T R O U B L E D C O M P A N Y R E P O R T E R Saturday, November 10, 2007, Vol. 11, No. 267 Headlines ADVANCED MARKETING: Posts $7.4 Mil. in Month Ended June 30, 2007 ADVANCED MARKETING: Incurs $2.2 Mil. Net Loss in July 31, 2007 AMERICAN HOME: Files Supplement to Initial Monthly Report DELPHI CORPORATION: Posts $794 Million Net Loss in Sept. 30, 2007 DURA AUTOMOTIVE: Incurs $20,505,000 Net Loss in September 2007 FEDERAL-MOGUL: Posts $12.1 Million Net Loss in September 2007 INTERSTATE BAKERIES: Incurs $7,699,993 Net Loss in September 2007 MORTGAGE LENDERS: Incurs $964,328 Net Loss in June 1-30, 2007 MORTGAGE LENDERS: Posts $2,738,168 Net Loss in Month Ended July 31 MORTGAGE LENDERS: Incurs $684,328 Net Loss in August 2007 PACIFIC LUMBER: Scotia Dev't Files September 2007 Operating Report PACIFIC LUMBER: Scotia Pacific Files September 2007 Monthly Repor ********* ADVANCED MARKETING: Posts $7.4 Mil. in Month Ended June 30, 2007 ---------------------------------------------------------------- Advanced Marketing Services Inc. and its debtor-affiliates filed with the Court a copy of their Monthly Operating Report ending June 30, 2007, containing a Balance Sheet and a Statement of Operations as of June 8, 2007. Curt Smith, chief executive officer and chief financial officer of AMS, reports that the company has disbursed a total of $2,024,342 for calculating the United States Trustee's quarterly fees. According to Mr. Smith, the Debtors' reorganization costs through June 30 are estimated at $16,340,605, including losses on the sale of their assets to Baker and Taylor, Inc. AMS Corp. Unaudited Balance Sheet As of June 8, 2007 ASSETS Current Assets Cash and Cash Equivalents $431,980 Short-term Investments 40,964,319 Accounts Receivable, Net (1,532,250) Vendor & Misc. Receivables 14,972,598 Intercompany Receivables 6,314,970 ---------- Inventory 28,942,080 Freight on Inventory 556,522 Inventory in Process, in Transit 0 Inventory Reserves (9,136,332) ---------- Inventory, Net 20,362,271 ---------- Deferred Income Tax - Income Tax Receivable - Prepaid Expenses 6,490,963 ---------- Total Current Assets 88,004,851 ---------- Long-Term Investments 15,921 Goodwill & Other Assets 11,873,152 ----------- TOTAL ASSETS $99,893,924 =========== LIABILITIES & STOCKHOLDER EQUITY Current Liabilities: Accounts Payable $502,622 Accrued Liabilities 11,852,714 Income Taxes Payable 164,944 Intercompany Payables 0 Short-term Debt 0 ----------- TOTAL CURRENT LIABILITIES 12,520,280 ----------- Long Term Liabilities 158,035,883 ----------- TOTAL LIABILITIES $170,556,163 =========== STOCKHOLDERS' EQUITY Common Stock @ Par Value 23,350 Additional Paid-in Capital 37,196,580 Common Stock Dividend (4,213,583) Deferred Compensation 0 Retained Earnings - Prior Year (56,406,906) Retained Earnings - Current Year (25,119,933) Cumulative Other Comp. Income (585,376) Treasury Stock (21,556,370) ----------- TOTAL STOCKHOLDERS' EQUITY (70,662,238) ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $99,893,924 =========== AMS Corp. Unaudited Statement of Operations For the period ended June 8, 2007 GROSS SALES Invoiced Amount $531,786 Stickering Revenue - Service & Fee Revenue - Interco Revenue - Total Sales Returns - Sales Returns Provision - Unprocessed Sales Returns - ---------- Sales Less Returns Prov. 531,786 ---------- Total Sales Deductions - ---------- NET SALES $531,786 ========== COST OF NET SALES Standard Cost of Sales $1,720,461 Interco Cost of Sales - Standard Cost of Returns (34,850) Standard Cost of Returns Provision - Standard Cost of Returns - Unprocessed - Purchase Variance, Revaluation 604 Return to Publisher Variance (3,536) Freight In Costs of Sales 4,187 Freight - AGL 6,977 Freight Customer Returns 2,293 Freight -Return to Publisher 21,586 Freight Warehouse Transfer 4,517 Quantity Adjustments 4,137,063 Markdown Expense - Publisher Incentive - Publisher Account Settlements - Other Costs of Sales - ---------- Total Cost of Sales 5,859,301 ---------- GROSS PROFIT ($5,327,514) ========== VARIABLE EXPENSES Freight Sales Shipments $15,777 Freight - Special Shipments - Shipping Supplies and Service 74,033 Payroll DC operations 168,955 Distribution Fees - ---------- Total Variable Expenses 258,765 ---------- VARIABLE PROFIT MARGIN (5,586,280) ---------- FIXED EXPENSE Payroll (excl. DC Oper.) 691,724 Travel & Entertainment 9,341 Professional Services 18,002 Information Services (20,520) Office Equipment & Supplies 2,818 Telephone Expense (954) Facility Occupancy 252,313 General Insurance 30,000 Depreciation - Uncollectible Accounts - Customer Service 1,749 Promotion Expense - Express Mail & Postage (13,497) Training & Education - Exchange Gain/Loss - Miscellaneous Expense 102,530 Shareholder's Relations 6,325 Co-op Advertising Exp/Inc - Miscellaneous Income (4) Warehouse Equipment 12,095 ---------- Total Fixed Expenses 1,091,921 ---------- OPERATING INCOME: (6,678,201) ---------- Interest Expense - Interest Income (146,666) Equity in Inc/Loss of Affiliates - Other Non-operating Expenses 938,796 ---------- NON-OPERATING INCOME 792,130 ---------- INCOME BEFORE INC TAX (7,470,330) Tax Provision (5,706) ---------- NET INCOME (LOSS) ($7,476,036) ========== Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Advanced Marketing disclosed total assets of $213,384,791 and total debts of $216,608,357. Publishers Group West disclosed total assets of $39,699,451 and total debts of $83,272,493. Publishers Group Inc. disclosed zero assets but $41,514,348 in liabilities. On Aug. 24, 2007, the Debtors' exclusive period to file a chapter 11 plan expired. On the same date, the Debtors and Creditors Committee filed a Plan & Disclosure Statement. On September 26, the Court approved the adequacy of the Disclosure Statement explaining the Second Amended Plan. The hearing to consider confirmation of the Plan is set on Nov. 15, 2007. (Advanced Marketing Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). ADVANCED MARKETING: Incurs $2.2 Mil. Net Loss in July 31, 2007 -------------------------------------------------------------- Advanced Marketing Services Inc. and its debtor-affiliates delivered to the Court a copy of their Monthly Operating Report ending July 31, 2007, containing a Balance Sheet as of July 8, 2007, and a Statement of Operations for the period ended July 7, 2007. Curt Smith, chief executive officer and chief financial officer of AMS, reports that the company has disbursed a total of $1,898,205 for calculating the United States Trustee's quarterly fees. According to Mr. Smith, the Debtors' reorganization costs through June 30 are estimated at $16,951,144, including losses on the sale of their assets to Baker and Taylor, Inc. AMS Corp. Unaudited Balance Sheet As of July 8, 2007 ASSETS Current Assets Cash and Cash Equivalents $375,375 Short-term Investments 40,410,170 Accounts Receivable, Net (1,248,567) Vendor & Misc. Receivables 15,098,476 Intercompany Receivables 5,602,851 ---------- Inventory 21,551,155 Freight on Inventory 556,522 Inventory in Process, in Transit - Inventory Reserves (9,134,090) ---------- Inventory, Net 12,973,588 ---------- Deferred Income Tax - Income Tax Receivable - Prepaid Expenses 4,882,704 ---------- Total Current Assets 78,094,597 ---------- PROPERTY & EQUIPMENT Leasehold Improvements - Office Furniture & Equipment - Warehouse Equipment - Autos - ---------- Total Property & Equipment - Accumulated Depreciation - ---------- Net Property & Equipment - Long-Term Investments - Goodwill & Other Assets 11,856,210 ----------- TOTAL ASSETS $89,950,807 =========== LIABILITIES & STOCKHOLDER EQUITY Current Liabilities: Accounts Payable $970,370 Accrued Liabilities 12,508,865 Income Taxes Payable 164,944 Intercompany Payables - Short-term Debt - ----------- TOTAL CURRENT LIABILITIES 13,644,179 ----------- Long Term Liabilities 149,286,857 ----------- TOTAL LIABILITIES $162,931,036 =========== STOCKHOLDERS' EQUITY Common Stock @ Par Value 23,350 Additional Paid-in Capital 37,196,580 Common Stock Dividend (4,213,583) Deferred Compensation - Retained Earnings - Prior Year (56,439,800) Retained Earnings - Current Year (27,397,109) Cumulative Other Comp. Income (593,297) Treasury Stock (21,556,370) ----------- TOTAL STOCKHOLDERS' EQUITY (72,980,229) ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $89,950,807 =========== AMS Corp. Unaudited Statement of Operations For the period ended July 7, 2007 GROSS SALES Invoiced Amount $447,715 Stickering Revenue - Service & Fee Revenue - Interco Revenue - Total Sales Returns - Sales Returns Provision - Unprocessed Sales Returns - ---------- Sales Less Returns Prov. 447,715 ---------- SALES DEDUCTIONS Cash Discount Provision - New Store Allowance - Customer Rebates - Co-op Allowance - Misc. Allowance & Adjustment - Sales Commissions - ---------- Total Sales Deductions - ---------- NET SALES $447,715 ========== COST OF NET SALES Standard Cost of Sales $1,251,955 Interco Cost of Sales - Standard Cost of Returns (129,540) Standard Cost of Returns Provision - Standard Cost of Returns - Unprocessed - Purchase Variance, Revaluation 11,134 Return to Publisher Variance (5,932) Freight In Costs of Sales (9) Freight - AGL (109,727) Freight Customer Returns (1,424) Freight -Return to Publisher 1,623 Freight Warehouse Transfer - Quantity Adjustments (135,659) Markdown Expense - Publisher Incentive - Publisher Account Settlements (58,200) Other Costs of Sales - ---------- Total Cost of Sales 824,220 ---------- GROSS PROFIT ($376,506) ---------- VARIABLE EXPENSES Freight Sales Shipments ($17,596) Freight - Special Shipments - Shipping Supplies and Service 40,381 Payroll DC operations 455,815 Distribution Fees - ---------- Total Variable Expenses 478,601 ---------- VARIABLE PROFIT MARGIN (855,107) ---------- FIXED EXPENSE Payroll (excl. DC Oper.) 776,889 Travel & Entertainment 2,750 Professional Services 27,698 Information Services 2,237 Office Equipment & Supplies 10,655 Telephone Expense 1,309 Facility Occupancy 116,082 General Insurance - Depreciation - Uncollectible Accounts - Customer Service 1,600 Promotion Expense - Express Mail & Postage 279 Training & Education - Exchange Gain/Loss - Miscellaneous Expense 8,897 Shareholder's Relations 1,250 Co-op Advertising Exp/Inc - Miscellaneous Income (13,080) Warehouse Equipment 14,627 ---------- Total Fixed Expenses 951,193 ---------- OPERATING INCOME: (1,806,300) ---------- Interest Expense - Interest Income (140,216) Equity in Inc/Loss of Affiliates - Other Non-operating Expenses 610,539 ---------- NON-OPERATING INCOME 470,324 ---------- INCOME BEFORE INC TAX (2,276,624) Tax Provision 552 ---------- NET INCOME ($2,277,175) ========== Advanced Marketing Services, Inc. (Excluding Publishers Group West Incorporated) Statement of Cash Flows From July 6 to 27, 2007 CASH RECEIPTS B&T Purchase Price - Reimbursement under B&T TSA - Inventory $232,485 CIA inventory - Vendor accounts receivable - Prepaid expenses - CSV Life Insurance - Foreign Subs - Standby L/C Expirations - WF Foothill Fee Reserve - Interest Income 147,386 Other 171,912 ---------- Total Cash Receipts $551,783 ========== CASH DISBURSEMENTS Publisher payments - Payroll & health insurance $396,276 KERP 376,050 MIP - Insurance 66,492 Rent-facilities 48,364 Freight 66,134 Shipping Supplies 92,366 Utilities 21,946 IT Expenses 51,228 Travel 12,458 Professional fees 700,653 US Trustee Fees 10,000 Office equipment and supplies - Communications 8,518 Warehouse equipment - Directors' fees - Miscellaneous 38,336 Post-petition A/P - ---------- Total Disbursements 1,888,819 ---------- Net Operating Cash Outflow ($1,337,036) ========== Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Advanced Marketing disclosed total assets of $213,384,791 and total debts of $216,608,357. Publishers Group West disclosed total assets of $39,699,451 and total debts of $83,272,493. Publishers Group Inc. disclosed zero assets but $41,514,348 in liabilities. On Aug. 24, 2007, the Debtors' exclusive period to file a chapter 11 plan expired. On the same date, the Debtors and Creditors Committee filed a Plan & Disclosure Statement. On September 26, the Court approved the adequacy of the Disclosure Statement explaining the Second Amended Plan. The hearing to consider confirmation of the Plan is set on Nov. 15, 2007. (Advanced Marketing Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Files Supplement to Initial Monthly Report --------------------------------------------------------- The Debtors filed a second supplement to their initial operating report to amend its schedule of retainers paid to retained professionals: American Home Mortgage Holdings, Inc. Schedule of Retainers Paid to Debtors' Retained Professionals Amount Applied As of Professional Amount Paid 8/06/07 Balance ------------ ----------- ------- ------- Cadwalader, Wickersham $2,000,000 $940,863 $1,059,137 Kekst & Company, Inc. 50,000 45,282 4,718 Kroll Zolfo Cooper LLC 500,000 -- -- Kroll Zolfo Cooper LLC 250,000 184,681 565,319 Milestone Advisors LLC 575,000 64,973 10,027 Young Conaway Stargatt 400,000 -- -- Young Conaway Stargatt 400,000 536,112 263,888 --------- --------- --------- Total $4,175,000 $1,771,910 $1,903,090 ========= ========= ========= Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 14, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORPORATION: Posts $794 Million Net Loss in Sept. 30, 2007 ----------------------------------------------------------------- Delphi Corporation, et al. Unaudited Consolidated Balance Sheet As of September 30, 2007 (In Millions) ASSETS Current assets: Cash and cash equivalents $107 Restricted cash 123 Accounts receivable, net: General Motors and affiliates 1,628 Other third parties 885 Non-Debtor affiliates 258 Notes receivable from non-Debtor affiliates 289 Inventories, net: Productive material, work-in-process & supplies 854 Finished goods 260 Other current assets 408 -------- TOTAL CURRENT ASSETS 4,812 Long-term assets: Property, net 1,796 Investment in affiliates 372 Investments in non-Debtor affiliates 4,026 Goodwill 152 Other intangible assets 27 Other 547 -------- TOTAL LONG-TERM ASSETS 6,920 -------- TOTAL ASSETS $11,732 ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities not subject to compromise: Debtor-in-possession financing $3,226 Accounts payable 1,266 Accounts payable to non-Debtor affiliates 707 Accrued liabilities 1,446 Notes payable to non-Debtor affiliates 65 -------- TOTAL CURRENT LIABILITIES 6,710 Long-term liabilities not subject to compromise: Employee benefit plan obligations and other 1,043 Liabilities subject to compromise 16,992 -------- TOTAL LIABILITIES 24,745 Stockholders' deficit: TOTAL STOCKHOLDERS' DEFICIT 13,013 -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $11,732 ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Operations Month Ended September 30, 2007 (In Millions) Net sales: General Motors and affiliates $644 Other customers 440 Non-Debtor affiliates 61 -------- Total net sales 1,145 -------- Operating expenses: Cost of sales 1,214 U.S. employee workforce transition program charges 223 Long-lived asset impairment charges - Depreciation and amortization 40 Selling, general and administrative 86 Securities & ERISA litigation charge - -------- Total operating expenses 1,563 -------- Operating loss (418) Interest expense (396) Loss on extinguishment of debt - Other (expense) income, net 33 Reorganization items (8) Income tax benefit (expense) (5) Equity income from non-consolidated affiliates 3 Equity income from non-Debtor affiliates (3) -------- NET LOSS ($794) ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Cash Flows Month Ended September 30, 2007 (In Millions) Cash flows from operating activities: Net loss ($794) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 40 Deferred income taxes (2) Pension and other postretirement benefit expenses 62 Equity income from unconsolidated affiliates 3 Equity income from non-Debtor affiliates (3) Reorganization items 8 U.S. employee workforce transition program charges 223 Changes in operating assets and liabilities: Accounts receivable, net 61 Inventories, net (24) Other assets (4) Accounts payable, accrued and other long-term debts 441 U.S. employee workforce transition program payments (12) Other postretirement benefit payments (20) Pension contributions (6) Payments for reorganization items (9) Other 22 -------- Net cash used in operating activities (14) Cash flows from investing activities: Capital expenditures (18) Proceeds from divestitures 62 Decrease in restricted cash 16 Other (15) -------- Net cash used in investing activities 45 Cash flows from financing activities: Net proceeds from DIP facility 120 Repayments on borrowings from non-Debtor affiliates (64) -------- Net cash used in financing activities 56 -------- Increase in cash and cash equivalents 87 Cash and cash equivalents at beginning of period 20 -------- Cash and cash equivalents at end of period $107 ======== Based in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.de