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 30, 2007, Vol. 11, No. 284 Headlines 155 EAST: Receives $1.5 Million Deposit on Purchase Agreement A-TITLE LLC: Case Summary & 20 Largest Unsecured Creditors AFFINION GROUP: IPO Withdrawal Prompts S&P to Revise Outlook AIMS WORLDWIDE: Posts $1,119,236 Net Loss in Third Quarter ALLIANCE IMAGING: Plans to Offer $125 Million of Sr. Sub. Notes ALLIANCE IMAGING: Moody's Rates Proposed $125MM Senior Notes at B3 AMERICAN GREETINGS: Unit Buying PhotoWorks Inc. for $26.5 Million AMERIGRAPH LLC: Involuntary Chapter 11 Case Summary AMERIQUAL GROUP: Weak Credit Profile Prompts Moody's Junk Rating AMR CORP: Fitch Affirms 'B-' IDR with Positive Outlook APPTIS INC: Names Paul Leslie as President and COO APPTIS INC: Moody's Cuts Family Rating to B3 and Revises Outlook ASPEN EXECUTIVE: Chap. 7 Conversion Hearing Deferred to Dec. 18 ASSET BACKED: Fitch Lowers Ratings to BB- on Two Cert. Classes ASSET-BACKED: Fitch Takes Rating Actions on Various Classes AUSTRALIAN FOREST: Sept. 30 Balance Sheet Upside-Down by $12.8MM BANE GROUP LLC: Case Summary & Two Largest Unsecured Creditors BARNERT HOSPITAL: DIP Facility Hearing Scheduled on December 6 BUMBLE BEE: Moody's Confirms B1 Corporate Family Rating CALPINE CORP: Creditors Committee Supports Fourth Amended Plan CALPINE CORP: Equity Committee Objects to Plan Confirmation CAPELLA HEALTH: Buys Community Health's Hospitals for $315 Million CAPELLA HEALTHCARE: $315 Mil. CHS Deal Cues Moody's Rating Review CDW CORP: High Leveraged Financial Cues S&P's "B" Credit Rating CHAMPION ENTERPRISES: Tender Offer for 7-5/8% Senior Notes Expires CHASE MORTGAGE: Fitch Rates $2.5 Million Trust at B CITY OF WALLER: Moody's Lifts Rating on Bonds to Baa3 from Ba1 COLUMBUS MCKINNON: Moody's Lifts Corporate Family Rating to B3 COMMUNITY HEALTH: Selling Nine Hospitals to Capella for $315 Mil. CONMED CORP: Good Performance Cues Moody's to Lift Ratings CONSTELLATION BRANDS: S&P Rates Proposed $500 Million Note at BB- CONSTELLATION BRAND: Moody's Rates $500 Mil. Senior Notes at Ba3 CREDIT BASED: Fitch Affirms Ratings on $398.7MM Certificates CREDIT BASED: Fitch Cuts Rating on Class B-3 to B from B+ CS 2006-TFL2: Fitch Rates $5.5 Million Class ARG-B Trust at BB- CUNNINGHAM LINDSEY: S&P Affirms 'B-' Counterparty Credit Rating DANA CORP: Indiana and Pine Tree Object to Plan Confirmation DANA CORP: Creditors Committee Supports Appaloosa Settlement Pact DANA CORP: Noteholders Balk at Appaloosa Settlement Agreement DANA TOWER: Voluntary Chapter 11 Case Summary DELPHI CORP: Delays Hearing on Chapter 11 Disclosure Statement DIRECTED ELECTRONICS: Moody's Cuts Corporate Family Rating to B2 DLJ MORTGAGE: Fitch Holds 'BB+' Rating on $22.3 Mil. Certificates ELEPHANT TALK: Sept. 30 Balance Sheet Upside-Down by $8.1 Million EL PASO: Affiliate Inks Deal to Purchase 50% of Gulf LNG Stake ENTRAVISION COMM: Explores Strategic Options for Ad Operations EQUIFIRST MORTGAGE: Moody's Downgrades Ratings on 17 Tranches FEDERAL-MOGUL: Expected Chap. 11 Exit Cues Moody's (P)Ba3 Rating FINDEX.COM INC: Posts $306,942 Net Loss in Third Quarter 2007 GFCM LLC: Moody's Affirms B3 Rating on $2.057 Mil. Class J Certs. GLOBAL CASH: 10-Q Filing Delay Cues Moody's Ratings Review HALCYON STRUCTURED: S&P Assigns 'BB' Rating on Class D Notes HARRAH'S ENT: Missouri Gaming Commission OKs Merger with Apollo IWT TESORO: Judge Glenn Sets January 11 as General Claims Bar Date JHT HOLDINGS: Weak Results Cue Moody's to Cut Rating to Caa3 JIMMY LEE: Case Summary & 20 Largest Unsecured Creditors JOY LEWIS: Voluntary Chapter 11 Case Summary L TERSIGNI: Section 341(a) Meeting Scheduled for December 10 L TERSIGNI: Files Chap. 11 Plan of Liquidation in Connecticut L TERSIGNI: Disclosure Statement Hearing Set for January 8 L TERSIGNI: Wants General Claims Bar Date Reset to January 18 LIN TV: Unlikely Business Sale Prompts S&P to Affirm "B+" Rating MATHIS PROPERTIES: Case Summary & 3 Largest Unsecured Creditors NANO SUPERLATTICE: Posts $46,194 Net Loss in Third Quarter NATIONAL EASTERN: Section 341(a) Meeting Continued to Dec. 10 PANOLAM INDUSTRIES: Exchange Offer for 10-3/4% Notes Expires PATMAN DRILLING: Files Schedules of Assets & Liabilities PEOPLE'S CHOICE: Wants Exclusive Period Extended to January 31 PHARMED GROUP: Court OKs Bid Procedures for Sale of Unit's Assets PHARMED GROUP: Gets Interim Court Nod on $18,250,000 DIP Financing POPE & TALBOT: Wants to Employ Shearman as Bankruptcy Counsel POPE & TALBOT: Wants to Employ Pachulski Stang as Co-Counsel POPE & TALBOT: Court Approves Kurtzman Carson as Claims Agent POPE & TALBOT: Seeks Court OK to Sell Wood Products to InterFor REFCO INC: Ch. 7 Trustee Wants Nod on MF Global Settlement Pact REFCO INC: Mayer Brown Wants $245 Million Lawsuit Dismissed RHODES COS: S&P Holds 'B' Rating and Revises Outlook to Negative SEA CONTAINERS: SCSL Panel Has Attride-Stirling as Bermuda Counsel SEA CONTAINERS: Marathon Discloses 10.7% Equity Stake SOLUTIA INC: Court Confirms Consensual Reorganization Plan SONA MOBILE: Markets $3 Million of 8% Senior Unsecured Notes SPECIALTY UNDERWRITING: Moody's Cuts Rating on Class B-1 to Ba3 SWEET TRADITIONS: Wants Lease Decision Period Extended to April 1 TELZUIT MEDICAL: Sept. 30 Balance Sheet Upside-Down by $9.8 Mil. TERRA ENERGY: Sept. 30 Balance Sheet Upside-Down by $1,512,209 THEATER XTREME: Sept. 30 Balance Sheet Upside-Down by $2,363,854 TRIBUNE COMPANY: Reports Revenues of $383 Million in October VALLEY HEALTH: Ongoing Losses Prompt Fitch to Junk Ratings VICTORY MEMORIAL: Has Until March 11, 2008 to File Chapter 11 Plan VIRGIN MOBILE: Moody's Assigns B2 Corporate Family Rating WELLS FARGO: Fitch Assigns 'B' Ratings on Two Cert. Classes WELLS FARGO: Fitch Affirms 'B' Ratings on Five Cert. Classes WELLS FARGO: Fitch Rates $6.981MM Class B-4 Certificates at BB WHITLATCH & CO: Court Sets Ch. 7 Conversion Hearing on December 11 * Fitch Says Vintage RMBS Continue to Underperform Expectations * Fitch Says Default Performance for CMBS Will Show Resiliency * BOOK REVIEW: Bankruptcy Investing: How to Profit from Distressed Companies (Revised Edition) ********* 155 EAST: Receives $1.5 Million Deposit on Purchase Agreement ------------------------------------------------------------- Hedwigs Las Vegas Top Tier LLC, an affiliate of the investment group led by NTH Advisory Group LLC, paid a non-refundable deposit of $1.5 million to 155 East Tropicana LLC . 155 East Tropicana LLC entered into a definitive Asset Purchase Agreement with Hedwigs Las Vegas Top Tier LLC. The company also subsequently entered into a first and second amendment to the Asset Purchase Agreement. Under the terms of the Agreement the Buyer was required to pay a non-refundable deposit of $1.5 million by 5:00 p.m. PST on Nov. 15, 2007. The closing under the Agreement remains subject to the completion of certain conditions described in the Agreement. There can be no assurance that: (i) the conditions to closing under the Agreement will ever be satisfied, or (ii) any transaction contemplated under the Agreement will be consummated, or (iii) if a transaction is consummated, it will be on the same or similar terms as currently provided under the Agreement. About NTH Advisory Group LLC Headquartered in Santa Monica, California, NTH Advisory Group LLC, is a casino and hotel development and advisory firm led by Richard Bosworth, its principal and president. About 155 East Tropicana LLC 155 East Tropicana LLC --- http://www.hooterscasinohotel.com/ -- owns the Hooters Casino Hotel in Las Vegas, Nevada. The property is located one-half block from the intersection of Tropicana Avenue and Las Vegas Boulevard, a major intersection on the Las Vegas Strip. The Hooters Casino Hotel features 696 hotel rooms and an approximately 29,000 square-foot casino. * * * As reported in the Troubled Company Reporter on Aug. 23, 2007, Standard & Poor's Ratings Services lowered its ratings on 155 East Tropicana LLC. The corporate credit rating was lowered to 'CCC+' from 'B-'. The ratings remain on CreditWatch with developing implications, as the potential for a sale of the company remains. A-TITLE LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: A-Title, L.L.C., 3240 East Tropicana Avenue Las Vegas, NV 89121 Bankruptcy Case No.: 07-17844 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Americana, L.L.C. 07-17847 Americana Holdings, L.L.C. 07-17848 American Eagle Referral Service, L.L.C. 07-17849 Type of Business: The Debtors are real estate agents and managers. They also operate non-residential buildings. Chapter 11 Petition Date: November 27, 2007 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtors' Counsel: Rob Charles, Esq. Lewis and Roca, L.L.P. 3993 Howard Hughes Parkway, Suite 600 Las Vegas, NV 89169 Tel: (702) 949-8320 Fax: (702) 949-8321 Estimated Assets Estimated Debts ---------------- --------------- A-Title, L.L.C. $100,000 to $1 Million to $1 Million $100 Million Americana, L.L.C. $1 Million to $1 Million to $100 Million $100 Million Americana Holdings, L.L.C. $1 Million to $1 Million to $100 Million $100 Million American Eagle Referral $10,000 to $1 Million to Service, L.L.C. $100,000 $100 Million A. A-Title, LLC does not have any creditors who are not insiders. B. Americana, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tunstall Consulting, Inc. Corp. $353,284 Attention: Gordon Turnstall P.O. Box 272850 Tampa, FL 33688-2850 Prudential R.E. Affiliates, franchise royalties $227,893 Inc. Attention: Corine Peterson 3333 Michelson Drive, Suite 1000 Irvine, CA 92612 Barbara Zucker commissions $163,455 10409 Mansion Hills Avenue Las Vegas, NV 89144 American Express travel/vendors who $124,910 accept Amex Rainbow Corporate Center, L.P. rent-- old location $106,223 V.H.T., Inc. virtual tour billing $95,121 Susan Smith commissions-- $94,369 (priority in part) Las Vegas Review Journal advertising $89,738 Kirby J. Presswood commissions-- $51,963 (priority in part) McGlaurey & Pullen, L.L.P. 2006 audit work $40,000 Ivan Sher commissions-- $38,086 (priority in part) Florence Shapiro commissions-- $38,086 (priority in part) Frank Napoli commissions-- $35,940 (priority in part) Molly Zettel commissions-- $30,093 (priority in part) Maxwelle Realty, Inc. commission $25,316 Barry Estates, Inc. commissions-- $23,625 (priority in part) J.M. Commercial Properties, commissions $23,448 Inc. Sirva Relocation commission $22,096 Makai Realty, Inc. commission $21,026 Purchase Power postage account $20,000 C. Americana Holdings, LLC does not have any creditors who are not insiders. D. American Eagle Referral Service, LLC does not have any creditors who are not insiders. AFFINION GROUP: IPO Withdrawal Prompts S&P to Revise Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised the rating outlook on direct marketer Affinion Group Inc. to negative from developing and affirmed the ratings, including the 'B+' corporate credit rating, on the company. "The outlook revision follows the withdrawal of a registration statement for an IPO by the company's parent, Affinion Group Holdings Inc.," explained Standard & Poor's credit analyst Debbie Kinzer. The rating on Affinion Group Inc. reflects some affinity partner concentration concerns, competitive pressures in the membership marketing business, and high financial risk. The company's leading position in membership marketing, recurring revenue streams from renewals, and positive discretionary cash flow partially offset these factors. AIMS WORLDWIDE: Posts $1,119,236 Net Loss in Third Quarter ---------------------------------------------------------- Aims Worldwide Inc. reported a net loss of $1,119,236 on revenue of $987,202 for the third quarter ended Sept. 30, 2007, compared with a net loss of $369,579 on revenue of $401,908 in the same period last year. The increase in revenue was substantially due to the acquisition of IKON and Target. In addition, activity generated from AIMSolutions contracts during the same period in 2006 contributed to the quarter revenue substantially. General and administrative expenses were $1,858,769 for the three months ended Sept. 30, 2007, compared to general and administrative expenses of $783,600 for the same period in 2006. The primary reason for the increase is attributed to acquisition and disposition costs along with normal G&A expenses added by including the new subsidiaries, IKON, Target America, Bill Main and Associates, and Streetfighter Marketing. Operating loss for the three months ended Sept. 30, 2007, was $1,119,236 compared to $369,579 for the same period in 2006. At Sept. 30, 2007, the company's consolidated financial statements showed $6,699,829 in total assets, $5,628,846 in total liabilities, ($108,018) in minority interest, and $1,179,001 in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $802,270 in total current assets available to pay $5,254,910 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?25e1 Going Concern Doubt Cordovano and Honeck LLP, in Englewood, Colorado, expressed substantial doubt about AIMS Worldwide Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the quarter ended Dec. 31, 2006. The auditing firm reported that the company has not fully realized the potential of its business plan and, accordingly, has experienced limited revenues related to the sale of its products and services. Additionally, the company continues to experience net operating losses, relies upon outside sources of working capital to meet current obligations and plans to sell assets to execute its business plan. About AIMS Worldwide Headquartered in Fairfax, Virginia, AIMS Worldwide Inc. (OTC BB: AMWW.OB) -- http://www.aimsworldwide.com/-- is a vertically integrated marketing communications consultancy providing organizations with its AIMSolutions branded focused marketing solutions. AIMS(TM) (Accurate Integrated Marketing Solutions) increases the accuracy of the strategic direction of its client's marketing program, improves results and reduces the cost, by refocusing "mass marketing" to a more strategic "One-2-One(TM)" relationship with the ideal customer. ALLIANCE IMAGING: Plans to Offer $125 Million of Sr. Sub. Notes --------------------------------------------------------------- Alliance Imaging Inc. intends to offer, subject to market and other conditions, $125 million aggregate principal amount of senior subordinated notes in a private offering. Alliance Imaging intends to use the net proceeds of the offering to repay borrowings under and terminate its Acquisition Credit Agreement, dated as of Nov. 5, 2007. The remaining proceeds will be used for funding future acquisitions and general corporate purposes. Based in Anaheim, California, Alliance Imaging Inc. (NYSE: AIQ) -- http://www.allianceimaging.com/-- provides shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The company had 494 diagnostic imaging systems, including 326 MRI systems and 77 PET or PET/CT systems, and served over 1,000 clients in 43 states at March 31, 2007. Of these 494 diagnostic imaging systems, 72 were located in fixed-sites, which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups' offices, or medical buildings and retail sites. * * * Moody's Investor Services placed Alliance Imaging Inc.'s long term corporate family and probability of default ratings at 'B1' in June 2006. The ratings still hold to date with a stable outlook. ALLIANCE IMAGING: Moody's Rates Proposed $125MM Senior Notes at B3 ------------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Alliance Imaging Inc's proposed $125 million senior subordinated notes. Concurrently, Moody's affirmed the company's Corporate Family and Probability of Default Ratings at B1. Following this rating action, the outlook is stable. The proposed facility will be used to repay a $50 million bridge facility, provide cash to the balance sheet for potential future acquisitions and pay estimated transaction fees and expenses. Moody's took these rating actions: -- Assigned B3 (LGD5, 83%) to the proposed $125 million, senior subordinated notes due 2012; -- Affirmed the B3 (LGD5, 83%) rated $150 million, 7.25% senior subordinated notes due 2012; -- Upgraded to Ba2 (LGD2, 27%) from Ba3 (LGD3, 35%) the $70 million senior secured revolver due 2010; -- Upgraded to Ba2 (LGD2, 27%) from Ba3 (LGD3, 35%) the $367 million senior secured term loan B due 2011; -- Affirmed the B1 Corporate Family Rating; -- Affirmed the B1 Probability of Default Rating. The ratings outlook is stable. The B1 Corporate Family Rating at B1 primarily reflects the following factors: 1) high capital requirements and operating leverage; 2) modest free cash flow; and 3) high financial leverage, pro forma for the transaction. Moody's also notes that the company's revenues are declining modestly as a result of recent Medicare reimbursement cuts together with competitive pressures in mobile MRI. Factors mitigating the abovementioned concerns include the company's substantive scale, the dispersion of its footprint, the diversification of its customer base as well as the company's low bad debt experience. The stable outlook reflects Moody's expectation that the company will increasingly replace lost MRI revenues and start to grow its revenue stream through the systematic build-out of its fixed-site operations and the expansion of its presence in the radiation therapy space. Strong growth in PET and PET/CT is expected to contribute to these efforts. Downward rating pressure could develop if there is a decline in the company's ratio of adjusted free cash flow to debt below about 3% or if the ratio of adjusted total debt to EBITDA increases above 5.5 times on a sustained basis. Adjusted total debt to EBITDA declines to 3.6 times on a sustained basis accompanied by material positive growth in revenues could result in a positive outlook. AIQ is a leading national provider of shared-service and fixed- site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging services primarily to hospitals and other healthcare providers on a shared and full-time service basis. The company provides services through a growing number of fixed-sites primarily in partnerships with hospitals or healthcare systems. The company maintained 470 diagnostic imaging systems, including 310 MRI systems and 76 PET or PET/CT systems, and over 1,000 clients in 43 states as of September 30, 2007. For the twelve months ended September 30, 2007, the company recognized revenue of roughly $443 million. AMERICAN GREETINGS: Unit Buying PhotoWorks Inc. for $26.5 Million ----------------------------------------------------------------- American Greetings Corporation and PhotoWorks Inc. have entered into an agreement whereby American Greetings, through a subsidiary, will acquire PhotoWorks for approximately $26.5 million. Under the terms of the agreement, American Greetings will make a cash tender offer to acquire all outstanding common shares of PhotoWorks at a price of 59.5 cents per share. The tender offer will be followed by a merger in which the holders of the outstanding common shares of PhotoWorks not purchased in the tender offer will receive the same per share price paid in the tender offer, in cash, without interest. American Greetings is expected to launch the tender offer shortly, and the merger is expected to close in late January 2008. The board of directors of PhotoWorks has unanimously recommended that shareholders of PhotoWorks accept the offer. Certain shareholders of PhotoWorks have already signed agreements by which they agreed to tender all of their shares in the tender offer. The shares held by such shareholders represent 44.5% of the total shares of PhotoWorks currently outstanding. "The acquisition of PhotoWorks positions us for a comprehensive photo strategy, bringing together both digital and physical products," Zev Weiss, chief executive officer of American Greetings said. "We are taking advantage of the opportunity to establish a leadership position in this growing channel of the social expression industry." "Our previous acquisition of Webshots provided a strong entree into the online photo sharing space, a significant number of unique visitors, and a scalable platform," Josef Mandelbaum, chief executive officer of AG Interactive, one of American Greetings' segments, stated. "Now, PhotoWorks provides a strong integrated supply chain platform to provide customers the ability to create unique, high quality physical products with their own photos. This further positions us to provide a full social expression photo solution to our consumers." "PhotoWorks is thrilled to be a part of this important step forward for American Greetings," Andy Wood, president and chief executive officer of PhotoWorks said. "We are excited to build and provide a compelling onlin experience for consumers in cooperation with one of the world's leading greeting card and social expression companies. I am confident that combining these companies' content and relationships will result in a more appealing site with truly unique products for all of our consumers." "At this time, the transaction is expected to have a minimal impact to fiscal 2008 earnings," Mr. Weiss added. About PhotoWorks Inc. Headquartered in Seattle, Washington, PhotoWorks Inc. (OTC:PHTW) - http://www.photoworks.com/-- is an online photography services company. The company offers processing and printing services to both digital and traditional camera users, in the United States. PhotoWorks provides customers with the ability to store and organize photos online, share them with friends and family, and order prints, reprints, photo albums and photo-related products. In addition, customers can create Custom Photo Books and Signature Photo Cards using the Company's Website. PhotoWorks can also process any brand of 35-millimeter film, advanced photo systems (24 millimeters) film or 35-millimeter, single-use cameras. The company offers prints, slides, digital images and online archiving, all from the same roll of 35-millimeter film. About American Greetings Corporation Based in Cleveland, Ohio, American Greetings Corporation (NYSE:AM) -- http://corporate.americangreetings....-- is engaged in the design, manufacture and sale of everyday and seasonal greeting cards, and other social expression products. Greeting cards, gift wrap, party goods, stationery and giftware are manufactured or sold by the Company in North America, including the United States, Canada and Mexico, and throughout the world, primarily in the United Kingdom, Australia and New Zealand. In addition, through its subsidiary, AG Interactive, Inc., the company distributes social expression products, including e-mail greetings, personalized printable greeting cards and a range of graphics, through a variety of digital and other electronic channels, including Websites, Internet portals and electronic mobile devices. Design licensing is done primarily by its subsidiary AGC Inc. and character licensing is done primarily by its subsidiaries, Those Characters From Cleveland, Inc. and Cloudco, Inc. * * * Moody's Investor Services placed American Greetings Corporation's probability of default rating at 'Ba3'. The rating still hold to date with a stable outlook. AMERIGRAPH LLC: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Amerigraph, L.L.C. 1600 Eastgate Parkway Gahanna, OH 43230 Case Number: 07-59587 Type of Business: The Debtor provides commercial printing services. Involuntary Petition Date: November 28, 2007 Court: Southern District of Ohio (Columbus) Petitioner's Counsel: Lawrence C. Bolla, Esq. Quinn, Buseck, Leemhuis, Toohey & Kroto, Inc. 2222 West Grandview Boulevard Erie, PA 16506 Tel: (814) 833-2222 Petitioners Claim Amount ----------- ------------ Kolorcure Corp. $270,000 1180 Lyon Rd. Batavia, IL 60510 Curbell Plastics, Inc. $132,000 7 Cobham Dr. Orchard Park, NY 14127 Pitman Co. $67,000 721 Union Blvd. Totowa, NJ 07512-2207 AMERIQUAL GROUP: Weak Credit Profile Prompts Moody's Junk Rating ---------------------------------------------------------------- Moody's Investors Service downgraded its debt ratings of AmeriQual Group LLC; Corporate Family and Probability of Default, each to B3 from B1 and senior secured second lien notes to Caa1 from B2. The outlook remains negative. Moody's also affirmed the SGL-3 Speculative Grade Liquidity rating. The downgrades reflect the weakened credit profile because of meaningfully lower shipments of Meals, Ready to Eat to the U.S. Military, AmeriQual's largest customer. Moody's also believes that MRE order volumes are likely to remain constrained over at least the near term. This and only modest planned growth in the company's commercial segment could complicate efforts to stabilize the weakening credit profile, in Moody's view. The B3 Corporate Family rating reflects the company's small size, high reliance on two customers and highly levered capital structure. Weak demand for the company's higher margin MRE's has caused a significant weakening of credit metrics. Moody's expects annual MRE shipments could trail the lower level realized in 2007 and only modest growth of the company's smaller commercial lines. This should prevent any meaningful improvement in credit metrics over the near term. Additionally, if MRE order volumes continue to decline, Debt to EBITDA and EBIT to Interest could weaken from the 6.7 times and 0.9 times, respectively, at September 30, 2007. Liquidity is adequate but could be tested in 2009 if MRE order volumes continue to decline. Moody's expects AmeriQual to generate modestly negative to about breakeven free cash flow over the next 12 months, which should support the ability to service its debt obligations. The negative outlook reflects Moody's concern that MRE shipments might not return to the volumes achieved in 2005 or 2006; levels that generated earnings and cash flows sufficient to sustain the lower leveraged capital structure the company had at that time. Availability under the revolver provides some cushion to offset weaker cash flows from the government business over the next 12 months. However, the potential exists for the growth in the commercial business to trail AmeriQual's projections. Any shortfall would further pressure the credit profile. The ratings may be downgraded if availability under the revolver was sustained below $12 million. Further declines in the operating margin, to below four percent, or funds from operations being sustained below $3 million could also result in a downgrade. Unexpected large growth in the commercial business lines that meaningfully reduced customer concentration or Debt/ EBITDA being sustained below 6.0 times or EBIT / Interest being sustained above 1.0 time could result in the stabilization of the outlook. Downgrades: Issuer: AmeriQual Group, LLC -- Corporate Family Rating, Downgraded to B3 from B1 -- Probability of Default Rating, Downgraded to B3 from B1 -- Senior Secured Regular Bond/Debenture, Downgraded to Caa1, 62-LGD4 from B2, 63-LGD4 AmeriQual Group, LLC, headquartered in Evansville, Indiana, is a supplier of individual and group field rations to the U.S. Department of Defense. The company also provides contract manufacturing and packaging services using thermal or high pressure processes to consumer products and other food distribution companies. AMR CORP: Fitch Affirms 'B-' IDR with Positive Outlook ------------------------------------------------------ Following the announcement by AMR Corp. that it intends to divest its American Eagle Holding Corp. subsidiary in 2008, Fitch expects no near-term impact on the debt ratings of AMR and its principal operating subsidiary, American Airlines Inc. Fitch affirmed both entities' Issuer Default Ratings at 'B-' on Nov. 13, 2007, while revising the Rating Outlook for AMR to Positive. Since AMR's announcement simply reflects the airline's desire to pursue an American Eagle divestiture without specific details on any prospective deal terms or the likely allocation of cash proceeds, the credit quality implications of any future transaction are still uncertain. Moreover, there is a real possibility that an acceptable transaction will not be closed in 2008 given uncertainties over the durability of the industry's revenue recovery and the persistence of record-high jet fuel prices. Fitch expects margin pressure at regional airline operators such as American Eagle to continue as a result of higher unit operating expenses and a softening U.S. macroeconomic environment that will likely make domestic unit revenue comparisons difficult in 2008. Should cash proceeds from any Eagle divestiture be directed toward debt reduction at the parent or American Airlines, Inc., the mainline carrier's credit profile could improve. AMR has already announced plans to pre-pay approximately $545 million of secured aircraft debt in the fourth quarter. However, most or all of the proceeds could be returned to shareholders without incremental leverage reduction. American Eagle and its Executive Airlines affiliate are expected to generate 2007 revenues of approximately $2.3 billion , and Fitch estimates that approximately $2.6 billion of secured debt resides at the American Eagle Holding Corp. subsidiary. APPTIS INC: Names Paul Leslie as President and COO -------------------------------------------------- Apptis Inc. has appointed Paul Leslie as president and chief operating officer, to oversee the company's growing services business. Mr. Leslie, a 25-year federal services technology veteran, brings to Apptis proven leadership experience in business development, mergers and acquisitions, operational excellence, strategic planning and extensive federal market operations. Mr. Leslie's arrival aligns with the company's organizational strategy to emphasize its broad technology services offerings while expanding the company's value-added reseller business as the Apptis Technology Solutions business. "I am pleased to welcome Paul to Apptis and am excited about the contribution he will make to our accelerating growth," said Bert Notini, Apptis chairman and chief executive officer. "His appointment as our president and COO adds seasoned and dedicated leadership that will further enhance our services strength. Paul's focus on our services business will compliment our Technology Solutions Group led by Rene LaVigne." "I am thrilled to be joining such a rapidly growing company in the Federal sector," Mr. Leslie stated. "I look forward to working with Bert, the senior management team, and especially the outstanding employees that support the mission of our customers. Apptis clearly shares the same philosophy I do about the most important element of an organization's success: high quality customer service accelerates strategic growth. Our focus will be the acceleration of breakout growth." "Paul's joining the Apptis team is an important milestone as we continue to focus on the unique strengths of the services and technology solutions offerings we have developed over the past few years," Mr. LaVigne, president and COO of Apptis Technology Solutions business, stated. "I look forward to working closely with Paul and expanding our market leadership." Mr. Leslie brings a solid track record of successfully building companies for substantial market growth. He served as president and CEO of Apogen Technologies, a federal sector IT services and solutions company with a focus on homeland security and defense. Mr. Leslie led Apogen through an impressive combination of organic growth and strategic acquisitions. Prior to joining Apogen, Mr. Leslie held corporate management positions at EDS, Universal Systems, BDM International, BTG and TRW. About Apptis Inc. Headquartered in Chantilly, Virginia, Apptis Inc. -- http://www.apptis.com/-- is a privately held company that provides IT services, including network engineering, software development, and systems integration, for agencies of the federal government and commercial clients. It also builds custom computer systems and resells equipment from such vendors as Cisco, Dell, and Hewlett-Packard. Other services include maintenance, support, and training. * * * As reported in the Troubled Company Reporter on Aug. 24, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Apptis (DE) Inc. to 'B' from 'B+'. At the same time, Standard & Poor's lowered its senior secured debt rating to 'B+' from 'BB-'. The outlook is negative. APPTIS INC: Moody's Cuts Family Rating to B3 and Revises Outlook ---------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating and other instrument ratings of Apptis (DE), Inc. and revised the outlook to negative. The downgrade reflects the company's recent operating underperformance and constrained liquidity profile as evidenced by minimal cash balances and minimal cushion under the company's financial covenants. Moody's took these rating actions: -- $25 million senior secured first lien revolver due 2011, lowered to B1 (LGD2, 29%) from Ba3 (LGD2, 28%) -- $130 million senior secured first lien term loan B due 2012, lowered to B1 (LGD2, 29%) from Ba3 (LGD2, 28%) -- Corporate Family Rating, lowered to B3 from B2 -- Probability of Default Rating, lowered to B3 from B2 -- The outlook is negative. The downgrade of Apptis's Corporate Family Rating to B3 with a negative outlook reflects the continuing challenging operating environment and constrained liquidity profile. The downgrade also reflects that the company's results were below their expectations and operating performance for the twelve months ended Sept. 30, 2007 has deteriorated. Apptis has been contending with a change in certain of its customers procurement practices, pricing pressures from competitors in an increasingly competitive bidding environment and increased costs stemming from the growth in contract work originated through subcontractors. Although the company is realigning its sales force and cost structure to contend with the change in the operating environment, there is a lack of transparency regarding future results as well as the future operating environment. After the application of Moody's standard adjustments, EBIT coverage of interest expense has weakened to well below 0.5 time, while total debt to EBITDA has ballooned to over 7.0 times for the twelve months ended Sept. 30, 2007. Other business concerns reflected in the B3 corporate family rating include a high concentration of revenue, Apptis' small revenue base compared to its high debt burden, and the continued exposure to delays or reduction in federal spending, which is prevalent in the government contract services business industry-wide. Apptis (DE), Inc., headquartered in Chantilly, Virginia, provides information technology services and solutions primarily to federal government agencies. The company's core capabilities include software development and engineering, network infrastructure deployment and support services, and product fulfillment. Revenue for the twelve months ended September 30, 2007 was approximately $380 million. ASPEN EXECUTIVE: Chap. 7 Conversion Hearing Deferred to Dec. 18 --------------------------------------------------------------- The hearing to consider the motion of Kelly Beaudin Stapleton, the United States Trustee for Region 3, seeking conversion of Aspen Executives Air LLC's chapter 11 case into chapter 7 has been moved from Nov. 20, 2007, to Dec. 18, 2007, 12:00 p.m. Objections, if any, are due December 11. In her request, the U.S. Trustee alleges that the Debtor failed to fulfill its primary fiduciary duty to act in the best interests of general creditors. The U.S. Trustee tells the U.S. Bankruptcy Court for the District of Delaware that the proposed buyer for the Debtor's business is an insider, given that a postpetition financing lender will be acquiring interest in the buyer after the sale. The U.S. Trustee illustrates that the Debtor is owned 99% by Calim Venture Partners II and 1% by Calim Private Equity LLC. CPE is the sole Manager of the Debtor. John P. Calamos, Sr. owns 50% of CPE, and 6.25% of CVP. Mr. Calamos and CVP are the Debtor's postpetition financing lenders. According to the U.S. Trustee, the Debtor's proposed procedures for the sale of its business to Pinnacle Air LLC gives Mr. Calamos right to acquire a controlling interest in Pinnacle, hence, Pinnacle is an insider. Additionally, the U.S. Trustee notes that the Debtor did not disclose in its schedules customer deposit funds held by its escrow agent, Reviewer LLC. The U.S. Trustee argues that the current management effectuated what appears to be a prima facie fraudulent transfer on the eve of its bankruptcy filing by diverting funds from the estate to Reviewer LLC. The transfer, the U.S. Trustee avers, took place immediately subsequent to a judgment levy by a judgment creditor and within one month of the bankruptcy filing. Bankruptcy Analyst Supports Conversion In support of the U.S. Trustee's motion, Diane M. Giordano, Bankruptcy Analyst for the Office of the United States Trustee for Region 3, states that no accounting was made on the deposit funds held by Reviewer LLC, as escrow agent, as of Nov. 15, 2007. In reviewing the agreements relating to the funds, Ms. Giordano tells the Court that she found no indication that members are notified that their deposits are transferred to a non-debtor entity escrow agent, or of the disposition of funds once transferred from the Debtor to the escrow agent. Ms. Giordano also notes that no clauses in the agreements require the Debtor to escrow the deposit funds. In addition, Ms. Giordano tells the Court that there were inconsistencies in the Debtor's monthly operating report for the period Sept. 14, 2007, to Sept. 30, 2007. Specifically, she notes that: -- the Debtor received insider funds from Mr. Calamos; -- there is a $112,906.55 disparity between the amount disclosed by the Debtor in its Accounts Receivable Reconciliation and Aging report ($895,842.74) and the gross revenue reflected in its Statement of Operations ($782,936.19); and -- the cash revenues in the Debtor's postpetition financing budget and the actual revenues on its monthly operating report do not match. Furthermore, Ms. Giordano states that the Debtor utilized Community Banks of Colorado for its prepetition banking and intended post petition banking. Despite requests for the Debtor to seek an alternate banking institution, no changes have been made, she says. About Aspen Executive Based in Basalt, Colorado, Aspen Executive Air, L.L.C., aka AEXJet -- http://www.aexjet.com/-- is a private jet travel company. The company filed for chapter 11 protection on Sept. 14, 2007 (Bankr. D. Del. Case No. 07-11341). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., and Curtis A. Hehn, Esq., at Pachulski Stang Ziehl & Jones LLP represent the Debtor. Donald J. Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection form its creditors, it listed assets between $1 million and $100 million. The Debtor's list of 20 largest unsecured creditors showed claims of more than $20 million. ASSET BACKED: Fitch Lowers Ratings to BB- on Two Cert. Classes -------------------------------------------------------------- Fitch has taken rating actions on these Asset Backed Securities Corporation mortgage-pass through certificates: Series 2003-HE2: -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-' -- Class M-4 affirmed at 'BBB'; -- Class M-5 downgraded to 'BB' from 'BBB-', and removed from Rating Watch Negative. Series 2004-HE6: -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 downgraded to 'BBB+' from 'A-'; -- Class M5 downgraded to 'BBB' from 'BBB+'; -- Class M6 downgraded to 'BB+' from 'BBB', and removed from Rating Watch Negative; -- Class M7 downgraded to 'BB-' from 'BBB-', and removed from Rating Watch Negative. Series 2004-HE8: -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 downgraded to 'BBB' from 'BBB+'; -- Class M5 downgraded to 'BB' from 'BBB'; -- Class M6 downgraded to 'BB-' from 'BBB-'; -- Class M7 downgraded to 'B+' from 'BB+', and removed from Rating Watch Negative. The collateral in all of the transactions listed above consists of 15 to 30-year fixed-rate and adjustable-rate mortgages primarily secured by first- and second-liens on one to four-family residential properties. The majority of the loans were originated by New Century. The servicers include Select Portfolio Servicing (rated 'RPS2' by Fitch), and Wells Fargo Home Mortgage (rated 'RPS1' by Fitch). The affirmations affect approximately $320.8 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The classes with negative actions reflect the deterioration in the relationship of CE to future loss expectations and affect $80.2 million in outstanding certificates. The downgrade of the M-5 bond of series 2003-HE2 was taken due to the continuous overcollateralization depletion that has occurred over the past year. The realized monthly losses have generally exceeded excess spread. As of the October 2007 remittance period, the 60+ delinquency (inclusive of bankruptcies, foreclosures and REO) is 21.38% while the current CE provided by the OC for M-5 is 4.02%. Both series 2004-HE6 and 2004-HE8 have recently stepped down which has allowed both trusts to meet (or be above as the OC is the case for 2004-HE6) the OC target amount. The release of OC and subsequent payment of the subordinate bonds will increase credit pressure up the capital structure. As of the October 2007 remittance period, the 60+ delinquency for series 2004-HE6 and 2004-HE8 is 29.07% and 32.64%, respectively. The current CE provided by the OC for series 2004-HE6 and 2004-HE8 is 12.17% and 4.80%, respectively. However, this amount of CE will decrease as the OC continues to release. ASSET-BACKED: Fitch Takes Rating Actions on Various Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on five Asset-Backed Securities Corporation transactions. Affirmations total $1.0 billion and downgrades total $67.5 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: ABSC 2005-HE1 -- $42.9 million class M1 affirmed at 'AA+' (BL: 83.0, LCR: 8.32); -- $35.3 million class M2 affirmed at 'AA' (BL: 63.96, LCR: 6.41); -- $21.6 million class M3 affirmed at 'AA-' (BL: 29.67, LCR: 2.98); -- $19.3 million class M4 affirmed at 'A+' (BL: 26.13, LCR: 2.62); -- $18.2 million class M5 affirmed at 'A' (BL: 22.95, LCR: 2.3); -- $17.6 million class M6 affirmed at 'A-' (BL: 19.90, LCR: 2.0); -- $14.2 million class M7 affirmed at 'BBB+' (BL: 17.43, LCR: 1.75); -- $12.5 million class M8 affirmed at 'BBB' (BL: 15.27, LCR: 1.53); -- $11.9 million class M9 affirmed at 'BBB-' (BL: 13.15, LCR: 1.32); -- $9.1 million class M10 affirmed at 'BBB-' (BL: 11.59, LCR: 1.16); -- $13.5 million class M11 downgraded to 'BB' from 'BB+' (BL: 10.10, LCR: 1.01). Deal Summary -- Originators: New Century (50%), WMC (50%) -- 60+ day Delinquency: 22.99%, -- Realized Losses to date (% of Original Balance): 1.17%; -- Expected Remaining Losses (% of Current Balance): 9.97%; -- Cumulative Expected Losses (% of Original Balance): 3.12%. ABSC 2005-HE2 -- $56.8 million class M1 affirmed at 'AA' (BL: 64.09, LCR: 7.36); -- $16.8 million class M2 affirmed at 'AA-' (BL: 32.74, LCR: 3.76); -- $27.9 million class M3 affirmed at 'A' (BL: 23.02, LCR: 2.64); -- $8.2 million class M4 affirmed at 'A-' (BL: 20.81, LCR: 2.39); -- $10.3 million class M5 affirmed at 'BBB+' (BL: 18.03, LCR: 2.07); -- $5.7 million class M6 affirmed at 'BBB' (BL: 16.46, LCR: 1.89); -- $7.8 million class M7 affirmed at 'BBB-' (BL: 14.28, LCR: 1.64); -- $10.3 million class M8 affirmed at 'BB+' (BL: 12.20, LCR: 1.4). Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 21.21%; -- Realized Losses to date (% of Original Balance): 0.88%; -- Expected Remaining Losses (% of Current Balance): 8.71%; -- Cumulative Expected Losses (% of Original Balance): 2.82%. ABSC 2005-HE3 -- $29.2 million class A affirmed at 'AAA' (BL: 92.82, LCR: 7.52); -- $30.5 million class M1 affirmed at 'AA+' (BL: 77.11, LCR: 6.24); -- $24.3 million class M2 affirmed at 'AA' (BL: 64.23, LCR: 5.2); -- $14.8 million class M3 affirmed at 'AA-' (BL: 56.27, LCR: 4.56); -- $14.1 million class M4 affirmed at 'A+' (BL: 47.95, LCR: 3.88); -- $12.1 million class M5 affirmed at 'A' (BL: 24.77, LCR: 2.01); -- $12.1 million class M6 affirmed at 'A-' (BL: 21.69, LCR: 1.76); -- $10.9 million class M7 affirmed at 'BBB+' (BL: 18.97, LCR: 1.54); -- $9 million class M8 affirmed at 'BBB' (BL: 16.77, LCR: 1.36); -- $7 million class M9 affirmed at 'BBB-' (BL: 15.01, LCR: 1.22); -- $5.4 million class M10 affirmed at 'BB+' (BL: 13.69, LCR: 1.11); -- $7.8 million class M11 rated 'BB' (BL: 12.28, LCR: 0.99), placed on Rating Watch Negative. Deal Summary -- Originators: WMC (100%) -- 60+ day Delinquency: 24.66%; -- Realized Losses to date (% of Original Balance): 1.57%; -- Expected Remaining Losses (% of Current Balance): 12.35%; -- Cumulative Expected Losses (% of Original Balance): 4.55%. ABSC 2005-HE4 -- $59 million class A affirmed at 'AAA' (BL: 85.72, LCR: 9.49); -- $45.6 million class M1 affirmed at 'AA+' (BL: 68.64, LCR: 7.6); -- $34.1 million class M2 affirmed at 'AA' (BL: 55.79, LCR: 6.18); -- $18.2 million class M3 affirmed at 'AA-' (BL: 48.86, LCR: 5.41); -- $16.8 million class M4 affirmed at 'A+' (BL: 41.31, LCR: 4.57); -- $14.8 million class M5 affirmed at 'A' (BL: 22.88, LCR: 2.53); -- $12.4 million class M6 affirmed at 'A-' (BL: 20.35, LCR: 2.25); -- $12.4 million class M7 affirmed at 'BBB+' (BL: 17.88, LCR: 1.98); -- $9.6 million class M8 affirmed at 'BBB' (BL: 15.96, LCR: 1.77); -- $10 million class M9 affirmed at 'BBB-' (BL: 13.90, LCR: 1.54); -- $7.2 million class M10 affirmed at 'BB+' (BL: 12.28, LCR: 1.36); -- $9.6 million class M11 affirmed at 'BB' (BL: 10.72, LCR: 1.19); -- $5.2 million class M12 affirmed at 'BB' (BL: 10.16, LCR: 1.12). Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 21.45%; -- Realized Losses to date (% of Original Balance): 0.98%; -- Expected Remaining Losses (% of Current Balance): 9.03%; -- Cumulative Expected Losses (% of Original Balance): 3.48%. ABSC 2005-HE5 -- $96.5 million class A affirmed at 'AAA' (BL: 81.77, LCR: 5.83); -- $38.7 million class M1 affirmed at 'AA+' (BL: 66.5, LCR: 4.74); -- $35 million class M2 affirmed at 'AA+' (BL: 55.68, LCR: 3.97); -- $21 million class M3 affirmed at 'AA' (BL: 47.88, LCR: 3.41); -- $19.3 million class M4 affirmed at 'AA-' (BL: 42.71, LCR: 3.04); -- $16.7 million class M5 affirmed at 'A+' (BL: 37.52, LCR: 2.67); -- $17.7 million class M6 affirmed at 'A' (BL: 31.89, LCR: 2.27); -- $14.5 million class M7 affirmed at 'A-' (BL: 27.17, LCR: 1.94); -- $13.4 million class M8 downgraded to 'BBB-' from 'BBB+' (BL: 16.55, LCR: 1.18); -- $10.7 million class M9 downgraded to 'BB' from 'BBB' (BL: 13.63, LCR: 0.97); -- $7 million class M10 downgraded to 'B' from 'BBB-' (BL: 12.31, LCR: 0.88); -- $10.7 million class M11 downgraded to 'CC/DR2' from 'BB+'; -- $11.8 million class M12 downgraded to 'CC/DR3' from 'B'. Deal Summary -- Originators: WMC (100%) -- 60+ day Delinquency: 26.57%; -- Realized Losses to date (% of Original Balance): 1.49%; -- Expected Remaining Losses (% of Current Balance): 14.03%; -- Cumulative Expected Losses (% of Original Balance): 5.71%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. AUSTRALIAN FOREST: Sept. 30 Balance Sheet Upside-Down by $12.8MM ---------------------------------------------------------------- Australian Forest Industries' consolidated balance sheet at Sept. 30, 2007, showed $21.2 million in total assets and $34.0 million in total liabilities, resulting in a $12.8 million total stockholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $591,268 in total current assets available to pay $31.6 million in total current liabilities. The company reported a net loss of $598,060 on sales of $477,244 for the third quarter ended Sept. 30, 2007, compared with a net loss of $1.6 million on sales of $4.0 million in the same period last year. During the fourth quarter of 2006, the company experienced a severe liquidity problem and was having difficulty obtaining logs to operate its businesses. Currently, management has entered into a processing contract with Weyerhaeuser to process their logs for which the company is receiving a processing fee. Operating costs for the three-months ended Sept. 30, 2007, aggregated $1.1 million. This includes costs incurred in general and administrative selling of $585,236. 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?25dc Going Concern Doubt Meyler & Company LLC, in Middletown, N.J., expressed substantial doubt about Australian Forest Industries' ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing frim pointed to the company's net loss of $6,232,558 in 2006, stockholders' deficit of $6,834,184 at Dec. 31, 2006, and existing uncertain conditions the company faces relative to its ability to obtain capital and operate successfully. The company's wholly owned subsidiary in Australia, Integrated Forest Products, is currently under administration in Australia (in the U.S. this is tantamount to a Chapter 11 Bankruptcy). About Australian Forest Headquartered in Port Melbourne, Victoria, Australia, Australian Forest Industries (OTC BB: AUFI.OB) fka. Multi-Tech International Corp., was incorporated in the State of Nevada on Sept. 21, 1998, under the name Oleramma Inc. The company operates a pine sawmilling and timber facility at Canberra, which has a capacity to process 200,000 cubic meters of log. This sawmill processed approximately 170,000 cubic meters of log during the year ended Dec. 31, 2006. BANE GROUP LLC: Case Summary & Two Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bane Group, L.L.C. 1709 Peters Creek Road, Northwest Roanoke, VA 24017 Bankruptcy Case No.: 07-71881 Chapter 11 Petition Date: November 28, 2007 Court: Western District of Virginia (Roanoke) Judge: Ross W. Krumm Debtor's Counsel: George A. McLean, Esq. P.O. Box 1264 Roanoke, VA 24006 Tel: (540) 982-8430 Total Assets: $1,500,001 Total Debts: $2,800,000 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Valley Bank bank loan; $2,400,000 36 Church Avenue value of collateral: Roanoke, VA 24011 $1,500,000 Invacare bank loan $400,000 1 Invacare Way value of collateral: Elyria, OH 44035-4190 $1,500,000 BARNERT HOSPITAL: DIP Facility Hearing Scheduled on December 6 -------------------------------------------------------------- The Honorable Donald H. Steckroth of the United States Bankruptcy Court for the District of New Jersey scheduled a hearing on Dec. 6, 2007, at 10:00 a.m., to consider approval of Nathan and Miriam Barnert Memorial Hospital Association's motion to obtain debtor-in-possession financing from New Jersey Health Care. As reported in the Troubled Company Reporter on Nov. 9, 2007, New Jersey Health has agreed to provide the Debtor with up to $5 million of revolving credit facility. Interest on the loan is 4.25% per annum. The proposed lending facility will be structured initially as a sub-limit for advances of up to a maximum of $2,500,000. The funds will be used to pay the Debtor's bankruptcy expenses. As adequate protection for NHC, the Debtor proposed to grant NHC a senior and priming lien on all of the Debtor's accounts and account related intangibles. Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital, owns and operates a 256 bed general acute care community hospital located at 680 Broadway in Paterson, New Jersey. The company filed for chapter 11 protection on Aug. 15, 2007 (Bankr. D. N.J. Case No. 07-21631). David J. Adler, Esq., at McCarter & English, LLP, represents the Debtor in its restructuring efforts. Warren J. Martin Jr., Esq. and John S. Mairo, Esq., at Porzio Bromberg & Newman, P.C., represent the Official Committee of Unsecured Creditors in this case. Donlin Recano & Company Inc. is the Debtor's claims, noticing, and balloting agent. The Debtor's schedules reflect total assets of $46,600,967 and total liabilities of $61,303,505. BUMBLE BEE: Moody's Confirms B1 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service confirmed the debt ratings of Bumble Bee Foods LLC and Clover Leaf Seafoods L.P., co-borrower under the rated secured revolving credit facility and term loan, and the core operating subsidiaries of Connors Brothers Income Fund, a publicly traded Canadian income trust. In a related action, Moody's upgraded the fund's speculative grade liquidity rating to SGL-3 from SGL-4. The rating outlook is positive. This concludes the review for possible downgrade that began on Aug. 8, 2007 following CBIF's announcement that it will recognize a $35 million charge in the second quarter ending June 30, 2007 related to the voluntary recall of certain canned meat products manufactured by its Castleberry's subsidiary due to two potential botulism incidents. The fund's ratings were also downgraded at that time to reflect weakened liquidity stemming from the recall charge, which resulted in the need to seek a covenant waiver and amendment to avoid a potential default, as well as the uncertainty surrounding the timing of expected cash outflows and the ultimate scope of the recall. Ratings confirmed: Bumble Bee Foods, LLC and Clover Leaf Seafoods L.P. as co- borrowers -- Corporate family rating at B1 -- Probability of Default Rating at B2 -- $75 million 5-year senior secured revolving credit at B1 (LGD 2, 29%) -- $200 million 6-year senior secured revolving credit at B1 (LGD 2, 29%) Ratings upgraded: Bumble Bee Foods, LLC and Clover Leaf Seafoods L.P. as co- borrowers -- Speculative Grade Liquidity Rating to SGL-3 from SGL-4 The confirmation reflects 1) Moody's increased comfort that the scope and cost of the product recall have been largely contained, and that it will have only a moderate impact on the company's near-term earnings and financial performance, and 2) the fund's stabilized liquidity position as a result of obtaining a waiver and amendment to the credit facilities, thus avoiding a covenant default in the second quarter ended June 30, 2007 and providing additional cushion for subsequent quarters. The fund's B1 CFR reflects the obligors' role as the key cash generating operations of their ultimate owner -- CBIF -- a publicly-traded Canadian Income Trust which pays out the majority of cash generated by its operations via distributions to its unit holders. CBIF's maintenance of a strong equity price and tax free status is highly reliant on its ability to maintain a high annual cash payout, which in turn means a continuing withdrawal of cash from Bumble Bee and Clover Leaf. Although distributions are typically managed to allow operations to retain sufficient cash to fund capital expenditures and support growth, they provide little remaining cash to materially reduce debt. The risks inherent in the Canadian income fund structure are partially mitigated by covenants within the bank agreement that limit the level of distributions. The suspension of distributions until March 2008 was a key factor in the fund's ability to maintain adequate liquidity during the recall period, which is expected to be largely complete at the end of 2007. The fund's rating also reflects its diversified portfolio of leading brand names and strong market positions in the shelf stable protein category, and its continued solid leverage and Interest Coverage metrics, as adjusted for one-time recall expenses. The positive ratings outlook reflects the expectation that the Castleberry's recall has been largely contained, with minimal impact on liquidity, and is largely complete. The outlook also reflects the expectation for continued solid operating performance, led by revenue growth in its seafood business, cost reduction initiatives and working capital management. An upgrade would require CBIF to resume distributions at levels which permit adequate debt coverage or sufficient reinvestment into core operations, evidence that the recall is fully complete, and Debt/EBITDA sustained below 3.0X, EBIT/interest above 4.5X , and positive free cash flow. The outlook would revert to stable if Debt/EBITDA were to exceed 4.0X, EBIT/interest fell and remained below 3.0X, and free cash flow to debt were to remain negative over the near-term. With combined revenues of approximately $930 million, Bumble Bee Foods, LLC and Clover Leaf Seafoods, L.P. are manufactures of branded, shelf stable fish and other assorted protein products. These companies are co-borrowers under the rated secured revolving credit facility and term loan, and are the core operating subsidiaries of Connors Brothers Income Fund, a publicly traded Canadian income trust. CALPINE CORP: Creditors Committee Supports Fourth Amended Plan -------------------------------------------------------------- The Official Committee of Unsecured Creditors declared its support to the confirmation of Calpine Corp. and its debtor- affiliates' Fourth Amended Joint Plan of Reorganization, urging all unsecured creditors to vote to accept it. The Creditors Committee, in a statement filed with the United States Bankruptcy Court for the Southern District of New York, believes that the Plan represents the culmination of its extensive and arduous negotiations with the Debtors, and provides unsecured creditors with the best alternative available under the present facts and circumstances to maximize their recoveries on account of their Claims against the Debtors. In addition, the Creditors Committee states that the Plan constitutes a basic waterfall structure which provides for the distribution of the stock in the Reorganized Debtors to the holders of Unsecured Claims and, if applicable, Interests in accordance with the priorities established by the Bankruptcy Code and based on the total distributable value for the Reorganized Debtors, as determined by the Court. If the Court finds that the Reorganized Debtors' total distributable value is less than the amount of allowed Claims, then old equity holders will not share in the New Calpine Common Stock, and the New Common Stock will be distributed to the Holders of Allowed Unsecured Claims in accordance with the Plan provisions, Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, states, on the Creditors Committee's behalf. Mr. Stamer notes, however, that the Creditors Committee does not agree with the valuation estimates as proffered by the Debtors and the Official Committee of Equity Security Holders. In the Debtors' updated valuation analysis, filed November 19, Mr. Stamer asserts that the the Debtors overstated the Reorganized Debtors' actual total distributable value. Miller Buckfire & Co., the Debtors' financial advisor, estimated that the mid-point total distributable value, based on an assumed December 31, 2007 Plan Effective Date, is $20,883,000,000. However, Mr. Stamer states, based on the expert report of Barry W. Ridings of Lazard Freres & Co. LLC, the Creditors Committee's valuation expert, the total enterprise value of the Reorganized Debtors is between $15,000,000,000 and $17,500,000,000, with a $16,250,000,000 midpoint. The expert report was not publicly disclosed, according to Mr. Stamer. Adding Miller Buckfire's estimates of distributable cash of $1,039,000,000 and other non-operating asset value of $494,000,000 to Mr. Ridings TEV range implies a midpoint distributable value of $17,783,000,000, Mr. Stamer explains. Based on Mr. Ridings' estimates and the Debtors' litigation adjusted Claim estimate of $21,085,000,000, the Creditors Committee says unsecured creditors will receive on account of their Claims the New Calpine Common Stock to be issued under the Plan, while old equity holders will not receive any recovery. The Creditors Committee contends that the Equity Committee's valuation estimate, on the other hand, significantly overstates the Reorganized Debtors' actual total distributable value. Despite its disagreement with the valuation estimates proffered by the Debtors and the Equity Committee, the Creditors Committee maintains that the Debtors' proposed waterfall plan currently represents the best restructuring opportunity available for the Debtors and maximizes value for unsecured creditors. The Court will convene a hearing on December 17 to consider confirmation of the Debtors' Plan. Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan begins Dec. 17, 2007. (Calpine Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Equity Committee Objects to Plan Confirmation ----------------------------------------------------------- The Official Committee of Equity Security Holders asks the U.S. Bankruptcy Court for the Southern District of New York to deny the confirmation of Calpine Corp. and its debtor-affiliates' Fourth Amended Joint Plan of Reorganization, on the ground that the Debtors' updated valuation analysis does not provide any distribution to equity holders. Representing the Equity Committee, Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson, LLP, in New York, contends that the Updated Valuation, filed November 19, 2007, is "flawed" and "grossly undervalues" Calpine Corporation. Mr. Kaplan further notes that, although the Debtors' projections remain conservative, the projections predict substantially improved cash flows for the Debtors in the next five years. However, he says, despite the prediction of increased cash flows, the Debtors' financial advisor, Miller Buckfire LLC, manipulated its valuation methodology to eliminate any incremental value resulting from the increased cash flows and to obtain an artificially low valuation. According to Mr. Kaplan, the Equity Committee believes that had Miller Buckfire used the same methodology it employed in performing its June 2007 valuations, the November 2007 valuation would be materially higher and would yield a substantial distribution to equity holders. The Equity Committee also wants the Plan to provide equity holders with a fixed recovery in the New Calpine Common Stock. Since the Plan allegedly fails to provide a fair recovery to equity holders, the Equity Committee urges all equity holders to vote to reject the Plan. The Equity Committee also urges all equity holders to opt out of the third-party releases contained in the Plan. The panel believes that the Plan violates provisions of the Bankruptcy Code, thus it should not be confirmed. Hearing on the Plan confirmation is set to begin on December 17. Plan confirmation objections are due November 30. Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan begins Dec. 17, 2007. (Calpine Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CAPELLA HEALTH: Buys Community Health's Hospitals for $315 Million ------------------------------------------------------------------ Capella Healthcare has signed a definitive agreement to purchase nine general acute care hospitals from Community Health Systems Inc. for $315 million. Funding for the deal will come from a combination of equity capital from Capella's partner GTCR Golder Rauner and debt financing led by Citigroup Global Markets Inc., Banc of America Securities LLC and Merrill Lynch Capital. Merrill Lynch acted as M&A advisor to Capella on this transaction. "This is a banner day for the Capella team, in that this transaction represents significant growth for our company and our hospitals," Daniel S. Slipkovich, chief executive officer of Capella, said. "CHS is known for running clinically strong, operationally sound community hospitals. We are excited about the opportunity to share our expertise and our resources with these facilities to build on their strong track records." Both companies are working on the regulatory approval processes and expect to close the transaction by first quarter 2008. Founded in 2005, Capella presently owns and operates five thriving hospitals across the nation. During its time of ownership, Capella has invested millions of dollars in improving and expanding its family of hospitals. Combined, the nine hospitals being acquired by Capella have 1,070 beds and employ nearly 4,000 people. They include: -- Willamette Valley Medical Center in McMinnville, Oregon, an 80-bed hospital accredited by The Joint Commission that is located 40 miles southwest of Portland; -- Saint Mary's Regional Medical Center in Russellville, Arkansas, a 170-bed facility accredited by The Joint Commission that has served the Arkansas River Valley since 1925; -- National Park Medical Center in Hot Springs, Arkansas, a 166-bed facility accredited by The Joint Commission that serves five counties in Central Arkansas; -- Mineral Area Regional Medical Center in Farmington, Missouri, a 135-bed facility accredited by the American Osteopathic Association and located 80 miles south of St. Louis; -- White County Community Hospital in Sparta, Tennessee, a 60-bed facility accredited by The Joint Commission that is located 60 miles east of Nashville; -- Parkway Medical Center in Decatur, Alabama, a 120-bed hospital accredited by The Joint Commission that is located approximately 35 minutes west of Huntsville; -- Woodland Medical Center in Cullman, Alabama, a 100-bed hospital accredited by The Joint Commission that is located 45 minutes from both Huntsville and Birmingham; -- Hartselle Medical Center in Hartselle, Alabama, a 150-bed facility accredited by The Joint Commission that is located 45 minutes southwest of Huntsville; and -- Jacksonville Medical Center in Jacksonville, Alabama, an 89-bed facility accredited by The Joint Commission that is located 80 miles east of Birmingham. Four of the nine hospitals - Jacksonville Medical, St. Mary's, National Park and Willamette Valley - were previously owned by Triad Hospitals Inc. Community Health Systems completed its acquisition of Triad in July. "Capella is focused on providing quality care by helping hospitals reach their full potential and meet the healthcare needs of their communities," Tom Anderson, president and co-founder of Capella, said. "We are looking forward to working with the employees, medical staffs and boards of these hospitals to best serve their patients." About Community Health Systems Inc. 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. About Capella Healthcare Headquartered in Franklin, Tennessee, Capella Healthcare -- http://www.capellahealth.com/-- partners with communities to build strong local healthcare systems that are known for quality patient care. Capella's senior leadership team has more than 200 years of combined experience managing over 200 hospitals. With the financial backing of GTCR Golder Rauner, the company has access to significant resources for the expansion and improvement of its hospitals and the services they provide. Capella operates five thriving hospitals across the nation. CAPELLA HEALTHCARE: $315 Mil. CHS Deal Cues Moody's Rating Review ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Capella Healthcare Inc. including the B2 Corporate Family Rating, under review for possible downgrade. The review follows the announcement that Capella has entered into a definitive agreement to acquire nine hospitals from Community Health Systems, Inc. (B1 CFR) for approximately $315 million. The transaction is expected to be funded through a combination of debt and an equity contribution from GTCR Golder Rauner, Capella's equity sponsor. Moody's views the proposed transaction as a transforming event for Capella that could present significant business and integration risks. Capella operated only five hospitals as of September 30, 2007, including the recent addition of Muskogee Regional Medical Center on Apr. 3, 2007. In addition to these risks, Moody's review will focus on the financing of the transaction, which Moody's anticipates will result in a considerable increase in financial leverage. More specifically, Moody's will consider the effect on interest coverage and free cash flow metrics resulting from the cost of servicing the incremental debt. Further, Moody's notes that, in accordance with the application of our Loss Given Default Methodology, the ratings of individual instruments could be subject to change based on the capital structure resulting from the final financing for the transaction. Moody's will also consider the potential benefits of the acquisition of the Community facilities, including the increase in scale and diversity. Currently the company's high concentration of revenue and EBITDA generated by two facilities is a factor that constrains the rating. Moody's will also take into consideration the company's track record of improving profitability at acquired facilities. These ratings have been placed under review for possible downgrade: -- Senior secured first lien revolver due 2011, B1 (LGD3, 39%) -- Senior secured first lien term loan due 2012, B1 (LGD3, 39%) -- Senior secured second lien term loan due 2013, Caa1 (LGD5, 78%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 Headquartered in Franklin, Tennessee, Capella is an owner and operator of non-urban hospitals. Following the proposed acquisition of the nine facilities from Community, Capella will operate 14 acute care hospitals in seven states. For the twelve months ended September 30, 2007, Moody's estimates that Capella generated revenues of approximately $275 million. Moody's estimates that revenue would have approximated $327 if Capella had operated Mukogee Regional Medical Center for the entire twelve month period. CDW CORP: High Leveraged Financial Cues S&P's "B" Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Vernon Hills, Illinois-based CDW Corp. The outlook is negative. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to the company's proposed $2.2 billion senior secured term loan due 2014. The first-lien loan is rated 'BB-', with a recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default. S&P also assigned a 'CCC+' rating to the company's proposed $890 million senior unsecured, cash pay notes (due 2015); $300 million senior unsecured paid-in-kind toggles notes (due 2015); and proposed $750 million senior subordinated notes (due 2017). These ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the proposed facilities will be used to refinance the acquisition of CDW by Madison Dearborn Partners and Providence Equity Partners for approximately $7.3 billion, which was completed in October 2007. "The ratings reflect CDW's highly leveraged financial profile and somewhat narrow geographic and market presence," said Standard & Poor's credit analyst Molly Toll-Reed. "These factors are offset partially by CDW's consistent profitability levels, diversified customer base, and relatively good position in the highly fragmented value-added reseller market for technology products and services." CHAMPION ENTERPRISES: Tender Offer for 7-5/8% Senior Notes Expires ------------------------------------------------------------------ Champion Enterprises Inc. disclosed the expiration of the tender offer and consent solicitation for the company's outstanding 7- 5/8% Senior Notes due 2009 (CUSIP No. 158496AB5). The Offer expired Nov. 27, 2007, at 12:00 midnight New York City time. On Nov. 28, 2007, holders, who tendered their notes prior to the Expiration Time but after 5:00 p.m., New York City time, on Nov. 9, 2007, and whose notes are accepted for purchase by the company, will receive the tender offer consideration of $1,022.80. Such holders will also receive accrued and unpaid interest on their notes from the last interest payment date to, but not including, the Final Payment Date. As of the Expiration Time, the company had received tenders for $75,582,000 in aggregate principal amount of the notes representing approximately 91.84% of the outstanding notes, of which $74,843,000 in aggregate principal amount of the notes, representing approximately 90.94%, had been received as of the Consent Payment Deadline. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at (212) 325- 4951 (collect). Holders can request documents from D.F. King & Co., Inc., the depositary and information agent, at (888) 644-5854 (U.S. toll free) or (212) 269-5550 (collect). About Champion Enterprises Inc. Based in Auburn Hills, Michigan, Champion Enterprises Inc. (NYSE: CHB) -- http://www.championhomes.com/-- operates 31 manufacturing facilities in North America and the United Kingdom working with independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. * * * Moody's Investor Service placed Champion Enterprises Inc.'s senior unsecured debt and probability of default ratings at 'B1' in September 2006. The ratings still hold to date with a negative outlook. CHASE MORTGAGE: Fitch Rates $2.5 Million Trust at B --------------------------------------------------- Fitch has rated Chase Mortgage Finance Trust, series 2007-S6 as: -- $1.2 billion classes 1-A1 through 1-A3, 1-AX, 2-A1 through 2-A3, 2-AX, A-P, and A-R (senior certificates) 'AAA'; -- $18.1 million class M 'AA'; -- $11.2 million class B-1 'A'; -- $7.5 million class B-2 'BBB'; -- $3.7 million privately offered B-3 'BB'; -- $2.5 million privately offered B-4 'B'; The 'AAA' rating on the senior classes reflects the 3.95% subordination provided by the 1.45% class M, the 0.90% class B-1, the 0.60% class B-2, the 0.30% privately offered class B-3, the 0.20% privately offered class B-4, and the 0.50% privately offered and not rated class B-5 certificates. Fitch believes the credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the primary servicing capabilities of JPMorgan Chase Bank, N.A. (rated 'RPS1' by Fitch). The transaction contains certain classes designated as exchangeable certificates and others as regular certificates. Classes 1-A1, 1-A2, 1-A3, 2-A1, 2-A-2, 2-A3 are exchangeable certificates. Classes 1-AX, 2-AX, A-P, A-R, M, and B-1 through B-5 are regular certificates. The trust consists of 1,846 first-lien residential mortgage loans with stated maturity of not more than 30 years with an aggregate principal balance of $1,245,527,883 as of the cut-off date, Nov. 1, 2007. The mortgage pool has a weighted average original loan-to-value ratio of 71.04% with a weighted average mortgage rate of 6.549%. The weighted-average FICO score of the loans is 748. The average loan balance is $674,717 and the loans are primarily concentrated in New York (27.4%), California (22.5%), and Florida (8.4%). Chase Home Finance LLC acquired the Mortgage Loans originated by or for JPMorgan or its affiliates after the origination. Chase Home Finance LLC sold the mortgage loans to Chase Mortgage Finance Corporation, who deposited the loans in the trust which issued the certificates. The Bank of New York Trust Company, N.A ('AA-/F1+') will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CITY OF WALLER: Moody's Lifts Rating on Bonds to Baa3 from Ba1 -------------------------------------------------------------- Moody's Investors Service has upgraded to Baa3 from Ba1 the underlying rating for City of Waller's outstanding general obligation bonds totaling $2.19 million. The rating upgrade reflects the City's ongoing tax base growth, and improved financial performance. Additional rating considerations included the slightly elevated debt burden that is somewhat mitigated by a healthy rate of principal retirement. Annual principal and interest payments for the outstanding obligations are secured by the proceeds of a continuing, direct annual ad valorem tax levied, within the limits prescribed by law, against taxable property within the City. Increasing Highway Access Boosts Tax Base Growth The City of Waller is located along Highway 290 approximately 45 miles northwest of downtown Houston (Moody's rated Aa3). Commercial and light industrial businesses have spurred tax base expansions, which have experienced a five-year average annual growth rate of 8.9%. Fiscal 2008 taxable values increased 3.2% to $106.32 million. Officials attribute 53% of the tax base growth to new construction. City officials report an additional 975 acres in the extraterritorial jurisdiction which has been released from the City of Houston. Recently completed improvements to Highway 290 have increased highway access and officials are currently working on a comprehensive plan to appropriately zone with a particular focus on freeway regions. Given the City's proximity to the Houston metro-area and increased accessibility, Moody's anticipates continued economic expansions. Improved Financial Performance Expected to Continue Historically the City operated with narrow financial reserves, ending fiscal year 2002 with $46,000 or 3.8% of General Fund revenues in fund balance. Additionally, transfers from the water and sewer and gas fund have traditionally offset operating deficits in the General Fund, which was the primary reason why Moody's downgraded the City of Waller to Ba1 in 1998. Officials strategically worked to reduce its reliance on the enterprise fund, with fiscal 2003 being the last year a transfer of that nature was made. Since fiscal 2004, the City no longer relies on a transfer from the enterprise fund. Transfers from the enterprise fund are now based on allocated administrative costs. Over the same period, financial performance has improved with the FYE 2006 General Fund balance of $584,211 or a favorable 37.5% of general Fund revenues. Officials report a FYE 2007 General Fund balance increase to $625,610. Additionally, the City has a policy to at least three months of operating expenditures in the General Fund reserve. Prudent financial management has strategically cut expenditures and conservatively estimated revenues to make such vast reserve performance improvements. Furthermore, increased sales tax revenues and property tax rate increases have helped to boost the reserve. Operating revenues are primarily derived from sales tax collections (41.1%) with property tax collections contributing an additional 23.9% and charges for services adding 17.6%. Driven by increased retail and restaurant sales, sales tax collections have grown at a favorable five year average rate of 16.2%. The City's maintenance and operation tax rate increased over the previous four years but in fiscal 2008 the M&O tax rate decreased $0.30 per $1,000 of assessed value to $2.12/$1,000. Given the City's reliance on an economically cyclical revenue source, Moody's believes officials to be prudent in the build-up of reserve levels and anticipates continued trends of this nature. Rapid Principal Retirement Keeps Burden Manageable The City's direct and overall debt ratios are somewhat elevated at 2.2% and 6.5%, respectively, both expressed as a percent of fiscal 2008 assessed valuation. Officials do not anticipate selling additional debt over the medium term. Principal retirement is above-average with 71.7% amortized over the subsequent ten years. Given historically moderate tax base expansions, the lack of additional borrowing plans, and a rapid principal retirement, Moody's anticipates the City's debt burden to remain manageable. Key Statistics: * 2006 US Census Estimated Population: 2,045 * 2008 Full Valuation: $106.32 million * 2008 Full Value per Capita: $51,990 * 2000 Census Per Capita Income as % of State: 75.8% * Direct Debt Ratio: 2.2% * Overall Debt Ratio: 6.5% * Payout of Principal (10 years): 71.7% * FY 2006 General Fund balance: $584,211 (37.5% of General Fund revenues) Unaudited FYE 2007 General Fund balance: $625,610 General Obligation Debt Outstanding: $2.19 million COLUMBUS MCKINNON: Moody's Lifts Corporate Family Rating to B3 -------------------------------------------------------------- Moody's Investors Service upgraded Columbus McKinnon's corporate family rating and its probability of default rating to Ba3 from B1 as the company continues to show strong operating performance and demonstrates its commitment to creating a conservative capital structure through debt reductions. At the same time, Moody's upgraded the company's senior subordinated notes to B1 from B2. The rating outlook is stable. The upgrade of the ratings reflects CMCO's strong operating performance as robust growth in the global industrial and manufacturing industries leads to solid demand of its products. In addition to improving efficiencies, this growth has allowed CMCO to reduce debt, resulting in credit metrics appropriate for the Ba3 level. For LTM September 2007, CMCO's key credit metrics are: EBITDA margin exceeding 16%; free cash flow/debt near 21%; debt/EBITDA at 2.1 times; and, EBIT/Interest expense of 4.6 times. Moody's expects that CMCO will continue to focus on its operations and to maintain a conservative financial strategy characterized by debt reductions and improved liquidity. Balancing these strengths is Moody's belief that CMCO will pursue "bolt-on" acquisitions that could require incremental capital investments. Additionally, the company has sales concentrated in North America, making it susceptible to regional volatility that can lead to fluctuations in its revenue base. The stable outlook reflects Moody's expectations that CMCO's debt protection measures will continue to improve over the next twelve to eighteen months. CMCO should be able to take advantage of the robust demand in its end markets and use free cash flow to enhance its liquidity. The key risks that CMCO faces are the volatility in its end markets including general manufacturing, which is concentrated in North America, and not being able to pass rising commodity costs through to customers. The rating for the senior subordinate notes reflect both the overall probability of default of the company, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD 4. The B1 rating assigned to the $136 million senior subordinated notes are the most junior obligations in CMCO's capital structure. These ratings/assessments were affected by this action: -- Corporate family rating to Ba3 from B1; -- Probability of default rating to Ba3 from B1; and, -- $136 million senior subordinated notes due 2013 to B1 (LGD4, 64%) from B2 (LGD4, 67%). Columbus McKinnon Corporation, headquartered in Amherst, New York, is a manufacturer of material handling products. Revenues for the twelve months ended September 30, 2007 totaled about $600 million. COMMUNITY HEALTH: Selling Nine Hospitals to Capella for $315 Mil. ----------------------------------------------------------------- Community Health Systems Inc. has signed a definitive agreement with Capella Healthcare, pursuant to Capella Healthcare acquiring its nine general acute care hospitals for approximately $315 million. Capella Healthcare will funding the deal with a combination of equity capital from Capella's partner GTCR Golder Rauner and debt financing led by Citigroup Global Markets Inc., Banc of America Securities LLC and Merrill Lynch Capital. Merrill Lynch acted as M&A advisor to Capella on this transaction. "This is a banner day for the Capella team, in that this transaction represents significant growth for our company and our hospitals," Daniel S. Slipkovich, chief executive officer of Capella, said. "CHS is known for running clinically strong, operationally sound community hospitals. We are excited about the opportunity to share our expertise and our resources with these facilities to build on their strong track records." Both companies are working on the regulatory approval processes and expect to close the transaction by first quarter 2008. Founded in 2005, Capella presently owns and operates five thriving hospitals across the nation. During its time of ownership, Capella has invested millions of dollars in improving and expanding its family of hospitals. Combined, the nine hospitals being acquired by Capella have 1,070 beds and employ nearly 4,000 people. They include: -- Willamette Valley Medical Center in McMinnville, Oregon, an 80-bed hospital accredited by The Joint Commission that is located 40 miles southwest of Portland; -- Saint Mary's Regional Medical Center in Russellville, Arkansas, a 170-bed facility accredited by The Joint Commission that has served the Arkansas River Valley since 1925; -- National Park Medical Center in Hot Springs, Arkansas, a 166-bed facility accredited by The Joint Commission that serves five counties in Central Arkansas; -- Mineral Area Regional Medical Center in Farmington, Missouri, a 135-bed facility accredited by the American Osteopathic Association and located 80 miles south of St. Louis; -- White County Community Hospital in Sparta, Tennessee, a 60-bed facility accredited by The Joint Commission that is located 60 miles east of Nashville; -- Parkway Medical Center in Decatur, Alabama, a 120-bed hospital accredited by The Joint Commission that is located approximately 35 minutes west of Huntsville; -- Woodland Medical Center in Cullman, Alabama, a 100-bed hospital accredited by The Joint Commission that is located 45 minutes from both Huntsville and Birmingham; -- Hartselle Medical Center in Hartselle, Alabama, a 150-bed facility accredited by The Joint Commission that is located 45 minutes southwest of Huntsville; and -- Jacksonville Medical Center in Jacksonville, Alabama, an 89-bed facility accredited by The Joint Commission that is located 80 miles east of Birmingham. Four of the nine hospitals - Jacksonville Medical, St. Mary's, National Park and Willamette Valley - were previously owned by Triad Hospitals Inc. Community Health Systems completed its acquisition of Triad in July. "Capella is focused on providing quality care by helping hospitals reach their full potential and meet the healthcare needs of their communities," Tom Anderson, president and co-founder of Capella, said. "We are looking forward to working with the employees, medical staffs and boards of these hospitals to best serve their patients." About Capella Healthcare Headquartered in Franklin, Tennessee, Capella Healthcare -- http://www.capellahealth.com/-- partners with communities to build strong local healthcare systems that are known for quality patient care. Capella's senior leadership team has more than 200 years of combined experience managing over 200 hospitals. With the financial backing of GTCR Golder Rauner, the company has access to significant resources for the expansion and improvement of its hospitals and the services they provide. Capella operates five thriving hospitals across the nation. About Community Health Systems Inc. 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. CONMED CORP: Good Performance Cues Moody's to Lift Ratings ---------------------------------------------------------- Moody's Investors Service changed the ratings outlook of ConMed Corporation from negative to stable. Moody's also upgraded the company's senior secured credit facility from Ba2 to Ba1 and upgraded the senior subordinated notes from B2 to B1. Moody's affirmed the company's Ba3 corporate family rating. The change in the ratings outlook from negative to stable reflects improving operating performance, improving cash flow, more conservative financial policy, and stabilization of the manufacturing issues at its Endoscopic division. Due to high single digit revenue growth at its core arthroscopy and powered surgical instruments divisions, ConMed has been able to grow total revenues by 6% to 7% over the past four quarters, which is a meaningful improvement over the sluggish revenue growth that the company reported at the end of 2005 and during the first three quarters of 2006. Based on stronger overall revenue growth, expanding gross margins, and tight control of operating expenses, the company has been able to expand operating margins from slightly over 7% in 2006 and to over 11% of revenues during the first nine months of 2007. M