T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 16, 2007, Vol. 11, No. 272 Headlines ACE AVIATION: S&P Withdraws 'B+' Rating at Company's Request AFM 805 INC: Case Summary & 30 Largest Unsecured Creditors AMERICAN HOME: Wants to Sell Certain Non-Debtor Loans AMERICAN HOME: Court OKs Termination of Deferred Compensation Plan AMERICAN HOME: Moody's Downgrades Ratings on 13 Tranches AMERICAN REPROGRAPHICS: Moody's Holds Ba3 Corporate Family Rating ANNIE PETTWAY: Case Summary & Two Largest Unsecured Creditors ASARCO LLC: Judge Schmidt to Approve Tri-State Settlement ASARCO LLC: Lease-Related Decision Deadline Extended to May 9 ATARI INC: CEO David Pierce Resigns, Curtis Solsvig Takes Over BARCLAYS CAPITAL: Moody's Downgrades Ratings on 11 Tranches BARONET INC: Seeks Protection from Creditors Under CCAA BEAR STEARNS: Expects Net Loss in Fourth Quarter of 2007 BEAR STEARNS: Fund LP Wants to Dissolve and Liquidate Assets BFC SILVERTON: S&P Puts 'BB+' Ratings Under Negative Watch BRISTOW GROUP: Completes $2.5 Mil. Buyout of Vortex Helicopters CALUMET SPECIALTY: S&P Affirms 'B' Rating and Revises Outlook CHAPARRAL RANCH: Voluntary Chapter 11 Case Summary COMMUNITY HEALTH: Moves Notes Exchange Offer Period to Nov. 30 COPANO ENERGY: Moody's Affirms B1 Corporate Family Rating COPANO ENERGY: S&P Holds 'BB-' Corporate Credit Rating CREDIT SUISSE: Fitch Rates $10.2MM Class N Certificates at BB- CREDIT SUISSE: Fitch Affirms Junk Rating on $9.9MM Certificates CYGNAL TECHNOLOGIES: Commences Court-Supervised Restructuring DAYTON SUPERIOR: Sept. 28 Balance Sheet Upside-Down by $98.1 Mil. DUNMORE HOMES: Wants To Hire Kurtzman Carson as Claims Agent E*TRADE FINANCIAL: Has Two Options to Rectify Stock Dilemma EAGLE BROADBAND: Files for Bankruptcy Protection in Texas EAGLE BROADBAND: Case Summary & 28 Largest Unsecured Creditors FORD MOTOR: Johnson Controls Inks MOU to Buy Saline ACH Plant FORD MOTOR: UAW Employees Ratify Healthcare MOU and National CBA GMAC LLC: Fitch Places 'BB+' IDR Under Negative Watch GREENPARK GROUP: Plan Confirmation Hearing Slated for December 18 HARBORVIEW MORTGAGE: Moody's Puts Low-B Ratings on 3 Cert. Classes HEALTHY DIRECTIONS: S&P Cuts Corp. Credit Rating to B- from B+ IMPAC MORTGAGE: Discloses Defaults on Various Loan Facilities IMPAC MORTGAGE: Delays Filing of Third Quarter Report for 2007 ISLE OF CAPRI: Buying IoC-Black Hawk's 43% Stake for $64.6 Million JP MORGAN: Moody's Holds Ba1 Rating on $9.1 Million Certificates KORA LLC: Case Summary & Two Largest Unsecured Creditors KRATON POLYMERS: Posts $754,000 Net Loss in Quarter Ended Sept. 30 LEHMAN MORTGAGE: Moody's Cuts Ratings on 2006-1 Class B4 Certs. LEVITT AND SONS: Asks Court to Set February 11 as Claims Bar Date LEVITT AND SONS: Seeks OK to Close On Pre-Bankruptcy Home Sales LEVITT AND SONS: Wants to Hire Kurtzman Carson as Claims Agent LEVITZ FURNITURE: Can File Schedules Until December 21 LEVITZ FURNITURE: Seeks Court's Approval to Auction Assets MEGA BRANDS: Weak Results Prompt Moody's to Review Ratings MERRILL LYNCH: Moody's Downgrades Ratings on 23 Certificates MERRILL LYNCH: Adequate Credit Support Cues S&P to Hold Ratings MIRANT CORP: Moody's Places Ratings Under Review ML-CFC COMMERCIAL: Fitch Rates $7.024MM Class N Certs. at BB- MORTGAGE LENDERS: Wants February 1 Set as Claims Bar Date MORTGAGE LENDERS: Wants Removal Period Extended to February 4 MYLAN LABORATORIES: $6.7 Bil. Merck Deal Cues S&P to Cut Rating NASH FINCH: Earns $15.4 Million in 3rd Quarter Ended Oct. 6 NELITA WAYNE: Voluntary Chapter 11 Case Summary NEUMANN HOMES: Case Summary & 20 Largest Unsecured Creditors OGLEBAY NORTON: FTC Requests for Add'l. Info on Carmeuse Merger PASCACK VALLEY: Submits Schedules of Assets and Liabilities PASCACK VALLEY: Files List of 20 Largest Unsecured Creditors PETSMART INC: Earns $29.5 Million in 3rd Qtr. Ended Oct. 28 PIKE NURSERY: Drought Prompts Bankruptcy Filing in Georgia POINDEXTER & CO: Weak Performance Cues S&P to Revise Outlook POLYONE CORP: Buys GLS Corp. as Part of Specialization Strategy PORTA SYSTEMS: Sept. 30 Balance Sheet Upside-Down by $28.7 Million QUEBECOR WORLD: Considers Refinancing to Retire Some Loans RED NED LYNCH: Case Summary & Three Largest Unsecured Creditors REMY WORLDWIDE: Court Approves Shearman & Sterling as Lead Counsel REMY WORLDWIDE: Bankruptcy Court Okays YCS&T as Delaware Counsel REMY WORLDWIDE: Court Okays Greenberg Traurig as Special Counsel RESI FINANCE: Moody's Upgrades Ratings on 27 Tranches SANTA CRUZ: Files Chapter 7 Petition to Resolve Debt Problems SELECT MEDICAL: Terminates $46 Mil. Merger Deal with Cora Health SEE WHY GERARD: Case Summary & Four Largest Unsecured Creditors SINCLAIR BROADCAST: Purchases Alarm Funding for $5.5 Million SPACEHAB INC: Sept. 30 Balance Sheet Upside-Down by $14.0 Million SUSSER HOLDINGS: Completes $6 Million Buyout of TCFS Holdings TOUSA INC: Posts $619.7 Mil. Net Loss in Quarter Ended Sept. 30 TROPICANA ENTERTAINMENT: Unit Inks Pact to Sell Horizon Casino TROPICANA ENTERTAINMENT: Posts $21 Million Net Loss in 3rd Quarter TROPICANA ENTERTAINMENT: Moody's Puts Ratings Under Review UNITED SUBCONTRACTORS: Moody's Places Ratings Under Review VONAGE HOLDINGS: To Pay Verizon $117.5 Million Over Patent Dispute VONAGE HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $62.9 Mil. WERNER LADDER: Emerges from Chap. 11 Protection Effective Oct. 31 * S&P Lowers Ratings on 112 Tranches from 21 U.S. Hybrid CDO * S&P Takes Rating Actions on Various CDO Tranches * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors, Volumes I and I ********* ACE AVIATION: S&P Withdraws 'B+' Rating at Company's Request ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B+' long-term corporate credit rating on Montreal-based ACE Aviation Holdings Inc. at the company's request. ACE is in the process of winding down as the final step in its strategy to realize shareholder values. 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 on November 12, 2007: 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 Ohio Valley A.F.M., Inc. 07-15506 Debtor-affiliates filing separate Chapter 11 petitions on November 5, 2007: Entity Case No. ------ -------- Gillespie Acquisition, Inc. 07-15378 Gillespie Wholesale, Inc. 07-15379 A.F.M. 711, Inc. 07-15381 A.F.M. 712, Inc. 07-15383 A.F.M. 713, Inc. 07-15384 A.F.M. 714, Inc. 07-15386 A.F.M. 716, Inc. 07-15388 Jackson Center 717, Inc. 07-15389 A.F.M. 717, Inc. 07-15390 A.F.M. 720, Inc. 07-15392 A.F.M. 721, Inc. 07-15393 A.F.M. 722, Inc. 07-15394 A.F.M. 723, Inc. 07-15396 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 Financial Condition of debtors filing separate Chapter 11 petitions on November 5, 2007: Estimated Assets Estimated Debts ---------------- --------------- Gillespie Acquisition, $1 Million to $1 Million to Inc. $100 Million $100 Million Gillespie Wholesale, $1 Million to $1 Million to Inc. $100 Million $100 Million A.F.M. 711, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 712, Inc. $1 Million to $1 Million to $100 Million $100 Million A.F.M. 713, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 714, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 716, Inc. $1 Million to $1 Million to $100 Million $100 Million Jackson Center 717, $100,000 to $100,000 to Inc. $1 Million $1 Million A.F.M. 717, Inc. Less than $1 Million to $10,000 $100 Million A.F.M. 720, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 721, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 722, Inc. $100,000 to $1 Million to $1 Million $100 Million A.F.M. 723, Inc. $100,000 to $1 Million to $1 Million $100 Million Financial Condition of debtors filing separate Chapter 11 petitions on November 12, 2007: 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 Ohio Valley A.F.M., Inc. $1 Million to $1 Million to $100 Million $100 Million Consolidated List of 30 Largest Unsecured Creditors of Debtors filing separate Chapter 11 petitions on November 5, 2007: Entity Nature of Claim Claim Amount ------ --------------- ------------ CORE-MARK INTERNATIONAL Trade $528,873 Attention: Bankruptcy 1055 Salt River Road Leitchfield, KY 42754 PEPSI-COLA (LIMA) Trade $85,159 Attention: Bankruptcy 75 Remittance Drive, Suite 1884 Chicago, IL PEPSI-COLA (SPRINGFIELD) Trade $69,713 Attn: Bankruptcy 75 Remittance Drive, Suite 1884 Chicago, IL 60675-1884 COCA COLA BOTTLING CO. Trade $46,435 OHIO LOTTERY COMMISSION Agency Agreement $30,901 HOME CITY ICE CO. Trade $25,924 I.C.E.E.-U.S.A. CORP. Trade $19,951 REITER DAIRY, INC. Trade $19,834 MIKE-SELLS POTATO CHIP Trade $15,076 COX AUTO TRADER $13,809 PROFESSIONAL REFRIGERATION Trade $12,966 & A/C MOVIE GALLERY U.S., INC. $10,606 IBC-WONDER BREAD/ Trade $10,374 HOSTESS CAKE MOVIES U BUY/S.Q.S. $9,996 SEVEN UP Trade $7,871 TRAUTH DAIRY INC.-ICE CREAM Trade $7,539 FRITO-LAY, INC. Trade $6,956 J.G. MAINTENANCE, INC. $6,869 DAYTON POWER AND LIGHT CO. Utility $5,622 SOLARAY CORP. $4,918 K.E. STRAYER CO. $4,660 LANCE, INC. Trade $3,240 AUTEC $2,828 COMMERCIAL PARTS & $2,319 SERVICES/OHIO BRUCE LILE $2,200 MCKEE BAKING CO. Trade $2,054 (LITTLE DEBBIE) PETRO OIL EQUIPMENT $1,938 MAINTENANCE ANTHONY INTERNATIONAL $1,820 AMERICAN ELECTRIC POWER Utility $1,438 ULTRA WASH SYSTEMS $1,413 Consolidated List of 30 Largest Unsecured Creditors of Debtors filing separate Chapter 11 petitions on November 12, 2007: 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 AMERICAN HOME: Wants to Sell Certain Non-Debtor Loans ----------------------------------------------------- American Home Mortgage Investment Corp. and its debtor- affiliates seek the U.S. Bankruptcy Court for the District of Delaware's approval of certain procedures permitting non-debtor subsidiaries, Broadhollow Funding LLC, and Melville Funding LLC, to take all appropriate actions to sell certain non-debtor loans, without further order of the Court. The Court previously approved a sale procedure for the sale of mortgage loans owned directly by Broadhollow and Melville. On September 26, 2007, the Debtors conducted an auction, resulting to the sale of all but 32 mortgage loans owned by Broadhollow and Melville, with an aggregate unpaid principal balance of $7,200,883 as of November 7, 2007. The Non-Debtor Loans were not sold at that time for various reasons. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the Non-Debtor Loans do not constitute property of the Debtors' bankruptcy estates within the meaning of Section 541 (a)(l) of the Bankruptcy Code because the ownership of the Non-Debtor Loans is vested in Broadhollow and Melville. However, because the Debtors are either the direct or ultimate parent companies of Broadhollow and Melville, certain buyers may be concerned that Court approval is necessary to consummate the sale of any Non- Debtor Loans. Sale Procedures The Debtors propose to establish these sale procedures for the non-debtor loans: -- The Debtors will give written notice of the proposed sale of any Non-Debtor Loans to the U.S. Trustee, counsel to the Official Committee of Unsecured Creditors, counsel to the Debtors' postpetition lenders, and to any party known to assert a lien on the Non-Debtor Loans, at least 10 days prior to closing of the sale. However, if the Debtors receive a higher and better offer after providing the Sale Notice, the Debtors may elect to close on the Improved Offer; -- The Sale Notice will consist of: * a disclosure that the Sale Notice is being provided in accordance with the order approving the request; * an identification of the Non-Debtor Loans being sold; * a general description of the relationship of the potential purchasers as of the time the Sale Notice is provided; * the estimated purchase price; * the proposed application of the sale proceeds; and * a summary of the proposed significant terms of the sale agreement, provided that the Sale Notice will be deemed fully confidential and will not be shared with any party, other than those with interests in the Non- Debtor Loans, absent written consent from the Debtors or Court order; -- Objections to a proposed sale will be filed with the Court by the end of the Notice Period; -- If no written objections are timely filed and served, Broadhollow and Melville are authorized by the Court to take all actions, and to execute all resolutions and other documents necessary to effectuate the Sale, without any further need to seek the Court's review or approval. Any objection filed after the objection period will be deemed untimely and will not be considered by the Court; -- If a written objection is timely filed and served that cannot be resolved, a hearing on the request will be scheduled with the Court so as to seek the Court's determination of (i) whether the sale of a Non-Debtor Loan requires the Court's approval, and if Court approval is required, (ii) whether to approve the proposed sale; -- Upon consummation of a sale, the Debtors will file and serve a notice of consummation to the applicable parties; and -- The Sale Procedures may be modified with respect to any particular sale of Non-Debtor Loans to the extent agreed in writing by the parties. Mr. Patton contends that the approval of the Sale Procedures is in the best interests of the Debtors' estates, their creditors and other parties-in-interest because it will provide the Parties with reasonable opportunity to consider the significant terms of each Non-Debtor Loan sale prior to the consummation of the sale. In addition, absent an objection, the Debtors will be permitted to take all appropriate actions necessary to effectuate the sale with little delay and without any further need to seek the Court's review or approval of the sale. The Sale Procedures will allow the Debtors' management to focus on their Chapter 11 process at large without having to repeatedly assess or make a determination as to whether a particular aspect of each Non-Debtor Loan sale requires the Debtors to seek Court approval, Mr. Patton argues. He adds that the Sale Procedures will give prospective buyers comfort that the sale is being conducted under a procedure approved by the Court. 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 HOME: Court OKs Termination of Deferred Compensation Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized American Home Mortgage and Investment Corp. and its debtor- affiliates to exercise their contractual rights to terminate American Home Mortgage Holdings Inc.'s deferred compensation plan as of Aug. 29, 2007. The Court also directed Merrill Lynch Trust Company, FSB, the compensation plan trustee under a deferred compensation plan trust agreement, to return the assets held in the trust to the Debtors' bankruptcy estates within seven days after the request's approval. The Hon. Christopher Sontchi also ruled that the settlement on the participant group's objection is approved pursuant to these terms: -- the Debtors will pay the participant group $400,000, to be shared pro rata among its members; -- each member of the participant group will have an allowed priority wage claim pursuant to Section 507(a)(4) of the Bankruptcy Code, if and to the extent each Member has an unpaid claim for deferred compensation in the 180 days prior to the Debtors' bankruptcy filing, up to a maximum of $10,950, payable on the earlier of: * when claims are payable pursuant to a Chapter 11 plan of reorganization; or * when other priority claims of terminated employees are paid; -- each Member will be entitled to assert a general unsecured claim for the amount of compensation each Member deferred under the Compensation Plan, which amount will be reduced by any amount of deferred compensation allowed as a priority wage claim. However, the Debtors retain the right to object to any claim, which asserts an amount in excess of the amount the Member deferred under the Compensation Plan, or in excess of the priority amount to which the party is entitled; -- upon receipt of his or her portion of the $400,000 payment, each Member will be deemed to release the Debtors, their bankruptcy estates, and their employees from all claims or causes of action related to the Compensation Plan or the Trust; and -- the Debtors will waive their right to bring any actions under Section 547 of the Bankruptcy Code against the Members, solely with respect to payouts of deferred compensation under the Compensation Plan. The Court further ruled that the settlement of the objection asserted by Valerie Lynn Scruggs is approved according to these terms: -- the Debtors will pay Ms. Scruggs $7,000; -- Ms. Scruggs will have an allowed priority wage claim pursuant to Section 507(a)(4), and to the extent Ms. Scruggs has an unpaid claim for deferred compensation that was designated in the 180 days prior to the Petition Date, up to a maximum of $10,950, which is payable when other priority claims of terminated employees are paid; -- Ms. Scruggs will be entitled to assert a general unsecured claim for the amount of compensation she deferred under the Compensation Plan; -- upon receipt of her payment, Ms. Scruggs will be deemed to release the Debtors from all claims or causes of action related to the Compensation Plan or the Trust; and -- the Debtors will waive their right to bring any actions under Section 547 against Ms. Scruggs, solely with respect to the payouts. Judge Sontchi has noted that the terms of the settlement are fair and equitable and that they represent "well above the lowest point in the reasonable range of potential litigation outcomes." He also said that the settlement "advances the paramount interests of creditors." Previously, the Debtors had informed the Court that they had reached a settlement in principle with each of the request's objecting parties, but that the Official Committee of Unsecured Creditors was still conducting a due diligence inquiry into the proposed settlement. The settlement resulted to this consensual order. 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: Moody's Downgrades Ratings on 13 Tranches -------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 13 tranches and has placed under review for possible downgrade the ratings of 6 tranches from 5 deals issued by American Home 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: American Home Mortgage Assets Trust 2005-2 * Cl. 1-B-2, Downgraded to Baa3, previously A2, * Cl. 1-B-3, Downgraded to Caa2, previously Baa2. Issuer: American Home Mortgage Investment Tr 2006-3 * Cl. III-M-1 Currently Aa3 on review for possible downgrade, * Cl. III-M-2, Downgraded to Baa2, previously A2, * Cl. III-M-3, Downgraded to Baa3, previously A3. Issuer: American Home Mortgage Assets Trust 2005-2 * Cl. 2-B-1 Currently Aa2 on review for possible downgrade, * Cl. 2-B-2, Downgraded to Ba1, previously A2, * Cl. 2-B-3, Downgraded to Caa1, previously Baa2, * Cl. 2-B-4, Downgraded to Ca, previously B3. Issuer: American Home Mortgage Investment Tr 2006-3 * Cl. II-1A-2 Currently Aaa on review for possible downgrade, * Cl. II-2A-2 Currently Aa1 on review for possible downgrade, * Cl. II-M-1 Currently Aa2 on review for possible downgrade, * Cl. II-M-2, Downgraded to Ba1, previously A1, * Cl. II-M-3, Downgraded to B3, previously A3. Issuer: American Home Mortgage Investment Trust 2006-2 * Cl. III-M-1 Currently Aa2 on review for possible downgrade, * Cl. III-M-2, Downgraded to Baa1, previously A2, * Cl. III-M-3, Downgraded to Baa2, previously A2, * Cl. III-M-4, Downgraded to Ba2, previously Baa1, * Cl. III-M-5, Downgraded to B3, previously Baa3. AMERICAN REPROGRAPHICS: Moody's Holds Ba3 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family Rating for American Reprographics Company LLC. Moody's has concurrently assigned a Ba2 rating to the proposed first lien credit facilities of ARC, consisting of a $75 million senior secured revolving credit facility and a $275 million senior secured term loan 'A'. The new senior secured credit facilities will replace an existing $30 million senior secured revolving credit facility and a $261 million senior secured term loan. The outlook has been changed to stable from positive, reflecting the potential for a significant slowdown in non-residential construction more severe than currently anticipated by Moody's. Moody's assigned these ratings: - $75 million senior secured first lien revolver due 2012, Ba2 (LGD2, 22%); - $275 million senior secured first lien term loan due 2012, Ba2 (LGD2, 22%); Moody's affirmed these ratings: - Corporate Family Rating, at Ba3; - Probability of Default Rating, at B1 Moody's will withdraw these ratings on the close of the new facilities: - $30 million senior secured revolving credit facility, at Ba2 (LGD2, 21%); - $261 million term loan facility due 2009, at Ba2 (LGD2, 21%); The outlook has been changed to stable from positive. The ratings primarily reflect the company's strong financial metrics, with projected leverage, interest coverage and cash flow metrics currently consistent with a higher rating. However, the ratings are vulnerable to a downturn in the non-residential construction industry given the company's heavy reliance on this sector. The ratings are also constrained by: 1) low barriers to entry; 2) pricing pressure in a highly fragmented reprographic services market, and, 3) geographic concentration with roughly 43% of revenues generated in the state of California. The outlook is stable, reflecting Moody's expectation that the company's financial metrics will remain within a range of the Ba3 rating category over the forthcoming year given the strength in cash flows from operations. Moody's anticipates that substantial free cash flows will be utilized primarily for debt reduction and opportunistic acquisitions going forward, barring a major share repurchase. The outlook could move up if the company's operating results continue to improve, resulting in total debt to EBITDA falling below 3.3 times or if EBIT to interest expense exceeds 3.5 times on a sustained basis. Downward pressure on the outlook could result if there is a significant downturn in the architectural, engineering and construction industries that the company serves, causing a decline in revenues, operating margins and free cash flow generation. Downward movement could also occur in the event that the company re-leverages its balance sheet as a result of a share repurchase, recapitalization, major dividend distribution or acquisition, translating into an increase in debt to EBITDA in excess of 4.3 times or a reduction of EBIT to interest expense below 1.9 times on a sustained basis. American Reprographics Company is a leading reprographics service company in the U.S. It provides document management services primarily to the "AEC" industries through a nationwide network of independently-branded service centers. For the last twelve months ended June 30, 2007 the company generated revenues of roughly $638 million. ANNIE PETTWAY: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Annie Lee Pettway 642 Broadway Westbury, NY 11590 Bankruptcy Case No.: 07-21471 Chapter 11 Petition Date: November 14, 2007 Court: District of Maryland (Baltimore) Debtor's Counsel: Edward V. Hanlon, Esq. 5510 Cherrywood Lane, Suite G Greenbelt, MD 20770 Tel: (301) 345-8008 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Portfolio Recovery & Aff. hospital $2,100 120 Coporate Boulevard, Suite 10 Norfolk, VA 23502 The Credit Bureau, Inc. CollectionAttorney $83 19 Prince Street Frontier-Fl/South Rochester, NY 14607 So telephone ASARCO LLC: Judge Schmidt to Approve Tri-State Settlement --------------------------------------------------------- Steven Church of the Bloomberg News reports that during a November 13, 2007, hearing, the Hon. Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas said that he will sign an order approving the Tri-State Settlement once the lawyers of ASARCO LLC prepare a final draft. ASARCO has previously sought the Bankruptcy Court's approval of the Tri-State Settlement, which aims to pay $158,000,000, in the aggregate, to the U.S. Government, the states of Kansas, Oklahoma, and Missouri, and certain state agencies, as resolution of the disputes with respect to the company's liability for past and future environmental response costs, assessment of natural resource damages, and estimated natural resource restoration costs at the Tri-State Site. Donald A. Robbins, ASARCO's director of environmental sciences, said in a proffer submitted to the Court that "the settlement is good for ASARCO because it provides certainty regarding exposure to environmental liabilities at a reasonable price." He added that the Tri-State Claims involves complex issues and diverse views of the parties involved, which made the settlement process particularly difficult. The alternative to settlement, according to Mr. Robbins, would have been to proceed to a difficult and lengthy estimation hearing for the Site, the outcome of which would have been uncertain for ASARCO. Post-Hearing Briefs on Coeur D'Alene Site ASARCO LLC and the U.S. Government each filed post-hearing briefs in connection with the environmental estimation hearing for the Coeur d'Alene Basin held on October 9 to 12, 2007. In its post-hearing brief, ASARCO maintained that the Bankruptcy Court should adopt the opinion issued by U.S. District Court for the District of Ohio that, among other things, found that the harm at the CAD Site is divisible and that ASARCO's share of the apportioned damages is 22%. The Ohio Court has had a lengthy fact-finding and testimony with the same parties involved during the CAD estimation hearing, Tony M. Davis, Esq., at Baker Botts, L.L.P., in Houston, Texas, relates. ASARCO contends that the Government has substantially overstated its claim for natural resources damages. Mr. Davis says one of the principal reasons for the overstatement is the Government's failure to appropriately consider cost-effectiveness in their selection of the restoration alternatives to be used in measuring the cost of redressing the injuries to natural resources in the Basin. The Government asserted that it is entitled to $333,200,000 of NRD damages. Mr. Davis argues that the NRD Claim failed to take into account the divisibility ruling of the Ohio Court. Applying the 22% divisibility share, ASARCO's NRD liability is limited to $73,000,000, which could be further reduced to $7,520,000 once several errors like double-billing for injuries, are taken into account, Mr. Davis elaborates. ASARCO asserts that its apportioned share of the Government's total response cost claim is $113,120,000. The estimate is based on the company expert Jeffrey Zelikson and Richard White's analysis of the Government's past costs and the various possibilities associated with the potential future response actions and related costs for the CAD Site, ASARCO notes. The estimate also reflects, Mr. Davis adds, the trial testimony demonstrating that any potential future final remedy that may be performed at the Site, like the U.S. Environmental Protection Agency's proposed "Comprehensive Remedy," will not commence earlier than 2032, if ever. Accordingly, ASARCO asserts that its total liability for the CAD Site, including past and future response costs and NRD, should not exceed $122,470,000. The U.S. Government, however, in its post-hearing brief, points out that ASARCO's argument that the Trustees must choose the cheapest alternative to compensate the public ignores the statutory preference for achieving restoration, and pays no heed to existing case law that both rejects choosing low cost options over primary restoration and precludes use of cost-effectiveness as the sole selection criterion. The Government emphasizes that applying the 22% Ohio Court ruling to the costs and damages case would have an enormous adverse impact on the amount of its environmental claim. The shortfall would run counter to the Comprehensive Environmental Response, Compensation, and Liability Act's "polluters pay" mandate, and shift the burden to the taxpaying public, the Government says. The Government maintains that its Claim asserting $184,499,647 for response costs at the CDA Site should be allowed. Along with its post-hearing brief, the Government filed a table comparing the amount of its actual claim with that of ASARCO's estimate. A copy of the CDA Claim Comparison Table is available for free at http://ResearchArchives.com/t/s?255b Responses to Tri-State Settlement The Doe Run Resources Corporation, doing business as The Doe Run Company; Blue Tee Corp., and Gold Fields Mining, LLC; and NL Industries, Inc., in separate filings with the Court, raised their concerns on the effect of the Tri-State Settlement to the contribution and indemnity claims they asserted against ASARCO. Doe Run, Blue Tee and Gold Fields, and NL Industries have asserted contribution and indemnification claims relating to the Tri-State Site against ASARCO. They are also potentially responsible parties with respect to the Site. The PRPs note that the Settlement grants to ASARCO protection from liability for contribution claims asserted by potentially responsible parties. They further point out that the provision may suggest that the states of Kansas, Missouri and Oklahoma may not be required to provide a credit to them for distributions actually received by those States on account of their respective allowed claims. To the extent the effect of the Settlement would deny the PRPs credits from the States otherwise available to them under applicable non-bankruptcy law, the PRPs object to the proposed settlement. The PRPs also object to the proposed settlement to the extent that it would limit their ability to receive credits for sums actually received by the U.S. Government and each of the subject States on account of the claims allowed under the Settlement Agreement, whether those funds are "received" under the Settlement, pursuant to a confirmed plan of reorganization, or otherwise. Furthermore, the PRPs oppose the proposed settlement to the extent that: (a) they would not be eligible to receive credits due to the effect of the phrase "non-settling potentially responsible parties;" (b) it may not assure that other alleged responsible parties at sites, operable units, designated areas and sub-sites for which ASARCO is liable will receive the benefit of the reduction in potential liability that is mandated by Section 9613(f)(2) of the Public Health and Welfare Code and is otherwise required by operation of law; (c) its effect could be to deny them the credits to which they are entitled based on the unilateral decisions of the Governmental Parties. The PRPs believe that their ability to negotiate or litigate their entitlement to those credits must be preserved, notwithstanding ASARCO's settlement with the Governmental Parties; and (d) the Settlement does not expressly state that they are third-party beneficiaries of the Governmental Parties' agreements to provide the credits, with explicit rights to enforce those agreements. Doe Run objects to the proposed settlement to the extent it would have the effect of precluding allowance of its claim for reimbursement of past costs it incurred for the Tri-State Site. The PRPs advise the Court that they and other PRPs at the Tri- States Sites have spoken with counsel for the EPA and the U.S. Department of Interior with respect to the matters they raised. The PRPs believe that they may resolve those issues through the public comment process. Accordingly, the PRPs ask the Court to direct ASARCO and the Governmental Agencies to modify the Settlement to properly address the issues they have raised. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Lease-Related Decision Deadline Extended to May 9 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas further extended, until May 9, 2008, the time within which ASARCO LLC and its debtor-affiliates may decide whether to assume or reject certain non-residential real property leases. The Debtors tell the Court that the extension will give them additional time to determine the extent of their reclamation obligations under the leases that relate to their Mission Mine located on lands leased from the San Xavier District of the Tohono O'odham Nation and certain individual members of the Tohono O'odham Nation who hold trust patent allotments of the lands. The Debtors are currently negotiating a settlement with the San Xavier District, the Allottees, and the U.S. Department of the Interior Bureau of Land Management and Bureau of Indian Affairs concerning their reclamation obligations. If the Debtors are not able to determine the nature and scope of their reclamation obligation, they cannot determine the cost of assuming or rejecting the Mission Mine Leases, Judith W. Ross, Esq., at Baker Botts, L.L.P., in Dallas, Texas, asserts. Thus, the reclamation obligations must be resolved before the Debtors can make a decision whether to assume or reject the Mission Mine Leases. The reclamation claims filed by the Mission Mine Parties will be subject to estimation pursuant to Court-approved procedures. ASARCO LLC, one of the Debtors, also initiated a litigation against the Department of Interior, and that litigation is on track for a December 2007 resolution, Ms. Ross informs the Court. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATARI INC: CEO David Pierce Resigns, Curtis Solsvig Takes Over -------------------------------------------------------------- David Pierce has resigned his position as Atari Inc.'s chief executive officer under the terms of his employment agreement. Curtis G. Solsvig III, chief restructuring officer, will assume Mr. Pierce's responsibilities on an interim basis. An executive search has been initiated to find Mr. Pierce's successor. "We appreciate David's support and commitment through a difficult period in the company's history and wish him well in his future endeavors." Gene Davis, chairman of the board of directors said. 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 million in total assets and $43.6 million in total liabilities, resulting in an $8.6 million in total shareholders' deficit. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $25.2 million in total current assets available to pay $34.1 million in total current liabilities. Net loss for the first quarter ended June 30, 2007, was $11.9 million, compared to net loss of $7.3 million in the year- earlier period. 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. BARCLAYS CAPITAL: Moody's Downgrades Ratings on 11 Tranches ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of 11 tranches and has placed under review for possible downgrade the ratings of 8 tranches from 2 deals issued by Barclays Capital in 2006. One downgraded tranche was left on review for possible further 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 incorporated its published methodology updates to the non delinquent portion of the transactions. Issuer: BCAP LLC Trust 2006-AA1 * Cl. A-2 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 Baa3, previously A2, * Cl. M-6, Downgraded to Ba1, previously A3, * Cl. M-7, Downgraded to Ba3, previously Baa1, * Cl. M-8, Downgraded to B3, previously Baa2, * Cl. M-9, Downgraded to Ca, previously Ba1. Issuer: BCAP LLC Trust 2006-AA2 * 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. M-7, Downgraded to Ba3, previously Baa1, * Cl. M-8, Downgraded to B3 on review for possible further downgrade, previously Baa3. BARONET INC: Seeks Protection from Creditors Under CCAA ------------------------------------------------------- Baronet Inc. and Baronet USA filed bankruptcy petitions under Companies' Creditors Arrangement Act after suffering losses for almost two years, Michael J. Knell at Furniture Today reports. The Debtors terminated all of its workers numbering 145 and closed down its factory, Furniture Today says. Baronet's operating losses were due to the strong Canadian dollar and the slump in the retail industry, Furniture Today relates, citing spokesman Thierry Audin. Sainte-Marie, Quebec-based Baronet Inc. -- http://www.baronet.ca/ -- manufactures and exports contemporary household furniture. Its market includes Iran, United Arab Emirates, United Kingdom, and most parts of the United States. BEAR STEARNS: Expects Net Loss in Fourth Quarter of 2007 -------------------------------------------------------- Samuel L. Molinaro, Jr., Executive Vice President, Chief Financial Officer and Chief Operating Officer of The Bear Stearns Companies Inc. provided an update Wednesday on the company's collateralized debt obligations and subprime related exposures. According to Mr. Molinaro, as of Aug. 31, 2007, the company had total ABS CDO related exposures of approximately $2 billion, which consisted of $963 million of AAA super senior, $165 million below AAA and $944 million of CDO Warehouse. These positions have been materially reduced through Nov. 9, 2007. The CDO Warehouse exposure as of Aug. 31, 2007 has essentially been liquidated or converted into CDO's. The company's overall CDO position as of Nov. 9, 2007, was $884 million, down from approximately $2 billion as of Aug. 31, 2007. During the period between Aug. 31, 2007, and Nov. 9, 2007, the company significantly increased its short subprime exposures reducing the Aug. 31, 2007 net exposure of about $1 billion to a negative $52 million net exposure as of Nov. 9, 2007. As a result of the extremely challenging environment, Mr. Molinaro relates that the company has gone through an exhaustive process of revaluing the mortgage and CDO portfolios. As a result, the company will be taking a net write-down of about $1.2 billion on these positions and others in its mortgage inventory. Net of tax, this write down is approximately $700 million. The vast majority of these losses are attributable to write downs on the CDO and CDO warehouse portfolio. Consequently, the company anticipates having a loss for the fourth quarter of 2007. The company has no off-balance-sheet exposures to CDO or subprime collateral held by conduits or other entities including Structured Investment Vehicles. Rating Agency Actions Fitch Ratings affirmed Bear Stearns and its subsidiaries' long- term credit ratings and downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. The Rating Outlook has been revised to Negative from Stable. Fitch says that despite the company's ability to manage its balance sheet amid a pressured environment, the ratings agency believes Bear Stearns financial performance has been negatively impacted by management's decision to support a sponsored structured credit fund. Similarly, Standard & Poor's Ratings Services took negative actions in response to the company's announcement of a fourth- quarter write down which will result in a loss, the company's first in its history. S&P lowered its long-term counterparty credit rating on the company to 'A' from 'A+' and affirmed the 'A- 1' short-term rating. The outlook is negative. Moody's, on the other hand, placed the long-term ratings of Bear Stearns (LT unsecured at A1) and its subsidiaries on review for possible downgrade. The Prime-1 short-term rating was affirmed. About Bear Stearns Companies New York-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is primarily a holding company that through its broker-dealer and international bank subsidiaries, principally Bear, Stearns & Co. Inc., Bear, Stearns Securities Corp. (BSSC), Bear, Stearns International Limited (BSIL) and Bear Stearns Bank plc (BSB) is an investment banking, securities and derivatives trading, clearance and brokerage firm serving corporations, governments, institutional and individual investors worldwide. The company operates as a securities broker and dealer in three principal segments: Capital Markets, Global Clearing Services and Wealth Management. BEAR STEARNS: Fund LP Wants to Dissolve and Liquidate Assets ------------------------------------------------------------ Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund LP has asked the U.S. Delaware Chancery Court in Wilmington to allow it to dissolve and liquidate its assets considering the decline in the subprime mortgage market and pending management complaints filed by its creditors, Bloomberg News reports. Bear Stearns Fund LP was linked to the Cayman Islands-based hedge funds, Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structure Credit Strategies Enhanced Fund, Ltd., which are currently liquidating under Cayman Islands' Companies Law in July 2007, the investment firm's lawyers said in the Delaware court filings. According to Bloomberg, Bear Stearns Fund LP is a "feeder fund" for the Cayman Islands-based Funds, which are "master funds." This set-up is usually done so the foreign master fund can gain a tax advantage for the domestic investors. "The partnerships can no longer operate in the manner contemplated by the agreement that created it," Bloomberg quotes the feeder fund counsel as saying. The Bear Stearns Master Funds previously sought court protection after a firm granted one of the investment funds $1,600,000,000 in emergency financing, the biggest hedge-fund bailout since the collapse of Long-Term Capital Management LP in 1998, Bloomberg notes. Aside from its liquidation request, Bear Stearns Fund LP also sought permission from the Delaware Chancery Court to employ KPMG International to oversee its liquidation. The investment firm's lawyers related to Bloomberg that KPMG is also overseeing the liquidation of about five of the firm's other hedge funds, including the Cayman Islands-based Master Funds. "KPMG is already serving as the liquidator of the two master funds," Bear Stearns spokesperson Russell Sherman said in an e- mailed statement. "By having KPMG, which is operating independently of [Bear Stearns Asset Management], serve as liquidators for the feeder fund will increase efficiencies and provide for a coordinated effort." Moreover, Samuel Molinaro, chief financial officer of New York- based Bear Stearns Cos., disclosed that the company will take a write-down of $1,200,000,000 for the fourth quarter of 2007 related to mortgage securities, creating the company's first quarterly loss in its 84-year history, the Wall Street Journal says. The write-down relates to Bear Stearns' position in collateralized debt obligations, complex mortgage-backed securities, and other like-holdings. The Journal says the size of the write-down might change during the last two weeks of the quarter ending November 30, 2007. According to Bloomberg data, Bear's shares rose $2.58, 2.6%, to $103.45 in New York Stock Exchange composite trading in Nov. 14. The company's shares have fallen 36.6% this year. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BFC SILVERTON: S&P Puts 'BB+' Ratings Under Negative Watch ---------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class B-1, B-2, and C notes issued by BFC Silverton CDO Ltd., the class A-1J notes issued by Hartshorne CDO I Ltd., the class A-1, A-2, A- 3, B, C, D, E, and combo notes issued by Pampelonne CDO II Ltd., and the class A-2, B, C, D, and E notes issued by Pampelonne CDO I Ltd. on CreditWatch with negative implications. The ratings on the class D, E, and F notes issued by BFC Silverton CDO Ltd. and the ratings on the class A-2, A-3, B1, B2, and B3 notes issued by Hartshorne CDO I Ltd. remain on CreditWatch with negative implications, where they were placed Oct. 22, 2007. Standard & Poor's notes that BFC Silverton CDO Ltd. triggered an event of default under section 5.1(d) of the indenture dated Oct. 31, 2007, when its class A/B par value coverage ratio fell below 100%. On Nov. 9, 2007, Hartshorne CDO I Ltd. triggered an EOD under section 5.1(h) of the indenture dated March 20, 2007, after failing the senior credit test. Pampelonne CDO I Ltd. triggered an EOD on Nov. 9, 2007, under section 5.1(e) of the indenture dated Oct. 19, 2006, when its class A EOD ratio fell below 100%. On Nov. 8, 2007, Pampelonne CDO II Ltd. triggered an EOD under section 5.1(e) of the indenture dated March 6, 2007, when its class A EOD ratio fell below 100%. When Standard & Poor's receives EOD notices, S&P place all affected note ratings on CreditWatch with negative implications. Ratings Placed on Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- BFC Silverton CDO Ltd. B-1 AAA/Watch Neg AAA BFC Silverton CDO Ltd. B-2 AAA/Watch Neg AAA BFC Silverton CDO Ltd. C AA/Watch Neg AA Hartshorne CDO I Ltd. A-1J AAA/Watch Neg AAA Pampelonne CDO I Ltd. A-2 AAA/Watch Neg AAA Pampelonne CDO I Ltd. B AA/Watch Neg AA Pampelonne CDO I Ltd. C A/Watch Neg A Pampelonne CDO I Ltd. D BBB/Watch Neg BBB Pampelonne CDO I Ltd. E BB+/Watch Neg BB+ Pampelonne CDO II Ltd. A-1 AAA/Watch Neg AAA Pampelonne CDO II Ltd. A-2 AAA/Watch Neg AAA Pampelonne CDO II Ltd. A-3 AAA/Watch Neg AAA Pampelonne CDO II Ltd. B AA/Watch Neg AA Pampelonne CDO II Ltd. C A/Watch Neg A Pampelonne CDO II Ltd. D BBB/Watch Neg BBB Pampelonne CDO II Ltd. E BB+/Watch Neg BB+ Pampelonne CDO II Ltd. Combo AAA/Watch Neg AAA Ratings Remaining on Creditwatch Negative Transaction Class Rating ----------- ----- ------ BFC Silverton CDO Ltd. D A/Watch Neg BFC Silverton CDO Ltd. E BBB/Watch Neg BFC Silverton CDO Ltd. F BB+/Watch Neg Hartshorne CDO I Ltd. A-2 AA/Watch Neg Hartshorne CDO I Ltd. A-3 A/Watch Neg Hartshorne CDO I Ltd. B1 BBB+/Watch Neg Hartshorne CDO I Ltd. B2 BBB/Watch Neg Hartshorne CDO I Ltd. B3 BBB-/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ BFC Silverton CDO Ltd. A Liq Fac AAA Hartshorne CDO I Ltd. X AAA Hartshorne CDO I Ltd. A-1S AAA Pampelonne CDO I Ltd. S AAA Pampelonne CDO I Ltd. A-1 AAA Pampelonne CDO II Ltd. S AAA BRISTOW GROUP: Completes $2.5 Mil. Buyout of Vortex Helicopters --------------------------------------------------------------- Bristow Group Inc. has completed the acquisition of Vortex Helicopters Inc. for approximately $2.5 million. The acquisition is part of the expansion of Bristow's Global Training Division. Upon completion of the transaction, the flight school was renamed Bristow Academy Inc., New Iberia Campus. "Having a training school in the heart of the Gulf of Mexico region is a key element in our global strategy to address pilot recruitment and retention," Patrick Corr, president of the Bristow's Global Training Division said. "The New Iberia campus will focus on attracting aspiring pilots who have a strong connection to the Gulf Coast community." "I'm looking forward to a new chapter in the growth of the company I established in 1987," Joe Sheeran, Vortex founder added. "It's exciting to see the opportunities that are available to the school, its students, and its staff through this acquisition." Mr. Sheeran will continue with the company in the role of general manager of the New Iberia campus. With the addition of the New Iberia school Bristow Academy now has training facilities located in Louisiana, California, and Florida, well as in the United Kingdom. The Academy is approved to provide training for all U.S. Federal Aviation Administration and European Joint Aviation Administration helicopter licenses. About Vortex Helicopters Inc. Headquartered in New Iberia, Los Angeles, Vortex Helicopters - http://www.vortex-helicopters.com/-- is a flight training school. Vortex owns 11 training helicopters and focuses on high quality flight training for helicopter pilots, primarily from the Gulf Coast area. About Bristow Group Inc. Headquartered in Houston, Texas, Bristow Group Inc. (NYSE:BRS) -- http://www.bristowgroup.com/-- fka Offshore Logistics Inc., provides helicopter transportation services to the worldwide offshore oil and gas industry with operations in the United States Gulf of Mexico and the North Sea. The company also has operations, both directly and indirectly, in offshore oil and gas producing regions of the world, including Australia, Brazil, China, Mexico, Nigeria, Russia and Trinidad. The company also provides production management services for oil and gas production facilities in the United States Gulf of Mexico. * * * Standard & Poor's Ratings Services placed Bristow Group Inc.'s long term corporate family and senior unsecured debt ratings at 'Ba2' in January 2006. The ratings still hold to date with a negative outlook. CALUMET SPECIALTY: S&P Affirms 'B' Rating and Revises Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on refining and marketing company Calumet Specialty Products Partners L.P. to positive from stable, and affirmed its 'B' corporate credit rating on the company. The revised outlook followed the announcement that Calumet intends to issue 2.8 million common units to help finance its pending acquisition of Penreco and provide additional liquidity for future spending needs, including acquisitions. "The outlook revision reflects expectations for Calumet to maintain relatively moderate debt leverage, the enhanced asset diversification from the pending Penreco acquisition, and completing expansion of its largest refinery in the near term," said Standard & Poor's credit analyst Paul B. Harvey. The positive outlook also reflects the potential for further asset diversification if Calumet completes the proposed $250 million acquisition of specialty hydrocarbon facilities in the U.S. and Europe. As part of the financing for the Penreco acquisition, Calumet has obtained a commitment from Bank of America N.A. for a new, $425 million senior secured first-lien term loan facility. Standard & Poor's intends to rate the facility when it receives final documentation later in the fourth quarter. Existing recovery and bank loan ratings reflect Calumet's present term loan facility and do not imply any potential ratings on the new facility. The ratings on Indianapolis, Indiana-based Calumet reflect its position as a small, independent petroleum refiner structured as a master limited partnership, its hedging on around 60% of fuel production through 2010, and more stable specialty product margins. The company has moderate debt leverage for the current rating, and modest asset diversity is provided by its three refineries and the pending acquisition of Penreco. CHAPARRAL RANCH: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Chaparral Ranch, L.L.C. 1443 Blackstone Avenue San Jose, CA 95118 Bankruptcy Case No.: 07-53719 Chapter 11 Petition Date: November 14, 2007 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: David A. Boone, Esq. 1611 The Alameda San Jose, CA 95126 Tel: (408) 291-6000 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million The Debtor does not have any creditors who are not insiders. COMMUNITY HEALTH: Moves Notes Exchange Offer Period to Nov. 30 -------------------------------------------------------------- CHS/Community Health Systems Inc. has extended the exchange offer period for its 8-7/8% Senior Notes due 2015, until Nov. 30, 2007, at 5:00 p.m., New York City time. The exchange offer was scheduled to expire on Nov. 13, 2007, at 5:00 p.m., New York City time. On Oct. 9, 2007, CHS/CHS launched an exchange offer pursuant to which it offered to the holders of the outstanding $3,021,331,000 aggregate principal amount of its Notes to exchange the Notes for a like principal amount of its 8-7/8% Senior Notes due 2015 which have been registered under the Securities Act of 1933, as amended. As of the close of business on Nov. 13, 2007, U.S. Bank National Association, the exchange agent, had received tenders of Notes in the aggregate principal amount of $3,016,621,000. Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems Inc. -- http://www.chs.net/-- (NYSE: CYH) operates general acute care hospitals in non-urban communities throughout the United States. Through its subsidiaries, the company currently owns, leases or operates 80 hospitals in 23 states. Its hospitals offer inpatient medical and surgical services, outpatient treatment and skilled nursing care. * * * Standard & Poor's Ratings Services placed Community Health Systems Inc.'s long term foreign and local issuer credit ratings at 'B+' in June 2007. The ratings still hold to date. COPANO ENERGY: Moody's Affirms B1 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service affirmed Copano Energy LLC's B1 Corporate Family Rating and the B2 rating on its 8.125% senior unsecured notes due 2016, including the proposed $125 million add- on announced this afternoon. The LGD rating on the notes was changed to B2 (LGD 5, 73%) from B2 (LGD 5, 75%). Proceeds from the proposed add-on will be used to repay borrowings under Copano's revolving credit facility. The rating outlook is positive. The ratings affirmation reflects Copano's increased scale and greater geographic diversification following the recently closed Cantera acquisition as well as its historically conservative leverage profile. As a result of the acquisition, Copano's total assets have increased to approximately $1.7 billion, which is more consistent with Ba-rated midstream companies. Cantera will add a third operating region to Copano's existing assets in the Mid- continent and the Texas Gulf Coast. The acquisition will further reduce Copano's commodity price exposure as all of Cantera's gathering contracts are fee-based. Copano estimates that its percentage of fee-based volumes will increase next year to 57% from 38%. These benefits are tempered by Copano's higher leverage and lower returns following the acquisition. Copano paid a very high multiple for Cantera (based on historical results), which will lower the its returns until cash flow grows over the next several years from expected higher production volumes. Copano funded the transaction with 63% equity, including $335 million from a private placement and $112.5 million issued to the seller. The remaining $277.5 million of the purchase price was funded from borrowings under Copano's revolving credit facility, of which $125 million is being termed out today. In spite of the relatively high amount of equity funding, Copano's leverage increased as a result of the Cantera acquisition. On a pro forma basis, Copano's debt/EBITDA (not adjusted for option premium amortization) is approximately 4.2x for the LTM period ended Sept. 30, 2007. Moody's expects that Copano's leverage will drop to less than 4.0x by the end of 2007 and will remain at or below that level in 2008. While this is somewhat higher than Copano's historical leverage levels, is at the lower end of comparable peers that range between 3.5x-4.5x. The rating outlook is positive, although the Cantera acquisition slowed the Copano's momentum toward an upgrade to Ba3. Moody's would like to see execution on the acquired assets as well as continued strong performance in other areas before proceeding with an upgrade. Weaker operational results including shortfalls in expected growth volumes on the Cantera assets or an unfavorable change in financial policies could result in a return to a stable outlook. Copano Energy LLC is headquartered in Houston, Texas. COPANO ENERGY: S&P Holds 'BB-' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Copano Energy LLC. At the same time, S&P affirmed its 'B+' rating on the company's $225 million senior unsecured notes due 2016, and assigned its 'B+' rating to the company's additional proposed $100 million senior unsecured notes due 2016. The outlook is positive. The ratings on Copano reflect a business risk profile that S&P categorize as weak. Houston, Texas-based Copano is a "midstream" energy company that gathers, processes, and transmits natural gas. It operates in the Texas Gulf Coast region and in Oklahoma. Copano's business risk profile reflects an asset base that is smaller than many of its midstream peers and margins that are sensitive to volume declines and commodity prices. For Copano's Texas Gulf Coast processing segment, most of the contracts are keep-whole and expose the company to commodity pricing volatility. Management has modified its Houston Central processing plant and negotiated its contracts to have fee arrangements that allow the company to condition the gas rather than fully process it at its discretion. However, these contracts remain more vulnerable to the spread between natural gas and natural gas liquids prices than purely fee-based contracts. For the Gulf Coast pipeline segment, the company purchases more than one-half of the gas on a percentage discount to index basis, where margins are a function of index pricing. "The positive outlook reflects earnings performance that, in combination with sizable equity issuances, has improved the company's financial profile," said Standard & Poor's credit analyst Plana Lee. "We could raise the rating if the company continues its strong operating performance and continues with its ongoing efforts to manage cash flow volatility through hedges," she continued. Any upward rating action would also rely on disciplined financing for acquisitions or growth projects. Conversely, lower-than- expected volumes, greater-than-expected debt-financed capital spending, or a weakened financial risk profile could dampen the possibility of an upgrade. CREDIT SUISSE: Fitch Rates $10.2MM Class N Certificates at BB- -------------------------------------------------------------- Fitch has rated Credit Suisse Commercial Mortgage Trust, series 2007-C5 commercial mortgage pass-through certificates as: -- $33,000,000 class A-1 'AAA'; -- $315,000,000 class A-2 'AAA'; -- $161,000,000 class A-3 'AAA'; -- $65,083,000 class A-AB 'AAA'; -- $982,500,000 class A-4 'AAA'; -- $347,984,000 class A-1-A 'AAA'; -- $197,981,000 class A-M 'AAA'; -- $74,100,000 class A-1-AM 'AAA'; -- $153,463,000 class A-J 'AAA'; -- $57,400,000 class A-1-AJ 'AAA'; -- *$2,172,710,000 class A-SP 'AAA'; -- *$2,720,810,685 class A-X 'AAA'; -- $23,807,000 class B 'AA+'; -- $20,406,000 class C 'AA'; -- $34,010,000 class D 'AA-'; -- $30,609,000 class E 'A+'; -- $13,604,000 class F 'A'; -- $40,813,000 class G 'A-'; -- $20,406,000 class H 'BBB+'; -- $30,609,000 class J 'BBB'; -- $23,807,000 class K 'BBB-'; -- $10,203,000 class L 'BB+'; -- $10,203,000 class M 'BB'; -- $10,203,000 class N 'BB-'. *Notional Amount Fitch did not rate the $17,005,000 class O, $3,401,000 class P, $10,203,000 class Q, and $34,010,685 class S. Classes A-1, A-2, A-3, A-AB, A-4, A-1-A, A-M, A-1-AM, A-J, A1-AJ, B, and A-SP are offered publicly while classes A-X, C, D, E, F, G, H, J, K, L, M, N, O, P, Q, and S are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 194 fixed rate loans having an aggregate principal balance of approximately $2,720,810,685, as of the cutoff date. CREDIT SUISSE: Fitch Affirms Junk Rating on $9.9MM Certificates --------------------------------------------------------------- Fitch Ratings has upgraded Credit Suisse First Boston's commercial mortgage pass-through certificates, series 2001-CF2, as: -- $18.9 million class F to 'AA' from 'AA-'; -- $14 million class G to 'A+' from 'A'; -- $16.4 million class H to 'A-' from 'BBB+'. In addition, Fitch affirms the following classes: -- $19.4 million class A-3 at 'AAA'; -- $523.2 million class A-4 at 'AAA'; -- Interest only classes A-CP and A-X at 'AAA'; -- $43.8 million class B at 'AAA'; -- $49.3 million class C at 'AAA'; -- $10.9 million class D at 'AAA'; -- $16.4 million class E at 'AAA'; -- $21.9 million class J at 'BB'; -- $8.2 million class K at 'BB-'; -- $9.3 million class L at 'B+'; -- $9.9 million class M at 'CCC/DR3'. Class N remains at and 'C/DR6', respectively. Class O has been depleted by realized losses and Fitch does not rate the $1 million class RA certificates. Classes A-1 and A-2 have paid in full. The rating upgrades are due to additional paydown (5.4%) and defeasance (8.3%) since Fitch's last rating action. As of the October 2007 distribution date, the pool's aggregate collateral balance has been reduced 32.1%, to $766 million from $1.128 billion at issuance. Twenty-seven loans (37.3%) have defeased to date. Currently, four assets (2.4%) are in special servicing with Fitch- expected losses on three. The largest specially serviced asset (1.1%) is a real estate owned office property located in Olivette, Missuori. Current occupancy is 96% and the special servicer marketing the property for sale. The three other specially serviced assets (1.2%) are a limited service hotel located in Niagra Falls, New York, a portfolio of manufactured housing properties in Vermont, and a multifamily in Bloomington, Illinois. Fitch-projected losses on the specially serviced assets are expected to deplete class N and impair class M. CYGNAL TECHNOLOGIES: Commences Court-Supervised Restructuring ------------------------------------------------------------- Cygnal Technologies Corporation said Wednesday that it is initiating a court-supervised restructuring in order to restore its financial health. The company will seek an Order under the Companies' Creditors Arrangement Act in a hearing before the Ontario Superior Court of Justice Wednesday morning. The Order being sought, if granted, will cover Cygnal Technologies Corporation and its subsidiaries Cygnal Technologies Ltd. and Accord Communications Ltd. The Order will not cover White Radio GP Inc. or White Radio LP, neither of which is participating in this process. The company's Chief Executive Officer, Jos Wintermans, said, "We are taking this action to address our problems, protect our stakeholders, develop a restructuring plan, and return to being a financially viable business. A thorough financial review has concluded that we face a serious viability issue." Our problems include a high level of indebtedness which bears interest at a high annual rate, a high cost structure, a deteriorating cash position and a lack of access to the funding required to maintain our operations." Although Cygnal has begun to implement several cost control measures, Cygnal does not and will not have the liquidity that it requires without the legal protection and other benefits provided by a Court-supervised restructuring process. We believe that today's action is the responsible course to take and that we must act quickly in order to preserve the cash we require for our operations and to maintain the viability of those operations. The Order being sought, if granted, will provide the process and the legal protection in which we can operate without interruption and serve our customers throughout this period." We believe that a successful restructuring will achieve greater benefit for our stakeholders than any other available alternative. However, it is not possible at this time to predict the final details of the restructuring plan that will be presented to our stakeholders for their approval or to speculate upon any other actions that might be taken in connection with this process." In order to provide Cygnal with access to the funds needed to conduct its business during this period, the Company's existing lender, Laurus Master Fund Ltd., will, upon the Order being granted, make available to Cygnal a further $7,415,000 in the form of "debtor-in-possession" financing. Laurus DIP Financing In addition, Laurus will maintain Cygnal's current operating credit facilities, although Cygnal will not be entitled to additional advances under those facilities. The additional financing is expected to provide Cygnal with adequate liquidity to fund its on-going operations while the company pursues its restructuring plan. If granted, the Order being sought will stay obligations of the company to creditors (other than Laurus), including suppliers, for the customary initial period of 30 days. The stay period may be extended upon subsequent applications to the Court. The company will pay suppliers for goods and services provided after the date of the Order being sought. Claims prior to the Order will be addressed in the restructuring plan. Under the terms of the Order sought, if granted, Laurus will be unaffected by the Order and will be entitled to demand payment of advances under the debtor-in-possession facility and all other secured indebtedness of Cygnal owing to Laurus upon notice to Cygnal following the occurrence of certain stated events of default. Laurus has given notice to the company that certain events of default have occurred under the existing loan agreements between the company and Laurus and has accelerated the payment of all of the company's obligations under these loan agreements and the related security. However, pursuant to a forbearance agreement between Laurus, the company and certain of the company's subsidiaries, Laurus has agreed that, for so long as no further events of default have occurred (other than any defaults arising as a result of the Company and its subsidiaries having sought court protection), Laurus will not take any further steps to enforce its rights under its existing loan agreements with Cygnal or in connection with any existing security or guarantees granted by Cygnal or its subsidiaries in favor of Laurus. The company intends to continue its efforts to solicit proposals from third parties for an alternative transaction, including a sale of the company or all or substa