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 13, 2007, Vol. 11, No. 269 Headlines ACE AVIATION: Earns CDN$224 Million in 3rd Quarter Ended Sept. 30 AKCEM CORP: Case Summary & Largest Unsecured Creditor ALLIANCE LAUNDRY: S&P Lifts Corp. Credit Rating to B- from CCC+ AMERISOURCEBERGEN CORP: Board Lifts Share Purchase by $500 Million AMERICAN HOME: Amends Terms of AHM Sale Deal on DBSP's Stay Motion AMERICAN HOME: Reaches Pact with Bear Stearns and EMC Mortgage AMERICAN TONERSERV: Sept. 30 Balance Sheet Upside-Down by $152,087 AMORTIZING RESIDENTIAL: Moody's Cuts Ratings on Four Cert. Classes ARCADIA RESOURCES: Posts $9.2 Million Net Loss in Second Quarter ARINC INC: Moody's Rates Proposed Credit Facilities at B2 AURIGA LABS: Posts $8.1 Million Net Loss in Quarter Ended Sept. 30 AXON FIN'L: Poor Portfolio Market Value Cues S&P to Junk Ratings BALLY TECHNOLOGIES: Fitch Lifts Credit Facility Rating to B BLACKHAWK AUTOMOTIVE: Withdraws Request to Sell Equipment BROTMAN MEDICAL: Taps Imperial Capital as Investment Banker CALPINE CORP: Resolves Claims with Calgen & 1st Lien Noteholders CALPINE CORP: Rosetta Resources Files Adversary Counterclaims CERIDIAN CORP: Closes $5.3 Bil. Buyout Deal with Fidelity Nat'l CHAMPION ENTERPRISES: Prices Tender Offering of 7-5/8% Notes CHARMING SHOPPES: Board OKs New $200 Mil. Share Repurchase Program CHRYSLER LLC: Closing Sterling Heights Vehicle Testing Center CITADEL BROADCASTING: Posts $447.8 Million Net Loss in 3rd Quarter CITY OF GILMER: Moody's Holds Ba1 Rating on $7.3 Mil. Tax Debt CITICORP MORTGAGE: Fitch Takes Rating Actions on 18 Deals CLAYTON WILLIAMS: Completes $21 Million Sale of Texas Assets COUNTRYWIDE FIN'L: Credit Rating Cut Cues Funding Modification CRICKET COMMS: Moody's Holds B2 Corporate Family Rating DANA CORP: Gets Banks' Proposals for $2 Billion Exit Financing DELPHI CORP: Wants DIP Financing Maturity Date Extended DELPHI CORP: Wants to Enter into $6.8 Billion Exit Financing DELPHI CORP: Committee Says Disclosure Statement is Inadequate DELPHI CORP: Senior Noteholders Balk at Disclosure Statement DHL EXPRESS: Gets Default Notice from ABX Air for Withholding Fees DIRECTED ELECTRONICS: Weak Performance Cues S&P to Cut Ratings DOLLARAMA GROUP: S&P Holds Ratings and Revises Outlook to Stable E*TRADE FIN'L: 4th Qtr. Write Down in ABS to Exceed Expectations FINANCIAL ASSET: Fitch Junks Rating on Class B-5 Certificates FORD MOTOR: Defers Volvo Sale; Intends to Improve Financials FORD MOTOR: Anticipates Jaguar & Land Rover Sale Talks in 2008 FORD MOTOR: Primary Stakeholder in Auto Fuel Cell Cooperation FORD MOTOR: Unit Earns $334 Million in Third Quarter of 2007 FORD MOTOR: New Labor Pact Gets Massive UAW Votes of Approval FORD MOTOR: Narrow Third Quarter Loss Cues S&P to Retain Watch GAP INC: October Net Sales Down 1% at $1.23 Billion H&E EQUIPMENT: Board Authorizes $100 Mil. of Stock Repurchase HARRAH'S ENT: Unit Lowers Conversion Price of $375MM Senior Notes HAYES LEMMERZ: Selling Automotive Brake to Brembo NA for $58 Mil. JAZZ PHARMA: Posts $19.4 Million Net Loss in Qtr. Ended Sept. 30 KNOLOGY INC: Neutral Leverage Cues S&P to Hold 'B' Loan Rating LEAP WIRELESS: To Restate FY 2004 Through 2nd Qtr 2007 Financials LEAP WIRELESS: Potential Credit Default Prompts S&P's Neg. Watch LEVITT AND SONS: Case Summary & 400 Largest Unsecured Creditors LSO LTD: Case Summary & 19 Largest Unsecured Creditors M FABRIKANT: Judge Bernstein Approves Joint Disclosure Statement M FABRIKANT: Plan Confirmation Hearing Slated for December 19 M FABRIKANT: Last Day of Filing Administrative Claims is Dec. 7 MORGAN STANLEY: S&P Places 'B' Rating Under Negative CreditWatch MATTRESS GALLERY: Wants to Hire Greenberg Traurig as Counsel MATTRESS GALLERY: Court Approves Kurtzman Carson as Claims Agent MCCLATCHY CO: Declining Revenue Cues Moody's to Review Ratings MCMORAN EXPLORATION: Prices $300 Million of 11.875% Notes Offering MEGA BRANDS: S&P Puts 'B+' Corp. Credit Rating Under Neg. Watch MORGAN STANLEY: Fitch Holds Junk Rating on Class B-5 Certificates MORGAN STANLEY: Moody's Cuts and Reviews Ratings on 11 Deals MORTGAGE ASSET: Fitch Holds Low-B Ratings on Five Cert. Classes MTI TECHNOLOGY: Selects Manatt Phelps as Special SEC Counsel NASDAQ STOCK: Hellman & Friedman Sells 23.5 Million Stake NASH FINCH: Board Declares $0.18 Per Share Quarterly Dividend NATIONAL CENTURY: L. Poulsen Arrested for Obstruction of Justice NATIONAL COAL: Weak Profile Cues Moody's to Junk Ratings NEOMEDIA TECH: Sept. 30 Balance Sheet Upside-Down by $76.7 Million OGLEBAY NORTON: Shareholders Approve Merger Deal with Carmeuse NA OPEN TEXT: Moody's Affirms B1 Corporate Family Rating OTTIMO FUNDING: Debt Enhancement Breach Cues S&P's Default Ratings PENN NATIONAL: Sets Special Shareholders Meeting on December 12 PERKINELMER INC: Completes Cash Tender Offer for ViaCell Inc. PLANET TECH: Completes $10 Million Acquisition of Antigen Labs POLYMER GROUP: Weak Business Prompts S&P to Hold 'BB-' Rating PREGO DELLA: Michael Carlevale Mulls Declaring Bankruptcy PROVIDENCE SERVICE: S&P Assigns 'B+' Corporate Credit Rating PSEG ENERGY: S&P Holds 'BB-' Corp. Rating and Revises Outlook RALI SERIES: Moody's Downgrades and Reviews Ratings on 12 Deals SAINT GERMAIN: Moody's Junks Ratings on $50 Mil. Capital Notes SATCON TECH: Retires Conv. Loan Using Note Purchase Pact Proceeds SCOTTISH RE: S&P Revises Outlook to Negative from Developing SEMCO ENERGY: Closed Cap Rock Deal Cues S&P to Withdraw Ratings SEQUOIA MORTGAGE: Fitch Holds Low-B Ratings on 10 Cert. Classes SIX FLAGS: Moody's Junks Corporate Family Rating SIX FLAGS: Declining Profitability Cues S&P to Lower Ratings SMART SERIES: Moody's Assigns (P)B2 Rating on Class E Notes SOLUTIA INC: Judge Beatty Approves $250 Million Backstop Deal STRUCTURED ASSET: Fitch Assigns Low-B Ratings on $21.3MM Certs. TERADYNE INC: Boards Approves New $400 Million Stock Repurchase TLC VISION: Posts $22.6 Million Net Loss in Quarter Ended Sept. 30 VALLEY HEALTH: Voters Trash Measure G; Cutler To Woe Public Again VESCOR DEV'T.: Section 341(a) Meeting Slated for December 12 VESCOR DEV'T.: Committee Taps Pachulski Stang as Co-Counsel WILLIAMS COS: S&P Lifts Corporate Credit Rating to BBB- from BB+ WORLDGATE COMMS: Posts $2.7 Million Net Loss in Third Quarter YUKOS OIL: Owners Get Nothing from $35.6 Billion Sale Proceeds * Entergy's Nuclear Spinco Spin-off Will Have Moderate Risk * S&P Places Ratings on 484 Classes of RMBS Under Negative Watch * Large Companies with Insolvent Balance Sheet ********* ACE AVIATION: Earns CDN$224 Million in 3rd Quarter Ended Sept. 30 ----------------------------------------------------------------- ACE Aviation Holdings Inc. reported Friday net income of CDN$224 million on net operating revenues of CDN$3.022 billion for the third quarter ended Sept. 30, 2007, compared with net income of CDN$103 million on net operating revenues of CDN$2.845 billion in the same quarter last year. Results for the 2007 quarter included non-controlling interest of CDN$69 million, foreign exchange gains of CDN$104 million and provision for income taxes of CDN$124 million. ACE ceased to consolidate the results and financial position of Aeroplan and Jazz with effect from March 14, 2007, and May 24, 2007, respectively, and is accounting for its investments under the equity method. As a result, ACE's results for the third quarter of 2007 are not directly comparable to the results for the 2006 quarter. The company reported EBITDAR of CDN$553 million and operating income of CDN$340 million for the third quarter of 2007. Air Canada reported EBITDAR of CDN$561 million and operating income of CDN$351 million, increases of CDN$124 million and CDN$119 million respectively over the third quarter of 2006 (excluding special charge). Passenger revenues increased by CDN$108 million or 4% over the 2006 quarter. This increase was partly offset by a decline of CDN$25 million in cargo revenues, driven by freighter capacity reduction. Operating costs decreased by CDN$26 million or 1% over the 2006 quarter. Unit cost, as measured by operating expense per ASM, decreased 4.4% over the third quarter of 2006. The special charge refers to a charge recorded in 2006 related to Air Canada's obligations for the redemption of pre-2002 Aeroplan miles. EBITDAR is a non-GAAP financial measure commonly used in the airline industry to assess earnings before interest, taxes, depreciation, and aircraft rent. Air Canada Technical Services reported EBITDA of CDN$15 million for the quarter, an improvement of CDN$3 million on the 2006 quarter. "The results for the quarter demonstrate very good performances by all of ACE's businesses," said Robert Milton, chairman, president and chief executive officer, ACE Aviation Holdings Inc. "I am particularly pleased with the results for Air Canada for the quarter. Air Canada has delivered the improved operating results signalled at the time of the release of the second quarter results. The benefits of its fleet replacement and refurbishment programs are beginning to translate into improving financial performance for the business. Management expects that this program will continue to yield improved operating results for the remainder of 2007 and beyond. "ACTS continued to build on the progress made in recent quarters and the business has recorded a 20% increase in year-to-date revenues. The business continues to announce new contracts. On Oct. 16, we completed the sale of a majority interest in ACTS to a consortium consisting of Sageview Capital and KKR. As a result, this is the final quarter that we will consolidate the results of ACTS. ACE received net cash of CDN$723 million on closing, together with a residual equity stake of 23%. "Aeroplan and Jazz both delivered strong results in the quarter and we reduced our interests in both entities to 20.1% on October 22 through secondary offerings that generated net cash proceeds to ACE of CDN$726 million. "ACE has cash of CDN$1.85 billion and other assets, primarily its interests in Air Canada, Aeroplan and Jazz, with a market value of CDN$2.4 billion. At Sept. 30, 2007, the company's consolidated balance sheet showed CDN$12.240 billion in total assets, $9.558 billion in total liabilities, and $1.938 billion in total shareholders' equity. About ACE Aviation Headquartered in Montreal, Canada, ACE Aviation Holdings Inc. (Toronto: ACE-A.TO) -- http://www.aceaviation.com/-- is the parent holding company of Air Canada, Aeroplan, Jazz, Air Canada Technical Services, Air Canada Vacations, Air Canada Cargo, and Air Canada Ground Handling Services. * * * ACE Aviation Holdings still carries Dominion Bond Rating Service's "B+" long-term local and foreign issuer credit ratings, which were placed on April 20, 2006 with a negative outlook. AKCEM CORP: Case Summary & Largest Unsecured Creditor ----------------------------------------------------- Debtor: Akcem Corporation 217B East Louisiana McKinney, TX 75069 Bankruptcy Case No.: 07-42642 Chapter 11 Petition Date: November 9, 2007 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Reedy Macque Spigner, Esq. Spigner & Gallerson 555 Republic Drive, Suite 101 Plano, TX 75074 Tel: (972) 881-0581 Fax: (972) 424-1309 Total Assets: $1,498,842 Total Debts: $391,175 Debtor's list of its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Collin Central Property Taxes $8,842 Appraisal District 250 West Eldorado Parkway McKinney, TX 75069 ALLIANCE LAUNDRY: S&P Lifts Corp. Credit Rating to B- from CCC+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Alliance Laundry Systems LLC to 'B-' from 'CCC+', and removed all ratings from CreditWatch, where they were placed with developing implications on Sept. 7, 2007. In addition, S&P raised its rating on the company's senior secured first-lien debt to 'B+' from 'B' with a '1' recovery rating, indicating the expectation of very high recovery (90%-100%) in the event of a payment default. The first-lien debt consists of a $260 million ($220 million outstanding at June 30, 2007) term loan B and $55 million revolving credit facility. S&P also raised the rating on the company's $150 million senior subordinated notes one notch to 'CCC' from 'CCC-'. The outlook is developing. About $425 million of rated debt is affected. S&P initially placed its ratings on Alliance Laundry on CreditWatch with negative implications on Aug. 15, 2007, after the company announced that it had identified errors in its reconciliation of unvouched payables, which resulted in the understatement of its liabilities and prevented the timely filing of its June 2007 Form 10-Q. S&P subsequently lowered the ratings and placed them on CreditWatch with developing implications on Sept. 7, 2007, after the company announced that its understatement of liabilities was somewhat higher than originally estimated, leading to a potential violation of its financial covenants and loss of access to its revolving credit facility. As a result of these developments, the company sought and obtained a bank amendment and waivers, which included an increase to its consolidated leverage ratio covenant as of June 30, 2007; extended until Nov. 13, 2007, the time to file its June 2007 quarterly financial statements; and waived defaults arising from any potential restatement of its financial statements for the year ended Dec. 31, 2006, and quarterly financial statements through March 31, 2007. "The ratings upgrade reflects the company's ability to timely file its restated financial statements and its Form 10Q for the period ended June 30, 2007, prior to Nov. 13, 2007," said Standard & Poor's credit analyst Christopher Johnson. Alliance Laundry filed prior to Nov. 13, 2007, its restated Forms 10K and 10Q for the fiscal year ended Dec. 31, 2007, and quarter ending March 31, 2007, respectively, and filed its Form 10Q for the period ended June 30, 2007. "The upgrade also reflects the company's improved liquidity position after it regained access to its revolving credit facility [with about $22 million in availability] following the amendment and waivers, and our expectation that the company will generate meaningful cash flows in the second half of its fiscal year. Still, we remain concerned about future covenant cushion under the company's bank financial covenants," the analyst added. The ratings on Ripon, Wisconsin-based Alliance Laundry reflect its narrow product portfolio, high debt leverage, and thin credit protection measures. The developing outlook takes into account our concerns over Alliance Laundry's tight covenant cushion, as well as S&P's expectations that its cash flow will continue to improve. S&P could lower ratings if Alliance Laundry fails to maintain compliance with its financial covenants or if the cushion on them tightens. Alternatively, S&P could raise ratings if Alliance Laundry maintains compliance and improves the cushion on its financial covenants to adequate levels. AMERISOURCEBERGEN CORP: Board Lifts Share Purchase by $500 Million ------------------------------------------------------------------ The Board of Directors of AmerisourceBergen Corporation increased the company's quarterly dividend rate 50% to $0.075 per common share from $0.05 per common share. The Board of Directors also authorized a $500 million increase in its existing $850 million share repurchase program, which allows the company to repurchase its outstanding shares of common stock subject to market conditions. "Increasing our dividend and share repurchase program demonstrates continued confidence in our performance and our disciplined use of cash to deliver long-term value to our shareholders," R. David Yost, AmerisourceBergen President & Chief Executive Officer, said. As of Nov. 7, 2007, the company had approximately $89 million remaining under the original $850 million share repurchase program, which was authorized on May 24, 2007. With the $500 million increase, the company now has approximately $589 million remaining under its existing share repurchase program. AmerisourceBergen currently has 167 million common shares outstanding. The company may repurchase the shares from time to time for cash in open market transactions or by other means in accordance with applicable federal securities laws, and will hold any repurchased shares as treasury shares, which will be available for general corporate purposes. The quarterly dividend of $0.075 per common share will be payable Dec. 3, 2007, to stockholders of record at the close of business on Nov. 19, 2007. About AmerisourceBergen Headquartered in Valley Forge, Pennsylvania, AmerisourceBergen Corporation (NYSE:ABC) -- http://www.amerisourcebergen.com/-- is one of the pharmaceutical services companies serving the United States, Canada and selected global markets. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. AmerisourceBergen employs more than 14,000 people. * * * AmerisourceBergen continues to carry Moody's Investor Services' Ba1 long term corporate family and Ba1 probability of default ratings. The outlook is positive. AMERICAN HOME: Amends Terms of AHM Sale Deal on DBSP's Stay Motion ------------------------------------------------------------------ American Home Mortgage Investment Corp. and its debtor-affiliates amended the terms of their court-approved purchase agreement with Wilbur Ross' AH Mortgage Acquisition Co. Inc. The amendment follows DB Structured Products Inc.'s intention to appeal before the U.S. District Court for the District of Delaware the order of the U.S. Bankruptcy Court for the District of Delaware approving the sale of the Debtors' loan servicing business to AHM Acquisition, free and clear of liens, claims and interests. The Debtors are expected to sell their loan servicing business to AHM Acquisition Co. Inc. for approximately $500,000,000, under a two-stage closing process. Included in the approved sale are certain of the Debtors' rights and obligations arising out of a master mortgage loan purchase and servicing agreement between the Debtors and DBSP. DB Structured Products asked the Bankruptcy Court to issue a limited stay of the sale order solely insofar as it would authorize the assignment of, and otherwise impair DBSP's rights under, the MLPSA, pending an expedited appeal that it intends to take to the District Court. Accordingly, the Debtors asked the Court to deny DBSP's motion given that they have recently agreed to a modification of the purchase agreement as it relates to the sale and transfer of DBSP servicing rights. Under the amended purchase agreement, DBSP's servicing rights are placed on a separate schedule, "Disputed Servicing Agreements." Pending a decision on DBSP's appeal, the mortgage loans under the MLPSA will continue to be serviced by the Debtors through the later of the final closing and Sept. 30, 2008, and the portion of the total purchase price under the purchase agreement relating to the unpaid principal balance of the loans serviced under the MLPSA will be escrowed, subject to the final resolution of the appeal. On Nov. 6, 2007, DBSP filed with the Court a notice stating that it is withdrawing the stay motion. 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). AMERICAN HOME: Reaches Pact with Bear Stearns and EMC Mortgage -------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates obtained the U.S. Bankruptcy Court for the District of Delaware's approval of a settlement agreement that resolves the adversary proceeding filed by Bear Stearns Mortgage Corp. and EMC Mortgage Corp. BSMCC and the debtor-defendants in the adversary proceeding, namely, AHM Corp., AHM Investment, AHM Acceptance and AHM Servicing, were parties to a certain Whole Loan Master Repurchase Agreement, dated June 23,2004, pursuant to which BSMCC purchased certain mortgage loans from the Defendants and the Defendants were to repurchase the Purchased Mortgage Loans from BSMCC on demand, or at a later, agreed upon date. With respect to any purchase of Purchased Mortgage Loans by BSMCC, the Repurchase Agreement provided that the Defendants maintain a certain margin amount calculated at a previously agreed upon percentage of the price at which the Defendants agreed to repurchase the Purchased Mortgage Loans from BSMCC. Pursuant to the Repurchase Agreement, if the Defendants failed to maintain the requisite margin amount, the Defendants were obligated, upon notice, to transfer cash in the amount of the deficiency. Failure to meet a Margin Call was an Event of Default thus rendering all amounts immediately due and payable by the Defendants and requiring that the Defendants transfer to BSMCC all documents and subsequently received funds related to the Purchased Mortgage Loans. On August 10,2007, BSMCC sold the Purchased Mortgage Loans to EMC on a servicing related basis as the result of the Defendants' alleged prepetition failure to meet a certain Margin Call and requested that the Defendants turn over all documents and subsequently received funds related to the Purchased Mortgage Loans. On August 24, 2007, BSMCC and EMC initiated the Adversary Proceeding, seeking a declaratory judgment that, among other things, (i) the Defendants were obligated to provide access to and deliver certain documents related to the Purchased Mortgage Loans to EMC, (ii) the Defendants were obligated to transfer certain documents related to the Purchased Mortgage Loans to EMC, (iii) the Defendants were obligated to prevent commingling of funds or payments related to the Purchased Mortgage Loans, (iv) the Defendants breached the Repurchase Agreement, and (v) the Defendants exercised and assumed an unauthorized right of ownership of the Purchased Mortgage Loans by failing to turn same over to EMC upon request. The Debtors have filed an answer to the complaint. As a result of extensive negotiations, the Parties have reached an agreement the terms of which are embodied in the executed Settlement Agreement. Pursuant to the Settlement Agreement, the Defendants agreed to convey to EMC, no later than November 2, 2007, all Servicing Rights, related to the Purchased Mortgage Loans under the Repurchase Agreement. EMC and BSMCC will transfer $100,000 to AHM Servicing. In addition, they will cause to be transferred the "Non-MSR Related Collateral", consisting of: a. the security known as AHM 2004-lIIA with Original Face Amount of $3,015,925 with CUSIP No. 02660TAJ2; b. all Principal and Interest received by BSMCC on account of above security; c. cash collateral balances unrelated to the P&I payments believed to be $28,051, as of October 10, 2007 based on the collateral statement received from BSMCC; and d. interest on cash balances held by BSMCC using an industry rate of Fed Funds effective for cash collateral balances held by a swap or repo counterparty. EMC and BSMCC will pay the Settlement Amount and release the Non- MSR Related Collateral to the Defendants no later than two business days after the completion of the Defendants' transfer obligations under the Settlement, provided however, that in the event that the Plaintiffs do not timely pay the Settlement Amount, the Settlement Amount will accrue liquidated damages of $1,000 per day calculated from and after the Transfer Date, plus cost of collection, including reasonable attorneys' fees. 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). AMERICAN TONERSERV: Sept. 30 Balance Sheet Upside-Down by $152,087 ------------------------------------------------------------------ American TonerServ Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $4,375,923 in total assets and $4,528,010 in total liabilities, resulting in a $152,087 total stockholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $1,374,567 in total current assets available to pay $4,047,915 in total current liabilities. The company reported a net loss of $1,234,037 on revenues of $1,086,602 for the third quarter ended Sept. 30, 2007, compared with a net loss of $732,724 on revenues of $172,952 in the same period in 2006. 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?2529 Going Concern Doubt As reported in the Troubled Company Reporter on April 1, 2007, Perry-Smith LLP expressed substantial doubt about American TonerServ Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. Perry-Smith pointed to the company's recurring losses from operations, and shareholders' deficit as of Dec. 31, 2006. About American TonerServ American TonerServ Corp., formerly Q Matrix Inc., (OTC BB: ASVP.OB) -- http://www.americantonerserv.com/ -- is a consolidator in the highly fragmented printer supplies and services industry. ATS acquires, integrates and manages independent businesses that deliver printer supplies, services and equipment to small/mid-sized businesses. AMORTIZING RESIDENTIAL: Moody's Cuts Ratings on Four Cert. Classes ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of four tranches issued by Amortizing Residential Collateral Trust Mortgage Pass- Through Certificates Series 2004-1. The collateral consists primarily of first-lien, subprime fixed and adjustable rate mortgage loans. The actions are based on the analysis of the current credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to current projected and stressed losses. Complete rating actions are: Issuer: Amortizing Residential Collateral Trust Mortgage Pass- Through Certificates Series 2004-1 -- Cl. M5, currently A3; downgraded to Baa2; -- Cl. M6, currently Baa1; downgraded to Baa3. -- Cl. M7, currently Baa2; downgraded to Ba1; -- Cl. M8, currently Baa3; downgraded to B1. ARCADIA RESOURCES: Posts $9.2 Million Net Loss in Second Quarter ---------------------------------------------------------------- Arcadia Resources Inc. reported Friday its financial results for the second quarter and six months ended Sept. 30, 2007. The company reported a net loss of $9.2 million for the second quarter ended Sept. 30, 2007, compared with a net loss of $735,619 in the same period last year. Net loss from continuing operations for the fiscal second quarter of 2008 was $4.5 million. Net loss from continuing operations for the year-ago second quarter was $1.6 million. Net revenues for fiscal second quarter 2008 were $38.7 million versus $38.3 million for the same quarter last year. The revenue increase primarily reflected organic growth of approximately $435,000 in the In-Home Health Services segment, which comprises approximately 81% of total net revenues. Revenues in the Retailer and Employer Services segment and the Durable Medical Equipment segment were essentially unchanged from the year-ago quarter. EBITDA loss from continuing operations for the fiscal second quarter of 2008 was $2.0 million, compared with positive EBITDA from continuing operations of $452,000 a year ago. For the first half of fiscal 2008, Arcadia reported a nearly 5% rise in net revenues, to $77.9 million. Net loss was $16.6 million, compared with a net loss of $893,552 in the first half of fiscal 2007. Net loss from continuing operations was $8.4 million, versus a net loss from continuing operations of $1.9 million for the first half of fiscal 2007. During the second quarter, the company disposed of the clinics and certain DME business operations. The financial results of those operations are reported in discontinued operations for the second quarter and six months ended Sept. 30, 2007. The prior period results have also been recast for consistency purposes. Discontinued operations accounted for an additional loss of $4.6 million and $8.2 million, for the second quarter and six months ended Sept. 30, 2007, respectively. Clinics accounted for $6.4 million of the loss from discontinued operations for the first half of fiscal 2008. "While we are never satisfied to report a loss, we are proud of the first half of fiscal 2008 in terms of our turnaround efforts and the building of a 'new' Arcadia HealthCare," commented Marvin R. Richardson, president and chief executive officer. "As a result of our operational and financial progress, we strengthened the balance sheet by reducing long-term debt of approximately $10 million since March 31, 2007. And, based on recent monthly results, we are pleased to reiterate our expectation that the company will be cash flow and EBITDA positive by the third quarter of fiscal 2008." Commenting on several of Arcadia's strategic actions during the second quarter of fiscal 2008, Mr. Richardson noted, "We took concrete steps to deliver on our business goals, including the divesting of our Clinic operations which produced significant losses, divesting the Florida and Colorado Durable Medical Equipment business units, financing Durable Medical Equipment accounts receivable and improving Florida Medicare collections. In the process, we generated $5.8 million of cash without diluting investors." "We also announced a major DailyMed(TM) initiative with the State of Indiana estimated to contribute approximately $40 million to fiscal 2009 revenues. Our collaboration with Indiana demonstrates the great potential of our DailyMed(TM) compliance pharmacy packaging system, which has been endorsed by multiple public agencies in Indiana and will be promoted with a state-sponsored direct-to-consumer campaign to 1.7 million Hoosier seniors. This will provide a solid foundation for additional payor contracts leading to a national launch of DailyMed planned for fiscal 2009." "To streamline our corporate operations, we closed four Arcadia offices, moving our executive team to our new headquarters in Indianapolis. We continue to focus on improving earnings and cash flow while seeking additional SG&A cost reductions and improvement in our overall accounts receivable collections. I feel that we have delivered tangible results to our shareholders and look forward to building upon this progress," Mr. Richardson concluded. At Sept. 30, 2007, the company's consolidated balance sheet showed $105.2 million in total assets, $49.5 million in total liabilities, and $55.7 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?2530 Going Concern Doubt As reported in the Troubled Company Reporter on July 4, 2007, BDO Seidman LLP, in Troy, Michigan, expressed substantial doubt about Arcadia Resources Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations. About Arcadia Resources Headquartered in Indianapolis, Arcadia Resources Inc. (AMEX: KAD) -- http://www.arcadiaresourcesinc.com/ -- is a national provider of alternate site healthcare services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing; comprehensive central fill and licensed pharmacy services including its proprietary DailyMed(TM) Pharmacy program and a catalog of healthcare-oriented products. ARINC INC: Moody's Rates Proposed Credit Facilities at B2 --------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Arinc Incorporated's proposed first lien credit facilities, consisting of a revolving credit facility due 2013, a synthetic letter of credit facility due 2014, and a term loan facility due 2014, as well as a Caa2 rating to the company's proposed second lien term loan due 2015. The Corporate Family Rating was assigned at B3 with a stable outlook. The proceeds from the debt offerings were used to partially finance the acquisition of Arinc by private equity sponsor, Carlyle Group. Arinc's previous senior secured credit facilities were repaid and terminated in their entirety upon close of the acquisition financing transactions. As such, Moody's will withdraw all of Arinc's pre LBO ratings, including its Ba3 Corporate Family Rating and senior secured credit facilities' ratings. Arinc's B3 Corporate Family Rating post the LBO reflects high leverage and weak interest coverage pro forma the new capital structure. As a result of its high debt burden, Arinc's credit metrics are expected to remain in the single B-range for the foreseeable future. The company's operating margins, while stable, are low relative to other aerospace and defense service providers. Moody's expects margins to improve as the company begins to leverage its leading market shares in core commercial segments and attempts to reduce the amount of government contract work passed-through to subcontractors, but recognizes that these efforts pose significant challenges in their implementation. Arinc's annual revenues of nearly $1 billion benefit from the stability provided by a diversified customer base, long-term contracts with government agencies and commercial airlines, and dominant market shares in air-to-ground commercial aviation communications. The essentiality of the company's services to the transportation system also suggests some degree of revenue stability over time. However, a significant portion of recent revenue growth is attributable to increased pass-through revenue and expansion in airport information systems, which has yet to yield favorable margins due to the high cost of gaining market share. The company is expected to generate modest free cash flow over the near term, which should be used to repay a small portion of debt, but the majority of this depends on the company's ability to realize cost savings from proposed work force reductions and benefits from restructuring initiatives. The stable outlook reflects Moody's expectation that Arinc will reduce leverage at a modest pace over the near to medium term through a combination of operating margin improvement and modest debt repayment from free cash flows. Significant debt repayment or substantial margin improvement resulting in metrics at these levels would be supportive of upward movement in the ratings or outlook: Leverage: debt/EBITDA below 6 times; Interest coverage: EBIT/interest in excess of 1.5 times; Cash flow: RCF/debt exceeding 7% with sustained positive FCF. Failure to improve operating margins resulting in metrics at these levels, or deterioration of liquidity due to prolonged negative free cash flow and heavy reliance on revolver drawings could put downward pressure on Arinc's ratings or outlook: Operating margins: remaining less than 5%; Leverage: debt/EBITDA remaining above 7 times; Interest coverage: EBIT/interest remaining below 1 time; Cash flow: RCF/debt less than 5%, or prolonged negative free cash flow. Assignments: Issuer: Arinc Incorporated (New) -- Probability of Default Rating, Assigned B3 -- Corporate Family Rating, Assigned B3 -- Senior Secured Revolving Credit Facility, Assigned B2 (LGD3-37) -- Senior Secured Synthetic Letter of Credit Facility, Assigned B2 (LGD3-37) -- Senior Secured Term Loan Facility, Assigned B2 (LGD3-37) -- Senior Secured Second Lien Term Loan Facility, Assigned Caa2 (LGD5-87) Arinc Inc., headquartered in Annapolis, Maryland, is a provider of communications information technology products and services and engineering services to the commercial aviation industry as well as government agencies. AURIGA LABS: Posts $8.1 Million Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ Auriga Laboratories Inc. reported Thursday its financial results for the third quarter ended Sept. 30, 2007. The net loss for the 2007 third quarter was $8.1 million, compared to a net loss of $3.5 million in the same period in 2006. The 2007 net loss includes $1.5 million of non-cash share-based compensation costs under SFAS 123(R) and $300,000 of depreciation and amortization expenses. The third quarter of fiscal 2006 results included $2.4 million of non-cash share-based compensation costs under SFAS 123(R) and $65,000 of depreciation and amortization costs. The company generated third quarter net revenue of $333,719, compared to $1.8 million in the same period a year earlier, a decrease of $1.5 million. The decrease was primarily due to a charge to the product returns reserve of $4.9 million, in-part due to a $1.3 million one-time charge relating to certain products affected by the FDA's recent federal register notices regarding timed-release guaifenesin and hydrocodone, and also the difference between gross prescription demand and gross revenues less sales discounts. For the nine months ended Sept. 30, 2007, net revenues increased by 126% to $12.0 million from $5.3 million for the nine months ended Sept. 30, 2006. Auriga had a net loss for the nine months ended Sept. 30, 2007, of $10.3 million, compared to a loss of $10.3 million in the first nine months of 2006. As of Sept. 30, 2007, the company had $1.5 million in cash and no term debt, representing an increase of $1.2 million in cash and a $2.2 million reduction in term debt as compared to the end of fiscal 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $14.6 million in total assets, $10.2 million in total liabilities, and $4.4 million in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $6.8 million in total current assets available to pay $10.2 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?2534 Going Concern Doubt As reported in the Troubled Company Reporter on April 3, 2007, Williams & Webster P.S., in Spokane, Wash., raised substantial doubt about Auriga Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditor pointed to the company's substantial operating losses since inception, negative working capital, and limited cash resources. About Auriga Laboratories Based in Norcross, Georgia, Auriga Laboratories Inc. (OTC BB: ARGA) -- http://www.aurigalabs.com/ -- is a specialty pharmaceutical company building an industry changing commission- based sales model targeting over 2000 filled territories by 2009. The company's high-growth business model combines driving revenues through a variable cost commission-based sales structure, acquisition and development of FDA approved products, all of which are designed to enhance its growing direct relationships with physicians nationwide. Auriga's current product portfolio includes 27 marketed products and 6 products in development covering various therapeutic categories. AXON FIN'L: Poor Portfolio Market Value Cues S&P to Junk Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit ratings on Axon Financial Funding LLC and Axon Financial Funding Ltd., co-issuers of the structured investment vehicle. Standard & Poor's also lowered its ratings on Axon's commercial paper, medium-term note, and subordinated mezzanine note programs. The ratings remain on CreditWatch with negative implications, where they were originally placed Sept. 14, 2007. The downgrades reflect significant deterioration of the market value of Axon's portfolio over the past week and Axon's decrease in net asset value to below 20% of total paid-in capital. If Axon's NAV of total paid-in capital falls to 0%, the vehicle will be accelerated and all senior liabilities will become due and payable. If an acceleration occurs, interest and principal payments will be suspended and all senior liabilities will be paid pari passu upon completion of the collateral liquidation. The downgrades follow Standard & Poor's analysis of the vehicle's ability to pay the senior liabilities based on the market value of Axon's portfolio. Further deterioration of the assets' market value, as provided by an independent third-party source, shows that the senior liabilities are vulnerable to nonpayment according to the terms of the respective liabilities. The downgrade of Axon's subordinated mezzanine debt reflects the declining market values and the vehicle's realized losses resulting from ongoing asset liquidations. Axon's subordinated mezzanine notes are currently highly vulnerable to nonpayment. The outstanding amount of Axon's senior debt is approximately $8.477 billion, and the outstanding amount of the subordinated mezzanine notes is approximately $890 million. Axon is a SIV structure managed by Axon Asset Management Inc., which purchases assets, manages the portfolio, and oversees the issuance of CP and MTNs. The portfolio is predominantly invested in structured finance assets, a considerable portion of which is U.S. RMBS, CMBS, and CDO securities. Ratings Lowered and Remaining on Creditwatch Negative Axon Financial Funding LLC and Axon Financial Funding Ltd. Up to $20 billion European and U.S. CP and MTN programs and up to $1.25 billion subordinated mezzanine note program Rating ------ To From -- ---- Issuer credit CCC/Watch Neg/C BBB/Watch Neg/A-2+ CP C/Watch Neg A-2/Watch Neg MTN CCC/Watch Neg BBB/Watch Neg Sub. mezzanine notes CCC-/Watch Neg CCC+/Watch Neg BALLY TECHNOLOGIES: Fitch Lifts Credit Facility Rating to B ----------------------------------------------------------- Fitch Ratings upgraded Bally Technologies' secured bank debt rating and affirmed Bally's Issuer Default Rating as: -- Secured bank credit facility upgraded to 'B/RR3' from 'B- /RR4'; -- IDR affirmed at 'B-'. The secured credit facility comprises a term loan with $308 million outstanding and a $75 million revolver, which was undrawn as of June 30, 2007. Fitch has revised the Rating Outlook on Bally Technologies to Stable from Negative. The Rating Outlook revision reflects Bally's significant progress in terms of its operating performance and its financial restatements. If those trends were to continue over the next couple quarters, Fitch anticipates that additional positive rating actions could occur. The rating actions are based on Bally's significantly improved product pipeline and solid acceptance of the Alpha platform over the past two years, which is generating meaningful improvement in its financial performance. On Nov. 1, Bally announced its fiscal 4Q'07 and FY07 (period ending June 30) results and reiterated its expectations for FY08, which were initially given on Aug. 21, 2007. Driven by the improved product platform, Bally generated 26% revenue growth to $682 million in FY07 and expects 21-22% growth in FY08 to more than $830 million. Reported adjusted EBITDA increased to $138.5 million in FY07 from $49.6 million in FY06. Bally's leverage ratio according to its credit facility as of June 30, 2007 was 2.17x versus a maximum allowable of 3.75x, which declines to 3.50x as of Sept. 30, 2007. Bally's credit profile has improved dramatically fueled by the improving operating profile. As of June 30, 2007, Bally had roughly $37 million in debt maturities through FY09, unrestricted cash balances of $40.8 million (up from $12.4 million as of Dec. 31, 2007), an untapped $75 million credit revolver, and a somewhat flexible capex budget. Tempering the financial improvement is the fact that Bally has been under investigation by the SEC since 2005 and has been untimely with its SEC filings. In its most recent audited financial statements Bally continues to note material weaknesses in internal controls over financial reporting, with revenue recognition and inventory valuation among the most significant items. While these items continue to be concerns that weigh on Bally's credit ratings, Fitch notes that Bally has made significant strides over the past 12 months with its restatements and becoming current on its filings. Bally has been restating its financial results and filed its fiscal 4Q07 10Q and fiscal 2007 10K on Nov. 2, 2007 (temporarily becoming current) and has now filed three 10Ks and six 10Qs within the last 12 months. However, Bally expects to miss the Nov. 9, 2007 deadline to file its fiscal 1Q08 10Q. An additional concern centers around how Bally will fare when the industry enters a new technology-driven upturn in the next 12-24 months with the onset of server-based gaming, which could benefit Bally as well as the other major players including IGT, WMS, and Aristocrat. While competition has increased since the peak of the last cycle, IGT is likely to remain the dominant player, in Fitch's view, because it has the most financial resources, the broadest product pipeline, and the largest sales/marketing team. Fitch believes Bally's improved financial position and operational turnaround should help it to compete in the next cycle, but maintenance of Bally's recent market share gains could become more challenging. The Recovery Ratings and notching reflect Fitch's recovery expectations under a distressed scenario. Bally's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation given Bally's limited tangible asset base. An 'RR3' recovery rating reflects Fitch's belief that 51-70% recovery, including the assumption of a fully drawn revolver, is possible under a distress scenario. BLACKHAWK AUTOMOTIVE: Withdraws Request to Sell Equipment --------------------------------------------------------- Blackhawk Automotive Plastics Inc. together with its parent holding company, Tier e Automotive Group Inc., withdrew their motion to sell their equipment, free and clear of liens. Reasons for the withdrawal were not disclosed in documents filed with the court. On Nov. 8, 2007, the Debtors sought authority from the U.S. Bankruptcy Court for the Northern District of Ohio to sell certain items of manufacturing equipment to Stopol Inc. On Oct. 23, the Debtors obtained two interim orders authorizing them to obtain up to $3.7 million if debtor-in-possession financing. As a condition of the financing, the Debtors are required to prosecute a sale of their business assets to be consummated within approximately 120 days of the Debtors' bankruptcy filing. Stopol has committed to purchase two units of equipment for an aggregate price of $220,900 on or before Nov. 30. Stopol also had an option to purchase two additional units of equipment for an aggregate price of $265,000 on or before Dec. 31. Stopol is in the business of brokering equipment for ultimate buyers requiring delivery on short notice. Headquartered in Salem, Ohio, Blackhawk Automotive Plastics Inc. manufactures injection molded plastic products and motor vehicle parts and accessories. The company filed for chapter 11 protection on October 22, 2007 (Bankr. N.D. Ohio, Case No. 07- 42671). An affiliate, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673) David M. Neumann, Esq. and William I. Kohn, Esq. at Benesch, Friedlander, Coplan & Aronoff, L.L.P. represent the Debtors. When the Debtors filed for bankruptcy, they listed assets and debts between $1 million to $100 million. BROTMAN MEDICAL: Taps Imperial Capital as Investment Banker ----------------------------------------------------------- Brotman Medical Center Inc. asks the United States Bankruptcy Court for the Central District of California for authority to employ Imperial Capital LLC as its investment banker. Imperia Capital is expected to: a. advise the Debtor on a proposed purchase price and the form of consideration; b. assist the Debtor in developing, evaluating, structuring and negotiating the terms and conditions of a potential transaction; c. assist the Debtor in the preparation of solicitation materials with respect to the transaction and the Debtor; d. identification of and contacting selected qualified buyers for the transaction offering materials; e. assist the Debtor in arranging for potential buyers to conduct due diligence investigations; f. advise the Debtor with respect to a potential reorganization in lieu of outright sale, and assist the Debtor in assessing the relative merits of potential sale or reorganization transaction; g. assist the Debtor in obtaining court approval for the transaction, if applicable; h. assist in the consummation of the transaction; and i. provide other financial advisory services with respect to the Debtor as may from time to time be agreed upon between the Debtor and the firm. The Debtor tells the Court that the firm will receive an initiation fee of $100,000 if the Debtor's employment request is approved. The firm will also receive in cash, 5% of the transaction consideration received by the Debtor. To the best of the Debtor's knowledge, the firm does not hold any interest adverse to the estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The United States Trustee for Region 16 has not appointed creditors who will serve on an Official Committee of Unsecured Creditors in this case. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. CALPINE CORP: Resolves Claims with Calgen & 1st Lien Noteholders ---------------------------------------------------------------- Calpine Corporation and its affiliated debtors in possession have reached a claims settlement with Law Debenture Trust Company of New York, as successor indenture trustee for the 9.625% First Priority Senior Secured Notes due 2014. Additionally, Calpine reached a claims settlement with the holders of the First Priority Secured Floating Rate Notes due 2009 issued by Calpine Generating Company LLC and CalGen Finance Corporation and First Priority Secured Institutional Term Loans due 2009 issued by CalGen and the indenture trustee and administrative agent for such notes. Both of these settlements are subject to approval by the U.S. Bankruptcy Court. "In reaching these settlements, we have successfully addressed one of our last major hurdles before emerging from Chapter 11 as a financially stable, stand-alone company with an improved competitive position in the energy industry," Robert P. May, Calpine's Chief Executive Officer, said. "We are very pleased to have reached this agreement, and we continue to be proud of what we have accomplished thus far in this process. We remain on track with our current timetable and expect to emerge from Chapter 11 prior to Jan. 31, 2008." Under the agreement with the Calpine First Lien Debtholders, the claims for make whole premium and damages claims asserted by the First Lien Trustee and disputed by the Debtors and the Official Committee of Unsecured Creditors have been settled and will be allowed as claims against Calpine in the aggregate amount of approximately $84 million plus interest, representing an allowed secured claim of approximately $50.4 million, plus interest at the contract non-default rate and an allowed unsecured claim of approximately $33.6 million, plus interest at the contract non- default rate. In addition, the Debtors have agreed to pay up to $3.5 million of the reasonable professional fees incurred by the First Lien Trustee. Under the agreement with the CalGen First Priority Noteholders, the claims for contract damages and default interest asserted by the First Priority Debt Representatives and disputed by the Debtors have been settled and will be allowed as unsecured claims against CalGen in the aggregate amount of approximately $50 million plus interest at the federal judgment rate, representing approximately $20.1 million on account of make whole premium and damages claims and approximately $29.1 million on account of default interest claims. In addition, the Debtors have agreed to pay up to $3 million of the reasonable professional fees incurred by the First Priority Debt Representatives and up to $684,000 of the reasonable professional fees incurred by Whitebox Advisors LLC. The Debtors will seek approval of these agreements from the United States Bankruptcy Court for the Southern District of New York on Nov. 27, 2007. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of the Plan is scheduled on Dec. 18, 2007. (Calpine Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Rosetta Resources Files Adversary Counterclaims ------------------------------------------------------------- Rosetta Resources Inc. has filed an answer and counterclaims to Calpine Corp.'s complaint in the U.S. Bankruptcy Court for the Southern District of New York adversary proceeding. Rosetta's answer details the inaccuracies contained in Calpine's complaint, and rejects Calpine's characterization of the transaction by which Calpine sold the shares of Rosetta to individual investors for more than $1 billion in cash plus other valuable consideration. As reported in the Troubled Company Reporter on Oct. 26, 2007, the Court denied the request of Rosetta to dismiss Calpine's fraudulent conveyance complaint, on the ground that it is uncertain at this time as to whether Calpine's creditors will receive a full recovery on their claims. "In an effort to manufacture a claim against our company, Calpine has grossly mischaracterized the underlying facts of the Rosetta transaction," Michael Rosinski, Rosetta Resources Executive Vice President and CFO, said. "We intend to continue to vigorously defend against Calpine's baseless claims, and prosecute our counterclaims against Calpine to recover for any and all damages Rosetta has suffered and may suffer as a consequence of Calpine's actions." Rosetta's counterclaims against Calpine allege that, if Calpine's allegation in the complaint that it was insolvent at the time of the Rosetta transaction is correct, its filings with the SEC and its warranties to Rosetta and its new investors that it was solvent at the time of the transaction would have been false and misleading, and that Calpine's board of directors and its sophisticated professionals knew or should have known of Calpine's financial condition at the time those statements were made. Rosetta further claims that Calpine breached the agreements pursuant to which Rosetta purchased the oil and gas business by failing to complete the transaction in material respects and by failing to pay over to Rosetta proceeds from operation of certain properties that Calpine sold to Rosetta. Rosetta also asserts that if Calpine obtains any recovery from Rosetta in the adversary proceeding, any such recovery would be subject to setoff against the damages Rosetta is seeking against Calpine. In the answer, Rosetta also identifies the factual inaccuracies in the allegations contained in Calpine's complaint. Calpine's complaint mischaracterizes its spin-off of Rosetta, which was Calpine's indirect subsidiary, to sophisticated institutional investors as an "insider transaction," wrongly implying that Calpine's executives and board were denied access to key information about the value of the assets being sold. Calpine further mischaracterizes the sale as being $400 million short of its oil and gas business' true value, when, in reality, Calpine extracted the highest possible value at the terms it dictated and a process it controlled. The answer alleges that the Rosetta transaction involved the private placement by two Calpine subsidiaries of the stock of Rosetta to sophisticated investors. Rosetta's answer alleges that Calpine "spent millions of dollars," working with "some of the most knowledgeable and well-respected experts in the industry," including investment bankers, petroleum engineers, accountants and lawyers, "to value the oil and gas business that was sold." The entity formed for the purpose of the transaction, which became Rosetta, was not permitted to retain its own advisors. Rosetta's answer further alleges that Calpine dictated the price at which it was willing to sell, flatly rejecting a lower proposal when initial efforts yielded insufficient offers to meet Calpine's price. The entire transaction was reviewed and approved by Calpine's sophisticated board -- all of whom Calpine, as part of its plan of reorganization, has proposed be released from any liability for their actions. In Calpine's own legal filings, Calpine has alleged that its own board members (two of whom (George Stathakis and Susan Wang) are still active members of Calpine's board and one of whom (Kenneth Derr former Chairman and CEO of Chevron) has an oil and gas background), were engaged in waste of Calpine's corporate assets, breached their fiduciary duties owed to Calpine's shareholders, and, at a minimum, committed negligence, notwithstanding the myriad of professional advisors who participated on the Rosetta transaction and provided advice to these same board members. Characterizing Calpine's allegations as "a transparent attempt to manufacture leverage with which to extort additional funds from Rosetta and its shareholders," Rosetta alleges that the transaction and its price were "the product of a comprehensive, fully-vetted and arms-length valuation process," culminating in the representations by Deutsche Bank to the Calpine board that the price constituted fair market value. Rosetta points out that the sale was the final part of Calpine's longstanding strategic decision to sell its "non-core" oil and gas assets, resulting in a price "at or above the highest range of valuations (of) any investment banker retained by Calpine," which was "uniformly applauded" by analysts after its terms were announced. About Rosetta Based in Houston, Texas, Rosetta is an independent oil and gas company engaged in the acquisition, exploration, development and production of oil and gas properties in North America. Its operations are concentrated in the Sacramento Basin of California, South Texas, the Gulf of Mexico and the Rocky Mountains. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. (Calpine Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CERIDIAN CORP: Closes $5.3 Bil. Buyout Deal with Fidelity Nat'l --------------------------------------------------------------- Fidelity National Financial Inc. has completed the acquisition of Ceridian Corporation for approximately $5.3 billion. FNF contributed approximately $525 million of the total $1.6 billion equity funding for the acquisition, resulting in a 33% ownership stake for FNF in Ceridian. The majority of FNF's equity contribution was funded through a borrowing under its existing bank credit facility. "We are very excited about the acquisition of Ceridian," said FNF chairman and chief executive officer William P. Foley, II. "Ceridian provides FNF with a company that has leading market positions in large, growing markets, long- term customer relationships, recurring revenue, strong cash flow and a significant margin expansion opportunity. We look forward to the opportunity it provides for us to continue to create significant long-term value for FNF shareholders." About Fidelity National Headquartered in Jacksonville, Florida, Fidelity National Financial Inc. (NYSE:FNF) -- http://www.fntg.com/-- fka Fidelity National Title Group Inc., through its subsidiaries, is a provider of title insurance, specialty insurance and claims management services. The company also provides flood insurance, personal lines insurance and home warranty insurance through its specialty insurance subsidiaries. In addition, FNF is a provider of outsourced claims management services to corporate and public sector entities through its minority-owned subsidiary, Sedgwick CMS Holdings, Inc. About Ceridian Corporation Headquartered in Minneapolis, Minnesota, Ceridian Corporation (NYSE:CEN) -- http://www.ceridian.com/-- is an information services company principally in the human resource, transportation and retail markets. The company's human resource solutions business enables customers to outsource a range of employment processes, such as payroll, tax filing, human resource information systems, employee self-service, time and labor management, benefits administration, employee assistance and work-life programs, recruitment and applicant screening, and post-employment health insurance portability compliance. It has HRS operations in the United States, Canada and the United Kingdom. Ceridian Corporation's Comdata subsidiary provides transaction processing, financial services and regulatory compliance services to the transportation and retail industries. Comdata's products and services include payment processing and the issuance of credit, debit and stored value cards. * * * As reported in the Troubled Company Reporter on Oct. 25, 2007, Moody's Investors Service assigned a B3 Corporate Family Rating to Ceridian Corporation related to its $5.2 billion acquisition by Thomas H. Lee Partners L.P. and Fidelity National Financial, Inc. In addition, Moody's assigned a B1 rating to its $2.55 billion senior secured credit facilities ($2.25 billion term loan and $300 million revolving credit facility), a Caa2 rating to its $1 billion of senior unsecured notes (anticipated $600 million cash pay and $400 million PIK toggle), and a Caa2 rating to its $300 million of senior subordinated notes. CHAMPION ENTERPRISES: Prices Tender Offering of 7-5/8% Notes ------------------------------------------------------------ Champion Enterprises Inc. has priced its tender offer and consent solicitation for the company's outstanding 7-5/8% Senior Notes due 2009 (CUSIP No. 158496AB5). The total consideration for the notes was calculated as of 10:00 a.m., New York City time, on Nov. 9, 2007, by reference to a fixed spread of 50 basis points over the yield on the 3.875 percent U.S. Treasury note due May 15, 2009. The reference yield to maturity on the Reference Treasury Security, as of 10:00 a.m., New York City time, on Nov. 9, 2007 was 3.477%. The company will pay the total consideration to holders of the notes who validly tendered their notes and delivered their consents prior to 5:00 p.m., New York City time, on Nov. 9, 2007, and whose notes are accepted for purchase by the company, on Nov. 13, 2007. The total consideration per $1,000 principal amount of the notes that were validly tendered prior to the Consent Payment Deadline will be $1,052.80, which includes a consent payment of $30. Holders of such notes validly tendered and accepted for payment will also receive accrued and unpaid interest on such notes from the last interest payment date to, but not including, the Initial Payment Date. At the final payment date, which is expected to be on or about Nov. 28, 2007, holders tendering their notes after the Consent Payment Deadline, but prior to 12:00 midnight, New York City time, on Nov. 27, 2007, unless extended, whose notes are accepted for purchase by the company, will receive the tender offer consideration of $1,022.80, but will not receive the Consent Payment. Holders of such notes tendered after the Consent Payment Deadline will also receive accrued and unpaid interest on such notes from the last interest payment date to the Final Payment Date. The company also disclosed that a majority of holders in principal amount of the notes have provided the requisite consents to amend the indenture governing the notes. As of the Consent Payment Deadline, the company had received tenders and consents for $74,843,000 in aggregate principal amount of the notes, representing approximately 90.94% of the outstanding notes. Holders may no longer withdraw the notes previously or hereafter tendered, except as described in the Offer to Purchase and Consent Solicitation Statement, dated Oct. 29, 2007. The Offer is subject to the satisfaction of certain conditions, including the financing condition, the minimum tender condition, the supplemental condition and other general conditions, as described in the Offer to Purchase and Consent Solicitation Statement, dated Oct. 29, 2007. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at (212) 325- 4951 (collect). Holders can request documents from D.F. King & Co., Inc., the information agent and tender agent, at (888) 644-5854 (U.S. toll free) or (212) 269-5550 (collect). About Champion Enterprises Inc. Auburn Hills, Michigan-based Champion Enterprises Inc., (NYSE: CHB) -- http://www.championhomes.com/-- operates 32 manufacturing facilities in North America and the United Kingdom and works with over 3,000 independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. * * * Moody's Investor Service placed Champion Enterprises Inc.'s senior unsecured debt and probability of default ratings at 'B1' in September 2006. The ratings still hold to date with a negative outlook. CHARMING SHOPPES: Board OKs New $200 Mil. Share Repurchase Program ------------------------------------------------------------------ Charming Shoppes Inc.'s board of directors has authorized a new $200 million share repurchase program. The share repurchases will be made from time to time in the open market or through privately negotiated transactions, and are expected to be funded from operating cash flow. The timing and number of shares purchased will depend on market conditions, and shares acquired will be held as treasury stock. The company expects to complete the program over the next several years. "Our new share repurchase program reflects our strong balance sheet and cash flows from operations, confidence in our long- term growth and our commitment to returning value to shareholders," Dorrit J. Bern, chairman, chief executive officer and president of Charming Shoppes Inc. stated. Under existing share repurchase programs, year to date, the company has repurchased approximately 22 million shares. There are approximately 3.3 million shares remaining under the company's existing 5 million share authorization. The company expects to complete the current five million share authorization by the end of the current fiscal year. In a separate press statement, the company disclosed the relocation of its Catherines Plus Sizes Memphis, Tennessee operations to its Bensalem, Pennsylvania offices. About Charming Shoppes Inc. Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) - http://www.charmingshoppes.com/-- is a multi- brand, multi-channel specialty apparel retailer focused on women's plus-size specialty apparel. The company operates in two segments: Retail Stores segment and Direct-to-Consumer segment. Charming Shoppes operates 2,425 retail stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINES PLUS SIZES(R), PETITE SOPHISTICATE(R), LANE BRYANT OUTLET(TM), and PETITE SOPHISTICATE OUTLET(TM). * * * As reported in the Troubled Company Reporter on Oct. 24, 2007, Moody's Investors Service placed the 'Ba3' corporate family and 'Ba3' probability of default ratings of Charming Shoppes Inc. on review for possible downgrade. CHRYSLER LLC: Closing Sterling Heights Vehicle Testing Center ------------------------------------------------------------- United Auto Workers union employees at a Chrysler LLC testing facility on Metropolitan Parkway in Michigan will be reassigned following the closure of the site, under the recently ratified labor contract between the carmaker and the union, Terry Oparka of C&G News reports. Mr. Oparka wrote that according to Chrysler spokesman Dave Elshoff, the Sterling Heights Vehicle Test Center, which employs twenty employees and is listed as an industrial warehouse, is for sale for $7 million. Mr. Elshoff added that other Michigan facilities designated to be shuttered are located in Windsor, in Detroit on Mound and and Van Dyke, and in Plymouth. As reported in the Troubled Company Reporter on Nov. 5, 2007, Chrysler disclosed that it would make volume-related reductions at several of its North American assembly and powertrain plants, and eliminate four products from its line-up. Shifts will be eliminated at five North American assembly plants which, combined with other volume-related manufacturing actions, will lead to a reduction of 8,500-10,000 additional hourly jobs through 2008. Additional actions include reductions of salaried employment by 1,000 and supplemental (contract) employment by 37%. The Company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume. The volume-related actions are in addition to 13,000 jobs eliminated by the three-year Recovery and Transformation Plan announced in February. The objectives of the RTP remain the same. "We have to move now to adjust the way our company looks and acts to reflect a smaller market," Tom LaSorda, vice chairman and president of the Chrysler Group, said. "That means a cost base that is right-sized and an appropriate level of plant utilization." About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CITADEL BROADCASTING: Posts $447.8 Million Net Loss in 3rd Quarter ------------------------------------------------------------------ Citadel Broadcasting Corporation reported Friday its results for the third quarter of 2007. Net loss for the quarter ended Sept. 30, 2007, was $447.8 million, as compared to net income of $18.4 million for the same period in 2006. Included in net loss for the quarter ended Sept. 30, 2007, was approximately $463.2 million of asset impairment and disposal charges, net of tax, and $4.6 million of stock-based compensation expense, net of tax. Included in net income for the quarter ended Sept. 30, 2006, was $3.1 million of stock-based compensation expense, net of tax. Net revenues for the third quarter of 2007 were $240.2 million as compared to $112.5 million for the third quarter of 2006. The increase in revenues was a result of the acquisition of ABC Radio on June 12, 2007. On a pro forma basis, which includes the results of ABC Radio for the quarter ended Sept. 30, 2006, net revenues were $249.2 million compared to $240.2 million for the quarter ended Sept. 30, 2007. Farid Suleman, chairman and chief executive officer of Citadel Broadcasting Corporation, commented: "The company is pleased with the progress of integrating the ABC Radio and Network business with our existing operations, and we are focusing our efforts on the potential sale of certain radio stations, which is expected to reduce the company's outstanding indebtedness." Operating loss for the third quarter of 2007 was $427.4 million as compared to operating income of $40.3 million in the corresponding 2006 period, a decrease of $467.7 million. The decrease in operating income for the three months ended Sept. 30, 2007, is the result of a $495.8 million asset impairment and disposal charge. The asset impairment and disposal charge is related to an overall deterioration in the radio market place and to a decline in the company's stock price during the three months ended Sept. 30, 2007, as compared to the company's stock price that was used under GAAP in the United States of America to record the ABC Radio merger, coupled with a decline in the estimated fair value of certain markets that are more likely than not to be disposed. Net interest expense increased to $39.0 million for the quarter ended Sept. 30, 2007, from $8.2 million for the quarter ended Sept. 30, 2006, an increase of $30.8 million. The increase in net interest expense was primarily the result of the interest incurred on the increased borrowings under the company's new senior credit and term loan facility as a result of the merger with ABC Radio. Income tax benefit for the quarter ended Sept. 30, 2007, was $20.0 million, compared to income tax expense of $13.4 million for the quarter ended Sept. 30, 2006. The income tax benefit for the quarter ended Sept. 30, 2007, is related to the $495.8 million asset impairment and disposal charges, which resulted in an income tax benefit of approximately $32.6 million, partially offset by the tax expense on pre-tax income excluding impairment loss. Free cash flow was $41.6 million for the three months ended Sept. 30, 2007, compared to $35.8 million for the three months ended Sept. 30, 2006, an increase of $5.8 million. The increase in free cash flow is a result of the acquired ABC Radio business, offset in part by an increase in interest costs and corporate general and administrative expenses. At Sept. 30, 2007, the company's consolidated balance sheet showed $4.92 billion in total assets, $3.44 billion in total liabilities, and $1.48 billion 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?2528 About Citadel Broadcasting Headquartered in Las Vegas, Nevada, Citadel Broadcasting Corp. (NYSE: CDL) -- http://www.citadelbroadcasting.com/-- is a radio broadcaster focused primarily on acquiring, developing and operating radio stations throughout the United States. Citadel is comprised of 169 FM and 61 AM radio stations, in addition to the ABC Radio Network business. * * * Citadel Broadcasting Corp. still carries Moody's Investors Service 'Ba3' corporate family and 'Ba3' bank loan debt ratings. The rating outlook is stable. CITY OF GILMER: Moody's Holds Ba1 Rating on $7.3 Mil. Tax Debt -------------------------------------------------------------- Moody's Investor Services affirmed the Ba1 underlying rating on the City of Gilmer's $7,255,000 outstanding general obligation limited tax debt. The rating action reflects the City's continued negative fund balance; unfavorable budgeting practices; an unwillingness to utilize the City's available taxing capacity; and unresolved audit findings. Continued Financial Strain Without a Clear Recovery Plan In September of 2005, Moody's downgraded the City of Gilmer from a Baa3 to a Ba1. In part, the downgrade was reflective of a negative fund balance. The negative fund balance has improved but remains negative. The FY 2006 fund balance was a negative $924K a $257K improvement over FY 2005. The budget continues to be structurally imbalanced with budgeted operating expenditures exceeding budgeted general fund operating revenues in FY 2006, FY 2007 and FY 2008. In each of these years, the overage has been corrected with a transfer from the sanitation and water and sewer funds. Absent a clearly defined transfer policy, as is the case with Gilmer, the reliance of the general fund on the transfer creates a spiraling dependency. In FY 2008, the City increased the water and sewer fee by 3% to support the $430K transfer to the general fund. In addition to the proprietary fund transfer to support operating expenditures, the City had utilized a line of credit to meet its daily operating needs. At the beginning of FY 2006, the balance owed on the line of credit was $577K, representing 20% of the City's overall operating revenues for the same fiscal year. The City paid $100K toward the principle amount during the fiscal year. The remaining balance along with the City's repeated reliance on the water, sewer and sanitation transfer indicates a weak cash position for the city. Additionally, the City has not demonstrated a sound and forward-looking approach to re-establish a positive fund balance. These factors and budgetary practices are not consistent with an investment grade rating category. Deferred Utilization of Ad Valorem Revenue Stream The City has experienced an upward trend in property values but has not harnessed the revenue potential this trend could afford. The City reduced the property tax rate in FY 2006, 2007 and 2008. The FY 2008 tax rate of $6.50 per $1,000 assessed valuation is well below the state constitutional limit of $25 per $1,000 assessed valuation. According to city management, the City has avoided raising tax rates and is adverse to keeping rates steady when there is growth in the base. Taking into consideration Gilmer's negative cash position, the unwillingness to utilize this revenue stream is especially troubling and contributes to the affirmation of the below investment grade rating. Audit Findings Also of concern to Moody's are "reportable condition" audit findings that have not been addressed by the City. In FY 2005, the city's audit noted the absence of several internal control measures related to journal entry accounting. The exact findings related to journal entry accounting were repeated in the city's FY 2006 audit. Of particular concern to Moody's is city management's lack of a well-formulated or articulated plan to correct these findings. Key Statistics Estimated 2004 Population: 5,071 Per Capita Income: $16,823 (86% of state median) 2007 Full Value: $210 million 2007 Full Value per Capita: $45,204 Direct Debt Burden: 3.9% Overall Debt Burden: 7.5% Payout in Ten Years: 52.1% FY 2006 General Fund Balance: Negative $924,474 General Obligation Debt Outstanding: $7.25 million CITICORP MORTGAGE: Fitch Takes Rating Actions on 18 Deals --------------------------------------------------------- Fitch Ratings upgraded four classes and affirmed 83 classes for these Citicorp mortgage-pass through certificates: Series 2002-11 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AA'; -- Class B-4 affirmed at 'A'; -- Class B-5 affirmed at 'BBB'. Series 2002-12 -- Class A affirmed at 'AAA'. Series 2003-2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 upgraded to 'AA' from 'AA-'. -- Class B-4 upgraded to 'A' from 'A-'. -- Class B-5 affirmed at 'BB+'. Series 2003-3 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AA'; -- Class B-4 affirmed at 'A'; -- Class B-5 affirmed at 'BB+'. Series 2003-4 -- Class A affirmed at 'AAA' Series 2003-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 upgraded to 'BBB' from 'BBB-'; -- Class B-5 upgraded to 'BB' from 'BB-'. Series 2003-8 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2003-10 -- Class A affirmed at 'AAA'. Series 2003-11 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-3 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-4 -- Class A affirmed at 'AAA'. Series 2004-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'. Series 2004-6 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-7 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-8 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2004-9 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. The affirmations affect about $4.744 billion in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The upgrades reflect an improvement in the relationship of CE to future loss expectations and affect about $3.8 million in outstanding certificates. The mortgage loans consist primarily of fixed-rate 15-30-year mortgages 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 transactions are seasoned from a range of 34 to 59 months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 0.09% (2002-11) to 0.72% (2004-4). All of the loans are serviced by CitiMortgage Inc. which is rated 'RPS1' by Fitch. CLAYTON WILLIAMS: Completes $21 Million Sale of Texas Assets ------------------------------------------------------------ Clayton Williams Energy Inc. has closed the sale of all of its producing and nonproducing acreage in Pecos County, Texas to an undisclosed buyer for $21 million, subject to typical post-close adjustments. The company expects to record a gain of approximately $13 million in the fourth quarter of 2007 in connection with this sale. Proceeds from the sale were used to repay indebtedness on the company's revolving credit facility. Clayton Williams Energy Inc. (NasdaqGM: CWEI) -- http://www.claytonwilliams.com/-- is an independent energy company located in Midland, Texas. It holds interests primarily in the Permian Basin, Louisiana; and the Austin Chalk and Cotton Valley Reef of Texas. * * * Moody's Investor Services placed Clayton Williams Energy Inc.'s long term corporate family ratings at 'B2' in July 2005. The ratings still hold to date with a stable outlook. COUNTRYWIDE FIN'L: Credit Rating Cut Cues Funding Modification -------------------------------------------------------------- Countrywide Financial Corporation has modified its funding structure by reducing its reliance on the public debt and non- agency secondary mortgage markets after credit rating agencies downgraded the company's debt ratings due to current market conditions and constrained liquidity, the company's Nov. 9, 2007 regulatory filing with the Securities and Exchange Commission disclosed. Specifically, Countrywide: * accelerated the integration of its mortgage banking activities into its bank subsidiary which has more stable funding and more access to highly reliable sources of funds which are less dependent on the capital markets during periods of market stress; * significantly changed its underwriting standards, focusing the bulk of its current loan production on loans that are available for direct sale to or securitization into programs sponsored by the government-sponsored agencies (Fannie Mae, Freddie Mac and Ginnie Mae); * procured other sources of financing, including: -- drawing the full $11.5 billion amount of its committed revolving credit facilities established to provide liquidity in the event of a disruption in the commercial paper market; -- making a private issuance of $2.0 billion of 7.25% convertible cumulative preferred stock; -- negotiating $7.5 billion of committed repurchase facilities, which included renewals of $2.5 billion of existing uncommitted repurchase facilities; -- negotiating an increase of $5.5 billion of an uncommitted but highly reliable repurchase facilities with a government-sponsored enterprise; and -- implementing an aggressive campaign to attract and retain bank deposits, including significant expansion of its network of financial centers. David Sambol, Countrywide's president and chief operating officer and director, relates that to retain access to the public debt markets, it is critical for the company to maintain investment- grade credit ratings. Among other things, Mr. Sambol says, maintenance of the company's current investment-grade ratings requires that the company has high levels of liquidity, including access to alternative sources of funding such as deposits and committed lines of credit provided by highly rated banks. The company must also maintain adequate capital that exceeds current rating agency requirements. Mr. Sambol notes that while Countrywide retains its investment grade ratings, all three rating agencies have placed the company's ratings on some form of "negative outlook." He warns that should the company's credit ratings drop below "investment grade," its access to the public corporate debt markets could be severely limited. "The cutoff for investment grade is generally considered a long- term rating of BBB- (or Baa3 Moody's Investors Service), which is equal to our lowest current rating. Furthermore, we expect that renegotiation or replacement of our existing financing arrangements beyond their current maturity dates will involve more restrictive terms and higher relative rates than those presently in place," Mr. Sambol explains. According to Mr. Sambol, any reduction of Countrywide's credit ratings below investment grade could, among others: a) subject the company's roughly $5.5 billion custodial deposits to placement with another bank; b) negatively affect the company's ability to retain its commercial deposits; and c) cause difficulty to the company's broker-dealer in conducting trading operations. Mr. Sambol points out that the company has responded to the risks by procuring additional sources of liquidity, including $9.2 billion of cash and cash equivalents as of Sept. 30, 2007. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. Bankruptcy Speculation Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco, raised the possibility that Countrywide might need to seek protection from creditors under chapter 11 in a research report entitled "Liquidity is the Achilles heel" distributed to Merrill Lynch clients. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," Mr. Bruce wrote. With $209 billion in assets and $194 billion in liabilities, Countrywide would be the largest chapter 11 filing in U.S. history by those measures. The company however gave banking customers reassurance that their money was safe. That company cited that it has assets of more than $100 billion; has investment-grade ratings from three major credit rating agencies; and credit woes currently hurting its lending business won't affect federally insured deposits. Countrywide also disclosed that it received a $2 billion strategic equity investment from Bank of America which was completed and funded Aug. 22, 2007. In September 2007, Countrywide completed more than 17,000 loan modifications and is on target to complete nearly 25,000 in 2007, in its ongoing effort to curb foreclosures. CRICKET COMMS: Moody's Holds B2 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service lowered Cricket Communications Inc.'s speculative grade liquidity rating to SGL-4 from SGL-1 and affirmed the company's long term ratings, including its B2 corporate family rating. The lowering of Cricket's liquidity rating reflects the potential that the company may become in technical default under the terms of its bank agreement following the announcement made by Cricket's parent company, Leap Wireless International Inc. that Leap will restate its financial results for the period of Jan 1 2004 to June 30, 2007 to correct for certain errors in previously reported service revenues, equipment revenues and operating expenses. While Moody's expects that the company will successfully receive a waiver over any potential default that may occur as a result of the restatements, the liquidity rating incorporates no such expectation. Downgrades: Issuer: Cricket Communications, Inc. -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-1 The restatements are expected to result in a net aggregate reduction of both service revenues and operating income by $20 million compared to previously reported aggregate service revenues and operating income of about $3.1 billion and $125 million respectively. This may result in a default under Cricket's senior secured credit agreement arising from a potential breach of representations regarding the presentation of Leaps prior financial statements and require the immediate repayment of Cricket's $890 million in senior secured term debt and $1.1 billion in senior unsecured notes which Cricket does not otherwise have the committed resources to satisfy. Moody's changed Cricket's outlook to developing in September 2007 to reflect the potential that the company's parent (Leap Wireless International Inc.) may reach an agreement to merge with MetroPCS Communications Inc. While PCS has withdrawn its offer for Leap, Moody's believes the potential for a merger continues to exist evidenced in part by Leap's request for its lenders to amend the timing of when a change of control provision is triggered. As such, Cricket's outlook continues to be developing. Leap Wireless International Inc. wholly-owns Cricket Communications Inc., which is a wireless service provider. Both companies are headquartered in San Diego, California. DANA CORP: Gets Banks' Proposals for $2 Billion Exit Financing -------------------------------------------------------------- Dana Corp. and its debtor-affiliates have received proposals from 10 financial institutions in connection with the exit financing contemplated in their joint plan of reorganization and the bankruptcy court-approved Disclosure Statement. The Debtors are seeking a $2 billion loan to exit Chapter 11 by the end of 2007. Dana has sought permission from the U.S. Bankruptcy Court for the Southern District of New York to enter into and perform under a commitment letter and a fee letter, which allows the payment of commitment fees and reimbursement of out-of-pocket expenses. Dana, however, has yet to identify the lenders or financial institutions who will syndicate or provide the loan. Corinne Ball, Esq., at Jones Day, in New York, told the Court that the Debtors, with the assistance of Miller Buckfire & Co., LLC, and AlixPartners, LLP, their financial advisors, are still in the process of selecting and negotiating the optimal financing package from proposals submitted by more than 10 financial institutions. "The Debtors need to proceed expeditiously to stay on target to emerge from chapter 11 by the end of 2007 and anticipate that they will be in a position to file the Commitment Letter with the Court on or about November 16, 2007," Ms. Ball says. The Debtors have asked the Court to hold a hearing on Nov. 28, 2007, to consider approval of the Commitment Letter. Objections are due Nov. 21, 2007, at 4:00 p.m. The Debtors said that in any event, they will file the Commitment Letter with the Court at least three business days prior to the scheduled hearing. According to Ms. Ball, the Commitment Documents will contain customary terms and conditions found in similar types of financing, and will generally provide for an Exit Facility consisting of: (a) Up to $2 billion senior credit facility, which will consist of: -- $650 million asset-based revolving credit facility with a sublimit for letters of credit to be determined; and -- $1.35 billion term loan. (b) Maturity is expected to be between five to seven years. (c) The collateral securing the exit facility is substantially all of the Debtors' assets, including a pledge of 65% of the stock of each of the Debtors' foreign subsidiaries. (d) The interest rate and fees are still to be negotiated but will be consistent with market rates used in similar financing type. (e) The Exit Facility will contain affirmative and negative covenants, representations and warranties and events of default customary for similar types of financings. (f) The Revolver will be undrawn at closing. The proceeds of the Term Loan will be used at closing to repay existing claims against the Debtors pursuant to the Plan, including repaying in full the DIP Credit Agreement, and any excess proceeds will remain on the balance sheet of the Reorganized Debtors. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/--designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off- highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007 the Debtors listed $6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland