T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 14, 2007, Vol. 11, No. 270 Headlines 1031 TAX GROUP: Chap. 11 Trustee Taps Kaufman as Virginia Counsel 1031 TAX GROUP: Chapter 11 Trustee Taps SEKO as Aircraft Broker ACE SECURITIES: S&P Holds BB+ Rating on Class B-1 Certificates AMERICAN HOME: Court Denies UBS Request for Stay of $500M Sale AMERICAN HOME: Asks Court to Compel Triad to Honor Claims AMERICAN HOME: Competes w/ Bear Stearns Over Rights to $1.8MM Fund AMERICAN OPPORTUNITY: Moody's Holds Ba2 Rating on 2001B Bonds BEXAR COUNTY: Performance Decline Prompts Moody's to Cut Ratings BLAST ENERGY: Plan Confirmation Hearing Deferred to November 28 BOMBAY CO: Taps DJM Realty to Dispose U.S. Retail Store Leases BRITISH AMERICAN HOMES: Involuntary Chapter 11 Case Summary C2K2 MOTORS: Voluntary Chapter 11 Case Summary CAITHNESS COSO: Extends Pricing Date of Notes & Bonds Offering CALPINE CORP: Creditor & Equity Panel Backs Claims Objection Plea CAMBER 7: Moody's Junks Rating on $11.25 Mil. Floating Rate Notes CANARGO ENERGY: Posts $9.96 Million Net Loss in Third Quarter CASH TECH: Arranges $750,000 of New Funding for its Cash Needs CD 2007-CD5: S&P Puts Low-B Ratings on Six Certificate Classes CETUS ABS: Moody's Downgrades Ratings on Four Note Classes CHARLES BOOTHE: Voluntary Chapter 11 Case Summary CHARYS HOLDING: Miller Ray Houser Raises Going Concern Doubt COMPUTER WORLDS: Involuntary Chapter 11 Case Summary CONNACHER OIL: Moody's Rates $600 Million Pending Notes Offering CONSTELLATION BRANDS: Buying Fortune's Wine Biz for $885 Million CONSTELLATION BRANDS: Fortune Deal Cues Fitch to Hold Ratings COUNTRYWIDE FINANCIAL: Loan Fundings Drops 48% in October 2007 DANA CORP: Judge Lifland Rejects Jasco's $20 Million Claim DANA CORP: Wants to Settle Asbestos Claims for $2 Million DANA CORP: Ad Hoc Asbestos Committee Balks at Proposed Settlement DARDENNE ANIMAL: Case Summary & 15 Largest Unsecured Creditors DELAWARE AVENUE: Case Summary & 10 Largest Unsecured Creditors DIOGENES CDO: Moody's Junks Rating on $16 Mil. Floating Rate Notes DISTRIBUTED ENERGY: Posts $15.2 Million Net Loss in 3rd Quarter DOLLAR FINANCIAL: Moody's Lifts Corporate Family Rating to B2 DON RODDAM: Voluntary Chapter 11 Case Summary DONNIE DUNN: Case Summary & Five Largest Unsecured Creditors DUKE FUNDING: Bad Credit Quality Cues Moody's to Downgrade Ratings DUKE FUNDING: Moody's Cuts Ratings on EUR67 Mil. Notes to Ba2 E*TRADE FINANCIAL: Shares Down 59%; Bankruptcy Risk Raised ECHOSTAR COMMS: Earns $200 Million in 3rd Quarter Ended Sept. 30 ENTERPRISE GP: Fitch Rates $850MM Sr. Secured Term Loan at BB EQUIFIRST MORTGAGE: Moody's Puts Low-B Rated Certs. on Neg. Watch EXCO RESOURCES: Earns $10.7MM in Third Quarter Ended Sept. 30 FINLAY ENTERPRISES: Completes $200MM Buy of Zale's Bailey Asset FREMONT GENERAL: Board Names Stephen Gordon as Chairman and CEO G-I HOLDINGS: Wants Exclusive Period Further Extended to April 30 GMAC MORTGAGE: Fitch Affirms 'B' Ratings on Three Classes GRAPHIC PACKAGING: S&P Holds All Ratings and Revises Outlook GREAT ALLIANCE: Case Summary & Five Largest Unsecured Creditors GREGORY LEGGOTT: Case Summary & Eight Largest Unsecured Creditors HERBST GAMING: EBITDA Decline Prompts Moody's to Pare Rating to B2 HIDDEN SPLENDOR: Court Approves White Law as Bankruptcy Counsel HIDDEN SPLENDOR: U.S. Trustee Appoints Five-Member Creditors Panel HIDDEN SPLENDOR: McGuirewoods Approved as Committee's Counsel HOMEBANC CORP: Wants Until March 6 to Remove Civil Actions HOMEBANC CORP: Wants to Lease-Decision Period Extended to March 6 INDYMAC: Moody's Junks Ratings on Five Certificate Classes INPHONIC INC: Organization Meeting Scheduled This Friday INPHONIC INC: Faces Nasdaq Delisting Due to Bankruptcy Filing INSITE VISION: Sept. 30 Balance Sheet Upside-Down by $1.9 Million INTERGRAPH CORP: Good Performance Prompts S&P to Lift Rating INVESTMENT PROPERTIES: Likely to File for Bankruptcy, Reinert Says IRON MOUNTAIN: High Debt Leverage Cues S&P to Revise Outlook LEVTIZ FURNITURE: Seeks Court OK to Employ Jones Day as Counsel LEVITZ FURNITURE: Wants to Hire Young Conaway as Conflicts Counsel LEVITZ FURNITURE: Wants Until December 21 to File Schedules LIBERTY TAX: Sept. 30 Balance Sheet Upside-Down by $10.2 Million LIMITED BRANDS: October 2007 Sales Drop 6% to $644.7 Million MARKOV CDO: Moody's Cuts Ratings on $32 Million Notes to Ba3 MATTRESS GALLERY: US Trustee Appoints Five-Member Creditors Panel MATTRESS GALLERY: Gets Interim Okay to Access OMG DIP Financing MEDFORD CROSSINGS: Laurel Creditors Wants Automatic Stay Lifted MEDFORD CROSSINGS: Lender Wants Obermayer Disqualified as Counsel MEDQUEST INC: Novant Merger Cues S&P to Retain Positive Watch MGM MIRAGE: Develops Kansas Resort Casino with Foxwoods & Sumner MIRANT CORP: Fitch Removes Ratings from Negative Watch MNK INVESTMENTS: Involuntary Chapter 11 Case Summary MOVIE GALLERY: Court Defers Hearing on Leases' Auction to Nov. 28 MOVIE GALLERY: Resolves Objections Auction of Leases MOVIE GALLERY: Securities Delisted from NASDAQ MQ ASSOCIATES: Unit Completes $45MM Merger with Novant Health MQ ASSOCIATES: Offers to Purchase $316 Million of Senior Notes MUSIC WORLD: Put Under Bankruptcy by Owners; To Close by January MYLOTTE DAVID: Organizational Meeting Scheduled on November 19 NATIONAL ENERGY: Board to Liquidate Assets and Dissolve Company NATIONAL MONEY: Moody's Lifts Senior Secured Rating to B2 from B3 NEUMANN HOMES: U.S. Trustee Appoints Seven-Member Creditors Panel NEUMANN HOMES: Ad Hoc Group of Secured Trade Creditors Formed OCCULOGIX INC: Posts $19.7 Million Net Loss in Qtr. Ended Sept. 30 OPEN TEXT: Successful Integration Cues S&P's Stable Outlook ORBITZ WORLDWIDE: Posts $32 Million Net Loss in Third Quarter POINT PLEASANT: Moody's Junks Rating on $32 Million Notes PRIMUS TELECOMMS: Has $445.6 Mil. Equity Deficit at Sept. 30 PRINCETON SKI: Organizational Meeting Scheduled on November 19 PSEG ENERGY: Stand-Alone Credit Cues S&P to Hold 'BB-' Rating SCO GROUP: Wants Cattleback Settlement Agreement Approved SILVER ELMS: Moody's Places Notes' Low-B Ratings Under Neg. Watch STATION CASINOS: Sept. 30 Balance Sheet Upside-Down by $290MM STATION CASINOS: Completes Merger Deal with FCP Acquisition TAUBMAN CENTERS: Fitch Holds 'BB' Issuer Default Rating TERWIN MORTGAGE: Poor Credit Support Cues S&P to Lower Ratings TRANSTEC INC: Voluntary Chapter 11 Case Summary TRUESTAR BARNETT: Wants Voluntary Chapter 11 Case Dismissed TWIN PEAKS FINANCIAL: Involuntary Chapter 11 Case Summary TYSON FOODS: Outlines International Expansion Plans TYSON FOODS: Earns $32 Million in Fourth Qtr. Ended Sept. 30 VIRAGEN INC: AMEX to Delist Stock Effective November 19 WENDY'S INTERNATIONAL: Fidelity National Cancels Planned Bid WESTAR ENERGY: Plans Public Offering of 7.6 Mil. Shares of Stock WESTLAKE CHEMICAL: Earns $38 Million in Third Quarter of 2007 WILLIAMS COS: S&P Lifts Ratings on Four Certs. from BB+ to BBB- * Moody's Downgrades Ratings on 64 Impac-backed Tranches * Beard Group's Featured Audio Conference for November 2007 * Upcoming Meetings, Conferences and Seminars ********* 1031 TAX GROUP: Chap. 11 Trustee Taps Kaufman as Virginia Counsel ----------------------------------------------------------------- Gerard A. McHale, Jr., the Chapter 11 Trustee for 1031 Tax Group LLC and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York for authority to employ Kaufman & Canoles as his special Virginia counsel, nunc pro tunc Oct. 24, 2007. As the Trustee's special Virginia counsel, Kaufman & Canoles will render legal services as the Trustee may request that relate to the Virginia Debtors, criminal investigation and additional necessary legal services in Virginia. The firm's attorneys will charge at an hourly rate between $320 and $300 for this engagement. Dennis T. Lewandowski, Esq., a partner of the firm, assures the Court that the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Lewandowski can be reached at: Dennis T. Lewandowshi, Esq. 2101 Parks Avenue, Suite 700 Post Office Box 626 Virginia Beach, Virginia 23451 Tel: (757) 491-4000 Fax: (757) 491-4020 http://www.kaufmanandcanoles.com/ Virginia Matters As reported in the Troubled Company Reporter on Oct. 29, 2007, the Court approved an agreement entered into by the Debtors, the Official Committee of Unsecured Creditors, and Edward H. Okun, the owner of The 1031 Tax Group. The agreement, dated Oct. 11, 2007, provides for the transfer of all of Mr. Okun's assets to the Debtors. However, with the appointment of Mr. McHale as the Debtors' chapter 11 trustee, under the agreement, Mr. McHale will become successor to the Debtors. Mr. McHale relates that included in the transfer are three entities controlled by Mr. Okun namely: (1) IPofA West Oaks Mall, L.P. (2) IPofA West Oaks LeaseCo; and (3) IPofA WOM Master LeaseCo, L.P. These three entities filed voluntary chapter 11 petitions on Oct. 2, 2007, with the U.S. Bankruptcy Court for the Eastern District of Virginia. A copy of these entities' case summary was published in the Troubled Company Reporter on October 4. About The 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' chapter 11 trustee on Oct. 25, 2007. 1031 TAX GROUP: Chapter 11 Trustee Taps SEKO as Aircraft Broker --------------------------------------------------------------- Gerard A. McHale, Jr., the Chapter 11 Trustee for 1031 Tax Group LLC and its debtor-affiliates asks the United States Bankruptcy Court for the Southern District of New York for permission to employ SEKO Enterprises Inc. as his aircraft broker. Under the terms of the broker agreement dates Nov. 1, 2007, SEKO Enterprises will assist the Trustee in selling a Lear 25D jet, Bell 206 B-3 helicopter and 1969 Gulfstream II in 120 days. In addition, the Trustee says that the agreement provides a 5% commission of the proceeds of the sale. The Trustee further says that SEKO Enterprises will charge 6% commission for the 1969 Gulfstreem. The Trustee relates that in June 2007 the firm entered into a brokerage contract with certain entities controlled by Edward H. Okun, the owner of 1031 Tax Group LLC, to sell these aicrafts, plus a 1970 Gulfstream IIB jet. On Oct. 11, 2007, the 1970 Gulstream jet was sold for $2.75 million. George W. Owen, the vice president of the firm, assures the Court that the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Owen can be reached at: George W. Owen SEKO Enterprises Inc. 910 Athens Highway Suite K, #110 Loganville, GA 30052 Tel: (770) 979-8913 Fax: (770) 736-1682 http://www.sekoent.com/ About The 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' chapter 11 trustee on Oct. 25, 2007. ACE SECURITIES: S&P Holds BB+ Rating on Class B-1 Certificates -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on the 30 remaining classes of asset-backed pass-through certificates from five Ace Securities Corp. Home Equity Loan Trust series issued between 2004 and 2006 The affirmations reflect adequate actual and projected credit support percentages. As of the October 2007 remittance period, cumulative realized losses were 1.23%, 3.41%, 1.31%, 1.40%, and 0.83% of the original pool balances for series 2004-SD1, 2005-SD2, 2005-SD3, 2006-SD1, and 2006-SD2, respectively. Severely delinquent loans (90-plus days, foreclosures, and REOs) were 12.53%, 27.16%, 23.81%, 50.94%, 56.70% of the current pool balances for the same respective deals. Series 2004-SD1 is 36 months seasoned and is at its overcollateralization target level of 0.75%; approximately 37.73% of the original pool principal balance is outstanding. Series 2005-SD2 is 27 months seasoned and is close to its O/C target level of 7.30%; approximately 41.84% of the original pool principal balance is outstanding. Series 2005-SD3 is 22 months seasoned and is close to its O/C target level of 3.78%; approximately 54.22% of the original pool principal balance is outstanding. Series 2006-SD1 is 18 months seasoned and is close to its O/C target level of 7.65%; approximately 53.16% of the original pool principal balance is outstanding. Series 2006-SD2 is 15 months seasoned and is close to its O/C target level of 5.10%; approximately 60.22% of the original pool principal balance is outstanding. Subordination, O/C, and excess spread provide credit support for these series. The collateral consists primarily of reperforming, fixed- and adjustable-rate mortgage loans secured primarily by first and second liens on one- to four-family residential properties. Ratings Affirmed Ace Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2004-SD1 A-1 AAA 2004-SD1 M-1 AA 2004-SD1 M-2 A 2004-SD1 M-3 BBB 2004-SD1 M-4 BBB- 2005-SD2 A-1 AAA 2005-SD2 M-1 AA 2005-SD2 M-2 A 2005-SD2 M-3 BBB+ 2005-SD2 M-4 BBB 2005-SD2 M-5 BBB- 2005-SD3 A-1 AAA 2005-SD3 M-1 AA+ 2005-SD3 M-2 A+ 2005-SD3 M-3 A- 2005-SD3 M-4 BBB+ 2005-SD3 M-5 BBB 2005-SD3 B-1 BB+ 2006-SD1 A-1B AAA 2006-SD1 M-1 AA+ 2006-SD1 M-2 AA 2006-SD1 M-3 A+ 2006-SD1 M-4 A 2006-SD1 M-5 A- 2006-SD2 A AAA 2006-SD2 M-1 AA+ 2006-SD2 M-2 AA- 2006-SD2 M-3 A 2006-SD2 M-4 A 2006-SD2 M-5 BBB+ AMERICAN HOME: Court Denies UBS Request for Stay of $500M Sale -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware denied UBS Real Estate Securities, Inc.'s request that the Court stay its order approving the sale of mortgage loan servicing business of American Home Mortgage and Investment Corp. and its debtor- affiliates to AHM Acquisition Co., Inc., for approximately $500,000,000, pending its appeal on the sale order. UBS has already notified the Bankruptcy Court that it will appeal before the U.S. District Court for the District Court of Delaware that it will appeal the sale order, which allows the Debtors to transfer rights to service mortgage loans with unpaid balance of at least $38,000,000,000 to Wilbur Ross' AHM Acquisition. UBS filed a request to stay the order as a "joinder" to a request by DB Structured Products Inc.'s request for a stay, pending appeal, of the sale order to the extent that it includes the transfer of the Debtors' rights and obligations arising out of a master mortgage loan purchase and servicing agreement between the Debtors and DBSP. DBSP, however, withdrew its request following an amendment to the AHM Acquisition asset purchase agreement, which amendment removed the DBSP servicing rights from the list of servicing agreements to be transfered to the buyer. American Home told Bankruptcy Court Judge Christopher S. Sontchi that UBS has not standing to appeal the sale order. The Debtor said that UBS is not a "person aggrieved" by the order because it has already transferred its interest in all of the mortgage loans it owned under the mortgage loan purchase and servicing agreements, as well as certain securitization trusts. The securitization trusts, filed objections to the sale of the Debtors' mortgage loan servicing business, actively participated in the hearing to approve the sale, and ultimately consented to the sale order. American Home also said that there is an immediate need for the Debtors to complete a sale of their servicing business. It said that parties, including federal agencies, would likely seek to terminate their servicing agreements with the Debtors should AHM Acquisition walk away from the sale. The Debtor said that, should the stay be granted, UBS should be required to post a bond of $500,000,000, equivalent to the purchase price, to secure the Debtors from loss in the event a closing of the sale will not subsequently occur. 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. 15, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Asks Court to Compel Triad to Honor Claims --------------------------------------------------------- American Home Mortgage Holdings, Inc., together with American Home Mortgage Investment Corp. and American Home Mortgage Servicing, Inc., filed a complaint against Triad Guaranty Insurance Corp. concerning Triad's refusal to honor claims that American Home submitted under its policy. James L. Patton Jr., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that as a mortgage originator, American Home protects itself against the potential economic harm occasioned by borrower defaults through insurance policies, including the Triad policy. On December 13, 2005, American Home and Triad entered into a Master Policy Agreement, pursuant to which Triad agreed to pay American Home for certain losses arising from homeowner defaults on certain loans originated by American Home. The insurance contract excluded coverage if, during origination, American Home inadvertently relied on misrepresentations of borrowers or appraisers. In July 2007, at least 14 borrowers of mortgage loans originated by American Home in 2005 and 2006 defaulted on their loans and failed to repay American Home. Mr. Patton recalls that after Triad reviewed the Defaulted Loans, it allegedly uncovered irregularities that existed at the time the American Home originated the Defaulted Loans, including: (a) a purportedly negligent analysis by property appraisers; (b) alleged misrepresentations by the borrower of their income and existing mortgage debts; and (c) allegedly incomplete loan applications. In September 2007, Triad informed the Debtors that it was canceling its certification of American Home's insurance coverage for the 14 Defaulted Loans. Mr. Patton explains that the Debtors may recover a portion of their losses brought by the defaulting borrowers' failure to make mortgage payments through foreclosure and sales, however, the sales in the aggregate cannot compensate the Debtors losses occasioned by Triad's refusal to cover the Debtors' Claims. In the aggregate, Triad's refusal to honor the claims will cost the Debtor a net loss of $1,132,105, Mr. Patton says. Mr. Patton asserts that Triad is obligated to pay the Debtors' insurance claims for the defaulted loans under the Federal Declaratory Judgment Act 2201 of Chapter 28 of the United States Code. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to compel Triad to honor the claims that American Home submitted under its policy, and award the Debtors costs and attorney's 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 HOME: Competes w/ Bear Stearns Over Rights to $1.8MM Fund ------------------------------------------------------------------ Wells Fargo Bank, N.A. is the securities administrator, paying agent, and note or certificate registrar for a series of mortgage-backed certificates held by Bear Stearns Mortgage Capital Corp., Bear Stearns & Co. Inc., and Bear, Stearns International Limited, which were issued in connection with certain securitization transactions. Todd C. Schiltz, Esq., at Wolf, Block, Schorr and Solis-Cohen, LLP, in Wilmington, Delaware, relates that the Bear Entities assert ownership of the Mortgage Certificates by exercising remedies in August 2007 under certain repurchase agreements between American Home Mortgage Investment Corp., and American Home Mortgage Acceptance, Inc., and each of the Bear Entities. Because of the remedies, the Bear Entities claim a right to the principal and interest payments for August 2007, which were payable on September 25. However, the Bear Entities had not re- registered the Mortgage Certificates in their own name, which is necessary to make the Bear Entities the holders of record of the Mortgage Certificates under the Transaction Agreements. The Mortgage Certificates were registered in the name of the Debtors, which decline to instruct Wells Fargo to make the August Payment to the Bear Entities. Accordingly, Wells Fargo seeks to remit the August Payment, and subsequent payments under the Mortgage Certificates, to the proper party. Mr. Schiltz contends that each of the Bear Entities and the Debtors appear to have valid arguments supporting a claim to the August Payment. Wells Fargo is prepared to deposit with the U.S. Bankruptcy Court for the District of Delaware the August Payment amounting to $1,863,786, until a determination can be made as to the proper claimant. Mr. Schiltz informs the Court that Wells Fargo has contacted the defendants on several occasions to attempt to resolve its involvement with respect to the disbursement of the August Payment, without success. He says that the Bear Entities have threatened to hold Wells Fargo strictly liable for failure to make the August Payment to them. Wells Fargo asked the Debtors to send an authorization to redirect the payment to the applicable Bear Entity, but has not received from the Debtors any letter of direction or authorization. Wells Fargo also ask the Court to (i) enjoin each of the defendants from instituting any actions against Wells Fargo relating to the August Payment and subsequent payments related to the Mortgage Certificates, (ii) relieve and discharge Wells Fargo from any liability relating to any claim that might arise in connection with the August Payment or subsequent payments, and (iii) award Wells Fargo its reasonable costs, attorney's fees, disbursements and allowances incurred in connection with the action. 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 OPPORTUNITY: Moody's Holds Ba2 Rating on 2001B Bonds ------------------------------------------------------------- Moody's Investors Services affirmed the Baa2 rating on the Bexar County (TX) Housing Finance Corporation Multifamily Housing Revenue Bonds (American Opportunity for Housing-Dublin, Kingswood, and Waterford Apartments Project) Senior Series 2001A and the Ba2 rating on the Subordinate Series 2001B. The outlook on the bonds is stable. The Junior Subordinate Series C bonds are not rated. The rating affirmation reflects the stability of the debt service coverage of the project over time. Dublin, Waterford, and Kingswood Manor apartments are three separate multi-family rental properties located in San Antonio, Texas with 156, 133, and 129 units respectively. The properties are located approximately 8 to 12 miles north of downtown San Antonio with good access to the city's principal traffic arteries. LEGAL SECURITY: The bonds are secured by a lien on and pledge and assignment of a security interest in the Trust Estate. Interest Rate Derivative: none Credit Strengths: * Debt service coverage remained solid for both the senior and subordinate bonds between 2003 and 2006. Debt service coverage dipped to a low of 1.46 in 2005, but rebounded in 2006, when it reached a solid 1.53x based on audited numbers. Coverage for the subordinate bonds ranged between 1.35 and 1.30 between 2003 and 2005, and reached 1.36x in 2006. Unaudited financials as of September 30, 2007 indicate that the properties continue to remain solid financially. * Fully funded debt service reserve funds for both the Series A and B bonds. * Bonds are secured by the revenues from all three properties, instead of relying on revenues from one property to cover debt service on the bonds. Moody's views this diversification of revenues as a credit strength. Credit Challenges: * Occupancy continues to be weak and uneven at the properties, with 90.5% at the Dublin property, 90.4% at the Kingswood property and 85.1% at the Waterford property as of September 2007. However, rent increases put into effect in 2007 have helped revenues to remain steady over time. * Slight concern about the health of the San Antonio submarkets where the properties are located, which are projected to experience a rise in vacancies over the next several years (Torto Wheaton Research). Outlook The outlook for the bonds is stable. The stable outlook reflects Moody's belief that the project will continue to perform close to current levels in terms of NOI. and debt service coverage. What could change the rating- UP * Improvement in occupancy rates, leading to increased rental revenue and growth in NOI and debt service coverage. What could change the rating- DOWN * Material deterioration in debt service coverage; tapping any of the debt service reserve funds. BEXAR COUNTY: Performance Decline Prompts Moody's to Cut Ratings ---------------------------------------------------------------- Moody's Investors Services downgraded the rating on Bexar County (TX) Housing Finance Corporation Housing Revenue Bonds (Nob Hill Apartments Project) Senior Series 2001A to Ba3 from Ba2 and downgraded the rating on the Subordinate Series 2001B to B1 from Ba3. The outlook remains negative. The Junior Subordinate Series C bonds are not rated. The rating downgrades reflect the continued financial deterioration of the project. Nob Hill Apartments Project is a 368-unit multi-family rental property. LEGAL SECURITY: The bonds are secured by a lien on and pledge and assignment of a security interest in the Trust Estate. Interest Rate Derivatives: none Credit Strengths: * Fully funded debt service reserve funds for both the Series A and B bonds. * An improvement in occupancy during the latter half of 2007, from a low of 72% in May of 2007 to 85% as of October 2007. * Significant capital investment into the property, including building a new community center for the residents. * Property is managed by the Lynd Management Company, which has a strong background in managing affordable housing properties throughout Texas. Credit Challenges: * Financial performance continues to decline. As of 2006 audited numbers, debt service coverage on the senior and subordinate bonds fell to 1.20x and 1.08x respectively. As of unaudited financial statements in September 2007, the property was not producing enough revenue to cover operating expenses and debt service payments. However, debt service continues to be paid in a timely fashion due to financial support from the property owner. * Increased expenses also contributed to the decline in debt service coverage, with administrative expenses experiencing 8% increase and Maintenance and Repair costs increasing 16% between 2005 and 2006 and continuing to increase in 2007. Outlook The outlook for the bonds remains negative. The negative outlook reflects the negative trend in debt service coverage over time. What could change the rating- UP * Significant improvement in occupancy and debt service coverage. What could change the rating- DOWN * Further deterioration in debt service coverage; tapping any of the debt service reserve funds. BLAST ENERGY: Plan Confirmation Hearing Deferred to November 28 --------------------------------------------------------------- The Honorable Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas continued the hearing to consider confirmation of Blast Energy Services Inc. and Eagle Domestic Drilling Operations LLC's Joint Amended Chapter 11 Plan of Reorganization to Nov. 28, 2007, at 9:00 a.m. As reported in the Troubled Company Reporter on Oct. 22, 2007, Judge Bohm approved the Amended Disclosure Statement explaining the Debtors' Amended Plan citing that it contained "adequate information" as required by Section 1125 of the Bankruptcy Code. Judge Bohm also scheduled a Nov. 14, 2007, hearing to consider confirmation of that Joint Amended Plan. Treatment of Claims Under the Plan, Administrative Claims will be paid in full and in cash on the effective date. Each holder of Priority Tax Claims, if any, will be paid in equal annual installments of principal and interest. Class 1 Allowed Priority Claims, totaling approximately $40,000, are expected to recover 100% of their allowed claim amounts either in cash or through a lesser treatment agreed to in writing. Laurus Master Fund Ltd.'s secured claim will be fully satisfied by a) transfer of rigs pursuant to a settlement agreement and a related sale order and b) payment of $2,100,000 pursuant to a settlement agreement and a related sale order. Berg McAfee Companies LLC's $1,120,000 estimated secured claim will be fully satisfied by issuance to Berg McAfee of a new three year note in the amount of $1,120,000 with an annual interest rate of 8%, with interest payable at the end of the term in Reorganized Blast Common Stock, and with a principal conversion right exercisable at Berg McAfee's election. Other secured claims, will, at the Debtors' option, either: a) be paid in cash in full; b) receive, without representation or warranty, the collateral securing its claim; or c) receive a note, secured by a lien securing its allowed secured claim. Holders of Convenience Claims against both Debtors will receive, in full and final satisfaction of their claim, cash on the distribution date equal to 75% of the allowed claim amounts. Unsecured Claims against both Debtors are entitled to cash payments equal to: (a) 35% of the allowed claim amount; and (b) 65% of the allowed unsecured claim in the form of a junior secured note. Second Bridge LLC's 900,000 shares of Blast common stock will, on the effective date, be purchased by Reorganized Blast for $900. Each holder of Allowed Unsecured Directors' Claim will be converted to Blast common stock at the rate of $ 0.20 per share. This class of claims in the Plan was created at the request of the Official Committee of Unsecured Creditors and informally has been consented to by each member of the Debtors' Board of Directors. All interests in the Debtors will be retained by the holders in the current form. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071017232413 Texas Comptroller Objections In a court filing dated Oct. 26, 2007, the Texas Comptroller of Public Accountants, who holds a priority tax claims for franchise taxes against the Debtors, filed with the Court an objection alleging that the Debtors' Joint Amended Plan failed to disclose a rate of interest due to holders of priority tax claims. The Texas comptroller contends that the Debtors' Joint Amended Plan should specify an interest rate of 9.25%. The Texas comptroller further states that the Debtors' Joint Amended Plan contains inadequate remedies in the event of a plan default. About Blast Energy Services Headquartered in Houston, Blast Energy Services and its debtor- affiliate Eagle Domestic Drilling Operations LLC -- http://www.blastenergyservices.com/-- owns and contracts land drilling rigs to third parties. The Debtor also provides services relating to drilling rig operations. Blast Energy owns and develops abrasive jetting intellectual property, technology and equipment providing downhole production enhancement and drilling solutions, and satellite broadband access for Internet, data, email, applications, VoIP and video streaming as energy industry management tools providing real-time supervisory control and data acquisition. The company filed for Chapter 11 protection on Jan. 19, 2007 (Bankr. S.D. Tex. Case No. 07-30424 and 07-30426). H. Rey Stroube, III, Esq., represent the Debtors. The Official Committee of Unsecured Creditors is represented by Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP. When the Debtor filed for protection from its creditors, it listed total assets of $63,500,851 and total debts of $51,019,486. BOMBAY CO: Taps DJM Realty to Dispose U.S. Retail Store Leases -------------------------------------------------------------- The Bombay Company, Inc., has selected DJM Realty, a provider of strategic real estate solutions, to exclusively manage the national disposition of all 335 retail store leases and five distribution center leases in the United States. Bombay specializes in unique home accessories, wall decor and furniture through 384 retail outlets in the U.S. and Canada. "There are very few opportunities to offer a real estate portfolio as unique as Bombay's, which consists of locations in elite malls, street front properties and strong strip, outlet and lifestyle centers," Andy Graiser, Co-President of DJM Realty, said. "Bombay stores are concentrated in the Northeast with 73 locations, the Southeast with 98 locations, the Midwest with 50 locations and California with 53 locations. We are excited to offer these prime real estate properties ranging from 1,800 to 11,000 square feet." Bombay is liquidating its inventory through the stores during the holiday season. The engagement of DJM Realty, which is subject to bankruptcy court approval expected next week, anticipates an auction on these properties in mid-December 2007. The 335 stores operate in the following 41 states: Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, North Carolina, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, Wisconsin and West Virginia. Bombay's distribution centers are located in Pennsylvania, Georgia, Texas, Indiana, and California, and range in size from 250 thousand to 400 thousand square feet. "Given the desirability of these properties and the amount of interest that we have already received, interested parties must act immediately," Mr. Graiser said. For more information regarding the disposition of these leases for Bombay, please contact James Avallone at (631) 752-1100 ext. 224. Headquartered in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/ -- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, L.L.P., represent the Debtors. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. Attorneys at Cooley, Godward, Kronish LLP acts as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. BRITISH AMERICAN HOMES: Involuntary Chapter 11 Case Summary ----------------------------------------------------------- Alleged Debtor: British American Homes, L.L.C. 7380 Sand Lake Road, Suite 100 Orlando, FL 32819 Tel: (305) 854-6000 Case Number: 07-05628 Type of Business: The Debtor develops commercial and residential properties. See http://britishamericanhomesusa.com/ Involuntary Petition Date: November 8, 2007 Court: Middle District of Florida (Orlando) Judge: Karen S. Jennemann Petitioner's Counsel: Asher Rabinowitz, Esq. Anderson & Badgley, P.L. 1270 Orange Avenue, Suite D Winter Park, FL 32789 Tel: (407) 478-4600 Fax: (407) 478-4777 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Giovanni & Jospehine joint judgment $89,688 Tramontana 3566 Gregg Court Wantaugh, NY 11793 Omotayo Awontunde joint judgment $89,173 11744 Pindall Chase Drive Fulton, MD 20759 William & Kathleen A. joint judgment $89,009 Laboon 5626 6th Street Pittsburgh, PA 15236 C2K2 MOTORS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: C.2.K.2. Motors, Inc. 212 Hogan Boulevard Mill Hall, PA 17751 Bankruptcy Case No.: 07-52925 Type of Business: The Debtor sells new and used automobiles in retail. It also leases passenger cars and trucks. Chapter 11 Petition Date: November 9, 2007 Court: Middle District of Pennsylvania (Wilkes-Barre) Judge: John J. Thomas Debtor's Counsel: Faith M. Lucchesi, Esq. De Boef Lucchesi & Associates, P.C. 1368 South Atherton Street State College, PA 16801 Tel: (814) 231-4050 Fax: (814) 231-4051 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. CAITHNESS COSO: Extends Pricing Date of Notes & Bonds Offering -------------------------------------------------------------- Caithness Coso Funding Corp. has extended the date on which the pricing for the Notes will be established from 2:00 p.m. New York City time on Nov. 13, 2007 to 2:00 p.m. New York City time on Nov. 30, 2007, in connection with its tender offers and consent solicitations for its $90 million original principal amount of 6.263% Subordinated Secured Notes due 2014 (CUSIP Nos. 128017AK6 and U12295AD0) and its $375 million original principal amount of 5.489% Senior Secured Bonds due 2019 (CUSIP Nos. 128017AG5 and U12295AC2. The company has also extended the date the tender offer is scheduled to expire from 9:00 a.m. New York City time on Nov. 27, 2007 to 9:00 a.m. New York City time on Dec. 7, 2007. Each of the Price Determination Date and the Expiration Time may be further extended by the company. The tender offers are subject to the satisfaction of certain conditions, including the receipt of specified financing, the consummation of the Acquisitions and certain other customary conditions. On Oct. 11, 2007, the company has received, pursuant to its tender offers and consent solicitations for any and all of its outstanding Notes, the requisite consents to adopt the proposed amendments and the proposed waivers to the Notes and the indentures governing the Notes. The tender offers and related consent solicitations were conducted in connection with the agreement between Caithness Energy L.L.C., certain owners of Caithness Energy, certain subsidiaries of Caithness Energy and ArcLight Renewco Holdings LLC, dated July 9, 2007, pursuant to which Renewco has agreed to acquire a 100% direct ownership interest in certain affiliates of the company. The company may, in its sole discretion, accept for payment and pay for Notes tendered on an initial settlement date prior to the Expiration Time. The company disclosed that as of 5:00 p.m., New York City time, on Nov. 12, 2007: the principal amount of Notes had been validly tendered and not withdrawn: -- $90,000,000 million original principal amount of the 2014 Notes, representing 100% of the outstanding original principal amount of such Notes; and -- $355,000,000 million original principal amount of the 2019 Bonds, representing 94.67% of the outstanding original principal amount of such Bonds. The company and the trustee have executed supplemental indentures giving effect to the proposed amendments and the proposed waivers. Such supplemental indentures and waivers will only become operative, however, concurrently with the acquisitions, provided that all validly tendered Notes are accepted for purchase pursuant to the tender offers. The company has retained Citi to act as sole dealer manager for the tender offers and as the solicitation agent for the consent solicitations. Citi can be contacted at (212) 723-6106 (collect) or at (800) 558-3745 (toll free). Global Bondholder Services Corporation is the Information Agent and Depositary for the tender offers and can be contacted at (212) 430-3774 (collect) or at (866) 470-4200 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent. About Caithness Coso Funding Corp. Based in New York City, Caithness Coso Funding Corp. is a single- purpose Delaware corporation formed to finance the business and operations of Navy I Partnership, BLM Partnership, and Navy II Partnership. The company has no material assets, other than the loans it has made and will make to the Partnerships and certain accounts created in connection with the offering of the notes, and does not conduct any business, other than issuing the notes and making the loans to the partnerships, and activities directly related thereto. * * * Moody's Investor Services assigned a Ba1 rating on Caithness Coso Funding Corp.'s subordinate debt. The outlook is stable. The rating was placed in January 2007 and still holds to date. Fitch placed the company's subordinate debt at BB+ in January 2007. CALPINE CORP: Creditor & Equity Panel Backs Claims Objection Plea ----------------------------------------------------------------- The Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders inform the U.S. Bankruptcy Court for the Southern District of New York that they support Calpine Corp. and its debtor-affiliates' objection to Claim No. 5166 filed by Hawaii Structural Ironworkers Pension Trust Fund. Hawaii Structural's Lawsuit Calpine had said in March 2003 that it was restating its net income for 2000, 2001 and a portion of 2002 by an immaterial amount, ranging from approximately 1.5% to 3% of income, to reflect a different accounting treatment of sale/leaseback transactions for two power plants as recommended by its auditors. After that announcement, Hawaii Fund, on behalf of itself and a putative class of shareholders, commenced a class action complaint in the Superior Court of the state of California, County of San Diego against Calpine, certain directors and officer defendants and certain underwrites of Calpine Corp.'s stock offering in 2002. The Hawaii Fund asserted that the statements that Calpine Corp. filed with the U.S. Securities and Exchange Commission in 2002 were materially false and misleading because they concealed the fact that the company's financial results and projections were overstated and concealed adverse trends that the company was then experiencing. In the California Lawsuit, the Hawaii Fund alleged that: * a registration statement and prospectus for Calpine's April 2002 follow-on offering of shares contained false or misleading material statements; * a forecast for 2002 earnings included in the April 2002 offering documents turned out to be incorrect at the end of 2002, eight months later; * Calpine's former chief executive officer, Peter Cartwright, one of the Individual Defendants, intended to sell shares within 90 days of the 2002 Offering but failed to disclose the intent in the offering documents; and * Calpine failed to disclose 31 purported "wash" trades between 2000 and 2001. $60-Million Claim In August 2006, the Hawaii Fund filed, on behalf of itself and the Class, Claim No. 5166 asserting "at least $60,000,000" in damages against Calpine Corporation. In June 2007, the Hawaii Fund asked the Bankruptcy Court to certify its class for purposes of the Class Claim. The request is still pending with the Bankruptcy Court. In August 2007, the Debtors, the Individual Defendants, the Underwriters and the Hawaii Fund participated in a mediation designed to facilitate a consensual resolution of Claim No. 5166. The mediation was not successful. Adjustments were Immaterial Mark E. McKane, Esq., at Kirkland & Ellis, LLP, in New York, asserted that slight adjustments associated with the 2003 Restatement were immaterial. He adds that the decline in Calpine's share price between April 2002 and March 2003 happened before the restatement was confirmed and is attributable to factors other than the restatement, none of which can subject the Debtors to any liability. The Hawaii Fund further sought to use 20/20 hindsight to recover damages on the basis that the Debtors failed to meet good faith projections. Mr. McKane said that it is blackletter law that, absent fraud, a company is not liable for failing to meet good faith projections. The burden then, he said, is on Hawaii Fund to prove that the forecast was made with actual knowledge of its falsity. With regards to Mr. Cartwright's stock sales, Mr. McKane noted that the offering documents explicitly stated that any sale would occur only after Mr. Cartwright obtained certain consents. Mr. Cartwright indisputably secured those consents and advised the market months before the offering of his intent to sell shares, Mr. McKane further said. Moreover, Mr. McKane asserts that Calpine need not disclose the purported "wash" trades because they were not "wash" trades. Even if the trades had been "wash" trades, they represented, in the aggregate, approximately 0.001% of Calpine's revenues and had no impact whatsoever on the company's gross profits, Mr. McKane added. Thus the Debtors requested the Court to expunge Claim No. 5166. Hawaii Fund's Request for Abstention Hawaii Fund asked the Bankruptcy Court to abstain from hearing the Debtors' objection to its Claim No. 5166, on the basis that: (a) abstention will not negatively impact the administration of the estate; (b) the consideration and application of non-bankruptcy laws predominate over any bankruptcy issues that may exist with respect to the claim objection; (c) the Hawaii Litigation was commenced in the California State Court in 2003, and therefore has jurisdiction over the claims asserted in the Hawaii Litigation; (d) the Debtors' filing of their objection in the Bankruptcy Court is an attempt at forum shopping to avoid a determination by the California State Court that has already granted relief in favor of Hawaii Structural; and (e) the Hawaii Litigation contains a jury demand and involves non-Debtor parties. Hawaii Fund wants the California State Court to determine the Debtors' objection where the Hawaii Litigation has been pending for almost three years before the bankruptcy filing and over four years in total. Debtors Want Abstention Plea Denied The Bankruptcy Court has acknowledged that permissive abstention is "appropriate only in certain narrowly tailored exceptional circumstances" because federal courts have a virtually unflagging obligation to exercise the jurisdiction given to them, Richard M. Cieri, Esq., at Kirkland & Ellis, LLP, in New York, notes. Hawaii Structural has filed its claim in the Bankruptcy Court, thus this Court is the appropriate forum to determine the Debtors' liability, Mr. Cieri asserted. Mr. Cieri further asserted that permissive abstention is inappropriate in complex reorganization cases like the Debtors'. The Debtors have set Jan. 31, 2008, as target deadline for emergence. The Hawaii Claim is one of the largest disputed litigation claims pending against the Debtors and therefore will have to be estimated or resolved before emergence to avoid disproportionately large reserves of stock held back on account of the Claim, Mr. Cieri pointed out. Thus, the Debtors ask the Court to deny Hawaii Structural's request for abstention. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of the Plan is scheduled on Dec 18, 2007. (Calpine Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CAMBER 7: Moody's Junks Rating on $11.25 Mil. Floating Rate Notes ----------------------------------------------------------------- Moody's Investors Service placed these notes issued by Camber 7 plc on review for possible downgrade: Class Description: $485,000,000 Class A-1 Floating Rate Secured Notes Due 2042 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: Class Description: $100,000,000 Class A-2 Floating Rate Secured Notes Due 2042 -- Prior Rating: Aaa -- Current Rating: Aa3, on review for possible downgrade Class Description: $72,000,000 Class A-3 Floating Rate Secured Notes Due 2042 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $81,000,000 Class B Floating Rate Secured Notes Due 2042 -- Prior Rating: Aa2 -- Current Rating: A3, on review for possible downgrade Class Description: $78,300,000 Class C Deferrable Floating Rate Secured Notes Due 2042 -- Prior Rating: A2 -- Current Rating: Baa3, on review for possible downgrade Class Description: $45,450,000 Class D Deferrable Floating Rate Secured Notes Due 2042 -- Prior Rating: Baa2 -- Current Rating: B1, on review for possible downgrade Finally, Moody's also downgraded these notes: Class Description: $11,250,000 Class E Deferrable Floating Rate Secured Notes Due 2042 -- Prior Rating: Ba1 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CANARGO ENERGY: Posts $9.96 Million Net Loss in Third Quarter ------------------------------------------------------------- Canargo Energy Corp reported a net loss of $9.96 million on oil and gas sales of $32,961 for the third quarter ended Sept. 30, 2007, compared with a net loss of $5.72 million on oil and gas sales of $2.09 million in the same period in 2006. The loss from continuing operations of $9.90 million for the three-month period ended Sept. 30, 2007, compares to a net loss from continuing operations of $4.23 million for the three month period ended Sept. 30, 2006. The decrease in operating revenue is attributable to lower sales volumes achieved from the Ninotsminda Field in the third quarter of 2007. Ninotsminda Oil Company Limited sold no barrels of oil for the three month period ended Sept. 30, 2007, compared to 38,968 barrels of oil for the three month period ended Sept. 30, 2006. For the three month period ended Sept. 30, 2007, NOC's net share of the 38,510 barrels of gross oil production for sale from the Ninotsminda Field in the period amounted to 25,032 barrels. In the period, no oil was sold from storage. For the three-month period ended Sept. 30, 2006, NOC's net share of the 40,798 barrels of gross oil production was 26,519 barrels. The operating loss from continuing operations for the three-month period ended Sept. 30, 2007 amounted to $2.20 million compared with an operating loss of $2.18 million for the three-month period ended Sept. 30, 2006. Discontinued Operations On Aug. 1, 2007, the company disclosed that it sold its entire shareholding of 8 million shares in Tethys for gross proceeds before commissions, expenses and payment of a pro rata share of the Tethys IPO costs to Tethys Petroleum Limited of CDN$23.6 million. The net proceeds were used to repay outstanding indebtedness. The net loss from discontinued operations, net of taxes and minority interest for the three month period ended Sept. 30, 2007, of $56,000 decreased from $2.02 million for the three month period ended Sept. 30, 2006, due to the activities of Tethys and CanArgo Samgori Limited. Cash and Cash Equivalents Cash and cash equivalents decreased $7.61 million from $14.69 million at Dec. 31, 2006, to $7.08 million at Sept. 30, 2007. The decrease was due to expenditures in the period to primarily fund the cost of development activities at the Ninotsminda Field, appraisal activities at the Manavi oil discovery and Kumisi gas discovery in Georgia and net cash used by operating activities. Restricted cash decreased from $300,000 at Dec. 31, 2006, to $0 at Sept. 30, 2007, due to the maturing of a deposit funding a letter of credit as required under a drilling service contract the company entered into with Baker Hughes International. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $102.17 million in total assets, $19.47 million in total liabilities, $2.12 million in temporary equity, and $80.58 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?2541 Going Concern Doubt As reported in the Troubled Company Reporter on March 26, 2007, LJ Soldinger Associates LLC expressed substantial doubt about Canargo Energy Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has incurred net losses since inception and may not have sufficient funds to execute its business plan. About CanArgo Energy CanArgo Energy Corp. (AMEX: CNR) -- http://www.canargo.com/ -- is an independent oil and gas exploration and production company with its oil and gas operations currently located in Georgia. CASH TECH: Arranges $750,000 of New Funding for its Cash Needs -------------------------------------------------------------- Cash Technologies Inc. arranged transactions that will provide the company with proceeds totaling $750,000. The company recently issued a 6% convertible debenture for $250,000 due June 30, 2010, to Crescent International Ltd. The conversion price of the debenture is $0.75 per share. The funds have been received and the transaction has closed. Cash Tech has also agreed to sell 7,000 shares of Health Payment Systems Inc. fka CDHC Inc. that it owns to two private investors for $500,000. Closing of this sale is scheduled on or before today, Nov. 13, 2007. Cash Tech acquired 15,000 shares of the stock in exchange for $1,000,000 in face value of Cash Technologies preferred stock in 2005. The sale of 7,000 of these shares therefore represents a small profit to Cash Tech. The company will continue to hold the remaining 8,000 shares. Furthermore, the company has engaged New York investment banking firm HPC Capital Management Corp. to raise additional working capital. The company has authorized HPC to raise up to $2,000,000 in the form of equity or convertible debt or a combination thereof. "These recent transactions are intended to bridge the company's cash needs until a larger financing can be arranged. Based on our current and projected revenues, the $2,000,000 financing would provide us with sufficient capital until the company is positive cash flow," Bruce Korman, CEO of Cash Technologies, stated. About Cash Technologies Headquartered in Los Angeles, Cash Technologies Inc. (AMEX: TQ) -- http://www.cashtechnologies.com/-- develops and markets innovative data processing solutions in the healthcare and financial services industries. Cash Technologies Inc.'s consolidated balance sheet at Aug. 31, 2007, showed $6.5 million in total assets, $10.6 million in total liabilities, and $105,188 in minority interest, resulting in a $4 million total stockholders' deficit. Going Concern Doubt Vasquez & Company LLP expressed substantial doubt about Cash Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm noted that the company has suffered significant recurring losses and is in immediate need of substantial working capital to continue its business and operations. CD 2007-CD5: S&P Puts Low-B Ratings on Six Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to CD 2007-CD5 Commercial Mortgage Trust's $2.09 billion commercial mortgage pass-through certificates series CD 2007-CD5. The preliminary ratings are based on information as of Nov. 9, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A- AB, A-4, A-1A, AM-FX, A-MA, AJ-FX, A-JA, B, and C are currently being offered publicly, and the remaining classes will be offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.21x, a beginning LTV of 109.6%, and an ending LTV of 103.5%. Preliminary Ratings Assigned CD 2007-CD5 Commercial Mortgage Trust Recommended Class Rating Amount credit support ----- ------ ------ -------------- A-1 AAA $42,300,000 30.000% A-2 AAA $89,000,000 30.000% A-3 AAA $39,400,000 30.000% A-AB AAA $51,700,000 30.000% A-4 AAA $958,680,000 30.000% A-1A AAA $284,848,000 30.000% AM-FX AAA $167,726,000 20.000% A-MA AAA $40,693,000 20.000% AJ-FX AAA $110,780,000 13.375% A-JA AAA $26,959,000 13.375% B AA+ $20,942,000 12.375% C AA $20,942,000 11.375% XP* AAA TBD N/A XS* AAA $1,047,091,908 N/A XW* AAA $1,047,091,908 N/A AM-FL** AAA $1,000,000 20.000% AJ-FL** AAA $1,000,000 13.375% D AA- $20,942,000 10.375% E A+ $18,324,000 9.500% F A $18,324,000 8.625% G A- $20,942,000 7.625% H BBB+ $23,559,000 6.500% J BBB $23,560,000 5.375% K BBB- $20,942,000 4.375% L BB+ $26,177,000 3.125% M BB $7,853,000 2.750% N BB- $5,236,000 2.500% O B+ $5,235,000 2.250% P B $5,236,000 2.000% Q B- $2,617,000 1.875% S NR $39,266,816 NR * Interest-only class with a notional amount. ** Floating-rate class. TBD -- To be determined. N/A -- Not applicable. NR -- Not rated. CETUS ABS: Moody's Downgrades Ratings on Four Note Classes ---------------------------------------------------------- Moody's Investors Service downgraded four classes of notes issued by Cetus ABS CDO 2006-4, Ltd., with two of these classes left on review for further possible downgrade. The notes affected by the rating action are: Class Description: $150,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $75,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade In addition Moody's also downgraded these notes: Class Description: $82,500,000 Class B Floating Rate Deferrable Subordinate Secured Notes Due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $60,000,000 Class C Floating Rate Deferrable Junior Subordinate Secured Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Nov. 6, 2007 of an event of default caused by a failure of the Net Outstanding Portfolio Collateral Balance plus the MVS Account Excess to exceed the required level pursuant to Section 5.1(h) of the Indenture. Cetus ABS CDO 2006-4, Ltd. is a synthetic resecuritization with the reference pool consisting of RMBS securities, CMBS securities, CDO securities and ABS securities. Recent ratings downgrades on the underlying portfolio magnified the impact of the ratings-based haircuts, causing the Net Outstanding Portfolio Collateral Balance plus the MVS Account Excess to be less than the required level. Upon an event of default in this transaction, one of the remedies available to noteholders is the sale and liquidation of the collateral securing the notes. It is not clear at this time whether this remedy will be selected. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued. Because of this uncertainty, the Class A-1 and Class A-2 Notes remain on review for possible downgrade pending the receipt of definitive information. CHARLES BOOTHE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Charles Edward Boothe Sandra Lyn Boothe 8205 East Adobe Drive Scottsdale, AZ 85255 Bankruptcy Case No.: 07-05929 Chapter 11 Petition Date: November 8, 2007 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtors' Counsel: Allan D. Newdelman, Esq. 80 East Columbus Avenue Phoenix, AZ 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtors did not file a list of their 20 largest unsecured creditors. CHARYS HOLDING: Miller Ray Houser Raises Going Concern Doubt ------------------------------------------------------------- Miller Ray Houser & Stewart LLP expressed substantial doubt about Charys Holding Company, Inc., fka Spiderboy International, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2007. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. The company has incurred losses from operations of $35,682,453 and $1,129,885 for the years ended April 30, 2007 and 2006, respectively. Consolidated revenues increased by $28,703,712 or 59.1% to $77,274,624 in fiscal 2007, as compared to the same period in the prior year. The acquisition of Complete Tower Sources Inc, Mitchell Site Acq, Inc., Crochet & Borel, the Cotton Companies, LFC, Inc., and Digital Communications Services, Inc. during this period increased Charys consolidated revenues by $28,486,682. The company posted a net loss of $309,125,469 on $77,274,624 of net revenues for the year ended April 30, 2007, as compared with a net loss of $1,429,165 on $48,570,912 of net revenues in the prior year. At April 30, 2007, the company's liquid working capital was a deficiency of $134,531,753 as compared to a deficiency of $31,137,683 at April 30, 2006. The increased working capital deficiency of $103,394,070 is a direct result of the increase in debt related to acquisitions. At April 30, 2007, total debt was $208,445,370, as compared to $26,099,733 in the prior year. As of April 30, 2007, the company has total current assets of $77,789,237 and total current liabilities of $203,856,454, resulting in a $126.1 million working capital deficit with a limited borrowing capacity. At April 30, 2007, the company's balance sheet showed $290,820,546 in total assets, $276,375,237 in total liabilities and $14,445,309 stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2509 About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Company, Inc. -- http://www.charys.com/-- is pursuing a growth opportunity in the Technology Infrastructure Support and Services market through an acquisitions strategy, focusing on companies that have strong individual reputation, proven and underleveraged growth capability, and significant management commitment tied to Charys- wide synergies. Chary's seeks to acquire stable, cash flow positive, small to medium-sized private companies engaged in providing direct services, outsourced services and infrastructure to medium and large enterprise businesses. Charys intends to operate these companies as independent subsidiaries, improving aggregate financial performance by influencing its subsidiaries to develop and leverage beneficial synergistic relationships. COMPUTER WORLDS: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Computer Worlds Solutions, Inc. 1550 Abbott Drive Wheeling, IL 60090 Case Number: 07-21123 Type of Business: The Debtor sells imported TV, video & computer monitors and components & consumer electronics. Involuntary Petition Date: November 9, 2007 Court: Northern District of Illinois (Chicago) Judge: Jacqueline P. Cox Petitioner's Counsel: James Dasso, Esq. Joanne Lee, Esq. Foley & Lardner, L.L.P. 321 North Clark Street, Suite 2800 Chicago, IL 60610 Tel: (312) 832-4557 or (312) 832-4500 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Wells Fargo Bank freight $39,033 Development Specialists, Inc. 70 West Madison, Suite 2300 Chicago, IL 60602 Fifth Third Bank loan $10,000 1023 West 55th Street Countryside, IL 60525 Yellow Freight Systems, Inc. credit advance $6,618 Development Specialists, Inc. 70 West Madison, Suite 2300 Chicago, IL 60602 CONNACHER OIL: Moody's Rates $600 Million Pending Notes Offering ---------------------------------------------------------------- Moody's Investors Service affirmed Connacher Oil & Gas Limited's B1 Corporate Family Rating, assigned a SGL-3 speculative grade liquidity rating and, under its Loss Given Default methodology, assigned a B1 (LGD4; 55%) rating to its pending $600 million offering of 8-year senior second lien notes and a B1 probability of default rating. Moody's does not rate Connacher's new 5-year CDN$200 million first secured bank revolver, undrawn at closing. The Corporate Family Rating has been moved from Connacher Finance Corp. to parent Connacher Oil & Gas Limited. Moody's also withdraws CFC's B1 ratings on a $180 million senior secured Term Loan B and $15 million first secured bank revolver (each retired with note proceeds). The rating outlook is stable. Generally, Connacher's ratings reflect high leverage and uncertain bitumen production rates and costs, balanced with potentially very large commercial resources; completion of its Pod One oil sands development roughly on time and within 20% of budget; Connacher's expectation that Pod One initial production will begin by year-end 2007; effectively full front-end funding for its Algar development (formerly Pod Two); and significant existing cash flow in the range of CAD90 million per year from conventional oil and gas operations. The stable outlook could be impacted if (i) tight regional labor and supplier markets or other factors unduly harm project timing or costs, (ii) actual Pod One production, decline curves per well pair, energy costs, or the key steam/oil ratio unduly impact sustainable production, costs, or capital intensity per unit of production, (iii) realized prices do not sufficiently support inherently high operating costs and deep price discounts relative to light sweet oil prices, or (iv) Algar financing and development costs overly burden debt service capacity. It will be late 2008 before Connacher can produce cash flow commensurate with its capital investment. Excepting Connacher's 26% equity interest in Petrolifera Petroleum Limited, a public Canadian firm with South American exploration and production interests, the notes are second secured by Connacher's and its subsidiaries' developed and undeveloped oil sands properties, conventional oil and gas properties, refining assets, and related contracts and regulatory permits. The new bank revolver is first secured by those assets. Connacher's economic substance resides in Pod One, the Montana refinery, the small conventional exploration and production business, the Algar project, and still fairly unevaluated oil sands acreage in Pods Three, Four, Five, and Six in the Great Divide and Halfway Creek regions. Connacher is a small conventional exploration, production, and refining firm that is pursuing the phased development of an oil sands project in Alberta, Canada. In early 2006, Connacher also acquired a small 8,400 barrel per day (bpd) oil refinery and related product inventory in northern Montana from Holly Corporation for CAD66 million. Connacher completed its initial (Pod One) development of its Great Divide oil sands steam assisted gravity drainage (SAGD) project in August, 2007, commenced steaming from 15 horizontal well pairs in September, and is now developing a second phase named Algar. First Pod One production is expected later this year after conversion of the lower of each well pair from steam injection to production with production ramp- up to Connacher's expected mid-2008 10,000 bpd target. More specifically, the ratings are restrained by high leverage; project development, cost, completion, and timing risks; extreme regional development cost pressures; volatile oil prices; potentially aggressive assumptions for the critical steam-oil ratio; resulting risk to production rates and unit costs given fixed steam generation capacity; still uncertain Pod One production timing, rates, final costs, and ultimate bitumen recovery until reservoir quality can be proven during production; an inherently high breakeven price in commercial operation and margin uncertainties; and the comparatively small size of the project sponsor (though experienced). The ratings also reflect the early stage of appraisal drilling across Algar and Pods Three, Four, Five, and Six and potentially thin asset coverage if third party engineer GLJ Petroleum Consultant's low case reserve estimate turns out to be more accurate than its expected or high cases. Partial risk mitigants include GLJ's more advanced evaluations of the Pod One and Algar resource bases which provide, in combination with Connacher's conventional oil and gas and refining assets, adequate asset coverage relative to the rating; a one-year fully funded debt service reserve in support of the notes; existing cash flow that covers interest expense; significant equity funding; and fully committed front end funding for Algar. Other risk mitigants include low reserve replacement risk (though oil sands reservoir quality, bitumen production rates, recovery percentage, costs, and all-in economics will vary across the acreage) and a small degree of discretionary cash flow support of capital needs if refining margins and natural gas prices remain sound. Connacher's natural gas production provides a partial economic hedge to its very high SAGD natural gas costs and its refinery production provides an economic hedge to both its bitumen diluent costs, diluted bitumen selling price, and the price differentials between heavy sour and light sweet crude oil prices. Connacher's oil sands properties span 95,000 acres 50 miles southwest of Fort McMurray, Alberta. Connacher had identified up to 8 pods of oil sands deposits with potential commercial viability. Its Great Divide project employs SAGD technology that has been used successfully for more than 8 years in the region and has had 21 years of pilot testing and then commercial application in the Alberta oil sands region. Upstream SAGD project cost escalation has been significantly less severe than mining and downstream integrated oil sands developments. The ratings also benefit from Great Divide's attractive location in the midst of ample pipeline, utilities, and road infrastructures; a seasoned, though lean, project management team, assisted by a recognized oil sands project contractors; and a seasoned though small sponsor with demonstrated access to equity capital. Great Divide benefits from comprehensive third party engineering and market evaluation studies by major recognized consultants and Pod One and Algar were evaluated with 3-D seismic imaging to assess reservoir thickness, horizontal consistency of the lower boundary of their bitumen sand formations, heterogeneity and permeability barriers, and by well control from appraisal wells and well corings. Together with CDN$103 million of first-in cash equity from Connacher, TLB proceeds and revolver borrowings funded Pod One's approximately CDN$310 million (CDN$265 million excluding capitalized interest and sunk costs) completion cost roughly on time and a manageable 20% over budget. TLB and the original revolver will be repaid with note proceeds, with remaining note proceeds, revolver borrowings, and cash flow funding Algar's estimated CDN$438 million cost (CDN$326 million before capitalized interest). Algar's capitalized interest is higher than Pod One's principally due to Pod One's significant equity funding. With Pod One having regulatory approval and Algar awaiting approval, Connacher may seek Pod Three and Four approvals in late 2008 or 2009. As of June 30, 2007, GLJ viewed Connacher to have sufficient appraisal well count and spacing, well log, coring, and 3-D seismic data to assign best estimates of 49.4 million barrels of proven net bitumen reserves, 159.4 million net barrels of proven and probable bitumen reserves (2P), and 215.3 million net barrels of proven, probable, and possible reserves (3P) based on GLJ's flat price assumption. Connacher Oil and Gas Limited is headquartered in Calgary, Alberta, Canada. CONSTELLATION BRANDS: Buying Fortune's Wine Biz for $885 Million ---------------------------------------------------------------- Constellation Brands Inc. and Fortune Brands Inc. have entered into an agreement under which Constellation will acquire Fortune's U.S. wine business for $885 million, subject to post-closing adjustments. The transaction is expected to close by Dec. 31, 2007. The business to be acquired includes some of California's wineries. The portfolio represents approximately 2.6 million cases. Brands to be acquired include Clos du Bois and Geyser Peak and Wild Horse. More than 1,500 acres of vineyards in Napa, Sonoma and Carneros, California, are included in the purchase, in addition to five California wineries. "This portfolio is an excellent fit and furthers our strategy of exceeding consumer expectations and expanding our presence in the growing high-end segments of the wine market," Rob Sands, Constellation Brands president and chief executive officer, said. "We are delighted about the prospect of adding these wineries and brands to our existing portfolio, which will enhance our growing position in the U.S. premium wine business," Mr. Sands added. "As an example, Clos du Bois, a two million case brand, has a history of strong consumer brand equity, growth and profitability. We also look forward to working with the people who have been responsible for the tremendous success of these wines." The company estimates that on a comparable basis this acquisition will be slightly accretive to diluted earnings per share for fiscal 2009 and modestly dilutive for fiscal 2008, assuming the transaction closes by Dec. 31, 2007. A plan for the integration of this acquisition into Constellation will be finalized after the close of the transaction, and the company will determine the best way to effectively assimilate the brands and facilities. The transaction will be financed with debt and is subject to customary and routine regulatory approvals and other closing conditions. About Fortune Brands Inc. Headquartered in Deerfield, Illinois, Fortune Brands Inc. (NYSE: FO)-- http://www.fortunebrands.com/-- is a holding company with subsidiaries engaged in the manufacture, production and sale of home and hardware products, spirits and wine, and golf products. The company operates through three segments: Home and Hardware, Spirits and Wine, and Golf. Home and Hardware includes kitchen and bathroom faucets and accessories; kitchen and bath cabinetry; residential entry door and patio door systems; vinyl-framed windows; locks, and tool storage and organization products. Spirits and Wine includes products made, marketed or distributed by Beam Global Spirits & Wine, Inc. (BGSW) subsidiaries or affiliates. Golf includes golf balls, golf clubs, golf shoes and gloves manufactured, marketed or distributed by Acushnet Company (Acushnet). About Constellation Brands Headquartered in Fairport, New York, Constellation Brands Inc. (NYSE: STZ, ASX: CBR) -- http://www.cbrands.com/-- is an international producer and marketer of beverage alcohol in the wine, spirits and imported beer categories, with significant market presence in the U.S., Canada, U.K., Australia and New Zealand. The company has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. CONSTELLATION BRANDS: Fortune Deal Cues Fitch to Hold Ratings ------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Constellation Brands Inc. following the company's announcement that it had entered into a definitive agreement to acquire Fortune Brands, Inc.'s U.S. wine business for $885 million. Fitch has affirmed these ratings: -- Issuer Default Rating 'BB-'; -- Bank credit facility 'BB-'; -- Senior unsecured notes to 'BB-'; -- Senior subordinated notes 'B+'. The Rating Outlook is Negative. Fitch's ratings apply to STZ's $3.9 billion credit facilities, $1.9 billion of senior unsecured debt, and $250 million of senior subordinated notes. The affirmation reflects the addition of market leading premium and super premium wines to STZ's already solid position in the U. S. market and around the world. STZ maintains leading market shares in most of the major wine markets around the globe and a diversified alcoholic beverage portfolio and has an excellent track record of integrating acquisitions. The company has restructured acquired operations to enhance productivity and has sold non-essential assets, which has provided some proceeds to reduce debt. Of concern is STZ willingness to operate at higher leverage levels and its appetite for acquisitions. Over the intermediate term, it is likely that the company will continue to make acquisitions that may result in financial and operational stress. The company's debt levels are expected to be meaningfully higher at the end of fiscal 2008 (ending Feb. 29, 2008). Leverage has grown as a result of successive debt financed acquisitions and stock repurchases, including an accelerated share repurchase transaction in May 2007. As a result, interest expense has increased and coverage measures have weakened considerably over the past couple of years. As of Aug. 31, 2007, pro forma for the acquisition of FO's wine business, debt/EBITDA (unadjusted for acquisition-related integration costs and restructuring and related charges) would be approaching 6.0 times, while EBITDA/interest would be slightly above 2.5x. Nonetheless, the strong fit of FO's wine brands, the high growth rates for the super-premium category and some reduction in debt in the near term are expected to improve these numbers in the short-term. Ongoing difficulties in U.K. and Australian operations and a reduction in U.S. distributor inventory levels, which have affected cash flow, are also expected to abate in calendar 2008. COUNTRYWIDE FINANCIAL: Loan Fundings Drops 48% in October 2007 -------------------------------------------------------------- Countrywide Financial Corporation released operational data for the month ended Oct. 31, 2007. Key operational results include: * Mortgage loan fundings for the month of October 2007 totaled $22 billion, a 48% decline from October 2006. * Average daily mortgage loan application activity for October 2007 was $1.8 billion, a 34% decrease from October 2006. The mortgage loan pipeline was $41 billion at Oct. 31, 2007, as compared to $61 billion for the same period last year. * The mortgage loan servicing portfolio continued to grow, reaching $1.47 trillion at Oct. 31, 2007. This is an increase of $202 billion, or 16%, from Oct. 31, 2006. * Banking Operations' assets were $106 billion at Oct. 31, 2007, which compares to $83 billion at Oct. 31, 2006. * Securities trading volume in the Capital Markets segment of $260 billion for October 2007 was 13% lower when compared to the same month last year. * Net earned premiums from the Insurance segment were $136 million in October 2007, up 35% from October 2006. "October's operating results continue to be indicative of current market trends," said David Sambol, President and Chief Operating Officer. "Total fundings were down substantially on a year-over- year basis, but were up 4% from the prior month, and production funded through the Bank has now surpassed 90 percent of total fundings. Average daily applications and the mortgage loan pipeline were essentially flat from the prior month. At $42 million, subprime fundings for the month of October 2007 were just 0.2 percent of total mortgage loan fundings." "Countrywide continues to work diligently toward mitigating the consequences our borrowers are facing as a result of the current market conditions," Mr. Sambol continued. "As such, we have recently launched our $16 billion home ownership preservation initiative to help borrowers facing, or who have already experienced, interest rate resets. We have also reached out to the community at large through various partnership initiatives with consumer housing groups such as the Neighborhood Assistance Corporation of America, the Homeownership Preservation Foundation, and NeighborWorks(R) America." 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. * * * The company continues to carry Moody's Ba2 long-term rating. DANA CORP: Judge Lifland Rejects Jasco's $20 Million Claim ---------------------------------------------------------- The Hon. Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York refused to abstain from hearing on Dana Corp. and its debtor-affiliates' objection to the $20,000,000 claim asserted by Jasco Tools, Inc. In a 15-page opinion, Judge Lifland explained that mandatory abstention does not apply to core proceedings and that proceedings for the allowance or disallowance of claims are "core." Judge Lifland continued that because nothing is more directly at the core of bankruptcy administration than the quantification of all liabilities of the debtor, the bankruptcy court's determination whether to allow or disallow a claim is a core function. Moreover, abstention is "an extraordinary and narrow exception to the duty of the federal courts to adjudicate controversies which are properly before it," Judge Lifland added. Judge Lifland also refused to lift the automatic stay to permit Jasco to continue prosecuting the lawsuit it filed against Dana Corp. and a supplier, Nationwide Precision Products Corp., in the New York Supreme Court, Monroe County. Judge Lifland says that allowing the thousands of claims asserted against the Debtors to continue in courts throughout the county would undermine one of the main purposes of utilizing Chapter 11 of the Bankruptcy Code. Judge Lifland notes that Jasco's claim does not raise any unsettled issues of state law and is not before a specialized tribunal. Moreover, Judge Lifland denies Jasco's breach of contract claim and claim for alleged trade secret misappropriation. The Court notes that nothing in the Agreement between Dana and Jasco required Dana