T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, November 6, 2007, Vol. 11, No. 263 Headlines ACURA PHARMA: Posts $2.5 Million Net Loss in Qtr. Ended Sept. 30 ADAMS SQUARE: Moody's Junks Ratings on Six Note Classes AFFILIATED COMPUTER: S&P Keeps 'BB' Ratings Under Negative Watch ALLEGHENY ENERGY: Earns $115 Million in Quarter Ended September 30 ALLTEL CORP: Moody's Places Corporate Family Rating at B2 APARTMENT INVESTMENT: Paying $.60/Share Dividend on November 30 APARTMENT INVESTMENT: Posts $2.3 Million Net Loss in Third Quarter AUDIOVOX CORP: Unit Inks Pact Buying Technuity Inc. for $16.5 Mil. BROOKLYN STRUCTURED: Poor Debt Quality Cues Moody's Ratings Review CAP CANA: Fitch Holds "B" Rating on $250 Million Senior Notes COSINE COMMS: Earns $127,000 in Three Months Ended September 30 COUNTRYWIDE HOME: Fitch Holds Low-B Ratings on Three Cert. Classes DADE BEHRING: Siemens Gets 94% Tenders for Common Stock Offer DELNET FINANCIAL: Case Summary & Largest Unsecured Creditor DELPHI CORP: Postpones Disclosure Statement Hearing DELUXE CORP: Earns $32.2 Million in Quarter Ended September 30 DR HORTON: S&P Cuts Corporate Credit Rating to BB+ from BBB- DRESSER-RAND GROUP: Earns $21.3 Million in Third Quarter of 2007 DRESSER-RAND GROUP: Inks $100 Million Alliance Pact with Repsol E*TRADE: Moody's Junks Ratings on Two Note Classes EAST VALLEY: Moody's Rates $275 Million Senior Notes at B1 EAST VALLEY: S&P Lowers Corporate Credit Rating to B from B+ ENRON CORP: Standard Chartered Wants Additional $2.7 Million FAIRPOINT COMMS: Expects to Complete Verizon Merger on Jan. 31 FAIRPOINT COMMS: Posts $5.2 Mil. Net Loss in Qtr. Ended Sept. 30 FEDDERS CORP: Court Approves Brown Rudnick as Committee's Counsel FEDDERS CORP: Panel Hires Greenberg Traurig as Delaware Counsel FEDDERS CORP: Panel Hires Lowenstein Sandler as Special Counsel FIRST HORIZON: Moody's Takes Rating Actions on 11 Deals FIRST MAGNUS: Can Hire Osborn Maledon as Special Counsel FIRST MAGNUS: Court Sets December 3 as Claims Filing Deadline FIRST MAGNUS: Repo Claimants Can Sell Mortgages Under Amended Plan FORD MOTOR: October Sales Up 6% in Canada; Truck Sales Up 15% FORD MOTOR: Reaches Tentative National Labor Agreement with UAW FORD MOTOR: UAW Ford National Council Urges Pact Ratification FREEPORT-MCMORAN: Closes $735 Million Phelps Dodge Sale Deal FREMONT GENERAL: Failed Ford Deal Cues Fitch to Cut Ratings GENERAL CABLE: Closes Phelps Dodge Sale Deal with Freeport-McMoRan GERDAU AMERISTEEL: 110 Million Shares Offering Gets Regulatory OK GULEN ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors HEALTH NET: Moody's Holds Ba2 Senior Unsecured Debt Rating INNER HARBOR: S&P Lifts Ratings on Two Note Classes to BB- INTERSTATE BAKERIES: Files Plan Based on Funding Commitment ISCHUS SYNTHETIC: Moody's Junks Ratings on Two Note Classes JUPITER HIGH-GRADE: Poor Debt Quality Cues Moody's to Cut Ratings KLEROS PREFERRED: Moody's Cuts Rating on Class D Notes to Ba2 KROPPAN GROUP: Case Summary & 18 Largest Unsecured Creditors KYPHON INC: CompleteS $4.2 Billion Merger Deal with Medtronic Inc. KYPHON INC: Completed Merger Deal Cues S&P to Withdraw Ratings LENNAR CORP: Weakened Credit Prompts S&P to Cut Ratings to BB+ LONDON FOG: Court Approves Amended Joint Disclosure Statement LONDON FOG: Court Sets Dec. 13 Hearing to Confirm Amended Plan M FABRIKANT: Disclosure Statement Hearing Scheduled Today MAG 7: Voluntary Chapter 11 Case Summary MASHANTUCKET WESTERN: S&P Lowers Issuer Credit Rating to BB+ MATTRESS GALLERY: To Reorganize with DIP Financing Plan MCKINLEY FUNDING: Moody's Reviews Ba1 Rating on 18,000 Shares MELLON RESIDENTIAL: Fitch Junks Rating on Class B4 Certificates MERRILL LYNCH: Fitch Holds BB Rating on Class B-3 Certificates MERRILL LYNCH: S&P Lowers Ratings on Five Certificate Classes MOSAIC CO: Fitch Lifts Issuer Default Rating to BB+ MYSTIQUE ENERGY: Intends to Merge with a Private Company NATIONAL EASTERN: Brings In Anthony Novak as Bankruptcy Counsel NATIONAL EASTERN: Hires Edward O'Donnell as Special Counsel NAVIOS MARITIME: Arm Amends Registration for IPO of Common Units NEWFIELD EXPLORATION: Earns $83 Million in Quarter Ended Sept. 30 NEWLAND INTERNATIONAL: Fitch Rates Senior Secured Notes at BB NORMA CDO: Moody's Junks Ratings on Four Note Classes OPPENHEIMER HOLDINGS: To Buy CIBC U.S. Capital Markets Businesses PACIFIC INSULATION: Case Summary & 20 Largest Unsecured Creditors PAMPELONNE CDO: Moody's Junks Ratings on Three Note Classes PHARMED GROUP: Proposes Procedures for Sale of Unit's Assets PHELPS DODGE: Completes $735 Million Asset Sale to General Cable PMA CAPITAL: Moody's Affirms Ba3 Senior Debt Rating POPE & TALBOT: Superior Court OKs Closure of Business Operations POPE & TALBOT: May Reject Leases Subject to 7 Days Written Notice POPE & TALBOT: Seeks to Obtain Up to $15,000,000 in DIP Financing PRINCETON SKI: Case Summary & 20 Largest Unsecured Creditors PUGET ENERGY: Inks Merger Pact with Infrastructure Investors PULTE HOMES: S&P Lowers Ratings to BB+ with Negative Outlook QUAKER FABRIC: Benesch Friedlander OK'd as Committee Local Counsel QUAKER FABRIC: Committee Can Hire BDO Seidman as Accountants QUAKER FABRIC: Committee Can Hire Shumaker Loop as Counsel QUALITY HOME: Wants AICCO Premium Financing Pact Approved QUANTA SERVICES: Moody's Withdraws Ba3 Corporate Family Rating QMED INC: Reports Insufficient Capital; Two Directors Resign R&G FINANCIAL: Closes $288MM Crown Bank Stake Sale to Fifth Third R&G FINANCIAL: Completes Restatement of 2002-2004 Annual Reports R&G FINANCIAL: Dividend Payments on Pref. Stock & Sec. Approved RA HENDRICKSON: Voluntary Chapter 11 Case Summary REALOGY CORP: Highly Leveraged Capital Cues S&P to Cut Rating RIVIERA HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $41.9 Mil. ROCKFORD PRODUCTS: Can Hire LeBoeuf Lamb as General Counsel ROCKFORD PRODUCTS: Court OKs BlackEagle as "Stalking Horse" Bidder RODNEY M. LUDINGTON: Case Summary & 16 Largest Unsecured Creditors SAGITTARIUS CDO: Moody's Junks Ratings on Six Note Classes SAINTS MEMORIAL: Moody's Holds "Ba1" Rating on Series 1993A Bonds SIERRA PACIFIC: Paying $0.08/Share Cash Dividend on December 12 SL COCKRELL: Voluntary Chapter 11 Case Summary SOURCE ENTERPRISES: Clear Thinking Named as Liquidation Trustee STACK 2007-2: Moody's Cuts Ratings on Three Note Classes to Low-B STACK 2006-2: Moody's Junks Ratings on Three Note Classes STACK 2007-1: Moody's Junks Ratings on Two Note Classes STANDARD PACIFIC: Quarterly Loss Cues S&P's Rating Downgrades STELCO INC: Compeletes Arrangement Deal With U.S. Steel Unit STUDENT FINANCE: Pepper Hamilton Can Settle Civil Case Under Seal TIMBERWEST FOREST: Posts $28.1MM Net Loss in Qtr. Ended Sept. 30 TIMBERWEST FOREST: S&P Withdraws Rating at Company's Request TIMKEN CO: Declares Quarterly Dividend of 17 Cents Per Share TIMOTHY BROWN: Voluntary Chapter 11 Case Summary UNITEDHEALTH GROUP: Unit to Buy Fiserv Health for $775 Mil. Cash WEBSTER CDO: Moody's Junks Ratings on Eight Note Classes WELLCARE HEALTH: Fraud Allegations Are Being Tied to Gov't. Probe WELLS FARGO: Fitch Took Rating Actions on Six Deals WILLIAMS PARTNERS: Williams Deal Cues Moody's to Review Ratings WINDSOR QUALITY: Moody's Holds Ba3 Corporate Family Rating WIRELESS NETWORK: Case Summary & 20 Largest Unsecured Creditors XELR8 HOLDINGS: Posts $355,279 Net Loss in 3rd Qtr. Ended Sept. 30 * Clear Thinking, Joseph Myers Appointed as Liquidation Trustee * Finkelstein Thompson Conducts Probe on Office Depot Claims * Large Companies with Insolvent Balance Sheets ********* ACURA PHARMA: Posts $2.5 Million Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Acura Pharmaceuticals Inc. reported Friday a net loss of $2.5 million for the third quarter ended Sept. 30, 2007, compared to a net loss of $3.1 million for the same period in 2006. Included in the 2007 and 2006 quarterly results are non cash compensation expenses of $200,000 and $900,000, respectively, relating to the company's issued and outstanding stock options and restricted stock units. Additionally, the 2007 three month results include non-cash expenses of $800,000 for losses on common stock warrants and amortization of debt discount relating to the company's bridge loans. For the nine months ended Sept. 30, 2007, the company had a net loss of $13.8 million compared to a net loss of $9.9 million in 2006. Included in the 2007 and 2006 nine month results are a non cash compensation expense of $900,000 and $5.0 million, respectively, primarily relating to the company's issued and outstanding stock options and restricted stock units. Additionally, the 2007 nine month results include non-cash expenses of $8.1 million for losses on common stock warrants and fair value changes in conversion features, and amortization of debt discount relating to the company's bridge loans. At Sept. 30, 2007, the company's consolidated balance sheet showed $14.6 million in total assets, $5.6 million in total liabilities, and $9.0 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?24c9 Going Concern Doubt BDO Seidman LLP in Chicago, expressed substantial doubt about Acura Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. At Sept. 30, 2007, the company had cash and cash equivalents of $12.0 million, working capital of $13.1 million, and an accumulated deficit of $331.1 million. Historically, the company has incurred significant losses. About Acura Pharmaceuticals Headquartered in Palatine, Illinois, Acura Pharmaceuticals Inc. (OTC BB: ACUR) -- http://www.acurapharm.com/-- is a specialty pharmaceutical company engaged in research, development and manufacture of innovative Aversion(R)(abuse deterrent) Technology and related product candidates. ADAMS SQUARE: Moody's Junks Ratings on Six Note Classes ------------------------------------------------------- Moody's Investors Service downgraded seven classes of notes issued by Adams Square Funding I Ltd., with four classes left on review for further possible downgrade. The notes affected by today's rating action are: -- $342,000,000 Super Senior Swap Prior Rating: Aaa Current rating: Ba2 on review for possible downgrade -- $48,000,000 Class A Senior Floating Rate Notes Due December 2051 Prior Rating: Aaa Current rating: Caa1 on review for possible downgrade -- $51,000,000 Class B-1 Senior Floating Rate Notes Due December 2051 Prior Rating: Aa2 Current rating: Caa2 on review for possible downgrade -- $10,000,000 Class B-2 Senior Floating Rate Notes Due December 2051 Prior Rating: Aa3 Current rating: Caa2 on review for possible downgrade -- $15,250,000 Class C Floating Rate Deferrable Notes Due December 2051 Prior Rating: A2 Current rating: Ca -- $16,000,000 Class D Floating Rate Deferrable Notes Due December 2051 Prior Rating: Baa2 Current rating: Ca -- $5,000,000 Class E Floating Rate Deferrable Notes Due December 2051 Prior Rating: Ba1 Current rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Oct. 12, 2007 of an event of default caused by a failure of the Class A Overcollateralization Ratio to equal or exceed 100% per Section 5.1(h) of the Indenture, dated Dec. 15, 2006. Adams Square Funding I, Ltd. is a hybrid collateralized debt obligation backed primarily by a portfolio of RMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. A high number of recent ratings downgrades on the underlying portfolio magnified the impact of the ratings-based haircuts, causing the Class A Overcollateralization Ratio to fail to meet the required level. Upon an event of default in this transaction, a majority of the controlling class is entitled to exercise certain remedies under the indenture. Liquidation of the underlying portfolio is one possible remedy; however, it is not clear at this time whether the controlling class will choose to exercise this option. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by the controlling class. Because of this uncertainty, the Super Senior Swap, Class A, Class B-1, Class B-2, Class C, and Class D Notes remain on review for possible downgrade pending the receipt of definitive information. AFFILIATED COMPUTER: S&P Keeps 'BB' Ratings Under Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services kept its 'BB' corporate credit and senior secured ratings on Dallas-based Affiliated Computer Services Inc. on CreditWatch with negative implications, where they were placed on March 20, 2007. The company announced that five independent directors have agreed to resign from ACS' board at the request of its chairman. This follows the withdrawal of the $6.2 billion buyout offer by private equity firm Cerberus Capital Management. "We will continue to monitor developments surrounding the dispute within the company's board of directors," said Standard & Poor's credit analyst Phil Schrank. "Additionally, we will discuss with management strategic alternatives to enhance shareholder value." ALLEGHENY ENERGY: Earns $115 Million in Quarter Ended September 30 ------------------------------------------------------------------ Allegheny Energy Inc. reported net income of $115.0 million on operating revenues of $846.6 million for the third quarter ended Sept. 30, 2007, compared with net income of $110.2 million on operating revenues of $816.6 million in 2006. Net income for the third quarter of 2007 increased by $21.0 million compared with adjusted net income of $94.0 million for the same period in 2006. There were no adjustments for the third quarter of 2007. The adjusted results for the third quarter of 2006 exclude a $16.7 million (after-tax) benefit associated with a change in Pennsylvania tax law, and a $500,000 (after-tax) loss from discontinued operations. Key factors contributing to the improved results include: - Operating revenues increased by $30.0 million compared to the third quarter of 2006, reflecting higher market prices, higher generation rates in Pennsylvania and increased retail sales, partially offset by lower generation output. - Fuel expense increased by $14.5 million, largely due to higher coal prices. - Purchased power and transmission expense decreased by $8.1 million, primarily due to the expiration of a power sale agreement associated with the former Ohio territory, partially offset by higher costs to purchase power to serve Virginia customers. - Operations and maintenance expense increased by $4.1 million, reflecting a contingent consulting fee. - Other income increased by $7.0 million, reflecting a gain related to the company's La Paz, Arizona, real estate. - Interest expense decreased by $6.8 million. - Income taxes increased by $9.6 million compared to adjusted income tax expense for 2006, largely due to higher pre-tax income. EBITDA for the third quarter of 2007 was $308.6 million, an increase of $22.3 million compared to the same quarter of the prior year. "Our solid financial performance continued in the third quarter," said Paul J. Evanson, chairman, president and chief executive officer of Allegheny Energy. "Favorable market prices, higher generation rates and increased retail sales were key drivers of our strong results." At Sept. 30, 2007, the company's consolidated balance sheet showed $9.5 million in total assets, $7.1 million in total liabilities, $12,573 in minority interest, and $2.4 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?24c3 About Allegheny Energy Headquartered in Greensburg, Pennsylvania, Allegheny Energy Inc. (NYSE: AYE) -- http://www.alleghenyenergy.com/-- owns and operates generating facilities and delivers electric service to over 1.5 million customers in Pennsylvania, West Virginia, Maryland and Virginia. * * * As reported in the Troubled Company Reporter on Sept. 11, 2007, Moody's Investors Service upgraded the long-term ratings of Allegheny Energy Inc. (senior unsecured bank facility to Ba1 from Ba2) and its generation subsidiaries, Allegheny Energy Supply Corporation LLC (senior unsecured to Ba1 from Ba3) and Allegheny Generation Company (senior unsecured to Baa3 from Ba3), concluding a review for possible upgrade that commenced on Aug. 8, 2007. The rating outlook for AYE, AYE Supply and AGC is stable. ALLTEL CORP: Moody's Places Corporate Family Rating at B2 --------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and a SGL-2 Speculative Grade Liquidity Rating to Alltel Corporation. In addition, Moody's assigned a Ba3 rating to the senior secured facilities and a Caa1 rating to the senior unsecured facilities related to the acquisition of Alltel Communications Inc. The new rating assignments are related to the pending acquisition of Alltel by TPG Capital and Goldman Sachs Capital Partners. The outlook for the new ratings is stable. The ratings are subject to Moody's review of final documentation. The A2 ratings on the existing senior unsecured notes of Alltel Corporation remain on review for downgrade pending the acquisition's closing. Upon successful closing of the company's acquisition by the consortium of private equity investors, Moody's expects that the review for possible downgrade will be concluded with a downgrade of the rating for the $2.3 billion existing notes to Caa1 and a withdrawal of ratings on $400 million of notes, for which a tender offer has commenced. Alltel's B2 corporate family rating is constrained by the considerable financial leverage pro forma for the buyout and an expectation that Alltel's credit metrics, including free cash flow to debt, will remain weak for at least eighteen to twenty-four months following the transaction's close. This reduced financial flexibility could impair the company's ability to compete as effectively as it has in the past, a risk that is further exacerbated by the maturation of the industry. The high leverage will require Alltel to sustain its strong operating margins and revenue growth to generate sufficient free cash flow to reduce debt. Moody's estimates that the company's total adjusted debt to EBITDA will approximate 8x at closing (anticipated to occur in November 2007) and will decline slightly by year-end 2008, mainly due to earnings growth. The main factors that help to mitigate the company's high leverage and weak financial metrics proforma for after the buyout are the flexibility of the proposed capital structure which provides Alltel with the option to defer cash interest related to its $2.5 billion of PIK toggle debt, the relatively long-dated maturity of Alltel's debt obligations, and a $1.5 billion senior secured revolving credit facility which is expected to remain undrawn thereby providing the company with adequate liquidity to cover its near term obligations. The company's strong market position, robust operating performance, and the fact that the majority of the company's existing management team (which has a long and strong record of success) is expected to remain in place, are also credit positives. In terms of liquidity, Alltel is expected to have full availability of its $1.5 billion committed senior secured revolving credit facility at closing as well as approximately $550 million of cash on hand. In addition, the company is expected to have a $750 million delayed draw term loan to fund its participation in the upcoming 700-MHz auction should the company choose to partake. The senior secured credit facilities have a net senior secured debt to EBITDA financial maintenance covenant, but Moody's believes there is substantial cushion (set at a ratio of 6.75x net senior secured debt to EBITDA) and that the covenant will not be limiting for quite some time. The Ba3 rating on the company's senior secured facilities, 2 notches above the Corporate Family rating, reflects its priority in the capital structure and a loss given default of LGD 2 (27%). The senior secured facilities are secured by a first lien pledge of substantially all of the domestic assets and stock of the company's subsidiaries. The Caa1 rating on the company's senior unsecured facilities, 2 notches below the Corporate Family rating, reflects their effective subordination to the secured debt and a loss given default of LGD 5 (79%) on the $7.7 billion senior unsecured committed bridge facility. Moody's notes that the company's existing senior unsecured notes hold the most junior position in the company's capital structure because of their issuance at the Holding company. Alltel's SGL-2 speculative grade liquidity rating is based primarily on the cash balance and the availability of external credit capacity, the headroom under the credit facilities' financial covenants, and PIK option on a portion of the unsecured debt. The SGL rating is somewhat constrained by Moody's expectation that the company will be modestly free cash flow negative in the first year following the acquisition and by the lack of other alternate sources of liquidity. The stable outlook reflects Moody's expectations that the company will achieve modest revenue and EBITDA growth over the next twelve-to-eighteen months as surging data usage offsets declines in voice ARPU and that initiatives designed to improve Alltel's cost structure and optimize its capital deployment will be quickly successful. Nevertheless, cash flow, financial leverage and interest coverage are expected to remain weak for the rating category during this period. Moody's notes that execution risk associated with cost reduction plans may be elevated as a result of the new ownership structure and high financial leverage. Given Alltel's high leverage and weak credit metrics pro forma for the buyout, downward ratings pressure could develop with a moderate decline in profitability or any operational shortfall. Moody's notes that should the company utilize what we estimate is its entire capacity in the upcoming 700-MHz spectrum auction, scheduled for January 2008, its balance sheet will be further weakened and its liquidity pressured. Weak credit metrics make a ratings upgrade unlikely in the near term. Over the intermediate term, the ratings could be upgraded if Alltel is able to achieve favorable revenue, earnings and free cash flow growth such that debt reduction could be expected to steadily accelerate. These ratings are assigned: -- Corporate Family Rating (to Alltel Corporation) -- B2 -- Probability of Default Rating (to Alltel Corporation) -- B2 -- Speculative Grade Liquidity Rating (to Alltel Corporation) -- SGL-2 -- $14 billion Senior Secured Term Loan B due 2015 (to Alltel Communications) -- Ba3, LGD2 (27%) -- $1.5 billion Senior Secured Revolving Credit Facility due 2013 (to Alltel Communications) - Ba3, LGD2 (27%) -- $7.7 billion Senior Unsecured Committed Bridge Facility (to Alltel Communications) -- Caa1, LGD 5 (79%) This rating remain on review for possible downgrade: -- $2.7 billion Senior Unsecured Notes (at Alltel Corporation) -- A2 These ratings are withdrawn: -- Issuer Rating (Alltel Corporation) -- A2 -- Short Term Rating (Alltel Corporation) -- Prime-1 -- Senior Unsecured Debt Securities Shelf (at Alltel Corporation) --(P)A2 The total transaction value is about $29 billion including a $14 billion Term Loan B (49% of total LBO financing sources), a committed bridge financing for $7.7 billion in total debt instruments (27%), $2.7 billion of existing senior unsecured notes (at Alltel Corporation, 8%), and $4.6 billion (16%) of common equity contributed by equity sponsors TPG and Goldman. Headquartered in Little Rock, Arkansas, Alltel Corporation operates the nation's largest wireless network (by geography), which delivers voice and data services to more than 12 million customers in 35 states within the United States. The company operates predominately in tier 2, tier 3 and rural markets and is a significant roaming partner to the 4 largest wireless providers (AT&T Mobility, Verizon Wireless, Sprint Nextel, and T-Mobile) mainly because of its extensive rural coverage. In July 2006, Alltel completed the spin-off of its wireline telecommunications business and the merger of that wireline business with Valor Communications. APARTMENT INVESTMENT: Paying $.60/Share Dividend on November 30 --------------------------------------------------------------- Apartment Investment and Management Company disclosed last week that its Board of Directors declared a regular quarterly dividend of $0.60 per share on its Class A Common Stock for the quarter ended Sept. 30, 2007. The dividend is payable on Nov. 30, 2007, to shareholders of record on Nov. 16, 2007. Headquartered in Denver, Colorado, Apartment Investment and Management Company (NYSE: AIV) -- http://www.aimco.com/-- is a real estate investment trust that owns and operates a geographically diversified portfolio of apartment communities through 19 regional operating centers. Aimco, through its subsidiaries and affiliates, is the largest owner and operator of apartment communities in the United States with 1,194 properties, including 206,217 apartment units, and serves approximately 750,000 residents each year. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Fitch Ratings affirmed Apartment Investment & Management Company's $823.5 million preferred stock at 'BB+'. The Rating Outlook is Stable. APARTMENT INVESTMENT: Posts $2.3 Million Net Loss in Third Quarter ------------------------------------------------------------------ Apartment Investment and Management Company reported Friday a net loss of $2.3 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $24.9 million in the third quarter of 2006. The reduction in net loss in the third quarter 2007 resulted from various items including: a change in accounting for tax credit arrangements in the third quarter 2006, which resulted in a non-recurring charge to earnings of $14.4 million, higher property net operating income of $3.9 million, and lower general and administrative expenses of $3.1 million. Funds from Operations was $80.2 million compared with $74.3 million in the third quarter 2006. Adjusted funds from operations was $55.9 million, compared with $57.6 million in the third quarter of 2006. AFFO includes deductions for capital replacement expenditures in the third quarter 2007 and the third quarter 2006, respectively. Chairman and chief executive officer Terry Considine comments: "Aimco's property operations team achieved solid results with same-store occupancy of 94.8%, year-over-year revenue growth of 4.2% and NOI growth of 4.9%. Most of our markets performed well and met our expectations; however, Florida was softer than we had anticipated. Our redevelopment team currently has 53 conventional projects underway and is on track to invest a total of $300 million dollars in conventional redevelopment projects in 2007 and a similar amount next year." Debt Activity During the third quarter 2007, Aimco closed 59 property loans generating gross proceeds of $600.3 million at a weighted average interest rate of 6.26%. This included refinancing $297.6 million in existing mortgage loans, reducing the average interest rate from 6.64% to 6.43%. After repayment of existing property debt, transaction costs and distributions to limited partners, Aimco's share of net proceeds was $258.3 million. At quarter-end, Aimco's corporate debt balance was $550.0 million, up from $540.0 million at year-end 2006, and carried a weighted average interest rate of 6.93%. The balance on Aimco's revolving credit facility was $75.0 million and total dry powder at quarter end was more than $600.0 million. During the third quarter 2007, the company amended its corporate credit agreement to increase its revolving debt capacity by $200.0 million with the same maturity and pricing terms as the existing $450.0 million revolving credit facility. The amendment also provided for an additional $75.0 million term loan that bears interest at a rate of LIBOR plus 1.375%, which is 12.5 basis points less than the existing $400.0 million term loan. The proceeds from the additional term loan were used to repay outstanding revolving loans. As of Sept. 30, 2007, Aimco had $7.3 billion of consolidated debt outstanding (excluding other borrowings), of which $5.6 billion was fixed rate mortgage debt and $1.7 billion was floating rate debt. The floating rate debt included $550.0 million of corporate debt, $704.6 million of tax-exempt bonds, and $485.5 million of other property loans. In addition, Aimco had $100.0 million of floating rate preferred stock. Other borrowings of $65.0 million at quarter-end consisted primarily of unsecured notes payable and obligations under sale and leaseback arrangements accounted for as financings. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $10.52 billion in total assets, $8.08 billion in total liabilities, and $403 million in minority interests, and $2.04 billion in total shareholders' equity. Repurchase of Common Stock During the third quarter 2007, Aimco repurchased approximately 1.2 million shares of its Class A Common Stock at an average price of $41.71 per share for a total cost of $49.1 million, bringing year-to-date 2007 common stock repurchases to 3.4 million shares at an average price of $51.27 per share for a total cost of $175.4 million. Redemption of Preferred Stock On Sept. 30, 2007, Aimco redeemed the 1,904,762 outstanding shares of its privately held 8.1% Class W Cumulative Convertible Preferred Stock. The aggregate redemption price of $104.0 million included a redemption price per share of $53.55 (102% of the $52.50 per share liquidation preference) plus approximately $1.06 per share of accumulated, accrued and unpaid dividends through the redemption date. About Apartment Investment Headquartered in Denver, Colorado, Apartment Investment and Management Company (NYSE: AIV) -- http://www.aimco.com/-- is a real estate investment trust that owns and operates a geographically diversified portfolio of apartment communities through 19 regional operating centers. Aimco, through its subsidiaries and affiliates, is the largest owner and operator of apartment communities in the United States with 1,194 properties, including 206,217 apartment units, and serves approximately 750,000 residents each year. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Fitch Ratings affirmed Apartment Investment & Management Company's $823.5 million preferred stock at 'BB+'. The Rating Outlook is Stable. AUDIOVOX CORP: Unit Inks Pact Buying Technuity Inc. for $16.5 Mil. ------------------------------------------------------------------ Audiovox Corporation's subsidiary, Audiovox Accessories Corporation, has signed a definitive agreement to acquire Technuity Inc. for a purchase price of $16.5 million, plus the repayment of $4 million of debt and an earn-out if certain sales and gross profit margin targets are met. "This latest acquisition will further strengthen our accessories product lines and core offerings to our customers," Patrick Lavelle, president and CEO of Audiovox Corporation stated. "Energizer's highly recognized consumer brands -- Energizer, known for the 'Energizer Bunny' and Eveready brand -- hold the top two market positions in every category in which it competes and coupled with our previous acquisitions of Terk, RCA and Oehlbach, make Audiovox a significant player in the accessories market." "We expect this deal to add in excess of $30 million to our annual sales and at higher margins than our core business," Mr. Lavelle continued. "This business is growing and will be accretive to our bottom line. We intend to continue to pursue strategic acquisitions within our core competencies that can generate higher and sustainable returns for our shareholders over the long-term." The company expected to close this acquisition on Nov. 1, 2007. About Technuity Inc. Headquartered in Indianapolis, Indiana, Technuity Inc. -- http://www.technuity.com/-- is into battery and power products industry. The company designs, manufactures, and markets licensed accessories products, including batteries, carrying cases, and accessoriescfor imaging, computing, communication, and entertainment devices. Technuity is also the exclusive licensee of the Energizer brand in North America, marketing Energizer- branded products for rechargeable batteries and battery packs for camcorders, cordless phones, digital cameras, and DVD players, well as for power supply systems, automatic voltage regulators and surge protectors. The Company has built a blue chip client base in the Big Box retail channel, supplying its products to Best Buy, Circuit City, and Wal-Mart, among others. About Audiovox Headquartered in Hauppauge, New York, Audiovox Corp. (Nasdaq: VOXX) -- http://www.audiovox.com/-- is a supplier and value added service provider in the consumer electronics industry. The company conducts its business through subsidiaries and markets mobile and consumer electronics products both domestically and internationally under several of its own brands. It also functions as an original equipment manufacturer supplier to a wide variety of customers, through several distinct distribution channels. * * * In October 1997, Moody's Investors Service placed Audiovox Corp.'s long term corporate family and bank loan debt ratings at 'B1'. Both ratings still hold to date. BROOKLYN STRUCTURED: Poor Debt Quality Cues Moody's Ratings Review ------------------------------------------------------------------ Moody's Investors Service placed these notes issued by Brooklyn Structured Finance CDO, Ltd. on review for possible downgrade: -- $890,000,000 Class A1S Senior Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $40,000,000 Class A1J Senior Floating Rate Notes Due 2047 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $35,000,000 Class A2 Senior 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 the following notes: -- $14,000,000 Class A3 Deferrable Floating Rate Notes Due 2047 Prior Rating: A2 Current Rating: Baa3, on review for possible downgrade -- $11,000,000 Class B Deferrable Floating Rate Notes Due 2047 Prior Rating: Baa2 Current Rating: Ba3, on review for possible downgrade -- $3,500,000 Class C Deferrable Floating Rate Notes Due 2047 Prior Rating: Ba2 Current Rating: B3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CAP CANA: Fitch Holds "B" Rating on $250 Million Senior Notes ------------------------------------------------------------- Fitch Ratings affirmed the 'B' rating on Cap Cana S.A.'s $250 million senior secured notes. In addition, Fitch assigned a preliminary rating of 'B-' to the expected issuance of $500 million in additional senior secured notes. Fitch's affirmation on the existing $250 million notes contemplates a change to the terms of certain covenants in the indenture relating to the incurrence of additional debt. It also reflects the expected increase in Cap Cana's leverage after the proposed $500 million issuance of additional senior secured notes. Cap Cana's principal activity is the development, construction, operation and administration of a tourist and leisure resort community project in the Dominican Republic. When fully developed, the project will be anchored by six championship golf courses (of which three are Jack Nicklaus Signature courses), the largest inland marina in the Caribbean, several luxury hotels, more than 10,000 housing units, and numerous sports facilities, along with high-end stores, restaurants, spas, and entertainment complexes. To date, Cap Cana has experienced tremendous success in terms of sales of real estate properties and construction within the project. Accumulated investment in the project is now over $340 million and total sales revenue amounts to over $1 billion. Cap Cana's first golf course, Punta Espada, commenced operations this past year and is scheduled to host a PGA Champions Tour Event in 2008. Cap Cana has also signed a licensing agreement with Trump Marks Real Estate LLC to brand sales of certain real estate properties. Trump-branded sales of Farallon cliff-side lots proceeded to total about $289 million in one day. Additionally, Cap Cana has signed a licensing and management agreement with the Ritz-Carlton Hotel Company for the management of a hotel expected to begin construction in 2008 and begin operating in 2010. Recently, Cap Cana has hired Parsons International, one of the largest management, construction, and engineering companies in the world as Project Manager. A material security package backs the notes in the event of a corporate default. Both the $250 million issuance and the proposed $500 million issuance will be secured by a first-priority mortgage over unencumbered real estate property, as well as receivables related to the sale of individual property units. The specific real estate that will give rise to receivables is clearly defined and completely separated between the two issuances: -- First-mortgage liens on land equal to a minimum of 200% of the outstanding debt secures the $250 million issuance. The proposed new issuance will be backed 150% by first-mortgage liens. -- Receivables arising from the sale of real estate properties will equal 125% of the outstanding debt from the $250 million issuance. The notes expected to be issued will be backed by 120% in receivables. Currently, the $250 million issuance is fully collateralized with about $350 million in eligible receivables under Trustee control. Phase I products that could give rise to eligible receivables to collateralize the $250 million issuance are nearly fully sold out. Delivery on many of these units will begin in early 2008, with this issuance expected to be fully collateralized by post- construction receivables by the end of 2008. Phase II products, which will give rise to eligible receivables backing the proposed issuance, include: sales at the Trump Condo Hotel, condominium units at Las Iguanas, which will be adjacent to a new Jack Nicklaus Signature course of the same name, and certain residences within the Green Village development that were not part of Phase I. The structure backing these issuances adds significant investor protections in two forms: -- Cash flow controls that will reduce project execution risks. -- Bond proceeds sized to the remaining construction costs will be held in escrow and only released upon the achievement of construction milestones. Additionally, a 6-month debt service reserve will be fully funded from proceeds. Major risks considered in the ratings of the two issuances by Cap Cana remain two-fold. First, sales of future units must be realized in order to collateralize the transaction and generate additional working capital and general liquidity for the project. Second, construction on individual units must be completed. Fitch believes these risks to be consistent with the expected 'B-' rating on the new issuance and the current 'B' rating on the outstanding notes. The ratings differential is explained by significantly different sales and construction risk profiles between the issuances and a loosening of the collateralization requirements for the new issuance. Independent engineer reports were used to facilitate modeling assumptions, which incorporated downside analysis regarding real estate valuations as well as construction costs. Fitch currently has a 'B' Long Term Issuer Default Rating for the Dominican Republic with a Positive Outlook. COSINE COMMS: Earns $127,000 in Three Months Ended September 30 --------------------------------------------------------------- CoSine Communications Inc. reported net income of $127,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $225,000 for the same period last year. Effective Dec. 31, 2006, the company ceased all customer service operations and, accordingly, there were no revenues recognized for the three and nine month periods ended Sept. 30, 2007. Revenues for the three and nine month periods ended Sept. 30, 2006, were $134,000 and $1.2 million, respectively, all of which was earned from service contracts. General and administrative expenses were $175,000 and $542,000 for the three and nine month periods ended Sept. 30, 2007, as compared to $295,000 and $906,000 for the three and nine month periods ended Sep. 30, 2006, respectively. The decrease from 2006 to 2007 was due to cost savings resulting from ceasing the company's customer support services as of Dec. 31, 2006, and outsourcing the executive, financial and administrative support services and personnel requirements to SP Corporate Services LLC, effective as of July 1, 2007. For the three month and nine month periods ended Sept. 30, 2007, interest income and other income was $302,000 and $885,000, respectively, as compared to $302,000 and $996,000 for the three month and nine month periods ended Sept. 30, 2006. The decrease in other income for the nine months ended Sept. 30, 2007, is due primarily to the $180,000 one-time sale of patents in the prior year. At Sept. 30, 2007, the company's consolidated balance sheet showed $23.1 million in total assets, $290,000 in total liabilities, and $22.8 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?24c0 Going Concern Doubt As reported in the Troubled Company Reporter on March 28, 2007, Burr, Pilger & Mayer LLP expressed substantial doubt about CoSine Communications Inc.'s ability to continue as a going concern after auditing the firm's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's actions in September 2004 to terminate most of its employees and discontinue production activities in an effort to conserve cash. About CoSine Communications Based in San Jose, California, CoSine Communications, Inc. (OTC: COSN.PK) -- http://www.cosinecom.com/ -- used to be a provider of carrier network equipment products and services, until the fourth quarter of 2004 when it decided to discontinue these product lines. In 2006, the company completed the wrap-up of its carrier services business. The company also sold the remaining assets of its carrier network products business with the sale of its patent portfolio in March 2006 and the sale of the rights to the related intellectual property in November 2006. COUNTRYWIDE HOME: Fitch Holds Low-B Ratings on Three Cert. Classes ------------------------------------------------------------------ Fitch Ratings took rating actions on these CWMBS (Countrywide Home Loans) Inc. transactions: CWMBS 2002-19 -- Class A affirmed at 'AAA'. CWMBS 2002-22 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BB'. CWMBS 2002-25 -- Class A affirmed at 'AAA'. CWMBS 2002-26 -- Class A affirmed at 'AAA'. CWMBS 2002-27 -- Class A affirmed at 'AAA'. CWMBS 2002-31 -- Class A affirmed at 'AAA'. CWMBS 2002-32 -- Class A affirmed at 'AAA'. CWMBS 2002-34 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA-'; -- Class B-3 affirmed at 'A-'; -- Class B-4 affirmed at 'BB+'. CWMBS 2002-35 -- Class A affirmed at 'AAA'. CWMBS 2002-36 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA-'; -- Class B-3 affirmed at 'BBB+'; -- Class B-4 affirmed at 'BB-'. CWMBS 2002-38 -- Class A affirmed at 'AAA'. CWMBS 2002-J4 -- Class A affirmed at 'AAA'. The collateral of the above transactions primarily consists of 30- and 15-year fixed-rate mortgage loans extended to prime borrowers and are secured by first liens, primarily on one- to four-family residential properties. As of the October 2007 distribution date, the above transactions are seasoned from 59 (series 2002-38) to 61 (series 2002-19) months. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 7% (series 2002-J4) to 30% (series 2002-38). The loans are master serviced by Countrywide Home Loans Servicing LP (rated 'RMS2+' by Fitch). The affirmations, affecting about $1.08 billion of outstanding certificates, reflect a stable relationship between credit enhancement and future loss expectations. DADE BEHRING: Siemens Gets 94% Tenders for Common Stock Offer ------------------------------------------------------------- The depositary for the tender offer advised Siemens AG that as of Oct. 31, 2007, the expiration of the tender offer, an aggregate of approximately 72,989,428 shares of common stock of Dade Behring had been validly tendered and not withdrawn which, together with approximately 2,663,344 shares to be tendered under guaranteed delivery procedures, represents approximately 94% of the outstanding common stock of Dade Behring. Siemens intended to accept all validly tendered shares of Dade Behring, ss the cash tender offer expired at 12:00 midnight Siemens expects to close the transaction on or about Nov. 6, 2007. After closing, Dade Behring will be integrated in the existing business of Siemens Medical Solutions Diagnostics, a wholly owned subsidiary of Siemens Medical Solutions USA Inc. "Becoming the leader in the laboratory diagnostics market enables Siemens to offer its customers a comprehensive portfolio of innovative solutions across the whole healthcare continuum - from prevention to diagnosis, to therapy and care," Erich R. Reinhardt, member of the Managing Board of Siemens AG and president and CEO of Siemens Medical Solutions (Med), said. "There is no other company that can bring together the entire medical imaging, laboratory diagnostics and clinical IT value chain under one roof, Mr. Reinhardt added. "Siemens alone can offer opportunities for the integration of such a comprehensive range of technology, workflows and information that will help our customers deliver an improved quality of patient care at reduced costs." "With its strong position in the field of clinical chemistry, Dade Behring complements our existing laboratory business," Mr. Reinhardt further explained. "Plus, its unique, fully integrated IT platforms for combining chemistry and immunodiagnostics dramatically improve laboratory workflow, supporting Siemens' commitment to partner with its customers to deliver increased efficiency throughout the healthcare enterprise." "Diagnostic testing plays a critical role in providing high quality health care. Together with Dade Behring, Siemens Medical Solutions Diagnostics is well-positioned to lead the way in bringing new capabilities to the diagnostics industry," Jim Reid- Anderson, currently chairman, president and CEO of Dade Behring, said. Mr. Reid-Anderson will lead the Siemens Medical Solutions Diagnostics global business that has nearly 15,000 employees. Jochen Schmitz will remain chief financial officer. Primary offices of the company will be located in Deerfield, Illinois - the current headquarters of Dade Behring. About Siemens Siemens AG (Berlin and Munich) -- http://www.siemens.com/-- provides electrical engineering and electronics products and services in over 190 countries. The company has around 475,000 employees working to develop and manufacture products, design and install systems and projects, and tailor a wide range of services for individual requirements. Founded more than 160 years ago, the company focuses on the areas of Information and Communications, Automation and Control, Power, Transportation, Medical, and Lighting. About Dade Behring Holdings Headquartered in Deerfield, Illinois, Dade Behring Holdings Inc. - - http://www.dadebehring.com/-- engages in the manufacture and distribution of diagnostics products and services to clinical laboratories. * * * Moody's Investors Service placed Dade Behring Inc.'s long term corporate family rating at 'Ba1' in April 2005. The rating still holds to date with a stable outlook. DELNET FINANCIAL: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Delnet Financial, Inc. 17821 East 17th Street Suite 145 Tustin, CA 92780 Bankruptcy Case No.: 07-13667 Type of Business: The Debtor filed for Chapter 11 protection on March 22, 2001 (Bankr. C.D. Calif. Case No. 01-12290). Chapter 11 Petition Date: November 2, 2007 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe, LLP 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department Water & Power Utility Bills $100 P.O. Box 30808 Los Angeles, CA 90030 DELPHI CORP: Postpones Disclosure Statement Hearing --------------------------------------------------- Delphi Corp. has asked the U.S. Bankruptcy Court for the Southern District of New York to adjourn until later this month a hearing currently scheduled for Nov. 8 to consider potential amendments to its Joint Plan of Reorganization and related Disclosure Statement as well as a proposed amendment to the Company's Investment Agreement. The purpose of the adjournment is to continue discussions with Delphi's Statutory Committees, both of which filed objections on Nov. 2 to the Disclosure Statement and Investment Agreement amendment approval motions, and other stakeholders, some of which also filed objections. The adjournment is also required because Delphi does not currently believe that all of the conditions to the effectiveness of the Investment Agreement amendment will be satisfied prior to the scheduled commencement of the Nov. 8 hearing. Delphi continues to expect that it will emerge from chapter 11 during the first quarter of 2008. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) - - http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 94; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELUXE CORP: Earns $32.2 Million in Quarter Ended September 30 -------------------------------------------------------------- Deluxe Corp. reported net income of $32.2 million for the third quarter ended Sept. 30, 2007, compared with net income of $31.2 million for the third quarter of 2006. The improvement in net income was due to improved operating performance partially offset by a higher effective tax rate in 2007. Revenue for the quarter was $388.6 million compared to $398.1 million during the third quarter of 2006. Small Business Services revenue was $8.3 million lower due to the first quarter sale of the company's industrial packaging product line, which accounted for $51 million in annual revenue in 2006, partially offset by the October 2006 acquisition of the Johnson Group. Financial Services revenue decreased $700,000 while Direct Checks revenue decreased $500,000. "Continued stabilization in the revenue of our personal check businesses combined with further success on our cost savings initiatives allowed us to stay on track with our transformation and report strong results for the quarter," said Lee Schram, chief executive officer of Deluxe. "We continue to find new opportunities to pursue and are pleased to announce we now have plans in place to achieve an additional $75 million in cost savings, which we expect to realize during 2008 and 2009." Operating income was $60.7 million, compared to $57.2 million in the third quarter of 2006. Operating margin was 15.6% of revenue compared to 14.4% in the prior year. The operating margin increase was driven by improved gross margin and lower SG&A expense. At Sept. 30, 2007, the company's consolidated balance sheet showed $1.45 billion in total assets, $1.43 billion in total liabilities, and $24.5 million in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $418.9 million in total current assets available to pay $554.8 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?24c5 Business Outlook The company stated that on a full year basis, revenue is expected to be between $1.608 billion and $1.615 billion, and diluted EPS is expected to be between $2.75 and $2.80. The company also stated that it expects operating cash flows to be between $240 million and $250 million in 2007. "Our operating cash flow in the quarter was better than expected. We repurchased $3 million of common stock in the quarter and, earlier this month, we satisfied our $325 million debt maturity on schedule," Schram stated. "We are confident that as we continue to execute in the fourth quarter, we can close the year with strong progress and financial returns." About Deluxe Headquartered in St. Paul, Minnesota, Deluxe Corporation (NYSE: DLX) -- http://www.deluxe.com/-- through its industry-leading businesses and brands, helps financial institutions and small businesses better manage, promote, and grow their businesses. The company uses direct marketing, distributors, and a North American sales force to provide a wide range of customized products and services: personalized printed items (checks, forms, business cards, stationery, greeting cards, labels, and retail packaging supplies), promotional products and merchandising materials, fraud prevention services, and customer retention programs. The company also sells personalized checks and accessories directly to consumers. * * * As reported in the Troubled Company Reporter on Aug. 1, 2007, Standard & Poor's Ratings Services revised its rating outlook on Deluxe Corp. to stable from negative. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. DR HORTON: S&P Cuts Corporate Credit Rating to BB+ from BBB- ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on D.R. Horton Inc. to 'BB+' from 'BBB-' and lowered its subordinated debt rating on Horton to 'BB-' from 'BB+'. The outlook remains negative. The rating actions affect approximately $3.8 billion in rated securities. "The downgrades reflect our expectation that Horton's operating and financial performance are increasingly vulnerable to deteriorating housing market and macroeconomic conditions," said credit analyst Elizabeth Campbell. "The spike in cancellation rates Horton recently reported impede the company's efforts to reduce its overall and speculative inventory levels, which remain the highest of our rated builders." Ms. Campbell added that mortgage market challenges and resultant credit tightening are likely to disproportionately negatively affect Horton's largely first-time buyer base. Additional challenges facing the company include rising national foreclosures (which puts inventory on the market that will likely compete most directly with Horton's lower price point product aimed at an entry-level buyer base) and expected continued national home price declines. Standard & Poor's expects that Horton will face challenges in 2008 and likely into 2009 due to the continued deterioration in housing market fundamentals overall and within the company's primary entry-level buyer base. S&P would revise the outlook back to stable if management successfully pares total and speculative inventory levels, continues to generate positive operating cash flow, and maintains liquidity (by successfully amending its credit facility if certain covenants require relief). However, if the company falls materially short of these measures, S&P will lower the ratings further. DRESSER-RAND GROUP: Earns $21.3 Million in Third Quarter of 2007 ---------------------------------------------------------------- Dresser-Rand Group Inc. reported net income of $21.3 million for the third quarter 2007. This compares to a net income of $22.9 million for the third quarter 2006. "Consistent with the information contained in our Oct. 3, 2007 news release, there are two items which affected our third quarter 2007 results," Vincent R. Volpe, Jr., President and Chief Executive Officer of Dresser-Rand, said. "Costs and margin related to deferred sales associated with the work stoppage at our Painted Post facility were approximately $20 million, which was higher than the originally anticipated range of $12 million to $18 million. As we continue to hire permanent replacement workers and extend subcontracting, the associated financial impact of the strike will continue to be reduced and we believe will not be of a material nature in 2008." "Additionally, we expected a stronger recovery in aftermarket bookings and shipments than experienced. This shortfall is principally due to a delay attributable to changes in the procurement and budgeting processes of certain national oil company clients. The impact of this shortfall on bookings in the first nine months of 2007, which we believe was one of timing rather than lost market share, was approximately $43 million compared to the corresponding nine month period in 2006. Excluding the specific national oil companies involved, the rest of the aftermarket bookings have grown from US$531.5 million in 2006 to $574.4 million in 2007 or 8.1%. We do see signs of recovery with one national oil company with which we are presently negotiating a three year blanket purchase agreement initially valued at approximately US$50 million in aftermarket parts and services. This agreement would essentially pre-approve the operating budget and, thereby, shorten the approval process. We expect this agreement to be signed in the fourth quarter of this year. In light of the above, we believe that the year-to-date aftermarket sales shortfall will be at least partially recovered in the fourth quarter." Market conditions remain strong in both new unit and aftermarket business segments. In the third quarter 2007, total revenues increased 25.5%, bookings increased 2.7% and backlog grew 48.0% over the prior year period. Total revenues for the third quarter 2007 of $389.3 million increased $79.0 million or 25.5% compared to $310.3 million for the third quarter 2006. Total revenues for the nine months ended Sept. 30, 2007, of $1.1 billion increased $119.1 million or 11.6% compared to revenues of US$1.0 billion for the corresponding period in 2006. Operating income for the third quarter 2007 was $36.4 million. This compares to operating income of $48.4 million for the third quarter 2006. Third quarter 2007 operating income decreased from the year ago quarter primarily due to the adverse impact of a work stoppage at the company's Painted Post facility in New York State. The company estimates the work stoppage reduced its operating income for the third quarter 2007 by approximately $20 million, which includes approximately $10 million higher costs principally for temporary workers and $10 million for margin related to deferred sales. Operating income for the nine months ended Sept. 30, 2007, was $119.4 million. This compares to operating income of $105.8 million for the corresponding period in 2006. Operating income increased from the year ago nine-month period primarily due to higher sales which was partially offset by the work stoppage at the Painted Post facility. Liquidity and Capital Resources As of Sept. 30, 2007, cash and cash equivalents totaled $184.0 million and borrowing availability under the company's $500 million senior secured credit facility was $306.6 million, as $193.4 million was used for outstanding letters of credit. In the first nine months of 2007, cash provided by operating activities was $187.7 million compared to $92.1 million for the corresponding period in 2006. The increase of $95.6 million in net cash provided by operating activities was principally from changes in working capital and improved operating performance. In the first nine months of 2007, capital expenditures totaled $15.0 million and the company prepaid $137.1 million of its outstanding indebtedness under its senior secured credit facility. As of Sept. 30, 2007, total debt was $370.0 million and total debt net of cash and cash equivalents was approximately $186.0 million. Painted Post Labor Agreement The labor agreement covering approximately 400 represented employees at the company's Painted Post facility in New York expired Aug. 3, 2007. There was no agreement reached resulting in a continuing work stoppage. The company implemented a multiphase contingency plan that has been designed to allow for uninterrupted service to its clients. The company estimates the work stoppage reduced its operating income for three and nine months ended Sept. 30, 2007, by approximately $20 million, which includes approximately $10 million in higher costs, principally for temporary workers, and $10 million for margin related to deferred sales. While the work stoppage has resulted in higher costs and deferred sales, the company maintains its commitment to the long-term improvement of its operations and believes any short-term adverse impacts to its business are worth incurring for whatever period necessary to meet its long-term objectives. Contingency plan update: 1. Approximately 180 temporary replacement workers have been contracted since the first week of the work stoppage. Temporary workers will be reduced as the company continues recruiting permanent replacement workers and extends subcontracting. 2. The company has begun the process of operating with a permanent workforce in Painted Post, which currently stands at 75 employees. This total includes both recently hired permanent workers and bargaining unit employees who have chosen to return to work. 3. Additionally, another twenty-five applicants have been offered employment and are expected to begin training in early November, bringing the total in-plant permanent workforce to approximately 100. 4. Subcontracting has grown to approximately 35% of Painted Post's labor hours and will continue, replacing the work of approximately 150 people by year-end 2007. 5. Quality products continue to be shipped starting with the second week of the work stoppage. 6. Production capacity will continue to ramp-up due to the above planned actions. About Dresser-Rand Group Headquartered in Houston, Texas, Dresser-Rand Group Inc. (NYSE: DRC) -- http://www.dresser-rand.com/-- is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The company operates manufacturing facilities in the United States, France, Germany, Norway, India, and Brazil, and maintains a network of 26 service and support centers covering more than 140 countries. * * * As reported in the Troubled Company Reporter on Sept. 6, 2007, Standard & Poor's Ratings Services assigned its "BB-" bank loan and recovery ratings to the $500 million senior secured revolving credit facility due 2012 of Dresser-Rand Group Inc. The rating has Stable outlook. DRESSER-RAND GROUP: Inks $100 Million Alliance Pact with Repsol --------------------------------------------------------------- Dresser-Rand Group Inc. has signed an alliance agreement with Repsol YPF. The agreement covers sales of all Dresser-Rand products and services. Dresser-Rand estimates the value of the alliance agreement to be approximately $100 million for products and services over the next two years. One steam turbine project for the Tarragona (Spain) refinery valued at approximately $13 million was secured in August 2007. Subsequently, in the month of October, two projects for the Petronor Refinery (Bilbao, Spain) have been awarded with a total value of approximately $20 million. Dresser-Rand will supply one process reciprocating compressor, one DATUM centrifugal compressor and associated services. "We're appreciative of the confidence that Repsol has placed in Dresser- Rand," Vincent R. Volpe, Jr., president and Chief Executive Officer of Dresser-Rand, said. "As a new alliance partner, we look forward to working with Repsol to provide value- adding solutions through lowest life cycle cost for new equipment and minimal emissions. We're also pleased to supply equipment to the planned refinery expansions reflecting the continued strength of this market segment, particularly as it relates to expansion in the European market." Repsol-YPF's decision to enter into an alliance with Dresser- Rand was primarily based on the company's technical capability as well as its proposal to reduce Repsol's total cost of ownership of their assets. Repsol-YPF will be able to realize considerable saving by not utilizing an EPC contractor for the final design stages and procurement (after FEED) based on Dresser-Rand's proprietary Corporate Product Configurator and its Price Book e-tools. About Repsol YPF Repsol YPF, S.A. (IBEX: REP) is an integrated Spanish oil and gas company with operations in 29 countries, the bulk of its assets are located in Spain and Argentina. Repsol S.A. is one of the world's ten largest private oil enterprises, employing over 30,000 people worldwide. Repsol YPF operates five refineries in Spain and four in Latin America and produces chemicals, plastics, and polymers. It sells gas under the brands Campsa, Petronor, and Repsol at more than 6,900 service stations in Europe and Latin America. It is one of Spain's largest sellers of liquefied petroleum gas. About Dresser-Rand Group Headquartered in Houston, Texas, Dresser-Rand Group Inc. (NYSE: DRC) -- http://www.dresser-rand.com/-- is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The company operates manufacturing facilities in the United States, France, Germany, Norway, India, and Brazil, and maintains a network of 26 service and support centers covering more than 140 countries. * * * As reported in the Troubled Company Reporter on Sept. 6, 2007, Standard & Poor's Ratings Services assigned its "BB-" bank loan and recovery ratings to the $500 million senior secured revolving credit facility due 2012 of Dresser-Rand Group Inc. The rating has Stable outlook. E*TRADE: Moody's Junks Ratings on Two Note Classes -------------------------------------------------- Moody's Investors Service placed these notes issued by E*TRADE ABS CDO V Ltd. on review for possible downgrade: -- $201,000,000 Class A-1S Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: -- $30,000,000 Class A-1J Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa, on review for possible downgrade Current Rating: Aa3, on review for possible downgrade -- $25,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aa2, on review for possible downgrade Current Rating: Baa3, on review for possible downgrade -- $16,000,000 Class A-3 Deferrable Secured Floating Rate Notes Due 2046 Prior Rating: A2, on review for possible downgrade Current Rating: Ba3, on review for possible downgrade -- $13,000,000 Class B Deferrable Secured Floating Rate Notes Due 2046 Prior Rating: Baa2, on review for possible downgrade Current Rating: Caa1, on review for possible downgrade -- $4,000,000 Class C Deferrable Secured Floating Rate Notes Due 2046 Prior Rating: Ba2, 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. EAST VALLEY: Moody's Rates $275 Million Senior Notes at B1 ---------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD-4, 56%) rating to the East Valley Tourist Development Authority's $275 million fixed rate senior secured notes due 2015. The Authority's B1 corporate family rating, B1 probability of default rating and stable rating outlook, initially assigned on July 17, 2007, were affirmed. The Authority is an instrumentality of the Cabazon Band of Mission Indians, a federally recognized Indian tribe. The Authority was formed to operate the Tribe's resort and casino business. Proceeds from the new note offering will be used to repay a $172 million unrated interim bridge loan facility, repay $61 million of debt incurred by the Tribe to support casino resort projects, make a $15 million distribution to the Tribe, reimburse the Tribe for costs related to development of the Eagle Falls Golf Course, fund general business purposes, and pay the costs of issuing the notes. The ratings consider the Authority's high pro forma leverage (about 6.2x debt/EBITDA), its small single asset profile, and the significant amount of competition already operating in its primary and secondary market areas. Positive rating consideration is given to the Authority's good historical performance in terms of growth trends and operating margins. Also considered are the favorable demographics and growth trends of the Southern California gaming market. The stable rating outlook considers the good risk reward profile of the Authority's planned expansion projects. It also takes into account the expectation that cash flow growth from the Authority's existing casino asset along with the cash flow contribution from its new expansion projects will result in positive free cash flow and a gradual reduction in leverage over the next several years. If a gradual reduction in leverage does not occur at the pace currently anticipated as a result of competitive pressure and/or lower than expected returns from planned expansions projects, ratings could be negatively impacted. The new notes will be senior secured obligations of the Authority and rank pari passu in right of payment with all other senior debt including a $30 million revolving credit facility that will become effective concurrent with the new note offering. On July 17, 2007, Moody's assigned a B1(LGD-4, 56%) to $150 million senior secured fixed rate notes due 2015 and a B1(LGD-4, 56%) to $140 million senior secured floating rate notes due 2014 along with a B1 corporate family rating, B1 probability of default rating and stable rating outlook. The B1 rating on the senior secured notes were previously withdrawn given the transaction did not incur as planned and instead, the Authority obtained an unrated interim bridge facility. The Authority currently owns and operates the Fantasy Springs Casino located in the Coachella Valley about 22 miles east of Palm Springs, California. Fantasy Springs opened in 1990. EAST VALLEY: S&P Lowers Corporate Credit Rating to B from B+ ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on East Valley Tourist Development Authority to 'B' from 'B+'. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' issue rating to the Authority's $275 million senior secured notes. The Authority is an instrumentality of the California-based Cabazon Band of Mission Indians, through which it operates the Fantasy Springs Resort and Casino near Palm Springs, California. These securities are being issued pursuant to Rule 144A of the Securities Act of 1933 without registration rights. Proceeds from the issue, along with internally generated cash flow, will be used to refinance existing debt, build a full-service spa and 150 additional hotel rooms, make improvements to the existing casino, and fund various payments to the Cabazon Tribe. S&P also have withdrawn its rating on the Authority's $153 million senior secured bridge facility, because this obligation will be repaid with proceeds from the senior notes offering. The downgrade reflects S&P's expectation that continued economic moderation, particularly related to the real estate credit crunch and elevated gas prices, has the potential to affect spending by 'locals' customers. And given Fantasy Springs' somewhat disadvantaged location as compared to many of its competitors in the Coachella Valley, this property is likely to be impacted more acutely. In addition, considering the proposed capital structure and the Authority's investment schedule, credit metrics are expected to be weak over the intermediate term. "The 'B' corporate credit rating reflects the Authority's narrow business focus operating in a single market, the existence of well-established competition, the potential for expanded competition, and the substantial expansion of the business beyond its previous scope," said Standard & Poor's credit analyst Guido DeAscanis. ENRON CORP: Standard Chartered Wants Additional $2.7 Million ------------------------------------------------------------ Standard Chartered Bank asks the U.S. Bankruptcy Court for the Southern District of New York to compel Enron Creditors Recovery Corp., formerly known as Enron Corp., to pay $2.7 million to cover the bank's claims against Enron North America Corp., Enron Power Marketing Inc., and EPC Estate Services Inc., the Associated Press reports. The AP adds that the amount is on top of the $24.5 million the bank received as part of a 2005 settlement with Enron. The bank claims that the settlement agreement didn't cover the claims it had against the three Enron entities that borrowed money. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. FAIRPOINT COMMS: Expects to Complete Verizon Merger on Jan. 31 -------------------------------------------------------------- FairPoint Communications Inc. provided Friday an update on the proposed merger with Verizon Communications Inc. As reported in the Troubled Company Reporter on Jan. 22, 2007, FairPoint Communications Inc. signed definitive agreements with Verizon Communications Inc. that will result in Verizon establishing separate entities for its local exchange and related business assets in the region, spinning off the capital stock of the parent of those new entities to Verizon's stockholders, and merging the parent with and into FairPoint. FairPoint and Verizon are working to complete the merger as quickly as possible after receipt of applicable regulatory approvals. The merger was approved by FairPoint's stockholders at its annual meeting on Aug. 22, 2007. If regulatory approvals are timely received, FairPoint expects to complete the merger on Jan. 31, 2008. The regulatory approval process is proceeding. The company has submitted pre-filed testimony, answered data requests, participated in technical conferences, presented testimony at hearings (which have concluded) and is preparing formal briefs and reply briefs. There can be no assurance that regulatory approval will be received or received on a satisfactory and timely basis. The company has entered into settlement agreements with many intervening parties in all three states, including rural local exchange carriers, competitive local exchange carriers and other wholesale carriers and electric utilities. Many of these parties have announced their support of the merger. Settlement conferences with certain other interveners continue. FairPoint also received approval from the Virginia State Corporation Commission and the Illinois Commerce Commission. About FairPoint Communications Based in Charlotte, North Carolina, FairPoint Communications Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural and small urban communities across the country. Today, FairPoint owns and operates 30 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * FairPoint Communications Inc. carries to date Moody's Investor Services' "B1" probability of default and long term corporate family ratings, which were placed in January 2005 with a stable outlook. FAIRPOINT COMMS: Posts $5.2 Mil. Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- FairPoint Communications Inc. disclosed Friday its financial results for the third quarter ended Sept. 30, 2007. The company reported a net loss of $5.2 million for the three months ended Sept. 30, 2007, compared with net income of $6.0 million in 2006. The net loss in the third quarter of 2007 was primarily driven by higher expenses, principally related to the pending merger with Verizon's wireline operations in Maine, New Hampshire and Vermont and a non-cash loss of $5.7 million related to certain interest rate swap agreements. Consolidated revenues for the three months ended Sept. 30, 2007 were $75.7 million, an increase of $5.0 million or 7.1%, compared with the three months ended Sept. 30, 2006. Operations acquired in the last twelve months accounted for approximately $2.0 million of the increase in total revenues. Excluding the impact of operations acquired in the previous twelve months, revenues increased approximately $3.0 million, or 4.4% compared with the third quarter of the prior year. Items contributing to the increase in revenues were increases in intrastate access revenue of $2.8 million (principally due to the settlement during the quarter of certain previously disputed access charges totaling $4.4 million), data and internet service revenue of $1.4 million, long distance revenue of $1.1 million and local service revenue of $200,000. These increases were partially offset by decreases in interstate access revenue of $1.5 million and other revenue of $900,000. Adjusted EBITDA for the third quarter of 2007 was $34.6 million, compared with $33.4 million for the same period last year. The increase in adjusted EBITDA is principally due to an increase in intrastate access revenues of $2.8 million, partially offset by a $2.1 million reduction in distributions from investments due to the sale of the company's investment in Orange County- Poughkeepsie Limited Partnership in April 2007. "Our third quarter results demonstrate our ability to maintain our focus on our business and particularly on our customers," said Gene Johnson, chairman & chief executive officer of FairPoint. "Our financial results for the quarter are indicative of the hard work our team has put forth while undertaking our proposed acquisition of Verizon's wireline operations in Maine, New Hampshire and Vermont. We continue to focus on driving the top-line, managing costs, maintaining a sound balance sheet and, most importantly, understanding the needs of our customers." Mr. Johnson, continued, "While we are experiencing substantial resistance to our merger proposal in the region, we have earned the support of many interveners. Our culture is to acknowledge objections and work diligently to satisfy them in the best interests of our shareholders, customers and employees. We believe we have made a great case for the merger with considerable investments in infrastructure, a plan for 675 new positions and significant broadband expansion throughout Northern New England to meet the needs of the residents and businesses of these three states for today, tomorrow and into the future. While there can be no assurance that we will receive satisfactory approval orders on a timely basis, we continue to anticipate all regulatory approvals will be received by the end of December, allowing the transaction to close on Jan. 31, 2008." Net cash provided by operating activities from continuing operations for the nine months ended Sept. 30, 2007, was $24.2 million, a decrease of $34.8 million compared with the nine months ended Sept. 30, 2006. The primary driver of this decrease in net cash provided by operating activities from continuing operations was the $28.4 million of merger related expenses incurred during the nine months ended Sept. 30, 2007. The remaining decrease is due to other changes in current assets and liabilities. At Sept. 30, 2007, the company's consolidated balance sheet showed $890.7 million in total assets, $687.1 million in total liabilities, and $203.6 million. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?24cb 2007 Outlook For the full year, FairPoint continues to anticipate revenues of $281 to $284 million. FairPoint continues to expect Adjusted EBITDA for the full year to be $123 to $125 million. Expected full year capital expenditures for 2007 remain unchanged at approximately $29 to $31 million, excluding expenditures related to the merger. About FairPoint Communications Based in Charlotte, North Carolina, FairPoint Communications Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural and small urban communities across the country. Today, FairPoint owns and operates 30 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * FairPoint Communications Inc. carries to date Moody's Investor Services' "B1" probability of default and long term corporate family ratings, which were placed in January 2005 with a stable outlook. FEDDERS CORP: Court Approves Brown Rudnick as Committee's Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Fedders Corp. and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Brown Rudnick Berlack Israels LLP as its counsel. As reported in the Troubled Company Reporter on Oct. 18, 2007, Brown Rudnick is expected to: a) assist and advise the Creditors' Committee in its discussions with the Debtors and other parties in interest regarding the overall administration of the cases; b) represent the Creditors Committee at hearings to be held before this Court and communicating with the Committee regarding the matters heard and the issues raised as well as the decision and consideration of this Court; c) assist and advise the Creditors' Committee in its examination and analysis of the conduct of the Debtors' affairs; d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with this Court by interested parties in these cases; advise the Creditors' Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consenting or objecting to pleadings or orders on behalf of the Committee, as appropriate; e) assist the Committee in preparing applications, motion, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Committee, including all trail preparation as may be necessary; f) confer with the professional retained by the Debtors and other parties in interest, as well as with such other professionals; g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as information that may be received from other professionals engaged by the Committee; h) participate in such examinations of the Debtors and other witnesses as may be necessary in order to anaylze and determine the Debtors' assets and financial condition, whether the Debtos have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates; i) negotiate and formulate a plan of reorganization for the Debtors; and j) assist the Creditors' Committee generally in performing such other services as may be desirable or required for the discharge of the Committee's duties. The Committee told the Court that the firm's professionals bill: Professional/Designation Hourly Rate ------------------------ ----------- Robert J. Stark, Esq. $715 Attorneys $320 - $890 Paraprofessionals $190 - $275 To the best of the Committee's knowledge the firm is a "disinterested" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No.: 07-11182). Its Debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FEDDERS CORP: Panel Hires Greenberg Traurig as Delaware Counsel --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors in Fedders North America Inc. and its debtor-affiliates' bankruptcy cases permission to retain Greenberg Traurig LLP as its Delaware counsel. As reported in the Troubled Company Reporter on Oct. 18, 2007, Greenberg Traurig is expected to a. provide legal advice with respect to the Committee's rights, powers and duties in these cases; b. assist the lead counsel in preparing, filing and serving all necessary applications, answers, response, objections, orders, reports and other legal papers; c. represent the Committee in any matters arising in the cases including disputes or issues with the Debtors, alleged secured creditors or other creditors or third parties; d. assist the Committee in it investigation and analysis of the Debtors, including but not limited to, the review and analysis of all pleadings, claims and plans of reorganization that may be filed in these cases and any negotiations or litigation that may arise out of or in connection with the matters, operations and financial affairs; e. represent the Committee in all aspects of confirmation proceedings; and f. perform all other legal services for the Committee that may be necessary or desrirable in these proceedings. The firm's professionals and their compensation rates are: Professionals Hourly Rates ------------- ------------ Donald J. Detweiler, Esq. $510 Victoria W. Counihan, Esq. $475 Dennis A. Meloro, Esq. $360 Elizabeth C. Thomas $190 Designations Hourly Rates ------------ ------------ Shareholders $235-$570 Associates $130-$480 Legal Assistants $65-$230 Paralegals $65-$230 Victoria W. Counihan, Esq., a shareholder of the firm, assured the Court that the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Ms. Counihan can be reached at: Victoria W. Counihan, Esq. Greenberg Traurig LLP 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 http://www.gtlaw.com/ Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No.: 07-11182). Its Debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FEDDERS CORP: Panel Hires Lowenstein Sandler as Special Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors in Fedders North America Inc. and its debtor-affiliates' bankruptcy cases authority to retain Lowenstein Sandler PC as its special litigation counsel and conflicts counsel. As reported in the Troubled Company Reporter on Oct. 18, 2007, the Committee sought to retain Lowenstein as special counsel with regard to issues pertaining to Bank of America and Goldman Sachs Credit Partners LP, as well as any matters where lead counsel finds a real or potential conflict of where lead counsel and the Committee deem it appropriate. Lowenstein told the Court that it intends to work closely with Saul Ewing Remick & Saul LLP, the Committee's lead counsel. Issues with Bank of America and Goldman In September 2007, the Troubled Company Reporter said, citing Bloomberg News that the Committee had opposed the $79 million in postpetition financing provided to Fedders by a group including Goldman Sachs Credit Partners LP and Bank of America NA. The Committee called the loan "outrageously expensive" arguing that it costs 14% over the London interbank offered rate for the term loan and LIBOR plus 5% for the revolving credit. In August 2007, Fedders obtained interim Court approval to borrow under the financing agreement. Lowenstein will bill on an hourly basis, plus reimbursement of the actual and necessary expenses the firm incurs. The firm's rates are: Designation Hourly Rate ----------- ----------- Partners $400 - $725 Counsel $265 - $445 Associates $185 - $450 Legal Assistants $75 - $175 Lowenstein assured the Court that it does not hold, or represent any other entity having an adverse interest in connection with the Debtors' cases. The firm can be contacted at: Sharon L. Levin, Esq., Member Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 http://www.lowenstein.com/ Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No.: 07-11182). Its Debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FIRST HORIZON: Moody's Takes Rating Actions on 11 Deals ------------------------------------------------------- Fitch Ratings took rating actions on these eleven First Horizon Alternative mortgage pass-through certificates: Series 2005-AA11 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 downgraded to 'BB+' from 'BBB'; -- Class B-4 downgraded to 'CCC/DR2' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. Series 2006-AA3 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 downgraded to 'BBB+' from 'A'; -- Class B-3 downgraded to 'BB-' from 'BBB', removed from 'Rating Watch Negative'; -- Class B-4 downgraded to 'CCC/DR2' from 'B+'; -- Class B-5 downgraded to 'C/DR5' from 'CCC/DR1'. Series 2006-AA4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 downgraded to 'BB+' from 'BBB'; -- Class B-4 downgraded to 'CC/DR3' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. Series 2006-AA6 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 downgraded to 'BBB+' from 'A'; -- Class B-3 downgraded to 'B+' from 'BBB'; -- Class B-4 downgraded to 'CCC/DR2' from 'BB'; -- Class B-5 downgraded to 'C/DR4' from 'B'. Series 2006-AA7 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 downgraded to 'BBB+' from 'A'; -- Class B-3 downgraded to 'B+' from 'BBB'; -- Class B-4 downgraded to 'CCC/DR2' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. Series 2006-AA8 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 downgraded to 'A-' from 'A'; -- Class B-3 downgraded to 'BB+' from 'BBB'; -- Class B-4 downgraded to 'CCC/DR2' from 'BB'; -- Class B-5 downgraded to 'C/DR5' from 'B'. Series 2006-FA2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 downgraded to 'A-' from 'A'; &nb