T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 7, 2007, Vol. 11, No. 290 Headlines AEROSPACE & INDUSTRIAL: Case Summary & 20 Largest Unsec. Creditors AMERICAN HOME: Seeks March 3 Extension of Plan Filing Period AMERICAN HOME: $50 Mil. Limited Recourse Financing Gets Final OK AMERICAN HOME: Court Extends Removal Period Until March 4 AMERICAN HOME: Lease Decision Period Extended Until March 3 AMORTGAGE ASSET: Fitch Rates Class B-5 Certificates at B ARROW ELECTRONICS: Arrow ECS Merges Distribution Biz with ATI ASSET BACKED: Moody's Lowers Ratings on 13 Tranches BANC OF AMERICA: Fitch Affirms 'B' Rating on Class 2-B-5 Certs. BAYWOOD INT'L: Posts $202,644 Net Loss in Third Quarter BLINK LOGIC: Posts Net Loss of $1.5 Million in Third Quarter BNC MORTGAGE: Moody's Cuts Ratings on Two Classes to B3 BOMBAY CO: Court Sets January 21 as Claims Bar Date BOSTON HILL: Case Summary & 13 Largest Unsecured Creditors BROADVIEW NETWORKS: IPO Cues Moody's to Hold B3 Corporate Rating CAPITAL LAND: Case Summary & Largest Unsecured Creditor CARRINGTON MORTGAGE: Moody's Junks Rating on Cl. M-10 Loans CHRISTIAN FAITH: Case Summary & Nine Largest Unsecured Creditors CHRYSLER LLC: CEO Expects $1.6 Billion Loss in 2007, Source Says CHRYSLER LLC: Expected $1 Bil. Loss Spurs January Production Cuts CITICORP MORTGAGE: Fitch Affirms Low-B Ratings on 10 Classes COMCAST CORP: RGU Additions to Fall Short of Previous Guidance CVR ENERGY: Earns $13.4 Million in Third Quarter of 2007 CVR ENERGY: Moody's Lifts Corp. Family Rating to B2 from Caa1 DB KEY: Can Hire Fisher to Auction Key Largo Property DB KEY: Obtains Court Approval to Hire Rice Pugatch as Counsel DB KEY: Case Dismissal Hearing Continued on December 26 DELTA FINANCIAL: Failing Angelo Gordon Deal May Lead to Bankruptcy DEUTSCHE ALT-A: Fitch Cuts Rating on Class B-3 Certs. to B E*TRADE FINANCIAL: Faces Lawsuit on Exploiting Stock Accounts EL POLLO: Dispute Judgment Prompts Moody's Ratings Review FIELDSTONE MORTGAGE: Moody's Downgrades Ratings on Nine Certs. FIRST FEDERAL: Fitch Holds Junk Rating on Class B Loans FORD MOTOR: Mulls Production Cuts Due to Low November Sales FRESENIUS MEDICAL: Acquires Renal Solutions for $190 Million GENERAL MOTORS: Mulls Production Cuts Due to Low November Sales GLOBAL EPOINT: Sept. 30 Balance Sheet Upside-Down by $9.8 Million GOLDEN EAGLE: Posts $554,623 Net Loss in Third Quarter GREENBELT CT: GECC Wants Examiner to Investigate Fund Transfers HEALTHSPORT INC: Posts $3.0 Million Net Loss in Third Quarter HIDDEN SPLENDOR: Wants to Access First Zion's Cash Collateral HOME DIRECTOR: Sept. 30 Balance Sheet Upside-Down by $4.3 Million HYDROGEN POWER: Posts $1.5 Million Net Loss in Third Quarter ICONIX BRAND: Planned Loan Increase Cues Moody's to Hold B1 PDR IKON OFFICE: Moody's Rates Proposed $150MM Senior Notes at Ba3 INPHONIC INC: Hires BMC Group as Claims and Balloting Agent INPHONIC INC: Section 341(a) Meeting Scheduled for December 13 INTEGRAL NUCLEAR: Exclusive Plan Filing Period Moved to Jan. 28 JAYS FOODS: Submits Schedules of Assets and Liabilities JAYS FOODS: Court Sets December 17 as General Claims Bar Date JOSEPH CHOAT: Case Summary & 15 Largest Unsecured Creditors KEVIN COOK: Case Summary & 14 Largest Unsecured Creditors LEVITT AND SONS: Trustee Appoints Nine-Member Creditors Committee LEVITT AND SONS: Wants to Hire Ruden McClosky as Special Counsel LEVITT AND SONS: Can Use Cash Collateral Until December 19 MARC HORTON: Voluntary Chapter 11 Case Summary MCTYRE GRADING: Case Summary & 20 Largest Unsecured Creditors MILDRED MIRAN : Case Summary & Nine Largest Unsecured Creditors MORGAN STANLEY: Minimal Paydown Cues Fitch to Hold Ratings MOVIE GALLERY: Can Hire Ernst & Young as Tax Advisors MOVIE GALLERY: Inks DIP Financing Pact Amendment w/ Goldman Sachs MOVIE GALLERY: Wants Lease Termination Procedures Approved NATIONAL FARM: Voluntary Chapter 11 Case Summary NATIONAL RETAIL: Fitch Lifts Rating on Preferred Stock from BB+ NETBANK INC: Court Approves Rogers Towers as Panel's Local Counsel NETBANK INC: Court OKs Kilpatrick Stockton as Committee's Counsel NETBANK INC: Creditors Have Until Feb. 15 to File Proofs of Claim NEW CENTURY: Court Approves Termination of Captive Policies NEW WORLD: Posts $731,079 Net Loss in Third Quarter NEXIA HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $685,025 NOVELL INC: SEC Inquiries Prompt Delay in 2007 Earnings Release PAN AMERICAN: Foreclosure Protection Extended Until December 12 PERFORMANCE TRANS: U.S. Trustee Picks Five-Member Creditors Panel PERFORMANCE TRANS: Taps Hodgson Russ as Bankruptcy Co-Counsel PERFORMANCE TRANS: Can Use All Cash Collateral of Secured Lenders PETROQUEST ENERGY: Moody's Lifts Corp. Family Rating to B3 PYRAMIDS CHILD: Case Summary & 25 Largest Unsecured Creditors REMY WORLDWIDE: Emerges from Chapter 11, Completes Sale of Knopf RESIDENTIAL CAPITAL: Extends $750 Million Debt Securities Offering REVLON INC: Stockholder to Refinance Unit's $170 Mil. Sub. Loan RH DONNELLEY: Board Authorizes $100 Mil. Common Stock Purchase RITCHIE (IRELAND): Wants Auction Sale Deferred to January 9 RIVERSIDE CASINO: Good Operation Cues Moody's to Lift Ratings SCO GROUP: Court Approves Tanner LLC as Accountant SCO GROUP: Court Permits CFO Solutions to Provide Company w/ CFO SOFA EXPRESS: Files for Chapter 11 Protection in Nashville SOFA EXPRESS: Case Summary & 20 Largest Unsecured Creditors TECO ENERGY: Moody's Lifts Debt Rating to Baa3 from Ba1 THORPE INSULATION: ERC and Westport Oppose Employment of Firms THORPE INSULATION: Chicago Balks at Hamilton as Rep.'s Consultant TRUMAN CAPITAL: Fitch Junks Rating on Class B Certificates UNISYS CORP: Considers Offering $250 Million of Senior Notes UNITEDHEALTH GROUP: Owns Up to Errors in Customer Service Relation UNITEDHEALTH GROUP: Current & Former Execs Agree to Give Up $900MM UNIVERSAL PROPERTY: Posts $41.7 Million Net Loss in Third Quarter URS CORP: Completed WGII Deal Cues Moody's to Cut Rating to Ba2 VALENTEC SYSTEMS: Sept. 30 Balance Sheet Upside-Down by $8.1 Mil. VERIFONE INC: To Restate 2007 Quarterly Financial Statements VERIFONE INC: Financial Restatement Cues Moody's Ratings Review WESTGATE FUNDING: Moody's Rates $19MM Class C Notes at Ba3 * Fitch Expects Improved Credit Quality for Packaging Industry * Fitch Expects Improvement for US Healthcare Sector in 2008 * Fitch Has Positive Outlook For NA Commc'l Aerospace Industry * Fitch Says Issuers Have Capacity to Maintain Fin'l Measures * BOOK REVIEW: American Economic Histor ********* AEROSPACE & INDUSTRIAL: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Aerospace & Industrial Manufacturing, Inc. 210 South Morocco Dallas, TX 75211 Bankruptcy Case No.: 07-36094 Type of Business: The Debtor manufactures aerospace and industrial systems. Chapter 11 Petition Date: December 5, 2007 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Edwin Paul Keiffer, Esq. Wright Ginsberg Brusilow, P.C. 1401 Elm Street, Suite 4750 Dallas, TX 75202 Tel: (214) 651-6517 Fax: (214) 744-2615 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Longhorn Fabrication & Design, Vendor $57,000 Inc. 2919 Hansboro Dallas TX 75233 A.B.T.E.C.H. Vendor $48,113 P.O. BOX 16006 Phoenix, AZ 85011 Fleet Group, Inc. Vendor $47,535 7610 Pebble Drive Fort Worth, Texas 76118 Reliant Energy Vendor $31,769 S.&P. Machne Shop Vendor $21,156 Hexagon Metrology Vendor $9,558 A.M.I. Metals Vendor $8,368 Equipment Depot Vendor $7,927 G.T. Southwest Hose, Inc. Vendor $6,080 J.&L. Industrial Supply Vendor $5,963 Universal Alloy Corp. Vendor $5,560 AlliedBarton Security Services Vendor $5,303 Locher, Inc. Vendor $5,029 Southwest United Industries Vendor $4,962 U.N.I.V.A.R. Vendor $3,900 Weatherford Aerospace Vendor $3,892 M.S.C. Industrial Supply Co., Vendor $3,544 Inc. Frymire Services Vendor $3,092 Siemens Vendor $2,017 Har-Conn Chrome Comp. of Texas Vendor $1,917 AMERICAN HOME: Seeks March 3 Extension of Plan Filing Period ------------------------------------------------------------ American Home Mortgage Investment Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to: (a) file a plan through March 3, 2008; and (b) solicit and obtain acceptances of that plan through May 5, 2008. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that since bankruptcy filing, the Debtors have made progress in administering the bankruptcy cases by, among other things, stabilizing their business operations, eliminating administrative costs arising from discontinued portions of the Debtors' business operations, and commencing, conducting, and concluding a hotly contested sale process for the Debtors' loan servicing business. Mr. Patton further relates that, among other things, the Debtors: -- sought and obtained the Court's authority to establish procedures to effectuate the sale of certain assets related to their mortgage origination business, including real property leases, equipment leases, and furniture, fixtures and equipment at the premises; -- filed requests seeking to reject about 800 unexpired leases of nonresidential real property and numerous executory contracts; -- have closed and fully vacated numerous locations, within the first 90 days of the cases and avoided significant additional administrative rent liability by vacating the various locations in a timely manner; -- engaged in negotiations and stipulations with Federal Home Loan Mortgage Corp. and the Government National Mortgage Association permitting the Debtors to continue to service certain mortgage loans for sufficient periods of time to effectuate the orderly transfer of the servicing of the loans for value; and -- sought and obtained the Court's permission to sell their Servicing Business to AH Mortgage Acquisition Co., Inc. Mr. Patton relates that as with other large and complex cases, the initial 120-day exclusive period did not provide the Debtors with an adequate opportunity to develop and negotiate a Chapter 11 plan. He adds that the contested nature of nearly every facet of these cases has prevented the Debtors and their professionals from turning their attention to a Plan. He points out that the Debtors have been focused on stabilizing the their business operations in the wake of the unprecedented upheaval in the mortgage loan and mortgage-backed securities experienced nationwide. Additionally, there are a variety of other tasks that are lie ahead of the Debtors before a meaningful Plan can be proposed, Mr. Patton notes. He discloses that the Debtors still have numerous assets that must be marketed and sold, including the their federally chartered thrift and bank, certain whole loans and construction loans, and certain other real estate holdings, like their corporate headquarters in Melville, New York. Termination of the Debtors' Exclusive Periods would adversely impact their business operations and the progress of these cases, Mr. Patton says. If the Court were to deny the request for extension, with any party-in-interest free to propose a Plan, that would foster a chaotic environment with no central focus, he notes. Judge Sontchi will convene a hearing on December 21, 2007, at 10:00 a.m., to consider the Debtor's request. Pursuant to Del.Bankr.LR 9006-2, the Debtor's Exclusive Periods is automatically extended until the conclusion of that hearing. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: $50 Mil. Limited Recourse Financing Gets Final OK ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave American Home Mortgage Investment Corp. and its debtor-affiliates authority, on a final basis, to enter into a $50,000,000 debtor- in-possession loan and security agreement dated Nov. 16, 2007, among the Debtor-borrowers, several lenders, and AH Mortgage Acquisition Co., Inc., in its capacity as lender and administrative agent. The Debtors previously obtained interim approval to borrow up to $35,000,000 under the limited recourse DIP facility, to fund their loan servicing business, pursuant to the terms of the final order and the Limited Recourse DIP Financing Documents. Upon the payment of the purchase price of the Servicing Business at the initial closing, and to secure the repayment of the Limited Recourse DIP obligations, the Administrative Agent is granted a valid, binding, enforceable, and perfected security interest in and lien on (i) all the Purchased Assets, including all proceeds and profits, and (ii) the collateral that is immediately junior to any permitted lien. The Court reminds the parties that nothing in the Final Order will be construed as granting the Secured Parties a security interest in or lien on any (i) proceeds of the sale of the Servicing Business, (ii) proceeds of the Bank of America collateral received by the sellers but not paid to BofA, (iii) the Sellers' assets that are not being purchased by AHM Acquisition Co., or (iv) other assets of the Debtors used in the Servicing Business, but not purchased by AHM Acquisition. The liens and security interests granted to the Administrative Agent will not (i) be subject to any lien or security interest that is avoided and preserved for the benefit of the bankruptcy estates, or (ii) be subordinated to any other lien or security interest pursuant Section 364(d) of the Bankruptcy Code, Judge Sontchi notes. In an event of default, Judge Sontchi notes, the Administrative Agent may: -- terminate all or any portion of the Limited Recourse DIP Facility and the Secured Parties' obligation to any further loans or advances; -- declare the Limited Recourse DIP Obligations to be immediately due and payable; and -- subject to certain Limited Recourse Provisions, exercise the sole rights and remedies against the collateral, as allowed under the request's interim and final orders, and the Limited Recourse DIP Documents. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Court Extends Removal Period Until March 4 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted American Home Mortgage Investment Corp. and its debtor-affiliates' request to extend to March 4, 2008, the deadline to file notices of removal of all civil actions pending as of Aug. 6, 2007. The Court, however, noted that the order is without prejudice to (i) any position the Debtors may take regarding whether Section 362 of the Bankruptcy Code applies to stay any litigation pending against them, or (ii) the Debtors' right to seek further extensions. As reported in the Troubled Company Reporter on Nov. 9, 2007, since their bankruptcy filing, the Debtors said they have focused primarily on maximizing the value of their bankruptcy estates for the benefit of the stakeholders through the orderly liquidation of assets. To that end, the Debtors have solicited, negotiated and sought approval for several sales of various assets, including the Debtors' mortgage loan servicing business. According to the Debtors, Chapter 11 imposes on them additional obligations to prepare schedules of assets and liabilities, produce monthly operating reports, respond to creditor inquiries, retain professionals and handle various tasks. Hence, they have not had an opportunity to fully investigate all of the State Court Actions to determine whether removal is appropriate. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Lease Decision Period Extended Until March 3 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended American Home Mortgage Investment Corp. and its debtor-affiliates' time to assume or reject any of the leases, subleases or other agreements, to which any of the Debtors are a party that may be considered an unexpired lease of nonresidential real property through and including March 3, 2008. As reported in the Troubled Company Reporter on Nov. 15, 2007, since their bankruptcy filing, the Debtors have focused primarily on maximizing the value of the Debtors' bankruptcy estates for their stakeholders through the orderly liquidation of their assets. As a result of the expedited and lengthy sale process of the Debtors' loan servicing business and other matters the Debtors faced during the initial stage of their bankruptcy cases, they have not had ample opportunity to evaluate all of their remaining real property leases, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, said. As of November 8, 2007, the Debtors have assumed and assigned approximately 40 unexpired leases of non-residential real property related to the Debtors' loan origination business, Mr. Patton disclosed. In addition, the Court has approved the Debtors' request to extend the deadline for lease disposition for unexpired leases related to the Servicing Business until March 3, 2008. Mr. Patton contended that the extension will not damage the lessors beyond the compensation that is available to them under the Bankruptcy Code because the Debtors had and will perform their undisputed obligations in a timely fashion, including the payment of postpetition rent. He also noted that the Debtors should not be forced at this relatively early stage of the Chapter 11 cases to prematurely assume the Leases and incur potentially significant and unnecessary administrative claims, or to reject the Leases and lose the opportunity to obtain value for those leases. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 18, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMORTGAGE ASSET: Fitch Rates Class B-5 Certificates at B -------------------------------------------------------- Fitch Ratings has affirmed these Mortgage Asset Securitization Transactions Adjustable-Rate Mortgages Trust mortgage pass-through certificates: Series 2004-8 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 rated 'B', placed on Rating Watch Negative. The affirmations, affecting approximately $148.3 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. Class B-5 was placed on Rating Watch Negative due to recent trends in delinquencies. The transaction has serious delinquencies (loans delinquent more than 90 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned) of 4.64%, while the CE of the B-5 bond is 1.01%. The deal has incurred 0.03% of loss to date. Fitch will closely monitor this transaction to see how delinquent loans move through the pipeline before taking rating action on this class. The collateral of the above transaction consists of conventional, fully amortizing, 30-year adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. The loans were acquired by UBS from various originators and are serviced by various servicers. Wells Fargo Bank N.A. (rated 'RMS1' by Fitch) is the master servicer.. As of the November 2007 distribution date, the pool factor is approximately 35% and the transaction is seasoned 39 months. ARROW ELECTRONICS: Arrow ECS Merges Distribution Biz with ATI ------------------------------------------------------------- The Enterprise Computing Solutions business of Arrow Electronics Inc. is transitioning its software distribution business to Arrow's subsidiary, Alternative Technology Inc., creating a software business in excess of $1 billion. Through this arrangement, ATI will gain eight additional product lines that were part of Arrow ECS' Software Group and will oversee partner relationships and internal staff for that business. Product lines that will be transferred to ATI include Bakbone, BEA, CA, CommVault, McAfee, Novell, Oracle and Symantec. Arrow ECS' storage, HP and IBM businesses will not change. "Arrow ECS is committed to increasing the depth of our offerings in high- growth sectors, including software and security," Kevin Gilroy, president of Arrow ECS, said. "In addition, Arrow ECS is focused on delivering comprehensive solutions to our partners. This initiative enables Arrow ECS to best serve our software suppliers and partners by providing focused support and dedicated resources to grow their business." It is anticipated that the suppliers will be transitioned to ATI by the end of Arrow's first quarter in 2008. A team comprising representatives from both Arrow ECS and ATI will manage the integration process. "This integration best enables Arrow ECS and ATI to share and apply best practices within our respective software businesses," Bill Botti, president and chief executive officer of ATI, said. "Partners will benefit from enhanced complementary product lines and a full suite of professional services available through ATI." ATI represents more than 30 software and security suppliers, including Citrix and VMware. About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. Arrow Enterprise Computing Solutions is a Englewood, Colorado- based business unit of Arrow Electronics Inc. that provides enterprise and midrange computing products, services and solutions to value-added resellers, system integrators, and independent software vendors. Alternative Technology Inc. is a Englewood, Colorado-based wholly owned subsidiary of Arrow Enterprise Computing Solutions, that provides end-to-end solutions, presales support, order management and marketing services to more than 3,000 partners. Established in 1986, ATI also offers a robust portfolio of processional services for partners, including onsite engineering, security assessments and technical call support. Alternative Technology Inc. has offices in Ft. Lauderdale, Florida, Carlsbad, California, and Mississauga, Canada. * * * Arrow Electronics' senior subordinated stock continues to carry Moody's Investors Service's Ba1 rating. The company's senior preferred stock is rated at Ba2. ASSET BACKED: Moody's Lowers Ratings on 13 Tranches --------------------------------------------------- Moody's Investors Service has downgraded the ratings of 13 tranches and has placed under review for possible downgrade the ratings of 2 tranches from 2 transactions issued by issued by Asset Backed Securities Corporation Home Equity Loan Trust in 2007. Additionally one downgraded tranche remains on review for possible further downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. In its analysis, Moody's has combined its published methodology updates as of July 13th, 2007 to the non delinquent portion of the transactions. Collateral backing these transactions is also experiencing higher than anticipated rates of delinquency, foreclosure, and REO relative to credit enhancement levels. Complete list of Rating Actions: Issuer: Asset Backed Securities Corporation Home Equity Loan Trust, Series AMQ 2007-HE2 -- Cl. M3 Currently Aa2 on review for possible downgrade, -- Cl. M4 Currently Aa3 on review for possible downgrade, -- Cl. M5, Downgraded to A2, previously A1, -- Cl. M6, Downgraded to A3, previously A2, -- Cl. M7, Downgraded to Baa3, previously A3, -- Cl. M8, Downgraded to Ba2, previously Baa1, -- Cl. M9, Downgraded to B1, previously Baa2, -- Cl. M10, Downgraded to Caa2, previously Baa3. Issuer: Asset Backed Securities Corporation Home Equity Loan Trust, Series RFC 2007-HE1 -- Cl. M5, Downgraded to A3, previously A2, -- Cl. M6, Downgraded to Baa2, previously A3, -- Cl. M7, Downgraded to Ba2, previously Baa1, -- Cl. M8, Downgraded to Ba3, previously Baa2, -- Cl. M9, Downgraded to B3 on review for possible further downgrade, previously Baa3, -- Cl. M10, Downgraded to Caa3, previously Ba1, -- Cl. M11, Downgraded to C, previously Ba2. BANC OF AMERICA: Fitch Affirms 'B' Rating on Class 2-B-5 Certs. --------------------------------------------------------------- Fitch Ratings has taken these rating actions on Banc of America Funding Corporation mortgage pass-through certificates: Series 2004-2 Group 1 -- Classes 1-CB-1, 1-CB-R, 1-CB-IO, 1-CB-PO and 1-30-PO affirmed at 'AAA'; -- Class 1-B-2 affirmed at 'A'; -- Class 1-B-3 affirmed at 'BBB'. Series 2004-2 Group 2 -- Classes 2-A-1, 2-A-IO and 2-30-PO affirmed at 'AAA'; -- Class 2-B-1 upgraded to 'AA+' from 'AA; -- Class 2-B-2 upgraded to 'A+' from 'A'; -- Class 2-B-3 upgraded to 'BBB+' from 'BBB'; -- Class 2-B-4 affirmed at 'BB'; -- Class 2-B-5 affirmed at 'B'. Series 2004-2 Group 3 -- Classes 3-A-1 to 3-A-17, 3-A-IO and 3-30-PO affirmed at 'AAA'. The upgrades are taken as a result of improvement in the relationship between credit enhancement and future expected losses and affect approximately $3.6 million of outstanding certificates, as of the November 2007 distribution date. The affirmations reflect a satisfactory relationship between CE and future loss expectations and affect approximately $370 million of outstanding certificates. This transaction is 39 months seasoned and the pool factors (current collateral balance as a percentage of initial collateral balance) for the various pools range from approximately 36% to 64%. BAFC, a special purpose corporation, purchased the mortgage loans from various sellers and deposited the loans into the trust. The above pools comprise of conventional, fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. Wells Fargo bank, N.A., rated 'RMS1' by Fitch, is the master servicer for the loans in these pools. BAYWOOD INT'L: Posts $202,644 Net Loss in Third Quarter ------------------------------------------------------- Baywood International Inc. reported a net loss of $202,644 on net sales of $3.2 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $179,003 on net sales of $205,331 in the same period last year. The increase in net sales for the three month period is attributable to the acquisition of Nutritional Specialties Inc., d/b/a LifeTime(R) on April 5, 2007, effective March 30, 2007. Gross profit increased to $1.3 million during the three months ended Sept. 30, 2007, compared to gross profit of $96,660 in the prior period quarter. Selling, general and administrative expenses for the three month period ended Sept. 30, 2007, were $1.2 million, compared to $227,835 for the same period last year. Total other expense for the three months ended Sept. 30, 2007, was $346,390, compared to $47,828 for the same period last year. Interest expense increased to $199,624 from $47,828 in the 2006 quarter. There is no income tax benefit recorded because any potential benefit of the operating loss carry forwards has been equally offset by an increase in the valuation allowance on the deferred income tax asset. Net sales for the nine months ended Sept. 30, 2007, were $6.6 million, compared to $900,026 for the same period last year, an increase of $5.7 million. Net loss for the nine months ended Sept. 30, 2007, was $892,840 as compared to a net loss of $393,388 for the same period last year. At Sept. 30, 2007, the company's consolidated balance sheet showed $13.9 million in total assets, $9.6 million in total liabilities, and $4.3 million in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, moreover showed strained liquidity with $3.6 million in total current assets available to pay $4.1 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2614 Acquisition of Nutritional Specialties Inc. On April 5, 2007, effective March 30, 2007, the company acquired, substantially all of the assets, and assumed certain liabilities, of Nutritional Specialties Inc., d/b/a LifeTime(R) or LifeTime(R) Vitamins, a California corporation, for a purchase price of approximately $11,100,000. Going Concern Doubt Epstein, Weber & Conover PLC, in Scottsdale, Ariz., expressed substantial doubt about Baywood International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of Dec. 31, 2006. The auditing firm reported that the company has experienced material operating losses and had a net working capital deficiency of $3,025,365 at Dec. 31, 2006. About Baywood International Headquartered in Scottsdale, Ariz., Baywood International Inc. (OTC BB BYWD.OB) -- http://www.bywd.com/-- is a nutraceutical company specializing in the development, marketing and distribution of its own proprietary brands under the names BAYWOOD PURECHOICE(R), BAYWOOD SOLUTIONS(R), Complete La Femme(R), and BAYWOOD EVOLUTION(TM). BLINK LOGIC: Posts Net Loss of $1.5 Million in Third Quarter ------------------------------------------------------------ Blink Logic Inc. reported a net loss of $1.5 million on revenues of $74,795 for the third quarter ended Sept. 30, 2007, compared with a net loss of $360,040 on revenues of $172,064 in the same period last year. The decrease in revenues results primarily from lower services revenue as a result of decreased revenues from a significant customer in 2007 compared to 2006. General and administrative expenses for the three months ended Sept. 30, 2007, were $451,389 compared to $163,451 for the three months ended Sept. 30, 2006. Interest expense increased from $55,928 for the three months ended Sept. 30, 2006, to $565,760 for the three months ended Sept. 30, 2007. This increase results primarily from the impact of the intrinsic value of beneficial conversion features on promissory notes and accretion of promissory notes to face value on conversion of promissory notes to common stock in Sept. 2007. At Sept. 30, 2007, the company's consolidated balance sheet showed $3.9 million in total assets, $2.3 million in total liabilities, and $1.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?261a Going Concern Doubt KPMG LLP, in Ottawa, Canada, expressed substantial doubt about DataJungle Software Inc. nka. Blink Logic Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has negative working capital at Dec. 31, 2006, and has incurred recurring losses, as well as recurring negative cash flow from operating activities. The auditing firm added that the company has an accumulated deficit and its economic viability is dependent on its ability to generate additional sales and finance operational expenses. About Blink Logic Inc. Headquartered in Mill Valley, Calif., Blink Logic Inc. (OTC BB: BLLG) -- http://www.blinklogic.com/-- formerly DataJungle Software Inc., develops and markets a web-based front-end dashboard software product for leading business intelligence platforms. The product allows an end-user to create visual and interactive dashboard views on top of their existing databases and data cubes without significant involvement from specialized software programmers. BNC MORTGAGE: Moody's Cuts Ratings on Two Classes to B3 ------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 18 tranches issued by BNC Mortgage Loan Trust in 2007. Additionally two downgraded tranches remain on review for possible further downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. In its analysis, Moody's has combined its published methodology updates as of July 13, 2007 to the non delinquent portion of the transactions. Collateral backing these transactions is also experiencing higher than anticipated rates of delinquency, foreclosure, and REO relative to credit enhancement levels. Complete list of Rating Actions: Issuer: BNC Mortgage Loan Trust 2007-1 -- Cl. M5, Downgraded to A3, previously A2, -- Cl. M6, Downgraded to Baa1, previously A3, -- Cl. M7, Downgraded to Ba1, previously Baa1, -- Cl. M8, Downgraded to Ba2, previously Baa2, -- Cl. M9, Downgraded to B3 on review for possible further downgrade, previously Baa3, -- Cl. B1, Downgraded to Caa2, previously Ba1. Issuer: BNC Mortgage Loan Trust 2007-2 -- Cl. M6, Downgraded to Baa1, previously A3, -- Cl. M7, Downgraded to Baa3, previously Baa1, -- Cl. M8, Downgraded to Ba1, previously Baa1, -- Cl. M9, Downgraded to Ba2, previously Baa2, -- Cl. B1, Downgraded to B1, previously Ba1, -- Cl. B2, Downgraded to Caa2, previously Ba2. Issuer: BNC Mortgage Loan Trust 2007-3 -- Cl. M6, Downgraded to Baa1, previously A3, -- Cl. M7, Downgraded to Baa2, previously Baa1, -- Cl. M8, Downgraded to Baa3, previously Baa2, -- Cl. M9, Downgraded to Ba1, previously Baa3, -- Cl. B1, Downgraded to B1, previously Ba1, -- Cl. B2, Downgraded to B3 on review for possible further downgrade, previously Ba2. BOMBAY CO: Court Sets January 21 as Claims Bar Date --------------------------------------------------- The United States Bankruptcy Court for the Northern District of Texas set Jan. 21, 2008, as the last day within which creditors of Bombay Co. and its debtor-affiliates may file their proofs of claim. Governmental units may file their proofs of claim on or before March 18, 2008. Proofs of claims must be filed at this address: AlixPartners LLP c/o John Franks 2100 McKinney Avenue, Suite 800 Dallas, Texas 75201 Basedc in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BOSTON HILL: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Boston Hill Realty Trust 93 Main Street Kingston, MA 02364 Bankruptcy Case No.: 07-17770 Type of Business: The Debtor owns and develops real estate. Chapter 11 Petition Date: December 5, 2007 Court: District of Massachusetts (Boston) Debtor's Counsel: Earl D. Munroe, Esq. Munroe & Chew 5 Broadway Saugus, MA 01906 Tel: (617) 848-1218 Fax: (617) 507-8377 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gary Coyne $1,500,000 c/o Richard McCarthy 2310 Commonwealth Avenue, Unit 3-6 Newton, MA 02466 Scott Farah $400,000 c/o Richard McCarthy 2310 Commonwealth Avenue, Unit 3-6 Newton, MA 02466 B.S.C. Cos., Inc. bank loan $350,000 15 Elins Street. Boston, MA 02127 Petruzzi Brothers $85,000 Eagle Leasing Co. $40,000 White Water, Inc. $32,500 Nations Rent U.S.A., Inc. $18,500 V.G.T. Enterprises, Inc. $5,700 Town of Shrewsbury $5,000 Ronald Rainer $2,000 R.W.W. Management Co., Inc. $2,000 Leo Dodier $100 Mark Valas $100 BROADVIEW NETWORKS: IPO Cues Moody's to Hold B3 Corporate Rating ---------------------------------------------------------------- Moody's Investors Service has affirmed Broadview Networks Holdings, Inc.'s B3 corporate family rating and the stable outlook following the Company's announcement that it has filed for an initial public offering of its common stock. If the Company successfully completes the IPO, Moody's believes that Broadview's credit profile would be improved via the elimination of the 50% debt attribution of the Series A and B preferred stock (about $60 million as per Moody's adjustments for hybrid instruments). Moreover, according to Moody's Vice President and Senior Analyst, Gerald Granovsky, "the Company could generate upward rating momentum if it achieves the targeted synergies in the ATX and InfoHighway acquisitions." However, the uncertainty of successfully consummating the IPO in a difficult capital markets environment and the intensifying competitive pressures temper the prospect to change the Company's ratings or the outlook at this time. The future ratings and the ratings outlook will incorporate the Company's leverage profile in light of organic or capital markets deleveraging, the potential for future debt-driven acquisitions, and a review of the company's performance and integration progress. Broadview plans to use the proceeds from the IPO for general corporate purposes, to fund capital expenditures or for future acquisitions. The Company may also exercise the clawback provision to redeem up to 35% of its outstanding 11-3/8% notes, due 2012. In conjunction with the IPO, Broadview will convert all preferred stock to common, and the shareholders will sell a portion of their common holdings in the IPO. The Company will not receive any proceeds from the sale of stock held by its existing shareholders. Broadview, headquartered in Rye Brook, New York, is a CLEC serving over 800,000 access line equivalents. CAPITAL LAND: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Capital Land Investors, L.L.C. Lisa M. Poulin, Trustee c/o Gordon & Silver, Ltd. 3960 Howard Hughes Parkway, 9th floor Las Vegas, NV 89169 Bankruptcy Case No.: 07-18099 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: December 4, 2007 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Talitha B. Gray, Esq. Gordon & Silver, Ltd. 3960 Howard Hughes Parkway, 9th floor Las Vegas, NV 89109 Tel: (702) 796-5555 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ohio Savings Bank construction deed $44,000,000 Commercial Lending Department of trust; value 200 Ohio Savings Plaza of security: 1801 East Ninth Street $30,000,000 Chicago, IL 60601 CARRINGTON MORTGAGE: Moody's Junks Rating on Cl. M-10 Loans ----------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 10 tranches from 2 transactions issued by Carrington Mortgage Loan Trust in 2007. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. In its analysis, Moody's has combined its published methodology updates as of July 13, 2007 to the non delinquent portion of the transactions. Collateral backing these transactions is also experiencing higher than anticipated rates of delinquency, foreclosure, and REO relative to credit enhancement levels. Complete list of Rating Actions: Issuer: Carrington Mortgage Loan Trust, Series 2007-FRE1 -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. M-7, Downgraded to Baa2, previously Baa1, -- Cl. M-8, Downgraded to Baa3, previously Baa2, -- Cl. M-9, Downgraded to Ba2, previously Baa3, -- Cl. M-10, Downgraded to B3, previously Ba1. Issuer: Carrington Mortgage Loan Trust, Series 2007-RFC1 -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. M-7, Downgraded to Baa2, previously Baa1, -- Cl. M-8, Downgraded to Ba2, previously Baa2, -- Cl. M-9, Downgraded to B3, previously Baa3, -- Cl. M-10, Downgraded to Ca, previously Ba1. CHRISTIAN FAITH: Case Summary & Nine Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: The Christian Faith Assembly dba Calvary Apostolic Church 43500 Telegraph Road Elyria, OH 44035 Bankruptcy Case No.:07-19234 Type of Business: The Debtor owns and manages a church. Chapter 11 Petition Date: December 5, 2007 Court: Northern District of Ohio (Cleveland) Judge: Randolph Baxter Debtor's Counsel: Frederic P. Schwieg, Esq. Cowden & Humphrey Co. L.P.A. 4415 Euclid Avenue, Suite 200 Cleveland, OH 44103-3758 Tel: (216) 241-2880, 133 (extension) Fax: (216) 241-2881 Total Assets: $1,238,306 Total Debts: $618,159 Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Syd Orr Loans $34,000 43500 Telegraph Road Elyria, OH 44035 Mike P. Harvey Co., L.P.A. Legal Fees $11,000 311 Northcliff Rocky River, OH 44116 Columbia Gas of Ohio, Inc. Utilities $840 P.O. Box 9001847 Louisville, KY 40290-1847 Ohio Edison Electric Service $330 Windstream Communications, Telephone $60 Inc. Elyria City Utilities Water & refuse $50 Church Mutual Insurance Co. Insurance Premium Unknown Lorain County Court of Common Court Costs Unknown Pleas Treasurer of State of Ohio Non-profit status Unknown CHRYSLER LLC: CEO Expects $1.6 Billion Loss in 2007, Source Says ---------------------------------------------------------------- Chrysler LLC Chief Executive Officer Robert Nardelli disclosed to company employees that Chrysler is in for a wider financial loss of $1.6 billion than what Steve Landry, executive vice president of North American sales, revealed to marketing and business students in Halifax, Nova Scotia last week, various papers report. It would be the Chrysler's second consecutive year of losses if Mr. Nardelli's forecast is right, according to the Associated Press citing an unnamed source. The company reported a loss of $618 million in 2006 but disclosed earnings of $1.8 billion in 2005. As reported in the Troubled Company Reporter on Dec. 3, 2007, Mr. Landry declared that Chrysler aniticipates a loss of $1 billion this year in costs. He told Saint Mary's University students in Halifax, Nova Scotia, that Chrysler's 2007 revenue is expected at $64 billion and costs at about $65 billion. Mr. Landry recounted Chrysler's business aim to recover costs next year and to yield a huge profit in 2009 and 2010, slashing about 8 models from its lineup. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CHRYSLER LLC: Expected $1 Bil. Loss Spurs January Production Cuts ----------------------------------------------------------------- Chrysler LLC plans to temporarily cease car production in its plants in Warren, Michigan and Fenton, Missouri, before Christmas, postponing its opening until the whole month of January, according to various sources. The move is due to due to the company's expected $1 billion loss, slow pickup sales and prevention of an oversupply. Sources say that the company will also shutter a truck plant in Mexico for two weeks in January. As reported in the Troubled Company Reporter on Dec. 4, 2007, Chrysler dealers delivered 161,088 new vehicles to U.S. customers in November 2007, down 2% compared with a year ago. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CITICORP MORTGAGE: Fitch Affirms Low-B Ratings on 10 Classes ------------------------------------------------------------ Fitch Ratings has affirmed these Citicorp Mortgage Securities Inc. trust issues: Series 2005-4 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 at 'B'. Series 2005-7 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 at 'B'. Series 2005-8 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 at 'B'. Series 2006-1 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 at 'B'. Series 2006-5 -- Class A at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'; -- Class B-5 at 'B'. The mortgage loans consist of 12-30-year fixed-rate mortgages extended to prime borrowers and are secured by one- to four-family residential properties. As of the November distribution date, the transactions are 13 to 28 months seasoned and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 82% (2005-4) to 88% (2006-1). The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $2.457 billion of outstanding certificates. COMCAST CORP: RGU Additions to Fall Short of Previous Guidance -------------------------------------------------------------- Comcast Corporation disclosed Tuesday that Michael Angelakis, co- chief financial officer, will participate in the 35th Annual UBS Global Media & Communications Conference on Dec. 5, 2007, at which time he will discuss, among other items, the company's current outlook for 2007. Reflecting an increasingly challenging economic and competitive environment and consistent with trends across the sector, Revenue Generating Units are now expected to increase by approximately 6 million, versus previous guidance of approximately 6.5 million additions. This represents a significant increase compared to the 5 million RGUs added in 2006. This RGU growth is expected to contribute to cable revenue growth for 2007 of approximately 11%, compared to previous guidance of at least 12%, cable operating cash flow growth, presented on a pro forma basis, of approximately 13% as compared to previous guidance of at least 14%, and consolidated operating cash flow growth of approximately 13% as compared to previous guidance of at least 13%. Cable capital expenditures are expected to be approximately $6.0 billion for the year, a 5% increase from originally issued guidance, reflecting increased advanced digital set-top box purchases, the company's digital acceleration program, expanded network enhancements and acquisition-related investments. Reflecting the impact of all the aforementioned items, Comcast's consolidated free cash flow is expected to be approximately 80% of 2006, compared to previous estimates of 2007 consolidated free cash flow of at least 90% of 2006. With the current outlook of 6 million RGU additions, 11% cable revenue growth, and 13% cable operating cash flow growth, 2007 will be a year of record RGU additions and solid financial performance, with the company enjoying its 8th consecutive year of double digit cable operating cash flow growth. About Comcast Corporation Based in Philadelphia, Comcast Corporation (Nasdaq: CMCSA, CMCSK) -- http://www.comcast.com/-- is a provider of cable, entertainment and communications products and services. With 24.2 million cable customers, 12.9 million high-speed Internet customers, and 4.1 million voice customers, Comcast is principally involved in the development, management and operation of broadband cable systems and in the delivery of programming content. Comcast's content networks and investments include E! Entertainment Television, Style Network, The Golf Channel, VERSUS, G4, AZN Television, PBS KIDS Sprout, TV One, Comcast SportsNet and Comcast Interactive Media, which develops and operates Comcast's Internet business. Comcast also has a majority ownership in Comcast Spectaccor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia. * * * Moody's Investors Service assigned a Ba1 rating to Comcast Corporation's preferred stock in April 2005. CVR ENERGY: Earns $13.4 Million in Third Quarter of 2007 -------------------------------------------------------- CVR Energy, Inc. reported third quarter 2007 net income of $13.4 million, compared to net income of $129.0 million for the third quarter of 2006. Net loss for the nine months ended Sept. 30, 2007, was $40.9 million compared to net income of $170.8 million for the same period in 2006. Third quarter operating income was $38.7 million in 2007, compared with $52.1 million for the same period in 2006, and for the nine months ended Sept. 30, 2007, operating income was $162.5 million compared with $267.0 million in the same period of 2006. "Our refinery and nitrogen fertilizer facilities in Coffeyville, Kansas, recovered rapidly from the devastating floods which swept across the area beginning June 30, and in fact, our refinery is now operating significantly above pre-flood rates," said Jack Lipinski, chief executive officer. "In addition, the nitrogen fertilizer plant, which was less affected by the flood and therefore lost only 18 days production, continues to perform well. It is the lowest-cost nitrogen fertilizer producer in North America." "CVR Energy's rapid recovery from the flood is the direct result of a committed effort by our employees and the dedication of our contractors and suppliers," he said. "Our return to normal operations so quickly demonstrates the phenomenal talents in this organization." At Sept. 30, 2007, the company's balance sheet showed total assets of $1.8 billion and total liabilities of $1.0 billion, resulting in a stockholders' equity of $34.5 million. Equity, as of Sept. 30, 2006, was $303.1 million. IPO On Oct. 26, 2007, the company consummated an initial public offering of 23 million shares of its common stock. The initial public offering price was $19 per share. The net proceeds to CVR Energy from the sale of common stock were $408.5 million before offering costs of approximately $11.4 million. The net proceeds were used to repay $380 million of debt, including $50 million of outstanding indebtedness under CVR Energy's revolving credit facility. The variance from operating income guidance provided in CVR Energy's IPO prospectus results from accelerating the recognition of expenses associated with the flood and related crude oil discharge into the third quarter. These expenses are within the original total estimate of flood related expenditures. The company believes it is fully insured for these expenses and will record any additional insurance proceeds as collection becomes more imminent. About CVR Energy Headquartered in Sugar Land, Texas, CVR Energy, Inc. -- http://www.cvrenergy.com/-- is an independent refiner and marketer of high value transportation fuels and, through a limited partnership, a producer of ammonia and urea ammonia nitrate fertilizers. CVR Energy's petroleum business includes a 113,500 barrel per day, complex, full-coking sour crude refinery in Coffeyville, Kansas. In addition, CVR Energy's supporting businesses include a crude oil gathering system serving central Kansas, northern Oklahoma and southwest Nebraska; storage and terminal facilities for asphalt and refined fuels in Phillipsburg, Kansas; and a rack marketing division supplying product to customers through tanker trucks and at throughput terminals. CVR ENERGY: Moody's Lifts Corp. Family Rating to B2 from Caa1 ------------------------------------------------------------- Moody's Investors Service upgraded CVR Energy, Inc.'s Corporate Family Rating from Caa1 to B2, senior first secured debt ratings from Caa1 (LGD 3; 31%) to B2 (LGD 3; 31%), Probability of Default rating from Caa2 to B3, and assigned a stable outlook. Moody's also assigned an SGL-3 speculative grade liquidity rating. The rating reflects substantial capital spending, working capital investment, and a major third quarter 2008 hedge obligation payment, all well in excess of expected otherwise sound 2008 operating cash flow. This is supported by adequate back-up liquidity lines and sound expected bank loan covenant coverage. CVR was formerly known as Coffeyville Resources LLC. It operates a 113,500 barrel-per-day crude oil refinery in Coffeyville, located in southeastern Kansas, a fertilizer production business, and a crude oil gathering system in Kansas and Oklahoma. CVR produces a very low level of premium gasoline and it carries the higher unit costs of comparatively low energy and heat efficiency. The upgrades reflect CVR's (i) strong management and strong technical team, (ii) comparatively quick return to full refinery capacity utilization and near normal processing yields, (iii) substantial debt reduction after its recent initial public offering, (iv) expected continued leverage reduction, (v) expected adequately supportive refining sector margins, particularly in its region, and (vi) a degree of diversification from CVR's low cost nitrogen fertilizer production business and sound fertilizer sector fundamentals. CVR has long-established crude oil sourcing logistics and diversified crude oil sources, strong regional refined product distribution logistics, and proximity to end-user markets. The ratings are restrained by sharply reduced 2007 free cash flow due to substantial downtime; expected more moderate fourth quarter 2007 and 2008 sector refining margins; still high leverage for a single standalone refinery operating in a capital intensive, volatile, commodity business; higher expected leverage in 2008 with outlays well in excess of cash flow; substantial cash consumed this quarter to rebuild working capital; a large cash obligation to CVR's hedge counter party (J. Aron); and a degree of uncertainty concerning CVR's full eventual environmental and liability settlements. A further restraint is that CVR may eventually convert its fertilizer business to a Master Limited Partnership. CVR will continue to fund substantial growth capital spending through 2009. Moody's anticipates that CVR's debt levels will surpass $600 million during 2008 before potentially falling in 2009, including funding a $123.7 million payment due to J. Aron in third quarter 2008. To the degree fourth quarter 2007 margins moderate, leverage would be higher as well. CVR's $397 million of net IPO proceeds repaid approximately $380 million of debt, including $50 million of bank revolver debt, taking pro-forma adjusted Sept. 30, 2007 balance sheet debt to approximately $491 million excluding $123.7 million of CVR's deferred hedge obligations to its counterparty that accumulated with the refinery flood downtime. CVR's ratings were downgraded to a Caa1 Corporate Family Rating in early August 2007 after its Coffeyville refinery incurred an emergency shut down due to a record flash flood of the nearby Verdigris River. CVR reported that major process units and equipment were not directly impacted by the flood but that damage to hundreds of individually minor, but systemically vital, motors and pumps was extensive. The incident also led to a spill of approximately 71,000 gallons of petroleum products into the adjacent community and river system and further delayed an IPO that had been essential for CVR to retain its ratings. Through the end of September 2007, including repairs, environmental settlements, and liability settlements, CVR incurred approximately $131 million of new costs associated with the flood and currently expects that number to increase to as much as $160 million. That figure excludes lost profit and the very large hedge obligation to J. Aron. CVR believes a substantial portion of the costs will eventually be reimbursed by insurance and has received $20 million of insurance proceeds to date. CVR's 2007 earnings and cash flow have been curtailed due to scheduled first quarter turnaround, the longer than expected downtime of that turnaround, complications arising with a coinciding major expansion program, the downtime associated with the Verdigris flood, and costs associated with its downtime and flood liabilities. For the nine months ending September 30, 2007, CVR reported $157 million of adjusted EBITDA before unrealized hedging gains and losses, down from $280 million in the same 2006 period. In Moody's view, given the macro and refining sector market forces at work, the sector has already seen its cyclical peaks and refining margins will moderate during 2008. The B2 first secured ratings apply to CVR's $775 million senior first lien secured term loan and $150 million senior first lien secured revolving credit facility. Under Moody's Loss Given Default Methodology, CVR's B3 Probability of Default Rating is below the B2 Corporate Family Rating due to CVR's all-bank pari- passu first secured capital structure. CVR Energy, Inc. is headquartered in Sugar Land, Texas. DB KEY: Can Hire Fisher to Auction Key Largo Property ----------------------------------------------------- D.B. Key Largo LLC obtained approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Fisher Auction Co. Inc. as its auctioneer. The objection of Philrich of Key Largo LLC, secured creditor, to the retention of Fisher was denied by the Court. Fisher's compensation as auctioneer will be based upon: (i) a 2.5% commission with an additional 1.5% commission to any cooperating buyer's broker; (ii) an additional 0.5% commission for the auctioneer if there is no cooperating buyer's broker; and (iii) a $7,000 flat fee if the stalking horse bid submitted by Philrich is the only bid received at the auction. The Court authorized the auctioneer to spend a maximum of $53,000 for out-of-pocket expenses to market the Debtor's property. The auction of the property is scheduled for Feb. 1, 2008, extendable for cause. As reported in the Troubled Company Reporter on Oct. 26, 2007, Fisher will assist the Debtor in the proposed auction of the Multi Family Development Site at Mile Marker 104 in Key Largo, Florida. The Debtor had proposed an "all cash" sale of the property at closing with no post contract due diligence period. The property has a purported value of $10 million. Fisher had proposed a $62,360 pre-sale budget for marketing and advertising expenses. In the event the Debtor cancels the sale, the Debtor agrees to reimburse the auctioneer reasonable expenses, plus 10% overhead costs. Hence, the Debtor will pay Fisher a maximum amount of $68,596 for costs and expenses. The firm can be reached at: Louis B. Fisher, III Fisher Auction Co., Inc. 619 East Atlantic Blvd. Pompano Beach, FL 33060 Tel: (954) 942-0917 or (800) 331-6620 Fax: (954) 782-8143 http://www.fisherauction.com/ Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages real estate. The company filed for chapter 11 bankruptcy protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127). The U.S. Trustee has not appointed members to the Official Committee of Unsecured Creditors in this case. The Debtor's schedules disclosed total assets of $10,382,165 and total liabilities of $14,090,922. DB KEY: Obtains Court Approval to Hire Rice Pugatch as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida gave D.B. Key Largo LLC authority to hire Rice, Pugatch, Robinson & Schiller PA as its counsel, nunc pro tunc to Sept. 28, 2007. The Troubled Company Reporter said on Oct. 26, 2007, that prior to the bankruptcy filing, the firm received a $20,000 retainer for its representation, along with the advance payment of a $1,039 filing fee for the case. The retainer was paid by M.A.M.C Inc, a servicing agent acting on behalf of the various individual lenders who collectively hold the second mortgage on the Debtor's real property. Lisa M. Schiller, Esq., of Rice Pugatch however, had explained to Alan Goldberg, M.A.M.C.'s chief restructuring officer, that despite its payment of the retainer, Rice Pugatch solely and strictly represents the Debtor. Ms. Schiller also told Mr. Goldberg that M.A.M.C. will have to hire a separate and independent counsel should they elect to do so. As such, Mr. Goldberg has advised Ms. Schiller that he agrees to the foregoing. Ms. Schiller assured the Court that her firm does not represent any interest adverse to the Debtor. The firm can be reached at: Lisa M. Schiller, Esq., Partner Mark S. Roher, Esq. Rice, Pugatch, Robinson & Schiller, P.A. 101 Northeast 3 Avenue, Suite 1800 Fort Lauderdale, FL 33301 Tel: (954) 462-8000 http://www.rprslaw.com/ Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages real estate. The company filed for chapter 11 bankruptcy protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127). The U.S. Trustee has not appointed members to the Official Committee of Unsecured Creditors in this case. The Debtor's schedules disclosed total assets of $10,382,165 and total liabilities of $14,090,922. DB KEY: Case Dismissal Hearing Continued on December 26 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida scheduled on Dec. 26, 2007, at 1:30 p.m., a continued hearing of the request of Philrich of Key Largo LLC, secured creditor, to dismiss D.B. Key Largo LLC's bankruptcy case. As reported in the Troubled Company Reporter on Oct. 24, 2007, Philrich had asked the Court to dismiss D.B. Key Largo LLC's chapter 11 bankruptcy case alleging bad faith filing. Philrich had informed the Court that the Debtor rushed to file chapter 11 case with the idea of "staving off" a foreclosure sale on a property securing the Philrich Mortgage Obligation. The real property securing the Philrich Mortgage Obligation is located at Mile Marker 104 in Key Largo, Florida and was intended to be developed by the Debtor as a condominium-hotel facility. Philrich had related that on June 16, 2006, the Debtor executed a certain promissory note and a mortgage securing payment of the note to TIB Bank of the Keys in the original principal amount of $6,234,000. Subsequently, the Debtor defaulted under that obligation by failing to pay it in full on its maturity date on April 1, 2007. The Debtor owes Phirich the sum of $5,982,522 on the principal of the Philrich Mortgage Obligation, with a default interest from April 1, 2007 to present of 18% per annum, plus other fees. Kluger, Peretz, Kaplan & Berlin, PL represents Philrich. Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages real estate. The company filed for chapter 11 bankruptcy protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127). The U.S. Trustee has not appointed members to the Official Committee of Unsecured Creditors in this case. The Debtor's schedules disclosed total assets of $10,382,165 and total liabilities of $14,090,922. DELTA FINANCIAL: Failing Angelo Gordon Deal May Lead to Bankruptcy ------------------------------------------------------------------ Delta Financial Corporation provided an update Thursday of its financial condition and current plans, including a possible filing of chapter 11 bankruptcy and an event of default under its warehouse facilities. The company said on Nov. 15, 2007, that it had entered into a letter of intent with an affiliate of Angelo, Gordon & Co. The letter of intent contemplated, among other things, the issuance of senior notes and common stock to that affiliate of Angelo Gordon. Also on Nov. 15, 2007, the company entered into a standstill agreement with three of its warehouse providers. Each of these agreements was subject to several varying conditions, including the company's pricing a securitization of mortgage loans. The company has been unable to complete the securitization transaction upon satisfactory terms. Warehouse Facilities Default Consequently, on Dec. 5, 2007, the company received reservation of rights notices from its warehouse lenders indicating that events of default have occurred under the warehouse facilities and the standstill agreement. Under these circumstances, the company's financial obligations under the agreements may be accelerated, and it may be subject to substantial payment obligations, as well as incurring cross-default claims from its other creditors. Likely Bankruptcy The company said it does not expect to be able to consummate the transaction with Angelo Gordon. Furthermore, the company does not believe that it will be able to continue as a going concern. The company presently intends to file shortly for protection under the federal bankruptcy code. The company intends to continue to operate its business as a "debtor-in-possession" as provided under the bankruptcy code; however, it intends to suspend taking new mortgage loan applications until further notice. The company is currently conducting discussions with entities that are potentially interested in acquiring its assets and operations in connection with a bankruptcy proceeding. However, due to the preliminary nature of these discussions, no assurances can be given that the company will complete any transaction. Angelo Gordon Deal Delta Financial stated in a Securities and Exchange filing in mid-November that it had entered into a letter of intent, dated Nov. 15, 2007, with an affiliate of Angelo, Gordon & Co., one of the company's principal stockholders. The letter of intent contemplates an aggregate financing of $100.0 million, including amounts outstanding under the residual financing facility established in August 2007. Once the proposed transaction is completed, an affiliate of Angelo Gordon, AG Special Situation Corp., will purchase from the company a new series of 10% Senior Secured Notes. The maturity of the notes will be three years after issuance. The initial aggregate principal amount of the notes will be equal $100.0 million, minus the principal amount outstanding under the August 2007 residual financing facility as of the issuance date of the notes. The company currently estimates that if the transaction closes in December 2007, the principal amount will be between $45 million and $49 million, such that the initial principal amount of the 10% Senior Secured Notes will be between $51 million and $55 million. Interest on the notes is expected to be payable on a payment-in- kind basis until the first anniversary of the closing date. In connection with the proposed note issuance, the company will issue to AGSSC 40 million newly issued shares of common stock as additional consideration, which may be initially issued in the form of convertible preferred stock or convertible debt securities. The company will also reduce the exercise price of Angelo Gordon's warrants to purchase 10.0 million shares of common stock to $1.00 per share. The warrants remain due to expire in February 2009. The transaction is subject to the completion of Angelo Gordon's due diligence procedures, and the negotiation and execution of definitive transaction agreements. The proposed Senior Secured Notes will be secured by a security interest in all of the company's securitization residuals, BIO certificates and excess cashflow certificates as of the closing date, together with any other assets of the company as the parties will agree upon in the definitive transaction documents. The Senior Secured Notes are repayable at the option of the company, and are subject to several events of default. If the transaction closes, the company's August 2007 residual financing facility will be extended to the day prior to the first anniversary of the closing date of the Senior Secured Notes (in or about December 2008). If the transaction closes as planned, Angelo Gordon will be the beneficial owner of about 61.4% of the company's outstanding common stock, and approximately 66.5% of the company's outstanding stock if it exercises all of its warrants. Upon the closing of the transaction, subject to certain limitations intended to comply with certain state lending regulations, AGSSC will obtain the right to elect a majority of the company's Board of Directors. AGSSC will also obtain registration rights with respect to the new shares of common stock, and preemptive rights with respect to the issuance of new shares of the company's capital stock. The company has agreed that, until Dec. 15, 2007, it will not to enter into any "Competing Transaction". However, the company has the right to terminate the letter of intent if it receives a "Superior Proposal". Arrangements with Warehouse Providers Contemporaneously with signing the letter of intent with AGSSC, the company entered into an agreement with three of its warehouse providers to facilitate the completion of the proposed transactions with AGSSC. These warehouse providers have agreed, until 11:59 P.M. on Dec. 14, 2007, (1) not to make any margin calls, or reduce their advance rates, on the loans currently collateralizing their warehouse lines and (2) to continue to fund the company's loan originations at prescribed advance rates. The agreement of these institutions is subject to several conditions, including: -- the company's letter of intent with AGSSC must remain in full force and effect; -- the company must complete certain whole-loan sale transactions and price a securitization of mortgage loans during this period; and -- the company is subject to certain financial covenants. Under these arrangements, and in light of market conditions, the company expected to significantly limit its originations during this period and until market conditions improve. In light of the company's significantly reduced loan production, it planned to terminate a warehouse facility that it has with a fourth financial institution, under which the company does not currently have any outstanding indebtedness. The company said it intends to close the transactions contemplated by the letter of intent with AGSSC on or prior to Dec. 14, 2007. At that time, under the arrangements with the warehouse providers, the company's existing warehouse facilities will expire. The company and these three financial institutions intend to negotiate to renew or replace the warehouse facilities with new facilities totaling $200 million in the aggregate. However, the company said there can be no assurance that the company will succeed in obtaining such facilities. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. DEUTSCHE ALT-A: Fitch Cuts Rating on Class B-3 Certs. to B ---------------------------------------------------------- Fitch Ratings has taken various rating actions on these Deutsche ALT-A Securities Mortgage Loan Trust 2006-AR1 mortgage pass- through certificates: -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 rated 'BBB', is placed on Rating Watch Negative; -- Class B-3 downgraded to 'B' from 'BB', and is removed from Rating Watch Negative; -- Class B-4 downgraded to 'C/DR4' from 'B', and is removed from Rating Watch Negative. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $316.98 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $4.24 million in outstanding certificates. In addition, approximately $2.82 million is placed on Rating Watch Negative Since the last review in June 2007, the 60+ delinquencies have increased from 2.21% to 3.02% of the current balance. The expected losses, as a result, since then have increased creating significant downgrade pressure on the subordinate bonds. The lowest rated class, B-4, has a CE level of 0.39%. Group 1 was not rated by Fitch. The collateral consists of conventional, adjustable-rate first lien residential mortgage loans. The originators comprising at least 10% of the pool include Greenpoint, Sierra Pacific, and IndyMac. Wells Fargo Bank, N.A. (rated 'RMS1' by Fitch) is the master servicer. E*TRADE FINANCIAL: Faces Lawsuit on Exploiting Stock Accounts ------------------------------------------------------------- E*Trade Financial Corp. disclosed that Sebastian River Holding's Inc. has filed a lawsuit that alleges collusion amongst E-trade and its employees to unlawfully, manipulate the company's stock. Sebastian River is suing under the civil section of the Racketeer Influenced and Corrupt Organizations Act. Several individual shareholders have joined the company as plaintiffs. In addition, the plaintiffs allege that E*trade illegally froze shareholders accounts, not allowing them to buy or sell nor move stock or cash out of their accounts. The suit seeks return of all assets confiscated by E*Trade, including cash and stock. Sebastian River is seeking actual and punitive damages for loss of market value and for loss of business opportunity. "You often hear about these large brokerage firms manipulating stock of small public companies for their own financial gain," Daniel Duffy, Sebastian River's CEO, stated. "The magnitude of E*Trade and its employees' conduct to artificially knock down our market cap is egregious and absolutely astounding. The really amazing part of this whole process is the fact that there is substantial documentation to prove all of the allegations of our lawsuit." On Aug. 8, 2007, the company declared an Iraq Dinar dividend to all shareholders of record on Sept. 14, 2007, because of the acts of E*Trade the company can not get an actual count of record date shareholders. As soon as this matter is concluded, Sebastian River Holding's Inc. will honor the dividend, even if the rate of the dinar is one dinar for one US dollar. About E*Trade Financial Based in New York City, E*Trade Financial Corp. (NasdaqGS: ETFC) - - http://us.etrade.com/-- provides financial services including trading, investing, banking and lending for retail and institutional customers. Securities products and services are offered by E*Trade Securities LLC. Bank and lending products and services are offered by E*Trade Bank, a Federal savings bank or its subsidiaries. * * * As reported in the Troubled Company Reporter on Dec. 4, 2007, Moody's Investors Service lowered E*Trade Financial Corporation's long-term senior debt rating to Ba3 from Ba2. The outlook for the long-term rating is negative. EL POLLO: Dispute Judgment Prompts Moody's Ratings Review --------------------------------------------------------- Moody's Investors Service placed El Pollo Loco, Inc.'s B3 corporate family rating and all its other long term debt ratings under review for possible downgrade and lowered the speculative grade liquidity rating to SGL-4 from SGL-3, following an unfavorable final judgment entered in a trademark dispute against the company. The rating action reflects Moody's concern about strains on the company's liquidity and its ability to pay a relatively large penalty, or to post a bond. The judgment was entered in a U.S. District Court in Texas on Nov. 30, 2007, with regard to a trademark dispute filed by El Pollo Loco -- Mexico, an unrelated entity controlled by founder of the first El Pollo Loco restaurant in Mexico and the US, for El Pollo Inc.'s alleged breach of contract in failing to develop new restaurants in Mexico. The Court awarded damages in the amount of $20.3 million plus attorneys' fees, in addition to directing the company to return certain intellectual property to Mexico, among other things. El Pollo stated that it would initiate the appeal process through a higher court in which case, collateral in the form of a letter of credit needs to be posted. "If El Pollo were to appeal, they would need to find alternative financing resources to post the bond besides using its existing credit facilities, and quickly," commented Moody's analyst, John Zhao, "the remaining availability under its L/C facility and cash flow from operations won't be sufficient to cover the collateral requirement at this time." As of September 30, 2007, the company had an approximately $7.4 million availability of Letter of Credit under the total $15 million L/C sub-limit. Moody's review will focus on the company's ability to secure a financing for the penalty payment or bond posting while staying in compliance with its financial covenants. Moody's will also assess the conditions on the alternative funding and its potential effect on the company's operational and financial condition if the company were able to obtain the funding. The SGL-4 Speculative Grade Liquidity rating reflects the company's weakened liquidity, primarily stemming from the need to fund the penalty or bond, potential increased demands on cash flow and/or reliance on its credit facility. These ratings were placed on review for possible downgrade: -- B3 Corporate family rating -- B3 Probability of default rating -- Ba3 (LGD2, 18%) for the $104.5 million senior secured term loan B maturing in 2011, -- Ba3 (LGD2, 18%) for the $25 million senior secured revolver maturing in 2010, -- Caa1 (LGD5, 71%) for the $123.4 million senior unsecured notes maturing in 2013, Rating downgraded: -- Speculative grade liquidity rating to SGL-4 from SGL-3. El Pollo Loco Inc, headquartered in Irvine, California, is a leading quick-service restaurant chain specializing in flame- grilled chicken and other Mexican-inspired entrees. The company operates or franchises approximately 341 restaurants primarily around Los Angeles and throughout Southwestern US, and generated total revenues of approximately $260 million in FY2006. FIELDSTONE MORTGAGE: Moody's Downgrades Ratings on Nine Certs. -------------------------------------------------------------- Moody's Investors Service has downgraded nine certificates from a transaction issued by Fieldstone Mortgage Investment Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were too low compared to the current projected loss numbers at the previous rating levels. Pool losses over the last few months have eroded credit enhancement available to all certificates of this transaction. In addition, between the July 25 and November 25 reporting dates, the 90+ day delinquency pipeline has doubled from approximately $16 million to $32 million as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for all certificates. Complete rating actions are: Issuer: Fieldstone Mortgage Investment Trust 2006-S1 -- Cl. A, Downgraded to Baa2 from Aaa -- Cl. M1, Downgraded to Ba2 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2 -- Cl. M3, Downgraded to B3 from Aa3 -- Cl. M4, Downgraded to Caa2 from A1 -- Cl. M5, Downgraded to Ca from Ba3 -- Cl. M6, Downgraded to C from B1 -- Cl. B1, Downgraded to C from B3 -- Cl. B2, Downgraded to C from Ca FIRST FEDERAL: Fitch Holds Junk Rating on Class B Loans ------------------------------------------------------- Fitch Ratings has affirmed five classes (representing approximately $15.95 million in outstanding principal) of First Federal Corporation manufactured housing issues as: Series 1996-1 -- Class A affirmed at 'AA'; -- Class B affirmed at 'CCC' and remains at 'DR1'. Series 1997-1 -- Class A affirmed at 'AA'; -- Class B affirmed at 'BBB'; Series 1997-2 -- Class A affirmed at 'AA+'; -- Class B remains at 'CC/DR1'. The collateral in the aforementioned transactions consists of fixed-rate manufactured housing contracts. As of the November distribution date, the transactions are seasoned from a range of 126 to 132 months, and the pool factors (current contract principal outstanding as a percentage of the initial pool) range from approximately 16% (series 1996-1) to 25% (series 1997-2). First Federal Savings and Loans Association converted its charter to a national bank charter and changed its name to Signal Bank, N.A. In order to achieve consistency among affiliated companies, the name of FirstFed Corp. (the special purpose corporation used to facilitate the securitization of manufactured housing contracts) was changed to Signal Securitization Corp. In December 2003, Clayton Homes Inc. assumed the servicing responsibilities for the FirstFed portfolio. When estimating future collateral losses for the aforementioned transactions, Fitch assumed default rates, prepayment rates and loss severities to remain relatively consistent with current levels. Based on these assumptions, Fitch expects losses on the remaining pool balance of approximately 7.43% for series 1996-1 transaction, 10.26% for series 1997-1 transaction and 8.84% for series 1997-2 transaction. When included with losses already incurred, total cumulative losses as a percentage of the initial pool balance are expected to be approximately 16.67% for series 1996-1 transaction, 13.76% for series 1997-1 transaction and 17.06% for series 1997-2 transaction. Of particular note, the transactions reviewed pay principal due to senior bonds prior to paying interest due to subordinate bonds. Higher than expected losses have caused significant interest shortfalls to various subordinate bonds in the transactions. While the structures allow for interest shortfalls to be recovered in the future in the event of sufficient excess spread, Fitch assessed the likelihood of the bondholder receiving all interest due when determining the bond's credit rating. FORD MOTOR: Mulls Production Cuts Due to Low November Sales ----------------------------------------------------------- Ford Motor Company and General Motors Corp. disclosed that due to low November sales, the carmakers intends to slash vehicle production in the first quarter of 2008, various sources report. Ford plans a 7% car production decrease in the first quarter, expecting to produce only 685,000 vehicles, while GM anticipates a production of 950,000 vehicles from January through March, down 11% from the same period in 2007, Nick Bunkley of The New York Times relates. As reported in the Troubled Company Reporter on Dec. 4, 2007, due to continued growth in crossover sales and increased demand for hybrids, fuel-efficient cars and Ford's industry-exclusive SYNC in-car connectivity technology, Ford sales in November totaled 182,951, up 0.4% versus a year ago. November marked the first sales increase following 12 months of declines. According to the Associated Press, analysts anticipate low annual sales in 2008, a drop in U.S. light vehicle sales to 3% to 15.6 million units, a record low since 1998. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FRESENIUS MEDICAL: Acquires Renal Solutions for $190 Million ------------------------------------------------------------ Fresenius Medical Care AG & Co. KGaA has acquired Renal Solutions, Inc. for total consideration of up to $190 million, consisting of $100 million at closing, $60 million after the first year, and up to $30 million in milestone payments over the next three years. RSI had approximately $10 million of net debt outstanding at closing. RSI is currently commercializing the Allient Sorbent Hemodialysis System, which is returning sorbent-based technology to the dialysis field. The SORB cartridge has a long market history in hemodialysis with over 6 million cartridges sold. As the innovator in the SORB technology field, RSI holds key patents and other intellectual property worldwide related to the SORB technology. The sorbent technology purifies tap water to dialysate quality and allows dialysate to be regenerated. This reduces the water volume requirement for a typical hemodialysis treatment from 120 liters/37 gallons of reverse osmosis water to just 6 liters/ 1.5 gallons of drinking water per treatment. The combination of Fresenius Medical Care's leading hemodialysis technology and the SORB technology will provide a platform for superior home products and therapies. Furthermore, the significant reduction of dialysate through SORB technology is one major step towards miniaturization -- a pre-requisite for the wearable kidney concept which could benefit certain patients and complement clinical-based therapy. Fresenius Medical Care sees the current market size of the Home Therapy Market (Peritoneal Dialysis and Home Hemodialysis) at about $2 billion representing approximately 11% of the overall worldwide dialysis market. The company believes the Home Therapy market has the potential to grow to $4 billion within the next 10 years. Fresenius Medical Care has a market share in this market segment of approximately 30%. Home hemodialysis has been a niche market for many years but with growing attention in recent past. With increased access to adequate therapy, the company projects the number of HHD patients in North America could grow from about 0.5% at the end of 2006 to approximately 4% of the patient population in the next 10 years. "The acquisition of RSI is an important step to advance the technology required for strong future growth in this field," Dr. Ben Lipps, Fresenius Medical Care CEO, said. "The combination offers us the long-term opportunity to extend our leadership to home and acute dialysis products. Furthermore, by combining our equipment and membrane technology with the SORB technology, we can provide innovative solutions in the future such as a possible wearable kidney. With this acquisition, Fresenius Medical Care expects to increase its annual R&D spending by approximately US$10 million starting in 2008. Our mid-term financial targets for the years 2007 through 2010 remain unchanged." About Fresenius Medical Headquartered in Bad Homburg, Germany, Fresenius Medical Care AG & Co. KGaA -- http://www.fmc-ag.com/-- provides products and services for individuals undergoing dialysis because of chronic kidney failure. Fresenius Medical Care also provides dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care provides dialysis treatment to around 128,200 patients around the globe. Fresenius AG holds around 37% of Fresenius Medical Care AG & Co. KgaA's capital. The company also operates facilities in Australia, Brazil, Canada, China, France, Korea, Mexico, Portugal and Sweden, among others. * * * The company carries Moody's Investors Service's Ba2 corporate family rating. GENERAL MOTORS: Mulls Production Cuts Due to Low November Sales --------------------------------------------------------------- General Motors Corp. and Ford Motor Company disclosed that due to low November sales, the carmakers intends to slash vehicle production in the first quarter of 2008, various sources report. GM said earlier this week that to avoid a deluge of inventory, it will shutter three pickup truck plants for two weeks in January. Aside from that, GM plants will also be closed over the holiday, according to Josee Valcourt, Terry Kosdrosky and Mike Spector of the Wall Street Journal. GM anticipates a production of 950,000 vehicles from January through March, down 11% from the same period in 2007, while Ford plans a 7% car production decrease in the first quarter, expecting to produce only 685,000 vehicles, Nick Bunkley of The New York Times relates. As reported in the Troubled Company Reporter on Dec. 4, 2007, GM dealers in the U.S. delivered 263,654 vehicles in November, down 11%, after three consecutive monthly increases, compared with a year ago, reflecting continuing reductions in daily rental sales and softening industry demand. However, GM's retail car deliveries increased, based on the strength of the all-new Chevrolet Malibu, 2008 Cadillac CTS and fuel-efficient Chevrolet Aveo, Cobalt, Pontiac G5 and G6. According to the Associated Press, analysts anticipate low annual sales in 2008, a drop in U.S. light vehicle sales to 3% to 15.6 million units, a record low since 1998. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GLOBAL EPOINT: Sept. 30 Balance Sheet Upside-Down by $9.8 Million ----------------------------------------------------------------- Global ePoint Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $11.3 million in total assets and $21.1 million in total liabilities, resulting in a $9.8 million total shareholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $7.1 million in total current assets available to pay $19.1 million in total current liabilities. The company reported a net loss of $5.4 million on sales of $302,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $3.3 million on sales of $1.1 million in the corresponding peri