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/raid1/www/Hosts/bankrupt/TCR_Public/071115.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 15, 2007, Vol. 11, No. 271 Headlines ACTUANT CORP: R. Alan Hunter Joins Board of Directors AFM 805 INC: Case Summary & 30 Largest Unsecured Creditors AFV SOLUTIONS: Posts $498,995 Net Loss in 1st Qtr. Ended Sept. 30 AGILENT TECHNOLOGIES: Inks Merger Agreement with Velocity11 AINSWORTH LUMBER: Moody's Junks Corporate Family Rating ALAN BURNS: Case Summary & 19 Largest Unsecured Creditors ALLIANCE BANCORP: Sells Brisbane Property to TA Associates AMERICAN HOME: Can Access $35 Mil. of AHM Acquisition Financing AMERICAN HOME: Asks Court to Move Lease Decision Period to Mar. 3 AMERICAN HOME: Wants Senior Managers Incentive Program Approved AMERICAN REPROGRAPHICS: S&P Holds 'BB' Corporate Credit Rating AMERISOURCEBERGEN CORP: Earns $87.5 Mil. in Qtr. Ended Sept. 30 AMMC VIII: Moody's Rates $20 Million Class E Notes at Ba2 AMR CORP: Fitch Holds Junk Rating on Senior Unsecured Debt ANN-LEE CONSTRUCTION: Case Conversion Hearing Moved to December 12 ANSLEY PARK: Moody's Junks Ratings on Four Note Classes ARCHSTONE-SMITH: S&P Retains 'BB-' Issuer Credit Rating ARES XII: Moody's Assigns Ba2 Rating on $35 Mil. Class E Notes ARVINMERITOR INC: Declares $0.10 Quarterly Dividend ARVINMERITOR INC: Posts $62 Million Net Loss in Fourth Quarter ATARI INC: Streamlines Operations, Establishes Business Plan BABBY-HENKEL: Case Summary & Two Largest Unsecured Creditors BAKER & TAYLOR: Moody's Changes Outlook to Negative from Stable BANC OF AMERICA: Fitch Holds BB+ Rating on Class M-MC Certs. BEAR STEARNS: Fitch Holds BB+ Rating on Class L Certificates CARIBE MEDIA: S&P Puts 'B' Ratings Under Positive CreditWatch CELL THERAPEUTICS: Sept. 30 Balance Sheet Upside-Down by 119.3MM CITIGROUP: Moody's Holds Low-B Ratings on Three Cert. Classes CLECO EVANGELINE: Moody's Lifts Rating on Senior Notes to Ba1 COLUMBUSNOVA CLO: Moody's Rates $11.25MM Class E Notes at Ba2 COREL CORP: S&P Holds 'B' Rating and Revises Outlook to Stable CREDIT SUISSE: Low Credit Levels Cue Moody's to Lower Ratings CREDIT SUISSE: Moody's Cuts Ratings on Two Cert. Classes to Low-B CSFB TRUST: Credit Support Erosion Cues S&P's Rating Downgrades CYRUS REINSURANCE: S&P Assigns Low-B Ratings on $105 Million Loan DELPHI CORP: To Receive Labor Payments from GM Through 2015 DUANE STREET: Moody's Rates $15 Million Class B Notes at Ba2 DURA AUTOMOTIVE: Asks Firm to Detail Purchase of Clients' Bonds DRYDEN XVIII: Moody's Assigns Ba2 Rating on $14MM Class B Notes E.DIGITAL CORP: Sept. 30 Balance Sheet Upside-Down by $2.04 Mil. E*TRADE: Moody's Lowers Outlook to Stable from Positive E*TRADE FINANCIAL: Possible Write-Downs Cue S&P to Cut Ratings EDITH MOSER: Voluntary Chapter 11 Case Summary ENCYSIVE PHARMA: Sept. 30 Balance Sheet Upside-Down by $136.6 Mil. FEDERAL MOGUL: District Court Affirms Chapter 11 Plan FIRST UNION: Fitch Junks Rating on $11.8 Mil. Class M Certs. FREESCALE SEMICONDUCTOR: Fitch Puts Issuer Default Rating at B+ GENERAL MOTORS: To Make Labor Payments to Delphi Through 2015 GENERAL MOTORS: Signs 2007 UAW-GM National Labor Contract GOLDMAN SACHS: Moody's Lowers and Reviews Ratings on 18 Deals GOLF TRUST: Terminates Plan of Liquidation and Dissolution GREENWOOD LLC: Case Summary & Four Largest Unsecured Creditors GSC CAPITAL: Moody's Junks Ratings on Four Certificate Classes HAZEL POINTE LP: Involuntary Chapter 11 Case Summary HM RIVERGROUP: S&P Holds 'B-' Rating and Removes Positive Watch HOME EQUITY: Poor Credit Support Cues S&P to Lower Ratings HOMEBANC CORP: Judge Carey Appoints Stuart Maue as Fee Auditor INFINITY ENERGY: Earns $3.2 Million in 3rd Quarter Ended Sept. 30 JEFFREY BRUNO: Case Summary & 20 Largest Unsecured Creditors JOHN CONNERS: Voluntary Chapter 11 Case Summary KKR FINANCIAL: Moody's Assigns Low-B Ratings on $62 Million Notes LAWRENCE SALANDER: Needs $200,000 DIP Fund to Pay Attorneys LAWRENCE SALANDER: Creditor Balks at DIP Pact with First Republic LAWRENCE SALANDER: Wants Until December 17 to File Schedules LEVITT AND SONS: Wants to Hire Berger Singerman as Bankr. Counsel LEVITT AND SONS: Selects AP Services as Crisis Managers LEVITT AND SONS: Wants Court's OK to Use Lenders' Cash Collateral LEVITZ FURNITURE: Gets Interim Okay to Use GECC's Cash Collateral MACY'S INC: Earns $33 Million in Third Quarter Ended Nov. 3 MAJESTIC STAR: Moody's Cuts Corporate Family Rating to B2 MAMC WINDWARD: Voluntary Chapter 11 Case Summary MATRITECH INC: Sept. 30 Balance Sheet Upside-Down by $9.9 Million MISSION BAY: Case Summary & 20 Largest Unsecured Creditors MONDY PROPERTIES: Voluntary Chapter 11 Case Summary MORGAN STANLEY: Moody's Affirms Low-B Ratings on Six Cert. Classes NASH FINCH: Earns $15.4 Million in Quarter Ended October 6 NASH FINCH: Board Approves One Million Share Repurchase Program NATURADE INC: Obtains $1.2 Mil. Exit Financing from Redux Holdings NEPTUNE CDO: Moody's Junks Ratings on Six Note Classes NEW YORK RACING: U.S. Trustee and PBGC Balk at Chapter 11 Plan NOMURA ALT-A: Moody's Lowers and Reviews Ratings on 10 Deals NOVASTAR FINANCIAL: Has $80.7 Million Equity Deficit at Sept. 30 NOVASTAR FINANCIAL: Inks Waiver Agreement with Wachovia Bank NOVASTAR FIN'L: Mulls Bankruptcy Filing Due to Bank Loan Default NUVEEN INVESTMENTS: Moody's Cuts Rating on Senior Notes to B3 PEABODY ENERGY: Fitch Affirms BB+ Issuer Default Rating PETROLEUM GEO: Arrow Seismic Deal Cues S&P to Hold 'BB-' Rating PILGRIM'S PRIDE: Earns $33.2 Million in Quarter Ended Sept. 29 PLAINS EXPLORATION: Provides Final Results of Pogo Elections PLAINS EXPLORATION: Earns $32.9 Mil. in Quarter Ended Sept. 30 POLAR REFRIGERANT TECHNOLOGY: Involuntary Chapter 11 Case Summary PROGRESSIVE GAMING: Posts $39.7 Million Loss in Third Quarter PROVIDENCE SERVICE: Moody's Puts Corporate Family Rating at B2 QUEBECOR WORLD: Moody's Junks Rating on New $400 Mil. Senior Notes QUEBECOR WORLD: S&P Rates Proposed $400 Million Senior Notes at B RAMPART CLO: Moody's Rates $16.35 Million Class E Notes at Ba2 REAL ESTATE: Moody's Holds Low-B Ratings on 6 Certificate Classes RELIANCE INTERMEDIATE: Moody's Rates $293MM Senior Notes at Ba2 RELIANCE INTERMEDIATE: S&P Rates $293 Million Secured Notes at BB- REMY WORLDWIDE: Files Supplement to Prepackaged Chapter 11 Plan REMY WORLDWIDE: Plan Confirmation Hearing Set for November 20 RIVERDEEP INTERACTIVE: Harcourt Deal Cues Moody's Rating Action ROGER ENGEN: Case Summary & Eight Largest Unsecured Creditors ROUTE 66: Case Summary & Seven Largest Unsecured Creditors SALANDER-O'REILLY: Wants to Use First Republic's $1.5MM DIP Fund SCOTTISH RE: Moody's Holds (P)Ba3 Rating on Senior Unsecured Shelf SMK SPEEDY: Need to Cut Overhead Costs Cues CCAA Bankruptcy Filing SPATIALIGHT INC: Sept. 30 Balance Sheet Upside-Down by $13.5 Mil. SPATIALIZER AUDIO: Earns $472,342 in Third Quarter Ended Sept. 30 STATION CASINO: Moody's Cuts Rating on Senior Notes to B2 TAXI TECHNOLOGY: Voluntary Chapter 11 Case Summary TRENT VON'LEE: Case Summary & 13 Largest Unsecured Creditors VICTORY OUTREACH: Case Summary & Eight Largest Unsecured Creditors VIEWPOINT CORP: Posts $256,000 Net Loss in 3rd Qtr. Ended Sept. 30 WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes WATERFORD WEDGWOOD: Posts EUR85 Mil. Equity Deficit at Sept. 30 WAVE SYSTEMS: Posts $4.8 Million Net Loss in Qtr. Ended Sept. 30 WELLS FARGO: Fitch Holds Low-B Ratings on 10 Cert. Classes WENDY'S INT'L: Gets Lower Purchase Proposal from Triarc Cos. WINDSTREAM REGATTA: Moody's Puts Corporate Family Rating at B1 WINDSTREAM REGATTA: S&P Assigns 'B+' Corporate Credit Rating X-RITE INC: Posts $2.8 Million Net Loss in Quarter Ended Sept. 29 *Chapter 11 Cases with Assets & Liabilities Below $1,000,00 ********* ACTUANT CORP: R. Alan Hunter Joins Board of Directors ----------------------------------------------------- Actuant Corporation has appointed R. Alan Hunter to the company's Board of Directors, effective immediately. Mr. Hunter is a retired executive from The Stanley Works where he had served as President and Chief Operating Officer from 1993-1997 as well as Vice President Finance and Chief Financial Officer from 1986-1993. He joined Stanley in 1974 and prior to that time was an Officer in the United States Navy. Mr. Hunter has been involved in several business and community organizations since retiring from Stanley in 1997. Commenting on the announcement, Bob Arzbaecher, Actuant's Chairman and CEO, said, "We are pleased to announce the addition of Alan to Actuant's Board of Directors. His broad experience in operations and finance, as well as his industrial tool and home center market background, nicely complements the Actuant portfolio of businesses. The rest of the Board and I look forward to his contributions and counsel on the various opportunities awaiting Actuant." Actuant also disclosed that Kathleen Hempel will be retiring from the Board at the company's Annual Meeting of Shareholders in January 2008. Arzbaecher commented, "Kathy has been a member of our Board since 2001. Since that time, Actuant has grown significantly, both in terms of internal growth and acquisitions. I am grateful for her dedication, integrity and leadership during this period of growth for Actuant and, speaking on behalf of the entire Board, we will miss her insight and passion for the business." About Actuant Corp. Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Australia, Brazil, China, Hong Kong, Italy, Japan, Taiwan, United Kingdom and South Korea. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. The company employs a workforce of approximately 6,000 worldwide. * * * As reported in the Troubled Company Reporter on June 6, 2007, Standard & Poor's Ratings Services assigned its 'BB-' rating to Actuant Corp.'s proposed $250 million senior unsecured notes due 2017. AFM 805 INC: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: A.F.M. 805, Inc. dba Ameristop Express 805 985 Burlington Park Burlington, KY 41005 Bankruptcy Case No.: 07-15511 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- A.F.M. 806, Inc. 07-15512 A.F.M. 807, Inc. 07-15513 A.F.M. 810, Inc. 07-15514 A.F.M. 812, Inc. 07-15515 A.F.M. 814, Inc. 07-15516 A.F.M. 815, Inc. 07-15517 A.F.M. 816, Inc. 07-15518 Type of Business: The Debtors own and operate convenience stores and gas stations. They belong to the AmeriStop Express banner of AmeriStop. See http://www.ameristop.com Chapter 11 Petition Date: November 12, 2007 Court: Southern District of Ohio (Cincinnati) Judge: Burton Perlman Debtors' Counsel: Ronald E. Gold, Esq. Frost Brown Todd, L.L.C. 2200 P.N.C. Center 201 East Fifth Street Cincinnati, OH 45202 Tel: (513) 651-6800 Fax: (513) 651-6981 Estimated Assets Estimated Debts ---------------- --------------- A.F.M. 805, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 806, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 807, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 810, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 812, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 814, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 815, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 816, Inc. $1 Million to $1 Million to $100 Million $100 Million Debtors' Consolidated List of their 30 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dayton Oil Co. $970,647 Contact: President or Chief Executive Officer 4232 Colonel Glenn Highway Beavercreek, OH 45431 CORE-MARK INTERNATIONAL $865,190 Attention: Bankruptcy 1055 Salt River Road Leitchfield, KY 42754 KENTUCKY LOTTERY CORP. $159,619 Attention: Bankruptcy Contact: President 6040 Dutchman's Lane Louisville, KY 40205-3271 DINSMORE & SHOL $137,961 JOSEPH DECOSIMO & CO. $153,027 PEPSI-COLA BOTTLING- $79,586 CINCINNATI COCA COLA BOTTLING CO. $46,008 C.N.A. INSURANCE $35,542 TRAUTH DAIRY $27,532 R.G.I.S. $24,771 RADIO STATION 94.9 $19,363 HOME CITY ICE CO. $17,900 I.C.E.E.-U.S.A. CORP. $15,842 FLANAGAN, LIEBERMAN, HOFFMAN $10,304 & SWAINE THE MERTEN GROUP $12,240 W.U.B.E.-F.M. $10,166 CHARLES DEGLOW $9,619 TRI-STATE JUICE $9,349 NARENDRA PATEL $7,524 RJM MANAGEMENT $7,429 COX AUTO TRADER $7,240 ZEP MANUFACTURING CO. $7,217 Duke Energy $7,085 TRI-STATE SERVICE STATION $7,024 MOVIE GALLERY U.S. INC. $6,838 C/O HOLLYWOOD M.W. DAVIS $6,382 FRITO-LAY, INC. $6,168 STAPLES $6,087 MOVIES U BUY/S.Q.S. $6,144 MARGE SCHOTT $5,881 AFV SOLUTIONS: Posts $498,995 Net Loss in 1st Qtr. Ended Sept. 30 ----------------------------------------------------------------- AFV Solutions Inc. reported a net loss of $498,995 on revenue of $20,277 for the first quarter ended Sept. 30, 2007, compared with a net loss of $1.2 million on revenue of $36,442 in the same period in 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $1.2 million in total assets, $550,537 in total liabilities, and $680.7 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?254b Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 22, 2007, Kansas City, Mo.-based Weaver & Martin LLC raised substantial doubt about AFV Solutions Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's losses from inception. About AFV Solutions Headquartered in Irvine, California, AFV Solutions Inc. (OTC BB: AFVS.OB) -- http://www.afvsolutions.com/-- brokers hybrid electric, CNG and LPG buses manufactured in China. AGILENT TECHNOLOGIES: Inks Merger Agreement with Velocity11 ----------------------------------------------------------- Agilent Technologies Inc. and Velocity11 have signed a definitive agreement for Agilent to acquire Velocity11. Velocity11, privately held, is a leader in automated liquid handling and laboratory robotics for the life science market. Financial details were not disclosed. The acquisition is expected to be final in 30 to 60 days, subject to certain closing conditions. The acquisition will enable Agilent to offer a more comprehensive suite of workflow solutions to its life science customers in the pharmaceutical, biotech and academic research markets. Velocity11 designs, manufactures and markets robotic solutions that range from standalone instrumentation to bench- top automation solutions to large, multi-armed robotic systems. The company also develops world-class software to control the robotics. Velocity11's technology will strengthen Agilent's offering of automated sample-preparation solutions across a broad range of applications. "Velocity11 is a market leader in lab automation with a solid reputation for innovative technology, quality products and superb customer service,"said Nick Roelofs, vice president of Agilent's Life Science Systems and Solutions Unit. "Together, we can offer customers a comprehensive set of workflow solutions with increased levels of automation, which can help speed drug discovery and genetic research. When the acquisition is final, customers will continue to experience the same personalized customer service they've come to expect from Velocity11, with the addition of Agilent's strong network of global service and support." "We are very excited to be joining Agilent and to have found a company with such a complementary culture, product line, commitment to customer satisfaction and vision for providing complete automated workflow solutions,"said Rob Nail, Velocity11's CEO. "The ability to leverage Agilent's global infrastructure and deep applications focus will allow us to continue to improve the services we provide our customers, innovate in new directions, and rapidly expand our reach worldwide." Agilent is offering jobs to substantially all of Velocity11's approximately 150 employees worldwide. Headquartered in Menlo Park, California, Velocity11 has a second office in Melbourn, Hertfordshire, U.K., with field sales and support offered throughout the U.S. and western Europe. The company was established in 1999. Velocity11 has been recognized as one of the fastest growing companies in Silicon Valley and in North America. In 2006, Velocity11 was named to Deloitte's "Fastest Growing U.S. Tech Company" list. About Velocity11 Velocity11 -- http://www.velocity11.com/-- is a privately held company based in Menlo Park, Calif., and is focused on pioneering automation technology solutions for life science laboratories. The company's customers comprise most of the major pharmaceutical and biotechnology companies as well as leading genome centers and academic institutions. Combining innovative engineering with high standards of quality and customer service, Velocity11 designs and manufactures flexible high-performance automation solutions for processes that are transforming the industry. Velocity11 is committed to providing its customers with The Ultimate Automation Experience(tm). Based in Santa Clara, California, Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/-- is a measurement company serving communications, electronics, life sciences and chemical analysis industries. The company's 19,000 employees serve customers in more than 110 countries. The company has operations in India, Argentina, Puerto Rico, Bolivia, Paraguay, Venezuela, and Luxembourg, among others. * * * As reported in the Troubled Company Reporter on Oct. 26, 2007, Moody's Investors Service assigned a Ba1 rating to Agilent Technologies, Inc.'s proposed offering of $500 million senior notes due 2017 and affirmed its existing ratings and stable outlook. AINSWORTH LUMBER: Moody's Junks Corporate Family Rating ------------------------------------------------------- Moody's Investors Service downgraded Ainsworth Lumber Co. Ltd.'s corporate family rating to Caa1 from B2. At the same time, the ratings on the senior unsecured notes were downgraded to Caa1 from B2 and the rating on the secured term loan was downgraded to B2 from Ba3. The downgrade reflects the company's deteriorating liquidity position as poor market conditions for the company's principal product, oriented strandboard, continue to hamper cash flow generation. The rating outlook remains negative. OSB markets have been depressed for most of 2007 with year-to-date North American OSB demand down 9%, as US housing starts are in the midst of one of its most precipitous declines. During the current US housing market downturn, OSB pricing have, on occasion, dropped to below cash costs. Near term improvements in the OSB market are not expected as three new OSB plants are scheduled to come on-line in the coming months and tighter home mortgage standards are further depressing housing starts. Ainsworth's cash flow generation is further challenged by the strong Canadian dollar. The company has significantly reduced capital expenditures and has taken other measures to preserve cash, however, given the ongoing cash drain, and in the absence of asset sales or additional funding, there is the possibility of Ainsworth's liquidity being depleted within twelve months. The outlook remains negative as we expect pressure on liquidity and debt measurements to continue over the near and intermediate term as the company pursues additional sources of capital. Downgrades: Issuer: Ainsworth Lumber Co. Ltd. -- Probability of Default Rating, Downgraded to Caa1 from B2 -- Corporate Family Rating, Downgraded to Caa1 from B2 -- Senior Secured Bank Credit Facility, Downgraded to a range of 24 - LGD2 to B2 from a range of 23 - LGD2 to Ba3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of 56 - LGD4 to Caa1 from a range of 55 - LGD4 to B2 Ainsworth's ratings are influenced primarily by the extremely volatile pricing of its core product - OSB, coupled with the company's high debt level, constrained liquidity position, the company's relatively modest size and its product line and geographic concentration. The rating also reflects the company's aggressive financial policies and growth aspirations with little history of paying down debt. The company's good cash flow in strong OSB pricing environments, coupled with the company's competitive assets and good fiber access somewhat offset these challenges. Ainsworth Lumber Co., Ltd., headquartered in Vancouver, British Columbia, Canada, is a publicly traded integrated producer of OSB and specialty overlaid plywood. ALAN BURNS: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtors: Alan J. Burns Linda Burns 511 Woodland Drive Danville, KY 40422-1772 Bankruptcy Case No.: 07-52208 Chapter 11 Petition Date: November 12, 2007 Court: Eastern District of Kentucky (Lexington) Debtors' Counsel: Laura Day DelCotto, Esq. Wise DelCotto PLLC 200 North Upper Street Lexington, KY 40507 Tel: (859) 231-5800 Fax: (859) 281-1179 Total Assets: $1,675,867 Total Debts: $8,005,910 Debtors' list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HNW, Inc. Personal Guaranty of $1,357,795 4840 Waterside Drive AJB Debt Lexington, KY 40513 Community Trust Bank Inc. Personal Guaranty of $1,200,000 P.O. Box 2947 AJB Debt Pikeville, KY 41502 Jeffrey and Christy Baird Personal Guaranty of $801,659 P.O. Box 832 AJB Debt Danville, KY 40423 National City Bank Personal Guaranty of $550,000 101 South Fifth Street AJB debt; co-maker Louisville, KY 40202 of AJB debt Central Kentucky Federal Co-maker and personal $480,000 Savings Bank guaranty of AJB debt 340 West Main Street Danville, KY 40422 US Bank, NA (fka Firstar Personal Guaranty of $231,442 Bank NA) AJB Debt Kentucky Department AJB 2005/06 unpaid $82,300 of Revenue Legal Branch - withholding taxes - Bankruptcy Section responsible officer liability National City Leasing Corp Personal Guaranty of $48,000 Fulcrum Corp. and Personal Guaranty of $43,000 Robert Hassur AJB Debt Fifth Third Bank 2007 Hyundai (NADA Blue $33,499 Book Value) ($22,255 secured) GMAC 2007 Escalade (NADA Blue $54,427 Book Value) (48,400 secured) AFC Enterprises Inc Personal Guaranty of Unknown AJB indebtedness ARW, LLC Co-guarantor of AJB Unknown debt with Community Trust Bank - Contribution Claims Boyle County Public Schools Boyle Co. Taxes Unknown Boyle County Sheriff Boyle County Property Tax Unknown Central Kentucky Federal Personal guaranty of JAR Unknown Savings Bank debt City of Danville Boyle Co. Taxes Unknown Department of Taxes Farmers National Bank Personal guaranty of Danarb Unknown Danville and JAR debts Residence at 511 Woodland $700,000 Place Danville, KY 40422 (270,000 Co-debtor - Crossroads secured) MidPop, LLC Personal guaranty of AJB Unknown debt ($35,500 secured) ALLIANCE BANCORP: Sells Brisbane Property to TA Associates ---------------------------------------------------------- Alliance Bancorp sold off its property in Brisbane, California to TA Associates Realty, Andrew C. Burr writes for CoStar News. According to the news, the property is a 1983-year old, six-storey office building with an area of 99,150-square-foot. The purchase price was not disclosed, however Alliance bought the property for $15 million in 2005, CoStar relates, citing an information source. Headquartered in Brisbane, California, Alliance Bancorp -- http://www.alliancebancorp.net/-- is a residential mortgage lender. Alliance Bancorp fka United Financial Mortgage Corp., on July 13, 2007, filed a voluntary chapter 7 petition with the U.S. Bankruptcy Court for the District of Delaware. Its parent company, Alliance Mortgage Investments Inc., and another affiliates, Alliance Bancorp Inc. of Oakbrook, Illinois, also filed voluntary chapter 7 petitions. The company ceased operations as of July 13, 2007. AMERICAN HOME: Can Access $35 Mil. of AHM Acquisition Financing --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave American Home Mortgage Investment Corp. and its debtor-affiliates authority, on an interim basis, to borrow $35,000,000 from the $50,000,000 loan provided by AH Mortgage Acquisition Co. Inc., the purchaser of its loan servicing business, to fund its servicing operations, pending the final closing of the sale. The key provisions of the credit facility are: -- The Facility is a senior secured limited recourse debtor- in-possession credit facility, comprised of a $50,000,000 revolving credit facility, with an interim availability of $35,000,000; -- The maturity date is the earliest of: (i) the Final Closing Date; and (ii) the earlier date on which either: * all Loans will become due and payable; or * all Loans and all other Obligations for the payment of money will be paid in full and the Commitments and this Loan Agreement are terminated; -- Loans will bear interest at the Eurodollar Rate plus the applicable margin. The Eurodollar Rate will be a periodic fixed rate equal to LIBOR plus the Applicable Margin of 3%; -- Upon the occurrence and during the continuance of any event of default, the Applicable Margin will increase by 2% per annum; -- Events of Default include: (i) failure to pay principal or interest; (ii) a default under other loan documents that remains unremedied for five days; (iii) false or misleading representations, warranties, or certifications; (iv) termination of any Loan Document; (v) any of the Debtors' Chapter 11 cases are converted to Chapter 7; and (vi) any of the Cases are dismissed and the dismissal order does not provide for termination of the commitments and full payment of the obligations of the Debtor Borrowers. Pursuant to a Court-approved stipulation, the Debtors will no longer be able to use their lenders' cash collateral in the event of the initial closing of the sale of the Debtors' servicing business. The Court has previously authorized the Debtors, on a final basis, to obtain $50,000,000 of postpetition financing from WLR Recovery Fund III, L.P., the financing arm of WL Ross & Co. LLC. The availability of funds under the DIP Facility, however, is not permitted to fund the operations of the Servicing Business, which was recently approved to be sold to AHM Acquisition, an entity sponsored by WL Ross & Co. Pursuant to the asset purchase agreement between the Debtors and AHM Acquisition, the sale will be closed in two steps -- (i) an initial or economic closing expected to occur mid-November 2007, and (b) a final closing anticipated to occur by September 30, 2008. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the APA provides that from and after the initial closing, AHM Acquisition will fund the obligations associated with the Servicing Business. Hence, the Sellers agreed to (i) grant AHM Acquisition, as of the initial closing, a collateral of first priority lien on, and security interest in, all of the purchased assets and the Sellers' cash and cash equivalents and other proceeds received in connection with the Servicing Business after the initial closing, and (ii) promptly seek approval of the grant of that lien and security interest pursuant to Section 364(c) of the Bankruptcy Code. 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 Move Lease Decision Period to Mar. 3 ----------------------------------------------------------------- American Home Mortgage and Investment Corp. and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the time for them to assume or reject any of the leases, subleases or other agreements, to which any of the Debtors are a party that may be considered an unexpired lease of nonresidential real property through and including March 3, 2008. Since their bankruptcy filing, the Debtors have focused primarily on maximizing the value of the Debtors' bankruptcy estates for their stakeholders through the orderly liquidation of their assets. As a result of the expedited and lengthy sale process of the Debtors' loan servicing business and other matters the Debtors faced during the initial stage of their bankruptcy cases, they have not had ample opportunity to evaluate all of their remaining real property leases, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. As of November 8, 2007, the Debtors have assumed and assigned approximately 40 unexpired leases of non-residential real property related to the Debtors' loan origination business, Mr. Patton discloses. In addition, the Court has approved the Debtors' request to extend the deadline for lease disposition for unexpired leases related to the Servicing Business until March 3, 2008. Mr. Patton contends that sought extension will not damage the lessors beyond the compensation that is available to them under the Bankruptcy Code because the Debtors had and will perform their undisputed obligations in a timely fashion, including the payment of postpetition rent. He also notes that the Debtors should not be forced at this relatively early stage of the Chapter 11 cases to prematurely assume the Leases and incur potentially significant and unnecessary administrative claims, or to reject the Leases and lose the opportunity to obtain value for those leases. The Debtors submit that ample "cause" exists for the Court to extend the assumption or rejection period. They add that the sought extension is without prejudice to the rights of the Debtors to seek further extensions with the consent of the counterparties to the Leases as contemplated by Section 365(d)(4)(B)(ii) of the Bankruptcy Code. 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: Wants Senior Managers Incentive Program Approved --------------------------------------------------------------- American Home Mortgage and Investment Corp. and its debtor- affiliates seek the U.S. Bankruptcy Court for the District of Delaware's authority to pay incentive to certain members of senior management, pursuant to Sections 105(a), 363(b)(1) and 503(c)(3) of the Bankruptcy Code. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that in August 2007, the Debtors were forced to drastically reduce their workforce from approximately 7,500 employees to 1,000 employees, who were determined to be essential to wind-down the Debtors' business, maintain the valuable loan servicing business and manage the remaining businesses. Since their bankruptcy filing, the Debtors' workforce has been further depleted, resulting to members of the Debtors' senior management, composed of 27 executives, senior vice presidents, and vice presidents, having to maintain and motivate a workforce, which has forced to perform additional duties, like the duties previously performed by former colleagues and additional tasks associated with the Chapter 11 cases, Mr. Patton says. He adds that the Senior Management is being asked to conduct structured sales of substantially all of the Debtors' assets within an expedited time frame, including the sale of the sale of the servicing business, the American Home Bank, mortgage loans, financial assets, real estate holdings, interests in reinsurance companies, furniture, fixtures & equipment and the Rabbi trust. To incentivize the Senior Management, the Debtors have developed an executive incentive plan (EIP), which aligns the interests of Senior Management with the interests of the Debtors' stakeholders, Mr. Patton tells the Court. He relates that the EIP is the result of significant discussions and negotiations with the Official Committee of Unsecured Creditors during the past several months. The amounts payable to the plan participants, pursuant to the EIP, are contingent upon the Debtors' successful and timely completion of certain asset sales and the efficient management of an expedited wind-down of the Debtors' business following the sales. The Executive Incentive Plan Mr. Patton explains that the EIP provides for contributions to a plan pool, which will not be less than $3,650,000 nor more than $9,000,000, based upon the achievement of objective measures of the value obtained through: * asset sales; * management of the asset sales process; * minimization of wind-down costs; and * rapid confirmation of a plan of liquidation. The contribution, if any, upon the consummation of an asset sales, will be calculated based upon the extent to which the proceeds remaining from the Asset Sales after payment of secured debt and costs exceed certain threshold amounts: Net Proceeds Asset Sales Contribution ------------ ------------------------ less than $230,000,000 None $230,000,000 to $300,000,000 1.5% of the Net Proceeds $300,000,000 to $400,000,000 $1,050,000 + 2.25% of the Net Proceeds more than $400,000,000 $3,300,000 + 3% of the Net Proceeds Regardless of the actual Net Proceeds, the Asset Sales Contribution will not exceed $5,000,000. The Debtors desire to incentivize Senior Management to efficiently and expeditiously close certain Asset Sales, hence, cutting off the administrative drain while maximizing the value of the Assets. The Debtors will contribute into the Plan Pool based upon the time it takes to consummate the sales of the Servicing Business and the American Home Bank: Assets Target Date Contribution ------ ----------- ------------ Servicing Business October 31, 2007 $700,000 American Home Bank January 31, 2008 300,000 American Home Bank February 28, 2008 150,000 American Home Bank March 1 or later None The sale order of the Servicing Business, which was signed by the Court on October 30, 2007, has satisfied the requirement of the asset sales milestone. The Debtors propose to make additional contribution to the Plan Pool if the costs in winding down their business is minimized. The Wind-Down Costs consist of the Debtors' expenses during the liquidation process, excluding (i) operating expenses of the servicing operations, (ii) fees and expenses associated with the Debtors' Chapter 11 cases, like professional fees, and (iii) health insurance costs of the Debtors' employees. Wind-Down Costs Contribution ------------ ------------ exceeds $45,000,000 None less than $45,000,000 10% of the amount by which the Wind-Down Costs are less than $45,000,000 less than $40,000,000 $500,000 + 20% of the amount by which the Wind-Down Costs are less than $40,000,000 Regardless of the actual Wind-Down Costs, the Wind-Down Costs Contributions will not exceed $2,000,000. The Debtors will endeavor to conclude these cases as quickly as possible to expedite distributions to creditors. Hence, the Debtors will also contribute to the Plan Pool if their cases will be resolve within one year from their bankruptcy filing. The contribution associated with the expeditious completion of the cases will be based upon the time it takes the Debtors to obtain confirmation of a plan of liquidation. Target Date Contribution ----------- ------------ on or before June 6, 2008 $1,000,000 after June 5, 2008, but prior 500,000 to August 6, 2008 later than August 6, 2008 None The Debtors submit that the EIP, which has a maximum aggregate payout of $9,000,000, provides significant value at relatively small cost to the bankruptcy estates. In light of the value, size, and complexity of the Debtors' business, and the issues that have already arisen and will continue to arise in these cases, the Debtors submit that the incentive amounts for the Senior Management are reasonable and responsibly targeted, and that the EIP's approval serves the best interests of the estates. Additional EIP Terms Mr. Patton says that Plan Participants are not eligible for incentive payments if they resign voluntarily, or are terminated for "cause." As a condition precedent to receiving payments under the EIP, Plan Participants are required to fully execute and return to the Debtors a general release and waiver of claims. Payments from the Minimum Plan Pool will be made according to certain percentages, while payments in excess of the Minimum Plan Pool will be made based upon subjective criteria determined by Michael Strauss, the Debtors' chief executive officer, Steve Cooper, the chief restructuring officer, and the compensation committee of the Debtors' board of directors. The Minimum Plan Pool payments will be made to Plan Participants on January 31, 2008. Every three months thereafter, each Plan Participant will be paid his or her pro rata share of 50% of the remaining estimated Plan Pool. The final payments will be made upon the completion of the claims reconciliation process. The Debtors will implement an updated EIP for the period from February 1, 2008, to July 31, 2008, for the benefit of those Plan Participants to be employed by the Debtors for that period. EIP's Confidential Information Pursuant to Section 107(b) of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure, the Debtors further seek the Court's permission to file under seal two of EIP's exhibits, which contain the identity of the Plan Participants and the proposed percentages of the Minimum Plan Pool payments. They also ask the Court to direct that the EIP Confidential Exhibits remain under seal, confidential and not be made available to anyone, except for the Court, the office of the U.S. Trustee, counsel to the Creditors Committee, counsel to Bank of America, N.A., and counsel to the DIP Lender, or others at the Debtors' or Court's discretion. Mr. Patton contends that good cause exists for the Court to grant the relief requested because the Exhibits contain non-public information, which is highly confidential. He notes that disclosure of the confidential information of the Exhibits may create a competitive and unhealthy work environment. Moreover, Mr. Patton points out that the critical employees are necessary (i) for the closing of the Assets Sales, and (ii) to assist the Debtors' professionals in resolving the issues in the bankruptcy cases. He argues that if the highly confidential information is exposed, those in the Debtors' industry may use those information to lure away highly-important employees at a critical juncture in these cases by offering enhanced compensation and bonuses. About American Home 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 REPROGRAPHICS: S&P Holds 'BB' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' rating and '1' recovery rating to Glendale, California-based American Reprographics Co. LLC's proposed $350 million senior secured credit facilities. The issue rating is two notches above the 'BB' corporate credit rating, which was affirmed with a stable outlook. The recovery rating of '1' indicates an expectation for very high (90% to 100%) recovery in the event of a payment default. The facilities consist of a $75 million revolving credit facility and a $275 million term loan. The credit facilities will be used to repay existing debts and for general corporate purposes. "The ratings on ARC reflect its exposure to the cyclical commercial construction industry and its acquisitive track record," said Standard & Poor's credit analyst Ariel Silverberg. These factors are tempered by its leadership position in architecture, engineering, and construction reprographics, and its intermediate financial risk profile. ARC is the largest provider in the U.S. of outsourced reprographics and related business services. Operating in a highly fragmented industry, the company has pursued an expansion strategy that supports organic growth with acquisitions of much smaller competitors. In the first nine months of 2007, ARC acquired eight companies for a total of about $92.9 million. Standard & Poor's expects the company to maintain an aggressive strategy on acquisition and to fund such transactions in a manner consistent with the current rating. The company serves more than 140,000 customers through 294 digitally-connected branches in more than 210 cities in the U.S., six locations in Canada and one in Mexico. Through its acquisitions, ARC has established a national footprint that gives it one of the leading positions in the potentially volatile AEC reprographics industry. AMERISOURCEBERGEN CORP: Earns $87.5 Mil. in Qtr. Ended Sept. 30 --------------------------------------------------------------- AmerisourceBergen Corporation reported its fiscal fourth quarter ended Sept. 30, 2007. The company reported a net income of $87.5 million over $16.3 billion total revenues in the three months ended Sept. 30, 2007, compared with a net income of $121.9 million over $15.6 billion total revenues in same quarter last year. The PharMerica Long-Term Care business, which the company spun-off on July 31, 2007, is included in the fourth quarter and fiscal year 2007 results from continuing operations. Fiscal Fourth Quarter Highlights -- Operating revenue of $15.3 billion, up 4.5%; -- Cash flow from operations of $128 million; and -- $546 million of share repurchases. Fiscal Year 2007 Highlights -- Record operating revenue of $61.7 billion, up 9%; -- Diluted earnings per share from continuing operations of $2.63, up 16%; -- Pharmaceutical Distribution Segment operating income increase of 14%; operating margin of 1.20%, up 5 basis points; -- Cash flow from operations of $1.2 billion, above expectations; -- $1.4 billion of share repurchases, above expectations; and -- Merchandise inventories were down 7% with a 9% operating revenue increase. "We delivered outstanding performance for the 2007 fiscal year, exceeding the diluted earnings per share expectations we originally announced for the fiscal year last November, despite the impact from the write-down of tetanus-diphtheria vaccine inventory within the specialty business in the fourth fiscal quarter," R. David Yost, AmerisourceBergen's President and Chief Executive Officer, said. "In the fourth quarter and the fiscal year, performance of our traditional drug distribution business was outstanding, driven by our ability to leverage our contracts with branded manufacturers, drive generic sales, and lower our expense ratios through our newly completed distribution network." Consolidated Results Consolidated operating income in the fiscal 2007 fourth quarter decreased 7% to $181.0 million, due to a $28 million write-down to market value of tetanus-diphtheria vaccine inventory in the Pharmaceutical Distribution Segment, poor performance in the Other Segment, and higher than normal bad debt expense. These negative impacts were partially offset by the net positive impact of $7.6 million from "facility consolidations, employee severance and other," which included a gain of $10.4 million from a favorable decision by an appeals court in an employment-related dispute with a former Bergen Brunswig chief executive officer whose employment was terminated long before the creation of AmerisourceBergen and charges of $2.8 million primarily associated with the spin-off of the company's PharMerica Long-Term Care business. In the prior year's fiscal fourth quarter, consolidated operating income was negatively impacted by $7.8 million of "facility consolidations, employee severance and other," offset by an $8.9 million gain from the settlement of pharmaceutical manufacturer antitrust litigation cases. Consolidated operating income for fiscal year 2007 was $820.3 million, up 10% over the previous fiscal year. The effective tax rate for the fourth quarter of fiscal 2007 was 35.6%, down from 37.6% in the previous fiscal year's fourth quarter primarily due to the favorable resolution of certain tax matters. The effective tax rate for fiscal year 2007 was 37.1%. Going forward, the Company expects the effective tax rate to be between 37% and 38%. A $24.6 million loss, net of tax, from discontinued operations in the fourth quarter of fiscal 2007 resulted from an adverse decision in litigation related to the contingent earn-out provisions within the acquisition agreement for our former Bridge Medical business, which the Company sold in fiscal 2005. Balance Sheet As of Sept. 30, 2007, the company's balance sheet showed total assets of $12.3 billion and total liabilities of $9.2 billion, resulting in $3.0 billion stockholders' equity. 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. AMMC VIII: Moody's Rates $20 Million Class E Notes at Ba2 --------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by AMMC VIII Limited: -- Aaa to the $337,500,000 Class A-1 Floating Rate Notes, Due 2022; -- Aa1 to the $37,500,000 Class A-2 Floating Rate Notes, Due 2022; -- Aa2 to the $25,000,000 Class B Floating Rate Notes, Due 2022; -- A2 to the $20,000,000 Class C Deferrable Floating Rate Notes, Due 2022; -- Baa2 to the $20,000,000 Class D Deferrable Floating Rate Notes, Due 2022; and -- Ba2 to the $20,000,000 Class E Deferrable Floating Rate Notes, Due 2022. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. American Money Management Corporation will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. AMR CORP: Fitch Holds Junk Rating on Senior Unsecured Debt ---------------------------------------------------------- Fitch Ratings affirmed the debt ratings of AMR Corp. and its principal operating subsidiary American Airlines Inc., as: AMR -- Issuer Default Rating at 'B-'; -- Senior unsecured debt at 'CCC'/RR6'; American Airlines -- Issuer Default Rating at 'B-'; -- Secured bank credit facility at 'BB-/RR1'. The Rating Outlook for both AMR and American has been revised to Positive from Stable. The affirmation and Outlook revision reflect progress made by AMR in directing free cash flow toward debt reduction throughout 2007, as well as Fitch's expectation that the airline can de-lever its balance sheet further-even in the face of record-high jet fuel costs and a challenging U.S. economic outlook moving into 2008. Ratings capture the airline's highly leveraged balance sheet and heavy fixed cash obligations, balanced against the substantial reduction in debt and improvements in liquidity achieved over the last two years. AMR's intention to pre-pay about $545 million of aircraft-backed debt in the fourth quarter appears to validate management's commitment to focus on debt reduction as the first and best use of free cash flow at a time when considerable uncertainty still exists over AMR's cost profile and its capacity to grow profitably in a very difficult airline industry operating environment. Sustained improvements in passenger unit revenue over the last several quarters, tied to solid air travel demand patterns and constraints on industry capacity growth, have supported a surge in AMR's free cash flow generation power. This in turn has made substantial debt reduction possible. Since year-end 2005, AMR's consolidated debt balance has declined from $14.7 billion to $12 billion at Sept. 30, 2007, while lease- adjusted leverage (capitalizing both aircraft and facilities rents at 8x LTM expenses) has fallen from 9.8x at year-end 2005 to 5.7x at Sept. 30. With its heavy emphasis on strengthened liquidity and $5.4 billion of unrestricted cash and investments, total net balance sheet debt stood at $6.6 billion at the end of the third quarter. Besides spiking energy costs and mounting concerns over the durability of healthy air travel demand and pricing patterns, AMR faces significant cost pressures that could intensify over the next several quarters if a new round of contracts with the Allied Pilots Association and other unions pushes unit labor costs significantly higher. The pilot union's call for substantial wage increases raises the risk that rising pay and benefit levels could keep AMR's unit costs at the high end of the legacy carrier group for an extended period. With longer-term deals in place at Northwest and Delta following their bankruptcies, AMR could face a protracted cost competitiveness challenge that may keep available seat mile capacity and fleet growth in check for a number of years. With crude oil prices surging to over $98 per barrel in early November, AMR and the other U.S. airlines have been forced to look for opportunities to recover higher fuel costs via fare hikes at a time when marginal demand patterns may already be softening. To date, rising fares and strong revenue per available seat mile gains have offset fuel cost pressure. Still, looking into 2008, Fitch expects all U.S. carriers to experience some additional margin pressure that could limit free cash flow generation and constrain further debt reduction. AMR has about 40% of fourth quarter jet fuel consumption hedged with effective caps of approximately $69 per barrel of crude oil. This will offset some fuel cost pressure, but AMR management has made it clear that additional fare hikes will be necessary to pass on higher fuel costs to customers. To date, the industry appears to be adopting a disciplined capacity approach in response to fuel cost pressure, and additional capacity reduction (especially in domestic markets) may well follow over the next few weeks. For AMR, the absence of new aircraft deliveries until 2009 will keep capital spending low and allow continued debt reduction as well as cash pension funding of $300 million -$400 million next year. Since unrestricted cash and investments now represent about 25% of LTM revenues (a healthy liquidity position even in the face of material industry event risk), most if not all free cash flow can be directed to the funding of debt maturities and pension contributions in 2008. Recent discussion of possible non-core asset spin-offs at AMR and the other legacy carriers raises questions over the long-term direction of core airline credit quality if cash-generating units such as the AAdvantage loyalty program, American Eagle regional airline unit, or the aircraft maintenance unit are ultimately separated from American Airlines Inc.-where the bulk of AMR's consolidated debt and fixed obligations reside. Any asset separation would presumably result in some margin erosion at the core airline, making the direction of cash proceeds from any asset sale toward debt reduction a credit-enhancing priority. While the Positive Rating Outlook reflects Fitch's view that further de-leveraging could drive an upgrade of AMR's IDR to 'B' in the near term, further spikes in jet fuel costs and/or a significant slowdown in the airline's RASM growth during 2008 could drive free cash flow lower and limit the potential for further improvements in credit quality. ANN-LEE CONSTRUCTION: Case Conversion Hearing Moved to December 12 ------------------------------------------------------------------ The Honorable Jeffery A. Deller of the United Sates Bankruptcy Court for the Western District of Pennsylvania continued the hearing on Dec. 12, 2007, at 10:00 a.m., to consider approval of Ann-Lee Construction and Supply Company Inc.'s request to convert its Chapter 11 bankruptcy case into a Chapter 7 liquidation proceeding. The hearing will be held at U.S. Steel Tower, 54th Floor, p02 Courtroom B in Pittsburgh. As reported in the Troubled Company Reporter on Oct. 4, 2007, the Debtor said they have incurred additional losses from Jan. 11, 2007, to Aug. 17, 2007, and as a result, it is unable to meet its debts as they come due. The Debtor further said that it was unable to file a viable Chapter 11 plan and disclosure statement within the required time set by the Court. The Debtor's exclusive plan filing period expired on Sept. 19, 2007. Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq. and Joseph V. Luvara, Esq. represent the Debtor in its restructuring efforts. Kirk B. Burkley, Esq., at Bernstein Law Firm PC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. ANSLEY PARK: Moody's Junks Ratings on Four Note Classes ------------------------------------------------------- Moody's Investors Service downgraded five classes of notes issued by Ansley Park ABS CDO Ltd., with three classes left on review for further possible downgrade. One additional class has been placed on review for possible downgrade. The notes affected by the rating action are: -- $11,150,000 Class X Senior Secured Notes Due 2046 Prior Rating: Aaa Current Rating: Aaa, on review for possible downgrade -- $450,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Baa1, on review for possible downgrade -- $98,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aaa Current Rating: Caa1, on review for possible downgrade -- $27,500,000 Class B Senior Secured Floating Rate Notes Due 2046 Prior Rating: Aa2 Current Rating: Caa2, on review for possible downgrade -- $9,000,000 Class C Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: A2, on review for possible downgrade Current Rating: Ca -- $8,000,000 Class D Secured Floating Rate Deferrable Notes Due 2046 Prior Rating: Baa2, 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. 2, 2007 of an event of default caused by a failure of the ratio, calculated by dividing the Net Outstanding Portfolio Collateral Balance by the Aggregate Outstanding Amount of the Class A Notes, to equal or exceed 100%, pursuant to Section 5.01(i) of the Indenture dated December 20, 2006. Ansley Park ABS CDO Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to effect the calculation of overcollateralization. Thus, the ratio of Net Outstanding Portfolio Collateral Balance divided by the Aggregate Outstanding Amount of the Class A Notes, failed to meet the required level. Upon an event of default in this transaction, a majority of the controlling class is entitled to exercise certain remedies under the indenture. Liquidation of the underlying portfolio is one possible remedy; however, it is not clear at this time whether the controlling class will choose to exercise this option. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by the controlling class. Because of this uncertainty, the Class X, Class A-1, Class A-2, and Class B Notes remain on review for possible downgrade pending the receipt of definitive information. ARCHSTONE-SMITH: S&P Retains 'BB-' Issuer Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BBB+' rating on the unsecured debt issued by Archstone-Smith Operating Trust. S&P's 'BB-' issuer credit and secured credit ratings on Archstone are unchanged. The withdrawal of the debt rating follows Archstone's redemption of more than 90% of its $575 million 4% exchangeable notes. Remaining noteholders have the option to put the notes back to the company through Nov. 30, 2007. Before their redemption, the exchangeable notes represented Archstone's remaining unsecured public debt obligations following the company's recent go-private transaction. S&P's current 'BB-' rating on roughly $5.1 billion of secured bank debt is unchanged, and S&P's outlook on the company remains stable. These weaknesses, however, are partly offset by the good quality and above-average historical operating performance of Archstone's portfolio. Rating Withdrawn Archstone-Smith Operating Trust Rating ------ To From -- ---- Exchangeable senior notes NR BBB+/Watch Neg Other Ratings Outstanding Archstone-Smith Operating Trust Rating ------ Corporate credit BB-/Stable/-- Secured credit facility BB- (Recovery rating 4) ARES XII: Moody's Assigns Ba2 Rating on $35 Mil. Class E Notes -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Ares XII CLO Ltd.: -- Aaa to the $479,500,000 Class A Floating Rate Notes Due 2020; -- Aa2 to the $52,500,000 Class B Floating Rate Notes Due 2020; -- A2 to the $42,000,000 Class C Floating Rate Deferrable Notes Due 2020; -- Baa2 to the $35,000,000 Class D Floating Rate Deferrable Notes Due 2020; and -- Ba2 to the $35,000,000 Class E Floating Rate Deferrable Notes Due 2020 The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Loans, High Yield Bonds, Structured Finance Securities, Senior Secured Floating Rate Notes and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Ares CLO Management XII L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ARVINMERITOR INC: Declares $0.10 Quarterly Dividend --------------------------------------------------- The ArvinMeritor Inc. Board of Directors, at a meeting held on Nov. 13, 2007, at its corporate headquarters in Troy, Mich., declared a quarterly dividend of $0.10 per share on the common stock of ArvinMeritor, payable Dec. 10, 2007, to holders of record at the close of business on Nov. 26, 2007. The company also disclosed Wednesday that its annual shareowners' meeting will be held on Jan. 25, 2008, at 9 a.m. EST, at its Troy, Mich. headquarters. Shareowners of record at the close of business on Nov. 23, 3007, will be entitled to notice of, and to vote, at the annual meeting. About Arvinmeritor Headquartered in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. * * * As reported in the Troubled Company Reporter on Oct. 9, 2007, Fitch Ratings downgraded its ratings on ArvinMeritor Inc. including Issuer Default Rating to 'BB-' from 'BB'; Senior secured revolver to 'BB' from 'BB+'; and Senior unsecured notes to 'B+' from 'BB-'. The rating outlook is negative. Standard & Poor's Ratings Services lowered its corporate credit rating and related ratings on ArvinMeritor Inc. to 'B+' from 'BB-'. The outlook is negative. Moody's Investors Service downgraded ArvinMeritor's Corporate Family Rating to B1 from Ba3 and maintained the outlook at stable. Moody's also lowered its ratings on the company's secured bank obligations (to Ba1, LGD-1, 8% from Baa3, LGD-2, 13%) and unsecured notes (to B2, LGD-4, 63% from B1, LGD-4, 63%). The Probability of Default is changed to B1 from Ba3, while the company's Speculative Grade Liquidity rating remains SGL-2. The outlook is stable. ARVINMERITOR INC: Posts $62 Million Net Loss in Fourth Quarter -------------------------------------------------------------- ArvinMeritor Inc. reported Wednesday financial results for its full fiscal year and fourth quarter ended Sept. 30, 2007. The company reported a net loss of $62 million for the fourth quarter ended Sept. 30, 2007, compared with a net loss of $274 million for the same period in fiscal year 2006. For the fourth quarter of fiscal year 2007, ArvinMeritor posted sales of $1.6 billion, flat over the same period last year. Sales reflect the continued downturn in Class 8 North American truck sales offset by stronger volumes in other regions. Operating income in the fourth quarter of 2007, before special items, was $8 million, compared to operating income, before special items, of $56 million in the prior year's fourth quarter. Loss from continuing operations during the fourth quarter of fiscal year 2007, before special items, was $4 million, compared to income from continuing operations, before special items, of $29 million a year ago. Fourth-quarter results reflect reduced North American volumes and significant premium costs associated with record European volumes. Special items included costs associated with supplier reorganizations, restructuring expenses and certain non-recurring tax charges. For the fourth quarter of 2007, ArvinMeritor reported positive free cash flow of $178 million. "Despite the solid progress we are making in implementing our strategic initiatives, our results this quarter were negatively impacted by weaker than anticipated North American truck production and the continuing capacity challenges in our European truck operations," said chairman, chief executive officer and president Chip McClure. "Going forward, we believe European capacity issues will be less severe due to actions we are taking to implement lean manufacturing improvements and bring new suppliers into the pipeline. "Following this period of extended softness in the North American truck market, we expect to see a rebound as the industry gradually returns in 2008. In Europe, we look forward to continued strong sales volumes, and in Asia and South America, we expect volumes to grow significantly." Sales from continuing operations for fiscal year 2007 were $6.4 billion, up $34 million, compared to fiscal year 2006. On a GAAP basis, net loss was $219 million, compared to a net loss of $175 million in fiscal tear 2006. Loss from continuing operations was $30 million, compared to income from continuing operations of $112 million in fiscal year 2006. Net debt was reduced by $146 million during the fiscal year despite negative free cash flow of $113 million. At Sept. 30, 2007, the company's consolidated balance sheet showed $4.789 billion in total assets, $4.181 billion in total liabilities, $65 million in minority interests, and $543 million in shareowners' equity. About Arvinmeritor Headquartered in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. * * * As reported in the Troubled Company Reporter on Oct. 9, 2007, Fitch Ratings downgraded its ratings on ArvinMeritor Inc. including Issuer Default Rating to 'BB-' from 'BB'; Senior secured revolver to 'BB' from 'BB+'; and Senior unsecured notes to 'B+' from 'BB-'. The rating outlook is negative. Standard & Poor's Ratings Services lowered its corporate credit rating and related ratings on ArvinMeritor Inc. to 'B+' from 'BB-'. The outlook is negative. Moody's Investors Service downgraded ArvinMeritor's Corporate Family Rating to B1 from Ba3 and maintained the outlook at stable. Moody's also lowered its ratings on the company's secured bank obligations (to Ba1, LGD-1, 8% from Baa3, LGD-2, 13%) and unsecured notes (to B2, LGD-4, 63% from B1, LGD-4, 63%). The Probability of Default is changed to B1 from Ba3, while the company's Speculative Grade Liquidity rating remains SGL-2. The outlook is stable. ATARI INC: Streamlines Operations, Establishes Business Plan ------------------------------------------------------------ Atari Inc. will re-focus its operations on publishing and distribution in North America, completing its withdrawal from the production business. Atari has licensed its Test Drive franchise to Infogrames Entertainment, S.A. under an agreement which includes a $5 million advance royalty. Restructuring Initiative Atari has determined to focus its resources on the publishing and distribution segments of the rapidly growing video game business. The company's operations will involve title acquisition, sales and marketing, and physical distribution of products from IESA, its 51% shareholder, and other selected partners. In line with that goal, Atari has agreed in principle with IESA to terminate its Production Services Agreement in the near future. As a result, Atari will no longer provide production and quality assurances services to IESA. Rather, Atari plans to transfer certain employees and contract other staff on a project basis for a limited period of time. As part of the company restructuring, Atari, Inc. will reduce its current workforce in order to re-align the company's cost structure with its on-going business base. Test Drive Licensing Agreement Test Drive Unlimited, an award-winning product in 2006, together with the entire Test Drive franchise has been licensed to IESA under a 6-year agreement that provides for a $5 million advance royalty. Test Drive Unlimited, an award-winning product in 2006, together with the entire Test Drive franchise has been licensed to IESA under a 6-year agreement that provides for a $5 million advance royalty. The agreement allows IESA, whose Eden Studios originally developed Test Drive Unlimited for Atari, to develop and market at least two new releases of the franchise during the life of the license. It is anticipated that the deal, signed on Nov. 8, 2007, will assure the continued vitality of the franchise and will strengthen the relationship between Atari and its parent company while providing an important element in the on-going financial restructuring of Atari. "Atari continues to take important steps to streamline operations and establish a winning business plan," Curtis G. Solsvig III, Atari's Chief Restructuring Officer, commented. "We expect that the actions we are undertaking today will position us for the future as a preferred business and distribution partner." BlueBay Credit Facility As reported in the Troubled Company Reporter on Oct. 26, 2007, Atari recently signed a deal with BlueBay High Yield Investments (Luxembourg) S.A.R.L for financial support in the form of a $10 million credit facility as part of its overall financial restructuring. Blue Bay owns in excess of 20% of IESA's stock. About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) - http://www.atari.com/ -- develops interactive games for all platforms and is a third-party publisher of interactive entertainment software in the U.S. Atari Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA, an interactive games publisher in Europe. Atari Inc.'s consolidated balance sheet at June 30, 2007, showed $35.0 million in total assets and $43.6 million in total liabilities, resulting in an $8.6 million in total shareholders' deficit. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. BABBY-HENKEL: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Babby-Henkel Building Specialties, Inc. P.O. BoX 40997 Tucson, AZ 85717 Bankruptcy Case No.: 07-02261 Type of Business: The Debtor is drywall/insulating contractor. Chapter 11 Petition Date: November 11, 2007 Court: District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. Eric Slocum Sparks P.C. 110 South Church Avenue Suite 2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BHM Investment Company Lease $3,060 $3,060 c/o Margaret Babby Monthly P.O. Box 12970 Tucson, AZ 85732 Southwest Carpenters Trusts Benefits Unknown 533 South Fremont Avenue Contributions Los Angeles, CA 90071 BAKER & TAYLOR: Moody's Changes Outlook to Negative from Stable --------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Baker & Taylor Acquisitions Corp. to negative from stable. In addition, Moody's affirmed the company's existing ratings except its probability of default rating which was changed to B2 from B1. The change in the rating outlook to negative reflects the company's weaker than expected operating profits for the fiscal year ended June 30, 2007 which resulted in deterioration in credit metrics, particularly EBIT/Interest Expense which fell to 0.7x. The negative outlook also reflects Moody's expectation that interest coverage will remain weak over the next twelve months until the full effect of the company's shift in focus toward margin improvements is fully evidenced. The company's operating profits during fiscal 2007 were constrained by the company's focus on driving top line sales at the expense of margins as well as by the acquisition of Advance Marketing Services (which generated negative profitability). While the company's first quarter ended Sept. 30, 2007 results showed signs of improvement in profitability, credit metrics still remained weak and continued to be below Moody's original expectations, notably EBIT/IE was 1.0x for the LTM period ended Sept. 30, 2007. These ratings are affirmed: -- Corporate family rating of B2, -- $165 million senior secured second lien notes of B2 (LGD3; 45%). This rating is changed: -- Probability of default rating to B2 from B1. The B2 corporate family rating is primarily driven by the company's weak credit metrics, aggressive financial policies, including a history of leverage buy outs and debt financed acquisitions, and its sizable customer concentration. The rating is also constrained by the company's weak operating profit as a result of its recent focus at growing market share and top line sales at the expense of profitability. These factors constrain the rating category despite the company's numerous strong qualitative factors and its adequate liquidity. Baker & Taylor's sizable market share and efficient distribution network are more indicative of an investment grade company. Also lending support to the rating category is the company's moderate scale, geographic and segmental diversification, and it high level of organic revenue growth. The rating outlook is negative. The negative outlook reflects the modest downward rating pressure that the company's fiscal year-end 2007 soft performance has placed on the rating category. It also reflects that the company's current level of EBIT/Interest Expense at 1x is weak for the B2 rating level. The change in the probability of default rating to B2 is as a result of modifying the approach taken in Baker & Taylor's estimated expected family recovery rate to the mean level family- level LGD from an enterprise valuation approach. Baker & Taylor Acquisitions Corp. is a holding company whose sole asset is Baker & Taylor Corporation. Baker & Taylor Corporation, headquartered in Charlotte, North Carolina, is a leading domestic and international distributor of books and entertainment products to libraries and retailers. It is wholly owned by Castle Harlan and management. BANC OF AMERICA: Fitch Holds BB+ Rating on Class M-MC Certs. ------------------------------------------------------------ Fitch Ratings upgraded class C of Banc of America Large Loan Inc., series 2006-BIX1, as: -- $43.2 million class C to 'AAA' from 'AA+'. In addition, Fitch affirmed these: -- $68.3 million class A-1 at 'AAA'; -- $223.5 million class A-2 at 'AAA'; -- Interest-only class X-1A at 'AAA'; -- Interest-only class X-1B at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- Interest-only class X-3 at 'AAA'; -- Interest-only class X-4 at 'AAA'; -- Interest-only class X-5 at 'AAA'; -- $15 million class B at 'AAA'; -- $42.4 million class D at 'AA'; -- $28.3 million class E at 'AA-'; -- $28.3 million class F at 'A+'; -- $28.3 million class G at 'A'; -- $28.3 million class H at 'A-'; -- $11.3 million class J at 'BBB+'; -- $11.8 million class K at 'BBB'; -- $18.9 million class L at 'BBB-'; -- $4.3 million class J-CP at 'BBB+'; -- $6.4 million class K-CP at 'BBB'; -- $12.5 million class L-CP at 'BBB-'; -- $1.4 million class J-CA at 'BBB+'; -- $0.9 million class K-CA at 'BBB'; -- $1.1 million class L-CA at 'BBB-; -- $2 million class M-MC at 'BB+'; Class L-SC has been paid in full. The rating upgrade is the result of increased credit enhancement levels due to payoff of three loans, partial prepayments and scheduled amortization. As of the October 2007 distribution date, the pool's aggregate certificate balance has decreased 52.4% to 547.5 million from $1,149.6 million at issuance. To date, four loans have paid off: the Lee's Summit loan, the Wyvernwood loan, the Sterling Court loan, and the Quality Hotel Times Square loan. 43 office properties were sold in the CarrAmerica Pool 3 and CarrAmerica Pool 2 loans and two in JER Denver Office Portfolio, reducing the balance of the loans. There are fourteen loans remaining in the pool. All pooled senior participations included in the trust have investment-grade shadow ratings. The non-pooled senior participation interests of three loans in the trust, CarrAmerica Pool 3, CarrAmerica Pool 2, and Midtown Center, are structured as stand-alone raked classes. The Greece Ridge Center loan matured in November 2007 and the borrower has exercised his first one-year extension option. The Holiday Hilton Head loan matures in December 2007 and is also expected to extend. All the remaining loans in the pool are scheduled to mature in 2008. BEAR STEARNS: Fitch Holds BB+ Rating on Class L Certificates ------------------------------------------------------------ Fitch Ratings upgrades these class of Bear Stearns commercial mortgage pass-through certificate, series 2004-BBA3: -- $7.5 million class H to 'AAA' from 'A'. Fitch downgrades and removes from Rating Watch Negative this class: -- $15.5 million class K to 'BBB-' from 'BBB'. Additionally, these classes are affirmed: -- Interest-only class X-1B at 'AAA'; -- $12.5 million class J at 'BBB+'; -- $18.7 million class L at 'BB+'. Classes A-1A, A-1B, A-2, X-2, X-3, X-4, X-5, B, X-1A, C, D, E, F, G, E-ST, F-ST, G-ST, H-ST, J-ST, K-ST, L-ST and M-ST have paid in full. The upgrade is due to 27.4% paydown since the last rating action. The transaction has paid down by 96.4% since issuance. The downgrade and removal from Rating Watch Negative are due to continued deterioration in performance of both of the remaining loans: Riverside Center (52.1%), Sheffield Office Park (47.9%). The $28.2 million Riverside Center loan is secured by a 633,503 square foot retail shopping center located in Utica, NY that is anchored by Wal-Mart, Lowe's, and BJ's Wholesale Club. The mall was 80.1% occupied in August 2007 compared to 91.4% at issuance. As of June 30, 2007, Fitch's annualized stressed debt service coverage ratio on net cash flow for the senior note was 1.21x compared to 1.57x at issuance. While there are prospects for the mall's vacant space, no new leases have been signed since the last rating action. The $26 million Sheffield Office Park loan is secured by a 514,438 sf, three-building office property located in Troy, Michigan. The largest tenant plans to exercise its option to vacate a portion of its space before the end of 2007, four years before the lease expires in October 2011 (the tenant will pay a lease cancellation fee). Fitch stressed the leasing costs at issuance, and the master servicer has instituted a cash trap which funds a leasing reserve. As of Sept. 30, 2007, Fitch's annualized stressed DSCR on NCF for the senior note has declined to 1.46x from 1.61x at issuance. Occupancy has been stable. As of Sept. 30, 2007, the buildings were 77.8% occupied compared to 79.7% at issuance. Fitch is concerned about softening in the Troy office market and uncertainty regarding leasing prospects at the property. The debt service coverage ratios for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. CARIBE MEDIA: S&P Puts 'B' Ratings Under Positive CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit and 'B' senior secured debt rating on Caribe Media, Inc. on CreditWatch with positive implications. "At the same time, we withdrew our ratings, including the corporate credit ratings, on ACS Media, LLC, and CBD Media Holdings, LLC, as well as our subordinated debt rating on CBD Media LLC, following the repayment of rated corporate debt," said Standard & Poor's credit analyst Ariel Silverberg. The CreditWatch listing reflects a reassessment of Caribe's business profile. In resolving the CreditWatch listing, S&P will consider management's intermediate term operational and financial strategies. If an upgrade to the corporate credit rating is the outcome of S&P's review, S&P expect that it would be limited to one notch. CELL THERAPEUTICS: Sept. 30 Balance Sheet Upside-Down by 119.3MM ---------------------------------------------------------------- Cell Therapeutics Inc. reported last week financial results for the quarter and nine months ended Sept. 30, 2007. Cell Therapeutics Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $84.9 million in total assets, $180.8 million in total liabilities, and 149,000 in minority interest in subsidiary, resulting in a $119.3 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $48.4 million in total current assets available to pay $82.3 million in total current liabilities. The company reported a net loss of $48.5 on revenues of $20,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $27.8 million on revenues of $20,000 in the same period in 2006. As a result of the acquisition of Systems Medicine Inc. during the quarter, the net loss for the quarter and the nine months ended Sept. 30, 2007, included a non-cash acquired in-process research and development charge of $21.3 million allocated to the purchase of SM. Excluding this in-process research and development charge, operating expenses increased modestly primarily as a result of manufacturing activity in preparation for submission of a marketing application for XYOTAX(TM) in Europe as well as costs related to initiating the phase III clinical trials, PGT307 and PIX303, for XYOTAX and pixantrone, respectively. For the nine months ended Sept. 30, 2007, CTI posted a net loss of $100.5 million on revenues of $60,000 compared to a net loss of $100.2 million on revenues of $60,000 for the same period in 2006. The company ended the quarter with $38.3 million in cash and cash equivalents, securities available-for-sale, and interest receivable before taking into account $4.5 million in VAT receivables. "Our acquisition of Systems Medicine Inc. and our proposed acquisition of ZEVALIN, coupled with progress on advancing XYOTAX toward a first half 2008 marketing application submission and positioning pixantrone for its phase III EXTEND data release by mid-2008 provides CTI with multiple shots at moving closer to our goal of breaking even," said James A. Bianco, M.D., president and chief executive officer of CTI. "We expect exciting new randomized clinical trial data on ZEVALIN to be reported on first- line therapy in follicular NHL at upcoming clinical meetings providing the possibility of expanding its label in 2008 -- potentially making 2008 a pivotal year for CTI and its shareholders." 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?2545 Proposed Acquisition of ZEVALIN CTI also disclosed that it has entered into an agreement to acquire ZEVALIN from Biogen Idec Inc. Completion of that acquisition is subject to certain closing conditions, including obtaining third party consents. CTI expects to complete the acquisition in the fourth quarter of 2007, at which time CTI will acquire the rights to develop, market and sell ZEVALIN in the United States. ZEVALIN(R) is a form of cancer therapy called radioimmunotherapy and is indicated for the treatment of patients with relapsed or refractory low-grade or follicular B-cell NHL, including patients with Rituximab-refractory NHL. It was approved by the FDA in February of 2002 as the first radioimmunotherapeutic agent for the treatment of NHL. Acquisition of Systems Medicine In July 2007, CTI acquired Systems Medicine, a privately held oncology company, in a stock-for-stock merger. SM applies a systems biology approach to drug development, combining pharmacogenomics and bioinformatics with experienced preclinical, clinical, and regulatory expertise to find and exploit a specific cancer's context of vulnerability. Specifically, SM defines the molecular and genetic alterations that cause cancer cells to be particularly sensitive to a drug or combination of drugs-the context of vulnerability. About Cell Therapeutics Based in Seattle, Cell Therapeutics Inc. (NasdaqGM: CTIC) -- http://cticseattle.com/ -- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. CITIGROUP: Moody's Holds Low-B Ratings on Three Cert. Classes ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed the ratings of 14 classes of Citigroup Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 2005-EMG as: -- Class A-1, $50,877,258, affirmed at Aaa -- Class A-2, $115,939,000, affirmed at Aaa -- Class A-3, $42,513,000, affirmed at Aaa -- Class A-4, $199,016,000, affirmed at Aaa -- Class A-J, $46,036,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $7,222,000, upgraded to Aa1 from Aa2 -- Class C, $2,708,000, upgraded to Aa2 from Aa3 -- Class D, $5,416,000, affirmed at A2 -- Class E, $1,805,000, affirmed at A3 -- Class F, $3,611,000, affirmed at Baa1 -- Class G, $1,805,000, affirmed at Baa2 -- Class H, $3,611,000, affirmed at Baa3 -- Class J, $8,124,000, affirmed at Ba1 -- Class K, $2,708,000, affirmed at Ba2 -- Class L, $1,806,000, affirmed at Ba3 As of the Oct. 22, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 31.5% to $495 million from $722.1 million at securitization. The certificates are collateralized by 197 seasoned loans, ranging in size from less than 1% to 6% of the pool, with the top 10 loans representing 29.1% of the pool. The pool includes seven shadow rated investment grade loans, which represent 23.4% of the outstanding balance. One loan has been liquidated from the pool resulting in a realized loss of about $20,000. Currently there are no loans in special servicing. Fifteen loans, representing 5.9% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 operating results for 89.2% of the pool. Moody's weighted average loan to value ratio for the conduit component is 43.4%, compared to 46.2% at Moody's last full review in September 2006 and compared to 47.2% at securitization. Moody's is upgrading Classes B and C due to increased credit support and stable overall pool performance. The top three shadow rated loans represent 13% of the pool. The largest shadow rated loan is the 240 Central Park South Loan ($30 million -- 6.1%), which is secured by a 304-unit apartment complex located in New York City. The property is 91.0% occupied, the same as last review. Property performance has been impacted by increased operating expenses. The loan matures in October 2012 and is interest only for its entire term. Moody's current shadow rating is Baa3, compared to Baa2 at last review. The second largest shadow rated loan is the 52 Vanderbilt Avenue Loan ($17.5 million - 3.5%), which is secured by a 184,000 square foot Class B office/retail building located in midtown Manhattan, New York City. The property was 96.2% leased as of February 2007, compared to 86.8% at securitization. Performance has improved due to increased rents and loan amortization. Moody's current shadow rating is Baa2, compared to Baa3 at last review. The third largest shadow rated loan is the 17-19 West 34th Street Loan ($17 million - 3.4%), which is secured by a 224,000 square foot Class B office/retail building located in midtown Manhattan, New York City. The property was 97.7% occupied as of December 2006, compared to 94.5% at last review. The loan matures in July 2010 and is interest only for its entire term. Moody's current shadow rating is Aaa, the same as at last review. The remaining four shadow rated loans represent 10.4% of the pool. Moody's affirms the shadow ratings of the following three loans -- 50 East 42nd Street ($15 million; 3%) - affirmed at Aa3; 1001 Central Park Avenue ($14 million; 2.8%) - affirmed at Aa2; and 295 Park Avenue South ($10.4 million; 2.1%) - affirmed at Aaa. Moody's is upgrading the shadow rating of the 6 West 32nd Street Loan ($12.2 million; 2.5%) to Baa1 from Baa2. CLECO EVANGELINE: Moody's Lifts Rating on Senior Notes to Ba1 ------------------------------------------------------------- Moody's Investors Service upgraded to Ba1 from Ba2 the rating of Cleco Evangeline LLC's 8.82% senior secured notes due 2019. The action concludes the review for possible upgrade that was initiated on May 22, 2007. The rating outlook is stable. The upgrade reflects substantial improvement in counterparty credit quality at Evangeline following Williams Companies Inc.'s (Williams: Ba2 senior unsecured; under review for upgrade) assignment of its tolling agreement with Evangeline to Bear Energy LP, a subsidiary of Bear Stearns Companies. Bear Energy's obligation to make payments to Evangeline under the tolling agreement is unconditionally guaranteed by Bear Stearns (A1: senior unsecured debt; stable outlook). However, the upgrade factors in Evangeline's sizeable increase in major maintenance costs in 2006 due to higher dispatch levels by the tolling counterparty. Over the next several years, major maintenance costs are expected to remain at elevated levels resulting in debt service coverage ratios between 1.30x to 1.40x. Furthermore, Moody's expects Evangeline's recent forced outage to pressure cash flows in the near term since bonus payments under the tolling agreements are linked to availability targets. The stable outlook reflects Moody's expectation that Evangeline's dispatch profile will not materially change and that Evangeline will be able to manage the higher major maintenance costs over the intermediate term such that the project is able to achieve debt service coverage ratios of at least 1.30x on a sustainable basis. The outlook also incorporates Moody's view that Evangeline's near term operations will improve to reflect its historically solid performance. Located in St. Landry, Evangeline Parish, Louisiana, Evangeline is a 785 MW natural gas fired generating station. Evangeline is owned 100% by Cleco Corporation (Baa3 senior unsecured; stable outlook), an electric utility and energy company headquartered in Pineville, Louisiana. COLUMBUSNOVA CLO: Moody's Rates $11.25MM Class E Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by ColumbusNova CLO IV Ltd. 2007-II: -- Aaa to the $300,250,000 Class A-1 Senior Notes Due 2021; -- Aaa to the $27,000,000 Class A-2 Senior Notes Due 2021; -- Aa2 to the $26,250,000 Class B Senior Notes Due 2021; -- A2 to the $25,000,000 Class C Deferrable Mezzanine Notes Due 2021; -- Baa2 to the $14,000,000 Class D Deferrable Mezzanine Notes Due 2021; and -- Ba2 to the $11,250,000 Class E Deferrable Junior Notes Due 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Senior Secured Loans, Second Lien Loans and Senior Unsecured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Columbus Nova Credit Investments Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. COREL CORP: S&P Holds 'B' Rating and Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Ottawa- based packaged software provider Corel Corp. to stable from positive. At the same time, S&P affirmed the ratings, including the 'B' long-term corporate credit rating, on the company. At Aug. 31, 2007, Corel had $169 million of debt outstanding. "The outlook revision reflects the company's weaker-than-expected operating performance for the nine months ended Aug. 31, 2007, and limited visibility that it can meaningfully improve its operating cash flows in the next 12 months despite several product releases under way," said Standard & Poor's credit analyst Madhav Hari. Specifically, in the nine months ended Aug. 31, 2007, Corel reported a mid-single-digit decline in organic revenues with weak performance at both high-margin Corel on a stand-alone basis (67% of pro forma revenues; negative 3.7% year-over-year) and InterVideo Inc. (33% of revenues; high single-digit year-over-year decline). "Nevertheless, discretionary free cash flow generation, while below our expectations of $40 million for fiscal 2007, remains substantive and offers solid support for the ratings," Mr. Hari added. The ratings on Corel reflect its weak market position within the highly competitive packaged software industry, weak pricing power, a limited track record of profitability, and the short life span of such products in general. The ratings also reflect an aggressive financial policy given Corel's desire to continue seeking additional debt-financed acquisitions in the medium term. These factors are partially offset by Corel's brand recognition as a viable alternative to globally dominant packaged software offerings; a large and diverse installed base; improving product, geographic, and distribution diversification from recent acquisitions; and a meaningful proportion of recurring revenues from original equipment manufacturers' sales, upgrades, and maintenance contracts. The stable outlook reflects S&P's view that Corel will be able to modestly increase its revenues and continue to generate meaningful free operating cash flow in the near term. S&P don't expect the company to significantly reduce its debt because discretionary cash flows will be used to fund acquisitions. Should new product releases and improved execution improve revenues, profitability, and free cash flow, we could revise the outlook to positive. Conversely, if revenue growth weakens further and profitability stalls because of competitive forces, pricing pressures, or shifting customer purchasing behavior, S&P could revise the outlook to negative. CREDIT SUISSE: Low Credit Levels Cue Moody's to Lower Ratings ------------------------------------------------------------- Moody's Investors Service downgraded twelve certificates and placed under review for possible downgrade one certificate from seven Credit Suisse First Boston deals issued in 2002 and 2003. CSFB Mortgage-Backed Pass-Through Certificates, Series 2002-5, 2002-18, and 2003-AR26 are transactions backed by Alternative-A mortgage loans. Series 2003-4, Series 2002-HE4, and 2002-HE16 issued by CSFB Mortgage Securities Corp. and CSFB Mortgage Acceptance Corp., Series 2002-HE4 are backed by fixed and adjustable rate first-lien subprime mortgage loans. All loans were originated or acquired by CSFB. These rating actions have been taken because existing credit enhancement levels are low given the current projected losses on the underlying pools. These pools of mortgages have seen high loss severities in recent months and future losses could cause a more significant erosion of the overcollateralization in some cases. The pool factors on all the affected groups within these transactions are under 10% as of the Oct. 25, 2007, reporting date. Complete rating actions are: Downgrades: Issuer: CSFB Mortgage-Backed Pass-Through Certificates, Series 2002-5 -- Cl. IV-B-3, Downgraded to Ba1 from Baa2 Issuer: CSFB Mortgage-Backed Pass-Through Certificates, Series 2003-AR26 -- Cl. IX-M-3, Downgraded to Ba2 from Baa1 Issuer: Credit Suisse First Boston Mortgage Acceptance Corp. Series 2002-HE4 -- Cl. M-2, Downgraded to Baa3 from A2 -- Cl. B, Downgraded to B2 from Baa1 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-HE-16 -- Cl. B-1, Downgraded to Ba3 from Baa2 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2002-HE1 -- Cl. M-1, Downgraded to A2 from Aa2 -- Cl. M-2, Downgraded to Baa3 from A2 -- Cl. B, Downgraded to Ca from Caa1 Issuer: Credit Suisse First Boston Mortgage Securities Corp. Series 2003-4 -- Cl. M-3, Downgraded to A2 from Aa3 -- Cl. B-1, Downgraded to Ba1 from Baa1 -- Cl. B-2, Downgraded to Caa3 from Ba3 -- Cl. B-3, Downgraded to C from B3 Review for Possible Downgrade: Issuer: CSFB Mortgage-Backed Pass-Through Certificates, Series 2002-18 -- Cl. II-B-3, Placed on Review for Possible Downgrade, currently Baa3 CREDIT SUISSE: Moody's Cuts Ratings on Two Cert. Classes to Low-B ----------------------------------------------------------------- Moody's Investors Service downgraded three tranches from two deals issued by Credit Suisse First Boston Mortgage Securities Corp. in 2002 and 2003. The collateral backing these classes consists of primarily first lien, adjustable-rate, jumbo A mortgage loans. Although the 2002 and 2003 deals have pool factors of 1.40% and 4.88%, respectively, the ratings were placed under review for downgrade based on existing credit enhancement levels relative to the current projected losses on the underlying pools. The affected tranches from Series 2002-AR2, for instance, are backed by only 24 remaining loans and the pool factor is less than 2%. The $29,654 1-B-3 tranche from this deal has realized losses and could be further written down should the deal experience additional losses, causing there to be less enhancment available to Classes 1-B-1 and 1-B-2. Complete rating actions are: Issuer: CSFB Mortgage-Backed Pass-Through Certificates -- Series 2002-AR2, Class I-B-1, downgraded from Aaa to A1 -- Series 2002-AR2, Class I-B-2, downgraded from Baa1 to Ba2 -- Series 2003-AR12, Class IV-M-2, downgraded from Baa3 to Ba3 CSFB TRUST: Credit Support Erosion Cues S&P's Rating Downgrades --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B mortgage pass-through certificates from CSFB Trust 2003-CF14 to 'B' from 'BBB'. At the same time, S&P downgraded class B from series 2004-CF1 to 'BB-' from 'BBB'. Concurrently, S&P affirmed its ratings on all remaining classes of mortgage pass-through certificates from four CSFB Trust series. The downgrade of class B from CSFB Trust 2003-CF14 reflects the erosion of available credit support for this transaction. Monthly losses have been outpacing monthly excess interest, causing overcollateralization to decline to $1,346,310, or 0.93% of the original pool balance, which is below its target of 2.75% of the original pool balance. As of the October 2007 remittance period, cumulative realized losses for series 2003-CF14 were 7.92% of the original pool balance and severely delinquent loans (90-plus days, foreclosures, and REOs) were 20.99% of the current pool balance. This transaction is 52 months seasoned and has paid down to 17.29% of the original pool balance. Cumulative realized losses have surpassed the threshold of 6.50%. At the current loss levels, current and projected credit support percentages are not sufficient to support the previous rating. The downgrade of class B from CSFB Trust 2004-CF1 reflects the increasing losses that are outpacing monthly excess interest, causing O/C to decline to 1.69% of the original pool balance, which is below its target of 1.87%. As of the October 2007 remittance period, monthly losses for series 2004-CF1 for the last three months averaged $250,691, while the average monthly excess interest was $57,776. Cumulative realized losses were $4,611,970, or 2.76% of the original pool balance and severely delinquent loans were 19.55% of the current pool balance. This transaction is 42 months seasoned and has paid down to 22.45% of the original pool balance. S&P affirmed the ratings on the M-1 and M-2 classes from the 2003-CF14 series, and on the A-2, M-1, and M-2 classes from the 2004-CF1 series based on loss coverage percentages that are sufficient to maintain the current ratings. The affirmations on the ratings from series 2004-CF2 and 2005-CF1 reflect adequate actual and projected credit support percentages. As of the October 2007 remittance period, the series were at or close to their O/C target. The table below shows the current performance data of these two series. Performance Data O/C Cum. realized Severely Series target losses(i) delinq (ii) ------ ------ ------------ --------- 2004-CF2 (Gr. 1) 4.13% 2.26% 10.25% 2004-CF2 Ln. (Gr. 2) 3.31% 1.29% 20.69% 2005-CF1 6.05% 1.32% 17.04% (i)As a percentage of original pool balance. (ii)As a percentage of current pool balance. Current pool bal. Months Series (% of orig. pool bal.) seasoned ------ ----------------- -------- 2004-CF2 (Gr. 1) 39.69 35 2004-CF2 (Gr. 2) 28.76 35 2005-CF1 43.23 25 Subordination, O/C, and excess spread provide credit support for all of the affected deals. The collateral for these transactions consists primarily of reperforming, fixed- and adjustable-rate mortgage loans secured primarily by first and second liens on conventional one- to four-family residential properties. Ratings Lowered CSFB Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-CF14 B B BBB 2004-CF1 B BB- BBB Ratings Affirmed CSFB Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2003-CF14 M-1 AA 2003-CF14 M-2 A 2004-CF1 A-2 AAA 2004-CF1 M-1 AA 2004-CF1 M-2 A 2004-CF2 I-A-1 AAA 2004-CF2 I-A-2 AAA 2004-CF2 II-A-1 AAA 2004-CF2 II-A-2 AAA 2004-CF2 II-A-3 AAA 2004-CF2 I-M-1 AA+ 2004-CF2 II-M-1 AA+ 2004-CF2 I-M-2 A+ 2004-CF2 II-M-2 A+ 2004-CF2 I-B BBB+ 2004-CF2 II-B BBB+ 2005-CF1 A-2 AAA 2005-CF1 A-3 AAA 2005-CF1 M-1 AA 2005-CF1 M-2 A 2005-CF1 B BBB CYRUS REINSURANCE: S&P Assigns Low-B Ratings on $105 Million Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned the following bank loan ratings to Cyrus Reinsurance II Ltd.'s three proposed bank loans totaling $105 million: -- Senior secured term loan (senior debt, $65 million, modeled probability of default of 70 basis points, cushion of 15%) rated 'BB+', -- Senior subordinated secured term loan (senior subordinated debt, $20 million, 235 bps, 40%) rated 'B', and -- Junior subordinated secured term loan (junior subordinated debt, $20 million, 661 bps, 18%) rated 'B-'. "The different ratings reflect differences in the modeled probability of the tranches attaching and the application of a cushion to consider the possibility of modeling error and other risks," said Standard & Poor's credit analyst Mark Davidson. "The cushion is a critical element to our rating process for sidecars and other forms of indemnified property catastrophe risk," Mr. Davidson added. "The cushion equals the percentage difference between the catastrophe losses associated with the modeled probability of default and the catastrophe losses at the point on Cyrus II's aggregate exceedance probability curve that correspond to the maximum adjusted probability of default that Standard & Poor's allows for the assigned rating." The cushion addresses the potential for modeling error, nonmodeled losses, variances between the modeled portfolio and the actual portfolio, deviations in assumptions for premiums and expenses, investment risk, and credit risk. Adverse outcomes in any of these areas would lower the catastrophe losses needed to cause a default. For example, if nonmodeled losses are $5 million above the expectations in the sidecar's business plan, the catastrophe losses needed to cause a default would be $5 million less than implied by the modeled output based on the sidecar's business plan. The cushion will vary by transaction. Although there are no formal restrictions, S&P believe most sidecars' debt issuances will have cushions between 15% and 30%. The cushion for securitization of indemnified property catastrophe risk through an excess of loss reinsurance agreement, often referred to as indemnified cat bonds or cat loans, will usually be less than 15% because risks other than modeled losses and modeling error are mitigated through the catastrophe bond or cat loan's structure. The cushions applied to Cyrus II are moderately less than the cushion Standard & Poor's would assign to a typical sidecar. Cyrus II's cushions are at the lower end of this range due to their higher modeled probability of attachment and XL Re Ltd. and XL Re Europe Ltd.'s (collectively, XL Re; (A+/Stable/--) strong geographic diversification. Standard & Poor's believes the catastrophe modeling software is more precise for less remote events because the lack of historical data for extremely remote events makes it very difficult to assess their frequency and severity. XL Re's portfolio is fairly balanced between exposures in the U.S. and the rest of the world. Consequently, the modeling software indicates that a thousand-year event from any peril would not cause the senior tranche to attach. Cyrus II is a limited-life, special-purpose Class 3 reinsurance company domiciled in Bermuda that will assume reinsurance (retro) risks from XL Re. XL Re will cede 10% of the premium and losses from most of its property catastrophe business to Cyrus II through a policy attaching quota share reinsurance treaty. The agreement covers policies starting between Jan. 1, 2008, and July 1, 2008, inclusive. Cyrus II will continue reinsuring XL Re until all covered policies cancel or expire. The loans will be on risk only for events occurring between Jan. 1, 2008 and July 1, 2009. Cyrus II will deposit the majority of the proceeds from its debt into a trust, and the trustee will ensure proper order of payments. The trust will also include funds raised from the issuance of common stock by Cyrus Reinsurance II Holdings SPC, the holding company of Cyrus II. Capital cannot be released from the trust before Sept. 1, 2009, except to pay claims and interest expense. DELPHI CORP: To Receive Labor Payments from GM Through 2015 ----------------------------------------------------------- General Motors Corp. said in its third quarter 2007 financial report filed with the U.S. Securities and Exchange Commission that it expects to make its annual payments to Delphi Corp. for labor costs through 2015, and said the payments could extend for up to five more years. Michigan-based General Motors said it will pay $300,000,000 to $400,000,000 a year for labor costs, as part of the settlements reached with Delphi and its labor union United Automobile, Aerospace & Agricultural Implement Workers of America. Pursuant to the settlements, which was contemporaneously filed with Delphi's Joint Plan of Reorganization on September 6, 2007 before the U.S. Bankruptcy Court for the Southern District of New York, General Motors agreed to reimburse a certain portion of Delphi's U.S. hourly labor costs incurred to produce systems, components, and parts for GM from October 1, 2006 through September 14, 2015. General Motors and the bankrupt auto-parts supplier also agreed to resolve all outstanding issues and claims against each other. Delphi agreed to withdraw a prior request to terminate its supply agreements with GM. Delphi, GM's former parts-making unit, also agreed to issue a $1,500,000,000 note in favor of GM, in exchange for its assumption of Delphi's pension obligations, and pay $2,700,000,000 cash to GM on the effective date of the Plan. Due to difficulties in obtaining commitment for a proposed $7,100,000,000 exit financing contemplated in the Plan, Delphi, however, has reduced the amount of cash to available for use as "currency" to be paid to creditors and interest holders. GM has consented to an amendment, providing that GM would receive $1,500,000,000 in a combination of at least $750,000,000 in cash and a second lien note for the remaining amount and $1,200,000,000 in junior convertible preferred stock of Delphi, instead of $2,700,000,000 in cash. Delphi is scheduled to seek the Bankruptcy Court's approval of the disclosure statement explaining the terms of the Plan at a November 29, 2007 hearing, which has already delayed for almost two months. Delphi has to obtain approval of the disclosure statement before it could begin soliciting votes from creditors and equity holders on the Plan. Delphi expects to emerge from bankruptcy in the first quarter of 2008. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUANE STREET: Moody's Rates $15 Million Class B Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Duane Street CLO V Ltd.: -- Ba2 to the $15,000,000 Class B Secured Deferrable Floating Rate Notes due 2021 The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Loans, High Yield Bonds, Structured Finance Securities, Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Dimaio Ahmad Capital LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. DURA AUTOMOTIVE: Asks Firm to Detail Purchase of Clients' Bonds --------------------------------------------------------------- DURA Automotive Systems Inc. and its debtor-affiliates asked the U.S. Bankruptcy Court for the District of Delaware to bar Ballard Spahr Andrews & Ingersoll, LLP, and 14 parties that it represents from further participating in the Chapter 11 cases, unless the law firm details under what circumstances its clients bought senior subordinated notes of Dura Operating Corporation due May 2009. DURA's Joint Plan of Reorganization, which will be presented to Court for confirmation on Dec. 6, 2007, provides that holders of subordinated notes aggregating $560,700,000, which include Ballard Spahr's clients, will not receive any recovery on their claims. Holders of $418,700,000 in senior notes, however, will receive 55% recovery on their claims and will have the option to purchase shares of reorganized DURA in a rights offering, backstopped by Pacificor, LLC. Ballard Spahr, on behalf of the 9% Subordinated Noteholders, has filed a number of pleadings in DURA's bankruptcy cases. Among other objections, Ballard Spahr opposed the Debtors' backstop agreement with Pacificor, and subsequently filed a notice that it intends to appeal the order approving the Backstop Deal. Ballard Spahr also commenced an adversary proceeding on behalf of Thomas and Pattian Kurak, two of the 14 Subordinated Noteholders, seeking a declaration that subordinated noteholders are entitled to participate in the $140,000,000 to $160,000,000 rights offering, and receive distributions under the Plan, pursuant to the terms of subordinated notes indentures. The Debtors noted that the firm, in its summary judgment briefing, purports to champion the cause not only of the named plaintiffs, but also of "similarly situated noteholders." On August 30, 2007, Ballard Spahr filed a verified statement, disclosing that it represented Certain 9% Subordinated Noteholders, specifically 14 entities holding senior notes with the aggregate face amount of $95,887,000 -- Tom Kurak, Pattiam Kurak, James W. Korth & Company, Jason Alan Pieper, Charles T. Kurak, Jeffrey R. Werner, Jeff Comfort, Donald L. Welker, Jeffrey Scott Einstein, Daniel Scott Hennum, Curtis H. Werner, Richard John Thielen, Carl E. Kruger, and Tamara A. Kurak. DURA insisted that Ballard Spahr amend its verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to, among other things, explain the nature of the group of the Certain 9% Subordinated Noteholders. "Without the type of disclosure mandated by Rule 2019, neither the Court, the Debtors nor any other party-in-interest can understand whether Ballard Spahr purports to represent merely a single disgruntled creditor who seemingly acquired its 9% Subordinated Notes for speculative purposes in the weeks and months following the Petition Date or a group of disgruntled creditors engaging in such speculation," said Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. As a result, neither the Court, the Debtors, nor any other party- in-interest can properly evaluate the credibility of arguments propounded by Ballard Spahr, Mr. DeFranceschi said. DURA asked the Court to (i) prohibit Ballard Spahr from intervening or otherwise being heard further in the Chapter 11 cases, and (ii) invalidate any pleading filed by firm in the Kurak Adversary Proceeding, the Appeals, or the Plan confirmation process, until the firm amended its Rule 2019 statement to include these information: (i) the acquisition date and face amount of each individual claim purchased; (ii) the date and amount of any sale of Subordinated Notes; (iii) the amount of each Certain 9% Subordinated Noteholder paid for such claim; and (iv) the fee arrangement between the Certain 9% Subordinated Noteholders and the firm. In light of the Court's approval of DURA's request to compel Ballard Spahr to provide the requested information, the law firm on November 7, filed a verified statement, disclosing, among other things, that it represents 13 noteholders and the amounts paid by each party for the notes: Transaction Face Value Total Party Date/s of Bonds Amount Paid ----- ------ -------- ----------- Tom & Pattiam Kurak 12/11/06 to $81,550,000 $4,409,150 15001 Sunfish Lake 6/29/07 Boulievard NW Ramsey, Minn. James W. Korth & 10/10/06 to 1,253,000 64,763 Company 8/09/07 2701 South Bayshore Dvie, Suite 305 Miami, Florida Jason Alan Pieper 1/09/07 to 1,477,000 114,053 11860 Irish Avenue 6/19/07 N. Gran, Minn. Charles T. Kurak 12/15/06 to 1,000,000 59,963 13 - 77th Ave., NE 4/11/07 Minneapolis, Minn. Jeffrey R. Werner 4/10/07 to 980,000 54,281 15385 Armstrong 5/16/07 Boulevard Ramsey, Minn. Jeff Comfort 3/26/07 to 798,000 55,829 415 Hidden Oaks Ct. 6/13/07 Mahtomedi, Minn. Donald L. Welker 5/24/07 420,000 50,740 9587 168th Ave. Becker, Minn. Jeffrey Scott Einstein 1/19/07 150,000 10,995 12062 93rd Pl.N. Maple Grove, Minn. Daniel Scot Hennum 6/22/07 130,000 19,500 10209 Jackson St., NE Blaine, Minn. Curtis H. Werner 5/02/07 102,000 8,033 Elk River, Minn. Richard John Thielen 1/10/07 100,000 6,125 260 Rice Creek Terrace Fridley, Minn. Carl E. Kruger 5/08/07 35,000 2,888 14963 Sunfish Lake Boulevard Ramsey, Minn. Tamara A. Kurak 2/13/07 30,000 2,100 1070 Grandview Ct. #17 Columbia Heights, Minn. ----------- ---------- Aggregate Face Amount of Bonds and Total Amount Paid $88,025,000 $4,858,418 =========== ========== Tamara Kurak sold notes in the face amount of $10,000 in June 2007, leaving her with notes in the face amount of $20,000, and the aggregate amount of notes held by the 9% Noteholders to $88,015,000. About DURA Automotive Based in Rochester Hills, Michigan, DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expired on Sept. 30, 2007. On Aug. 22, 2007, the Debtors' filed their Plan of Reorganization and the Disclosure Statement explaining that Plan was approved on Oct. 3, 2007. The hearing to consider confirmation of the plan is set for Nov. 26, 2007. (Dura Automotive Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DRYDEN XVIII: Moody's Assigns Ba2 Rating on $14MM Class B Notes --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Dryden XVIII Leveraged Loan 2007 Limited: -- Ba2 to the $14,000,000 Class B Secured Deferrable Floating Rate Notes due 2019. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Loans, High Yield Debts, Structured Finance Securities, Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Prudential Investment Management Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. E.DIGITAL CORP: Sept. 30 Balance Sheet Upside-Down by $2.04 Mil. ---------------------------------------------------------------- e.Digital Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $1.79 million in total assets and $3.83 million in total liabilities, resulting in a $2.04 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liqudity with $1.76 million in total current assets available to pay $3.15 million in total current liabilities. The company reported a net loss of $157,740 for the second quarter ended Sept. 30, 2007, compared with a net loss of $1.60 million in the same period last year. Revenues increased to $2.42 million in the second quarter of fiscal 2008 and were only $13,017 for the comparable prior period. In the prior year's second quarter the company was transitioning from an older product to the company's new eVU product that was introduced in the third quarter of fiscal 2007. 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?254e Going Concern Doubt Singer Lewak Greenbaum & Goldstein LLP, in Santa Ana, Calif., expressed substantial doubt about e.Digital Corp.'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 reported that the company has suffered recurring losses from operations, and its total liabilities exceeds its total assets. About e.Digital Corp. Headquartered in San Diego, e.Digital Corp. (OTC: EDIG) -- http://www.edigital.com/-- is an innovator of dedicated portable inflight entertainment systems. e.Digital also owns and is pursuing the monetization of its Flash-R(TM) portfolio of flash memory-related patents. E*TRADE: Moody's Lowers Outlook to Stable from Positive ------------------------------------------------------- Moody's Investors Service lowered its rating outlook on E*TRADE Financial Corporation (Senior debt at Ba2) and its lead thrift subsidiary, E*TRADE Bank (LT deposits at Baa3) to stable from positive. This followed the company's announcement that, due to the continuing deterioration in the credit quality of its ABS portfolio, it will report higher than previously anticipated impairment charges in 4Q07. Although Moody's believes that E*TRADE's core earnings, capital and liquidity remain healthy and continue to lend support to its Ba2 rating, the remaining exposure from its mortgage-related portfolio is likely to have a negative impact on earnings and profitability over the next several quarters. In particular, the remaining $450 million in CDO and second-lien RMBS securities may require additional impairment charges to reflect the continuing deterioration in the underlying sub-prime mortgage collateral. Additionally, although most of E*TRADE's $12 billion second-lien loan portfolio has high FICO scores and relatively low combined loan-to-values, portions of it may require increased loss provisions given the higher sensitivity of second- lien defaults and recovery rates to falling home prices. As a result, there is an important degree of uncertainty about the timing and magnitude of the charges that E*TRADE will take over the course of the next 12-18 months in its investment and loan portfolios. While E*TRADE's core retail brokerage business continues to perform well, it is likely that the firm-wide performance over this time horizon will not be sufficiently strong as to exert positive pressure on its rating. Consequently, Moody's has lowered its outlook to stable. As Moody's noted previously, E*TRADE's liquidity position remains sound. Client cash and deposit flows have been positive, and secured funding availability and advance levels for agency collateral have remained stable through recent market turbulence. E*TRADE's access to a $23 billion ($13.4 billion available) collateralized credit line from the Federal Home Loan Bank is a key alternate liquidity source that adequately backstops the current wholesale strategy. E*TRADE Financial Corporation provides internet-based retail brokerage and banking services through its operating subsidiaries. The company reported $407 million in pre-tax profit for the first nine months of 2007. E*TRADE FINANCIAL: Possible Write-Downs Cue S&P to Cut Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on E*TRADE Financial Corp. to 'B' from 'BB-' and on its subsidiary E*TRADE Bank to 'BB-' from 'BB+'. At the same time, S&P placed the ratings on CreditWatch with negative implications. "The ratings actions are driven by the company's expectations of additional write-downs of its investment securities in the fourth quarter coupled with our view of potential deterioration in its loan portfolios and potential client attrition prompted by headline risk. The CreditWatch is pending further details from management on valuations of the securities and loan portfolios. At this time, the company still has flexibility to delever its balance sheet and to utilize its $14.4 billion of FHLB borrowing," said Standard & Poor's credit analyst Helene De Luca. These risks offset the strong retail brokerage business metrics for October and the third quarter, against the backdrop of strong industry-wide investor activity and market sentiment. Potential loan and securities deterioration in the fourth quarter could have a material impact on E*TRADE's capital and liquidity. Some concerns in the loan portfolio include the fact that 87% of loans are purchased from third parties; 51% of home equity loans have loan-to-value ratios greater than 80%, of which 20% have LTVs greater than 90%; and about 40% of loans are in the 2006 vintage year. However, only about 5% of loans are under 660 in FICO scores. Concerns in the securities portfolio revolve around potential deterioration in market values. S&P are concerned that future liquidity could be strained and funding at the Bank could weaken. At Sept. 30, 2007, about $7.4 billion in deposits was more than the FDIC insurance limit and not covered by SIPC. The funding mix has been about half retail-based deposits and sweeps. During the past year, the Bank significantly increased its FHLB advances. At Sept. 30, 2007, liquidity was supported by approximately $14.4 billion in additional FHLB borrowing capacity at the Bank. Also, cash and equivalents at the parent and nonregulated subsidiary, Converging Arrows, was approximately $163 million. E*TRADE's $250 million senior secured revolver was recently extended to 2010 and was not drawn at Sept. 30, 2007. However, this revolver imposes covenants pertaining to capital health. Leverage (adjusted net assets-to-adjusted tangible equity) at Sept. 30, 2007, increased since year-end 2006. The company will remain on CreditWatch with negative implications pending further details from management on valuations of the securities and loan portfolios. The company still has significant flexibility to delever its balance sheet and to utilize its $14.4 billion of FHLB borrowing capacity to ensure that it meets regulatory capital requirements and to sufficiently manage its liquidity. If the loan and securities portfolio valuations are at manageable levels and the balance sheet reduction is successful, the ratings could be affirmed at these levels. EDITH MOSER: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Edith P. Moser 410 North Pinecrest Lane Bristol, VA 24201 Bankruptcy Case No.: 07-71797 Chapter 11 Petition Date: November 13, 2007 Court: Western District of Virginia (Roanoke) Judge: William F. Stone, Jr. Debtor's Counsel: John M. Lamie, Esq. Browning Lamie & Gifford P.O. Box 519 Abingdon, VA 24212-0519 Tel: (276) 628-6165 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. ENCYSIVE PHARMA: Sept. 30 Balance Sheet Upside-Down by $136.6 Mil. ------------------------------------------------------------------ Encysive Pharmaceuticals Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $77.2 million in total assets and $213.8 million in total liabilities, resulting in a $136.6 million total shareholders' deficit. The company reported a net loss of $22.5 million, compared to a net loss of $25.5 million for the same period in 2006. The net loss for the third quarter included a restructuring charge of approximately $5.4 million regarding retention agreements with employees entered into as part of the June 2007 reorganization. The company expects to incur an additional restructuring charge of approximately $1.2 million in the fourth quarter of 2007 as a result of these retention agreements. Revenues of $8.8 million for the third quarter of 2007, compared to $6.3 million for the third quarter of 2006, included approximately $3.6 million in Thelin(R) European sales. Argatroban royalty income was approximately $4.8 million in the third quarter of 2007, compared to $6.0 million in the third quarter of 2006. Since the Argatroban royalty income is used to pay the outstanding Argatroban notes, the royalty income is not available to fund the company's operational requirements. "We made excellent progress in making Thelin(R) available to more patients in the EU, having now launched in four of the big five EU countries, with Italy expected by year's end," said George Cole, president and chief executive officer of Encysive Pharmaceuticals. "This progress now positions Encysive for solid sales growth in 2008." Interest expense was $6.1 million in the third quarter of 2007, compared to $1.0 million in the third quarter of 2006. The third quarter of 2007 included a non-cash write-off of approximately $3.2 million of deferred debt issue costs related to the original Argatroban notes, which were redeemed in a refinancing in September 2007. Cash, cash equivalents and accrued interest at Sept. 30, 2007, was $54.2 million, compared to $43.8 million at Dec. 31, 2006. The Sept. 30, 2007, balance includes $14.0 million in net proceeds from the sale of approximately 7.7 million shares of the company's common stock and warrants to purchase approximately 7.7 million shares of common stock in a registered direct offering, and net proceeds of $11.2 million from the refinancing of the original Argatroban notes. 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?2544 Going Concern Doubt As reported in the Troubled Company Reporter on April 30, 2007, KPMG LLP, in Houston, expressed substantial doubt about Encysive Pharmaceuticals Inc.'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 pointed to the company's recurring losses from operations and net capital deficiency. About Encysive Pharmaceuticals Headquartered in Houston, Texas, Encysive Pharmaceuticals Inc. (Nasdaq: ENCY) -- http://www.encysive.com/-- is a global biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. The company's research and development programs are predominantly focused on the treatment and prevention of interrelated diseases of the vascular endothelium and exploit the company's expertise in the area of the intravascular inflammatory process, referred to as the inflammatory cascade, and vascular diseases. FEDERAL MOGUL: District Court Affirms Chapter 11 Plan ----------------------------------------------------- The Honorable Joseph H. Rodgriguez of the U.S. District Court for the District of Delaware affirmed on November 13, 2007, the order of U.S. Bankruptcy Court Judge Judith Fitzgerald, confirming the Fourth Amended Joint Plan of Reorganization of Federal-Mogul Corporation and its debtor affiliates. To recall, the Bankruptcy Court confirmed the Federal-Mogul Plan on Nov. 8, 2007, on a wholly consensual basis without objections. The District Court and Bankruptcy Court approvals of the Fourth Amended Plan will allow the Company's emergence from Chapter 11 before year end, Federal-Mogul stated in a press release. "We are extremely pleased to have reached this significant milestone signaling the emergence of the Company from Chapter 11 proceedings," Federal-Mogul Chairman, President and Chief Executive Officer Jose Maria Alapont said in a press release. "The Federal-Mogul team worldwide is devoted to exceeding employee, customer and stakeholder expectations through service and operational excellence, leading technology and the Company's sustainable global profitable growth strategy." Federal-Mogul voluntarily filed for bankruptcy in 2001 for Chapter 11 in the United States and Administration in the UK in order to separate its asbestos liabilities from its true operating potential. The Company reported, in a regulatory filing with the Securities and Exchange Commission, that the Fourth Amended Plan provides that: (a) present and future asbestos personal injury claimants will be permanently channeled to a trust established pursuant to Section 524(g) of the Bankruptcy Code, thereby protecting the Company from existing and future asbestos liability; and (b) all currently outstanding stock of the Company will be cancelled, 50.1% of newly issued common stock of reorganized Federal-Mogul will be distributed to the asbestos trust, and 49.9% of the newly issued common stock of reorganized Federal-Mogul will be distributed pro rata to the noteholders and holders of unsecured claims against the U.S. Debtors that elected to have their claims satisfied by receiving shares of common stock of reorganized Federal-Mogul rather than cash. The holders of currently outstanding common and preferred stock of the Company, at the time those shares are cancelled, will receive warrants that may be used to purchase shares of common stock of reorganized Federal-Mogul at a predetermined exercise price. The Plan also provides that the U.S. asbestos trust will: (i) make a payment to the reorganized Company, or pay a portion of the common stock of reorganized Federal-Mogul to be issued to the U.S. asbestos trust in lieu thereof, for the agreed amounts that will be used by the U.K. Administrators to provide distributions on account of U.K. asbestos personal injury claims; and (ii) provide an option to an affiliate of Carl Icahn for the purchase of the remaining shares of common stock of reorganized Federal-Mogul held by that trust. If the affiliate of Mr. Icahn does not exercise such option, an affiliate of Mr. Icahn will provide certain financing to the U.S. asbestos trust. The Federal-Mogul Plan intends to resolve approximately $9.4 billion in asbestos claims, according to Bloomberg News. Furthermore, unsecured creditors of the U.S. Debtors have the option to either receive shares of common stock of reorganized Federal-Mogul or receive cash distributions under the Plan equal to 35% of their allowed claims, payable in three annual installments, provided that the aggregate payout of all allowed unsecured claims against the U.S. Debtors does not exceed $258,000,000. About Federal-Mogul Based in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. Federal-Mogul also has operations in Mexico and the Asia Pacific Region, which includes, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Bankruptcy Court confirmed the Fourth Amended Plan on Nov. 8, 2007. FIRST UNION: Fitch Junks Rating on $11.8 Mil. Class M Certs. ------------------------------------------------------------ Fitch Ratings downgraded and assigned a distressed recovery rating to First Union National Bank-Chase Manhattan Bank's commercial mortgage pass-through certificates, series 1999-C2, as: -- $11.8 million class M to 'CCC/DR1' from 'B'. In addition, Fitch affirms these classes: -- $577.7 million class A-2 at 'AAA'; -- Interest-only class IO at 'AAA'; -- $47.3 million class B at 'AAA'; -- $62 million class C at 'AAA'; -- $14.8 million class D at 'AAA'; -- $41.4 million class E at 'AAA'; -- $17.7 million class F at 'AAA'; -- $41.4 million class G at 'AA'; -- $11.8 million class H at 'A'; -- $11.8 million class J at 'BBB+'; -- $11.8 million class K at 'BB+'; -- $11.8 million class L at 'BB-'. The $5.5 million class N is not rated by Fitch. The downgrade is the result of Fitch expected losses on specially serviced loans. As of the October 2007 distribution report, the pool's aggregate certificate balance was reduced 26.6% to $866.7 million from $1.18 billion at issuance. Currently, two assets (1.1%) are in special servicing, with losses expected. The largest specially serviced loan (0.6%) is secured by a multifamily property located in Euless, Texas. The asset was transferred to special servicing in October 2007 due to monetary default. The second specially serviced asset (0.5%), a real estate owned asset, is secured by a 51,282-square foot retail property located in Chesapeake, Virginia formerly occupied by a Winn Dixie. The special servicer is currently marketing the property. Fitch expects losses from both specially serviced loans will be absorbed by the non-rated class N. FREESCALE SEMICONDUCTOR: Fitch Puts Issuer Default Rating at B+ --------------------------------------------------------------- Fitch initiated coverage of Freescale Semiconductor Inc. by establishing these ratings: -- Issuer default rating of 'B+'; -- Bank revolving senior secured credit facility of 'BB+/RR1'; -- Senior secured term loan of 'BB+/RR1'; -- Senior unsecured notes of 'B/RR5'; -- Senior subordinated notes of 'CCC+/RR6'. The Rating Outlook is Stable. Fitch's actions affect about $10 billion of debt. Rating concerns center on: -- Fitch's belief that Freescale will be challenged to meaningfully improve profitability over the next few years due to weaker than originally anticipated customer and end market demand over the near-term, pressured average selling prices across key end markets, and maturing end market growth rates (including handsets). Fitch remains cautious regarding Freescale's higher than company-wide margin networking segment due to anticipated pressured wireless infrastructure spending for 2008. In addition, the wireless and mobile solutions group segment continues to suffer from the competitive weakness of Motorola Inc. ('BBB+'/F2/Negative Outlook) and substantially lower than company-wide profitability levels; -- Freescale's relatively weak credit protection measures, with Fitch-estimated leverage of 6.6x (2.4x secured debt/EBITDA), interest coverage of 2x, and free cash flow/total debt of 2.2%; Fitch expects credit metrics will remain near current levels over the intermediate term, due to minimal debt amortization requirements and Fitch's expectations for only modest profitability expansion; -- Freescale's significant but necessary ongoing R&D expenditures required to win new design references, diversify its WSMG segment, and strengthen the intellectual property portfolio. Despite solid foundry relationships and R&D partnerships, Freescale's ongoing investment requirements will remain substantial, approximating 25%-30% of total sales for capital spending and R&D (consistent with semiconductor industry); and -- Greater than originally contemplated volatility in WMSG, given continued concentration to Motorola (26% of total company sales for the quarter ended Sep. 28, 2007), which has lost 8% of share in the global handset market over the last year (to approximately 14% in the 3rd quarter of 2007). Although Freescale is likely to attract additional wireless customers in WMSG, Fitch does not anticipate meaningful positive earnings contribution from such an event over the near-term. The Outlook and ratings are supported by Freescale's: -- Leading market positions in comparatively stable automotive electronics and standard products markets, as well as higher-margin networking markets; -- Continued solid position as key supplier to Motorola, which despite current operational challenges and market share losses Fitch believes will remain a leader in the global handset industry given its significant scale, leading market positions (#1 in North America), and strong brand name; -- Relatively diversified end market, product, and customer (outside Motorola) portfolios, particularly in the Transportation and Standard Products Group segment; and -- Significant unit scale, ensuring supply continuity with foundries and, thereby, supporting the company's asset light strategy and more stable free cash flow. Fitch may downgrade Freescale if: -- Credit protection measures deteriorate due to erosion in the company's profitability or free cash flow; -- Management does not execute on its restructuring efforts, including successful site consolidation, asset sales, and meaningful improvement in the company's cash conversion cycle. Conversely, Fitch may consider positive rating actions if Freescale: -- Improves its operating margin profile and free cash flow characteristics via successful expansion of higher-margin products along with a successful design win at another significant wireless handset manufacturer; -- Utilizes proceeds from potential asset sales or divestitures to materially reduce debt. The senior secured debt facility is secured by Freescale's equity ownership in all material wholly-owned subsidiaries (limited, in the case of foreign subsidiaries, to 65% of the voting stock of such subsidiaries) and substantially all present and future tangible and intangible assets of Freescale. In addition, the bank facility carries a limitation on senior secured debt of 4.0x EBITDA through 2008, and declines to 3.75x through 2010, and 3.5x thereafter. There are also limitations on dividends, sale of assets and other customary covenants. Adequate financial flexibility and liquidity as of Sep. 28, 2007, supported by about $772 million of cash and cash equivalents, about $370 million of which is located in the U.S., and an undrawn $750 million revolving bank credit facility expiring Dec. 1, 2012; Fitch anticipates annual free cash flow will be $100-200 million annually over the next few years, modestly supporting liquidity. Additionally, the company is currently pursuing the sale of certain assets, which could be utilized for modest debt reduction, which the current ratings and outlook incorporate. With no borrowings outstanding under the revolving bank credit facility, Freescale's only debt amortization until 2013 is 1% per annum under the term loan facility, or approximately $35 million per year. At Sep. 28, 2007, total debt was about $9.5 billion and consisted primarily of: i) $3.5 billion of senior secured term loan expiring Dec. 1, 2013; ii) $500 million of floating rate senior notes due 2014; iii) $1.5 billion of 9.125% PIK-election senior notes due 2014; iv) $2.35 billion of 8.875% senior notes due 2014; v) $1.6 billion of 10.125% senior subordinated notes due 2016; and vi) $59 million of other debt, including capital leases. The Recovery Ratings for Freescale reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of Freescale, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation scenario. In deriving a distressed enterprise value, Fitch applies a 35% discount to Freescale's operating EBITDA of about $1.4 billion for the latest 12 months ended Sep. 28, 2007. The discount is equivalent to Fitch's estimate of maintenance capital spending, rent expense, and total interest expense for Freescale, assuming the company exercises its option to pay in kind interest expense on the above referenced $1.5 billion PIK- election senior notes. Fitch then applies a 6 times distressed EBITDA multiple, which considers that a stress event would likely result in a contraction to Freescale's current multiple. As is standard with Fitch's recovery analysis, the revolver is assumed to be fully drawn and cash balances fully depleted to reflect a stress event. The 'RR1' for Freescale's secured bank facility and term loan reflects Fitch's belief that 91%-100% recovery is likely. The 'RR5' for Freescale's senior notes reflects Fitch's belief that 11%-30% recovery is realistic. The 'RR6' for Freescale's senior subordinated debt reflects Fitch's belief that 0%-10% recovery is realistic. GENERAL MOTORS: To Make Labor Payments to Delphi Through 2015 ------------------------------------------------------------- General Motors Corp. said in its third quarter 2007 financial report filed with the U.S. Securities and Exchange Commission that it expects to make its annual payments to Delphi Corp. for labor costs through 2015, and said the payments could extend for up to five more years. Michigan-based General Motors said it will pay $300,000,000 to $400,000,000 a year for labor costs, as part of the settlements reached with Delphi and its labor union United Automobile, Aerospace & Agricultural Implement Workers of America. Pursuant to the settlements, which was contemporaneously filed with Delphi's Joint Plan of Reorganization on September 6, 2007 before the U.S. Bankruptcy Court for the Southern District of New York, General Motors agreed to reimburse a certain portion of Delphi's U.S. hourly labor costs incurred to produce systems, components, and parts for GM from October 1, 2006 through September 14, 2015. General Motors and the bankrupt auto-parts supplier also agreed to resolve all outstanding issues and claims against each other. Delphi agreed to withdraw a prior request to terminate its supply agreements with GM. Delphi, GM's former parts-making unit, also agreed to issue a $1,500,000,000 note in favor of GM, in exchange for its assumption of Delphi's pension obligations, and pay $2,700,000,000 cash to GM on the effective date of the Plan. Due to difficulties in obtaining commitment for a proposed $7,100,000,000 exit financing contemplated in the Plan, Delphi, however, has reduced the amount of cash to available for use as "currency" to be paid to creditors and interest holders. GM has consented to an amendment, providing that GM would receive $1,500,000,000 in a combination of at least $750,000,000 in cash and a second lien note for the remaining amount and $1,200,000,000 in junior convertible preferred stock of Delphi, instead of $2,700,000,000 in cash. Delphi is scheduled to seek the Bankruptcy Court's approval of the disclosure statement explaining the terms of the Plan at a November 29, 2007 hearing, which has already delayed for almost two months. Delphi has to obtain approval of the disclosure statement before it could begin soliciting votes from creditors and equity holders on the Plan. Delphi expects to emerge from bankruptcy in the first quarter of 2008. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. (Delphi Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Signs 2007 UAW-GM National Labor Contract --------------------------------------------------------- General Motors Chairman and CEO Rick Wagoner, United Auto Workers President Ron Gettelfinger and their respective senior leadership teams, signed the 2007 UAW-GM national labor contract at a special ceremony held Monday at the UAW-GM Center for Human Resources in Detroit, Michigan. The new contract is effective for the next four years. As reported in the Troubled Company Reporter on Oct. 11, 2007, GM confirmed that its UAW-represented employees have ratified the GM-UAW 2007 national labor agreement. The Troubled Company Reporter disclosed that GM and the UAW reached a tentative agreement on Sept. 26, 2007, after more than two months of bargaining. The new four-year agreement covers approximately 74,000 hourly employees located in more than 80 U.S. facilities. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. Moody's ratings of GMAC LLC (Ba2 senior unsecured/Negative outlook) and of Residential Capital LLC (Ba3 senior unsecured/Negative outlook) are unaffected by the action. GOLDMAN SACHS: Moody's Lowers and Reviews Ratings on 18 Deals ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 81 tranches and has placed under review for possible downgrade the ratings of 15 tranches from 18 deals issued by Goldman Sachs in 2006 and late 2005. Two downgraded tranches remain on review for possible downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Issuer: GSAA Home Equity Trust 2005-14 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Baa3, previously A3, -- Cl. B-1, Downgraded to B1, previously Baa1, -- Cl. B-2, Downgraded to Caa2, previously Baa3, -- Cl. B-3, Downgraded to C, previously Ba2. Issuer: GSAA Home Equity Trust 2005-15 -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa3, -- Cl. B-3, Downgraded to Caa1, previously Ba2. Issuer: GSAA Home Equity Trust 2005-MTR1 -- Cl. B-1, Downgraded to Ba1, previously Baa2, -- Cl. B-2, Downgraded to Ba3, previously Baa3, -- Cl. B-3, Downgraded to Caa2, previously Ba2. Issuer: GSAA Home Equity Trust 2006-1 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to Baa1, previously A2, -- Cl. B-1, Downgraded to Ba2, previously Baa1, -- Cl. B-2, Downgraded to B1, previously Baa2, -- Cl. B-3, Downgraded to Caa3, previously Ba2. Issuer: GSAA Home Equity Trust 2006-11 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. B-1, Downgraded to Baa2, previously A3, -- Cl. B-2, Downgraded to Ba1, previously Baa1, -- Cl. B-3, Downgraded to Caa2, previously Ba2. Issuer: GSAA Home Equity Trust 2006-12 -- Cl. M-4, Downgraded to A3, previously A2, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa3, -- Cl. B-3, Downgraded to B3 on review for possible further downgrade, previously Ba2. Issuer: GSAA Home Equity Trust 2006-14 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3, Downgraded to A3, previously A1, -- Cl. M-4, Downgraded to Baa2, previously A2, -- Cl. B-1, Downgraded to Ba2, previously Baa2, -- Cl. B-2, Downgraded to B2, previously Ba2. Issuer: GSAA Home Equity Trust 2006-16, Asset-Backed Certificates, Series 2006-16 -- Cl. M-5, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa2, -- Cl. B-2, Downgraded to Ba2, previously Baa3, -- Cl. B-3, Downgraded to B1, previously Ba2. Issuer: GSAA Home Equity Trust 2006-17 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Baa3, previously A3, -- Cl. B-1, Downgraded to Ba2, previously Baa2, -- Cl. B-2, Downgraded to B1, previously Baa3, -- Cl. B-3, Downgraded to Caa2, previously Ba2. Issuer: GSAA Home Equity Trust 2006-19 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa3, -- Cl. B-3, Downgraded to B1, previously Ba2. Issuer: GSAA Home Equity Trust 2006-20 -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. B-1, Downgraded to Baa2, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa3, -- Cl. B-3, Downgraded to Ba2, previously Ba1. Issuer: GSAA Home Equity Trust 2006-3 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to Baa1, previously A2, -- Cl. B-1, Downgraded to Baa2, previously A3, -- Cl. B-2, Downgraded to Ba2, previously Baa1, -- Cl. B-3, Downgraded to B2, previously Baa3, -- Cl. B-4, Downgraded to Ca, previously Ba2. Issuer: GSAA Home Equity Trust 2006-4 -- Cl. B-3, Downgraded to Baa3, previously Baa2. Issuer: GSAA Home Equity Trust 2006-5 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa2, -- Cl. B-3, Downgraded to Caa2, previously Ba2. Issuer: GSAA Home Equity Trust 2006-6 -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa2, -- Cl. B-3, Downgraded to B2, previously Baa3, -- Cl. B-4, Downgraded to B3 on review for possible further downgrade, previously Ba2. Issuer: GSAA Home Equity Trust 2006-8 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa1, previously A2, -- Cl. M-5, Downgraded to Baa2, previously A3, -- Cl. B-1, Downgraded to Ba3, previously Baa2, -- Cl. B-2, Downgraded to B2, previously Baa3, -- Cl. B-3, Downgraded to Ca, previously Ba2. Issuer: GSAA Home Equity Trust 2006-9 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa1, previously A2, -- Cl. M-5, Downgraded to Baa2, previously A3, -- Cl. B-1, Downgraded to Ba2, previously Baa2, -- Cl. B-2, Downgraded to B2, previously Baa3, -- Cl. B-3, Downgraded to Caa3, previously Ba2. Issuer: GSAA Home Equity Trust Asset Backed Certificates Series 2005-12 -- Cl. B-4, Downgraded to Ba3, previously Ba2. GOLF TRUST: Terminates Plan of Liquidation and Dissolution ---------------------------------------------------------- Stockholders of Golf Trust of America Inc. approved the termination of the company's Plan of Liquidation and Dissolution at a special meeting of stockholders, held on Nov. 8,2007 . The Plan of Liquidation was originally approved by the board of directors of the company on Feb. 25, 2001, and adopted by the holders of both the company's common and preferred stock on May 22, 2001. Since that date the company had been operating under the Plan of Liquidation, which contemplated: -- the sale of all of the company's assets; -- the payment of, or provision for, the company's liabilities and expenses; and -- the ultimate distribution of the remaining proceeds of the liquidation to the company's common stockholders. The termination of the Plan of Liquidation was proposed to stockholders in connection with the company's decision to explore alternative business strategies, including a merger, capital stock exchange, asset acquisition or other business combination, in order to maximize stockholder value. The company determined that operating as a going concern outside of the Plan of Liquidation would give it more flexibility in the pursuit of its new strategic direction. The board will still be permitted to pursue the sale of the company's remaining assets and liquidate the company if the company is unable to identify and effect a viable alternative, but will no longer be required to do so by the terms of the Plan of Liquidation. As part of the transition of senior management in connection with the termination of the Plan of Liquidation, on Nov. 8, 2007, W. Bradley Blair, II disclosed his resignation as chief executive officer and president of the company and as a director. On the same date, the board appointed Michael C. Pearce, a current member of the board, as chief executive officer and president of the company. Mr. Pearce, 46, has been a private investor in various companies since 2002. From late 1999 through 2001, he served as chief executive officer of iEntertainment Network. From 1996 to 1998, he served as senior vice president of sales and marketing of publicly-traded VocalTec Communications, later returning in 1999 in a consulting capacity to its chairman on matters pertaining to strategic alternatives, business development and mergers and acquisitions. From 1983 to 1996, he was employed in various technology industry management positions, including senior vice president of sales and marketing at Ventana Communications, a subsidiary of Thomson Corporation, vice president of Sales at Librex Computer Systems, a subsidiary of Nippon Steel, and National Sales Manager at Hyundai Electronics America. From 1979 to 1983, he attended Southern Methodist University. Headquartered in Charleston, South Carolina, Golf Trust of America Inc. (AMEX:GTA) -- http://www.golftrust.com/-- was formerly a real estate investment trust but is now engaged in the liquidation of its interests in golf courses in the United States pursuant to a plan of liquidation approved by its stockholders. The company owns two properties (6 eighteen-hole equivalent golf courses). As of Sept. 30, 2007, the company has $11.20 million net assets in liquidation. GREENWOOD LLC: Case Summary & Four Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Greenwood, LLC P.O. Box 311 Greenwood, VA 22943 Bankruptcy Case No.: 07-62155 Chapter 11 Petition Date: November 13, 2007 Court: Western District of Virginia (Lynchburg) Judge: William E. Anderson Debtor's Counsel: W. Stephen Scott, Esq. Scott Kroner, PLC P. O. Box 2737 Charlottesville, VA 22902 Tel: (434) 296-2161 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Vantage Enterprise LLC Site Work $26,258 P.O. Box 1657 Haverhill, MA 01831 Frank Ghegurovich Loan $20,533 c/o Manhattan Financial 44 Trapelo Road Belmont, MA 02478 Mitchell Kambis Development $14,700 c/o Virginia Estates Consulting Services 1575 State Farm Boulevard Suite 5 Charlottesville, VA 22911 Scot Osborne Contracting Services $3,661 GSC CAPITAL: Moody's Junks Ratings on Four Certificate Classes -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of nine tranches and has placed under review for possible downgrade the ratings of five tranches from two deals issued by GSC Capital in 2006. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also incorporated its published methodology updates to the non delinquent portion of the transactions. Complete list of Actions: Issuer: GSC Capital Corp. Mortgage Trust 2006-1 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2 Currently Aa3 on review for possible downgrade, -- Cl. M-3, Downgraded to Ba1, previously A2, -- Cl. M-4, Downgraded to B3, previously Baa1, -- Cl. B-1, Downgraded to Ca, previously Baa3. Issuer: GSC Capital Corp. Mortgage Trust 2006-2 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa2, previously A1, -- Cl. M-5, Downgraded to Ba1, previously A2, -- Cl. M-6, Downgraded to Ba3, previously A3, -- Cl. M-7, Downgraded to Caa2, previously Baa1, -- Cl. M-8, Downgraded to C, previously Baa2, -- Cl. B-1, Downgraded to C, previously Baa3. HAZEL POINTE LP: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Hazel Pointe, L.P. 1701 North Market Street, Suite 210 Dallas, TX 75202 Case Number: 07-35654 Alleged debtor-affiliates: Entity Case No. ------ -------- Distinct Development, L.L.C. 07-35655 Distinct Development II, L.L.C. 07-35657 Distinct Edgewater, L.L.C. 07-35658 G.P.&E. Leasing, L.P. 07-35659 Involuntary Petition Date: November 13, 2007 Court: Northern District of Texas (Dallas) Petitioner's Counsel: John Nicholas Schwartz, Esq. Fulbright & Jaworski, L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, TX 75201 Tel: (214) 855-7173 Fax: (214) 855-8200 Petitioners ----------- Texans Commercial Capital 777 East Campbell Road, Suite 700 Richardson, TX 75081 HM RIVERGROUP: S&P Holds 'B-' Rating and Removes Positive Watch --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on HM Rivergroup PLC and subsidiary Riverdeep Interactive Learning USA Inc. and removed the ratings from CreditWatch with positive implications, where they were placed on July 18, 2007. The outlook is stable. The action is based on S&P's expectation that the company's proposed $4 billion, predominantly debt-financed acquisition of the Harcourt educational publishing business from Reed Elsevier PLC, specifically its financing structure and expected synergies, together pose very high ongoing financial risks. Ratings originally were placed on CreditWatch based on the possibility that the deal terms and structure could be configured to reduce financial risk. Standard & Poor's also assigned its bank loan and recovery ratings to the $7.15 billion senior secured credit facilities of Riverdeep Interactive Learning. The senior secured first-priority bank loan, which consists of a $500 million revolving credit facility due 2013 and a $4.95 billion term loan B due 2014, is rated 'B' (one notch higher than the 'B-' corporate credit rating), with a recovery rating of '2', indicating the expectation for substantial (70%-90%) recovery in the event of a payment default. The second-lien bank loan, which consists of a $600 million tranche A term loan due 2014 and a $1.1 billion tranche B delayed draw term loan due 2014, is rated 'CCC', with a recovery rating of '6'. The recovery rating indicates the expectation for negligible (0%-10%) recovery in the event of a payment default, as a result of its junior-lien position and the substantial amount of first-lien debt. Pro forma consolidated total debt and preferred stock at Sept. 30, 2007, was roughly $8.1 billion. "The ratings on HM Rivergroup reflect heightened financial risk resulting from the leveraged acquisition of Harcourt, minimally offset by the company's good business positions in the educational publishing industry," said Standard & Poor's credit analyst Hal Diamond. HOME EQUITY: Poor Credit Support Cues S&P to Lower Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of asset-backed certificates from Home Equity Asset Trust's series 2003-8 and 2004-1. S&P also affirmed its ratings on the remaining eight classes from these transactions. The lowered ratings reflect the recent deterioration of available credit support to the affected classes as of the October 2007 remittance period. Projected credit support is lower than the original levels for the affected classes. Subordination, overcollateralization, and monthly excess interest support these series, while recent losses have eroded O/C below the target levels for both series. Current O/C is $1.77 million compared with its $2.63 million target for series 2003-8, while O/C is $2.60 million compared with $4.0 million for series 2004-1. The six- and 12-month average losses for series 2003-8 are approximately $156,106 and $224,950, respectively, while the six- and 12-month average losses for series 2004-1 are approximately $448,265 and $493,264, respectively. While the six-month average loss amount has improved for both deals, the percentages of total and serious (90-plus days, foreclosures, and REOs) delinquencies have not improved significantly over the past 12 remittance periods. The affirmations reflect sufficient current and projected credit support percentages at the current rating categories as of the October 2007 remittance period. The collateral for both deals consists of 30-year, fixed- and adjustable-rate, first- and second-lien subprime mortgage loans secured by one- to four-family residential properties. Ratings Lowered Home Equity Asset Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-8 B-3 B BBB- 2004-1 B-1 BB BBB- 2004-1 B-2 B BB 2004-1 B-3 CCC B Ratings Affirmed Home Equity Asset Trust Series Class Rating ------ ----- ------ 2003-8 M-1 AA 2003-8 M-2 A 2003-8 M-3 A- 2003-8 B-1 BBB+ 2003-8 B-2 BBB 2004-1 M-1 AA 2004-1 M-2 A+ 2004-1 M-3 A HOMEBANC CORP: Judge Carey Appoints Stuart Maue as Fee Auditor -------------------------------------------------------------- The Honorable Steven Carey of the United States Bankruptcy Court for the District of Delaware determined that the size and complexity of HomeBanc Mortgage Corporation and its debtor- affiliates' cases will result in numerous and lengthy written applications for payment of professional fees and reimbursement of expenses in significant amounts. He finds that the appointment of a fee auditor pursuant to Rule 9017 of the Federal Rules of Bankruptcy Procedures, Rule 706 of the Federal Rules of Evidence and Rule 2016-2(j) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware and the procedures of the Court, is in the best interests of the Debtors' estates, their creditors and all parties-in-interest. The Debtors and the Official Committee of Unsecured Creditors have conferred and reached an agreement with respect to the Court's order. The Order applies to: -- all professionals in the Debtors' cases employed or to be employed pursuant to Sections 327, 328 or 1130 of the Bankruptcy Code; -- all members of the official committees appointed in the Debtors' Chapter 11 cases; and -- any claims for reimbursement of professional fees and expenses under Section 503(b) of the Bankruptcy Code to the extent permitted by the Court. To the extent that the fees and expenses of any ordinary course professionals employed exceed the compensation cap set forth in the October 17, 2007 Ordinary Course Professionals Order, the fees and expenses will be reviewed by the fee auditor. Judge Carey has ordered the appointment of Stuart Maue as the fee auditor to act as special consultant to the Court for professional fee and expense review and analysis. Mr. Maue's duties include: * review in detail quarterly interim fee applications and final fee applications filed by the Applicants; and * to the extent reasonably practicable, avoid duplicative review when reviewing final fee applications comprised of quarterly interim fee applications that have already been reviewed by the fee auditor. Judge Carey states that Mr. Maue may review any filed documents in the Debtors' cases and will be responsible for general familiarity with the docket in the Chapter 11 cases. Mr. Maue will be deemed to have filed a request for notice of papers filed in the Debtors' Chapter 11 cases. Mr. Maue's fees and expenses will be subject to application and review pursuant to Federal Rule of Evidence 706(b), and will be paid from the Debtors' estates as an administrative expense under Section 503(b)(2) of the Bankruptcy Code. The total fees paid to the fee auditor for his services will be charged at his ordinary hourly rate for services of this nature. In conjunction with the appointment of a fee auditor, Judge Carey says it is necessary to establish uniform procedures for the review, allowance and payment of fees and expenses of applicants to ensure compliance with Section 330 of the Bankruptcy Code and other applicable rules and guidelines. Judge Carey clarifies that the terms of the September 10, 2007 Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals, except that at the time of filing each monthly fee application and each quarterly interim fee application, the Applicant will also send to Mr. Maue the application or request, including the fee detail containing the time entries and itemized expenses. With respect to fee applications filed before the Order, each of the Applicants will provide the Fee Detail to Mr. Maue within 45 days from November 5, 2007. Judge Carey set certain procedures, which includes: * If Mr. Maue has any questions, issues or disputes regarding a quarterly interim fee application, he will communicate his concerns in writing -- Initial Report -- to the Applicant within 30 days after the latter of the due date of a quarterly interim fee application, or service upon Mr. Maue of a quarterly interim fee application; * Any Applicant who has received an Initial Report may respond to the questions, issues or disputes raised within 10 days after the date of the Initial Report; * Mr. Maue will file with the Court a final report with respect to each quarterly interim fee application within the latter of 30 days after the date of the Initial Report, or 20 days after the receipt of a response to the Initial Report. The final report will be served upon the affected Applicant and certain notice parties; * Within 15 days after the date of the Final Report, the subject Applicant may file with the Court a response to the Final Report, which will be served upon the Notice Parties. Hearings on all quarterly interim fee applications for a particular interim quarterly period will be scheduled by the Court in consultation with the Debtors' counsel after Mr. Maue has filed final reports for all quarterly interim fee applications for the period; and * Should an Applicant fail to meet one or more deadlines for the review of a quarterly interim fee application, and, in the sole discretion of Mr. Maue, the Applicant's failure to meet the deadlines does not allow sufficient time for the review process to be completed, the quarterly interim fee application will be heard at a subsequent hearing date. Judge Carey says that Mr. Maue will be available for deposition and cross-examination by the Debtors, Creditors Committee, the United States Trustee and other interested parties, consistent with Rule 706 of the Federal Rules of Evidence. Headquartered in Atlanta, Ga., HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- is a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. Headquartered in Atlanta, Ga., HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- is a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Debtors' financial condition as of June 30, 2007, showed total assets of $5,100,000,000 and total liabilities of $4,900,000,000. The Debtors' exclusive period to file a plan ends on Dec. 7, 2007. (HomeBanc Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). INFINITY ENERGY: Earns $3.2 Million in 3rd Quarter Ended Sept. 30 ----------------------------------------------------------------- Infinity Energy Resources Inc. reported Monday its operating results for the third quarter and first nine months of 2007. The company reported net income of $3.2 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $28.3 million for the corresponding quarter of 2006. Net income from continuing operations was $3.1 million for the third quarter of 2007, versus a net loss from continuing operations of $32.6 million in the three months ended Sept. 30, 2006. For the three months ended Sept. 30, 2007, revenues approximated $2.5 million, compared with approximately $3.7 million in the third quarter of 2006. The $1.3 million, or 34%, decrease in revenue consisted of an approximate $100,000 decrease attributable to lower average prices and a $1.2 million decrease attributable to lower oil and gas production. Net income in the third quarters of 2007 and 2006 benefited from $4.8 million and $11.9 million of income related to changes in derivative values, respectively. In the third quarter of 2006, the company reported a $15.0 million ceiling write-down of oil and gas properties and a $26.9 million charge related to the early extinguishment of debt. For the nine months ended Sept. 30, 2007, revenues approximated $7.1 million, compared with approximately $9.5 million in the first nine months of 2006. The $2.4 million, or 25%, decrease in revenue consisted of an approximate $500,000 decrease attributable to lower average prices and a $1.9 million decrease attributable to lower oil and gas production. The company reported a net loss of $16.6 million in the first nine months of 2007, versus a net loss of $36.9 million in the nine months ended Sept. 30, 2006. Net income in the first nine months of 2007 and 2006 benefited from $4.5 million and $11.7 million of income related to changes in derivative values, respectively. In the first nine months of 2007, the company reported a $15.8 million ceiling write-down of oil and gas properties, versus a ceiling write-down of $26.6 million in the first nine months of 2006. Nine-month results in 2006 also included a charge of $27.1 million related to the early extinguishment of debt. EBITDA (earnings from continuing operations before interest, income taxes, depreciation, depletion, amortization and accretion expenses, gains and losses on the sale of assets, expense related to the early extinguishment of debt, change in derivative fair value and ceiling write-down of oil an gas properties) for the three- and nine-month periods ended Sept. 30, 2007, totaled $643,000 and $639,000, respectively. Exploration and production operations produced 340 MMcfe (3.7 MMcfe per day) and 996 MMcfe (3.6 MMcfe per day) during the three and nine months ended Sept. 30, 2007, respectively, compared with 500 MMcfe (5.4 MMcfe per day) and 1,242 MMcfe (4.6 MMcfe per day) in the respective prior-year periods. Approximately $5.0 million in net cash was used in operating activities during the nine months ended Sept. 30, 2007, compared with $13.5 million in net cash provided by operating activities in the corresponding period of the previous year. Net cash used in investing activities, including capital expenditures involving exploration and production activities, totaled $16.7 million in the first nine months of 2007, versus $29.0 million in the nine months ended Sept. 30, 2006. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $55.5 million in total assets, $33.7 million in total liabilities, and $21.8 million in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $3.1 million in total current assets available to pay $31.9 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?2543 Management Comments "Our new management team is working diligently, and making progress, on addressing the company's borrowing deficiency with Amegy Bank and positioning Infinity to pursue the development potential of its properties in Texas and offshore Nicaragua," stated Stanton E. Ross, chief executive officer of Infinity Energy Resources Inc. "The workout agreement with our bank is progressing well," continued Ross. "We have entered into two non-binding letters of intent with a substantially larger oil and gas exploration company to farm in to Infinity's acreage position in Erath and Hamilton Counties in Texas, and to purchase all of our oil and gas producing properties in the Rocky Mountains. While there can be no assurance that these transactions will occur, we are optimistic and expect to release additional information prior to the end of this month." "In addition, I am pleased to report that progress continues regarding our 1.4 million-acre oil and gas concession offshore Nicaragua, which we believe has the potential to be the company's most valuable asset. Negotiations between federal and regional governmental agencies in Nicaragua regarding a variety of issues have been ongoing for the past several months, and based upon recent progress, I will be traveling to Managua later this month. We are hopeful that all issues regarding our contract will be finalized before year- end, in which case we expect to move forward with additional seismic and development work in early 2008," concluded Ross. About Infinity Energy Headquartered in Denver, Infinity Energy Resources Inc. (NasdaqGM: IFNY) -- http://www.infinity-res.com/-- is an independent energy company engaged in the exploration, development production of natural gas and oil and the acquisition of natural gas and oil properties in Texas and the Rocky Mountain region of the United States. The company also has a 1.4 million-acre oil and gas concession offshore Nicaragua in the Caribbean Sea. Amegy Bank Deficiency and Defaults Under the Forbearance Agreement entered into with Amegy Bank N.A. in August, Infinity is required to repay an $11.5 million borrowing base deficiency by Nov. 30, 2007. In order to satisfy the $11.5 million borrowing base deficiency, Infinity is required to sell the assets of Infinity Oil & Gas of Wyoming Inc., which holds its Rocky Mountain oil and gas assets, and may be required to sell Infinity Oil and Gas of Texas Inc. In addition, Infinity is currently in default under the loan agreement with Amegy. The company failed to meet certain financial and other covenants during the three months ended Sept. 30, 2007, including the interest coverage ratio and the funded debt to EBITDA ratio. Although Infinity intends to seek waivers of existing and future defaults as they occur, Amegy currently has the right to declare an event of default and foreclose on substantially all of Infinity's assets. JEFFREY BRUNO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtors: Jeffrey E. Bruno Dana S. Bruno 42 Field Street Norwalk, CT 06851 Bankruptcy Case No.: 07-50693 Chapter 11 Petition Date: November 12, 2007 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtors' Counsel: Ellery E. Plotkin, Esq. Ellery E. Plotkin, LLC 777 Summer Street 2nd Floor Stamford, CT 06901 Tel: (203) 325-4457 Fax: (203) 325-4376 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Patriot National Bank $32,776 900 Bedford Street Stanford, CT 06901 TD Bank North NA - CT $19,725 P.O. Box 9547 Portland, ME 04112-9547 American Express $17,979 c/o GC Services 6330 Gulfton Houston, TX 77081 Washington Mutual Bank $14,831 BMW Bank of North America $13,775 Capital One Bank $10,565 DMCCB $10,310 Ameriquest $8,818 Bank of America $8,403 Macy's $7,676 Brooks Brothers $6,777 Chase $6,247 Chrysler Financial $4,975 Internal Revenue Services $4,878 Chase Bank, USA $4,084 Dell Financial Services $4,051 c/o Primary Financial Services Dell Financial Services $3,162 DFS Acceptance Capital One Bank $2,493 HSBC Bank Nevada N.A. $1,994 DSNB/VISA $1,685 JOHN CONNERS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: John Michael Conners 1570 Kildare Way Pinole, CA 94564 Bankruptcy Case No.: 07-43823 Chapter 11 Petition Date: November 8, 2007 Court: Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: William F. McLaughlin, Esq. Law Offices of Robert A. Ward 1305 Franklin Street, Suite 301 Oakland, CA 94612 Tel: (510) 839-5333 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. KKR FINANCIAL: Moody's Assigns Low-B Ratings on $62 Million Notes ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by KKR Financial CLO 2007-A Ltd.: -- Aaa to the $1,126,300,000 Class A Senior Secured Floating Rate Notes, Due 2017; -- Aa2 to the $30,000,000 Class B Senior Secured Floating Rate Notes, Due 2017; -- A2 to the $70,000,000 Class C Deferrable Mezzanine Secured Floating Rate Notes, Due 2017; -- Baa2 to the $57,000,000 Class D Deferrable Mezzanine Floating Rate Notes, Due 2017; -- Ba2 to the $45,000,000 Class E Deferrable Mezzanine Floating Rate Notes, Due 2017; and -- B2 to the $17,000,000 Class F Deferrable Mezzanine Floating Rate Notes, Due 2017. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of senior secured loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. KKR Financial Advisors II LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. LAWRENCE SALANDER: Needs $200,000 DIP Fund to Pay Attorneys ----------------------------------------------------------- Lawrence B. Salander and Julie D. Salander ask the U.S. Bankruptcy Court for the Southern District of New York for permission to borrow $200,000 debtor-in-possession financing from First Republic Bank, their largest secured creditor. The Debtors also ask the Court's permission to use their secured creditors' cash collateral. The Debtors tell the Court that they urgently need the $200,000 DIP money from the lender to cover immediate attorney fees and expenses related to preservation of the collateral. The Debtors do not believe that any party has a lien on its cash; but they do not have access to their records. Although the First Republic has not asserted a lien on the Debtors' cash, once the DIP agreement is approved, First Republic will have a postpetition lien on the Debtors' cash. The Debtors tell the Court that First Republic is willing to allow the Debtors to use its cash collateral, on the Courts' interim approval of the DIP agreement. According to the Debtors, they could not find alternative lenders since their assets have been frozen and seized. The DIP facility has an interest at prime plus 5%, payable monthly in arrears. In addition, the Debtors request to borrow an additional $300,000 under the DIP agreement with First Republic, pending Court's approval. About Lawrence B. Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- which exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LAWRENCE SALANDER: Creditor Balks at DIP Pact with First Republic ----------------------------------------------------------------- Utilities & Industries Management Corp., a creditor in the bankruptcy cases of Lawrence B. Salander and Julie D. Salander, asks Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York to bar the Debtors from accessing First Republic's debtor-in-possession fund and cash collateral. According to Utilities, the Debtors do not need the DIP financing since its gallery, Salander-O'Reilly Galleries LLC already has a pending request with the Court to borrow DIP financing from First Republic Bank. Utilities & Industries contends that the Debtors reason to borrow the funds, which is to escrow future fees accrued by their counsel, is not valid. U&I recommends that the Court should wait until the Debtors have filed their complete schedules of assets and liabilities "in order to get a clearer picture of the Debtors' financial situation". U&I reminds the Court that the Debtors are the subject of a highly publicized scheme of misappropriating millions of dollars which are proceeds from the sale of various art works. Utilities tells the Court that the Debtors omitted in its first day affidavit a pending state court proceeding Utilities filed against them. Finally, Utilities tells the Court that the Debtors' request for DIP financing mainly attempts to cross collateralize the DIP lender's prepetition claims and to give it a greater priority by virtue of the DIP agreement. Hence, the DIP financing is not necessary because this augmentation of the DIP lender's secured status is "even more offensive". The Court is set to hear the matter today, at 3:00 p.m. Matthew D. Brown, Esq., at Cullen and Dykman LLP is counsel to Utilities & Industries Management Corp. About Lawrence B. Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- which exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LAWRENCE SALANDER: Wants Until December 17 to File Schedules ------------------------------------------------------------ Lawrence B. Salander and Julie D. Salander ask the U.S. Bankruptcy Court for the Southern District of New York to extend until Dec. 17, 2007, the period within which they can file their schedules of assets and liabilities and statement of financial affairs. The Debtors tell the Court that due to an execution of a subpoena of documents, they currently do not have access to records and information needed to complete their schedules and statement. However, the Debtors anticipate to gain access to these information in the coming weeks or within 45 days. Prior to bankruptcy, the Debtors were served with certain search warrants and governmental units impounded their personal business records. About Lawrence B. Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- which exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LEVITT AND SONS: Wants to Hire Berger Singerman as Bankr. Counsel ----------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Berger Singerman, P.A., as their counsel, nunc pro tunc to Nov. 9, 2007. Lawrence E. Young, managing director at AlixPartners, LLP, and chief restructuring officer of Levitt and Sons, LLC, relates that Berger Singerman has substantial experience in bankruptcy cases before the Court and others, and is well-qualified to act as counsel for the Debtors. As counsel, the firm will: (a) advise the Debtors with respect to their responsibilities in complying with the United States Trustee's Guidelines and Reporting Requirements and with the rules of the Court; (b) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the Debtors' Chapter 11 cases; (c) protect the interests of the Debtors in all matters pending before the Court; and (d) represent the Debtors in negotiations with their creditors and in the preparation of a plan. Berger Singerman's hourly rates, subject to adjustments, are: Professionals Hourly Rate ------------- ----------- Paul Singerman, Esq. $475 Jordi Guso, Esq. $435 Leslie Gern Cloyd, Esq. $435 Associate attorneys $250 - $370 Legal assistants and paralegals $75 - $160 Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, an attorney at and shareholder of the firm, discloses that the firm's conflicts check system revealed certain parties represented, or is being represented, by the firm, none of which impairs the firm's disinterestedness or constitutes any conflict of interest. Berger Singerman neither holds nor represents any interest adverse to the Debtors and is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code, Mr. Singerman states. Neither he nor the firm has or will represent any other entity in connection with the Debtors' Chapter 11 cases and accept any fee from any other party or parties, except the Debtors, unless otherwise authorized by the Court, he continues. The Debtors retained Berger Singerman to act as their legal counsel in connection with restructuring matters on Aug. 28, 2007. Since then, the firm has provided prepetition services to the Debtors. Mr. Singerman discloses that a total of $1,526,271 was received between the period September 25 and Nov. 8, 2007. According to Mr. Singerman, the firm has applied the amount in payment in full of its prepetition fees and expenses, and after doing so, $825,000 will be held by Berger Singerman as security for the fees and costs that may be awarded to it by the Court -- $750,000 as fee retainer, and $75,000 as cost deposit. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) LEVITT AND SONS: Selects AP Services as Crisis Managers ------------------------------------------------------- Levitt and Sons, LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ AP Services, LLC as their crisis managers, nunc pro tunc to Nov. 9, 2007. In addition, the Debtors ask the Court for authority to designate Lawrence E. Young as chief restructuring officer, and designate John Dischner as executive vice president to the Debtors. Seth Wise, the Debtors' president, tells the Court that Messrs. Young and Dreschner have over 15, and 10, years of experience in crisis management and business reorganizations, and have demonstrated expertise assisting companies with financial restructurings, operational improvement plans and cash management. The Debtors seek to employ APS pursuant to the terms of an engagement letter between APS and the Debtors, effective as of October 22, as amended. APS will provide restructuring management services, including providing Mr. Young to serve as CRO and Mr. Dischner to serve as EVP. APS will also: -- assist the Debtors in evaluating and implementing strategic and tactical options through the restructuring process; -- provide certain additional temporary staff to assist the Debtors in their restructuring efforts; -- assist with the preparation of the statement of financial affairs, schedules and other regular reports required by the Bankruptcy Code or the Court or which are customarily issued by the chief financial officer; -- assist in preparing for and filing of bankruptcy cases for the Debtors, coordinating and providing administrative support for the cases and developing a plan of reorganization or other appropriate case resolution, if necessary; and -- management of the claim and claim reconciliation processes. APS and Messrs. Young and Dischner will be paid in accordance to the firm's hourly rates, subject to changes: Professionals Hourly Rates ------------- ------------ Lawrence Young $725 John Dischner $575 Michelle Campbell $550 Barry Folse $700 Drew Lockard $420 Pat Murray $350 Jason Kilpela $350 Colin Keenan $350 Omar Zaidi $350 Michelle Smith $350 APS has received a $1,500,000 retainer from the Debtors, to be applied against fees and expenses in the Debtors' Chapter 11 cases. If APS wants to augment its professional staff with independent contractors, it will file, and require the Independent Contractor to file, 2014 affidavits indicating that the Independent Contractor has reviewed the list of the interested parties in the Debtors' Chapter 11 cases. The Independent Contractor must remain disinterested during the time APS is involved in providing services on behalf of the Debtors, and represent that he will not work for the Debtors or other interested parties during the time APS is involved in providing services to the Debtors. Mr. Wise notes that it is APS' standard practice to charge for an Independent Contractor's services at the APS' rate for an employee of comparable skill and experience, which rate typically exceeds the compensation provided by APS to the Independent Contractor. APS employees serving as officers of the Debtors, including the CRO and EVP, will be entitled to receive whatever indemnities are made available, during the term of ASP's engagement, to other -- non-APS affiliated -- officers of the Debtors. Nonetheless, Mr. Young ascertains that the firm holds no adverse interest as to matter for which it has been employed by the Debtors. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis manager, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) LEVITT AND SONS: Wants Court's OK to Use Lenders' Cash Collateral ----------------------------------------------------------------- Levitt and Sons, LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to use existing cash on hand, including the cash collateral in which their bank lenders may claim an interest. Lawrence E. Young, a managing director at AlixPartners, LLP, and chief restructuring officer of Levitt and Sons, LLC, relates that the Debtors need immediate access to Cash Collateral to continue to operate, and pay wages and other direct operating expenses. As of the Debtors' bankruptcy filing, LAS had roughly $4,700,000 of unrestricted cash on hand. Pursuant to the Debtors' 13-week cash flow forecast ending Feb. 8, 2008, the Debtors anticipate making $8,413,100 in total disbursements during the period, including $488,900 during the week ended Nov. 16, 2007. The Debtors expect receiving $7,438,200 from business operations as well as the sale of certain assets during the period. Mr. Young says LAS's cash on hand is maintained at accounts with City National Bank in the company's name. The cash on hand includes funds advanced by Levitt Corp. to LAS, the proceeds of lot sales remitted in the ordinary course of business by LAS's subsidiary to LAS, and other receipts of LAS. None of the lenders has control of the City National Bank accounts. Prior to bankruptcy, LAS financed the purchase and development of residential projects through loans from five Bank of America; KeyBank, N.A.; AmTrust, FSB formerly known as Ohio Saving Bank; Regions Bank, N.A.; and Wachovia Bank, N.A. Each of the loans are secured by mortgages on the real estate owned by certain of the Debtors. Generally, the lenders have discrete collateral that is grouped geographically. Additionally, in Tennessee, Regions Bank, N.A., as successor to Union Planters Bank, Wachovia Bank, N.A. and Financial Federal Savings Bank financed the construction of certain of the Debtors' models and spec homes. The Debtors' outstanding obligations under various credit facilities are: Outstanding Balance Prepetition Facility As of Sept. 30, 2007 -------------------- -------------------- Credit facility dated August 9, 2005, $95,000,000 with KeyBank, N.A. Credit facility dated December 2, $25,000,000 2005, with Regions Bank, N.A. Acquisition, development and $9,600,000 construction revolving loan facility dated September 5, 2002, with Wachovia Bank, N.A. Residential acquisition, development $102,000,000 and construction revolving loan facility dated May 31, 2006, with Wachovia Bank, N.A. Credit facility dated September 29, $8,600,000 2004, as amended May 8, 2006, with Wachovia Bank, N.A. Credit facility dated July 15, 2004, $1,100,000 with AmTrust Bank Credit facility dated October 6, $103,000,000 2005, with Bank of America Each of the lenders holds first liens on the lots and related improvements. None of the property of the Debtors is collateral for more than one of the lenders. The Debtors also intend to sell homes and lots postpetition. Mr. Young says the proceeds of those sales constitutes the cash collateral of one or more of the lenders. According to him, the Debtors also propose to use those proceeds to fund their postpetition operations in the ordinary course of business in accordance with the budget. As adequate protection for the use of cash collateral, the Debtors propose to grant the lenders replacement liens on all postpetition property that is of the same nature and type of each lender's prepetition collateral. Immediate access to cash collateral, Mr. Young notes, will allow the Debtors to preserve the value of their assets so as to avoid immediate and irreparable harm to their estates, and afford the Debtors adequate time to negotiate and seek approval for additional cash collateral use, subject to and within the limits imposed by the budget. A full-text copy of the Debtors' budget is available at no charge at http://researcharchives.com/t/s?2549 About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) LEVITZ FURNITURE: Gets Interim Okay to Use GECC's Cash Collateral ----------------------------------------------------------------- Judge Gerber of the U.S. Bankruptcy Court for the Southern District of New York gave PLVTZ Inc., dba Levitz Furniture Inc., and its debtor-affiliates interim permission to use the cash collateral securing repayment of their obligations to General Electrical Capital Corporation. PLVTZ Chief Financial Officer Kathleen M. Guinnessey said the Debtor is facing an immediate liquidity crisis. Absent authority to use cash collateral, PLVTZ would be forced to immediately cease all business operations to the direct detriment of all parties-in-interest. PLVTZ is seeking to sell off its assets pursuant to competitive bidding and auction. While the Debtor is pursuing its options in chapter 11, it is imperative that it maintain employee, customer and other relationships to ensure that it maximizes the value of its estate, Ms. Guinnessey told Judge Gerber at the November 9 hearing. In the next four weeks ending Dec. 2, 2007, PLVTZ anticipates receiving $18,700,000 from operations. It anticipates making $25,043,000 in total disbursements, including: -- $19,238,000 to fund operations; -- $2,850 in payments to major vendors and utilities and other bankruptcy-related payments; and -- $2,954,000 in fees and other payments to its lenders. A full-text copy of PLVTZ's four-week cash flow projections is available at no charge at: http://ResearchArchives.com/t/s?2553 Prior to the bankruptcy filing, PLVTZ borrowed funds under a Credit Agreement, dated Dec. 21, 2006, syndicated by GECC as agent and lender; and GE Capital Markets Inc., as lead arranger. Borrowings under the Prepetition Credit Facility were used to refinance prior indebtedness and for PLVTZ's working capital and other general corporate purposes. The Prepetition Credit Facility consists of: (a) a $78,000,000 revolving credit facility; (b) a $7,000,000 term loan; and (c) a swing line loan subfacility under the Revolving Credit Facility. The Prepetition Credit Facility has a five-year term ending on Dec. 21, 2011. As of the bankruptcy filing, $32,629,063 was outstanding on the Prepetition Credit Facility, consisting of $25,629,063 outstanding under the Revolving Credit Facility and $7,000,000 outstanding under the Term Loan. In addition, roughly $9,900,000 of standby letters of credit were outstanding. PLVTZ's obligations under the Prepetition Credit Facility are secured by a first-priority lien on all of PLVTZ's personal property. PLVTZ Holdings II, LLC, also guaranteed PLVTZ's obligations. Holdings' guaranty is secured by a pledge of Holdings' shares of common stock in PLVTZ. PLVTZ is also the obligor under a $22,000,000 Secured Convertible Debenture, dated Aug. 8, 2007, with YA Global Investments, L.P., as debenture holder. The Convertible Debenture is due Aug. 8, 2010. As of the Petition Date, the Debtor owed YA $22,704,000. YA has the right, at any time, to convert up to $20,000,000 in principal amount under the Convertible Debenture, together with accrued but unpaid interest, into shares of common stock of PLVTZ. The Convertible Debenture is secured by a second-priority lien on all of PLVTZ's personal property. GECC and YA are party to a Subordination Agreement dated as of Aug. 8, 2007. The parties have agreed that the Debenture Junior Liens are subordinated to the Senior Liens, and that in the event PLVTZ filed for bankruptcy, the Debenture Holder is required to consent to the use of cash collateral consented to by the Agent or any Lenders so long as the Debenture Holder receives a junior replacement lien in postpetition assets of the Debtor that is junior and subordinate to all liens granted pursuant to the to use cash collateral. On Nov. 5, 2007, the Debtor received notice from the Debenture Holder that it had accelerated the maturity of the Secured Debenture. Two days later, GECC sent to the Debtor a Notice of Default, Reservation of Rights and Assessment of Interest at the Default Rate. The Debtor acknowledges that the acceleration of the Secured Debenture constitutes an Event of Default under the Secured Credit Agreement. Paul D. Leake, Esq., at Jones Day, in New York, the Debtor's proposed counsel, relates that the Debtor has negotiated with and received the consent of its senior secured lender to use Cash Collateral in accordance with a budget that the Debtor believes will be sufficient to pay its administrative expenses that become due and payable before a sale can be consummated. GECC has agreed to allow the Debtor to use Cash Collateral from the Petition Date through the earlier to occur of: (i) three business days following notice by GECC to the Debtor that an Event of Default has occurred and is continuing; or (ii) Dec. 2, 2007. After notice of an Event of Default and prior to the termination of the Specified Period, the Debtor may use Cash Collateral solely to meet payroll obligations, pay expenses essential to the preservation of the Debtor and its estate or as agreed by the Agent in its sole discretion. Any extension or other modification of the Cash Collateral Budget will be subject to the prior written approval of GECC and the Lenders. The Debtor's right to use Cash Collateral, including any amounts in the concentration accounts the Debtor maintained with Bank of America, N.A., and Mellon Bank, N.A., on the Petition Date or credited to a Concentration Account on or after the Petition Date, will terminate at the expiration of the Specified Period. As adequate protection of the interests of GECC and Lenders in the Prepetition Collateral against any diminution in the value of their interests in the Collateral as a result of the use of Cash Collateral, GECC and the Lenders will receive adequate protection replacement liens which are senior and prior to all other interests or liens in or on the Collateral. GECC and the Lenders will have an allowed superpriority administrative expense claim against the bankruptcy estate. PLVTZ will also make adequate protection payments, including timely payment of interest under the Prepetition Credit Facility and GECC's legal costs. The Debtor will also pay to GECC all cash on hand in excess of $3,000,000 at the end of the week of November 18, 2007, and in excess of $3,750,000 at the end of the week of November 25. The Excess Cash will be applied on account of the Debtor's obligations under the Prepetition Credit Facility. The Debtor is also required to set aside $250,000 from the proceeds of any sale or disposition of the Lenders' Collateral as security for any reimbursement, indemnification or similar continuing obligations of the Debtor in favor of GECC or the Lenders. The Lenders' Replacement Liens is subject to a carve-out for: (a) allowed administrative expenses pursuant to 28 U.S.C. Section 1930 (a)(6); (b) the lesser of (i) all allowed reasonable fees and expenses of attorneys, consultants and financial advisors employed by the Debtor and the statutory committee appointed in the case and (ii) $1,500,000 provided for in the Budget; (c) amounts actually received by the Debtor after November 4, 2007 as prepayments for goods delivered to the customer or otherwise returned or credited to the customer; and (d) the costs, fees and expenses of a trustee appointed under Chapter 7 of the Bankruptcy Code, not to exceed $50,000. As adequate protection of the Debenture Holder's interests, the Debenture Holder will be granted replacement liens on the Collateral, which will be subject and subordinate to GECC and the Secured Lenders' Liens, including the Replacement Liens; and the Carve Out and other Prior Liens. Any official committee appointed in the case will have 60 days following retention of counsel to challenge the validity, extent, perfection or priority of the mortgage, security interests and liens of GECC, the Lenders or the Debenture Holder with respect to the Cash Collateral. If no Statutory Committee is appointed, other parties-in-interest to the case may present a challenge within 75 days following the Petition Date. Pursuant to the stipulation, GECC required the Debtor to meet these milestones with respect to the disposition of its assets: November 16, 2007 PLVTZ must have accepted a stalking horse bid reasonably acceptable to GECC November 19, 2007 The Bankruptcy Court must have approved and entered a sales procedures order with respect to the sale of the Debtor's entire chain of store locations or the sale of a substantial portion of the Debtor's assets as a going concern The Court must have approved fees payable to the Stalking Horse Bidder November 28, 2007 PLVTZ must have completed the auction November 29, 2007 PLVTZ must have received Court approval of the Sale Transaction The Debtor must have executed all related documents November 30, 2007 To the extent applicable, the GC Sale must have been consummated, or the Full Chain Liquidation will have commenced. To the extent that the Debtor is seeking to liquidate its leases and leasehold interests as part of a Full Chain Liquidation, it must complete the auction for the Lease Liquidation on or before November 28; received Court approval of the Lease Liquidation by November 29; and consummated the Lease Liquidation November 30. Any objections to the Debtor's use of the Lenders' Cash Collateral on a permanent basis must be filed by November 19. GECC is represented in the Debtor's case by Julia Frost-Davies, Esq., at Bingham McCutchen LLP, in Boston, Massachusetts. YA is represented by Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P., in Cincinnati, Ohio. If any timely objections are received, the Court will hold a hearing to consider the objections on November 29, 2007 at 12:00 p.m., Eastern Time. If no objections are timely filed and served, the November 9 Order will represent and be the final findings, conclusions and judgment of the Court. A full-text copy of the Court-approved Cash Collateral Stipulation is available at no charge at: http://ResearchArchives.com/t/s?2554 About Levitz Furniture Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq. and Brad B. Erens, Esq. at Jones Day represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. (Levitz Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). MACY'S INC: Earns $33 Million in Third Quarter Ended Nov. 3 ----------------------------------------------------------- Macy's Inc. reported Wednesday net earnings of $33 million for the third quarter of 2007, ended Nov. 3, 2007. This compares with a net loss of 3 million in the same period ended Oct. 28, 2006. The company reported income from continuing operations of $33 million for the third quarter ended Nov. 2007, compared with income from continuing operations of $20 million for the same 13-week period last year. Results of the third quarter of 2007 includes May Company merger integration costs of $17 million. The third quarter of 2006 included merger integration costs and related merchandise inventory adjustments of $145 million. For the first three quarters of 2007, Macy's Inc. reported net income of $143 million compared with net income of $262 million for the first three quarters of 2006. Income from continuing operations was $159 million, compared to income from continuing operations of $228 million in the first three quarters of 2006. Results for the first three quarters of 2007 includes May Company merger integration costs of $150 million. The first three quarters of 2006 included merger integration costs and related merchandise inventory adjustments of $451 million, as well as gains on the sale of credit receivables of $191 million. Terry J. Lundgren, Macy's Inc. chairman, president and chief executive officer, said, "Despite the unseasonably warm weather in September and October, we were able to deliver third quarter same- store sales within our guidance and earnings per share at the top end of our guidance. We have a wide range of new and distinctive merchandise in our assortment for the holiday season at both Macy's and Bloomingdale's, and we believe we will compete successfully in the fourth quarter, despite what continues to be a challenging economic environment." Sales Sales in the third quarter totaled $5.906 billion, an increase of 0.3% compared to total sales of $5.886 billion in the same period last year. On a same-store basis, Macy's Inc.'s third quarter sales were down 0.8%. This is within the company's guidance for third quarter sales to be in the range of down 1% to up 1%. For the year to date, Macy's Inc.'s sales totaled $17.719 billion, down 0.5% from total sales of $17.811 billion in the first 39 weeks of 2006. On a same-store basis, Macy's Inc.'s year-to-date sales were down 1.0%. In the third quarter of 2007, the company opened four stores and closed one. Macy's opened stores in Northridge and Brea, California, and Portland, Oregon. Bloomingdale's opened a store in Chevy Chase, Maryland. Macy's closed a store in Columbus, Ohio. Operating Income Macy's Inc.'s operating income totaled $183 million or 3.1% of sales for the quarter ended Nov. 3, 2007, compared to operating income of $134 million or 2.3% of sales for the same period last year. For the first nine months of 2007, Macy's Inc.'s operating income totaled $641 million or 3.6% of sales, compared to operating income of $576 million or 3.2% of sales for the same period last year. Cash Flow Net cash provided by continuing operating activities was $285 million for the first nine months of 2007, compared with $1.971 billion for the first nine months of last year. The first nine months of 2006 included $1.860 billion in proceeds from the sale of proprietary credit receivables. Net cash used by continuing investing activities in the first nine months of 2007 was $618 million, compared with cash provided by continuing investing activities of $865 million in the first nine months of last year. The first nine months of 2007 included $96 million from the disposal of property and equipment, primarily from the sale of duplicate facilities associated with the May Company integration. In the first nine months of 2006, cash from continuing investing activities included the company's purchase of $1.141 billion in credit receivables from General Electric Capital Corporation, which then were sold to Citigroup for $1.323 billion, as well as $1.047 billion in proceeds from the disposition of Lord & Taylor and $494 million from the disposal of property and equipment, primarily from the sale of approximately 60 duplicate store locations. Net cash used by continuing financing activities was $602 million in the first nine months of 2007, compared with $2.345 billion in cash used by continuing financing activities in the first nine months of last year. The company issued $2.9 billion in debt in the first nine months of 2007. The company repurchased approximately 2.7 million shares of its common stock for a total of approximately $84 million in the third quarter of 2007. In the first nine months of 2007, the company repurchased approximately 72.2 million shares of its common stock for approximately $3 billion. At Nov. 3, 2007, the company had remaining authorization to repurchase up to approximately $1.17 billion of its common stock. At Nov. 3, 2007, the company's consolidated balance sheet showed $29.669 billion in total assets, $20.229 billion in total liabilities, and $9.440 billion in total shareholders' equity. About Macy's Inc. Headquartered in Cincinnati and New York, Macy's Inc. (NYSE: M) -- http://www.fds.com/-- is one of the nation's premier retailers, with fiscal 2006 sales of $27 billion. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com, bloomingdales.com and Bloomingdale's By Mail. Prior to June 1, 2007, Macy's Inc. was known as Federated Department Stores Inc. * * * As reported in the Troubled Company Reporter on Oct. 23, 2007, Moody's Investors Service affirmed all ratings of Macy's Inc., including its long term rating of Baa2, Prime 2 short term rating, and (P)Ba1 Preferred shelf rating but changed the outlook to negative from stable. The change in outlook was prompted by the continuing negative comparable store sales in the former May doors, credit metrics that are at the trigger points cited in Moody's Credit Opinion of Feb. 28, 2007, for a downgrade, and the uncertain outlook on consumer spending that could further delay improvement in the former May stores' performance. MAJESTIC STAR: Moody's Cuts Corporate Family Rating to B2 --------------------------------------------------------- Moody's Investors Service lowered Majestic Holdco, LLC's B2 corporate family and B2 probability of default rating to B3 while its 12 1/2% discount notes were lowered to Caa2 (LGD-6, 95%) from Caa1 (LGD-6, 95%). Majestic Holdco's rating outlook is negative. The Majestic Star Casino, LLC's senior secured note rating was lowered to B2 (LGD-3, 34%) from B1 (LGD-3, 33%) while its senior unsecured note rating was lowered to Caa2 (LGD-5, 80%) from Caa1 (LGD-5, 80%). The downgraded ratings of Majestic HoldCo LLC and Majestic Star Casino LLC is in response to a further decline in consolidated EBITDA and EBITDA margins and a corresponding weakening of leverage and coverage measures. A continued decline in consolidated EBITDA and EBITDA margins through the third quarter of fiscal 2007 resulting from significant competition in all of the markets in which Majestic Star operates, has increased adjusted debt/EBITDA to above 8.5x, and resulted in adjusted EBITDA coverage of about 1.1x. Although the company has experienced year-to-date growth in net revenues, EBITDA has been negatively impacted by the improved facilities and marketing efforts of competitors in the Black Hawk, CO market as well as increased levels of marketing and promotions over the last nine months from competitors in the Tunica, MS market. Revenues and EBITDA have also been negatively affected by construction disruption related to the $32 million Black Hawk expansion scheduled to open in July 2008. The negative rating outlook anticipates that Majestic Star's operating results and liquidity profile will remain vulnerable to continued competition and promotional activity. The negative outlook also considers that, given Majestic's significant debt and competitive markets, there is a risk that the company might not meet certain bank agreement covenants in the fourth quarter of 2007. As a result, Majestic Star may need to seek further amendments to existing financial covenants. If the company fails to receive such future amendments, the ratings would be lowered. Ratings could also be lowered if Majestic Star's operating results do not improve in the near-term. Without significant improvement in operating results, the company will likely need to refinance its debt in a manner that materially lowers its debt service obligations going forward; to the extent that operating and financial performance remains at current levels, Moody's believes a default is possible. Moody's prior rating action related to Majestic Star occurred on Nov. 13, 2006 when company's rating outlook was revised to negative from stable. Majestic Star Casino LLC directly and indirectly owns and operates riverboat casinos in Gary, Indiana; Tunica, Mississippi; and Black Hawk, Colorado. Majestic HoldCo LLC owns 100% of The Majestic Star Casino LLC. MAMC WINDWARD: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: M.A.M.C. Windward, LLC 501 Continental Plaza 3250 Mary Street Coconut Grove, FL 33133 Bankruptcy Case No.: 07-19849 Type of Business: The Debtor operates real estate property. Chapter 11 Petition Date: November 9, 2007 Court: Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: Mark S. Roher, Esq. 101 Northeast 3rd Avenue Suite 1800 Fort Lauderdale, FL 33301 Tel: (954) 462-8000 Fax: (954) 462-4300 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. MATRITECH INC: Sept. 30 Balance Sheet Upside-Down by $9.9 Million ----------------------------------------------------------------- Matritech Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $6.7 million in total assets, $16.5 million in total liabilities, and $104,312 in preferred stock, resulting in a $9.9 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $5.5 million in total current assets available to pay $16.3 million in total current liabilities. The company reported a net loss of $4.8 million on revenues of $4.0 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $2.9 million on revenues of $2.8 million in the same period in 2006. The increase in net loss in the third quarter of 2007 was primarily due to increased SG&A expenses as well as increased non- cash charges to interest expense related to the 2006 Secured Convertible Notes. 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?254d Going Concern Doubt As reported in the Troubled Company Reporter on April 5, 2007, PricewaterhouseCoopers LLP raised substantial doubt about Matritech Inc.'s ability to continue as a going concern citing recurring losses and negative cash flows from operations after auditing the company's financial statements as of Dec. 31, 2006, and 2005. About Matritech Inc. Headquartered in Newton, Massachusetts, Matritech Inc. (Amex: MZT) -- http://www.matritech.com/ -- is a marketer and developer of protein-based diagnostic products for the early detection of cancer. The company uses its patented proteomics technology to develop diagnostics for the detection of a variety of cancers. The company's first two products, the NMP22(R) Test Kit and NMP22(R) BladderChek(R) Test, have been FDA cleared for the monitoring and diagnosis of bladder cancer. The company has discovered other proteins associated with cervical, breast, prostate, and colon cancer. MISSION BAY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Mission Bay Ski & Bike, Inc. 1110 South Street Elgin, IL 60123 Bankruptcy Case No.: 07-20870 Chapter 11 Petition Date: November 7, 2007 Court: Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Bruce Dopke, Esq. Holleb & Coff P.O. Box 681246 Schaumburg, IL 60168 Tel: (847) 524-4811 Fax: (847) 524-4131 Total Assets: $1,186,375 Total Debts: $1,183,960 Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Trek Bicycle Corp Goods sold and $24,050 Lockbox Suite 21957 delivered Network Place Chicago, IL 60673-1219 Shimano American Corp. Goods sold and $15,070 Shoe Division-Remit delivered P.O. Box 513839 Los Angeles, CA 90051-3839 AT&T Real Yellow Pages Dex Advertising $14,622 8519 Innovation Way Chicago, IL 60682-0085 Blue Seventy Wetsuits Goods sold and $12,352 delivered American Bicycle Group Goods sold and $10,108 delivered Zipp/Compositech Goods sold and $7,671 delivered FIA Card Services Charges $6,614 Felt Racing Goods sold and $6,576 National City Credit Card Charges $6,458 Illinois Department of Revenue Retailer's Occupation $6,073 Retailer's Occupation Tax Tax Quality Bicycle Goods sold and $5,900 delivered JB Importers Goods sold and $5,666 delivered Zoot Sports Goods sold and $5,420 delivered Bell Sports, Inc. Goods sold and $4,305 delivered Look Cycle USA Goods sold and $4,071 delivered Windy City Sports Advertising/Publishing $3,000 Yellow Book USA Advertising $2,675 Internal Revenue Service Withholding Taxes $2,092 Pearl Izumi Goods sold and $1,834 delivered Northwave Cycling Shoes Goods sold and $1,784 delivered MONDY PROPERTIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Mondy Properties, L.L.C. 228 Jasmine Drive Jackson, MS 39212 Bankruptcy Case No.: 07-03641 Chapter 11 Petition Date: November 13, 2007 Court: Southern District of Mississippi (Jackson Divisional Office) Judge: Edward Ellington Debtor's Counsel: Derek A. Henderson, Esq. 111 East Capitol Street, Suite 455 Jackson, MS 39201 Tel: (601) 948-3167 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor does not have any creditors who are not insiders. MORGAN STANLEY: Moody's Affirms Low-B Ratings on Six Cert. Classes ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 14 classes of Morgan Stanley Capital I Inc., Commercial Pass-Through Certificates, Series 2003-IQ4 as: -- Class A-1, $55,390,352, affirmed at Aaa -- Class A-2, $449,730,000, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $18,194,000, affirmed at Aaa -- Class C, $23,652,000, upgraded to A1 from A2 -- Class D, $4,549,000, upgraded at A2 from A3 -- Class E, $7,278,000, affirmed at Baa1 -- Class F, $7,277,000, affirmed at Baa2 -- Class G, $8,188,000, affirmed at Baa3 -- Class H, $8,187,000, affirmed at Ba1 -- Class J, $3,639,000, affirmed at Ba2 -- Class K, $1,819,000, affirmed at Ba3 -- Class L, $5,459,000, affirmed at B1 -- Class M, $1,819,000, affirmed at B2 -- Class N, $1,819,000, affirmed at B3 -- Class MM-A, $10,000,000, upgraded to Baa3 from Ba1 -- Class MM-B, $5,000,000, upgraded to Ba1 from Ba2 As of the Oct. 15, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 17% to $604.3 million from $727.8 million at securitization. The certificates are collateralized by 108 loans, ranging in size from less than 1% to 11.6% of the pool, with the top 10 loans representing 51.9% of the pool. The pool includes three shadow rated investment grade loans, representing 26.6% of the pool. Five loans, representing 9% of the pool, have defeased and are collateralized with U.S. Government securities. The pool has not experienced any losses to date and currently there are no loans in special servicing. Thirteen loans, representing 10.7% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 93% of the pool. Moody's weighted average loan to value ratio for the conduit component is 78%, compared to 80.4% at Moody's last full review in May 2006 and compared to 81.3% at securitization. Moody's is upgrading Classes C and D due to stable overall pool performance and increased credit support. The largest shadow rated loan is the Mall at Millenia Loan ($70 million -- 11.6%), which represents a participation interest in the senior component of a $195 million mortgage loan. The loan is secured by the borrower's interest in a 1.1 million square foot regional mall located in Orlando, Florida. The mall is anchored by Bloomingdale's, Macy's and Neiman Marcus. The in-line space was 99% occupied as of July 2007, compared to 97.2% at last review. Moody's current shadow rating is Baa1, compared to Baa2 at last review. The property is also encumbered by a $15 million non- pooled junior loan that serves as the security for non-pooled Classes MM-A and MM-B. Moody's current ratings for these classes are Baa3 and Ba1, respectively, compared to Ba1 and Ba2 at last review. The second largest shadow rated loan is the Federal Center Loan ($67.5 million -- 11.2%), which represents a participation interest in a $135 million mortgage loan. The loan is secured by two adjacent Class B office buildings located in Washington D.C. The buildings total 722,000 square feet and were 99% leased as of February 2007, essentially the same as at last review. The General Services Agency is the largest tenant, occupying about 620,500 square feet under two leases expiring in August 2009 (269,000 square feet) and January 2013 (351,500 square feet). Moody's current shadow rating is Baa3, the same as at last review. The third largest shadow rated loan is the Oakbrook Center Loan ($23 million -- 3.8%), which represents a participation interest in a $221.1 million mortgage loan. The loan is secured by a mixed-use property located in Oak Brook (Chicago), Illinois that consists of an open-air regional mall, three office buildings and a ground lease to a hotel and a theater. Oakbrook Center totals about 2.4 million square feet, of which 1.6 million square feet serves as collateral for the loan. The mall is anchored by Lord & Taylor, Marshall Field's, Neiman Marcus, Bloomingdale's Home, Nordstrom and Sears. Occupancy of the in-line and office space as of March 2007 was 97.6% and 74.9%, respectively, compared to 93.4% and 76.6% at last review. Moody's current shadow rating is A1, the same as at last review. The top three conduit loans represent 14.7% of the pool. The largest conduit loan is the Katy Mills Loan ($55 million -- 9.1%), which represents a participation interest in a $148 million mortgage loan. The loan is secured by the borrower's interest in a 1.2 million square foot regional mall located in Katy (Houston), Texas. The mall is anchored by Bass Pro Shops, Burlington Coat Factory, AMC Theaters, Bed, Bath & Beyond, and Marshalls. The property was 95% occupied as of December 2006, compared to 89.7% at last review. The property's performance has been impacted by increased operating expenses. Moody's LTV is 92.8%, compared to 91.1% at last review. The second largest conduit loan is the Encino Place Loan ($18.4 million -- 3%), which is secured by an 84,000 square foot mixed use retail and office property located in Encino, California. The property was 94% leased as of December 2006, compared to 91% at last review. Property performance has been impacted by decreased revenues and increased expenses. Moody's LTV is in excess of 100%, the same as at last review. The third largest conduit loan is the Laurels Apartments Loan ($15.6 million -- 2.6%), which is secured by a 254-unit multifamily property located in Gainesville, Florida. The property was 98% occupied as of December 2006, the same as at last review. Moody's LTV is 79.6%, compared to 83% at last review. NASH FINCH: Earns $15.4 Million in Quarter Ended October 6 ---------------------------------------------------------- Nash Finch Company disclosed financial results for the third quarter ended Oct. 6, 2007. Net earnings for the third quarter 2007 were $15.4 million, as compared to net loss of $4.6 million in the prior year quarter. During the third quarter the company reported the effect of resolving two Internal Revenue Service examinations, 2003 statute of limitations expiration and filing of various reports to settle potential tax liabilities resulting in a decrease to income tax expense of approximately $4.9 million. Net earnings for the first forty weeks of 2007 were $30.3 million, as compared to net earnings of $3.4 million in the prior-year period. Total company sales for the sixteen week third quarter of 2007 were $1.3 billion compared to $1.4 billion in the prior-year quarter. Sales for the first forty weeks of 2007 were $3.4 billion compared to $3.5 billion in the prior-year period. The third quarter and year-to-date sales declines of 4.2% and 2.0%, respectively, result primarily from the transition of a large customer to another supplier which was announced earlier this year, the closure of unprofitable retail stores, and to a lesser degree customer attrition that occurred in 2006 that has not yet been fully offset by new customer gains in 2007. "I remain quite pleased with the overall improvements our company has made thus far this year, and specifically the improvements in EBITDA visible in the third quarter results," Alec Covington, President and CEO of Nash Finch, said. "EBITDA as a percentage of sales increased once again among all three business units versus the prior year, a trend which we have been able to sustain throughout 2007. These accomplishments have primarily resulted from improved inventory management resulting in higher gross margins and lower product cost, as well as significant reductions in our overall expense structure." During the third quarter and year-to-date periods of 2007, the Company repaid $16.0 million and $41.3 million, respectively, of debt on its senior credit facilities. The company continues to focus on effectively managing its working capital, reducing indebtedness, improving cash flow, and is currently in compliance with all of its debt covenants. The debt leverage ratio as of the end of the third quarter 2007 was 2.51, a significant improvement from 3.42 at the end of fiscal 2006. Availability on the company's revolving credit facility at the end of the quarter was $105.9 million. As of Oct. 6, 2007, the company's balance sheet showed total assets of $981.5 million and total liabilities of $657.9 million, resulting in a $323.6 million stockholders' equity. Notice of Default On Sept. 10, 2007, Nash Finch received a purported notice of default, which was subsequently reissued on Sept. 27, 2007, to correct a procedural defect in the initial notice, from certain hedge funds who are beneficial owners purporting to hold at least 25% of the aggregate principal amount of the Notes. The hedge funds alleged in the notice that Nash Finch was in breach of Section 4.08(a)(5) of the Indenture governing the Notes, which provides for an adjustment of the conversion rate on the Notes in the event of an increase in the amount of certain cash dividends to holders of Nash Finch's common stock. Nash Finch believes it made all required adjustments to the conversion rate on the Notes after it increased the quarterly dividends paid to shareholders from $0.135 to $0.18 per share and, accordingly, does not believe that a default has occurred under the Indenture. However, to avoid any uncertainty, Nash Finch has asked the Trustee to execute a supplemental indenture clarifying the company's obligations with respect to such increases in its quarterly dividends. The Indenture trustee has filed an action in the Hennepin County District Court, in Minneapolis, Minnesota for an order determining its obligations with respect to the supplemental indenture. Nash Finch has filed its own action in the same court, seeking a determination that the supplemental indenture is proper and should be executed, and that regardless of whether the supplemental indenture is executed, no default has occurred under the Indenture. Under the terms of the Indenture, if a default has occurred, Nash Finch would have 30 days from the date of receipt of a valid notice of default to cure. Nash Finch has asked the Court to toll the 30 day cure period while the Court determines whether the Indenture trustee must execute the supplemental indenture and whether Nash Finch adjusted the conversion rate in accordance with the requirements of the Indenture. If the Court determines the hedge fund's assertion to be correct, Nash Finch would cure the default by making an upward adjustment in the conversion rate of 0.4307 shares per $1,000 bond. "In consultation with our legal and financial advisors, Nash Finch determined that it made all required adjustments to the conversion rate on the Notes, and therefore we are confident that no event of default has occurred," Bob Dimond, Executive Vice President and CFO of Nash Finch, said. "We are disappointed that this small group of noteholders has chosen to pursue this path -- it appears to be nothing more than an opportunistic attempt to achieve financial gain that is well beyond what they are due." About Nash Finch Headquartered in Minneapolis, Minnesota, Nash Finch Company (NASDAQ:NAFC) -- http://www.nashfinch.com/-- distributes food products. Nash Finch's core business, food distribution, serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods(R), Family Thrift Center(R) and Sun Mart(R) trade names. NASH FINCH: Board Approves One Million Share Repurchase Program --------------------------------------------------------------- The Board of Directors of Nash Finch Company authorized, last week, a share repurchase program authorizing the company to purchase up to 1 million shares of the company's common stock. The program will take effect on Nov. 19, 2007 and will continue until Jan. 3, 2009. Notice of Default On Sept. 10, 2007, Nash Finch received a purported notice of default, which was subsequently reissued on Sept. 27, 2007, to correct a procedural defect in the initial notice, from certain hedge funds who are beneficial owners purporting to hold at least 25% of the aggregate principal amount of the Notes. The hedge funds alleged in the notice that Nash Finch was in breach of Section 4.08(a)(5) of the Indenture governing the Notes, which provides for an adjustment of the conversion rate on the Notes in the event of an increase in the amount of certain cash dividends to holders of Nash Finch's common stock. Nash Finch believes it made all required adjustments to the conversion rate on the Notes after it increased the quarterly dividends paid to shareholders from $0.135 to $0.18 per share and, accordingly, does not believe that a default has occurred under the Indenture. However, to avoid any uncertainty, Nash Finch has asked the Trustee to execute a supplemental indenture clarifying the company's obligations with respect to such increases in its quarterly dividends. The Indenture trustee has filed an action in the Hennepin County District Court, in Minneapolis, Minnesota for an order determining its obligations with respect to the supplemental indenture. Nash Finch has filed its own action in the same court, seeking a determination that the supplemental indenture is proper and should be executed, and that regardless of whether the supplemental indenture is executed, no default has occurred under the Indenture. Under the terms of the Indenture, if a default has occurred, Nash Finch would have 30 days from the date of receipt of a valid notice of default to cure. Nash Finch has asked the Court to toll the 30 day cure period while the Court determines whether the Indenture trustee must execute the supplemental indenture and whether Nash Finch adjusted the conversion rate in accordance with the requirements of the Indenture. If the Court determines the hedge fund's assertion to be correct, Nash Finch would cure the default by making an upward adjustment in the conversion rate of 0.4307 shares per $1,000 bond. "In consultation with our legal and financial advisors, Nash Finch determined that it made all required adjustments to the conversion rate on the Notes, and therefore we are confident that no event of default has occurred," Bob Dimond, Executive Vice President and CFO of Nash Finch, said. "We are disappointed that this small group of noteholders has chosen to pursue this path -- it appears to be nothing more than an opportunistic attempt to achieve financial gain that is well beyond what they are due." About Nash Finch Headquartered in Minneapolis, Minnesota, Nash Finch Company (NASDAQ:NAFC) -- http://www.nashfinch.com/-- distributes food products. Nash Finch's core business, food distribution, serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods(R), Family Thrift Center(R) and Sun Mart(R) trade names. NATURADE INC: Obtains $1.2 Mil. Exit Financing from Redux Holdings ------------------------------------------------------------------ Naturade Inc. said Tuesday that its controlling shareholder, Redux Holdings Inc., has completed an infusion of new capital into the company in the amount of $1,200,000, finalizing the plan of reorganization under Chapter 11 as approved by the United States Bankruptcy Court allowing Naturade to emerge from bankruptcy. In addition to a comprehensive debt restructuring, the reorganization plan features an equity provision rarely observed in companies emerging from bankruptcy. Of particular note, the plan allows for Naturade to retain its status as a public company through the retention of an equity interest by the existing public shareholders and the Bankruptcy Code allows for the registration of all of the equity shares of Naturade. "Although it has taken a bit longer than originally anticipated, [Tues]day's news reaffirms that our efforts have been for a good cause and that the reorganization process remains a valid method to repair companies that are worth saving," stated Adam Michelin, Naturade's Chairman. "Naturade is now clear of the bankruptcy process and has the financial resources to meet the demands of its customers. Equally important, our employees can refocus their efforts on rebuilding and growing a premium brand that has helped develop the 'health food' industry before there was one." The money was privately raised with help from The Ventana Group based in Menlo Park and Lawrence Financial Group based in Los Angeles. About Redux Holdings Inc. Redux Holdings (PINKSHEETS: RDXH) -- http://www.reduxholdings.com/ -- acquires the assets of companies and isolates, recombines and manages those assets to increase their value and develop profitable strategic options. The company is distinguished by the extensive experience of its personnel in identifying, analyzing and stabilizing these business opportunities and effecting efficient turnaround and asset monetization. About Naturade Inc. Based in Brea, California, Naturade Inc. (OTC BB:NRDCE.OB) -- http://www.naturade.com/-- distributes nutraceutical supplements. The company filed for chapter 11 protection on Aug. 31, 2006 (Bankr. C.D. Calif. Case No. 06-11493). Richard H. Golubow, Esq., Robert E. Opera, Esq. and Sean A. O'Keefe, Esq., at Winthrop Couchot P.C., in Newport Beach, California, represent the Debtor. When the Debtor filed for protection from its creditors, it listed assets of $10,255,402 and debts of $18,427,161. NEPTUNE CDO: Moody's Junks Ratings on Six Note Classes ------------------------------------------------------ Moody's Investors Service downgraded seven classes of notes issued by Neptune CDO V Ltd., with four of these classes left on review for further possible downgrade. The notes affected by the rating action are : -- $190,000,000 Class A-1LA-1 Floating Rate Notes Due January 2045 Prior Rating: A2, on review for possible downgrade Current Rating: Ba1, on review for possible downgrade -- $35,000,000 Class A-1LA-2 Floating Rate Notes Due January 2045 Prior Rating: Baa2, on review for possible downgrade Current Rating: Caa1, on review for possible downgrade -- $25,000,000 Class A-1LB Floating Rate Notes Due January 2045 Prior Rating: Baa3, on review for possible downgrade Current Rating: Caa2, on review for possible downgrade -- $41,000,000 Class A-2L Floating Rate Notes Due January 2045 Prior Rating: Ba3, on review for possible downgrade Current Rating: Caa3, on review for possible downgrade -- $9,000,000 Class A-3L Floating Rate Notes Due January 2045 Prior Rating: B1, on review for possible downgrade Current Rating: Ca -- $9,000,000 Class A-4L Floating Rate Notes Due January 2045 Prior Rating: Caa2, on review for possible downgrade Current Rating: Ca -- $10,000,000 Class A-5L Floating Rate Notes Due January 2045 Prior Rating: Caa3, 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. 2, 2007 of an event of default caused by a failure of the Senior Class A Overcollateralization Ratio to exceed the required level pursuant to Section 5.1(f) of the Indenture, dated June 7, 2007. Neptune CDO V Ltd. is an ABS collateralized debt obligation backed primarily by a portfolio of RMBS securities, CMBS securities and ABS CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to effect the calculation of overcollateralization. Thus, the Senior Class A Overcollateralization Ratio failed to meet 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-1LA-1, Class A-1LA-2, Class A-1LB and Class A-2L Notes remain on review for possible downgrade pending the receipt of definitive information. NEW YORK RACING: U.S. Trustee and PBGC Balk at Chapter 11 Plan -------------------------------------------------------------- The United States Trustee for Region 2 and Pension Benefit Guaranty Corporation, a creditor committee member, each filed their objection to the disclosure statement explaining The New York Racing Association Inc.'s proposed Chapter 11 Plan of Reorganization. The U.S. Trustee and PBGC assert that the Debtor's Disclosure Statement have failed to provide adequate information under Section 1125 of the Bankruptcy Code. The U.S. Trustee points out that statutory fees, which include quarterly fees due to the U.S. Trustee, should not be classified as "administrative expense claims" under the Plan. According to the U.S. Trustee, the treatment of quarterly fees in the Plan fails to take into consideration the estate's liability for that fees under Section 1930(a)(6) of the Bankruptcy Court. On the other hand, PBGC tells the Court that the Debtor failed to disclose approximately $14 million in additional contribution due to certain pension plans, which information is necessary to determine the feasibility of the Debtor's Plan. To date, PBGC says, the Debtor made no statement regarding whether it intends to satisfy the remaining contribution. As reported in the Troubled Company Reporter on Oct. 29, 2007, the Debtor's Plan incorporated a proposed compromise and settlement of these issues disputed between the Debtor and the State of New York including, among others: a. State's motion to dismiss the Debtor's bankruptcy case; b. adversary litigation; and c. proofs of claims filed by the State against the Debtor's estate. Salient provisions of the settlement agreement: i. The State and the Debtor will enter into the franchise agreement that provides the Debtor with franchise from Jan. 1, 2008 to Dec. 31, 2037. ii. The adversary litigation will be dismissed with prejudice. iii. The State's request to dismiss will be withdrawn. iv. The Debtor will transfer all of its right, title and interest in the racetracks to the State. v. The State will provide up to $75,000,000 to allow the Debtor to satisfy all valid claims. Treatment of Claims Under the Plan, Administrative, Priority Tax and Priority Non-Tax Claims will be paid in cash in full. On the effective date, each holder of Secured Claim will be entitled to receive, either: a) cash payment in full; b) sale proceeds of the property securing its claim; c) surrender of the property securing its claim; or d) other distribution necessary to satisfy the requirments of the Bankruptcy Code. Each holder of General Unsecured Claims will be entitled to receive an amount equal to the holder's pro rata share of the cash available for distribution. Holders are expected to recover 100% under the Plan. Subject to certain exceptions, the Debtor tells the Court that the Unsecured Creditors whose allowed claim is more than $10,000, has the option to reduce the amount to at least $10,000 and entitled to receive cash in equal to the amount of the allowed convenience claim on the effective date. Holders of Insured Litigation Claims will be entitled to proceed with the liquidation of their claim, including any litigation pending as of the Debtor's bankruptcy filing. Pension Benefit Guaranty Corporation's claim will be withdrawn on the effective date upon the payment of approximately $17,400,000 into the pension benefit plan, and in turn, the Debtor will assume the benefit plan and obligation of contributing sponsor under ERISA. Holders of Convenience Claims will be entitled to receive cash in an amount equal to the amount of its claim. In the alternative, each holders may elect to be treated as General Unsecured Claim and receive its pro rata share of the cash available for distribution. Penalty Claims will receive its pro rata share of cash available for distribution under the Plan. Equity Interest and State Claim holders will not be entitled to receive or retain any property under the Plan. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071026012415 A full-texy copy of the Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=071026012643 About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. The U.S. Trustee for Region 2 appointed an Official Committee of Unsecured Creditors and Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Committee. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NOMURA ALT-A: Moody's Lowers and Reviews Ratings on 10 Deals ------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 48 tranches and placed under review for possible downgrade the ratings of 30 tranches from 10 deals issued by Nomura in 2006 and late 2005. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also incorporated its published methodology updates to the non delinquent portion of the transactions. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR6 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to Baa3, previously A1, -- Cl. M-3, Downgraded to B2, previously A3, -- Cl. M-4, Downgraded to Ca, previously Baa1, -- Cl. M-5, Downgraded to C, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AF1 -- Cl. I-A-4 Currently Aaa on review for possible downgrade, -- Cl. I-A-5 Currently Aaa on review for possible downgrade, -- Cl. I-M-1 Currently Aa2 on review for possible downgrade, -- Cl. I-M-2, Downgraded to Ba2, previously A2, -- Cl. I-M-3, Downgraded to Caa2, previously Baa2, -- Cl. II-A Currently Aaa on review for possible downgrade, -- Cl. C-B-1 Currently Aa2 on review for possible downgrade, -- Cl. C-B-2, Downgraded to B2, previously A2, -- Cl. C-B-3, Downgraded to Caa3, previously Baa2, -- Cl. C-B-4, Downgraded to C, previously Ba3, -- Cl. C-B-5, Downgraded to C, previously B2, -- Cl. III-A-2 Currently Aaa on review for possible downgrade, -- Cl. IV-A-2 Currently Aaa on review for possible downgrade, -- Cl. V-A Currently Aaa on review for possible downgrade. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AF2 -- Cl. I-M-1 Currently Aa2 on review for possible downgrade, -- Cl. I-M-2, Downgraded to Baa2, previously A2, -- Cl. I-M-3, Downgraded to B2, previously Baa2, -- Cl. II-A Currently Aaa on review for possible downgrade, -- Cl. C-B-1 Currently Aa2 on review for possible downgrade, -- Cl. C-B-2, Downgraded to B2, previously A2, -- Cl. C-B-3, Downgraded to Caa2, previously Baa2, -- Cl. III-A-2 Currently Aaa on review for possible downgrade, -- Cl. IV-A Currently Aaa on review for possible downgrade, -- Cl. V-A-2 Currently Aaa on review for possible downgrade, -- Cl. V-M-1 Currently Aa2 on review for possible downgrade, -- Cl. V-M-2, Downgraded to Baa2, previously A1, -- Cl. V-M-3, Downgraded to Ba2, previously A3, -- Cl. V-M-4, Downgraded to B2, previously Baa1, -- Cl. V-M-5, Downgraded to Caa3, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AP1 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to Baa2, previously A2, -- Cl. M-3, Downgraded to B3, previously Baa2, Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AR1 -- Cl. B-1 Currently Aa2 on review for possible downgrade, -- Cl. B-2, Downgraded to Baa3, previously A2, -- Cl. B-3, Downgraded to B3, previously Baa2, -- Cl. B-4, Downgraded to Caa3, previously Ba2, -- Cl. B-5, Downgraded to C, previously B2, -- Cl. V-M-2, Downgraded to Baa1, previously A1, -- Cl. V-M-3, Downgraded to Ba3, previously A3, -- Cl. V-M-4, Downgraded to Ca, previously Baa1, -- Cl. V-M-5, Downgraded to C, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AR2 -- Cl. I-A Currently Aaa on review for possible downgrade, -- Cl. C-B-1 Currently Aa2 on review for possible downgrade, -- Cl. C-B-2, Downgraded to B1, previously A2, -- Cl. C-B-3, Downgraded to Caa2, previously Baa2, -- Cl. C-B-4, Downgraded to C, previously Ba2, -- Cl. C-B-5, Downgraded to C, previously B2, -- Cl. II-A-3 Currently Aaa on review for possible downgrade, -- Cl. III-M-1 Currently Aa2 on review for possible downgrade, -- Cl. III-M-2, Downgraded to A3, previously A1, -- Cl. III-M-3, Downgraded to Ba1, previously A3, -- Cl. III-M-4, Downgraded to B2, previously Baa1, -- Cl. III-M-5, Downgraded to Ca, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AR3 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to A3, previously A1, -- Cl. M-3, Downgraded to Baa3, previously A3, -- Cl. M-4, Downgraded to Ba3, previously Baa1, -- Cl. M-5, Downgraded to B2, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-AR4 -- Cl. A-1B Currently Aaa on review for possible downgrade, -- Cl. A-4A Currently Aaa on review for possible downgrade, -- Cl. A-4B Currently Aaa on review for possible downgrade, -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa2, previously A1, -- Cl. M-5, Downgraded to Ba3, previously A3, -- Cl. M-6, Downgraded to Caa1, previously Baa1, -- Cl. M-7, Downgraded to Ca, previously Baa3. Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2006-WF1 -- Cl. M-3, Downgraded to Baa3, previously Baa2, -- Cl. M-4, Downgraded to Ba3, previously Baa3. Issuer: Nomura Home Equity Loan, Inc. Home Equity Loan Trust, Series 2006-AF1 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to Baa3, previously A2, -- Cl. M-3, Downgraded to B2, previously Baa2. NOVASTAR FINANCIAL: Has $80.7 Million Equity Deficit at Sept. 30 ---------------------------------------------------------------- NovaStar Financial Inc.'s balance sheet as of Sept. 30, 2007, showed total assets of $4.54 billion, total liabilities of $4.62 billion, resulting in total stockholders' deficit of $80.7 million. NovaStar reported a net loss available to common shareholders of $598.0 million for the third quarter ended Sept. 30, 2007. Third- quarter 2006 net income available to common shareholders was $25.3 million. For the third quarter ended Sept. 30, 2007, the company had a net loss of $595.3 million on interest income of $96.9 million, as compared with net income of $28.5 million on interest income of $98.1 million. For the third quarter 2007, NovaStar raised its provisions for credit losses to $99.1 million from $10.2 million in the same quarter a year ago. Faced with continued deterioration of nonprime lending fundamentals and the secondary market for loans, NovaStar has taken several actions to preserve liquidity, curtail risks associated with originating or holding loans and reduce its workforce. NovaStar implemented these actions during the third quarter: -- The company raised $48.8 million in equity capital in July through a sale of convertible preferred securities to institutional investors. As conditions deteriorated further, additional fundraising through a shareholder rights offering was canceled in September. -- NovaStar suspended wholesale lending operations in August, closing two operations centers and reducing its workforce, while meeting loan commitments that already had been made. -- The company sharply reduced retail, or direct-to-consumer, activity. About 12 retail offices were closed in September, the workforce was further reduced, and the remaining retail organization shifted to brokering loans for other lenders rather than originating loans for NovaStar. -- The company transferred $300.5 million in mortgage loans in a transaction that was a sale from a legal perspective but a financing transaction for GAAP financial reporting. The sale resulted in a decrease in cash of approximately $5 million. These loans had not been securitized, and the sale enabled the company to reduce warehouse borrowing, as well as to eliminate exposure to cash margin calls in connection with the loans. -- In September, NovaStar canceled a dividend that had been planned based on its 2006 taxable income as a Real Estate Investment Trust. This caused the company's REIT status to be terminated, retroactive to Jan. 1, 2006, and NovaStar is now taxed as a C corporation. Subsequent to Sept. 30, 2007, NovaStar has taken these additional steps: -- NovaStar sold mortgage servicing rights and servicing advances related to securitized loans to another servicer for proceeds of approximately $147 million, after deduction of certain expenses and a $7.9 million holdback, closing the transaction on Nov. 1, 2007. Proceeds were used to reduce debt and for working capital. The holdback is to be released upon the delivery of all closing documents and is expected to be used to reduce debt. NovaStar has substantially reduced its servicing staff to handle a significantly smaller number of loans. -- The company sold $364.3 million in mortgage loans. The cash impact for loans that settled in the fourth quarter will be minimal. -- In the interest of conserving liquidity, the Board of Directors has suspended payment of the next regularly scheduled dividend on the company's Series C Preferred Stock and Series D-1 Preferred Stock. -- NovaStar has requested a review of a determination by NYSE Regulation Inc., that the company's common stock and Series C Preferred stock should be de-listed by the exchange. The review of this determination is scheduled for Dec. 5, 2007. However, the company believes there is a high likelihood that its securities will be de-listed from the NYSE following the review. Although NovaStar is exploring alternative arrangements for the listing or quoting of its common stock and preferred stock, trading is likely to take place on the OTCBB. "As the mortgage environment has grown progressively worse through 2007, we have greatly reduced our business activity and simplified our organization," said Scott Hartman, Chairman and Chief Executive Officer. "Going forward, our strategy is to manage the cash flows from our portfolio of mortgage-backed securities and operate our retail brokerage operations." Liquidity and Borrowing Capacity Subsequent to the end of the third quarter, NovaStar completed the sale of mortgage servicing rights and servicing advances to Saxon Mortgage Services Inc. Total proceeds to NovaStar, resulting from the transaction were approximately $147 million after deduction of certain expenses and a $7.9 million holdback. Proceeds were used to reduce debt and for working capital. The holdback is to be released upon the delivery of all closing documents and is expected to be used to reduce debt. As of Sept. 30, 2007, the company was out of compliance with the net worth covenant in its financing facilities with Wachovia. The company has obtained a waiver of this non-compliance through Nov. 30, 2007, and intends to repay all outstanding indebtedness to Wachovia as soon as practicable. The company expects to be out of compliance with the net worth covenant subsequent to Nov. 30, 2007, and there can be no assurance that the company will be able to obtain additional waivers or amendments from Wachovia or that it will be able to repay its outstanding indebtedness to Wachovia. Dividends NovaStar does not plan to pay dividends on its common stock for the foreseeable future. As a result of the termination of the company's REIT status, the obligation to distribute 2006 taxable income no longer applies. The Board of Directors has suspended payment of the quarterly dividend of $.55625 per share on NovaStar's 8.90% Class C Cumulative Redeemable Preferred Stock, which otherwise would have been paid in December, in accordance with the articles supplementary of the company's charter establishing the Series C Preferred Stock. Unpaid dividends on the Series C Preferred Stock will continue to accrue. The Board of Directors also has suspended payment of the cumulative semi-annual dividend of $1.125 per share on NovaStar's 9.0% Class D-1 Convertible Preferred Securities, which otherwise would have been paid in January, in accordance with the articles supplementary of the company's charter establishing the Series D-1 Preferred Stock. Unpaid dividends on the Series D-1 Preferred Stock will continue to accrue and the dividend rate on the Series D-1 Preferred Stock will increase from 9.0% to 13.0%, compounded quarterly, effective Jan. 16, 2008, with respect to all unpaid dividends and subsequently accruing dividends. Portfolio Management In the third quarter, NovaStar transferred $300.5 million in loans to mitigate future margin calls and resulted in a decrease in cash of approximately $5 million. The transaction was a sale from a legal perspective but recorded as a financing transaction for financial reporting purposes. Subsequent to Sept. 30, 2007, the company sold a substantial portion of its remaining whole loans, further reducing risks. Investor concerns over deteriorating credit quality in the nonprime market have continued to cause declines in the fair value of NovaStar's mortgage securities, as well as its remaining whole loans held-for-sale. Mortgage Banking Currently, NovaStar is not engaged in mortgage banking activities, but is brokering loans for other lenders. The company does not intend to re-enter mortgage banking until the economics turn more favorable. About NovaStar Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- is a specialty finance company that originates, purchases, securitizes, sells and invests in loans and mortgage-backed securities. The company also services a large portfolio of residential loans. NOVASTAR FINANCIAL: Inks Waiver Agreement with Wachovia Bank ------------------------------------------------------------ NovaStar Financial Inc. and certain of its affiliates last week entered into a Master Repurchase Agreements Waiver with Wachovia Bank, N.A. and certain of its affiliates. Under the waiver agreement, Wachovia agreed not to enforce, for a period ending on Nov. 30, 2007, the adjusted tangible net worth requirement under certain agreements, and waived, for the same period, any breach or event of default that would have resulted under the agreements solely as a result the company's failure to maintain the required adjusted tangible net worth. Wachovia expressly reserved the right to terminate the waiver agreement prior to Nov. 30, 2007, if any event of default or breach occurs under the agreements other than solely as a result the company's failure to maintain the required adjusted tangible net worth. These are the agreements affected by the waiver agreement: 1. Master Repurchase Agreement (2007 Residual Securities) dated as of April 18, 2007, among Wachovia Investment Holdings LLC, Wachovia Capital Markets LLC, NovaStar Mortgage Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 2. Master Repurchase Agreement (2007 Whole Loan) dated as of May 9, 2007, among Wachovia Bank, National Association, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI Property Financing Inc., HomeView Lending Inc., NovaStar Financial Inc., NFI Holding Corporation and NovaStar Mortgage Inc. 3. Master Repurchase Agreement (2007 Non-investment Grade) dated as of May 31, 2007, among Wachovia Investment Holdings LLC, Wachovia Capital Markets LLC, NovaStar Mortgage Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 4. Master Repurchase Agreement (2007 Investment Grade) dated as of May 31, 2007, among Wachovia Bank, N. A., Wachovia Capital Markets LLC, NovaStar Mortgage Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 5. Master Repurchase Agreement (New York) dated as of July 6, 2007, between Wachovia Bank, National Association and NovaStar Mortgage Inc. In addition to the financing agreements above, Wachovia also routinely engages in other ordinary course financial transactions with the company, including but not limited to financial derivative transactions, and has acted as an underwriter for certain securitizations sponsored by the company. About NovaStar Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- is a specialty finance company that originates, purchases, securitizes, sells and invests in loans and mortgage-backed securities. The company also services a large portfolio of residential loans. NOVASTAR FIN'L: Mulls Bankruptcy Filing Due to Bank Loan Default ---------------------------------------------------------------- NovaStar Financial Inc. stated in its quarterly report filed yesterday with the Securities and Exchange Commission that it may file for bankruptcy due to certain causes, including a probable default in its covenant with Wachovia Bank NA. Expected Default on Wachovia Covenant As of Sept. 30, 2007, the company was out of compliance with the net worth covenant in its repurchase agreements with Wachovia but has obtained a waiver to be in compliance. The waiver expires on Nov. 30, 2007. The company expects to be out of compliance with the net worth covenant subsequent to Nov. 30, 2007 and there can be no assurance that the company will be able to obtain additional waivers or amendments. If the company cannot obtain additional waivers or amendments, there can be no assurance Wachovia would not issue an event of default and cause the outstanding borrowings to become due and payable immediately which also could cause the company to file bankruptcy. The company has made it a priority to repay its outstanding borrowings with Wachovia and has been selling its mortgage assets to generate cash to repay these borrowings. The company's plan is to continue to use available cash inflows in excess of its immediate operating needs, including debt service payments, to repay all of Wachovia's outstanding borrowings and any remaining fees due under the repurchase agreements at the earliest practical date. As of Nov. 13, 2007, the company had $83.9 million of short-term borrowings outstanding with Wachovia and still owed approximately $11.8 million in commitment fees. The cash flows which the company will use to repay Wachovia will most likely be generated from these sources: -- remaining proceeds from the sale of mortgage servicing rights; -- sale or liquidation of nonperforming assets; and -- monthly cash proceeds from its portfolio of mortgage securities. While the company believes that it can successfully repay Wachovia in a manner that is to Wachovia's satisfaction, there can be no assurance the company will be able to generate the cash flows needed to meet Wachovia's repayment expectations. During and after this period of repayment, any new advances or availability provided to the company will be at Wachovia's sole discretion and there can be no assurance of any future advances or availability under the Wachovia facilities. As a result, any unforeseen adverse liquidity events could cause the company to exhaust its cash balances and may result in the company filing bankruptcy. Additionally, if the company were unable to repay Wachovia to their satisfaction, there can be no assurance Wachovia would not issue an event of default and cause the outstanding borrowings to become due and payable immediately which also could cause the company to file bankruptcy. Cash Balance Decline & Wachovia Margin Calls As a result of the 2007 subprime environment, the company used up significant cash reserves during the nine months ended Sept. 30, 2007. The company's cash balances declined by about $99.0 million during the nine months ended Sept. 30, 2007 primarily due to these events: During the nine months ended Sept. 30, 2007, poor credit performance of subprime loans and wider bond spreads on mortgage- backed securities caused a significant decline in the fair value of the company's mortgage securities as well as its mortgage loans held-for-sale. Consequently, during the nine and three months ended Sept. 30, 2007, the company was subject to cash margin calls of approximately $138.0 million and $57.7 million, respectively, on the company's mortgage securities and mortgage loans held-for- sale. The company could continue to be subject to additional margin calls if the value of its mortgage assets declines further. In October 2007, the company was subject to an additional $26.5 million margin call on its mortgage loans and securities by Wachovia. The company satisfied the margin call by using its availability under the Mortgage Servicing Rights and Residual Securities facilities. There is no assurance that if the company is subject to additional margin calls that it will be able to satisfy them. If the company is unable to satisfy them it may be forced to file bankruptcy. Pending Suit Filed by American Interbanc In March 2002, an action was filed against NovaStar Home Mortgage Inc. in Superior Court of Orange County, California entitled American Interbanc Mortgage, LLC v. NovaStar Home Mortgage Inc. et. al. In the action, the plaintiff alleged that NHMI and two other mortgage companies, defendants, engaged in false advertising under a California statute permitting lawsuits by a competitor. Plaintiff amended its complaint subsequently to allege also that Defendants engaged in unfair competition under a different California statute and interfered intentionally with plaintiff's prospective economic relations. On May 4, 2007, a jury returned a verdict by a 9-3 vote awarding plaintiff $15.9 million. The court trebled the award, made adjustments for amounts paid by settling Defendants, and entered a $46.1 million judgment against Defendants on June 27, 2007. The award is joint and several against the three defendants including NHMI. It is unknown if the other two defendants have the financial ability to pay any of the award. One of the other defendants has filed a bankruptcy petition. NHMI's motion for the trial court to overturn or reduce the verdict was denied on Aug. 20, 2007. NHMI is currently appealing the decision. There can be no assurances that the appeal will be successful. NHMI has a negative net worth and no ability to pay the judgment and as a result management believes that it is unlikely the judgment will ever be paid by NHMI. NovaStar does not believe that the plaintiff has a valid legal basis to hold NovaStar or its subsidiaries other than NHMI responsible for the judgment. But should the plaintiff be successful at any attempt, NovaStar may be forced to consider bankruptcy. In accordance with generally accepted accounting principles, NHMI has recorded a liability of $47.2 million as of Sept. 30, 2007 with a corresponding charge to earnings. The $47.2 million includes interest which is accruing on the obligation. Because NHMI is a wholly owned indirect subsidiary of NovaStar, the $47.2 million liability is included in the consolidated financial statements of NovaStar. The liability is included in "Liabilities of discontinued operations" line of the condensed consolidated balance sheets while the charge to earnings is included in the "(Loss) income from discontinued operations, net of income tax" line of the consolidated statements of operations. About NovaStar Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- is a specialty finance company that originates, purchases, securitizes, sells and invests in loans and mortgage-backed securities. The company also services a large portfolio of residential loans. NUVEEN INVESTMENTS: Moody's Cuts Rating on Senior Notes to B3 ------------------------------------------------------------- Moody's Investors Service downgraded Nuveen Investments Inc.'s senior unsecured notes to B3 from Baa1 following the completion of the company's leveraged buyout by an investor group led by Madison Dearborn Partners LLC. This concludes the review for downgrade that began on June 20, 2007. With the completion of the transaction, the ratings that were previously assigned to Windy City Acquisition Corp. are now in effect for Nuveen as the acquisition company used to fund the transaction has been subsequently merged into Nuveen: -- $250 million 6-year senior secured revolver at Ba3 -- $2.315 billion 7-year senior secured term loan at Ba3 -- Corporate family rating at B1 -- $785 million 8-year senior unsecured notes at B3 The outlook for the ratings is stable. The rating agency stated that today's downgrade is a result of Nuveen's increased financial leverage with the acquisition of the company by MDP. Moody's had previously announced its expectation for the downgrade on Oct. 17, 2007 based upon the proforma financial profile of the company. According to Moody's, Nuveen's increased financial leverage and the structural subordination of the $550 million of existing senior unsecured notes are the drivers of the rating change. Moody's VP/senior credit officer Matthew Noll commented, "By increasing its debt from $550 million to $3.65 billion, Nuveen's financial flexibility has been dramatically diminished as seen by substantial deterioration in the company's total debt / EBITDA and EBITDA / interest expense coverage." The rating agency added that Nuveen benefits from its leading positions in closed-end funds and separately-managed accounts, its improving diversification in terms of product and customer types, and an expectation that it will return to higher profit margins as it decreases leverage over time. Furthermore, Nuveen's plans for the build-up of a larger institutional client base and a greater international presence could be modestly accelerated under the ownership of MDP. Moody's added that Nuveen would see further downward rating pressure if total debt / EBITDA or EBITDA / interest expense rises above 8x and below 1.1x, respectively; its market share of closed end funds and retail separately managed accounts is reduced to less than half of its current levels; or if it experienced several consecutive quarters of material net outflows. Conversely, reducing total debt / EBITDA to less than 5x, increasing AUM to above 3% of the total US open-end mutual funds, along with increasing institutional AUM to 30% of its total AUM could lead to upward rating action. These ratings have been downgraded: Nuveen Investments Inc. -- $250 million, 5-year unsecured notes due 2010 to B3 from Baa1; -- $300 million, 10-year unsecured notes due 2015 to B3 from Baa1. Nuveen Investments Inc., headquartered in Chicago, is a US- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. The company's assets under management were $170 billion as of Sept. 30, 2007. PEABODY ENERGY: Fitch Affirms BB+ Issuer Default Rating ------------------------------------------------------- Fitch affirmed these ratings for Peabody Energy Corporation's: -- Issuer Default Rating at 'BB+'; -- Senior unsecured notes at 'BB+'; -- Senior unsecured revolving credit and term loan at 'BB+'; -- Convertible junior subordinated debentures due 2066 at 'BB- '. The Outlook is Stable. The ratings reflect Peabody's large, well diversified operations, good control of low cost production, strong liquidity and moderate leverage. In particular, Peabody ranks first in the Wyoming Powder River Basin with 2006 sales of 138 million tons and reserves of 3.3 billion tons and first in the Midwest with 2006 sales of 39 million tons and reserves of 4.1 billion tons. On Oct. 31, 2007, Peabody completed the spin-off of Patriot Coal Corporation to shareholders. Patriot has coal assets and operations in West Virginia and Kentucky. While the transaction will increase Peabody's financial leverage slightly, it will decrease the company's legacy liabilities by roughly $1 billion and reducing related annual expenditures by about $100 million. Liquidity at quarter end was strong with cash on hand of $216.3 million ($159.7 million pro forma for the Patriot spin-off) and availability under its revolver of $1.35 billion. Total Debt with Equity Credit/EBITDA for the latest 12 months ended Sept. 30, 2007 was 3.5x. Pro forma for the Patriot spin-off, leverage on the same measure would have been 3.6x. Peabody has substantial legacy liabilities and adjusted leverage remains over 4X post the Patriot spin-off. Peabody is the largest US coal producer fueling 10% of domestic electricity generation and the fifth largest coal producer in Australia. In 2006, Peabody sold 247.6 million tons of coal and had year end reserves of 10.2 billion tons. PETROLEUM GEO: Arrow Seismic Deal Cues S&P to Hold 'BB-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit ratings on Norway-based oilfield services company Petroleum Geo-Services ASA following an announcement that it intends to acquire Norway-based Arrow Seismic ASA. The outlook is stable. "The affirmation reflects our view that the transaction is favorable from a business standpoint, as it will give PGS additional marine acquisition vessel capacity," said Standard & Poor's credit analyst Jeffrey B Morrison. "The transaction will be entirely debt financed. As a result, we expect the company's credit measures to temporarily rise above levels acceptable for the current ratings. However, we expect PGS to use free operating cash flow to reduce debt in 2008 and bring its ratios back into line with our expectations for the ratings," Mr. Morrison said. Pro-forma debt/EBITDA is expected to rise to about 2.5-3x, but is expected to decline to below 2.0x by year end 2008, which is our targeted level for the rating in the current industry upcycle. The ratings on PGS reflect the company's participation in the very competitive and highly cyclical seismic subsector of the oilfield services industry. They also reflect management's increasing focus on rewarding shareholders and acquisitions and the company's aggressive financial risk profile. S&P's concerns are partly offset by PGS' strong market position, a sizable and sophisticated fleet, and a favorable near term operating environment. PGS conducts operations through two primary business segments: marine geophysical operations (about 76% of total revenues) and onshore geophysical operations (about 20%). The company's marine seismic operations, in particular, benefit from a solid market position. The stable outlook incorporates S&P's expectations that currently favorable industry conditions, a healthy near-term project backlog, and improved organic cash flow will help management to quickly bring the company's credit ratios back into line with the expectations for the ratings. PILGRIM'S PRIDE: Earns $33.2 Million in Quarter Ended Sept. 29 -------------------------------------------------------------- Pilgrim's Pride Corporation reported a net income of $33.2 million on record sales of $2.15 billion for the fourth fiscal quarter ended Sept. 29, 2007. These results include a charge of $12.0 million, $7.1 million net of tax, related to the early extinguishment of debt incurred by the company in connection with the calling of its 9-5/8% bonds in September. For the fourth quarter of fiscal 2006, the company reported a net loss of $7.5 million on total sales of $1.34 billion. "Industry fundamentals remained solid in the fourth quarter as strong export demand and low cold-storage inventories helped sustain positive market pricing trends," O.B. Goolsby Jr., Pilgrim's Pride president and chief executive officer, said. "Our improved profitability compared to the prior-year period resulted from higher market pricing for chicken products and an improved product mix as we succeeded in upgrading some of our commodity- type meat into higher-margin, value-added products. In addition, our consumer retail segment continued to post good growth as a result of increased penetration of supermarket meat and deli cases and our growing role as a category management partner." Despite favorable industry fundamentals and the year-over-year improvement in profitability, Mr. Goolsby acknowledged that the company's earnings for the fourth quarter were below its own expectations. He said operational inefficiencies and higher fuel costs resulted in higher production and freight costs during the quarter. "Automation will be a key focus of our capital investment program in fiscal 2008. We believe this investment, which includes labor- reducing technology, will enable us to move more products through our plants efficiently and help alleviate some of the recent issues related to a tight labor market and higher input costs," Mr. Goolsby explained. For the full 2007 fiscal year, the company reported net income of $47.0 million on record sales of $7.60 billion. Included in these results were charges of $26.5 million, $15.8 million net of tax related to the early extinguishment of debt incurred by the company in connection with the financing for the Gold Kist acquisition and in connection with the calling of the company's 9- 5/8% bonds in September. In fiscal 2006, Pilgrim's Pride reported a net loss of $34.2 million on sales of $5.24 billion. As of Sept. 29, 2007, the company's balance sheet showed total assets of $$3.7 billion and total liabilities of $2.6 billion, resulting in a $1.1 billion stockholders' equity. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Pilgrim's Pride Corp. holds Moody's Investors Service's B1 senior unsecured credit rating, B2 senior subordinated notes, and Ba3 corporate family ratings. PPC's planned new $250 million senior unsecured notes also bears Moody's B1 rating and its new $200 million senior subordinated notes bears Moody's B2 rating. The outlook on all ratings is stable. Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a 'BB-' corporate credit rating. PLAINS EXPLORATION: Provides Final Results of Pogo Elections ------------------------------------------------------------ Plains Exploration & Production Company disclosed the final results of elections made by stockholders of Pogo Producing Company for the form of merger consideration to be received in the merger of Pogo with and into PXP Acquisition LLC, a wholly owned subsidiary of PXP. The final results of elections are: -- Cash Elections: Pogo stockholders who validly elected to receive cash will receive approximately $56.53 in cash and 0.0396 of a share of PXP common stock for each share of Pogo common stock with respect to which that election was made; -- Stock Elections: Pogo stockholders who validly elected to receive PXP common stock will receive 1.1870 shares of PXP common stock for each share of Pogo common stock with respect to which that election was made; and -- Non-Elections: Pogo stockholders who did not make a valid election will receive 1.1870 shares of PXP common stock for each share of Pogo common stock. The cash election and stock election were subject to proration calculations pursuant to the merger agreement. Under the merger agreement, cash will be issued in lieu of fractional shares of PXP. Payment of the cash portion of the merger consideration began on Nov. 13, 2007. About Pogo Producing Headquartered in Houston, Texas, Pogo Producing Company (NYSE: PPP) -- http://www.pogoproducing.com/-- explores for, develops and produces oil and natural gas. Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. About Plains Exploration & Production Headquartered in Houston, Plains Exploration & Production Co. (NYSE: PXP) - http://www.plainsxp.com/-- is an independent oil and gas company primarily engaged in the upstream activities of acquiring, developing, exploiting, exploring and producing oil and gas in its core areas of operation: onshore and offshore California, Colorado and the Gulf Coast region of the United States. * * * As reported in the Troubled Company Reporter on Nov. 8, 2007, Standard & Poor's Ratings Services affirmed its 'BB' corporate rating on independent oil and gas company Plains Exploration & Production Co., and removed from CreditWatch and withdrew its 'BB' corporate credit rating on Pogo Producing Co. PLAINS EXPLORATION: Earns $32.9 Mil. in Quarter Ended Sept. 30 -------------------------------------------------------------- Plains Exploration & Production Company disclosed financial and operating results for the third quarter 2007. PXP reported third quarter 2007 net income of $32.9 million on revenues of $299.0 million, compared to the third quarter 2006 net income of $272.7 million on revenues of $280.9 million. Third quarter 2006 results included a $345.5 million pre-tax gain on sale of oil and gas properties. For the first nine months of 2007, PXP reported net income of $78.7 million on revenues of $779.2 million, compared to net income of $213.9 million on revenues of $810.9 million. Results for the nine month period of 2006 included a $345.5 million pre-tax gain on sale of oil and gas properties partially offset by a $299.9 million derivative loss. At Sept. 30, 2007, the company's balance sheet showed total assets of $3.9 billion and total liabilities of $2.7 billion, resulting in a stockholders' equity of $1.2 billion. Outlook Oil and gas capital expenditures, excluding acquisitions, are expected to be $850 million to $950 million for the year ended 2007. The increase from the previous estimate is primarily attributed to additional development spending associated with the recent Gulf of Mexico exploration successes, higher capitalized costs related to the Piceance properties and two months of capital related to Pogo Producing Company. About Plains Exploration & Production Headquartered in Houston, Plains Exploration & Production Co. (NYSE: PXP) - http://www.plainsxp.com/-- is an independent oil and gas company primarily engaged in the upstream activities of acquiring, developing, exploiting, exploring and producing oil and gas in its core areas of operation: onshore and offshore California, Colorado and the Gulf Coast region of the United States. * * * As reported in the Troubled Company Reporter on Nov. 8, 2007, Standard & Poor's Ratings Services affirmed its 'BB' corporate rating on independent oil and gas company Plains Exploration & Production Co., and removed from CreditWatch and withdrew its 'BB' corporate credit rating on Pogo Producing Co. POLAR REFRIGERANT TECHNOLOGY: Involuntary Chapter 11 Case Summary ----------------------------------------------------------------- Alleged Debtor: Polar Refrigerant Technology, L.L.C. P.O. Box 157 Stratham, NH 03885 Case Number: 07-12544 Type of Business: The Debtor is involved in the cleaning and selling of gas cylinders. Involuntary Petition Date: November 13, 2007 Court: District of New Hampshire (Manchester) Judge: Mark W. Vaughn Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Danube International, Ltd. loans $850,000 c/o Steve Barnes P.O. Box 922 Hampton, NH 03843 Steve Barnes American Express $26,500 P.O. Box 922 loan-Polar Hampton, NH 03843 PROGRESSIVE GAMING: Posts $39.7 Million Loss in Third Quarter ------------------------------------------------------------- Progressive Gaming International Corporation reported a net loss of $39.7 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $3.2 million in the corresponding quarter last year. The company incurred a net loss from continuing operations in the three months ended Sept. 30, 2007, of approximately $4.7 million, inclusive of a one-time charge of $800,000 associated with the early retirement of debt of the company's Senior Credit Facility. In the three months ended Sept. 30, 2006, the company incurred a net loss from continuing operations of $5.4 million. Systems revenues, now reported as the sole component of revenues from continuing operations, rose 29% to $18.3 million for the quarter ended Sept. 30, 2007, from $14.2 million in the same period a year ago. Systems revenues for the quarter ended Sept. 30, 2007, were relatively consistent with systems revenues for the quarter ended June 30, 2007, which also reflected a high level of growth. The results of operations from the recently divested slot and table game routes along with the associated losses for the write down of the related assets are included in the discontinued operations line item of the company's statement of operations. As a result of the completion of table game division sale, the company recorded a charge of approximately $35 million in the third quarter of 2007. The charge represents additional costs related to the disposition of this division and includes a $24.7 million charge related to the Webb vs. Mikohn legal settlement. This accrual consists of the $20 million settlement fee the company paid from cash on hand on Nov. 5, 2007, and legal fees of approximately $4.7 million which are due 30 business days from the execution of the agreement. The net gain from discontinued operations for the third quarter of 2006 was approximately $2.1 million and included a $3.5 million table games patent license agreement. Commenting on the results, Progressive Gaming International Corporation president and chief executive officer, Russel McMeekin, stated, "Our transition to a company that is solely focused on supplying leading systems technology for the global gaming industry is now complete and we believe Progressive is solidly positioned to achieve sustainable high-margin revenue growth." Progressive Gaming International Corporation executive vice president, chief financial officer and treasurer, Heather Rollo, added, "Growing customer acceptance of our system-centric products combined with the benefits of our recurring revenue business model is raising visibility for our future prospects. During the 2007 third quarter we recorded year-over-year systems revenue growth of 29%. Systems revenues of $51.9 million through the first nine months of 2007 reflect a 29%, or $11.7 million, improvement over the comparable period in 2006. In addition, we are benefiting from cost reduction initiatives undertaken throughout 2007 which have eliminated approximately $7.0 million in annualized costs. The year-over-year growth in systems revenues and our success in streamlining our operations resulted in gross margin from operations of 55% for the 2007 third quarter period, which is consistent with our targeted 2007 gross margin range of 54% to 58%. Gross margins improved to 54%, or by more than 300 basis points through the first nine months of 2007 compared to the first nine months of 2006. "With the sale of our Table Games Division assets and the recent strategic financing, we were able to improve our balance sheet, and that has provided financial flexibility to allow us to continue to pursue opportunities for growth and to post the required bond in the ongoing Webb litigation matter. Notwithstanding the near-term use of capital to address this matter, we expect our debt repayment to continue in accordance with previously stated plans. We have issued a notice to redeem $15 million of our Senior Secured Notes on November 19 and intend to redeem these notes through borrowings or other financing sources. Our goal remains to further strengthen our balance sheet and eliminate the remainder of our high yield debt." Cash balance at Sept. 30, 2007, is $30.3 million and reflects cash used for repayment of Senior Credit Facility, the purchase of intellectual property under the company's strategic arrangement with IGT and other arrangements, the settlement of matters related to the company's legacy business and general working capital. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $150.3 million in total assets, $114.1 million in total liabilities, and $36.2 million in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $60.2 million in total current assets available to pay $109.0 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?2547 Going Concern Doubt Ernst & Young LLP, in Las Vegas, expressed substantial doubt about Progressive Gaming International Corp.'s ability to continue as a going concern in an modified audit report on the company's consolidated financial statements for the year ended Dec. 31, 2006, in light of recent developments related to the Webb litigation. The auditing firm reported that the company received an unfavorable ruling on their post-trial claims in the Webb litigation. As a result, on Nov. 5, 2007, the company executed a Settlement Agreement and Mutual Release with Webb. The company will pay $24.7 million to Webb, including legal fees, in exchange for a dismissal and release of all claims. The execution of the Settlement Agreement may constitute an Event of Default under the company's Senior Credit Facility. To the extent the settlement agreement is deemed to be an Event of Default, and the company is unable to obtain a waiver or cure the Event of Default, the lender could seek acceleration of the outstanding balance of $10 million. In addition, prior to the ruling, the company had issued an irrevocable call notice to redeem $15 million of their Senior Notes on Nov. 19, 2007. About Progressive Gaming Headquartered in Las Vegas, Progressive Gaming International Corp. (NasdaqGM: PGIC) -- http://www.progressivegaming.net/-- is a supplier of integrated casino and jackpot management system solutions for the gaming industry worldwide. This technology is widely used to enhance casino operations and drive greater revenues for existing products. Products include multiple forms of regulated wagering solutions in wired, wireless and mobile formats. PROVIDENCE SERVICE: Moody's Puts Corporate Family Rating at B2 -------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating to Providence Service Corporation. Concurrently, Moody's also assigned a B1 to the company's proposed senior secured credit facilities comprised of these: $40 million senior secured revolver, $173 million senior secured term loan and a $40 million delayed draw term loan. Additionally, Moody's assigned a B2 Probability of Default Rating and an SGL-2 Speculative Grade Liquidity Rating. The outlook for the ratings is stable. Proceeds from the proposed credit facilities and proposed $70 million convertible subordinated notes (unrated by Moody's), along with roll-over equity from existing LogistiCare Inc. senior management, will be used to complete the acquisition of LogistiCare by Providence Service for a total consideration of $256.5 million including about $17.7 million of existing debt. The B2 Corporate Family Rating reflects the pro forma high leverage, customer contract concentration with Medicaid and government payers, acquisitive nature of Providence Service, and inherent seasonality. Pro forma for the acquisition of LogistiCare, adjusted debt to EBITDA will be about 5.9 times. Moody's expects the company's leverage position to remain above 5 times over the intermediate term. Sidney Matti, analyst, stated that, "Providence Service has been very active with acquisitions with seven acquisitions, including LogistiCare, aggregating over $240 million since January 2006." Moody's anticipates that the company will continue its acquisition strategy in order to further strengthen its market position and expand its service offerings. Due to the budgetary nature of the Medicaid business and the school segment business, the company has an inherent seasonality focused on the second and third quarters. The B2 Corporate Family Rating also considers pro forma leading market positions, stability in the renewal of contracts and stable free cash flow generation. Moody's notes that, on a pro forma basis, the company is the leader in both the Medicaid counseling and case management home based services and the management and arrangement of outsourced Medicaid non-emergency transportation services. Since its inception as a company, Providence Service has had its state contracts renewed, while LogistiCare has only had one contract (Georgia) not renewed. On a pro forma basis, Moody's anticipates that the company will generate stable free cash flow resulting from improving operating performance from new contracts as well as minimal capital expenditures requirement within the business model. The stable ratings outlook anticipates the company will continue to experience improving operating performance driven by the favorable demographic trends related to growth in Medicaid eligible individuals, realization of revenues from recently signed contracts and the continued outsourcing of government services. Additionally, the rating outlook incorporates Moody's expectation that the company will continue its acquisition strategy over the near term. However, Moody's anticipates that the company will undertake smaller acquisitions (less than $20 million) over the ratings horizon. The SGL-2 speculative grade liquidity rating to Providence Service reflects a good liquidity profile comprised of Moody's expectation for stable cash flow generation, effective availability under the $40 million proposed senior secured revolving credit facility and adequate cushion under the financial covenants. Ratings are subject to review of final documentation. These ratings were assigned to Providence Service Corporation: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; -- SGL-2 Speculative Grade Liquidity Rating; -- B1 rating (LGD3/37%) on a $40 million Senior Secured Revolver; -- B1 rating (LGD3/37%) on a $173 million Senior Secured Term Loan; and -- B1 rating (LGD3/37%) on a $40 million Delayed Draw Term Loan. Headquartered in Tucson, Arizona, Providence Service Corporation is a provider and manager of government sponsored social services. For the twelve months ended Sept. 30, 2007, the company reported about $242 million in revenues. Headquartered in Atlanta, Georgia, LogistiCare Inc. is an information technology-based provider of outsourced transportation management to health and human service organizations. LogistiCare is currently in the process of being acquired by Providence Service. For the twelve months ended Sept. 30, 2007, the company generated about $319 million in revenues. QUEBECOR WORLD: Moody's Junks Rating on New $400 Mil. Senior Notes ------------------------------------------------------------------ Moody's Investors Service rated Quebecor World Inc.'s new $400 million senior unsecured note issue Caa1. At the same time, ratings for about $1.6 billion of existing senior unsecured notes for QWI and its wholly-owned subsidiary companies, Quebecor World Capital Corporation and Quebecor World Capital ULC, were downgraded to Caa1 from B3. In addition, QWI's corporate family rating was affirmed at B3, the ratings outlook for all instruments was revised to stable from negative, and QWI's speculative grade liquidity rating was upgraded to SGL-3 from SGL-4. The actions reflect the combined impact of two significant ongoing transactions, the first of which is partial divestiture of QWI's European operations. This will remove a cash flow drag and management distraction while converting the operation into a small amount of cash and a semi-liquid residual investment. Secondly, a CDN$250 million common share issue together with proceeds from the new senior unsecured note issue and a concurrent $100 million convertible debenture facilitates redemption of QWI's Series 5 Preferred Shares (CDN$175 million), and a reduction of what would otherwise be outstanding under a new, 2-year, $375 million (partially) secured and guaranteed revolving credit facility. The resulting improvement in liquidity and modest improvement in ongoing cash generation combine to cause the favorable ratings outlook revision and SGL rating upgrade. However, with it being confirmed that QWI's bank credit facility will permanently benefit from a package of security and upstream subsidiary guarantees not shared with its senior unsecured notes, the bank credit facility's preferential access to realization proceeds triggers the notes' ratings to be downgraded by one notch to Caa1. The new notes are rated at the same Caa1 level as the company's existing notes. The rating action assumes that the proposed transactions close as expected and that the related documentation conforms to what has been provided to Moody's thus far. Accordingly, the ratings are subject to adjustment should the transactions not close, or should they close on a basis different than that presented to Moody's. Assignment: Issuer: Quebecor World, Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD4, 60) Downgrades: Issuer: Quebecor World, Inc. -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD4, 60) from B3 (LGD4, 55) Issuer: Quebecor World Capital Corporation -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD4, 60) from B3 (LGD4, 55) Issuer: Quebecor World Capital ULC -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD4, 60) from B3 (LGD4, 55) Upgrades: Issuer: Quebecor World, Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Outlook Actions: Issuer: Quebecor World Capital Corporation -- Outlook, Changed To Stable From Negative Issuer: Quebecor World Capital ULC -- Outlook, Changed To Stable From Negative Issuer: Quebecor World, Inc. -- Outlook, Changed To Stable From Negative On Nov. 12, 2007, QWI announced the above-noted financing transactions. On Nov. 7, 2007, QWI announced that it had entered into a definitive agreement to combine its European operations with those of RSDB NV's Roto Smeets, a Netherlands-based commercial printing company. With QWI retaining a 29.9% minority interest in the combined entity, Moody's views the transaction as being modestly positive by way of a problem operation being effectively divested, but with very little cash being returned, there is no immediate, significant financial benefit. Accordingly, Moody's continues to be very cautious in evaluating QWI's longer term prospects. In the interim, QWI's CFR remains B3, albeit Moody's sees the company as being weakly positioned at the B3 rating level. Headquartered in Montreal, Quebec, Canada, Quebecor World Inc. is one of the world's largest commercial printers. QUEBECOR WORLD: S&P Rates Proposed $400 Million Senior Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services kept its ratings on Montreal- based printing company Quebecor World Inc. on CreditWatch with negative implications following the company's announcement of its refinancing plan. On Aug. 9, 2007, Standard & Poor's placed the ratings on CreditWatch with negative implications; on Aug. 28, 2007, S&P subsequently lowered the ratings and kept them on CreditWatch with negative implications because of Quebecor World's weak operating performance, reduced financial flexibility, and the possibility that the company would not be in compliance with its covenants for certain senior unsecured notes (since resolved). The ratings will remain on CreditWatch until Standard & Poor's is comfortable that the company has addressed its near-term liquidity issues. At the same time, Standard & Poor's assigned its 'B' debt rating to Quebecor World's proposed $400 million senior unsecured notes due 2014. The 'B' debt rating will be placed on CreditWatch with negative implications. "The CreditWatch update follows Quebecor World's announcement of a proposed refinancing plan," said Standard & Poor's credit analyst Lori Harris. This plan includes a new CDN$250 million public equity offering; a new $400 million senior unsecured notes offering; a new $100 million senior unsecured convertible debentures offering (unrated); and an amendment of the company's credit facilities, including the reduction in the revolving credit facility to $375 million from $750 million, the extension of the maturity date by one year to January 2010, and changes to the covenants. "The successful completion of these transactions will improve the company's financial flexibility and liquidity position, which have been weak," Ms. Harris added. Proceeds from the proposed refinancing will be applied to the balance outstanding on the revolving credit facility, to redeem the series 5 preferred shares for about CDN$175 million, and for general corporate purposes. On Nov. 7, 2007, the company announced that it had signed a definitive share purchase agreement with Dutch printer RSDB NV (Roto Smeets) to sell Quebecor World's European operations to RSDB. The proposed new company, Roto Smeets Quebecor, which will be the leading player in the European printing industry, will be owned 70.1% by RSDB and 29.9% by Quebecor World. The purchase price for Quebecor World's European business will be EUR240 million (equal to about $350 million), to be paid to Quebecor World in cash, RSQ shares, and an eight-year note receivable. S&P expect the transaction to close shortly upon regulatory and shareholder approvals. Reported revenues and adjusted EBITDA were down 7% and 19%, respectively, for the nine months ended Sept. 30, 2007, compared with the same period in 2006. The weak performance is due to price pressures, volume declines, and operating inefficiencies. The company's recent completion of a significant equipment retooling program should positively affect profitability and cash flow in 2008. However, Standard & Poor's believes management will remain challenged in its efforts to turn around the business because of very difficult printing industry fundamentals, including ongoing pricing pressures and volume declines, electronic substitution, cyclicality, and significant competition. The ratings will remain on CreditWatch with negative implications until the successful completion of the equity offering, senior unsecured notes offering, senior unsecured convertible debentures offering, and closing of the sale of Quebecor World's European business to RSDB under the existing terms and conditions. RAMPART CLO: Moody's Rates $16.35 Million Class E Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Rampart CLO 2007 Ltd.: -- Aaa to the $384,000,000 Class A Floating Rate Notes due 2021; -- Aa2 to the $26,100,000 Class B Floating Rate Notes due 2021; -- A2 to the $25,100,000 Class C Deferrable Floating Rate Notes due 2021; -- Baa2 to the $15,300,000 Class D Deferrable Floating Rate Notes due 2021; and -- Ba2 to the $16,350,000 Class E Deferrable Floating Rate Notes due 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of dollar-denominated debt securities, Loans, Equity Securities, Finance Leases, & Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stone Tower Debt Advisors LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. REAL ESTATE: Moody's Holds Low-B Ratings on 6 Certificate Classes ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 18 classes of Real Estate Asset Liquidity Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-2 as: -- Class A-1, $322,901,720, affirmed at Aaa -- Class A-2, $212,794,000, affirmed at Aaa -- Class XP-1, Notional, affirmed at Aaa -- Class XP-2, Notional, affirmed at Aaa -- Class XC-1 Notional, affirmed at Aaa -- Class XC-2, Notional, affirmed at Aaa -- Class B, $9,330,000, affirmed at Aa2 -- Class C, $14,773,000, affirmed at A2 -- Class D-1, $8,805,000, affirmed at Baa2 -- Class D-2, $4,413,000, affirmed at Baa2 -- Class E-1, $1,943,500, affirmed at Baa3 -- Class E-2, $1,943,500, affirmed at Baa3 -- Class F, $4,665,000, affirmed at Ba1 -- Class G, $3,110,000, affirmed at Ba2 -- Class H, $1,555,000, affirmed at Ba3 -- Class J, $1,555,000, affirmed at B1 -- Class K, $1,555,000, affirmed at B2 -- Class L, $777,000, affirmed at B3 As of the Oct. 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 4.1% to $596.3 million from $622 million at securitization. The certificates are collateralized by 95 loans, ranging in size from less than 1% to 9.2% of the pool, with the top 10 non-defeased loans representing 46% of the pool. The pool includes five investment grade shadow rated loan groups, representing 21.5% of the pool. One loan, representing 1.3% of the pool, has defeased and is collateralized with Canadian government securities. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Thirteen loans, representing 13.2% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 71.4% of the pool. Moody's loan to value ratio for the conduit component is 85.2%, compared to 86.1% at securitization. Moody's is affirming all classes due to stable overall pool performance. The largest shadow rated loan concentration is the SRI Portfolio Loan ($55 million -- 9.2%), which is secured by a portfolio of 190 stand-alone restaurants (424,589 square feet in total) located in seven provinces with the greatest concentrations in Ontario (42.6%) and Quebec (32.7%). The properties are leased to two franchisee groups, Kit (60%) and Priszm Brands (40%). All properties are governed by eight, 15-year master leases. The restaurants are primarily branded as Kentucky Fried Chicken. The loan matures in October 2010 and is interest-only for its entire term. There is also a $10 million B Note held outside the trust. Occupancy is 99.4%, compared to 100% at securitization. Moody's current shadow rating is A1, the same as at securitization. The second largest shadow rated loan concentration is the Innvest Portfolio Loan ($31 million -- 5.9%), which is secured by a cross- collateralized/cross-defaulted pool of four hotels. The properties are operated as Radisson Hotels, include a total of 707 rooms and are located in Toronto, Kitchener and London, Ontario and Laval, Quebec. The loan matures in November 2014 and amortizes on a 300- month schedule. The loan is recourse to the borrower. Moody's current shadow rating is Baa3, the same as at securitization. The third largest shadow rated loan is Toronto Congress Centre Loan ($19.9 million -- 3.4%), which is secured by a 500,000 square foot convention center located in Mississagua, Ontario. The loan matures in October 2015 and amortizes on a 240-month schedule. Moody's current shadow rating is Aa3, the same as at securitization. The fourth largest shadow rated loan is 1849 Yonge Street Loan ($13.9 million -- 2.3%), which is secured by a 97,125 square foot office building located in downtown Toronto. The loan is interest only for the first 36 months of the term, converting to a 360- month amortization schedule thereafter. Moody's current shadow rating is Baa3, the same as at securitization. The fifth largest shadow rated loan is Jutland Road Loan ($8.2 million -- 1.4%), which is secured by an 87,908 square foot office building located in Victoria, British Columbia. The loan matures in September 2015 and amortizes on a 180-month schedule. The loan is on the master servicer's watchlist due to lease expirations. The loan is recourse to the borrower. Moody's current shadow rating is Baa2, the same as at securitization. The top three conduit loans represent 15.7% of the pool. The largest conduit loan is the AMEC Building Loan ($36.4 million -- 6.1%), which is secured by a 13-story, 222,291 square foot, Class A office building located in the Vancouver CBD. The loan matures in August 2015 and amortizes on a 300-month schedule. The loan is recourse to the borrower. Moody's LTV is 81.1%, compared to 79.7% at securitization. The second largest conduit loan is the Kitchner Portfolio Loan ($31.1 million -- 5.2%), which is secured by two cross- collateralized/cross-defaulted loans secured by two office properties, totaling 400,219 square feet and located in Kitchner, Ontario. The loan matures in October 2015 and amortizes on a 25- year schedule. Moody's LTV is 94.3%, compared to 95.1% at securitization. The third largest conduit loan is the LaSalle Portfolio Loan ($26.9 million -- 4.4%), which is secured by a 798,391 square foot eight-building warehouse/office complex located in LaSalle, Quebec. Moody's LTV is 91.3%, compared to 86.4% at securitization. RELIANCE INTERMEDIATE: Moody's Rates $293MM Senior Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating with a stable outlook to Reliance LP's CDN$1.075 billion Senior Secured Notes and a Ba2 rating to Reliance Intermediate Holdings LP's $293 million of Senior Secured Notes. According to Moody's analyst Bart Oosterveld, "the ratings reflect the significant leverage and relatively aggressive growth forecasts, mitigated by the structural features enhancing the position of bondholders, as well as Reliance's strong market position in a duopoly market for water heating products and services." Proceeds of the notes will be applied to transaction costs and to repay bridge facilities used by Alinda Capital Partners when it acquired Reliance Home Comfort in June of this year. The Opco Notes are secured by a perfected first priority security interest in all shares and partnership interests of Reliance LP, as well as a security interest in certain accounts maintained by a depositary. The Holdco Notes are secured by a perfected first priority security interest in the partnership interests in the Issuer held by its corporate parent entities. Moody's notes that in conjunction with the current transaction, Reliance LP also plans to enter into a CDN$240 million capital expenditure/liquidity bank facility, which will rank pari passu with the Opco Notes. Moody's ratings incorporate these key factors: Reliance's water heating division provides an essential service and exhibits significant business stability. Reliance is one of two companies enjoying an effective duopoly in market for water heating products and services in the province of Ontario. The water heating business is characterized by economies of scale, long asset lives and low maintenance, and has been a consistent source of significant financial margins to the company; The stability and nature of Reliance's water heater business is a key factor mitigating some of the risk factors present in the proposed transactions, including the company's significant prospective leverage and the use of non-amortizing debt. In Moody's opinion, while the company's projected debt service coverage levels and other financial metrics provide some comfort to noteholders, the stability and margins of the water heater business underpin the credit ratings; While significant barriers to entry exist in certain market segments that Reliance operates in, the company's divisions operate in unregulated, competitive markets; Noteholders benefit from a variety of structural provisions to enhance their position: these include standard ringfencing provisions such as limitations on business purposes and corporate separateness, as well as a payment waterfall structure at the Opco level and a six month debt service reserve account. Moody's notes as a weakness in the structure the fact that deposits into the waterfall will occur on a quarterly, rather than a monthly basis. Through its different operating segments, Reliance Home Comfort (formerly UE Waterheater Income Fund) installs and maintains home comfort products, primarily water heaters, security alarm systems and monitoring services, and HVAC and related products. It is headquartered in Toronto. RELIANCE INTERMEDIATE: S&P Rates $293 Million Secured Notes at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BBB-' debt rating to Reliance LP's CDN$1.075 billion senior secured notes (a portion of which will be issued in U.S. dollars) maturing 2012 through 2017. At the same time, Standard & Poor's assigned its 'BB-' debt rating, with a recovery rating of '5', to Reliance Intermediate Holdings LP's approximately $293 million (CDN$275 million) senior secured notes due 2014. The '5' recovery rating indicates the expectation of modest (10%-30%) recovery if a payment default occurs. The ratings are subject to review of final documentation and legal review. Proceeds from the issue will be used to refinance the bridge debt that was used to purchase Reliance Comfort LP, formerly the UE Waterheater Income Trust. The operating businesses (Reliance Home Comfort) consist of renting, installing, and servicing home comfort products and services such as water heaters; heating, ventilation, and air conditioning equipment; security systems, and related monitoring services; and other related products and services. All assets are located in Canada, with the core water heater business operating only in Ontario. Both Reliance and RIHLP are indirectly owned by Alinda Capital Partners LLC, an independent infrastructure fund. The ratings reflect the very stable and predictable cash flows generated from the water heater business, tempered with the more variable and higher risk security monitoring business, which generates approximately 20% of EBITDA. "The water heater business has a strong business risk profile and we consider it an investment-grade business while the security monitoring business has characteristics of a speculative-grade business," said Standard & Poor's credit analyst Ronald Charbon. S&P consider the consolidated financial profile of Reliance and RIHLP to be highly leveraged. The ratings also reflect certain structural features. Reliance will be a special purpose, bankruptcy remote operating partnership formed to indirectly own the companies that operate a portfolio of home comfort businesses; and the ratings assume that Reliance meets Standard & Poor's criteria for special purpose entities, including the provision of an independent director and a nonconsolidation opinion. RIHLP's notes will be structurally subordinated to the Reliance notes and all of its cash flows for debt payment and equity distributions will be received after obligations at Reliance have been satisfied. REMY WORLDWIDE: Files Supplement to Prepackaged Chapter 11 Plan --------------------------------------------------------------- Remy and its debtor affiliates delivered to the Court on Nov. 7, 2007, a plan supplement in support of their Joint Prepackaged Plan of Reorganization. To recall, the Debtors filed a Prepackaged Plan on Oct. 9, 2007. The Plan provides for, among others, (i) full payment of secured and unsecured claims; (ii) a backstopped rights offering to raise $85 million in preferred equity; (iii) the exchange of existing 8-5/8% Senior Notes for $100 million of new third lien notes and $45 million in cash, (iv) the conversion of certain subordinated notes into common equity of the company; and (v) the cancellation of all existing equity interests in Remy. The Plan Supplement includes Principal Exit Financing Documents, Employee-Related Documents, and Corporate Governance Documents. Financing Documents The Principal Exit Financing Documents are comprised of: 1. The Intercreditor Agreements with respect to the (i) the First Lien Revolver Credit Facility and (ii) Second Lien Term Loan Facility The Debtors entered into the two Intercreditor Agreements with Barclays Bank PLC, as administrative agent of the financing facilities, and certain lenders, on October 10, 2007. The Revolver Cap Amount is $100 million minus the aggregate of all repayments and prepayments of the revolver obligations under the Revolver Credit Agreement. The Second Lien Cap Amount is $50 million minus the aggregate of all repayments and prepayments of the term loan obligations under the Second Lien Credit Agreement. 2. The Intercreditor and Subordination Agreement with respect to the Third Lien Notes The Plan provides for the issuance of new third lien notes. The Subordination Agreement provides that each of the Third Lien Noteholders agrees that the payment of the Third Lien Obligations is and will be subordinate to the prior payment in full of the First Lien and Second Lien Obligations. 3. The Borrower Pledge Agreement and the Borrower Security Agreement among the Debtors, as pledgors and grantors; and The Bank of New York Trust Company, N.A., as collateral agent for itself and the holders of Third Lien Notes Under the Pledge Agreement, to induce the Agent and the noteholders to accept the Third Lien Indenture and the related securities, the Pledgor Entities agree to pledge collateral, which include (i) limited liability company membership interests and (ii) certain shares of capital stock the Pledgors hold and own. Among the Pledgor Entities are Remy International, Inc., Remy International Holdings, Inc., Power Investments, Inc., and Reman Holdings, LLC. Under the Security Agreement, the Grantors agree to grant to the Collateral Agent a continuing Lien on certain personal property -- the Collateral -- to secure the prompt and complete payment and performance of all Obligations, including all reasonable out-of-pocket fees, costs, and expenses. Among the Grantor Entities are Remy International, Inc., Remy, Inc., Remy Sales, Inc., Remy Korea Holdings, L.L.C., Remy India Holdings, Inc., and M&M Knopf Auto Parts, L.L.C., Power Investments, Inc., and Reman Holdings, LLC. 4. The Intellectual Property Security Agreement, whereby Debtor Grantors agree to grant to The Bank of New York, as collateral agent for the Third Lien Noteholders, a continuing Lien on the Intellectual Property Collateral. The Intellectual Property Collateral includes patents, trademarks, copyrights and related licenses. 5. The Third-Priority Floating Rate Secured PIK Toggle Notes Due 2014 Indenture. The Bank of New York serves as trustee under the 2014 Indenture. Employee-Related Documents Included in the Plan Supplement are Amended Employment Agreements and Restricted Stock Award Agreements the Debtors will enter into with certain officers and directors. The Debtors will amend their Employment Agreements with John H. Weber, Kerry Shiba, John Pittas, David Muir, Gerald Mills, and Douglas C. Laux, whereby the Executives will receive these salaries and bonuses: Bonus ---------------------- Executive Base Salary Annual Long-term --------- ----------- ---------- ---------- John H. Weber $875,000 $2,400,000 $4,000,000 Kerry A. Shiba 469,000 1,006,000 1,670,000 John Pittas 378,000 507,780 990,000 David Muir 375,000 400,020 660,000 Gerald Mills 375,000 400,020 660,000 Douglas C. Laux 450,000 763,040 1,320,000 Under Remy's 2010 Long-Term Incentive Cash Bonus Plan and Remy's Amended Annual Incentive Bonus Plan, each Participant will be paid bonus upon the attainment of EBITDAR objectives established by the Company's Board of Directors. The Board will determine which employees of the Company will become participants of the Bonus Plans. Upon the occurrence of the Plan becoming effective, Mr. Weber will be paid an emergence bonus equal to 1.5 times his Base Salary. He will be employed and as the chief executive officer of Remy and will be a member of the company's Board of Directors. The other Executives, except for Mr. Laux, will be paid emergence bonuses equal to 0.75 times their Base Salaries. After the Effective Date, the Executives will also be entitled to receive an award of restricted common stock of Remy, par value $0.0001 per share, equal to the number of shares of Restricted Stock with a value equal to 2% of the total equity value of the Company immediately after the Effective Date. The shares will vest 12% of the shares on each of the first, second, and third anniversaries of the date of grant of the award and 32% on each of the fourth and fifth anniversaries of the Grant Date, provided that the Executive remains continually employed through each anniversary date and satisfies the terms of the applicable award. Under the Amended Employment Agreements, the Executives are eligible to participate in all pension, 401(k) and other employee pension benefit plans, policies and programs. Governance Documents The Plan Supplement also provides a copy of: * The Registration Rights Agreement, * Remy International, Inc.'s Amended and Restated By-laws, and * The Fourth Amended and Restated Certificate of Incorporation of Remy International, Inc. The Debtors disclose that these individuals will serve as directors of Reorganized Remy International, Inc.: 1. John H. Weber 2. Eric A. Scroggins 3. Brent B. Bickett 4. William P. Foley 5. Al Stinson 6. Norman Stout 7. Stephen Magee The individuals who will serve as officers of Reorganized RII, the Debtors add, are: Name Position ---- -------- John H. Weber CEO, President, and Director Gerald T. Mills Senior V-Pres., Chief Human Resources Officer David R. Muir Senior V-Pres., Chief Procurement Officer Douglas C. Laux Senior V-Pres., Chief Financial Officer John J. Pittas Senior V-Pres., President of the Electrical Aftermarket Business of Remy A full-text copy of the 610-page Remy Plan Supplement is available for free at http://ResearchArchives.com/t/s?255a Certain of the Plan documents remain subject to approval by some or all of the Plan Support Parties, the Committed Purchasers, the Steering Committee, the Informal Committee, the Debtors and certain other parties. The Debtors aver that the Plan Supplement is integral to the Plan and, if the Plan is approved, will be approved in the Confirmation Order. About Remy Worldwide Based in Anderson, Indiana, Remy Worldwide Holdings Inc. acts as a holding company of all the outstanding capital stock of Remy International Inc. Remy International -- http://www.remyinc.com/ -- manufactures, remanufactures and distributes Delco Remy brand heavy-duty systems and Remy brand starters and alternators, locomotive products and hybrid power technology. The company also provides a worldwide component core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy has operations in the United Kingdom, Mexico and Korea, among others. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 8, 2007 (Bankr. D. Del. Cases No. 07-11481 to 07-11509). Douglas P. Bartner, Esq., Fredric Sosnick, Esq., and Michael H. Torkin, Esq., at Shearman & Sterling LLP, represent the Debtors' in their restructuring efforts. Pauline K. Morgan, Esq., Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as co-counsels to the Debtors. The Debtors' claims agent is Kurtzman Carson Consultants LLC and their restructuring advisor is AlixPartners, LLC. The Debtors' taps Greenbert Traurig, LLP, as special corporate advisory and litigation counsel and Ernst & Young LLP as their accountant, auditor and tax services provider. At Sept. 30, 2006, Remy Worldwide's balance sheet showed total assets of $919,736,000 and total liabilities of $1,265,648,000. (Remy Bankruptcy News; Issue No. 7, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REMY WORLDWIDE: Plan Confirmation Hearing Set for November 20 ------------------------------------------------------------- A hearing to consider the confirmation of Remy Worldwide Holdings Inc. and its debtor-affiliates' Joint Prepackaged Plan of Reorganization has been set for Nov. 20, 2007. Based in Anderson, Indiana, Remy Worldwide Holdings Inc. acts as a holding company of all the outstanding capital stock of Remy International Inc. Remy International -- http://www.remyinc.com/ -- manufactures, remanufactures and distributes Delco Remy brand heavy-duty systems and Remy brand starters and alternators, locomotive products and hybrid power technology. The company also provides a worldwide component core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy has operations in the United Kingdom, Mexico and Korea, among others. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 8, 2007 (Bankr. D. Del. Cases No. 07-11481 to 07-11509). Douglas P. Bartner, Esq., Fredric Sosnick, Esq., and Michael H. Torkin, Esq., at Shearman & Sterling LLP, represent the Debtors' in their restructuring efforts. Pauline K. Morgan, Esq., Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as co-counsels to the Debtors. The Debtors' claims agent is Kurtzman Carson Consultants LLC and their restructuring advisor is AlixPartners, LLC. The Debtors' taps Greenbert Traurig, LLP, as special corporate advisory and litigation counsel and Ernst & Young LLP as their accountant, auditor and tax services provider. At Sept. 30, 2006, Remy Worldwide's balance sheet showed total assets of $919,736,000 and total liabilities of $1,265,648,000. (Remy Bankruptcy News; Issue No. 7, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) RIVERDEEP INTERACTIVE: Harcourt Deal Cues Moody's Rating Action --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Riverdeep Interactive Learning USA Inc.'s proposed $5.450 million senior secured first lien credit facilities and a Caa2 to its proposed $1,700 million senior secured second lien facilities. In addition, Moody's confirmed Riverdeep's B3 Corporate Family rating with a negative rating outlook. Details of the rating action are: Rating assigned: Riverdeep Interactive Learning USA Inc. -- $500 million senior secured first lien revolving credit facility due 2013 -- B1, LGD3, 32% -- $4,950 million senior secured first lien term loan B due 2014 -- B1, LGD3, 32% -- $600 million senior secured second lien term loan due 2014 -- Caa2, LGD5, 81% -- $1,100 million senior secured second lien delayed draw term loan due 2014 -- Caa2, LGD5, 81% Ratings confirmed: -- Corporate Family rating -- B3 -- Probability of Default rating -- B3 Ratings confirmed subject to withdrawal at closing: -- $250 million senior secured first lien revolving credit facility, due 2012 -- $2,120 million senior secured first lien term loan, due 2013 The rating outlook is negative. This concludes the review for possible downgrade which Moody's initiated on July 17, 2007, following the company's announcement that it planned to acquire the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier. Proceeds from the proposed facilities and $235 million of new cash common stock will be used to pay a cash consideration of $3,700 million for the Harcourt acquisition; refinance $2,087 million of existing Riverdeep senior secured debt facilities and $589 million of its existing unrated senior unsecured bridge facility; pay fees and expenses of $257 million; and provide $252 million in additional cash. In addition, Riverdeep will pay the seller an equity consideration, in common stock, valued by Riverdeep management at $300 million. Riverdeep plans to keep in place existing unrated debt, including Riverdeep Holdings Limited's $390 million senior unsecured facility, Riverdeep Group Limited's $447 million senior unsecured facility, Houghton Mifflin Company's $142 million senior secured notes and HM Receivables Co., LLC's $100 million securitization facility. Moody's notes that the proposed equity contribution will be more than consumed by fees and expenses associated with the proposed acquisition and related financing. The confirmation of Riverdeep's B3 Corporate Family rating reflects the increased market share which the Harcourt acquisition will bestow upon Riverdeep (increasing its market position in the US basal publishing segment to number two from number four) and management's expectation that the increased EBITDA and free cash flow resulting from the acquisition and related synergies will result in a meaningful reduction of consolidated leverage by the end of 2009. In addition, the rating confirmation incorporates (1) the formal decision of Riverdeep's board to abstain from pursuing any significant acquisition or any releveraging recapitalization over the next two year period and (2) management's commitment to apply the full net proceeds from the sale of its College division (if successfully concluded) to reduce term loan debt. The negative outlook reflects the large increase in Riverdeep's debt (which more than doubles) resulting from the proposed financing, uncertainty that Riverdeep will succeed in growing market share, delivering cost cutting synergies, and achieving positive free cash flow, to the degree currently planned by management, and the possibility that market conditions could prevent a meaningful rebound in some of Riverdeep's business lines. The B3 Corporate Family rating continues to underscore Riverdeep's heavy debt burden, high leverage, the rapid pace of the company's growth under its present owners and the integration risks which the company faces in connection with the proposed acquisition of Harcourt, on top of on-going integration related to the Houghton Mifflin, acquisition, which occurred less than a year ago. Additionally, the rating incorporates the fierce competition which Riverdeep faces from established educational publishing rivals, (including Pearson and McGraw Hill) and the secular threat which the market faces from increasing electronic substitution. Ratings are supported by the barriers which the capital-intensive basal publishing sector presents to new entrants, the importance associated with spending on K-12 educational materials, the reputation of the Houghton Mifflin, Harcourt and Riverdeep brand names, and the relatively strong state adoption calendar expected for the period 2007-2010. The proposed first lien credit facilities benefit from a guarantee of Riverdeep's parent, Riverdeep Interactive Learning Ltd., and all direct and indirect subsidiaries, including Riverdeep Inc. LLC, and Houghton Mifflin Company (excluding subsidiaries of Houghton Mifflin Company), and are secured by a pledge of the stock and substantially all assets of the guarantors. The proposed second lien facilities are guaranteed by the same parties which guarantee the second lien facilities, but with a second lien security interest. Riverdeep Interactive Learning USA Inc. is one of the largest U.S. educational publishers with revenues of about $2.4 billion for the LTM period ended June 30, 2007, pro forma for the Harcourt acquisition. The company is headquartered in Dublin, Ireland. ROGER ENGEN: Case Summary & Eight Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Roger Delano Engen 19916 Cohen Drive Juneau, AK 99801 Bankruptcy Case No.: 07-00599 Chapter 11 Petition Date: November 13, 2007 Court: District of Alaska (Juneau) Judge: Donald MacDonald IV Debtor's Counsel: Brock M. Weidner, Esq. Law Office of Brock M. Weidner P.O. Box 35152 Juneau, AK 99803 Tel: (907) 790-4434 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Bank Loan $53,300 P.O. Box 15026 Wilmington, DE 19850-5026 Key Bank Bank Loan $25,000 P.O. Box 94722 Cleveland, OH 44101 Wells Fargo Trade Debt $23,400 Wells Fargo Business District P.O. Box 348750 Sacramento, CA 95834 Citibank Bank Loan $23,000 Citibusiness Cards Discover Bank Loan $13,000 CBJ Trade Debt $12,000 Sears Plus Trade Debt $7,100 Capital One Bank Loan $2,000 ROUTE 66: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Route 66 Street Village Corporation P.O. Box 3183 Pinellas Park, FL 33781 Bankruptcy Case No.: 07-10971 Type of Business: The Debtor develops real estate and rental units. Chapter 11 Petition Date: November 13, 2007 Court: Middle District of Florida (Tampa) Judge: Paul M. Glenn Debtor's Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 North MacDill Avenue Tampa, FL 33609 Tel: (813) 877-4669 Fax: (813) 877-5543 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's list of its Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BB&T Credit Card $11,608 Bankcard Service Center P.O. Box 698 Wilson, NC 27894-0698 ASAP Equipment Rental Claim of Lien $8,600 5377 McIntosh Road Sarasota, FL 34233 Diane Nelson, Tax Collector Real Estate Taxes $8,000 P.O. Box 10832 Clearwater, FL 33757-8832 David A. Bacon, Esq. Legal Services $2,638 Harry W. Marlow, Inc. Survey Services $1,500 Environmental Analysis and Services $1,431 Permitting, Inc. Armstrong Environmental Services $943 Services SALANDER-O'REILLY: Wants to Use First Republic's $1.5MM DIP Fund ---------------------------------------------------------------- Salander-O'Reilly Galleries LLC asks the U.S. Bankruptcy Court for the Southern District of New York for permission to borrow up to $1.5 million in postpetition financing from its secured lender, First Republic Bank, the Associated Press reports. Salander-O'Reilly Galleries, AP says, will use the money to finance its operating costs. First Republic Bank already extended $25.3 million in prepetition loan to the Debtor, AP relates. The Court will hear the Debtor's request today, November 15. About Salander-O'Reilly Galleries Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. SCOTTISH RE: Moody's Holds (P)Ba3 Rating on Senior Unsecured Shelf ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Scottish Re Group Limited (senior unsecured shelf of (P)Ba3) and changed the outlook to negative from stable. The change in outlook applies to the company's debt ratings and the Baa3 insurance financial strength ratings of the company's core insurance subsidiaries, Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re Inc. All of the aforementioned ratings were affirmed. Moody's says that the change in outlook was driven primarily by adverse experience on the company's substantial exposure to subprime and Alt-A investments. As of the end of the third quarter, Scottish Re had about $3 billion of subprime ABS and Alt- A holdings, which represented 27% of its total investment portfolio. For the third quarter of 2007, the company reported a net loss of $109.5 million, driven by $102 million in realized losses on investments, including $95 million of subprime-related losses. According to Scott Robinson, Moody's vice president & senior credit officer, "Notwithstanding the relatively high quality of investments, the magnitude of the company's subprime and Alt-A exposure makes the company susceptible to further losses, especially in a severe downside scenario. While its operating income was in line with our expectations, credit challenges in the investment portfolio together with continued financial reporting control issues may make it more difficult for Scottish Re to regain the confidence of cedants and write meaningful amounts of new business." Moody's notes that although much of the subprime ABS and Alt-A exposure ($2.3 billion) resides in non-recourse securitization vehicles the company has sponsored, the company's substantial equity investments in these securitizations would be further eroded should the investment holdings experience additional realized losses. As further default experience on recent vintages of subprime and Alt-A investments emerges, Moody's will continue to evaluate the impact of potential ranges of investment losses on the company's financial condition. These ratings were affirmed, with the outlook changed to negative from stable: Scottish Re Group Limited: -- Senior unsecured shelf of (P)Ba3; -- subordinate shelf of (P)B1; -- junior subordinate shelf of (P)B1; preferred stock of B2; and -- preferred stock shelf of (P)B2 Scottish Holdings Statutory Trust II: -- preferred stock shelf of (P)B1 Scottish Holdings Statutory Trust III: -- preferred stock shelf of (P)B1 Scottish Annuity & Life Insurance Company (Cayman) Ltd.: -- IFS rating of Baa3 Premium Asset Trust Series 2004-4: -- senior secured debt of Baa3 Scottish Re Inc.: -- insurance financial strength of Baa3 Stingray Pass-Through Certificates: -- Baa3 (based on IFS rating of SALIC) On August 22, Moody's affirmed Scottish Re's ratings and changed the outlook to stable from positive. The rating action followed the company's disclosure of sizable holdings of subprime ABS and Alt-A holdings in its investment portfolio. Scottish Re Group Limited is a Cayman Islands company with principal executive offices located in Bermuda. On Sept. 30, 2007, Scottish Re reported total assets of $13.4 billion and shareholder's equity of $869 million. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. SMK SPEEDY: Need to Cut Overhead Costs Cues CCAA Bankruptcy Filing ------------------------------------------------------------------ SMK Speedy International Inc. obtained protection under the Companies' Creditors Arrangement Act on Nov. 8, 2007. "This action was necessary to allow the company the opportunity to complete the franchising of certain remaining corporate owned stores, the sale of others and the reduction of corporate overheads," said Dorsy Asplund, chief executive officer. "We are now in the process of franchising and selling the remaining stores as quickly as possible. We are confident that a strong franchise operation will emerge from this process. The majority of the Speedy locations have previously been franchised and are continuing to operate on a business as usual basis." KPMG LLP is the financial advisor to the company. Mintz & Partners Limited is the monitor in the Debtor's cases appointed by the Superior Court of Justice. Ontario-based SMK Speedy International Inc. -- http://www.speedy.com/-- is a privately held specialty car repair shop owned by Speedy Muffler King which opened its' first store in 1956 and was one of the first muffler replacement specialists in North America. The company specializes in exhaust and muffler repair under the Speedy Auto Service name (originally Speedy Muffler King), its mechanics also fix shocks, brakes, steering, and variety of other automotive ailments. The company operates more than 120 stores in Canada and licenses eight stores in South Korea. The Goldfarb Corporation in 2004 sold its controlling interest in SMK Speedy to Minute Muffler and Brake, a Canadian automotive services company with more than 110 franchised locations. SPATIALIGHT INC: Sept. 30 Balance Sheet Upside-Down by $13.5 Mil. ----------------------------------------------------------------- SpatiaLight Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $5.5 million in total assets and $19.0 million in total liabilities, resulting in a $13.5 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $695,152 in total current assets available to pay $17.8 million in total current liabilities. The company reported a net loss of $2.9 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $4.2 million in the same period in 2006. The company recognized revenue of approximately $298,000 during the quarter ended Sept. 30, 2006, primarily from sales of LCoS Sets to LGE. The company recognized no revenue during the third quarter 2007. LGE has informed the company that they intend to discontinue production of RPTVs and they are no longer ordering T-3 LCoS Sets from the company. The loss of this customer and the company's inability to obtain additional purchase orders from its current or prospective customers to replace the loss in expected revenue in a timely manner has significantly harmed sales and results of operations during 2007. 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?254c Going Concern Doubt As reported in the Troubled Company Reporter on March 23, 2007, Odenberg, Ulakko, Muranishi & Co. LLP, in San Francisco, expressed substantial doubt about SpatiaLight Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses, negative cash flows from operations, negative working capital position, and stockholders' deficit. About SpatiaLight Inc. Headquartered in Novato, California, SpatiaLight Inc. (OTC BB: HDTV.OB) -- http://www.spatialight.com/-- manufactures high- resolution LCoS imagers for use in high-definition display applications such as rear projection televisions, monitors, front projection systems, near-to-eye applications, micro-projectors and other display applications. The company's primary manufacturing facility is located in South Korea. SPATIALIZER AUDIO: Earns $472,342 in Third Quarter Ended Sept. 30 ----------------------------------------------------------------- Specillizer Audio Laboratories Inc. reported net income of $472,342 on royalty revenues of $30,107 for the third quarter ended Sept. 30, 2007, compared with a net loss of $61,798 on royalty revenues of $67,744 in the same period last year. The increased net income results solely by the one time sale of the company's assets. There will be no more licensing revenue in the future under the company's current business model, as substantially all of the assets of the company were sold on July 2, 2007. At Sept. 30, 2007, the company's consolidated balance sheet showed $1,651,967 in total assets, $46,371 in total liabilities, and $1,605,596 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?254f Going Concern Doubt Ramirez International Financial & Accounting Services Inc., in Irvine, Calif., expressed substantial doubt about Spatializer Audio Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the year ended Dec. 31, 2006. The auditing firm pointed to the company's significant operating losses. About Spatializer Audio Headquartered in Thousand Oaks, Calif., Spatializer Audio Laboratories Inc. (OTC BB: SPAZ.OB) -- was a developer, licensor and marketer of next-generation audio technologies for the consumer electronics, computing and mobile communication markets. STATION CASINO: Moody's Cuts Rating on Senior Notes to B2 --------------------------------------------------------- Moody's Investors Service downgraded the existing senior unsecured notes of Station Casino Inc. to B2 (LGD 3, 46%) from Ba2 (LGD3, 48%) and existing senior subordinated notes to Caa1 (LGD5, 83%) from Ba3 (LGD5, 82%) in line with expectations outlined in Moody's press release dated Oct. 22, 2007. In addition, Moody's removed the provisional designation of Station's B2 corporate family rating and Ba2 senior secured bank credit facility that were assigned on Oct. 22, 2007. Concurrently, Moody's concluded the review of Station Casinos, Inc. ratings initiated on Dec. 4, 2006 and will withdraw those ratings. Moody's assigned an SGL-2 speculative grade liquidity rating. The SGL rating reflects the company's ability to service debt obligations and capital spending needs over the next twelve months from cash flow and the existence of alternate liquidity provided by its $650 million revolving credit facility (estimated availability of about $500 million). Station is expected to have solid room under its leverage covenants, and adequate cushion under its interest coverage covenants. Given that all the company's assets are currently pledged, the company has limited ability to raise cash through asset sales. These actions follow the completion of the acquisition of Station Casinos by a group of investors led by Frank J. Fertitta III, chairman and chief executive officer of Station, Lorenzo J. Fertitta, vice chairman and president of Station, and Colony Capital Acquisitions LLC, an affiliate of Colony Capital LLC. The outlook is stable. Station Casinos Inc., headquartered in Las Vegas Nevada, owns and operates gaming and entertainment facilities including Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, among others. Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. TAXI TECHNOLOGY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Taxi Technology Corp. 622 West 57th Street New York, NY 10019 Bankruptcy Case No.: 07-13562 Type of Business: The Debtor is one of four companies that the New York City Taxi & Limousine Commission approved to provide mandatory technology systems such as credit and debit card payment acceptance ability, real-time passenger maps, interactive advertising and text-messaging capability to taxicab owners. Chapter 11 Petition Date: November 13, 2007 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Debtor's Counsel: Jonathan S. Pasternak, Esq. Rattet, Pasternak & Gordon Oliver, L.L.P. 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. TRENT VON'LEE: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Trent D. Von'Lee 21 Pinnacle Ridge Road Farmington, CT 06032 Bankruptcy Case No.: 07-21598 Chapter 11 Petition Date: November 9, 2007 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Gregory F. Arcaro, Esq. Brown,Paindiris & Scott, LLP 2252 Main Street Glastonbury, CT 06033 Tel: (860) 659-0700 Total Assets: $2,925,195 Total Debts: $1,986,754 Debtor's list of its 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Department of Education Student Loan $6,125 501 Bleeker Street Utica, NY 13502 Chi T. Hoang Judgment $2,980 10 Sunrise Terrace East Granby, CT 06026 New Alliance Bank Judgment $2,659 c/o Jacobs & Rozich, LLC 142 Temple Street P.O. Box 1952 New Haven, CT 06509 Prestige Collection Services $2,065 Jefferson Capital Services Unknown $1,818 Credit Protection Association Merchandise $1,586 Connecticut Valley Radiology Medical Services $1,291 Aaron Sales & Lease Unknown $1,049 NCO Financial Merchandise $568 SNET Utilities $492 AT&T Services Utilities $320 Stassinos Law Offices Unknown $253 Kason CR CRP Medical Services $110 VICTORY OUTREACH: Case Summary & Eight Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Victory Outreach Oakland 3814 MacArthur Boulevard Oakland, CA 94619 Bankruptcy Case No.: 07-43864 Type of Business: A California religious nonprofit corporation. Chapter 11 Petition Date: November 13, 2007 Court: Northern District of California (Oakland) Debtor's Counsel: Charles D. Novack, Esq. Law Offices of Charles Novack 409 13th Street 10th Floor Oakland, CA 94612 Tel: (510) 465-1000 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Benjamin Mohr $15,000 M.C. Lending P.O. Box 39 San Ramon, CA 94583 Wells Fargo Bank Overdraft $4,576 3450 Fruitvale Avenue Oakland, CA 94619 Capital One Credit Card Debt $4,367 c/o Corporation Service Co 11 South 12th Street Richmond, VA 23218 American Express Credit Card $3,000 Integrity Direct $210 Avaya $164 Collection Bureau of America $143 Woodforest National Bank $52 VIEWPOINT CORP: Posts $256,000 Net Loss in 3rd Qtr. Ended Sept. 30 ------------------------------------------------------------------ Viewpoint Corporation disclosed recently financial results for the third quarter and nine months ended Sept. 30, 2007. Net loss for the third quarter of 2007 was $256,000 compared to a net loss of $5.2 million in the second quarter 2007 and a net loss of $12.3 million in the third quarter 2006. Operating loss for the third quarter of 2007 was $2.4 million, compared to operating loss of $2.6 million in the second quarter of 2007 and a $13.2 million operating loss for the third quarter of 2006. Both the net loss and operating loss in the third quarter of 2006 included a non-cash goodwill impairment charge of $10.7 million. Viewpoint reported total revenue of $4.5 million for the third quarter of 2007, an 18% as compared to $3.8 million in the second quarter of 2007 and a 40% increase as compared to $3.2 million in the third quarter 2006. Gross profit was $2.4 million for the third quarter of 2007, in line with the second quarter of 2007, and an increase of 3% compared to the $2.3 million in the third quarter of 2006. Patrick Vogt, chief executive officer, commented, "I am pleased with the progress in the third quarter. Our Unicast Ad Delivery platform continues to achieve strong results as we maintain our laser focus on meeting the escalating demand for Premium Rich Media. Our business continues to gain momentum and we are on track to finish 2007 with strong financial results." Adjusted operating loss for the third quarter 2007 was $1.5 million, in-line with the second quarter of 2007 and an improvement over a $1.7 million adjusted operating loss in the third quarter of 2006. For the nine months ended Sept. 30, 2007, the company reported revenue of $11.7 million, a 10% decrease compared to $12.9 million for the same period in 2006. Gross profit for the nine months ended Sept. 30, 2007, was $7.1 million, a 4% decrease compared to $7.4 million for the nine months ended Sept. 30, 2006. Viewpoint's operating expenses for the nine month period ending Sept. 30, 2007, were $14.0 million, compared with $25.8 million for the nine month period ending Sept. 30, 2006. The company's net loss for the nine months ended Sept. 30, 2007, of $7.4 million was based on a loss from operations of $6.9 million, which included charges of $1.3 million for non-cash stock based compensation and $1.2 million for depreciation and amortization. This compares to a net loss for the nine months ended Sept. 30, 2006, of $19.1 million based on a loss from operations of $18.5 million, which included charges of $1.6 million for non-cash stock based compensation and $900,000 for depreciation and amortization and a $10.7 million non-cash goodwill impairment charge. During the first nine months of 2007 the adjusted operating loss was $4.4 million as compared to an adjusted operating loss of $5.2 million for the first nine months of 2006. Viewpoint's cash, cash equivalents, and marketable securities as of Sept. 30, 2007, were $3.3 million. This can be compared to cash, cash equivalents, and marketable securities of $5.7 million as of June 30, 2007, and $4.3 million as of Dec. 31, 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $28.6 million in total assets, $10.4 million in total liabilities, and $18.2 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?254a Going Concern Doubt As reported in the Troubled Company Reporter on March 22, 2007, PricewaterhouseCoopers LLP, in New York, expressed substantial doubt about Viewpoint Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, 2005, and 2004. The auditing firm pointed to the company's negative cash flow from operations, net losses since inception, and limited capital to fund future operations. About Viewpoint Corp. Headquartered in New York, Viewpoint Corp. (NasdaqGM: VWPT) -- http://www.viewpoint.com/-- is an Internet marketing technology company, offering Internet marketing and online advertising solutions through the powerful combination of its proprietary visualization technology and a full range of campaign management services including TheStudio, Viewpoint's creative services group; Unicast, Viewpoint's online advertising group; and KeySearch, Viewpoint's search engine marketing consulting practice. The company has approximately 140 employees with offices in New York, Los Angeles, Austin, Texas and London. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 26 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2006-C23 as: -- Class A-1, $80,695,398, affirmed at Aaa -- Class A-2, $137,307,000, affirmed at Aaa -- Class A-3, $62,700,000, affirmed at Aaa -- Class A-PB, $252,071,000, affirmed at Aaa -- Class A-4, $1,280,716,000, affirmed at Aaa -- Class A-5, $500,000,000, affirmed at Aaa -- Class A-1A, $618,842,366, affirmed at Aaa -- Class A-M, $422,986,000, affirmed at Aaa -- Class A-J, $274,941,000, affirmed at Aaa -- Class X-P, Notional, affirmed at Aaa -- Class X-C, Notional, affirmed at Aaa -- Class B, $37,011,000, affirmed at Aa1 -- Class C, $52,873,000, affirmed at Aa2 -- Class D, $37,011,000, affirmed at Aa3 -- Class E, $31,724,000, affirmed at A1 -- Class F, $42,299,000, affirmed at A2 -- Class G, $52,873,000, affirmed at A3 -- Class H, $52,873,000, affirmed at Baa1 -- Class J, $58,161,000, affirmed at Baa2 -- Class K, $52,873,000, affirmed at Baa3 -- Class L, $10,575,000, affirmed at Ba1 -- Class M, $21,149,000, affirmed at Ba2 -- Class N, $15,862,000, affirmed at Ba3 -- Class O, $10,575,000, affirmed at B1 -- Class P, $15,862,000, affirmed at B2 -- Class Q, $15,862,000, affirmed at B3 As of the Oct. 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by about 0.7% to $4.20 billion from $4.23 billion at securitization. The certificates are collateralized by 307 mortgage loans. The loans range in size from less than 1% to 7.5% of the pool, with the top 10 loans representing 33.9% of the pool. No loans have defeased. There are two shadow rated loans comprising about 1.2% of the pool. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Fifty three loans, representing 30.2% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 operating results for 89% of the performing loans. Moody's loan to value ratio for the conduit component is 103.7%, virtually the same as at securitization. The top three conduit loans represent 18.3% of the outstanding pool balance. The largest conduit loan is the Prime Outlets Pool Loan ($315.3 million -- 7.5%), which is a 50% participation interest in a $630.6 million loan secured by 10 retail centers located in eight states, including Texas, Pennsylvania, Florida, and Ohio. The total gross leaseable area is 3.5 million square feet. The loan is interest only for the first 24 months of the term, amortizing on a 360-month schedule thereafter. Moody's LTV is 109.7%, the same as at securitization. The second largest conduit loan is the 1775 Broadway Loan ($250 million - 5.9%), which is secured by a 25-story, 619,000 square foot, Class B office building, located in the Columbus Circle submarket of New York City. The loan is on the master servicer's watchlist due to low debt service coverage. Several major tenants with below market rents have leases expiring in 2008 and 2009. The loan is interest only for the first 48 months of the term, amortizing on a 360-month schedule thereafter. Moody's LTV is 114.6%, the same as at securitization. The third largest conduit loan is the 620 Avenue of the Americas Loan ($205 million - 4.9%), which is secured by a seven-story, 670,000 square foot, office/retail building, located in the Flatiron submarket of New York City. The loan is on the master servicer's watchlist due to low debt service coverage. Several major tenants with below market rents have leases expiring in 2010. The loan is interest only for its entire term. There is additional debt in the form of a junior non-pooled component ($30 million) and mezzanine debt ($30 million). Moody's LTV is 110.4%, the same as at securitization. The largest shadow rated loan is the Cavalier Country Club Apartments Loan ($26.7 million -- 0.6%), which is secured by a 744-unit apartment complex located in Newark, Delaware. Performance has been negatively impacted by higher expenses. Moody's current shadow rating for the loan is Baa3, compared to Baa2 at securitization. The second largest shadow rated loan is the 594 Broadway Loan ($24 million -- 0.6%), which is secured by a 217,000 square foot office building located in New York City. Performance has been negatively impacted by higher expenses. Moody's current shadow rating for the loan is Baa1, compared to A2 at securitization. WATERFORD WEDGWOOD: Posts EUR85 Mil. Equity Deficit at Sept. 30 --------------------------------------------------------------- Waterford Wedgwood plc released interim results for the six months to Sept. 30, 2007. Waterford posted a net loss of EUR57.1 million on EUR317.4 million of revenue for the six months ended Sept. 30, 2007, compared with a net loss of EUR21.1 million on EUR352.5 million of revenue for the same period in 2006. At Sept. 30, 2007, the Group's consolidated balance sheet showed EUR683.2 million in total assets, EUR767.7 million in total liabilities, and EUR84.5 million in stockholders' deficit. "After significant improvements in the bottom line in the year to March 2007, results for the first half of this year slowed," Peter Cameron, chief executive of Waterford, commented. "There was genuine consumer enthusiasm for our products, especially in the US, but sales were affected by product shortages over the six months to September, and adverse currency fluctuations." "The lack of working capital for much of the period, which limited our ability to manufacture and deliver our products, was addressed following receipt of the proceeds of the Open Offer. There is now a significant backlog of orders and we are confident of a strong Christmas season. Our new and contemporary ranges are being met with enthusiasm, and the investment we made in our portfolio is now being reflected in a higher demand for our products - the total order book at Nov. 1, 2007, was 14% up on the same date last year. "We announced in October that we planned a restructuring of the Group's cost base which we aim to implement by the end of this financial year. We are now in consultations with our employee representatives and expect to announce a fully-financed plan in the near future. While we maintain a vigilant watch over our cost base, we recognize that cost reduction by itself will not be enough -- driving sales will be key and I am confident that with the capital injection now in place, revenues should gather momentum. We also disclosed in October that we were in advanced talks with a major financial institution concerning a significant investment in the Group's Preference Shares. These talks are ongoing. "We expect the profit margin benefits of the restructuring, demand for our contemporized products and the benefits of the recent refinancing to combine to give an improved performance in the second half of the current financial year." Headquartered in Waterford, Ireland, Waterford Wedgwood plc -- http://www.waterfordwedgwood.com/-- manufactures premium- priced goods including crystal, ceramics and cookware. The company has leading positions in its key markets in the US, Europe and Japan. * * * Waterford Wedgwood's 9-7/8% notes due 2010 carry junk ratings from Moody's Investors' Service's (Caa2), Standard & Poor's (CCC-), and Fitch Ratings (CC). These ratings apply to date. WAVE SYSTEMS: Posts $4.8 Million Net Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Wave Systems Corp. reported recently results for the third quarter of 2007. For the 2007 third quarter, the company reported a net loss of $4.8 million compared to a 2006 third quarter net loss of $4.5 million. The increased net loss reflects increased spending in both research and development and selling, general and administrative expenses, principally reflecting increased headcount largely in sales and customer support and engineering, as well as higher professional fees, stock option expense, rent and travel expenses. Principally reflecting an increase in license revenues in the third quarter of 2007 versus last year, Wave's net revenues rose to $1.7 million, compared to 2006 third quarter revenues of $846,000. The improvement in license revenues was principally due to increased royalties from shipments of Wave software by Wave's leading OEM partner. Gross profit rose to $1.5 million or 87.9% compared to $643,000 or 76.0% in the 2006 third quarter. As of Sept. 30, 2007, Wave had total current assets of $9.6 million, including cash and equivalents of $7.8 million, and no long-term debt. Steven Sprague, Wave's president and chief executive officer, commented, "Our third quarter results reflect continued growth principally as a result of the deployment of our trusted computing solutions via our OEM partners. Year-to-date our EMBASSY Trust Suite software has shipped on over 13 million PCs, bringing our total shipments to over 17 million. As the installed base of Trusted Platform Modules increases and trusted computing becomes more prevalent, we are seeing growing interest in the use of the technology. During the third quarter and into the fourth quarter, we are seeing a healthy increase in demand for software upgrades. "With the commercial availability of Seagate's Momentus 5400 hard drive solutions starting in the third quarter, we have realized a significant uptake in interest in Wave's trusted computing software solutions. While the revenue contribution from this source was minimal in the third quarter, there is strong interest in our product. We have already successfully closed a number of initial enterprise sales in a variety of industries, and our pipeline of opportunities is growing. In addition to the activity around full disc encryption, we have seen a tremendous up-tick in interest in the TPM. Many customers are considering the deployment of both solutions and in particular, they are looking at the authentication capabilities of TPMs and biometrics as well as Wave's software to manage those devices. "Our company-wide imperative is to focus on our current sales opportunities. At the same time, we have worked to expand the reach of our sales and marketing effort through recently forged sales relationships with Safend, Convergent Computing and Ping Identity. Seeking additional complementary partner relationships remains another important component of our effort to expand awareness of our solutions on both an application-specific and geographic basis." At Sept. 30, 2007, the company's consolidated balance sheet showed $10.3 million in total assets, $3.3 million in total liabilities, and $7.0 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2548 Going Concern Doubt KPMG, in Boston, expressed substantial doubt about Wave Systems Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. About Wave Systems Headquartered in Lee, Massachusetts, Wave Systems Corp. (NasdaqGM: WAVX) -- http://www.wave.com/-- delivers computing applications and services with advanced products, infrastructure and solutions across multiple trusted platforms from a variety of vendors. Wave holds a portfolio of significant fundamental patents in security and e-commerce applications and employs some of the world's leading security systems architects and engineers. WELLS FARGO: Fitch Holds Low-B Ratings on 10 Cert. Classes ---------------------------------------------------------- Fitch Ratings affirmed these Wells Fargo Mortgage Backed Securities pass-through certificates: Wells Fargo 2002-10 -- 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 'AA'; -- Class B-5 affirmed at 'A'. Wells Fargo 2002-14 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AA+'; -- Class B-5 affirmed at 'A'. Wells Fargo 2002-18 -- Class A affirmed at 'AAA'. Wells Fargo 2002-20 -- Class A affirmed at 'AAA'. Wells Fargo 2003-3 Group 1 -- Class A affirmed at 'AAA'. Wells Fargo 2003-3 Group 2 -- Class A affirmed at 'AAA'. Wells Fargo 2003-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BBB'; -- Class B-5 affirmed at 'BB'. Wells Fargo 2003-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'AA-'; -- Class B-4 affirmed at 'BBB+'; -- Class B-5 affirmed at 'BB'. Wells Fargo 2003-9 Group 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'. Wells Fargo 2003-9 Group 2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA-'; -- Class B-3 affirmed at 'A-'; -- Class B-4 affirmed at 'BBB-'; -- Class B-5 affirmed at 'BB-'. Wells Fargo 2003-10 -- Class A affirmed at 'AAA'. Wells Fargo 2003-12 -- Class A affirmed at 'AAA'. Wells Fargo 2003-13 -- Class A affirmed at 'AAA'. Wells Fargo 2003-14 -- Class A affirmed at 'AAA'. Wells Fargo 2003-16 -- Class A affirmed at 'AAA'; -- Class B-2 affirmed at 'A'; -- Class B-5 affirmed at 'B'. Wells Fargo 2003-17 -- Class A affirmed at 'AAA'. Wells Fargo 2003-18 -- Class A affirmed at 'AAA'. Wells Fargo 2003-19 -- Class A affirmed at 'AAA'. Wells Fargo 2003-B -- 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 affirmed at 'BB+'; -- Class B-5 affirmed at 'B+'. Wells Fargo 2003-I -- 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+'. Wells Fargo 2003-K -- Class A affirmed at 'AAA'. Wells Fargo 2003-M -- Class A affirmed at 'AAA'. Wells Fargo 2003-O -- Class A affirmed at 'AAA'. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect about $5.81 billion of outstanding certificates. As of the October distribution date, the transactions listed above are seasoned from 46 (2003-19 and 2003-O) to 65 (2002-10) months. The pool factors (current principal balance as a percentage of original) range approximately from 9% (2002-18) to 67% (2003-17). The underlying collateral for Wells Fargo Asset Securities Corp. transactions consists of prime fixed and adjustable-rate mortgage loans secured primarily by one- to four- family residential properties. All of the mortgage loans were generally originated in conformity with underwriting standards of Wells Fargo Home Mortgage Inc. WFHM sold the loans to Wells Fargo Asset Securities Corporation, a special purpose corporation, who deposited the loans into the trust. Wells Fargo Bank N.A., rated 'RMS1' by Fitch, is the master servicer for all of the transactions. WENDY'S INT'L: Gets Lower Purchase Proposal from Triarc Cos. ------------------------------------------------------------ At the request of the Board of Directors of Wendy's International Inc. and in connection with the company's sales process, Triarc Companies Inc. has submitted a proposal to purchase 100% of the food chain's equity with a proposed purchase price below the valuation range Triarc had indicated it would be prepared to offer in its July 30, 2007 letter. As reported in the Troubled Company Reporter on Aug. 1, 2007, Nelson Peltz, chairman of Triarc, asked the special committee working on Wendy's sale to consider his company's purchase offer. In his letter, Mr. Peltz dislosed that Triarc's offer could range from $37 to $41 per share, which could increase further depending on due diligence results. In its Nov. 12, 2007 proposal, Triarc indicated that the consideration would be primarily in the form of cash with a portion to be paid in the form of Triarc equity. Triarc's proposal is subject to the receipt of satisfactory financing commitments, completion of due diligence, and the approval by Triarc's Board of Directors of the final terms of the transaction, including the final form of the merger agreement and all other definitive agreements to be entered into in connection with the transaction. The Troubled Company Reporter previously disclosed citing the Wall Street Journal that among the entities interested in buying the company is Cedar Enterprises Inc., a Columbus, Ohio-based franchisee which owns 134 Wendy's restaurants. A group formed by Fidelity National Financial Inc., Thomas H. Lee Partners LP, Oaktree Capital Management LP, and Ares Management LLC also joined to bid for the company. Last week, Fidelity National decided to put off its buyout offer for the fastfood chain, according to a source cited by The Wall Street Journal. According to WSJ's source, Fidelity National pointed to the poor terms of a staple financing recently disclosed by Wendy's banks as the reason why it is not going forward with its bid. Earlier, an unnamed source told WSJ that the sale of Wendy's could be affected by a financing package its lenders -- J.P. Morgan Chase & Co. and Lehman Brothers Holdings Inc. -- provided. The package, which is anchored by a securitization of the royalty fees franchisees pay Wendy's, allows the lenders to back out should financing conditions worsen, the unnamed source said. Calling the financing as "highly conditional," the unnamed source believes such term could lower bids or make bidders think twice about proceeding. Wendy's decided to sell the business in June 2007 to "minimize disruption to the company and its operations." About Triarc Companies Inc. Headquartered in New York City, Triarc Companies Inc. (NYSE:TRY.B/TRY) -- http://www.triarc.com/-- is a holding company and, through its subsidiaries, is currently the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield & Company LLC, an asset management firm. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of Dec. 31, 2006, 1,061 were owned and operated by the company's subsidiaries. Deerfield & Company LLC, through its wholly-owned subsidiary, Deerfield Capital Management LLC, is a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with about $13.2 billion under management as of Dec. 31, 2006. About Wendy's International Based in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/,http://www.wendys.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the Americas, Asia, the Pacific Rim, Europe and the Middle East. * * * As reported in the Troubled Company Reporter on June 21, 2007, Moody's Investors Service lowered all ratings of Wendy's International Inc. and placed all ratings on review for further possible downgrade. Affected ratings include the company's Ba2 corporate family rating which was lowered to Ba3. Additionally, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Wendy's International Inc. to 'BB-' from 'BB+'. WINDSTREAM REGATTA: Moody's Puts Corporate Family Rating at B1 -------------------------------------------------------------- Moody's Investors Service assigned a B1 first-time Corporate Family rating to Windstream Regatta Holdings Inc. In addition, Moody's has assigned a Ba1 rating to Windstream's proposed senior secured facilities and a B2 to its proposed senior subordinated notes. Details of the rating action are: Ratings assigned: -- Proposed $20 million senior secured first lien revolving credit facility, due 2013 -- Ba1, LGD1, 9% -- Proposed $66 million senior secured term loan B, due 2014 -- Ba1, LGD1, 9% -- Proposed $217 million senior subordinated notes due 2017 -- B2, LGD4, 65% -- Corporate Family rating -- B1 -- Probability of Default rating -- B1 The rating outlook is stable. The B1 Corporate Family rating reflects the company's relatively high leverage, its small scale, the limited growth prospects of the directory publishing business, the increasing threat posed by competing directory publishers and web-based directory service providers in many of Windstream's markets, and the recent soft top line results experienced by the company. However, the ratings are supported by Windstream's diversified customer and geographic market base, its positive free cash flow generation, adequate liquidity profile and the strong market position conferred by its exclusive publishing agreements with Windstream Corporation as the "official" yellow pages directory within Windstream Corporation's incumbent markets. The stable outlook incorporates the relative predictability of Windstream's sales and the relative resilience of yellow pages advertising to economic downturns, when compared to other forms of media. The company plans to use the proceeds of the proposed debt in connection with a proposed tax free exchange of stock and debt valued at $525 million. Windstream's owners (funds associated with Welsh, Carson, Anderson, and Stowe) will exchange their current equity investment in Windstream Corporation for all of the stock of Windstream Yellow Pages Inc. and Windstream will effect a cash distribution of about $40 million and a debt distribution of $210.5 million to Windstream Corporation. In addition, the proceeds will be used to cover fees and expenses, including a consulting fee of $10 million to Local Insight Media LP (a majority owned subsidiary of WCAS) The stable rating outlook reflects the predictability of Windstream's business model, its relatively low capital spending requirements and the absence of any meaningful debt maturities prior to 2013. The senior secured facilities are guaranteed by Windstream's direct and indirect subsidiaries and are secured by a pledge of stock and assets of the borrower and its operating subsidiaries. The senior subordinated notes receive the benefit of the same guarantees as the senior secured debt, however these guarantees are unsecured subordinated obligations. Ratings are subject to Moody's satisfactory review of documentation, which was not available at the time the ratings were assigned. Headquartered in Hudson, Ohio, Windstream Regatta Holdings, Inc. will represent one of the largest publishers of yellow page directories in the US. The company reported revenues of $143 million for the LTM period ended Sept. 30, 2007. WINDSTREAM REGATTA: S&P Assigns 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Hudson, Ohio-based Windstream Regatta Holdings Inc., owner of Windstream Yellow Pages, Inc. WYP's name is expected to change to Local Insight Yellow Pages, Inc., after the transaction closes. The rating outlook is stable. "At the same time, we assigned our loan and recovery ratings to Windstream's proposed $86 million senior secured credit facilities, consisting of a $20 million revolving credit facility and a $66 million term loan," said Standard & Poor's credit analyst Ariel Silverberg. The revolving facility and the term loan were both rated 'BB' with recovery ratings of '1', indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default on each of the facilities. Additionally, S&P assigned its 'B-' rating to Windstream's proposed $217 million senior subordinated notes. Proceeds from the credit facilities and notes will be used to finance the purchase of WYP by investment funds of Welsh, Carson, Anderson, and Stowe, pay for fees and expenses, and for general corporate purposes. The ratings on Windstream Yellow Pages reflect S&P's expectation that debt leverage, as measured by total debt to EBITDA, over time will be managed close to levels permitted under its proposed bond indenture. This is more in line with leverage maintained at other yellow page directory companies owned by WCAS funds. This is tempered in part by WYP's geographic diversity, high customer renewal rates, and incumbent positions. X-RITE INC: Posts $2.8 Million Net Loss in Quarter Ended Sept. 29 ----------------------------------------------------------------- X-Rite Incorporated has posted a net loss of $2.8 million for the third quarter ended Sept. 29, 2007, compared to a net loss of $28.2 million for the same quarter of 2006. Net sales from continuing operations totaled $55.6 million, an 8.6% increase over third quarter of 2006. Adjusted operating income, which excludes acquisition and restructuring expenses, was $4.9 million, and reflects a gross margin of 55.6% for the third quarter of 2007 versus $3.6 million and a gross margin of 60.4% for the same period in 2006. "Overall sales in our core markets are in line with expectations, and the integration of the sales, engineering and general & administrative functions is on track," Thomas J. Vacchiano, Jr., Chief Executive Officer of X-Rite, stated. "Our revenue performance in the third quarter was consistent with our targets as we continue to successfully integrate our product lines, develop exciting new products and expand our customer base." "Our gross margins were below expectations by approximately 5.0% in the third quarter," stated Mary E. Chowning, Chief Financial Officer. "Approximately 2.6% of the gross margin decline in the third quarter was related to issues we encountered as we converted our core operating system and conformed operating practices in Europe. This conversion will allow us to standardize operating policies and practices in the operations area and move product production from Europe to the U.S. more efficiently. Additionally, weak performance in our color services business and unfavorable product mix impacted our gross margins by approximately 2.8%. However, these items are not expected to impact gross margins significantly in the longer term." Outlook During fiscal year 2007, the company expects to realize cost synergies related to the Amazys integration of $14 million to US$16 million. This includes the $13.3 million of synergies achieved in the first nine months of 2007. Anticipated cumulative synergies since the closing of the transaction are expected to range from $20 million to $22 million by the end of 2007. "Backlog and order levels at the end of the third quarter remain strong and we continue to believe that we are well positioned to capitalize on future growth opportunities," stated Vacchiano. "We are particularly enthusiastic about the Pantone acquisition and our ability to leverage their brand, market position and products to drive our top line going forward. We remain committed to our fiscal 2007 guidance of 4% to 6% revenue growth on a combined pro forma basis and expect our full year results, excluding Pantone, to be at or slightly above the high end of the range." Pantone Transaction On Aug. 23, 2007, the company entered into a definitive agreement to purchase Pantone, Inc. for $180 million in cash. The transaction and refinancing of the company's current debt was financed through new borrowings. The Pantone acquisition was completed on Oct. 24, 2007, and thus did not affect third quarter performance. About X-Rite Headquartered in Grandville, Michigan, X-Rite Incorporated (Nasdaq: XRIT) -- http://www.xrite.com/-- offers color measurement technology solutions comprised of hardware, software and services for the verification and communication of color data. The company serves a broad range of industries, including graphic arts, digital imaging, industrial and retail color matching, and medical, among other industries. X-Rite serves customers worldwide from its offices in China, Japan, Mexico, Singapore, Germany, Switzerland, Italy, Russia, among others. The X-Rite Latin America sales team provides assistance to customers in Mexico, Central and South America, and the Caribbean. X-Rite's sales team works together with highly qualified local vendors and distributors to ensure the best possible personalized customer assistance, offering a wide and unparalleled array of products, support and repair services. * * * As reported in the Troubled Company Reporter on Oct. 3, 2007, Moody's Investors Service confirmed X-Rite, Inc.'s B1 corporate family rating, affirmed the speculative grade liquidity rating of SGL-1 and revised the outlook to negative in view of the additional leverage and integration risk associated with the company's recently announced acquisition of Pantone Inc., the market leading color standards provider. Simultaneously, Moody's assigned ratings to X-Rite's new bank credit facilities, which consist of a $250 million first lien term loan (rated Ba3), $40 million first lien revolver (Ba3) (undrawn at closing) and $125 million second lien term loan (B3). Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on X-Rite Inc. and removed the rating from CreditWatch where it was placed with negative implications on Aug. 24, 2007, following the announcement that it planned to acquire unrated Pantone Inc. for $180 million as part of a $415 million refinancing. The outlook is stable. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to Grand Rapids, Michigan-based X-Rite's secured financing. The first-lien facilities, consisting of a $40 million five-year revolving credit agreement and a $250 million term loan, are rated 'BB-', with a recovery rating of '2', indicating the expectation for substantial (70%-90%) recovery in the event of a payment default. Standard & Poor's also assigned its 'B' rating to the company's $125 million six-year second-lien term loan. The '5' recovery rating reflects the expectation for modest (10%-30%) recovery in the event of a payment default. S&P will withdraw its ratings on the company's existing bank debt concurrent with the closing of the financing. *Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------ Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re 8374 Annapolis, L.L.C. Bankr. D. Colo. Case No. 07-22838 Chapter 11 Petition filed November 6, 2007 Filed as Pro Se In Re Nielsen-Metier, Inc. Bankr. D. Colo. Case No. 07-22907 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/cob07-22907.pdf In Re Camarra's Asphalt Construction, Inc. Bankr. S.D. Fla. Case No. 07-19702 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/flsb07-19702.pdf In Re Brockton Family and Community Resources, Inc. Bankr. D. Mass. Case No. 07-17163 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/mab07-17163.pdf In Re Papa T's Famous Pizza and Grill, Inc. Bankr. D. N.J. Case No. 07-26378 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/njb07-26378.pdf In Re 866 Third Corp. Bankr. S.D. N.Y. Case No. 07-13521 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/nysb07-13521.pdf In Re 141 2nd Corp. Bankr. S.D. N.Y. Case No. 07-13523 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/nysb07-13523.pdf In Re Polaris Firdous, L.L.C. Bankr. S.D. Ohio Case No. 07-59056 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/ohsb07-59056.pdf In Re Paul A. Howard M.D., P.C. Bankr. N.D. Okla. Case No. 07-12172 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/oknb07-12172.pdf In Re Melendez Paramedical Services, Inc. Bankr. D. P.R. Case No. 07-06594 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/prb07-06594.pdf In Re A.A. 10000 Corp. Bankr. D. P.R. Case No. 07-06601 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/prb07-06601.pdf In Re American Development Fund, Inc. Bankr. S.D. Texas Case No. 07-37808 Chapter 11 Petition filed November 7, 2007 See http://bankrupt.com/misc/txsb07-37808.pdf In Re Abbott Systems, Inc. Bankr. S.D. Ala. Case No. 07-13327 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/alsb07-13327.pdf In Re Funny Bone Comedy Club of Boise, L.L.C. Bankr. D. Idaho Case No. 07-01751 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/idb07-01751.pdf In Re Terrence J. Scheibal Bankr. S.D. Ill. Case No. 07-32282 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/ilsb07-32282.pdf In Re Saugus Dockside, Inc. Bankr. D. Mass. Case No. 07-17206 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/mab07-17206.pdf In Re 36 Water Corp. Bankr. S.D. N.Y. Case No. 07-13529 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/nysb07-13529.pdf In Re 1487 2nd Corp. Bankr. S.D. N.Y. Case No. 07-13530 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/nysb07-13530.pdf In Re L.&R. Properties, L.L.C. Bankr. M.D. Ga. Case No. 07-71174 Chapter 11 Petition filed November 8, 2007 Filed as Pro Se In Re G.B. Richardson Property Management Corp. Bankr. M.D. Fla. Case No. 07-05070 Chapter 11 Petition filed November 8, 2007 Filed as Pro Se In Re Nitro Auction House & Antique Sales, L.L.C. Bankr. S.D. W.V. Case No. 07-21143 Chapter 11 Petition filed November 8, 2007 See http://bankrupt.com/misc/wvsb07-21143.pdf In Re Greenview Enterprises, L.L.C. Bankr. S.D. Ala. Case No. 07-13343 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/alsb07-13343.pdf In Re Spare Time Tools Equipment Rental, L.L.C. Bankr. D. Ariz. Case No. 07-02256 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/azb07-02256.pdf In Re Ocean View Landscape Construction, Inc. Bankr. D. Mass. Case No. 07-17244 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/mab07-17244.pdf In Re W. Jackson Phillips Bankr. E.D. N.C. Case No. 07-04264 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/nceb07-04264.pdf In Re Luis Ivan Poblete Bankr. D.C. Case No. 07-00598 Chapter 11 Petition filed November 9, 2007 Filed as Pro Se In Re Handkov Enterprises, L.L.C. Bankr. M.D. Tenn. Case No. 07-08329 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/tnmb07-08329.pdf In Re Cuong Viet Nguyen Bankr. N.D. D. Tex. Case No. 07-35626 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/txnb07-35626.pdf In Re Trebor International Enterprises L.L.C. Bankr. D. Conn. Case No. 07-50690 Chapter 11 Petition filed November 10, 2007 See http://bankrupt.com/misc/ctb07-50690.pdf In Re Advanced Properties and Investments, L.L.C. Bankr. E.D. Wis. Case No. 07-29049 Chapter 11 Petition filed November 11, 2007 See http://bankrupt.com/misc/wieb07-29049.pdf In Re Greg Duke Bankr. M.D. Ala. Case No. 07-11583 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/almb07-11583.pdf In Re Revelation Pentecostal House Prayer For All Nations, Inc. Bankr. M.D. Fla. Case No. 07-05697 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/flmb07-05697.pdf In Re Rachel M. Leff Bankr. E.D. N.Y. Case No. 07-74601 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/nyeb07-74601.pdf In Re Roy Richard Haley Bankr. N.D. Okla. Case No. 07-12213 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/oknb07-12213.pdf In Re Ashland-Upland Associates, L.L.P. Bankr. E.D. Penn. Case No. 07-16664 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/paeb07-16664.pdf In Re T.O.A. A.L.T.A. Comprehensive Urban Rural Advanced Health Services, Inc. Bankr. D. P.R. Case No. 07-06704 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/prb07-06704.pdf In Re Oliver Thomas Bankr. E.D. Va. Case No. 07-13447 Chapter 11 Petition filed November 12, 2007 See http://bankrupt.com/misc/vaeb07-13447.pdf In Re Indiana Motor Car, L.L.C. Bankr. N.D. Ind. Case No. 07-13256 Chapter 11 Petition filed November 13, 2007 See http://bankrupt.com/misc/innb07-13256.pdf In Re Bethlehem Assembly of Full Gospel Baptist Church Bankr. E.D. Mich. Case No. 07-63052 Chapter 11 Petition filed November 13, 2007 See http://bankrupt.com/misc/mieb07-63052.pdf In Re Robert G. Anderson Bankr. D. N.D. Case No. 07-31023 Chapter 11 Petition filed November 13, 2007 See http://bankrupt.com/misc/ndb07-31023.pdf In Re Long Island Restaurant Solutions, L.L.C. Bankr. E.D. N.Y. Case No. 07-74612 Chapter 11 Petition filed November 13, 2007 See http://bankrupt.com/misc/nyeb07-74612.pdf In Re Concepts In Accounting, Inc. Bankr. S.D. N.Y. Case No. 07-13567 Chapter 11 Petition filed November 13, 2007 See http://bankrupt.com/misc/nysb07-13567.pdf In Re Kinda Trust Bankr. D. N.J. Case No. 07-26726 Chapter 11 Petition filed November 13, 2007 Filed as Pro Se In Re William Kenneth O'Dantel Bankr. C.D. Calif. Case No. 07-14420 Chapter 11 Petition filed November 13, 2007 Filed as Pro Se ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. 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A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena R. Jusay, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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