issued Notes ARLO VI: Moody's Pares Rating on $7.5MM Credit-Linked Notes to B1 ARLO VI: Moody's Slices Rating on $28MM Credit-Linked Notes to Ba1 ARLO VI: Moody's Cuts Aa3 Rating on $28 Million Notes to Ba1 ASARCO LLC: Has Until February 11 to File Chapter 11 Plan AVAYA INC: Completed LBO Cues S&P to Lower Rating to B from B+ AVNET INC: To Combine Acquired ChannelWorx Pty with Avnet Tech BARNET HOSPITAL: Court Okays Porzio Bromberg as Panel's Counsel BIG FINANCE: Case Summary & 20 Largest Unsecured Creditors BLOCKBUSTER INC: Posts $35 Million Net Loss in Qtr. Ended Sept. 30 BOMBARDIER INC: Fitch Affirms Low-B Ratings and Revises Outlook BRANDYWINE REALTY: Earns $400,000 in Quarter Ended Sept. 30 BROADHOLLOW FUNDING: Debt Payment Failure Spurs S&P's "D" Ratings BRODERICK CDO: Moody's Junks Rating on $4 Mil. Class E Notes BRODERICK CDO: Moody's Lowers Ratings on Two Notes to Low-B CAIRN MEZZ: Moody's Lowers Ratings on Three Notes to Low-B CALDECOTT CDO: Moody's Junks Ratings on Three Note Classes CHANCELLOR GROUP: Voluntary Chapter 11 Case Summary CHRYSLER LLC: Overall October 2007 U.S. Sales Down 9% CHRYSLER LLC: Plans Product and Plant Changes in North America CITGO PETROLEUM: Fitch Holds BB Issuer Default Rating CMS ENERGY: Fitch Lifts Issuer Default Rating to BB+ COACH AMERICA: Weak Performance Cues S&P's Negative CreditWatch COEUR D'ALENE: Earns $3.6 Million in 3rd Quarter Ended Sept. 30 COMFORCE CORP: Sept. 30 Balance Sheet Upside-Down by $11.7 Million COSTA BELLA: Moody's Cuts Ratings on Three Notes to Low-B DAVID DURDEN: Case Summary & 15 Largest Unsecured Creditors DIXIE GROUP: Earns $2.2 Million in Quarter Ended September 29 DOBSON COMMS: Merger with AT&T Inc. Obtains US DOJ's Clearance DS WATERS: Closed $225MM Holdco Note Cues S&P to Hold B- Rating ELK POWER: Voluntary Chapter 11 Case Summary ENCORE ACQUISITION: Earns $11.9 Million in Third Quarter 2007 FIRST HORIZON: Fitch Takes Rating Actions on 11 Transactions FNBA MORTGAGE: Moody's Cuts Series 2004-AR1 Cert.' Rating to B1 FREMONT GENERAL: Failed Ford Deal Cues Fitch to Lower Ratings FRESH DEL MONTE: S&P Puts 'BB-' Rating Under Positive Watch GAINEY CORP: Underperformance Cues Moody's to Lower Ratings GALLERY CORP: Case Summary & 20 Largest Unsecured Creditors GENESCO INC: Weak Performance Cues Moody's to Lower Ratings GENERAL MOTORS: October 2007 Sales Increased by 3% GMAC COMMERCIAL: Moody's Holds Junk Rating on Class P Certificates GMAC LLC: Unit Posts $1.6 Bil. Net Loss in Third Quarter 2007 GMAC LLC: Moody's Downgrades Senior Unsecured Rating to Ba2 GMAC LLC: Reduced Earnings Prospects Cue S&P to Hold 'BB+' Rating GRAND AVENUE: Moody's Lowers Ratings on Two Notes to Low-B GREENBELT CT: Gets Court OK to Use Cash Collateral Up To $500,000 GREENBELT CT: Seeks Court Okay to Obtain DIP Financing GSAA HOME: Fitch Puts Low-B Ratings on $2.4 Million Cert. Classes HEALTHTRONICS INC: Earns $0.6 Mil. in Q3 Ended September 30 HUDSON MEZZANINE: Moody's Junks Ratings on Two Note Classes INTEGRATED PACKAGING: Case Summary & 7 Largest Unsec. Creditors INTERPUBLIC GROUP: Posts $21.9 Million Net Loss in 3rd Quarter INTERSTATE BAKERIES: Gets Buy Offer from Teamsters Consortium ISTANA HIGH: Moody's Cuts Ratings on Two Notes To Low-B IWT TESORO: Court Approves Lowenstein Sandler as Panel's Counsel KL INDUSTRIES: Disclosure Statement Hearing Deferred to Dec. 18 KLEROS PREFERRED: Moody's Cuts Rating on Class E Notes to Ba2 KLEROS PREFERRED: Moody's Junks Ratings on Two Note Classes KLEROS REAL: Moody's Cuts Ratings on Three Notes to Low-B KLEROS REAL: Moody's Reviews Ba2 Rating on $9MM Class E Notes KLYTIE'S DEVELOPMENT: Chapter 15 Petition Summary LAS VEGAS SANDS: Posts $48.5 Mil. Net Loss in Qtr. Ended Sept. 30 LEHMAN MORTGAGE: Fitch Junks Rating on Class B5 Certificates LONGRIDGE ABS: Moody's Junks Ratings on Three Note Classes M FABRIKANT: Disclosure Statement Hearing Moved to November 6 MAGNA ENTERTAINMENT: Posts $49.8 Million Net Loss in 3rd Quarter MAGNOLIA FINANCE: Moody's Junks Rating on Series 2007-1C Notes MAMMOTH ANTHRACITE: Voluntary Chapter 11 Case Summary MAXIM HIGH: Moody's Cuts Ratings on Two Note Classes to Low-B MCMORAN EXPLORATION: Prices 16.25MM Common Stock Public Offering METHANEX CORP: CEO Bruce Aitken to Buy 35,000 Additional Shares METROPCS COMMS: Withdraws Proposal to Merge with Leap Wireless MKP VELA: Moody's Junks Ratings on Three Note Classes MTI TECHNOLOGY: Court Approves Omni Management as Claims Agent NASSAU CDO: Moody's Junks Rating on 18,000 Preference Shares NEWBURY STREET: Moody's Cuts Ratings on Two Note Classes to Low-B NEWCASTLE CDO: Moody's Holds Ba2 Rating on Class XII Certs. NEXTMEDIA OPERATING: Moody's Holds B2 Corporate Family Rating NPS PHARMA: Sept. 30 Balance Sheet Upside-Down by $209.7 Million OCTANS III: Moody's Junks Ratings on Four Note Classes OCTANS II: Moody's Junks Rating on $45,000,000 Class X-1 Notes OMEGA HEALTHCARE: Earns $15.3 Million in Quarter Ended Sept. 30 OUTLOOK RESOURCES: Defaults in Filing Financial Reports with OSC PAMPELONNE II: Moody's Lowers A2 Swap Notes' Rating to Ba2 PAMPELONNE II: Moody's Cuts B1 Swap Notes' Rating to Ba3 PAMPELONNE II: Moody's Cuts B2 Swap Notes' Rating to B2 PAMPELONNE II: Moody's Cuts C1 Swap Notes' Rating to B1 PAMPELONNE II: Moody's Cuts C2 Swap Notes' Rating to B3 PAMPELONNE II: Moody's Cuts D1 Swap Notes' Rating to B1 PAMPELONNE II: Moody's Cuts D2 Swap Notes' Rating to Ba3 PAMPELONNE II: Moody's Cuts E1 Swap Notes' Rating to Ba1 PAMPELONNE II: Moody's Cuts E2 Swap Notes' Rating to Ba3 PEOPLE'S CHOICE: Moody's Cuts Ratings on 2 Cert. Classes to Low-B PINE MOUNTAIN: Moody's Junks Ratings on Two Note Classes POPE & TALBOT: Has Protection Under CCAA Until November 23 POPE & TALBOT: PricewaterhouseCoopers Appointed as Monitor PRC LLC: Liquidity Concerns Prompt S&P to Junk Credit Rating PRIVA INC: Closes Asset Sale Under BIA to Fiberlinks Textiles PRUDENTIAL SEC.: Moody's Holds Caa1 Rating on Class L Certs. QMED INC: Incurred Losses Prompt Chap. 11 Protection Consideration QUAKER FABRIC: Hires University Management to Collect Receivables QUAKER FABRIC: Can Hire RAS Management as Liquidation Consultant QUAKER FABRIC: Files Schedules of Assets & Liabilities QUALITY HOME: Court Approves Countrywide Settlement Pact QUALITY HOME: Court Fixes December 17 as Claims Bar Date QUALITY HOME: Court Okays David Gould as Chapter 11 Trustee REMY WORLDWIDE: Taps Huron Consulting as Financial Consultant RESIDENTIAL CAPITAL: $2.3BB Net Loss Cues S&P to Lower Rating RESIDENTIAL CAPITAL: Moody's Cuts Senior Debt Rating to Ba3 ROCKVILLE CDO: Moody's Cuts Rating on Class E Notes to B1 GSC ABS: Moody's Lowers Rating on $22.4MM Class D Notes to Ba2 ROGERS COMMS: Declares Quarterly Dividend of $0.125 Per Share ROGERS COMMS: Earns CDN$269 Million in 3rd Quarter Ended Sept. 30 S&C REAL ESTATE: Voluntary Chapter 11 Case Summary SCO GROUP: Seeks Court OK to Hire Mesirow as Financial Advisor SCO GROUP: U.S. Trustee Balks at Retention of Mesirow as Advisor SOLIDUS NETWORKS: Involuntary Chapter 11 Case Summary SOURCE ENTERPRISES: Names Clear Thinking as Liquidation Trustee SPECTRUM BRANDS: Completes Sale of Canadian Home & Garden Unit ST. MARY LAND: Earns $57.7 Mil. in Third Quarter Ended Sept. 30 STRUCTURED ADJUSTABLE: Fitch Takes Rating Action on Seven Deals STRUCTURED ASSET: Fitch Junks Ratings on Three Cert. Classes STRUCTURED ASSET: Moody's Junks Rating on Class M11 Certs. STATIC RESIDENTIAL: Moody's Junks Ratings on Four Note Classes TECO ENERGY: Sells TECO Transport to Greenstreet for $405 Mil. TEKNI-PLEX: Moody's Holds Caa1 Corporate Family Rating TENNECO AUTOMOTIVE: Moody's Holds B1 Corporate Family Rating TENNECO INC: Commences $230 Mil. Tender Offer for 10-1/4% Notes TENNECO INC: Fitch Rates New Senior Unsecured Notes at BB- TENNECO INC: S&P Rates Proposed $250 Million Senior Notes at B+ TESORO CORP: Board To Review Tracinda's Offer to Buy Equities TESORO CORP: Earns $47 Million in Quarter Ended September 30 TRIBUNE CO: Unit Completes $62.4 Mil. Newspapers Sale to Hearst TRINITY INDUSTRIES: Earns $87 Million in Quarter ended Sept. 30 TRONOX INC: Posts $19.1 Million Net Loss in Quarter Ended Sept. 30 UBS MORTGAGE: Fitch Holds BB Rating on Class M-8 Certificates UNITED COMMERCIAL: Moody's Rates Class M Certificates at Ba3 WELLMAN INC: Considers Strategic Actions Before Debt Refinancing WILLIAMS SCOTSMAN: Completes Merger with Ristretto Group WINDY CITY: Moody's Lowers Bank Facilities' Rating to Ba3 WYNN LAS VEGAS: Moody's Rates $400 Million 6.58% Notes at Ba2 WYNN RESORTS: Debt Burden Cues S&P's "BB" Corp. Credit Rating * BOND PRICING: For the Week of Oct. 29 - Nov. 2, 200 ********* AARDVARK ABS: Moody's Rates $44.5 Mil. Class C & D Notes at Low-B ----------------------------------------------------------------- Moody's Investors Service placed these notes issued by AArdvark ABS CDO 2007-1 on review for possible downgrade: -- $78,000,000 Class A2 Senior Secured Floating Rate Notes Due July 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also disclosed that it has downgraded and left on review for possible downgrade these notes: -- $47,000,000 Class B Senior Secured Floating Rate Notes Due July 2047 Prior Rating: Aa2 Current Rating: A2, on review for possible downgrade -- $23,500,000 Class C Secured Floating Rate Deferrable Notes Due July 2047 Prior Rating: A2 Current Rating: Ba1, on review for possible downgrade -- $21,000,000 Class D Secured Floating Rate Deferrable Notes Due July 2047 Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. ACE CASH: Moody's Affirms Junk Rating on Senior Unsecured Notes --------------------------------------------------------------- Moody's Investors Service affirmed the Caa1 rating on the senior unsecured notes of ACE Cash Express. The rating outlook is stable. The affirmation is in conjunction with a $45 million add-on offering of senior unsecured notes. The notes, which are due in 2014, are an add-on to ACE's $175 million senior unsecured note offering of September 2006, which was undertaken in conjunction with the company's leveraged buyout transaction with New York- based private equity firm JLL Partners. ACE's ratings (which also include a Corporate Family Rating of B3 and a senior secured Term Loan B rating of B3) reflect the company's strong market position in the highly fragmented U.S. payday lending and check cashing industry, strong operating cash flow, experienced management team, diversified product and geographic mix, strong risk management and information systems infrastructure, and generally attractive industry fundamentals based on the demand and growth fundamentals of the payday lending and check cashing businesses. The ratings also reflect the credit challenges the company faces, including substantial leverage and debt service burden following its 2006 leveraged buyout transaction, and negative tangible net worth resulting from the significant goodwill and other intangibles following the LBO. However, the credit strengths noted above serve to mitigate these factors, therefore ACE's CFR is the same as rated peer firms. The Caa1 senior unsecured rating takes into account the notes' structurally subordinated status to the secured debt. Following the LBO, the proportion of tangible assets in the company's asset structure is relatively small. Therefore, in a distressed scenario asset coverage for the secured debt is expected to be modest and virtually non-existent for the unsecured debt holders. This could constrain future upward rating movement for the senior unsecured notes. Based in Irving, Texas, ACE Cash Express offers check cashing, payday lending, pre-paid debit card and bill payment services along with various other financial products. ACXIOM CORP: Declares Quarterly Dividend of 6 Cents Per Share ------------------------------------------------------------- The Board of Directors of Acxiom(R) Corporation declared a quarterly cash dividend of 6 cents per share payable on Nov. 26, 2007 to shareholders of record as of the close of business today, Nov. 5, 2007. While Acxiom intends to pay regular quarterly dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared by the Board at its discretion. Based in Little Rock, Arkansas, Acxiom(R) Corporation (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. * * * As reported in the Troubled Company Reporter on Oct. 3, 2007, Standard & Poor's Ratings Services said its 'BB' corporate credit rating on Acxiom Corp. remains on CreditWatch with negative implications, where it was placed on May 17, 2007. At the same time, S&P also placed the 'BB' senior secured debt ratings on CreditWatch with negative implications, because the debt will no longer be refinanced as part of the LBO financing. AFFILIATED COMPUTER: Earns $66.1 Million in Quarter Ended Sept. 30 ------------------------------------------------------------------ Affiliated Computer Services Inc. reported Thursday results of its first quarter fiscal year 2008 ended Set. 30, 2007. The company reported net income of $66.1 million for the first quarter of fiscal 2008, compared with net income of $61.4 million for the first quarter of fiscal 2007. The compay reported revenues of $1.49 billion, an 8% increase compared to the prior year quarter. The company's internal revenue growth rate for the quarter was 6%. First quarter adjusted non-GAAP operating income was $164 million, a 10% increase over the prior year quarter adjusted non-GAAP operating income. Consolidated adjusted non-GAAP operating margins were 11.0%, a 30 basis point increase from the prior year quarter adjusted non-GAAP operating margins. "Our goals for 2008 are to show consistent and good growth in revenue, operating income and earnings per share each quarter. Our first quarter results demonstrate that we are accomplishing our objectives," said Lynn Blodgett, ACS president and chief executive officer. "Our operational execution is excellent, our financial discipline strong and systematic, and our focus on cost reduction is organized and constant. I am confident that 2008 will be a strong year for ACS." Cash flow from operations during the first quarter was approximately $8 million. This quarter's cash flow results were impacted by the company's annual management incentive compensation payments and the timing of accounts receivable collections. Capital expenditures and additions to intangible assets were approximately $75 million, or 5% of revenue. Free cash flow during the quarter was negative $67 million. The company's first quarter cash flow results also included approximately $41 million, or approximately 3% of revenues, of interest paid on debt, cash paid related to legal and other costs associated with the ongoing stock option investigations, potential sale of the company and shareholder derivative lawsuits, partially offset by cash interest income. At Sept. 30, 2007, the company's consolidated balance sheet showed $6.08 billion in total assets, $3.92 billion in total liabilities, and $2.16 billion in total shareholders' equity. 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. AGRONOMICAL MANAGEMENT: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Agronomical Management Company aka Packsaddle Country Club aka Granite Ridge 118 Club Circle Kingsland, TX 78639 Bankruptcy Case No.: 07-12021 Type of Business: The Debtor operates a golf course. Chapter 11 Petition Date: November 1, 2007 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Patrick H. Autry, Esq. Plunkett & Gibson, Inc. 70 Northeast Loop 410, Suite 1100 San Antonio, TX 78216 Tel: (210) 734-7092 Fax: (210) 734-0379 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Granville Harper Investor $150,000 P.O. box 39174 Santa Barbara, CA 93130 Ewing Irrigation Trade $103,712 3441 East Harbour Drive Phoenix, AZ 85034 KC Engineering Trade $100,000 705 North Highway 281, Suite 103 Marble Falls, TX 78654 Rapid Advance Loan $95,000 Bobby & Patti Williams Loan $75,000 Jack & Bonnie Taylor Loan $61,000 Michael Eyhorn Loan $50,361 John and Sharon Barnes Loan $36,000 Craig and Pam Felton Loan $28,000 Neal and Robin Sharp Loan $25,500 CM Turf Trade $23,000 Bill Sadler Trade $18,061 Lone Star Flag Trade $16,840 U.S. Food Service Trade $16,406 Vern and Janet Showalter Loan $11,500 Boice & Fern Hodges Loan $10,000 Joe & Nina Jayne Loan $10,000 Central TX Electric Coop. Loan $9,864 3rd Coast Turf Loan $8,817 Green Industries, Inc. Trade $8,150 AIRTRAN HOLDINGS: Names Robert Fornaro as Chief Executive Officer ----------------------------------------------------------------- AirTran Holdings Inc., the parent of AirTran Airways, has named Robert L. Fornaro, 54, as its chief executive officer effective Nov. 1, 2007. Joe Leonard will continue to serve as chairman of the board of directors. Mr. Leonard became CEO of AirTran Holdings, Inc., on Jan. 9, 1999. At its regularly scheduled fall meeting on Oct. 31, the AirTran Holdings, Inc., board of directors elected Mr. Fornaro to serve as CEO and president as well as a member of the board of directors. Mr. Fornaro has had a long and successful career with AirTran Airways, most recently serving as president and chief operating officer. Mr. Fornaro joined the company as president and CFO in 1999 and was elected to the board of directors in 2001. "Bob Fornaro is highly respected throughout the airline industry and has been well known for many years in the media, financial and investor communities for his strategic planning, financial acumen and marketing expertise," Mr. Leonard said. "As part of the board's succession planning, we had focused on Bob as the CEO of AirTran Holdings; and under Bob's talented leadership capabilities, the company will continue to build on its growth plan and deliver results for our Shareholders, Crew Members and Customers. Bob will bring energy, enthusiasm and experience to the CEO role at AirTran Airways and is the right man for the job." A native of Long Island, New York, Mr. Fornaro attended Rutgers College on a lacrosse scholarship while earning a bachelors degree in economics. He also received a masters degree from Harvard University. Prior to joining AirTran Airways in 1999, Fornaro held various executive roles with airlines such as TWA, Braniff, Northwest and US Airways. Mr. Fornaro resides in Orlando with his wife, Karen, and they have three adult children. Mr. Fornaro serves on the boards of the Georgia Aquarium, Central Atlanta Progress and Forward Atlanta which is part of the Metro Atlanta Chamber of Commerce. AirTran Holdings Inc., through its subsidiary AirTran Airways Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield- Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel- efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * Airtran Holdings Inc.'s 7% Convertible Notes due 2023 holds Moody's Investors Services' and Standard & Poors' junk ratings. AIRTRAN HOLDINGS: Earns $10.6 Mil. in Quarter Ended Sept. 30 ------------------------------------------------------------ AirTran Holdings Inc., the parent company of AirTran Airways Inc., reported third-quarter net income of $10.6 million, compared to a loss of $4.6 million during the same period last year. Included in the third-quarter 2007 results is a one-time, net of tax charge of $6.6 million related to costs associated with the effort to acquire Midwest Air Group. Without this charge, AirTran Airways net income was $17.3 million. The company reported operating revenues of $608.5 million for the quarter ended Sept. 30, 2007, compared to operating revenues of $486.8 million for the same quarter last year. Capacity as measured in available seat miles increased 20.9%, while traffic measured in revenue passenger miles increased 32.3% resulting in an all-time record load factor of 80.1%. During the quarter AirTran Airways served a record 6,442,786 passengers, up 25.4% from the year-ago period. Operating income reached a third- quarter record of $38.5 million representing a 6.3% operating margin, a 7.1 percentage point improvement over the same period last year. "I am very pleased with our third-quarter performance," Joe Leonard, chairman and chief executive officer of AirTran Airways, said. "We confronted high fuel costs, adverse weather and air traffic control delays in some of our major East Coast markets -- but our operational performance and service levels stayed well ahead of the competition. We remain on track to make 2007 our ninth consecutive year of successful growth." "Our unit revenue improved nearly 3 percent year over year and contributed to the record-setting revenue performance," Bob Fornaro, president and chief operating officer said. "We are optimistic that this trend will continue through year end." "The strategic deployment of our new 737s continues to drive down costs throughout the network," Stan Gadek, senior vice president of finance and chief financial officer said. "Looking forward, we believe there are additional opportunities to further reduce costs and raise productivity." For the nine months ended Sept. 30, 2007, AirTran Holdings net income tripled to $54.9 million from $18.3 million in the year-ago period. AirTran Holdings Inc., through its subsidiary AirTran Airways Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield- Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel- efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * Airtran Holdings Inc.'s 7% Convertible Notes due 2023 holds Moody's Investors Services' and Standard & Poors' junk ratings. AMERICAN HOME: Fitch Cuts Low-B Ratings on Classes II-M-4 & II-M-5 ------------------------------------------------------------------ Fitch Ratings took these rating actions on American Home Mortgage Investment Trust 2006-1, Group 2 mortgage pass-through certificates: -- Class II-A affirmed at 'AAA'; -- Class II-M-1 affirmed at 'AA'; -- Class II-M-2 downgraded to 'A-' from 'A'; -- Class II-M-3 downgraded to 'BBB-' from 'BBB'; -- Class II-M-4 downgraded to 'B' from 'BB', and placed on Rating Watch Negative. -- Class II-M-5 downgraded to 'B-/DR2' from 'B'. The affirmations, affecting about $215 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The downgrades, affecting $8.2 million of outstanding certificates, reflects the deterioration in the relationship of CE to future loss expectations. The amount of loans with serious delinquencies (including 60+, foreclosure, bankruptcy, and real- estate owned) is 4.01% of the outstanding pool balance while the CE for the affected II-M-2, II-M-3, II-M-4, and II-M-5 bonds is 2.64%, 1.78%, 0.99% and 0.43%, respectively. The transaction has experienced 0.05% of loss to date and Fitch anticipates that the high delinquencies will translate into even greater losses, further reducing the CE of the subordinate classes. The collateral of the above transaction consists of 100% 5/1 ARM mortgage loans extended to Prime and Alt-A borrowers and secured by first liens on one- to four-family residential properties. The loans were originated and deposited by American Home Mortgage, and are master serviced by Wells Fargo Bank N.A., which is currently rated 'RMS1' by Fitch. As of the September 2007 distribution date, the pool factor (current mortgage loan principal outstanding as a percentage of the initial pool) is 81% and the transaction is seasoned 18 months. AMERIGROUP CORP: Unit Completes $12MM Buyout of Memphis Managed --------------------------------------------------------------- AMERIGROUP Corporation's Tennessee subsidiary has completed the acquisition of the assets of Memphis Managed Care Corporation $12 million, and received the necessary regulatory approvals. The acquisition is effective Nov. 1, 2007. On Sept. 5, 2007, AMERIGROUP Corporation disclosed that the controlling members of Memphis Managed Care Corporation have approved the sale of its assets, including TLC Family Care Health Plan, to AMERIGROUP Community Care of Tennessee, subject to regulatory approval by the State of Tennessee. AMERIGROUP funded the transaction through available unregulated cash and does not expect the transaction to have a material impact on its 2007 earnings or to impact operations of AMERIGROUP's Middle Tennessee health plan. With the completion of this transaction, AMERIGROUP Community Care of Tennessee now serves an additional 167,000 Tennessee residents who are enrolled in the State's TennCare program and who live in Memphis and the surrounding West Tennessee region. On April 1, AMERIGROUP Community Care of Tennessee began serving TennCare enrollees who live in Nashville and the surrounding Middle Tennessee region. Total membership in both regions now stands at approximately 352,000. AMERIGROUP Community Care of Tennessee operates in West Tennessee through an administrative services only agreement with the State, which means that the company maintains and administers a network of physicians, hospitals and other healthcare providers. In Middle Tennessee, AMERIGROUP Community Care of Tennessee operates a full-risk health plan that serves about 185,000 people in the TennCare program. TLC Family Care Health Plan has a shared-risk contract with the State of Tennessee but is not at this time a full-risk contractor. TennCare has plans to award new full-risk contracts through an RFP process to health plans in West Tennessee and East Tennessee during 2008. With the completion of this transaction, subsidiaries of AMERIGROUP Corporation acquired substantially all of the assets of Memphis Managed Care Corporation, including TLC Family Care Health Plan and MidSouth Health Solutions, an affiliated firm that offers disease management and case management services. AMERIGROUP does not expect this transaction to have a material impact on its 2007 earnings or to impact operations of its Middle Tennessee health plan. About Memphis Managed Care Memphis Managed Care was founded by the Regional Medical Center at Memphis, which operates the only Level I trauma center in the region, and UT Medical Group Inc., the private physician practice organization of the College of Medicine of the University of Tennessee Health Science Center. About Amerigroup Corporation Headquartered in Virginia Beach, Virginia, Amerigroup Corporation (NYSE: AGP) -- http://www.amerigroup.com/-- improves healthcare access and quality for low-income Americans by developing innovative managed health services for the public sector. Through its wholly owned subsidiaries, Amerigroup serves more than 1.7 million people through publicly-funded healthcare programs in 11 states. * * * Moody's Investors Service placed AMERIGROUP Corp.'s long term corporate family rating at 'B1' and bank loan debt rating at 'Ba3' in March 2007. The ratings still hold to date with stable outlook. ARLO VI: Moody's Junks Rating on $10 Mil. Credit-Linked Notes ------------------------------------------------------------- Moody's Investors Service downgraded and placed these notes issued by ARLO VI Limited Series 2006 (Charleston Springs) on review for possible downgrade: Class Description: -- $10,000,000 Secured Limited Recourse Credit-Linked Notes due 2039 Prior Rating: Ba1 Current Rating: Caa1, 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 reference obligations, which consist primarily of residential mortgage-backed securities and commercial mortgage- backed securities. ARLO VI: Moody's Junks Rating on Shark River-Issued Notes --------------------------------------------------------- Moody's Investors Service downgraded and placed these notes issued by ARLO VI Limited Series 2006 (Shark River) on review for possible downgrade: Class Description: -- $10,000,000 Secured Limited Recourse Credit-Linked Notes due 2039 Prior Rating: Ba1 Current Rating: Caa1, 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 reference obligations, which consist primarily of RMBS & CMBS bonds. ARLO VI: Moody's Pares Rating on $7.5MM Credit-Linked Notes to B1 ----------------------------------------------------------------- Moody's Investors Service downgraded and placed these notes issued by ARLO VI Limited Series 2006 (Army Pier 1) on review for possible downgrade: Class Description: -- $7,500,000 Variable Secured Limited Recourse Credit- Linked Notes due 2047 Prior Rating: Baa2 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. ARLO VI: Moody's Slices Rating on $28MM Credit-Linked Notes to Ba1 ------------------------------------------------------------------ Moody's Investors Service downgraded and placed these notes issued by ARLO VI Limited Series 2006 (Old Orchard) on review for possible downgrade: Class Description: -- $28,750,000 Secured Limited Recourse Credit-Linked Notes due 2039 Prior Rating: Aa3 Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consist primarily of structured finance securities. ARLO VI: Moody's Cuts Aa3 Rating on $28 Million Notes to Ba1 ------------------------------------------------------------ Moody's Investors Service downgraded and placed these notes issued by ARLO VI Limited Series 2006 (Pine Brook) on review for possible downgrade: Class Description: -- $28,750,000 Secured Limited Recourse Credit-Linked Notes due 2039 Prior Rating: Aa3 Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying reference obligations, which consist primarily of structured finance securities. ASARCO LLC: Has Until February 11 to File Chapter 11 Plan --------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas granted ASARCO LLC and its debtor affiliates exclusive rights to file a bankruptcy plan through Feb. 11, 2008, and exclusive rights to solicit acceptances for that plan through April 14, 2008. The extension is ASARCO's eight request to date. ASARCO said it needed more time to evaluate, quantify and resolve contingent claims. The company added that negotiations and mediations with regards to its asbestos and environmental liabilities are currently ongoing. Environmental Claims at Three Sites Settled As a result of those mediations conducted in August and September 2007, ASARCO entered into three separate settlements with certain government agencies and the states of Kansas, Missouri and Oklahoma for the resolution of certain environmental claims at the Azurite Mine Site, the Golinsky Mine Site, and the Tri-State Mining District. The Azurite Settlement provides that the U.S. Department of Agriculture Forest Service will have an allowed $5,000,000 general unsecured claim with respect to all past and future response costs incurred or to be incurred by the government agency in connection with the Azurite Site. ASARCO will not object to a disbursement of up to $300,000 from the ASARCO Environmental Trust Fund to the Forest Service for costs incurred in 2007. The Golinsky Settlement also entitles the Forest Service an allowed $4,050,000 general unsecured claim with respect to all past and future response costs incurred or to be incurred in connection with the Golinsky Site. ASARCO also agree not to object to a disbursement of up to $125,000 from the ASARCO Environmental Trust Fund to the Forest Service for costs incurred in 2008. The Tri-State Settlement further entitles allowed general unsecured claims to these creditors: Creditor Claim Amount -------- ------------ EPA and the Bureau of Indian Affairs $91,000,000 Kansas 3,250,000 Missouri 3,250,000 Oklahoma 7,500,000 Dept. of Interior 2,000,000 The states of Kansas, Missouri, and Oklahoma will have a joint, indivisible allowed general unsecured claim totaling $51,000,000, for natural resource damages. Under the Settlements, ASARCO, on the one hand, and the Creditors, on the other hand, agree not to sue or assert claims or causes of action against each other. The Settlements also provide that ASARCO is entitled to protection from contribution actions or claims as provided by Section 113(f)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act. The Tri-State Agreement is conditioned on the entry of orders by the U.S. District Courts for the District of Kansas and the Western District of Missouri, modifying existing consent decrees relating to the Tri-State Site. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). AVAYA INC: Completed LBO Cues S&P to Lower Rating to B from B+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Avaya Inc. to 'B' from 'B+' and removed the rating from CreditWatch where it was placed with negative implications on June 5, 2007. The downgrade reflects the completion of the company's LBO. The outlook is stable. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to Avaya's $3.8 billion secured financing. The seven-year term loan B is rated 'B', with a recovery rating of '3', indicating the expectation for meaningful recovery in the event of a payment default. Standard & Poor's also assigned its 'CCC+' rating to the company's $700 million senior unsecured cash pay notes and $750 million senior unsecured payment-in-kind toggle notes. "The ratings reflect the company's highly leveraged balance sheet and significant competitive pressures, more than offsetting its leading position in the enterprise voice communications industry and good base of recurring maintenance revenues," said Standard & Poor's credit analyst Bruce Hyman. Basking Ridge, New Jersey-based Avaya is the leading supplier of voice communications equipment for enterprise customers, competing against Cisco Systems Inc., Nortel Networks Corp., Siemens AG, Alcatel Lucent, and others. Pro forma adjusted EBITDA was $827 million for the fiscal year ended Sept. 30, 2007, or about 16% of sales. Pro forma debt to EBITDA for the fiscal year was about 8.3x, including tax-effected underfunded pension and postretirement benefits as debt. S&P expect Avaya to increase its EBITDA margins through a number of cost reduction actions, although onetime actions to reduce costs will affect near-term cash flows. The business should deleverage somewhat over the next few years, primarily because of EBITDA growth. AVNET INC: To Combine Acquired ChannelWorx Pty with Avnet Tech -------------------------------------------------------------- Avnet Inc. has acquired ChannelWorx Pty Ltd of Australia. ChannelWorx will be integrated into Avnet Technology Solutions' Australia business. In addition to gaining 300 resellers and systems integrators, the acquisition will bring Avnet new employees with experience in storage networking and solutions. KP Tang, president of Avnet Technology Solutions, Asia Pacific, noted that the acquisition is a significant step in diversifying Avnet's business in the market. "Adding this strong line-up of networking suppliers from ChannelWorx to our product offerings moves us strategically into emerging and high-growth technologies with incremental cross selling opportunities," Mr. Tang added. "This acquisition represents the opportunity to gain greater scale and scope in the market and offer greater value to our reseller partners in Australia." The transaction will also provide Avnet Technology Solutions Australia with a greater presence in Melbourne. "Expanding both our geographic footprint and our technology solutions offerings fits perfectly with our strategic growth plan," Gavin Lawless, general manager of Avnet Technology Solutions Australia, added. "We are excited about the opportunities this acquisition will provide to accelerate growth for our partners and for Avnet." About ChannelWorx Pty Ltd of Australia Headquartered in Melbourne, ChannelWorx Pty Ltd of Australia is a networking and security distributor established in 1989. ChannelWorx markets a portfolio of networking products from suppliers including Juniper, Extreme Networks, Ironport, and Avaya and software products from Google. About Avnet Inc Phoenix, Arizona-based, Avnet Inc. -- http://www.avnet.com/-- (NYSE:AVT) distributes electronic components and computer products for industrial customers. It has operations in Australia, Belgium, China, Germany, Hong Kong, India, Italy, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, and Sweden, Brazil, Mexico and Puerto Rico. Avnet Technology Solutions is an operating group of Avnet Inc. (NYSE:AVT) -- http://www.ats.avnet.com.au/-- with locations in more than 30 countries. Avnet Technology has sales divisions focused on specific customer segments and a select line card strategy that gives attention to the needs of its customers and suppliers. * * * Moody's Investors Service placed Avnet Inc.'s long term corporate family, senior unsecured debt and probability of default ratings at ' Ba1' in September 2006. The ratings still hold to date. BARNET HOSPITAL: Court Okays Porzio Bromberg as Panel's Counsel --------------------------------------------------------------- The United States Bankruptcy Court for the District of New York gave the Official Committee of Unsecured Creditors in Nathan and Miriam Barnert Memorial Hospital Association's bankruptcy case authority to employ Porzio, Bromberg & Newman, P.C., as its counsel. Porzio Bromberg is expected to: a) provide the Debtor's Committee with legal advice with respect to its rights, duties and powers in this case; b) consult with the Debtor, its counsel, other professionals retained in this case and the United States Trustee concerning the administration of the case; c) assist and advise in the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's business, and any other matters relevant to this case or to the formulation of a plan of reorganization or liquidation, including considering the appointment of a trustee or examiner, as appropriate; d) assist and advise the Committee in its analysis of, and negotiations with, the Debtor and any third parties, in the formulation of any plan of reorganization or liquidation; e) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in the Debtor's case; f) prepare pleadings, motions, applications, objections and other papers as may be necessary in furtherance of the Committee's interests and objectives; g) analyze and advise the Committee of the meaning and import of all pleadings and other documents filed with the Court; h) represent the Committee at all hearings and other proceedings; and i) perform other legal services as may be required and are deemed to be in the interest of the Debtor's Committee and of unsecured trade creditors in accordance with those powers and duties set forth in the Bankruptcy Code. The firm's professionals and their compensation rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Warren J. Martin Jr., Esq. Principal $475 John S. Mairo, Esq. Attorney $430 Terri J. Freedman, Esq. Attorney $360 Brett S. Moore, Esq. Attorney $360 Robert M. Schechter, Esq. Attorney $250 Mathew D. Laskowski Paralegal $155 Qandeel Sheikh Paralegal $125 Warren J. Martin, Jr., Esq., a principal of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Martin can be reached at: Warren J. Martin, Jr., Esq. Porzio, Bromberg & Newman, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, New Jersey 07962 Tel: (973) 538-4006 Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital, owns and operates a 256 bed general acute care community hospital located at 680 Broadway in Paterson, New Jersey. The company filed for chapter 11 protection on Aug. 15, 2007 (Bankr. D. N.J. Case No. 07-21631). David J. Adler, Esq., at McCarter & English, LLP, represents the Debtor. The U.S. Trustee for Region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. BIG FINANCE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: BIG Finance and Insurance Services, Inc. P.O. Box 7148 Laguna Niguel, CA 92607 Bankruptcy Case No.: 07-13634 Type of Business: The Debtor is a personal credit financial institution. Chapter 11 Petition Date: October 31, 2007 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Adam M. Starr, Esq. Greenberg Traurig, LLP 2450 Colorado Avenue, Suite 400E Santa Monica, CA 90404 Tel: (310) 586-7700 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Poling Investments, LLC Note Payable $17,916,548 Attn: Kathryn Poling 35 Miramounte Road Carmel Valley, CA 93924 Dr. Sam & Dawn Maywood Note Payable $1,894,337 6105 Avenida Cresta La Jolla, CA 92037 Crenshaw Family Note Payable $1,163,528 Partnership Ltd. Attn: Kirby Crenshaw 4245 Kemp Boulevard, Suite 711 Wichita Falls, TX 76308 Don Roger Norman Trust Note Payable $1,112,583 c/o Norman Properties P.O. Box 838 Poway, CA 92074 Ronald K. Walker and Note Payable $556,797 Jane C. Walker 10 Via Marino Palm Coast, FL 32137 Kent Moerk Note Payable $545,889 Chemin des Paves 2000 Newchatel Switzerland Dealer Financial Services Trade Debt $324,000 c/o Gardner Honsowetz Potter Budge Ford LLP 725 Country Club Road Eugene, OR 97401 John J. Rasmussen Note Payable $290,882 6 Silver Maple Place Novato, CA 94949 Marc de Garidel Note Payable $290,882 55 Rue Jacques Dulua Neuilly/Seine France 92200 Denny Weinberg Note Payable $281,043 2510 Alhambra Court Camarillo, CA 93012 Gilbert S. Omeon Note Payable $221,186 Global Network Ministries Office Lease $218,671 New Commence Investment Ltd. Note Payable $173,187 Richard Anthony Smee Note Payable $169,765 JP Turner & Company, LLC Investment Banking $148,500 Services Nicholas Hynes Note Payable $142,165 Peter J. Ungaro and Note Payable $116,353 Brenda Ungaro Ari Rubinstein Note Payable $116,353 David M. Drury $115,731 James Spallino Note Payable $115,040 BLOCKBUSTER INC: Posts $35 Million Net Loss in Qtr. Ended Sept. 30 ------------------------------------------------------------------ Blockbuster Inc. reported Thursday financial results for the third quarter ended Sept. 30, 2007. For the third quarter of 2007, net loss was $35.0 million, as compared with a net loss of $24.7 million for the third quarter of 2006. Net loss for the third quarter of 2007 included $9.6 million in severance and lease termination costs. Total revenues decreased 5.7% to $1.24 billion for the third quarter of 2007 from $1.31 billion for the third quarter of 2006. The revenue decrease is primarily due to the closure and sale of 526 company-operated stores worldwide. This decrease was partially offset by a $79.2 million year-over-year increase in revenues from Blockbuster's online rental service resulting from growth in the subscriber base, which totaled approximately 3.1 million total subscribers at the end of the quarter. "We believe the actions we have taken over the last quarter have better positioned Blockbuster for the future," said Jim Keyes, Blockbuster chairman and chief executive officer. "Going forward, we are focused on protecting our core rental business, developing new retail opportunities, and becoming the preferred provider of digital entertainment. To this end, we have launched a series of initiatives centered around product availability and increased emphasis on our retail business. I am pleased with the progress we have made both strategically and financially and believe we are on our way to transforming Blockbuster into a company that is able to generate total revenue growth, effectively redeploy resources and balance investment in a manner that delivers favorable returns." As part of its previously announced efforts to improve profitability, management said it has completed a preliminary review of the company's cost structure and has implemented a plan to reduce annualized overhead costs by approximately $45 million through the elimination of staffing and operational redundancies in the company's in-store and online corporate support structure and through improvements in other operating efficiencies. Management continues to evaluate a number of other methods to reduce costs, including outsourcing various corporate functions. Additionally, consistent with its efforts to strike an appropriate balance between the growth of its online subscription service and enhanced profitability, during the quarter the company implemented pricing modifications to the BLOCKBUSTER Total Access offering, reduced advertising spend and minimized promotion of the program in its stores. These actions significantly reduced the number of unprofitable BLOCKBUSTER Total Access subscribers, improved profitability across the remaining subscriber base and contributed to a sequential improvement in the company's operating results from the second quarter of 2007. Further, in light of the company's emphasis on growing its overall customer base - through its stores, through the mail and eventually through the digital delivery of content - going forward, the company will no longer be narrowly focused on its online subscriber count but instead will concentrate on the growth of, and report on, its total membership. "During each month this quarter, over 20 million customers around the world used the BLOCKBUSTER(R) brand to satisfy their needs for media entertainment, and that customer base presents us with a tremendous opportunity," said Keyes. "Our goal is to continue to increase our membership base by providing even more ways for customers to get the entertainment they want through our stores, through the mail and through new technologies." Worldwide same-store rental revenues for the third quarter increased 1.1% from the same period last year, reflecting a 2.3% increase in domestic same-store rental revenues and a 2.8% decline in international same-store rental revenues. Worldwide same-store retail revenues for the third quarter of 2007 increased 14.2% from the same period last year largely due to a 79.5% increase in international same-store game retail revenues. Operating loss for the third quarter of 2007 totaled $5.6 million, compared to operating income of $3.3 million for the same period last year. Gross profit decreased $75.7 million, which was primarily driven by the decline in total revenues and an approximately $29 million impact to rental gross profit associated with the cost of free in-store exchanges under the BLOCKBUSTER Total Access program. Gross margin declined 270 basis points to 53.9% for the third quarter of 2007. Cash flow used for operating activities of $17.1 million for the third quarter of 2007 reflected a $168.9 million decrease from cash provided by operating activities of $151.8 million in the third quarter of 2006. Free cash flow decreased $174.5 million to a negative $38.6 million for the third quarter of 2007 from a positive $135.9 million for the third quarter of 2006. Both changes were primarily the result of changes in working capital and rental library. About Blockbuster Inc. Headquartered in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with over 7,800 stores throughout the Americas, Europe, Asia and Australia. * * * As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services lowered its ratings on Dallas- based Blockbuster Inc. to 'B-' from 'B'. The outlook is negative. BOMBARDIER INC: Fitch Affirms Low-B Ratings and Revises Outlook --------------------------------------------------------------- Fitch Ratings affirmed the ratings for Bombardier Inc. and Bombardier Capital Inc., as: Bombardier Inc. -- Issuer Default Rating at 'BB-'; -- Senior unsecured debt at 'BB-'; -- Preferred stock at 'B'. Bombardier Capital Inc. -- IDR at 'BB-'; -- Senior unsecured debt at 'BB-'. The rating outlook has been revised to Positive from stable. The ratings cover outstanding debt and preferred stock totaling about $5.4 billion as of July 31, 2007. Due to the existence of a support agreement and demonstrated support by the parent, BC's ratings are linked to those of BBD. The rating outlook revision to positive reflects expectations for continued margin improvement, sales growth, and solid cash generation in the next several quarters. Strong orders in all of BBD's businesses and a large backlog support projections for continued improvement. These factors, combined with some debt maturities in February 2008, could lead to a steady improvement in BBD's credit metrics and to a review of the ratings. Bombardier's operating performance has been better than Fitch's expectations in the past year. Margins have improved at both Bombardier Aerospace and Bombardier Transportation, sales have grown at double digit rates in the first half of fiscal 2008, and cash generation has been much stronger than projected. Strong free cash flow and an increase in regional jet orders have addressed some of Fitch's most significant concerns, while the business jet and transportation markets have remained solid. The company recapitalized in a conservative manner last year, and it now has a solid balance sheet when considering the improvement in most of its businesses during the past year. Factors supporting the ratings include BBD's diversification, leading market positions, the health of the business jet and turboprop markets, cash balances, debt maturity schedule, BT's successful restructuring, and large backlog. Rating concerns include the elevated but improving consolidated gross debt levels compared to EBITDA; relatively low operating margins; business jet market cyclicality; the pension plan deficit; the impact of exchange rate volatility on margins, financial results, and planning; and several RJ concerns, including uncertainty regarding development of new aircraft models and contingent obligations related to past aircraft sales. BBD's eventual decision about its potential entry into the mainline aircraft market could potentially have an impact on its financial and operating profile. Fitch believes the recent performance issues with one operator's Q400 aircraft are not a significant credit concern at this time. As of July 31, 2007 BBD's leverage measures had improved from levels reported over the past several years, largely as a result of stronger operating performance. Gross debt/EBITDA in the latest 12 months ended July 31, 2007 was 4.1x compared to 4.6x at the end of fiscal 2007. The company's consolidated EBITDA margins improved to 7.9% in the LTM period compared to 7.4% in F2007. BA's EBIT margins improved 220bps in the first half of F2008 to 5.5%, and BT's EBIT margins improved 100 bps to 4.3%. Fitch expects modest margin improvement for the rest of the year, and continued margin expansion in F2009. The company had nearly $3 billion of unrestricted cash balances at the end of the fiscal second quarter, not including $1.2 billion of restricted cash related to its letter of credit facility. Restricted cash balances are not available for liquidity purposes or for the benefit of unsecured bond holders. Bombardier's unrestricted cash balances are the company's sole source of liquidity because the LOC facility is not available on a revolving credit basis. Free cash flow in the LTM period was $1.4 billion. The recent cash performance was driven by advance payments related to strong orders, decreases in BC's aircraft portfolio, and low capital expenditures, all of which more than offset discretionary pension contributions and seasonal working capital investment. Fitch expects BBD to generate additional free cash flow in the second half despite higher expected capital expenditures. BRANDYWINE REALTY: Earns $400,000 in Quarter Ended Sept. 30 ----------------------------------------------------------- Brandywine Realty Trust disclosed its financial and operating results for the three and nine month periods ended Sept. 30, 2007. Net income totaled $400,000 in the third quarter of 2007, compared to a $1.4 million net loss in the third quarter of 2006. In both instances, the results are influenced by non-cash real estate depreciation and amortization charges which are added back in the calculation of funds from operations. Funds from operations totaled $62.0 million in the third quarter of 2007, compared to $63.7 million in the third quarter of 2006. Our FFO payout ratio for the third quarter of 2007 was 64.7%. Net income totaled $16.9 million for the nine months ended Sept. 30, 2007, compared to a $19.6 million net loss for the nine months ended Sept. 30, 2006. The company realized a $25.5 million gain on the disposition of discontinued operations during the nine months ended Sept. 30, 2007, compared to a $5.2 million gain during the comparable period in 2006. Funds from operations totaled $179.6 million for the nine months ended Sept. 30, 2007, compared to $175.9 million for the nine months ended Sept. 30, 2006. The company's FFO payout ratio for the first nine months of 2007 was 67.3%. "We are pleased with our third quarter performance," stated Gerard H. Sweeney, President and CEO of Brandywine Realty Trust. "We continue to experience occupancy gains in our core portfolio, even as we were able to execute a series of value-added termination transactions. We achieved better operating margins, realized improving rental rates and significantly reduced our capital expenditures related to leasing activities, all in line with our plan." At Sept. 30, 2007, the company's balance sheet showed total assets of $5.4 billion and total liabilities of $3.5 billion, resulting in a stockholders' equity of $1.7 billion. Equity as of Dec. 31, 2006, was $1.8 billion. Distributions On Sept. 12, 2007, the company's Board of Trustees declared a quarterly dividend distribution of $0.44 per common share that was paid on Oct. 19, 2007 to shareholders of record as of Oct. 5, 2007. The Board also declared quarterly dividend distributions of $0.46875 per 7.50% Series C Cumulative Redeemable Preferred Share and $0.460938 per 7.375% Series D Cumulative Redeemable Preferred Share that were paid on Oct. 15, 2007 to holders of record as of Sept. 30, 2007 of the Series C and Series D Preferred Shares, respectively. Share Repurchase Program The company is authorized to purchase an additional 539,200 common shares and may make repurchases from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share repurchase program does not contain any time limitation and does not obligate us to repurchase any shares. The company may discontinue the program at any time. About Brandywine Realty Trust Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust (NYSE: BDN), http://www.brandywinerealty.com/-- is one of the full-service, integrated real estate companies in the United States and is focused primarily on the ownership, management and development of class A, suburban and urban office buildings in selected markets aggregating approximately 42 million square feet. * * * Fitch assigned a 'BB+' rating on Brandywine Realty Trust's Preferred Stock. The outlook is positive. BROADHOLLOW FUNDING: Debt Payment Failure Spurs S&P's "D" Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of subordinated notes issued by Broadhollow Funding LLC to 'D' from 'CCC'. At the same time, Standard & Poor's also lowered its rating on the intercompany variable funding notes issued by Melville Funding LLC and held by Broadhollow Funding LLC to 'D' from 'BBB'. The downgrades reflect Broadhollow's and Melville's failure to pay the amounts outstanding on the subordinated and variable-funding notes, respectively, that became due following the automatic event of default that occurred 60 days after the Aug. 9, 2007 notice of American Home Mortgage Investment Corp.'s bankruptcy filing. Standard & Poor's rating analysis relied on the proceeds from asset sales and the receipt of payments under market value swaps to retire the outstanding subordinated and variable-funding notes. According to AHM, the full payment requested under the swaps was not received, resulting in insufficient funds being available to repay the Melville variable-funding notes. Standard & Poor's understands that one of the swap providers, Bank of America N.A., is disputing its obligations under its swap with Broadhollow, and that the matter is the subject of litigation between the parties. Nevertheless, the Broadhollow subordinated notes would have suffered a loss irrespective of the swap payments due to insufficient proceeds from the collateral sale. To date, the subordinated and variable-funding notes have not been repaid in full. On Aug. 6, 2007, Standard & Poor's placed its ratings on the subordinated notes from Broadhollow's series 2004-A and 2005-A on CreditWatch with negative implications, and on Oct. 9, 2007, lowered the ratings to 'CCC' from 'BBB'. Ratings Lowered Broadhollow Funding LLC Variable-rate subordinated notes series 2004-A Rating ------ To From -- ---- D CCC/Watch Neg Broadhollow Funding LLC Variable-rate subordinated notes series 2005-A Rating ------ To From -- ---- D CCC/Watch Neg Melville Funding LLC Variable funding notes series 2007-I Rating ------ To From -- ---- D BBB BRODERICK CDO: Moody's Junks Rating on $4 Mil. Class E Notes ------------------------------------------------------------ Moody's Investors Service placed these notes issued by Broderick CDO III Ltd. on review for possible downgrade: -- $318,750,000 Class A-3 Third Priority Senior Secured Floating Rate Delayed Draw Notes due 2050 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $56,250,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes due 2050 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $92,000,000 Class A-5 Fifth Priority Senior Secured Floating Rate Notes due 2050 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: -- $28,000,000 Class B Sixth Priority Senior Secured Floating Rate Notes due 2050 Prior Rating: Aa2 Current Rating: Baa3, on review for possible downgrade -- $10,000,000 Class C Seventh Priority Senior Deferrable Secured Floating Rate Notes due 2050 Prior Rating: A2 Current Rating: Ba3, on review for possible downgrade -- $10,000,000 Class D Eighth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 Prior Rating: Baa2 Current Rating: B3, on review for possible downgrade -- $4,000,000 Class E Ninth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 Prior Rating: Ba1 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. BRODERICK CDO: Moody's Lowers Ratings on Two Notes to Low-B ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Broderick CDO 2 Ltd. on review for possible downgrade: Class Descriptions: -- $42,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes due 2049 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $70,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes due 2049 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $67,600,000 Class B Fourth Priority Senior Secured Floating Rate Notes due 2049 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $23,500,000 Class C Fifth Priority Senior Deferrable Secured Floating Rate Notes due 2049 Prior Rating: A2 Current Rating: Baa2, on review for possible downgrade -- $8,000,000 Class D Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2049 Prior Rating: Baa2 Current Rating: Ba1, on review for possible downgrade -- $4,900,000 Class E Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes due 2049 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. CAIRN MEZZ: Moody's Lowers Ratings on Three Notes to Low-B ---------------------------------------------------------- Moody's Investors Service placed these notes issued by Cairn Mezz ABS CDO II Limited on review for possible downgrade: Class Descriptions: -- $450,000,000 Class A1-VF Senior Secured Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $30,000,000 Class A2A Senior Secured Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $120,000,000 Class A2B Senior Secured Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $37,500,000 Class B1 Senior Secured Floating Rate Notes Due 2047 Prior Rating: Aa2 Current Rating: Aa2, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $11,250,000 Class B2 Senior Secured Floating Rate Notes Due 2047 Prior Rating: Aa3 Current Rating: Baa1, on review for possible downgrade -- $33,750,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 Prior Rating: A2 Current Rating: Baa3, on review for possible downgrade -- $30,000,000 Class D Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade -- $16,875,000 Class E Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 Prior Rating: Ba1 Current Rating: B2, on review for possible downgrade -- $10,000,000 Combination Notes Due 2047 Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CALDECOTT CDO: Moody's Junks Ratings on Three Note Classes ---------------------------------------------------------- Moody's Investors Service placed these notes issued by Caldecott CDO 1, Ltd. on review for possible downgrade: Class Descriptions: -- $200,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2048 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $125,000,00 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2048 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: -- $65,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2048 Prior Rating: Aaa, on review for possible downgrade Current Rating: Baa1, on review for possible downgrade -- $40,500,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2048 Prior Rating: Aa2, on review for possible downgrade Current Rating: Baa3, on review for possible downgrade -- $16,500,000 Class C Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: A2, on review for possible downgrade Current Rating: Ba2, on review for possible downgrade -- $18,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: Baa2, on review for possible downgrade Current Rating: Caa2, on review for possible downgrade -- $10,500,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: Baa3, on review for possible downgrade Current Rating: Caa3, on review for possible downgrade Moody's also announced that it has downgraded these notes: -- $8,500,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048 Prior Rating: Ba1, on review for possible downgrade Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CHANCELLOR GROUP: Voluntary Chapter 11 Case Summary --------------------------------------------------- Lead Debtor: Chancellor Group, Inc. P.O. Box 742 Pampa, TX 79066-0742 Bankruptcy Case No.: 07-20512 Debtor-affiliate filing separate Chapter 11 petitions on October 30, 2007: Entity Case No. ------ -------- Gryphon Field Services, L.L.C. 07-20511 Debtor-affiliate filing separate Chapter 11 petitions on October 29, 2007: Entity Case No. ------ -------- Gryphon Production Co., L.L.C. 07-20510 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 Debtors' 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 Financial Condition of debtor-affiliate filing separate a Chapter 11 petition on October 29, 2007: Estimated Assets Estimated Debts ---------------- --------------- Gryphon Production Co., $1 Million to $1 Million to L.L.C. $100 Million $100 Million Financial Condition of debtor-affiliate filing separate a Chapter 11 petition on October 30, 2007: Estimated Assets Estimated Debts ---------------- --------------- Gryphon Field Services, $1 Million to $1 Million to L.L.C. $100 Million $100 Million The Debtors did not file lists of their largest unsecured creditors. CHRYSLER LLC: Overall October 2007 U.S. Sales Down 9% ----------------------------------------------------- Chrysler LLC reported U.S. sales for October 2007 of 145,316 units; down 9% compared to October 2006 with 159,586 units sold. "Growing concerns about the housing slump are showing up in consumers' expectations about future economic conditions as auto sales for the month of October continue below trend levels," Darryl Jackson, Vice President - U.S. Sales, said. "Today's company announcement on product changes reflects our customer- driven philosophy and current market conditions." Chrysler brand car sales were led by Sebring Sedan which posted sales of 5,015 units, up 86% versus 2006 and Sebring Convertible which finished the month with sales of 1,856 units, up 837% versus October 2006. Chrysler Town & Country sales rose 26% to 12,177 units versus October 2006 with 9,668 units. Jeep(R) brand sales were down 21% year-over-year, driven by planned fleet reductions. Jeep Wrangler and Wrangler Unlimited posted sales of 9,354 units, up 8% versus October 2006. Dodge brand car sales increased 18% over last year, aided by steady sales of the Dodge Avenger with 6,268 units delivered. "Given the competitive market, our approach is to provide substantial value to our consumers by offering consumer cash and lease cash on the majority of our 2008 models in November," Michael Keegan, Vice President - Volume Planning and Sales Operations, said. "We will also introduce 0% APR for 36 months on 2008 models through the end of the month." Chrysler finished the month with 469,426 units of inventory, or an 84-day supply. Inventory is down by 8% compared to October 2006 when it was at 508,724 units. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Chrysler is a unit of Cerberus Capital Management. * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services said its corporate credit ratings on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC remain on CreditWatch with positive implications, following the United Auto Workers' narrow approval of the new Chrysler-UAW labor contract. The ratings were placed on CreditWatch on Sept. 26, 2007, based on S&P's belief that Chrysler would reach a deal similar to the one General Motors Corp. reached with the UAW on that date. As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC (B/Negative/--), including a 'BB-' rating to the $5 billion "first-out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's $2 billion senior secured, second lien term loan in connection with the closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. CHRYSLER LLC: Plans Product and Plant Changes in North America -------------------------------------------------------------- Chrysler LLC disclosed that it would make volume-related reductions at several of its North American assembly and powertrain plants, and eliminate four products from its line-up. Shifts will be eliminated at five North American assembly plants which, combined with other volume-related manufacturing actions, will lead to a reduction of 8,500-10,000 additional hourly jobs through 2008. Additional actions include reductions of salaried employment by 1,000 and supplemental (contract) employment by 37%. The Company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume. The volume-related actions are in addition to 13,000 jobs eliminated by the three-year Recovery and Transformation Plan announced in February. The objectives of the RTP remain the same. "The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," Bob Nardelli, Chairman and Chief Executive Officer, said. "Annual industry volume (U.S. market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008." "We have to move now to adjust the way our company looks and acts to reflect a smaller market," Tom LaSorda, Vice Chairman and President, added. "That means a cost base that is right-sized and an appropriate level of plant utilization." Mr. LaSorda added that third-shift operations at assembly plants usually reflect a high demand after a product is launched. Three of the five plants affected by this action are the result of elimination of third shifts -- in Belvidere, Illinois; Toledo, Ohio, and Brampton, Ontario. In contract negotiations just concluded with the United Auto Workers union, Chrysler committed to spending more than $15 billion on products, plants and engineering during the life of the contract through 2011. The company reported that it will eliminate four models through 2008, including Dodge Magnum, the convertible version of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango. "These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products," Jim Press, Vice Chairman and President, added. "Further, these product actions are all in response to dealer requests." Manufacturing Actions Chrysler will eliminate shifts at five assembly plants, and take further volume-related actions at several other facilities. It will: * drop third-shift operations at Belvidere Assembly Plant in Illinois in the first quarter 2008. Belvidere builds the Dodge Caliber, Jeep Patriot and Jeep Compass. * drop second-shift operations at its Jefferson North Assembly Plant in Detroit, Michigan, in the first quarter 2008. It's expected that the plant will return to two shifts in first quarter 2010 with the introduction of the next generation of sport-utility vehicles. The addition of a third shift will remain an option, depending on market demand. Jefferson North builds the Jeep Grand Cherokee and Jeep Commander. * drop third-shift operations at the Toledo North Assembly Plant in Ohio in the first quarter 2008. Toledo North builds the Jeep Liberty and Dodge Nitro. * drop third-shift operations at Brampton Assembly Plant in Ontario in first quarter 2008. Brampton will build the Chrysler 300, Dodge Charger and Dodge Challenger. The Dodge Magnum will be discontinued. * drop second shift operations at Sterling Heights Assembly Plant in Michigan in first quarter 2008. Sterling Heights builds the Dodge Avenger and Chrysler Sebring sedans and Chrysler Sebring Convertible. * in addition, Mack Avenue Engine Plant II in Detroit, Michigan, will return to a traditional two-shift/two-crew operation in the first quarter 2008 after operating on a three-crew, two-shift, 120-hour-per-week (3/2/120) schedule. Mack II builds the 3.7-liter V-6 engine. "I'm confident that we have the right team in place and a business plan that doesn't need to be re-written," concluded Mr. Nardelli. "Like all good plans, the RTP has built-in flexibility that allows us to stay one step ahead of market change. And that is the way to long-term sustained profitability." About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Chrysler is a unit of Cerberus Capital Management. * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services said its corporate credit ratings on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC remain on CreditWatch with positive implications, following the United Auto Workers' narrow approval of the new Chrysler-UAW labor contract. The ratings were placed on CreditWatch on Sept. 26, 2007, based on S&P's belief that Chrysler would reach a deal similar to the one General Motors Corp. reached with the UAW on that date. As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC (B/Negative/--), including a 'BB-' rating to the $5 billion "first-out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's $2 billion senior secured, second lien term loan in connection with the closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. CITGO PETROLEUM: Fitch Holds BB Issuer Default Rating ----------------------------------------------------- Fitch Ratings affirmed these CITGO Petroleum Corp. ratings: -- Issuer Default Ratings at 'BB'; -- $1.15 billion senior secured credit facility at 'BBB-'; -- $700 million secured term-loan B at 'BBB-'; -- Fixed-rate industrial revenue bonds at 'BBB-'. The rating outlook for CITGO is stable. The main drivers behind the rating include: the continued strength of U.S. refining fundamentals; the competitiveness of CITGO's three heavy-conversion capacity refineries; and record-high market valuations for refining assets, which enhances the value of CITGO's secured facilities. Ongoing concerns revolve primarily around the ownership of CITGO by Petroleos de Venezuela S.A (PDVSA, IDR 'BB-'; Outlook Negative), the national oil company of Venezuela. CITGO currently sends most of its excess cash to its parent, which could limit CITGO's financial flexibility during a downturn. For the twelve months ending June 30, 2007, CITGO paid $2.42 billion in distributions to its parent. In May, CITGO amended its credit facility to allow for a cumulative total of $4 billion in distributions to parent PDV America from asset sales, up from the previous limit of $3 billion. CITGO's secured facilities are backed by the company's current assets (accounts receivable and inventories) as well as the Lake Charles, Louisiana and Corpus Christi, Texas refineries. Covenants include a maximum debt to capitalization of 55% and a minimum EBITDA to interest coverage of 3x to 1x. The agreements also contain a carve-out provision to allow for additional debt totaling the greater of $200 million or 10% of CITGO's net worth as well as a $250 million accounts receivable securitization program. CITGO's refineries can process a high percentage of heavy sour crude, which typically sells at a substantial discount to lighter crudes such as benchmark West Texas Intermediate. CITGO's discounts, however, are limited somewhat by the crude contracts with Venezuela which account for a notable portion of CITGO's crude throughput. CITGO is one of the largest independent crude oil refiners in the U.S. with three modern, highly complex crude oil refineries and two asphalt refineries. Following the sale of its stake in the CITGO-Lyondell joint-venture refinery in Houston, CITGO now owns 859,000 barrels per day of crude refining capacity. CITGO branded fuels are marketed through more than 8,200 independently owned outlets. CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. CMS ENERGY: Fitch Lifts Issuer Default Rating to BB+ ---------------------------------------------------- Fitch Ratings upgraded the ratings for CMS Energy Corp. and Consumers Energy Co. as follows: CMS Energy Corp. -- Issuer Default Rating to 'BB+' from 'BB-'; -- Senior Secured Bank Loan to 'BBB-' from 'BB+'; -- Senior Unsecured Debt to 'BB+' from 'BB-'; -- Preferred Stock to 'BB' from 'B'. CMS Energy Trust I -- Preferred Stock to 'BB' from 'B'. Consumers Energy Co. -- IDR to 'BBB-' from 'BB+'; -- Senior Secured Debt to 'BBB+' from 'BBB'; -- Senior Unsecured Debt to 'BBB' from 'BBB-'; -- Preferred Stock to 'BBB-' from 'BB+'. Consumers Financing I -- Preferred Stock to 'BBB-' from 'BB+'. The rating outlook on CMS and Consumers is stable and the Rating Watch Positive designations have been removed. CMS and Consumers were originally placed on Rating Watch Positive on Aug. 6, 2007. The new ratings reflect CMS' reduced business risk profile as it has exited its international businesse