T R O U B L E D C O M P A N Y R E P O R T E R Monday, November 19, 2007, Vol. 11, No. 274 Headlines ADVANCED MARKETING: Judge Sontchi Confirms Ch. 11 Liquidation Plan ADVENTURE LODGING: List of Three Largest Unsecured Creditors AEARO TECHNOLOGIES: 3M Deal Prompts Moody's to Review Ratings AES CORP: Cash Tender Offer for $1.24 Bil. Senior Notes Expires AFFINIA GROUP: Acquires Certain Assets of Brake Pro under CCAA ALIMENTATION COUCHE-TARD: Moody's Holds Ba1 Corp. Family Rating AMERICAN COLOR: Noteholders Okay Deferment of Interest Payment AMERICAN COLOR: Amends Provisions in Bank Credit Facilities AMERICAN COLOR: Moody's Lowers LGD Rating on Deferred Payment AMERICAN COLOR: S&P Puts D Rating on Deferred Interest Payment AQUA DULCE: List of 20 Largest Unsecured Creditors ARBY'S RESTAURANT: Triarc's Offer for Wendy's Cues S&P's Watch ARMSTRONG WORLD: Ex-Parent to Dissolve After Asset Distribution AVAYA INC: Moody's Places Corporate Family Rating at B2 BRAD FISHER: Case Summary & 14 Largest Unsecured Creditors BRAKE PRO: Sells Certain Assets to Affinia Group BRODER BROS: Posts $11.6 Mil. Net Loss in Quarter Ended Sept. 29 BRODER BROS: Weak Operating Results Cue S&P to Cut Rating to B- CAPITAL AUTO: Fitch Rates $7.963 Million Class D Trust at BB CARDSYSTEMS SOLUTIONS: Plan Confirmation Hearing Moved to Nov. 19 CHARYS HOLDING: In Talks w/ Creditors for Financial Restructuring CHERRY CREEK: S&P Places All Ratings Under Negative CreditWatch CHRYSLER LLC: Mulls Product Portfolio Streamlining CLEARANT INC: Posts $576,000 Net Loss in 3rd Qtr. Ended Sept. 30 CLEVELAND UNLIMITED: Financial Restatement Prompts Moody's Review COGENTRIX ENERGY: Moody's Withdraws Ba2 Corporate Family Rating COI MIDWEST: Judge Neiter Confirms Amended Reorganizational Plan CPG INTERNATIONAL: Earns $300,000 in Third Quarter of 2007 CPG INTERNATIONAL: S&P Holds All Ratings and Revises Outlook CRDENTIA CORP: Completes Acquisition of Medical People CREDIT SUISSE: Stable Performance Cues Fitch to Affirm Ratings DELPHI CORP: Obtains Court Nod for $6.8 Bil. Exit Financing Plan DOBSON COMMS: Completes $13 per Share Merger Deal with AT&T DOBSON COMMS: Gives Notice of Right to Convert 1.5% Sr. Debentures DPL CAPITAL: Moody's Puts Securities' Ba1 Rating Under Review DUKE FUNDING: Fitch Junks Ratings on Two Note Classes DUNLINE RUBBER: Surging Canadian Dollar Cues Closure and Lay Offs DUNMORE HOMES: Wants to Hire Pachulski Stang as Counsel DUNMORE HOMES: Taps Alvarez & Marsal North America as Consultant DUNMORE HOMES: Taps A&M Securities as Investment Banker DWIGHT AVIS: Case Summary & 20 Largest Unsecured Creditors EDS CORP: Buying Saber Holdings 93% Stake for $420 Million EJD CORP: Case Summary & Four Largest Unsecured Creditors ENRON CORP: Government Gets Go Ahead to Seek Lay's Assets ER BANG: Case Summary & 13 Largest Unsecured Creditors FARM AND GARDEN: Case Summary & 20 Largest Unsecured Creditors FIRST MAGNUS: Gets Court OK to Retain Ludwig Schacht as Auditor FIRST MAGNUS: Selects Fennemore Craig as Special Counsel FIRST MAGNUS: Wants to Sell Pima County Property for $1.6 Million FLEET TRUCKING: Case Summary & 20 Largest Unsecured Creditors FORD MOTOR: Ratified UAW Pact Prompts Moody's to Hold Ratings GASTAR EXPLORATION: Moody's Puts Corporate Family Rating at Caa2 GASTAR EXPLORATION: S&P Puts Corporate Credit Rating at CCC+ GMAC LLC: Hull Succeeds Khattri as Financial Services Unit's CFO GOLFGEAR INT'L: Placed Under Chapter 7 to Stave Off Lawsuits GRANDVILLE BUILDERS: Case Summary & 20 Largest Unsecured Creditors HERBST GAMING: S&P Lowers Corporate Credit Rating to B from B+ HOMELAND SECURITY: Sept. 30 Balance Sheet Upside-Down by $5.7 Mil. ICM HOLDINGS I: Case Summary & Largest Unsecured Creditor ICONIX BRAND: Buying Starter(R) Brand from NIKE for $60 Million INTERPUBLIC GROUP: Moody's Rates New $200 Million Notes at Ba3 INTERPUBLIC GROUP: S&P Rates 4.75% Convertible Sr. Notes at B INVESTMENT PROPERTIES: Case Summary & 53 Largest Unsec. Creditors JAMBOREE TOURS: Case Summary & Nine Largest Unsecured Creditors JED OIL: Sept. 30 Balance Sheet Upside-Down by $15.7 Million KEVIN MCCARTHY: Case Summary & 13 Largest Unsecured Creditors L TERSIGNI: Files for Chapter 11 Protection in Connecticut L TERSIGNI: Case Summary & 13 Largest Unsecured Creditors M FABRIKANT: Panel Pursues $10.25 Mil. Recovery from Hahn Estate MAGNOLIA BEACH: Case Summary & 14 Largest Unsecured Creditors MEZZ CAP: S&P Holds 'BB' Rating on Class G Certificates MORGAN STANLEY: S&P Downgrades Ratings on 78 Certificates MTI GLOBAL: Posts CDN$2.1 Million Net Loss in Third Quarter MYLAN INC: Prices Public Offering of Preferred & Common Stock MYLAN INC: Moody's Lowers Corporate Family Rating to B1 NEUMANN HOMES: Wants to Rescind $80 Million Tadian Homes Purchase PASCACK VALLEY: Court Approves Sills Cummis as Bankruptcy Counsel PASCACK VALLEY: D. Knowlton Designated as Patient Care Ombudsman PASCACK VALLEY: U.S. Trustee Appoints Five-Member Creditors Panel PATRON SYSTEMS: Files for Chapter 11 Protection in Colorado PATRON SYSTEMS: Case Summary & 20 Largest Unsecured Creditors PIKE NURSERY: Case Summary & 20 Largest Unsecured Creditors PLAINS EXPLORATION: Discloses Result of Election by Pogo's Holders POGO PRODUCING: Holders Who Voted Cash to Receive $56.53/Share QUALIFIED EXCHANGE: Case Summary & 19 Largest Unsecured Creditors REMY WORLDWIDE: Hires Huron Consulting as Financial Consultant REMY WORLDWIDE: U.S. Trustee Balks at Schedules Filing Extension REMY WORLDWIDE: Wants to Sell Knopf Business for $18.5 Million RIGHT-WAY DEALER: Judge Somma Approves Disclosure Statement RIVER RADIOLOGY: Voluntary Chapter 11 Case Summary RITCHIE (IRELAND): Auction Sale of Policies Deferred to Dec. 10 SEQUOIA MORTGAGE: Fitch Affirms Ratings on 18 Cert. Classes SIERRA TRANSIT: Case Summary & 20 Largest Unsecured Creditors SONICBLUE INC: Court Fixes December 7 as Admin. Claims Bar Date SONICBLUE INC: Trustee Reconstitutes Unsecured Creditors Panel ST GERMAIN: Completed Wind-Down Cues Fitch to Withdraw Rating SUNCOAST ROOFERS: Case Summary & 20 Largest Unsecured Creditors TENNECO INC: Receives $474 Mil. Tenders for 10-1/4% Sr. Notes TOUSA INC: Gets NYSE Noncompliance Notice on Common Stock Value TOUSA INC: Fitch Lowers Issuer Default Rating to C from CC TOUSA INC: Moody's Lowers Corporate Family Rating to Ca TRIPLE CROWN: Host Sale Prompts S&P's Negative CreditWatch TROPICANA ENTERTAINMENT: S&P Affirms 'B' Corp. Credit Rating UNITED HERITAGE: Earns $1.1 Mil. in Second Quarter Ended Sept. 30 UNITED RENTALS: Cerberus Not Prepared to Proceed with Purchase UNITED RENTALS: S&P Retains 'BB-' Rating Under Negative Watch UNIVERSAL FOOD: Court Sets Virginia Asset Sale Hearing on Nov. 21 UNIVERSAL FOOD: Panel Retains Schiff Hardin as Bankruptcy Counsel URS CORP: Completes $3.1 Bil. Acquisition of Washington Group VALLECITO GAS: Case Summary & 19 Largest Unsecured Creditors VIRGIN MOBILE: Sept. 30 Balance Sheet Upside-Down by $622.1 Mil. WILLIAMS COMPANIES: Moody's Ups Senior Unsecured Debt's Rating WOLVERINE TUBE: S&P Affirms Junk Rating and Removes Pos. Watch ZIM CORP: Posts $101,207 Net Loss in 2nd Quarter Ended Sept. 30 * Fitch Expects Moderately Weaker 2007 Sales Than Last Year * S&P Places Ratings on 11 Tranches Under Negative CreditWatch * BOND PRICING: For the Week of Nov. 12 - Nov. 16, 2007 ********* ADVANCED MARKETING: Judge Sontchi Confirms Ch. 11 Liquidation Plan ------------------------------------------------------------------ The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware confirmed on November 15, 2007, the Amended Plan of Liquidation jointly filed by Advanced Marketing Services, Inc., and its debtor-affiliates and the Official Committee of Unsecured Creditors, moving the company one step closer to emergence from bankruptcy. The Plan Proponents filed their Third Amended Joint Plan of Liquidation on November 13 to provide, among other things, that: (a) the initial Plan Administrator, and each successor Plan Administrator, will serve until the earlier of (i) the later to occur of the entry of a Final Decree, the dissolution of Reorganized AMS, as defined in the Plan, and the payment of final distributions to unsecured creditors, or (ii) the expiration of the term of the Plan Administrator's employment agreement or resignation, death, incapacity, removal or termination; and (b) in connection with the merger, Reorganized AMS' certificate of incorporation will be revised to include a provision prohibiting the issuance of any non-voting equity securities, and will otherwise comply with Sections 1123(a)(6) and (7). A blacklined copy of the Third Amended Plan is available for free at http://bankrupt.com/misc/Blacklinever3rdAmendedPlan.pdf Judge Sontchi found that the Plan modifications (i) do not adversely affect the treatment of any Claims against or Interests in the Debtors under the Plan, and (ii) comply with Section 1127 of the Bankruptcy Code and Rule 3019 of the Federal Rules of Bankruptcy Procedure. Subject to the restrictions on Plan modifications under Section 1127, the Plan Proponents reserve the right to alter or amend the Plan before its substantial consummation. Plan Complies With Section 1129(a) During the Confirmation Hearing, Judge Sontchi determined that the Third Amended Plan satisfies all of the requirements for Plan confirmation. In accordance with the supporting declaration filed by Advanced Marketing Services CFO and CEO Curtis R. Smith on November 13, Judge Sontchi specifically finds that: (1) The Plan meets the requirements under Sections 1129(a)(1) and (a)(2) and complies with all applicable provisions of Sections 1122 and 1123, as well as the Bankruptcy Rules. (2) The Plan Proponents and their agents have solicited votes on the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code and are entitled to the protections afforded by Section 1129(a)(2) of the Bankruptcy Code. (3) The Plan Proponents have proposed the Plan in good faith and not by any means forbidden by law. The Debtors' officers and directors have acted in good faith in the negotiation and formulation of the Plan, thus satisfying Section 1129(a)(3). (4) The Plan provides that Professional Fee Claims will be entitled to payment only if and to the extent they are approved by the Court. It also provides that all other Administrative Claims will be entitled to payment only if they are Allowed Claims. Accordingly, the Plan satisfies Section 1129(a)(4). (5) The powers granted to Mr. Smith as Plan Administrator are consistent with applicable state law and the Bankruptcy Code provisions concerning liquidation proceedings, as well as in the interests of holders of claims and interests and with public policy. (6) The transactions contemplated by the Plan do not involve any rates established or subject to any governmental regulatory commission, hence, Section 1129(a)(6) is inapplicable. (7) The Plan satisfies Section 1129(a)(7) because each Holder of a Claim or Interest either has accepted the Plan or will receive property of a value that is not less than the amount that the holder would receive pursuant to a liquidation of the Debtors under Chapter 7. (8) The Plan satisfies Section 1129(a)(8) because Classes 1, 2, 6, 7, 10 and 11 are not Impaired by the Plan and are conclusively presumed to have voted to accept the Plan. Classes 4 and 5 will not retain any value or receive and distribution under the Plan and are deemed to have rejected the Plan pursuant to Section 1126(g). Classes 3, 8, 9, 12 and 13 are Impaired and are entitled to vote. As attested to in the Tabulation Certification, Classes 3,8,9, 12 and 13 have voted to accept the Plan. (9) Treatment of Administrative and Tax Claims under the Plan satisfies the requirements of Section 1129(a)(9). (10) As attested to in the tabulation certification, more than a majority in number and two-thirds in dollar amount of non-insider Creditors in Class 3 and Class 12 have voted to accept the Plan, thus satisfying Section 1129(a)(1O). (11) The Debtors have sufficient Assets, and the Plan provides adequate means with which, to satisfy all claims under the Plan. In addition, confirmation is not likely to be followed by the need for further financial reorganization, hence, Section 1129(a)(11) has been satisfied. (12) The Plan provides that, on or before the Effective Date, all fees due and payable will be paid in full, thus satisfying Section 1129(a)(12). (13) The Debtors are not obligated to pay "retiree benefits" as defined in Section 1114. Accordingly, Section 1129(a)(13) is inapplicable. In addition, Judge Sontchi finds that the statutes under Section 1129(a)(14)and (15) apply only to individual debtors and, thus, are inapplicable to Plan confirmation. Also, the requirements of Section 1129(a)(16) are not applicable to Plan confirmation because the Debtors are not non-profit entities or trusts. Moreover, in compliance with Section 1129(b), Judge Sontchi finds that the Plan does not "discriminate unfairly" and is fair and equitable with respect to each Imp[aired class of Claims or Interests that have not voted to accept the Plan. Judge Sontchi states that the requirements of Section 1129(d) are satisfied because the principal purpose of the Plan is not the avoidance of taxes. Judge Sontchi further determines that the provisions of the Plan constitute a good faith compromise and settlement of all claims or controversies relating to the rights that a Holder of a Claim or Interest may have with respect to any Allowed Claim or Allowed Interest or any distribution to be made. Plan Confirmation Objections Resolved Judge Sontchi ruled that all Plan confirmation objections and reservation of rights that have not been resolved, withdrawn or rendered moot are overruled. Objections to Plan confirmation were previously filed by (i) Leigh Robinson, doing business as ExPress; Paul Joannides, doing business as Goofy Foot Press; and Daniel Poynter, doing business as Para Publishing, and (ii) Jefferies & Co., Inc. Pursuant to a stipulation at the Confirmation Hearing, the Plan Proponents and the Objecting Parties to the Plan confirmation agreed to resolve Jefferies & Co.'s objection by modifying the language in the exculpation set forth in the Plan. The Plan Proponents agreed that the undisputed amounts of the scheduled claims of Express, et al., are allowed and will be paid on the Effective Date in these amounts: -- with respect to the undisputed amount of the scheduled claim of Express, $37,471 plus interest, accruing at the federal judgment rate as of the Petition Date, 4.99% from the Petition Date through and including the Effective Date; -- with respect to the undisputed amount of the scheduled claim of Goofy Foot Press, $48,257 plus interest, from the Petition Date to the Effective Date; and -- with respect to the undisputed amount of the para Publishing's scheduled claim, $15,927 plus interest accruing at the Federal Judgment Rate. The Plan Proponents and Express, et al., further agreed that the rights of all parties are reserved with respect to any disputed amounts of the scheduled claims. The also agreed to establish a reserve account of $50,000 to fund the payment of any additional Allowed Claims of Express, et al. Filing of objections to Goofy Foot Press' claims will be January 31, 2008. Dissolution of Reorganized AMS Upon the filing of a Certificate of Dissolution with the Office of the Secretary of Delaware, Reorganized AMS will be deemed dissolved for all purposes without the necessity for any other actions. On the Effective Date, the Assets of the Debtors will automatically vest in Reorganized AMS, free and clear of al claims, liens, charges, interests or other encumbrances, except as provided in the Plan. in addition, on the Effective Date, the Deffered Compensation Plan will terminate without further corporate action. Pursuant to the Plan and in accordance with the provisions of a July 2003 Trust Agreement among AMS, Publishers Group West, Inc., and Union Bank of California, N.A., the Deferred Compensation Trust will terminate, and the trustee will pay all case and any other assets held in respect of the Deffered Compensation plan to Reorganized AMS. According to Judge Sontchi, the Cash and Assets held in the deferred Compensation Trust will be transferred to Reorganized AMS and will become property of the AMS Estate available for distribution to Holders of Allowed Unsecured Claims against AMS. Individuals who contributed to the Deferred Compensation Plan will be treated as Holders of Unsecured Claims against AMS. Creation of Post-Confirmation Committee Subject to the terms of the Plan, the Creditors Committee will dissolve automatically on the Plan Effective Date, and its members will be deemed relieved of all of their prospective duties and obligations in connection with the Chapter 11 cases or the Plan and its implementation. In addition, on the Effective Date, the Creditors Committee will be reconstituted as the Post- Confirmation Committee, with these members: * Random House, Inc., * Hachette Book Group USA, Inc., * Harper Collins Publishers, * Penguin Group, and * Workman Publishing Co. The bylaws and and the fiduciary duties adopted by the Creditors Committee prior to the Effective Date will apply to the Post- Confirmation Committee. Also, the new committee will have the right to terminate the Plan Administrator with or without cause and to then appoint a successor Plan Administrator. Filing of Admin. & Professional Fee Claims Judge Sontchi directed that requests for Administrative Claims arising on or after May 1, 2007, through the Effective Date must be filed and served on the Plan Administrator no later than 30 days after the Effective Date. Requests for Professional Fee Claims must be filed no later than 45 days after the Effective Date. If a claim arises from the rejection of any executory contract or unexpired lease, that Claim will be forever barred and will not be enforceable against the Debtors or the Estates unless a proof of claim is filed with the Court within 30 days after the entry of the Confirmation Order. Texas Taxing Authorities Claims The Plan Proponents agreed that these Claims are allowed and will be paid on the Effective Date: -- claim filed by the Lewisville independent School District in the amount of $61,011, plus interest of $6,711 for an aggregate total of $67,722; -- claim filed by the County of Denton for $8,628, plus interest of $949, for an aggregate total of $9,577; and -- claim filed by the city of Carrollton for $23,322, plus interest in the amount of $2,565, for an aggregate total of $25,888. However, the Claims filed by the county of Denton and the city of Carrollton for postpetition taxes will be withdrawn. If the Texas Taxing Authorities Claims are not paid in full by Dec. 15, 2007, interest will accrue from and after the said date at the statutory rate of 12%. Rejection of Executory Contracts Under the Confirmation Order, each of the executory contracts or unexpired lease pursuant to Section 365 is rejected by the applicable Debtor, unless the Contract was previously assumed or rejected by the Debtors by Court order; was identified on the assumption schedule; is the subject of a request to assume pending on or before the Plan Effective Date; or is otherwise assumed pursuant to the terms of the Plan. Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Advanced Marketing disclosed total assets of $213,384,791 and total debts of $216,608,357. Publishers Group West disclosed total assets of $39,699,451 and total debts of $83,272,493. Publishers Group Inc. disclosed zero assets but $41,514,348 in liabilities. On Aug. 24, 2007, the Debtors' exclusive period to file a chapter 11 plan expired. On the same date, the Debtors and Creditors Committee filed a Plan & Disclosure Statement. On September 26, the Court approved the adequacy of the Disclosure Statement explaining the Second Amended Plan. The hearing to consider confirmation of the Plan is set on Nov. 15, 2007. (Advanced Marketing Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). ADVENTURE LODGING: List of Three Largest Unsecured Creditors ------------------------------------------------------------ Adventure Lodging Properties Inc. filed with the U.S. Bankruptcy Court for the Northern District of Texas its list of unsecured creditors, disclosing: Entity Claim Amount ------ ------------ TXU Energy $6,643 P.O. Box 10001 Dallas, TX 75310 Verizon $6,560 1135 East Chocolate Avenue Hershey, PA 17033 Heart of Texas Area-Wide $3,632 303 South Pioneer Drive Abilene, TX 79605 Headquartered in Brownwood, Texas, Adventure Lodging Properties Inc. filed for Chapter 11 protection on Sept. 3, 2007, (Bankr. N.D. Tex. Case No. 07-60150). Dana A. Ehrlich, Esq., of the Law Office of Dana Ehrlich and Greg Gossett, Esq., of Gossett, Harrison, Reese, Millican, Stipanov represent the Debtor in its restructuring efforts. The Debtor disclosed estimated assets and debts of $1 million to $100 million at the time of its filing. AEARO TECHNOLOGIES: 3M Deal Prompts Moody's to Review Ratings ------------------------------------------------------------- Moody's Investors Service has placed Aearo technologies Inc. ratings, including the B2 corporate family rating, under review for possible upgrade. This rating action results from the recent announcement that 3M Company is acquiring Aearo for $1.2 billion. 3M is a much stronger company with healthier credit metrics. Moody's anticipates that change of control language within Aearo's credit agreements will require the repayment of Aearo's credit facilities. Upon repayment of its credit facilities, all of Aearo's rating will be withdrawn. Ratings under review for possible upgrade: * Corporate family rating at B2; * Probability of default at B2; * $535 million first lien credit facilities at B1 (LGD3, 34%); and, * $200 million second lien term loan at Caa1 (LGD5, 86%). Aearo is a worldwide leader in the personal protection equipment industry, competing primarily in hearing, eye, head, face, respiratory and fall protection segment of the market. In addition, Aearo is a leader in the energy absorbing composites industry offering products used in applications to control excess noise, vibration and thermal energy. AES CORP: Cash Tender Offer for $1.24 Bil. Senior Notes Expires --------------------------------------------------------------- The AES Corporation disclosed that the offer to purchase up to $1.24 billion aggregate principal amount of its outstanding senior notes in accordance with the terms and conditions described in its Offer to Purchase and the related Letter of Transmittal expired as scheduled at 12:00 midnight on Nov. 13, 2007. As of such time, a total of approximately $1.9 billion aggregate principal amount of Notes had been validly tendered, consisting of approximately: (i) $192.6 million principal amount of 8.75% Senior Notes due 2008, (ii) $600.0 million principal amount of 9.00% Second Priority Senior Secured Notes due 2015 and (iii) $1.1 billion principal amount of 8.75% Second Priority Senior Secured Notes due 2013. In accordance with the terms of the tender offer, since the total amount of Notes tendered exceeded the Tender Cap, the company accepted for purchase all of the 2008 Notes, all of the 2015 Notes and approximately $447.4 million principal amount of the 2013 Notes (representing a pro ration factor of 37.6714%, with each amount tendered rounded down to the nearest $1,000) that were validly tendered prior to the expiration time. Settlement of the tender offer occurred today at which time none of the 2015 Notes, approximately $9.3 million principal amount of the 2008 Notes and approximately $752.6 million principal amount of the 2013 Notes remained outstanding. AES Corporation, -- http://www.aes.com/-- a global power company, operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the Troubled Company Reporter on Oct. 12, 2007, Moody's Investors Service affirmed The AES Corporation's Corporate Family Rating at B1 and the senior unsecured rating assigned to its new senior unsecured notes offering at B1 following its upsizing to $2 billion from $500 million. Fitch Ratings assigned a 'BB/RR1' rating to AES Corporation's $2 billion issuance of senior unsecured notes maturing 2015 and 2017. AES' long-term Issuer Default Rating is rated 'B+' by Fitch. Fitch said the rating outlook is stable. AFFINIA GROUP: Acquires Certain Assets of Brake Pro under CCAA -------------------------------------------------------------- Affinia Group Inc. has acquired certain assets of Brake Pro Ltd. under the Companies' Creditors Agreement Act of Canada. The purchase includes manufacturing equipment, friction formulations and unrestricted rights to the brand name. Financial terms of the transaction, which was completed on Nov. 7, 2007, were not disclosed. Affinia is in the process of relocating the physical assets to its own North American manufacturing facilities, and will resume production of the Brake Pro(R) product line. Affinia expects to have Brake Pro brand product offerings in the marketplace as quickly as possible after the asset transition and manufacturing integration is complete. "The Brake Pro name is highly respected in the industry because of the consistently high performance of their proprietary friction products," John R. Washbish, president of Affinia's Under Vehicle Group said. "The Brake Pro line will enhance our existing brake block and medium duty product offerings." "More importantly it will put us back into the heavy duty segment, and the Brake Pro line will give us a great product offering for severe duty applications such as waste handling equipment, logging equipment, construction vehicles and transit applications," Mr. Washbish continued. "The market can expect to see Brake Pro product from us as quickly as we can reset the equipment." About Brake Pro Ltd. Headquartered in Ontario, Canada, Brake Pro Ltd. -- http://www.brakepro.com/-- develops heavy-duty friction line composed of rugged, field-tested organic and metallic, application specific formulations. The Superior Court of Justice in Ontario has extended the company's stay under the Companies' Creditors Arrangement Act to Feb. 29, 2008. About Affinia Group Headquartered in Ann Arbor, Michigan, Affinia Group Inc. -- http://www.affiniagroup.com/-- designs, manufactures and distributes aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. * * * Moody's Investors Service placed Affinia Group Inc.'s long term corporate family and probability of default ratings at 'B2' in January 2007. The ratings still hold to date with a stable outlook. ALIMENTATION COUCHE-TARD: Moody's Holds Ba1 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the corporate family rating of Alimentation Couche-Tard, Inc. at Ba1 and the 7.50 % senior subordinated notes (2013) at Ba2 (LGD 5, 89%). Moody's also revised the rating outlook to positive from stable. Revision of the rating outlook to positive reflects the company's relatively strong financial metrics, as well as Moody's opinion that store- level operations at existing and new stores will continue to exceed the industry norm and that the likely future acquisitions and shareholder returns will be prudently financed. These ratings are affirmed with a positive outlook: - $350 million 7.50% senior subordinated notes (2013) at Ba2 (LGD 5, 89%); - Corporate family rating Ba1; - Probability of default rating at Ba1. Moody's does not rate the company's $650 million unsecured revolving credit facility. Certain of Couche-Tard's key rating drivers are consistent with an investment grade profile, including the company's solid operating performance at both new and existing stores, the cost efficiency and geographic diversity derived from the company's position as the second-largest independent convenience store operator, and the limited elasticity of motor fuel demand. Important credit metrics such as Debt / EBITDA of 3.4 times and EBITA / Interest Expense of 3.8 times are also strong for a speculative grade issuer. However, constraining the credit profile are the inherent operating risks of Couche-Tard as a consolidator in a retail segment that is ripe for further consolidation, the competition with large integrated oil companies and non-traditional gasoline retailers, the sales concentration in the high-volume, low-margin categories of gasoline and tobacco, and the thin free cash flow because of dividends and substantial capital investment. Alimentation Couche-Tard, Inc, with headquarters in Laval, Quebec, operates or licenses about 5,600 convenience stores in Canada and the United States under the "Circle K", "Couche-Tard", "Mac's", and other banners. The company also licenses around 4,200 "Circle K" convenience stores in Mexico and East Asia. Revenue for the twelve months ending July 2007 was about US $12.8 billion. AMERICAN COLOR: Noteholders Okay Deferment of Interest Payment -------------------------------------------------------------- American Color Graphics, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on Nov. 14, 2007, holders of in excess of 92.5% of the aggregate principal amount of our 10% Senior Second Secured Notes Due 2010 agreed with the company to: (a) defer to March 15, 2008, the semi-annual payment of cash interest on the 10% Notes held by such holders, which would otherwise have been due on Dec. 15, 2007, and (b) amend certain covenants in the 10% Notes indenture. In consideration thereof, the company issued to each such holder a senior second secured noninterest-bearing promissory note due March 15, 2008, of the company with a principal amount equal to the sum of the amount of the cash interest payment deferred on the 10% Notes held by such holder and a consent fee equal to 1% of the principal amount of the 10% Notes held by such holder. The notes are fully and unconditionally guaranteed by ACG Holdings, Inc. American Color Graphics, Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. AMERICAN COLOR: Amends Provisions in Bank Credit Facilities ----------------------------------------------------------- American Color Graphics, Inc., disclosed that on Nov. 14, 2007, certain provisions of its bank credit facilities were amended or waived to: (a) provide for an additional $5 million term loan to the company under its existing term loan facility, which was consummated on Nov. 14, 2007, and (b) temporarily waive until Feb. 15, 2008, any default under these bank credit facilities resulting from noncompliance with the first lien coverage ratio covenant in each such bank credit facility as of September 30, and December 31, 2007, for all purposes of such bank credit facilities, including, without limitation, for the purpose of determining the company's entitlement to make additional borrowings under either bank credit facility on or prior to such date. The amendment and waiver also: (a) amended the covenant in each of the bank credit facilities requiring the company to maintain certain levels of minimum total liquidity and (b) temporarily waived until Feb. 15, 2008, the company's noncompliance with its obligation thereunder to deliver its restated consolidated financial statements for the fiscal years ended March 31, 2007, 2006 and 2005 accompanied by a report or opinion of its independent certified public accountants that was not subject to any "going concern" qualification. The company relates that the Report of Independent Registered Public Accounting Firm accompanying its restated consolidated financial statements included in the company's Report on Form 10K/A dated Aug. 31, 2007, contains a "going concern" qualification. American Color Graphics, Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. AMERICAN COLOR: Moody's Lowers LGD Rating on Deferred Payment ------------------------------------------------------------- Moody's Investors Service has downgraded American Color Graphics, Inc. Probability of Default rating to Ca/LD from Ca, while affirming its Ca Corporate Family rating and the Ca rating on $280 million of senior secured (2nd priority) notes due 2010 following the company's announcement that it has received noteholder consent to defer its upcoming interest payment. Details of the rating action are: Rating lowered: * Probability of Default rating -- to Ca/LD from Ca Ratings affirmed: * $280 million senior secured second priority notes due 2010 -- Ca, LGD4, 63% * Corporate Family rating -- Ca The rating outlook is stable. This concludes the review of ACG's Probability of Default rating which was lowered (but remained under review) on Nov. 7, 2007, following the company's announcement that it had commenced a consent solicitation requesting holders of its senior second secured notes to defer the semi-annual cash interest payment to March 15, 2008 from December 15, 2007. The downgrade of the PDR to Ca/LD reflects Moody's view that any missed, delayed or deferred debt payment obligation constitutes a default event, even if such deferral is permitted by noteholder consent. Moreover, the Ca component of the Ca/LD rating signals a very high probability of default on an ongoing basis for the company's other obligations that have not been subject to the in- substance default. On Nov. 14, 2007, ACG announced that it had received consent from over 90% of noteholders to the solicitation request commenced on November 7, 2007. American Color Graphics, Inc., a leading provider of print and pre-media services, recorded sales of $441 million for the LTM period ended June 30, 2007. The company is based in Brentwood, Tennessee. AMERICAN COLOR: S&P Puts D Rating on Deferred Interest Payment -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on American Color Graphics Inc.'s 10% senior secured second-priority notes due 2010 to 'D' from 'C', and lowered its corporate credit rating on the company to 'SD' from 'CC'. All ratings were removed from CreditWatch, where they were placed with negative implications July 24, 2007. The rating actions stem from the company's announcement that it received consents from holders of at least 90% of the principal amount of the 10% notes to defer to March 15, 2008, the semi- annual payment of cash interest on the notes held by consenting holders. This interest payment was previously due Dec. 15, 2007. "While a payment default has not occurred relative to the legal provisions of the notes, we consider a default to have occurred when a payment related to an obligation is not made in accordance with the original terms, and when the nonpayment is a function of the borrower being under financial stress," explained Standard & Poor's credit analyst Craig Parmelee. ACG also stated that its credit agreement and receivables facility were amended to: (1) provide for an additional $5 million term loan to ACG under the 2005 term loan facility and (2) temporarily waive until Feb. 15, 2008, any default under the bank credit facilities resulting from noncompliance with the first-lien interest coverage ratio covenant as of Sept. 30 and Dec. 31, 2007. This amendment also (1) amended the covenant requiring ACG to maintain certain levels of minimum total liquidity and (2) temporarily waived until Feb. 15, 2008, ACG's noncompliance with its obligation to deliver the company's restated consolidated financial statements for the fiscal years ended March 31, 2007, 2006, and 2005 (which are to be accompanied by a report or opinion of the company's independent certified public accountants that is not subject to any "going concern" qualification). AQUA DULCE: List of 20 Largest Unsecured Creditors -------------------------------------------------- Aqua Dulce Partners G.P. filed with the U.S. Bankruptcy Court for the Northern District of Texas its list of unsecured creditors, disclosing: Entity Claim Amount ------ ------------ Texas Rangers Baseball Partners G.P. $350,000 Attn: Casey Shilts Suite 400, 1000 Ballpark Way Arlington, TX 76011 Richard and Patti Wright $176,000 611 Taylor Place Arroyo Grande, CA 93420 James and Regina Neel $174,195 6430 Goldfinch Way Atascadero, CA 93422 Milestone Distributors $150,000 Chris and Sharee Neel $140,000 Modern Luxury Inc. $106,000 Elmo Water Supply Corporation $85,000 Zinn & Associates $80,090 Anthony & Sylvan Pools Inc. $74,000 Emerald Diamond L.P. $60,000 George Buck Tyson $50,000 Randolph L. Neel $50,000 Knight Restoration $41,649 Rustic Plumbing Inc. dba Carti's Plumbi $34,000 United Rentals $32,910 Sandy Rickards $30,000 Texas Energy Savers $29,158 Gardere Wynne Sewell $28,083 Debra Jenkins $28,000 M&L Electrical Contractors $26,016 Headquartered in Dallas, Texas, Aqua Dulce Partners G.P. filed for Chapter 11 protection on Sept. 4, 2007, (Bankr. N.D. Tex. Case No. 07-34389). Dennis Oliver Olson, Esq., of Olson, Nicoud & Gueck represents the Debtor in its restructuring efforts. The Debtor disclosed estimated assets and debts between $1 million to $100 million at the time of its filing. ARBY'S RESTAURANT: Triarc's Offer for Wendy's Cues S&P's Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the Atlanta based-Arby's Restaurant Group Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. This action follows the announcement by Trian Fund Management L.P. that Triarc Companies Inc., of which Arby's is a wholly owned subsidiary, has placed a bid to purchase all the outstanding stock of Wendy's International Inc. "Although the terms of proposed transaction are not yet known, we believe that it will be primarily a cash transaction financed with debt, and that this would likely increase the financial risk at Arby's," said Standard & Poor's credit analyst Charles Pinson- Rose. If Triarc's bid is not accepted, Standard & Poor's would likely resolve the credit watch at that time. If the bid is accepted, Standard & Poor's would examine the terms and financing of the transaction and then take the appropriate rating action. ARMSTRONG WORLD: Ex-Parent to Dissolve After Asset Distribution --------------------------------------------------------------- Armstrong Holdings, Inc., the former parent company of Armstrong World Industries, Inc., disclosed its timetable for dissolution including distribution of net assets to shareholders. The last day of trading in ACKH common stock and the record date for shareholders entitled to receive a final distribution of the company's net assets will be on Dec. 5, 2007. The company's stock transfer books will close and no further trading or transfers will be recognized after settlement of trades made through that date. On Dec. 12, 2007, the distribution agent, American Stock Transfer & Trust Company, will begin the distribution of assets to shareholders. Following this distribution, Armstrong Holdings, Inc. will file Articles of Dissolution with the Commonwealth of Pennsylvania and will cease to exist. The company's net assets for distribution total approximately $28 million, which will be divided pro-rata per share among the holders of the 40,551,975 outstanding shares of ACKH common stock. This amounts to a distribution of approximately $0.69 per share. Shareholders should consult their tax advisor on the tax implications of this distribution. Shareholders who hold ACKH stock in brokerage accounts will receive the distribution in their accounts and their ACKH holdings will be cancelled after the distribution. Direct shareholders do not need to return their stock certificates to receive a distribution. Those certificates will become void and have no value. When they receive their distribution checks, direct shareholders should cancel or destroy those Armstrong Holdings stock certificates. Direct shareholders with questions concerning their accounts should contact American Stock Transfer & Trust Company at (800) 937-5449. Armstrong Holdings, Inc. previously was the parent holding company of Armstrong World Industries, Inc. until Oct. 2, 2006. On that date, AWI emerged from Chapter 11 bankruptcy. Under AWI's Plan of Reorganization, the company's ownership in AWI was cancelled. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. (NYSE: AWI) -- http://www.armstrong.com/-- designs and manufactures floors, ceilings and cabinets. AWI operates 42 plants in 12 countries and employs approximately 14,200 people worldwide. The company has Asia-Pacific locations in Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. It also has locations in Colombia, Costa Rica, Greece and Iceland, among others. The company and its affiliates filed for chapter 11 protection on Dec. 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * Standard & Poor's Ratings Service affirmed the 'BB' corporate credit and senior secured ratings for Armstrong World Industries Inc. on March 2007. Moody's Investors Service assigned, in October 2006, a Ba2 rating on Armstrong World Industries, Inc.'s new credit facility and a Corporate Family Rating of Ba2. Moody's said the ratings outlook is stable. AVAYA INC: Moody's Places Corporate Family Rating at B2 ------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to newly private Avaya, Inc. as well as Ba3 ratings to its new senior secured $200 million revolver and $3.8 billion term loan. The company was acquired by TPG Capital LLC and Silver Lake Partners on October 26, 2007 for $8.3 billion. Moody's also withdrew the company's previous Ba3 corporate family rating and shelf ratings which were placed under review for downgrade after the company announced the going private transactions. The outlook is stable. These ratings have been assigned: * Corporate family rating, B2 * Probability of default, B2 * $200 million Senior Secured Revolving Credit Facility, Ba3, LGD2 (28%) * $3,800 million Senior Secured Term Loan, Ba3, LGD2 (28%) These ratings will be withdrawn: * Shelf registration for senior unsecured debt (P)B1 * Shelf registration for preferred stock (P)B3 The capital structure includes the above rated debt as well as an unrated, undrawn $335 million senior secured multi currency asset- based revolving credit facility and an unrated $1.45 billion senior unsecured bridge facility consisting of a $700 million senior unsecured cash-pay bridge loan and a $750 million senior unsecured PIK-toggle bridge loan. In addition to the debt financing, the capital structure includes approximately $2.4 billion in equity from the private equity sponsors. The above debt instrument ratings were determined using Moody's Loss Given Default Methodology. The ratings could be affected if the capital structure changes. The B2 corporate family rating reflects the significant leverage being used to finance the buyout offset by the company's industry leading position within the enterprise telephony market and favorable replacement trends facing the industry. Closing leverage is estimated to be approximately 7x funded debt to EBITDA (on a Moody's adjusted basis which includes approximately $1 billion of unfunded pension obligations). Despite the strong cash generating capabilities of the underlying business, the debt service, pension service and capital requirements of the business leave minimal cash in the next few years to pay down debt and little cushion in the event of a downturn. Leverage and cash flow coverage at these levels are suggestive of a B3 rating, but the strength of the company's business and major cost cutting initiatives are positive factors that offset the company's high leverage. However, the rating remains weakly positioned at the low end of the B2 rating category. Avaya is a leader in the global enterprise telephony industry and holds the largest market share in numerous sub-segments. The industry is going through a significant upgrade cycle as customers replace or migrate their traditional TDM phone systems to next generation internet protocol systems. The company has one of the largest installed bases of corporate phone systems in the world. Incumbency is a key ratings driver as customers tend to be "sticky" and generate a recurring revenue stream from multi-year maintenance contracts, upgrades, replacements and expansions once a system has been put in place. The company is also a leader in sales of IP based enterprise telephony systems. While Cisco initially dominated the IP enterprise phone market, Avaya has made significant strides and in numerous segments has surpassed Cisco. The stable outlook reflects the view that the company will continue to benefit from the general growth in IP telephony upgrades, maintain or grow their market share and realize on their cost cutting initiatives. The ratings could be negatively impacted by a significant slow down in enterprise telephony spending, loss of market share or challenges in implementing the planned cost reductions or reducing leverage. Moody's does not anticipate an upgrade in the near term given the high debt levels. Avaya Inc., based in Basking Ridge, New Jersey, is a leading worldwide supplier of communications systems and software for enterprise customers. The company had revenues of approximately $5.3 billion for fiscal 2007. BRAD FISHER: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Brad Charles Fisher Janet Elizabeth Fisher 1205 Le Grande Cannon Boulevard Helena, MT 59601 Bankruptcy Case No.: 07-61338 Chapter 11 Petition Date: November 14, 2007 Court: District of Montana (Butte) Debtor's Counsel: R. Clifton Caughron, Esq. Caughron and Associates P.O Box 531 Helena, MT 59624-0531 Tel: (406) 442-4446 Fax: (406) 442-4481 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Residence at 1205 $951,650 Attn: Special Procedures Le Grande Cannon ($403,000 Function Boulevard, Helena, secured) 600 17th Street MT 59601 ($305,007 Denver, CO 80202-5402 senior lien) ($1,165,913 senior lien) 2006 Income Taxes $6,000 Montana Department of Revenue Residence at 1205 $188,818 Attn: Kim Davis Le Grande Cannon ($403,000 P.O. Box 7701 Boulevard, Helena, secured) Helena, MT 59604-7701 MT 50601 ($1,256,657 senior lien) State Income Taxes $2,500 2007 Sallie Mae 3rd Pty Lsc Educational $54,235 11100 Usa Parkway Fishers, IN 46037 Cach LLC Collection Bank of $9,360 America N.A. Associates/Citibank Credit Card $9,206 Target Credit Card $7,115 Citibank/Sears Charge Account $3,999 Beneficial/Household Finance Check Credit or $3,898 Line of Credit Citi Credit Card $3,847 Capital 1 Bank Credit Card $1,712 Jc Penney Charge Account $1,592 WFFNB/Eddie Bauer Charge Account $364 Chase-pier1 Credit Card $177 WFNNB/Express Charge Account $78 BRAKE PRO: Sells Certain Assets to Affinia Group ------------------------------------------------ Affinia Group Inc. has acquired certain assets of Brake Pro Ltd. under the Companies' Creditors Agreement Act of Canada. The purchase includes manufacturing equipment, friction formulations and unrestricted rights to the brand name. Financial terms of the transaction, which was completed on Nov. 7, 2007, were not disclosed. Affinia is in the process of relocating the physical assets to its own North American manufacturing facilities, and will resume production of the Brake Pro(R) product line. Affinia expects to have Brake Pro brand product offerings in the marketplace as quickly as possible after the asset transition and manufacturing integration is complete. "The Brake Pro name is highly respected in the industry because of the consistently high performance of their proprietary friction products," John R. Washbish, president of Affinia's Under Vehicle Group said. "The Brake Pro line will enhance our existing brake block and medium duty product offerings." "More importantly it will put us back into the heavy duty segment, and the Brake Pro line will give us a great product offering for severe duty applications such as waste handling equipment, logging equipment, construction vehicles and transit applications," Mr. Washbish continued. "The market can expect to see Brake Pro product from us as quickly as we can reset the equipment." About Affinia Group Headquartered in Ann Arbor, Michigan, Affinia Group Inc. -- http://www.affiniagroup.com/-- designs, manufactures and distributes aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. About Brake Pro Ltd. Headquartered in Ontario, Canada, Brake Pro Ltd. -- http://www.brakepro.com/-- develops heavy-duty friction line composed of rugged, field-tested organic and metallic, application specific formulations. The Superior Court of Justice in Ontario has extended the company's stay under the Companies' Creditors Arrangement Act to Feb. 29, 2008. BRODER BROS: Posts $11.6 Mil. Net Loss in Quarter Ended Sept. 29 ---------------------------------------------------------------- Broder Bros., Co., disclosed results for its third quarter ended Sept. 29, 2007. The company's operating results include the results of operations of Amtex Imports Inc., a single-location distributor with approximately $40 million in annual revenues, from the date of acquisition on Sept. 28, 2006. Third Quarter 2007 Results Third quarter 2007 net sales were $246.4 million compared to $249.2 million for the third quarter 2006. Loss from operations for the third quarter 2007 was $3.1 million compared to income from operations of $8.5 million for the third quarter 2006. Third quarter 2007 net loss was $11.6 million compared to a net loss of $2.5 million for the third quarter 2006. Earnings before interest, taxes, depreciation and amortization was $1.9 million for the third quarter 2007 compared to EBITDA of $13.9 million for the third quarter 2006. Results include the impact of certain restructuring, consolidation and other highlighted charges. Excluding these highlighted charges, EBITDA was $7.6 million for the third quarter 2007 and $17.2 million for the third quarter 2006. The company has three operating segments: (a) the Broder division, which includes Amtex's results, generated third quarter 2007 net sales of $102.0 million compared to $98.9 million in the third quarter 2006; (b) the Alpha division generated third quarter 2007 revenue of $114.2 million compared to $117.6 million in the third quarter 2006; and (c) the NES division generated net sales of $30.2 million in the third quarter 2007 compared to $32.7 million in the third quarter 2006. Third quarter 2007 gross profit was $40.1 million compared to $46.2 million for the third quarter 2006. Gross margin of 16.3% was less than the 18.5% gross margin in the prior period. Gross profit from commodity trade brand products declined due to higher unit volumes sold at lower gross margins. The company continued to sell fewer low margin white t-shirts. Gross profit from private label brand products was flat to the prior year due to lower unit volumes sold at higher gross margins. Insufficient private label inventory levels in key styles during the third and third quarters of 2006 contributed to volume declines during the third quarter 2007 relative to the prior period due to a greater than anticipated loss of placement of some important products in customer programs. Year-to-Date Results For the nine months ended September 2007, net sales were $696.4 million compared to $718.3 million for the nine months ended September 2006. Loss from operations for the nine months ended September 2007 was $5.6 million compared to income from operations of $17.3 million for the nine months ended September 2006. Net loss for the nine months ended September 2007 was $27.1 million compared to net loss of $8.0 million for the nine months ended September 2006. EBITDA for the nine months ended September 2007 was $9.4 million compared to EBITDA of $32.0 million for the nine months ended September 2006. Excluding the highlighted charges denoted herein, EBITDA for the nine months ended September 2007 was $25.9 million compared to EBITDA of $41.9 million for the nine months ended September 2006. Business Outlook The company continues to execute its strategy to create multi- branded distribution centers both to improve inventory availability to customers and to reduce overall inventory levels. Improved inventory availability is expected to generate increased revenue volume and profitability, as well as operational savings realized through higher volume leveraging fixed costs. The company operated 10 major distribution centers as of Sept. 29, 2007. The distribution center strategy will lead to eight larger, multi-branded, distribution centers yielding essentially equivalent UPS ground service coverage. In addition, the company operated eight "Express" locations in the Los Angeles, CA; Louisville, KY; Detroit, MI; Chicago, IL; St. Louis, MO; Charlotte, NC; Indianapolis, IN; and Philadelphia, PA markets as of September 29, 2007. The Express locations are expected to maintain and grow the company's market position in rationalized locations by offering products customized to meet the needs and preferences of each local market including serving as customer pick-up locations. The company expects the distribution center consolidation to be substantially completed by the end of fiscal year 2007. Liquidity The company relies primarily upon cash flow from operations and borrowings under its revolving credit facility to finance operations, capital expenditures and debt service requirements. Borrowings and availability under the revolving credit facility fluctuate due to seasonal demands. Historical borrowing levels have reached peaks during the middle of a given year and low points during the last quarter of the year. Borrowings under the revolving credit facility decreased from $110.4 million at December 31, 2006 to $89.0 million at September 29, 2007. The company's revolving credit facility provides for aggregate borrowings up to $225.0 million, subject to borrowing base availability. As of Sept. 29, 2007, borrowing base availability was $85.7 million. Balance Sheet At Sept. 29, 2007, the company's balance sheet showed total assets of $568,618,000 and total liabilities of $529,801,000 resulting in a shareholders' equity of $38,552,000. Equity at Dec. 30, 2006 was $65,643,000. A full-text copy of the company's financial report for the quarter Sept. 29, 2007 may be viewed for free at: http://ResearchArchives.com/t/s?2574 About Broder Bros. Headquartered at Trevose, Pennsylvania, Broder Bros., Co. -- http://www.broderbrosco.com/;http://www.broderbros.com/; http://www.alphashirt.com/and http://www.nesclothing.com/-- is a distributor of imprintable sportswear and accessories in the United States. The company operates the "Broder," "Alpha" and "NES" brands. The company operates 10 major distribution centers. Further it also operates eight "Express" facilities offering pickup room service to customers in the Los Angeles, CA; Louisville, KY; Detroit, MI; Chicago, IL; St. Louis, MO; Charlotte, NC; Indianapolis, IN; and Philadelphia, PA markets. Broder Bros., Co. was purchased in May 2000 by Bain Capital. Subsequent to Bain's purchase of Broder Bros., the company expanded its geographic reach and market share through the acquisitions of St. Louis T's in 2000, Full Line Distributors and Gulf Coast Sportswear in 2001, T-Shirts & More and Alpha Shirt Company in 2003, NES Clothing Company in 2004 and Amtex in 2006. BRODER BROS: Weak Operating Results Cue S&P to Cut Rating to B- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on apparel distributor Broder Bros Co., including its corporate credit rating, to 'B-' from 'B'. The outlook is negative. Total debt outstanding at Trevose, Pennsylvania-based Broder was about $325 million on Sept. 29, 2007. The downgrade follows Broder's earnings release for the third quarter ended Sept. 29, 2007, that reflects significantly weakened operating results and credit protection measures. "The company has suffered various operating issues for the past several years, and this has affected its financial performance and exacerbated the deterioration in credit protection measures," said Standard & Poor's credit analyst Susan H. Ding. CAPITAL AUTO: Fitch Rates $7.963 Million Class D Trust at BB ------------------------------------------------------------ Fitch has rated Capital Auto Receivables Asset Trust 2007-4 as: -- $333,000,000 4.91023% class A-1 'F1+'; -- $100,000,000 4.93% class A-2a 'AAA'; -- $460,000,000 floating rate class A-2b 'AAA'; -- $160,000,000 5.00% class A-3a 'AAA'; -- $150,000,000 floating rate class A-3b 'AAA'; -- $301,946,000 5.30% class A-4 'AAA'; -- $51,757,000 6.39% class B 'A'; -- $23,888,000 7.40% class C 'BBB'; -- $7,963,000 7.50% class D 'BB'. CARDSYSTEMS SOLUTIONS: Plan Confirmation Hearing Moved to Nov. 19 ----------------------------------------------------------------- The Honorable James M. Marlar of the United States Bankruptcy Court for the District of Arizona continued the hearing to consider confirmation of Cardsystems Solutions Inc.'s Chapter 11 Plan of Liquidation to Nov. 19, 2007, at 9:00 a.m. The hearing will be held at 38 South Scott Avenue, Courtroom 466 in Tucson, Ariozona. Judge Marlar had approved, on Aug. 9, 2007, the Third Amended Disclosure Statement explaining the Debtor's Plan and initially schedules a confirmation hearing on Sept. 13, 2007. Overview of the Plan Under the Plan, the Debtor's cash on hand will be used to pay all creditors. If the Debtor's cash on hand is insufficient, the escrowed cash may be transfered to the Debtor from the escrow account by JPMorgan Chase Bank N.A. On the effective date of the Plan, Edward B. Berger will be appointed as the liquidating agent, to oversee the operation and management of the Debtor. As the Debtor's liquidating agent, Mr. Berger will, specifically: i. control and manage the property of the estate, including taking any action necessary to sell assets and collect proceeds; ii. distribute estate assets in accordance with the terms of the Plan; and iii. file with the Court a report at the conclusion of the administration of the estate assets showing all assets and income administered and disbursed. Treatment of Claims Under the Plan, Administrative Claims will be paid in full, in cash after the effective date. Priority Tax and Priority Wage Claims will be paid an amount equal to one-half of any allowed claims. Equity Interest holders, if any, will also be paid on a pro rata basis, according to the holders contractual priority. Treatment of Merrick's Claim As a result of its secured claim, Merrick Bank will receive a cash distribution on the effective date. The amount will be funded from the deposit and the escrow account, which will be transferred directly to Merrick by JPMorgan Chase. In addition, Merrick's recovery will be limited to $14,750,000. Funding for the payment of the first $10 million will be: a. $5.1 million -- the Debtor will release all claims to the deposit; b. $1,216,195 -- the Debtor will release all claims to the escrow release; c. $5,183,805 -- the remaining cash of $5,183,805 will be disbursed from the account to Merrick. Funding for the payment of the remaining principal amount of $4,750,000 will be: a. Merrick agrees to transfer $1,500,000, plus other interest, from the escrow account to the estate for the benefit of the General Unsecured creditors, in turn, Merrick will have an allowed claim of $1,250,000. b. Merrick will have first priority on the first $3.5 million of net distribution of proceeds of estate assets. c. Merrick will be entitled to cause the liquidation of as many of the escrowed shares held by the estate as is necessary to yield a net return to Merrick in an amount that the sum of the Merrick trust recoveries and the Merrick Stock Recoveries equals $3.5 million, on third anniversary of the effective date. A full-text copy of Cardsystems' Third Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070818021736 A full-text copy of Cardsystems' Third Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=070818021539 Headquartered in Sonoita, Arizona, Cardsystems Solutions Inc. -- http://www.cardsystems.com/-- was acquired by Pay By Touch Payment Solutions, LLC -- http://www.paybytouch.com/-- a biometric authentication, loyalty, membership, payment and other electronic transaction solutions provider. The Company filed for bankruptcy protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515). Frederick J. Petersen, Esq., Michael McGrath, Esq., and Lowell Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., represent the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has not been appointed in the Debtor's case. When the Debtor filed for bankruptcy protection, it disclosed assets amounting to $13,087,515 and debts totaling $23,860,343. CHARYS HOLDING: In Talks w/ Creditors for Financial Restructuring ----------------------------------------------------------------- Charys Holding Company, Inc., is in discussions with various creditors regarding potential changes to its capital structure. In conjunction with these discussions, the company has elected not to make the scheduled interest payment due on Nov. 16, 2007, on its Senior Convertible Notes due 2012. Charys has retained AlixPartners, LLP to provide advisory services in connection with these restructuring efforts. In addition to supporting the measures to improve Charys' operations and cost structure, AlixPartners is participating with the company, Senior Convertible Note holders, and other creditors in order to better align the capital structure to match expected operating performance. "We believe we are taking a reasonable course of action to improve our capital structure as quickly as possible," Billy V. Ray, Jr., Charys' Chairman and CEO said. "While the challenges faced are complicated and the process time-consuming, we are optimistic that there is a resolution that works for all parties involved." The operating subsidiaries continue to conduct business as usual, with performance consistent with recent company estimates. About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Company, Inc. -- http://www.charys.com/-- acquires stable, cash flow positive, small to medium-sized private companies engaged in providing direct services, outsourced services and infrastructure to medium and large enterprise businesses. Charys operates these companies as independent subsidiaries, improving aggregate financial performance by influencing its subsidiaries to develop and leverage beneficial synergistic relationships. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 14, 2007, Miller Ray Houser & Stewart LLP expressed substantial doubt about Charys Holding Company, Inc., fka Spiderboy International, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2007. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. CHERRY CREEK: S&P Places All Ratings Under Negative CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A1J, A2, A3, B, and C notes issued by Cherry Creek CDO II Ltd. and the class A1J notes issued by TABS 2007-7 Ltd. on CreditWatch with negative implications. The class A2, A3, B1, B2, B3, C, and I sub notes issued by TABS 2007-7 Ltd. remain on CreditWatch with negative implications, where they were placed on Oct. 22, 2007. Standard & Poor's notes that Cherry Creek CDO II Ltd. triggered an event of default on Nov. 14, 2007, under section 5.1(h) of the indenture, dated March 15, 2007, when the senior credit test ratio was less than 100%. On Nov. 6, 2007, TABS 2007-7 Ltd. triggered an EOD under section 5.1(h) of the indenture dated March 20, 2007, due to a failure of the senior credit test. 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 ----------- ----- -- ---- Cherry Creek CDO II Ltd. A1J AAA/Watch Neg AAA Cherry Creek CDO II Ltd. A2 AA/Watch Neg AA Cherry Creek CDO II Ltd. A3 A/Watch Neg A Cherry Creek CDO II Ltd. B BBB/Watch Neg BBB Cherry Creek CDO II Ltd. C BB+/Watch Neg BB+ TABS 2007-7 Ltd. A1J AAA/Watch Neg AAA Ratings Remaining on Creditwatch Negative TABS 2007-7 Ltd. Class Rating ----- ------ A2 AA/Watch Neg A3 A/Watch Neg B1 BBB+/Watch Neg B2 BBB/Watch Neg B3 BBB-/Watch Neg C BB/Watch Neg I Sub BBB-/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Cherry Creek CDO II Ltd. A-1S AAA TABS 2007-7 Ltd. A1S AAA TABS 2007-7 Ltd. X AAA CHRYSLER LLC: Mulls Product Portfolio Streamlining -------------------------------------------------- Chrysler LLC is in discussions with dealers on product portfolio changes and poor performing dealerships, Jeff Bennett and Josee Valcourt of the Wall Street Journal reports citing three dealers familiar with the matter. To avoid confusion on overlapping products, sources said that Chrysler wants dealers to sell all of its passenger cars under the Chrysler name; pickup and commercial trucks under the Dodge name; and, sport-utility vehicles under the Jeep name. According to WSJ, the move would reduce the number of dealers and weed out competition between products such as midsized sedans Dodge Avenger and Chrysler Sebring, which are marketed under different names. As reported in the Troubled Company Reporter on Nov. 5, 2007, the company had plans to eliminate four models through 2008, including Dodge Magnum, the convertible version of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CLEARANT INC: Posts $576,000 Net Loss in 3rd Qtr. Ended Sept. 30 ---------------------------------------------------------------- Clearant Inc. disclosed results for its third quarter and nine months ended Sept. 30, 2007. The company reported a net loss of $576,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $2.6 million in the same period last year. For the third quarter ended Sept. 30, 2007, total revenues were $160,000, compared to $191,000 in the same quarter of the prior year. Direct distribution revenue rose 79% to $136,000 from $76,000 a year ago. Revenues from licensing and contract research declined to $13,000 from $84,000 in the third quarter of 2007 and 2006, respectively. The company reported that revenues, for the nine-month period ending Sept. 30, 2007, increased 56% to $763,000 from $488,000 in the same period of 2006. Direct distribution revenue grew to a $440,000 for the first nine months of 2007, compared to $85,000 in the first nine months of the prior year. Revenues from licensing and contract research, activities that the company intends to de-emphasize in the future, declined to $243,000 from $315,000 million for the first nine months of 2007 and 2006, respectively. Net loss was $2.4 million for the first nine months of 2007, compared to a net loss of $7.5 million in the first nine months of 2006. "Our rapidly growing direct distribution business clearly has the potential to expand significantly and to be the spearhead of future growth for the company," said Jon Garfield, chief executive officer. "Our solid growth during the first nine months of the year was achieved despite the funding constraints we experienced before the recent capital injection. These constraints led us to delay hiring of new salespeople and to defer arrangements to increase tissue supply. Following the recent infusion of capital into the company, we are now expanding our sales efforts by looking to hire new sales representatives." At Sept. 30, 2007, the company's consolidated balance sheet showed $3.7 million in total assets, $2.2 million in total liabilities, and $1.5 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?2571 Going Concern Doubt Singer Lewak Greenbaum & Goldstein LLP, in Los Angeles, expressed substantial doubt about Clearant Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and negative cash flow from operations. About Clearant Inc. Headquartered in Los Angeles, Clearant Inc. (OTC BB: CLRA) -- http://www.clearant.com/-- develops and markets a proprietary pathogen inactivation technology that reduces the risk of contamination to biological products by inactivating a broad range of pathogens. The Clearant Process(R) is based on exposing a biological product to gamma-irradiation under specialized, proprietary or patented conditions that deliver a predetermined amount of radiation to inactivate a desired level of pathogens, thereby reducing the risk of contamination, while preserving the functionality and integrity of the treated product. CLEVELAND UNLIMITED: Financial Restatement Prompts Moody's Review ----------------------------------------------------------------- Moody's Investors Service placed Cleveland Unlimited Inc.'s (Revol) Caa1 corporate family, Caa1 senior secured and B3 probability of default ratings under review for possible downgrade and lowered its speculative grade liquidity rating to SGL-4 from SGL-3. The rating action follows the company's disclosure that it would potentially need to restate its financial results for one or more prior periods and that the scope and magnitude of any potential restatement is currently uncertain. This raises significant concerns over the adequacy of the company's internal control procedures and has heightened Moody's concerns over Revol's liquidity position. The potential restatement issue exacerbates already weak fundamentals for Revol's Caa1 corporate family rating in Moody's opinion. Moody's currently believes that the company's relatively limited cash position, questionable prospects for full recovery value in a distress scenario and an uncertain path to sustained free cash flow generation may warrant a downward revision to Revol's rating even in the event that financial statement issues and internal control procedures are satisfactorily addressed. Downgrades: Issuer: Cleveland Unlimited, Inc. * Speculative Grade Liquidity Rating: -- Downgraded to SGL-4 from SGL-3 On Review for Possible Downgrade: Issuer: Cleveland Unlimited, Inc. * Probability of Default Rating: -- Placed on Review for Possible Downgrade, currently B3 * Corporate Family Rating: -- Placed on Review for Possible Downgrade, currently Caa1 * Senior Secured Regular Bond/Debenture: -- Placed on Review for Possible Downgrade, currently Caa1, 60 - LGD4 Outlook Actions: Issuer: Cleveland Unlimited, Inc. * Outlook: Changed To Rating Under Review From Stable Revol has indicated that it believes it has adequate liquidity to service its current debt and payment obligations and continue its business operations in the ordinary course. A technical default under Revol's senior secured indenture may arise from the late filing of its financial statements. This could result in the need for Revol to accelerate repayment of its $150 million in senior secured notes which the company does not otherwise have the committed resources to satisfy. Moody's notes that the company's Chief Financial Officer resigned in August 2007 and has yet to be replaced (although the services of a financial consultant have been retained) and Revol's previously appointed accounting firm has suspended its audit engagement until an investigation by the company's Audit Committee into various accounting matters is completed. Moody's review will focus on the potential for Revol to become current with respect to its financial statement filing requirements or otherwise obtain any necessary waivers to avoid a potential default. Additionally, Moody's will seek to meet with company management to determine Revol's prospects for achieving sustained free cash flow generation or obtaining any necessary additional capital in light of increasing industry operating risks arising from slowing industry subscriber growth and the company's limited access to cash resources, which totaled roughly $24 million as at June 30, 2007. Should the company's delay of its financial statement filings persist for longer than 60 days, Moody's expects to move towards concluding the ratings review with available information at that time. Based in Independence, Ohio, Cleveland Unlimited, Inc. is a provider of wireless telecommunications service in Ohio. COGENTRIX ENERGY: Moody's Withdraws Ba2 Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings for Cogentrix Energy, LLC and Cogentrix Delaware Holdings, LLC. CEI has repaid CDHI's senior secured credit facilities in full and terminated the facilities. Furthermore, it has notified bondholders of its intention to redeem all of its outstanding 8.75% senior notes due 2008 on December 14, 2007. These notes have been guaranteed by The Goldman Sachs Group, Inc. Moody's has withdrawn these ratings: Cogentrix Energy, LLC - Corporate family rating of Ba2 - $354 million senior unsecured notes due 2008, rated Aa3 Cogentrix Delaware Holdings, LLC - $193 million senior secured term loan due 2012 - $ 50 million senior secured revolving credit facility due 2010 CEI is headquartered in Charlotte, North Carolina, and is the parent company of CDHI. COI MIDWEST: Judge Neiter Confirms Amended Reorganizational Plan ---------------------------------------------------------------- The Hon. Richard M. Neiter of the U.S. Bankruptcy Court for the Central District of California confirmed COI Midwest Investment LLC's Modified Amended Chapter 11 Plan of Reorganization. Plan Funding The Plan will be funded from the proceeds of the sale of the Debtor's property, estimated approximately $13.8 million. The Debtor assures the Court that the amount is more than enough to ensure all Secured and General Unsecured Claims. Under the Plan, All General Unsecured Claims will expect to recover 3.97% of its allowed claim. Treatment of Claims Under the Plan, Administrative and Priority Tax Claims will be paid in full on the effective date. Secured Claim of Wells Fargo, totaling $8.6 million, will also be paid in full. Holders of Priority Unsecured Claims will be paid in cash equal to the allowed amount of the claim on the effective date. General Unsecured Claims, excluding Delaware Street Capital II L.P. Entities, totaling $2.5 million, will be paid in full, including postpetition interest from the Debtor's bankruptcy filing through the date of payment of allowed claims under Section 1961(a) of the Bankruptcy Code. General Unsecured Claims of DSC Entities, totaling $3.6 million, will also be paid in full. Holders of Equity Interests will retain their interest in the Debtor under the Plan. A full-text copy of COI Midwest's Modified Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070821040218 A full-text copy of COI Midwest's Modified Amended Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=070821040831 Headquartered in the City of Industry, California, COI Midwest Investments LLC leases its real property in Canyon Road. The Company filed for bankruptcy protection on June 1, 2006 (Bankr. C.D. Calif. Case No. 06-12329). Ron Bender, Esq., and David B. Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for bankruptcy, it listed estimated assets between $10 million and $50 million and estimated debts between $1 million and $10 million. CPG INTERNATIONAL: Earns $300,000 in Third Quarter of 2007 ---------------------------------------------------------- CPG International Inc. disclosed third quarter 2007 financial results. "Although the residential housing market further weakened in the 3rd quarter, CPG continued to execute on its business plan achieving impressive growth for the quarter," said Glenn Fischer, CPG's Interim Chief Executive Officer. "We continued building out the AZEK Building Products distribution and sales footprint for both AZEK Trim and AZEK Deck products, expanded decking capacity to meet increasing demand, and saw growth from recent product introductions including our AZEK Mouldings line." In the third quarter, AZEK entered the second phase of its capacity build-out in Foley, Alabama and Scranton, Pennsylvania to support the rapid growth of its cellular PVC decking product AZEK Deck. In addition, AZEK continued the build-out of its multi- product distribution network and began shipping AZEK Trim to Home Depot in support of a 98 store test program. "We are committed to building AZEK into the leading brand of premium, low maintenance building products. The expansion of our production capabilities and distribution partners will greatly support us in this initiative," said Ralph Bruno, President AZEK Building Products. Third Quarter Highlights Third quarter sales improved to $82.6 million, up 25.5% from the third quarter 2006. Volume growth was primarily attributable to the acquisition of Procell Decking Systems as well as growth in our AZEK Trim and Mouldings business. Gross margin improved 250 basis points in 2007 versus the comparable period in 2006 driven by lower material costs, increased volumes, and improved operating productivity. Net income rose to $0.3 million in the third quarter from a loss of $0.8 million in 2006 reflecting strong sales growth and margin improvements. EBITDA performance in third quarter of 2007 grew to $15.2 million from $9.8 million last year. Adjusted EBITDA was $16.5 million in the quarter, up 56.1% from $10.6 million in 2006. Year-to Date Highlights Sales for the first nine months of 2007 were $254.1 million, up 20.7% over the first nine months of 2006. The successful acquisitions of Procell and Santana and strong growth in our locker systems sales more than offset the effects of a declining housing market. Gross margin improved 270 basis points for the first nine months of 2007 driven by lower material costs, increased volumes, and improved operating productivity. Net income was $6.6 million for the first nine months of 2007, an improvement of 153.1% from $2.6 million in 2006. Sales growth and improved margins helped drive all-time record EBITDA performance in the first nine months of 2007 as EBITDA was up 45.0% to $50.3 million. Adjusted EBITDA was $52.6 million in the first nine months of 2007, up 45.9% from $36.1 million in the first nine months of 2006. At September 30, 2007, CPG had cash of $17.4 million and had no amounts outstanding on its $40.0 million revolving credit facility. CPG's Adjusted EBITDA guidance is $65 million to $70 million for the full year of 2007. "We expect to have a very solid year of growth despite the difficult residential building market," said Scott Harrison, Executive Vice President and Chief Financial Officer. "However, with resin costs increasing and the continued slow pace in the housing market, we are narrowing our guidance today to $65 million to $70 million, the lower end of our previously issued range." Balance Sheet At Sept. 30 2007, the company's balance sheet showed total assets of $579,384,000, total debts of $380,932,000 and total shareholders' equity of $198,452,000. Equity at Dec. 31, 2006 stood at $156,972,000. The company's balance sheet also showed accumulated deficit of $1,509,000 as of September 30. A full-text copy of the company's financial report for the third quarter of 2007 may be viewed for free at: http://ResearchArchives.com/t/s?2575 About CPG International Headquartered in Scranton, Pennsylvania, CPG International -- http://www.cpgint.com/-- manufactures highly engineered, premium, low-maintenance, building products for residential and commercial markets designed to replace wood, metal and other traditional materials in a variety of construction applications. The company's products are marketed under several brands including AZEK(R) Trim, AZEK(R) Deck, AZEK(R) Mouldings, Santana Products, Comtec Industries, Capitol, EverTuff(TM), TuffTec(TM), Hiny Hider(R) and Celtec(R), as well as many other brands. CPG INTERNATIONAL: S&P Holds All Ratings and Revises Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on CPG International Inc. to positive from stable and affirmed all of its ratings, including the 'B' corporate credit rating. "The outlook revision reflects our belief that CPG's sales and earnings could grow meaningfully if the company continues to increase its penetration of the exterior trim and decking markets, if it maintains current profitability, and if residential construction demand settles at expected levels in 2008," said Standard & Poor's credit analyst Sean McWhorter. "Greater earnings and cash flow could lead to stronger credit measures and a higher rating." CPG, based in Scranton, Pennsylvania, manufactures engineered building products. With sales of $305 million for the 12 months ended Sept. 30, 2007, it operates in two main plastic product segments --c ellular PVC decking and trim board (sold under the AZEK brand), and bathroom partitions and lockers (in the Scranton Products segment). "We believe that earnings growth is the most likely driver for improvement in leverage or interest coverage, given that the company must pay prepayment penalties to redeem its debt in the intermediate term," Mr. McWhorter said. CPG is highly leveraged, with total debt, including capitalized operating leases of $304 million. "We could raise the ratings if AZEK's momentum in gaining market share continues, the company's residential end markets stabilize at expected levels, and earnings continue to grow