/raid1/www/Hosts/bankrupt/TCR_Public/071212.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, December 12, 2007, Vol. 11, No. 294
Headlines
ACCELLENT INC: Moody's Junks Family Rating on Covenant Amendment
ACE SECURITIES: Fitch Junks Ratings on Two Certificate Classes
ACE SECURITIES: Fitch Lowers Ratings on $52.1 Million Certs.
ACTIVISION INC: Kotick and Kelly to Get $10MM Cash Bonuses Each
AMSCAN HOLDING: Moody's Confirms Ba3 Rating on Credit Facility
APIDOS CDO: S&P Assigns 'BB' Rating on Class D (PIK) Notes
ATARI INC: Amends Credit Facility to Increase Borrowing by $4 Mil.
AXIA INC: Weak Earnings Prompt S&P to Junk Credit Rating
BANC OF AMERICA: S&P Affirms Ratings on 20 Certificate Classes
BANC OF AMERICA: S&P Holds Low-B Ratings on Six Cert. Classes
BIG A: Committee Taps Liner Yankelevitz as Bankruptcy Counsel
BIG A: U.S. Trustee Elects 2 Additional Members to Creditors Panel
BOSQUE POWER: Moody's Assigns (P)B1 Rating on $412.5MM Facility
BROADCAST INT'L: Sept. 30 Balance Sheet Upside-Down by $3,685,278
CAPITAL AUTOMOTIVE: S&P Affirms 'BB+' Corporate Credit Rating
CARBIZ INC: Begins Operations in Sioux City & Council Bluffs Area
CARLOS CARABALLO-ORTIZ: Case Summary & 21 Largest Unsec. Creditors
CETUS ABS: S&P Places Ratings Under Negative CreditWatch
CHAMPION ENTERPRISES: S&P Lifts Rating on Sr. Notes to B+ from B
CITIMORTGAGE ALTERNATIVE: Fitch Cuts Ratings on Two Classes to B
CLAYMONT STEEL: $565MM Evraz Deal Cues Moody's to Review Ratings
CLAYMONT STEEL: S&P Places All Ratings Under Positive Watch
COGNIGEN NETWORKS: Completes Acquisition of Commission River
COMPASS DIVERSIFIED: Amends Credit Pact; Gets New $150MM Term Loan
CONSOLIDATED COMMS: Cash/Stock Election Deadline is December 27
CONSTRUCTION RESOURCES: Case Summary & 20 Largest Unsec. Creditors
CSFB HOME: Moody's Lowers Ratings on 19 Tranches
CWABS: Moody's Lowers Ratings on 70 Tranches
DANA VILLAS ASSOCIATES: Voluntary Chapter 11 Case Summary
DEL FRISCO'S: S-1/A Filing Cues S&P to Put Ratings Under Watch
DUKE FUNDING: EOD Notices Prompt Fitch to Junk Ratings
EL POLLO: Court Decision Prompts S&P's Negative CreditWatch
EPICOR SOFTWARE: Moody's Affirms B1 Corporate Family Rating
FIELDSTONE MORTGAGE: Moody's Junks Ratings on Three Classes
FIRST FRANKLIN: Moody's Cuts Rating on Class M-5 to B1 from A2
GLOBAL GEOPHYSICAL: Moody's Rates $150MM Credit Facilities at B2
GREAT ATLANTIC: S&P Lifts Corp. Credit Rating to B from B-
HELIX ENERGY: Moody's Rates Proposed $500MM Senior Notes at B3
HOLLINGER INC: Black Gets a Modest 6-1/2 Years Jail Term for Fraud
HOLOGIC INC: Completes $1.7 Bil. Offering of Conv. Senior Notes
ICONIX BRAND: S&P Rates Proposed $60MM Add-On Term Loan at BB
INDYMAC BANCORP: S&P Lowers Credit Rating to BB+/B from BBB-/A-3
INSIGNIA VESSEL: Moody's Holds B2 Rating with Stable Outlook
IXI MOBILE: Sept. 30 Balance Sheet Upside-Down by $15.5 Million
JP MORGAN: Fitch Affirms 'B-' Rating on $2.8MM Class P Certs.
K-SEA TRANSPORTATION: S&P Holds 'BB-' Corporate Credit Rating
KALISPEL TRIBE: Fitch Assigns Issuer Rating at B+
KEYSTONE AUTOMOTIVE: Weak Performance Cues S&P to Cut Rating
LEINER HEALTH: Strategic Plans Prompt S&P to Cut Credit Rating
LL&E ROYALTY: Reports Cash Loss of $166,944 in Third Quarter
MATTRESS GALLERY: Court Sets December 15 as Claims Filing Deadline
MBIA INC: Inks $1 Billion Stock Purchase Deal with Warburg Pincus
MBIA INC: Barclays Sees $4.2 Bil. Losses Despite Warburg's Help
MBIA INC: Fitch Provides Commentary on Capital-Raising Activity
MERRILL LYNCH: S&P Affirms 'B+' Rating on Class F Certificates
MGM MIRAGE: Board Approves Amendment and Restatement of Bylaws
MONITOR OIL: Can Borrow $1 Million from $5 Million Financing
MORGAN STANLEY: Limited Amortization Cues Fitch to Hold Ratings
MTI TECHNOLOGY: Court OKs Manatt Phelps as Special SEC Counsel
MUSICLAND HOLDING: Panel Wants to Avoid Payments to 10 Creditors
NEUMANN HOMES: Committee Taps Paul Hastings as Counsel
NEUMANN HOMES: Gets Initial OK to Use Lenders' Cash Collateral
NICHOLS BROS: Inks $20 Mil. Consortium with Todd and Martinac
OBLAST OF KIROV: Moody's Assigns Ba3 Issuer Rating
OSHUN DEVELOPMENT: Case Summary & 18 Largest Unsecured Creditors
OWENS-ILLINOIS: Debt Reduction Cues Fitch to Lift IDR to B+
PCI GAMING: Moody's Rates $185MM Muti-Draw Term Facility at B1
PHOENIX FOOTWEAR: Earns $11.1 Million in Third Quarter
POPE & TALBOT: Remaining Wood Products Sale Procedures Opposed
POPE & TALBOT: Trade Creditors Ask Court to Secure Goods Payment
PROBE MFG: Sept. 30 Balance Sheet Upside-Down by $309,938
PROVIDENCE SERVICE: Deal Change Cues Moody's to Withdraw Rating
REAL MEX: Poor Liquidity Cues Moody's to Cut CFR to B3 from B2
RENAISSANCE HOME: Moody's Lowers Rating on Class M-8 to B3
ROBERT NIEBAUER: Case Summary & 18 Largest Unsecured Creditor
ROCKY ROBINSON: Can Employ Sheridan-MacMahon as Sales Agent
ROCKY ROBINSON: Judge Mitchell OKs Marcher Consultants as Advisor
ROCKY ROBINSON: Submits Schedules of Assets and Liabilities
SAFENET INC: Lt. Gen. Steven Boutelle Joins Board of Directors
SALEM CAPITAL: Exclusive Plan Filing Period Expires on February 22
SALEM CAPITAL: Gets Court OK to Hire Shaw Guissis as Counsel
SALEM CAPITAL: Submits Schedules of Assets and Liabilities
SAXON ASSET: Moody's Cuts Rating on Cl. B-3 to B2 from Baa3
SEA CONTAINERS: SCSL Panel Wants to Set Record Staring on Progress
SEA CONTAINERS: Wins GE Seaco Arbitration Case
SEARS HOLDINGS: Inks Privacy Contract with Restoration Hardware
SOURCE MEDIA: Moody's Affirms B1 Corporate Family Rating
SOUTHAVEN POWER: Seeks Court's Approval on Asset Sale Procedure
ST MARY LAND: S&P Holds 'BB-' Rating and Revises Outlook to Pos.
STRUCTURED ASSET: Moody's Downgrades Ratings on 51 Tranches
SUPERMERCADOS BONANZA: Files Schedules of Assets and Liabilities
SUPERMERCADOS BONANZA: Section 341(a) Meeting Reset to January 14
THORNBURG MORTGAGE: S&P Removes 'B' Rating from Negative Watch
U.S. DRY: Completes Initial Closing of $3.5 Mil. Conv. Financing
VILLAGE WALK LLC: Case Summary & Three Largest Unsecured Creditors
WARD WHITE: Discloses Intention to Dissolve
WARP 9: Sept. 30 Balance Sheet Upside-Down by $572,431
WASHINGTON MUTUAL: To Close WaMu Capital; Cuts Staff by 22%
WASHINGTON MUTUAL: Moody's Cuts FS Rating to C- from C+
WCI COMMUNITIES: Gets Limited Waiver Extension Until January 7
WELLS FARGO: Fitch Affirms Ratings on 148 Certificate Classes
WELLS FARGO: Moody's Downgrades Ratings on 12 Tranches
WENDY'S INTERNATIONAL: Says Financial Performance is "Improving"
WENDY'S INTERNATIONAL: Gives Update on Strategic Review Process
WENDY'S INT'L: Ian Rowden Steps Down as Chief Marketing Officer
WR GRACE: Deadline to File Opposition to Daubert Briefs is Dec. 21
WR GRACE: Rehearing Plea on Libby Conspiracy Charge Denied
XEROX CORP: S&P Lifts Rating on Preferred Trust to BBB- from BB
XM SATELLITE: SEC Won't Take Any Action On Stock Option Practices
* Fitch Expects Steel Industry Will See Further Consolidation
* Fitch Expects US Airlines Credit Recovery Will Be Slow in 2008
* Fitch Says Prime and Subprime Losses Climbed Further in November
* Fitch Says US Gaming Industry Has Stable Outlook
* Linda Grant Williams Joins as Dreier LLP's Corporate Partner
* Beard Audio Conferences Presents
* Upcoming Meetings, Conferences and Seminar
*********
ACCELLENT INC: Moody's Junks Family Rating on Covenant Amendment
----------------------------------------------------------------
Moody's Investors Service downgraded Accellent Inc.'s Corporate
Family Rating to Caa1 from B3 and assigned a negative outlook. At
the same time, Moody's changed Accellent's speculative grade
liquidity rating to an SGL-4 from an SGL-3 rating.
The downgrades are based primarily on very tight headroom under
recently amended covenants creating impaired liquidity, continued
weakness in top-line growth, and negative free cash flow
generation -- which has continued to worsen since our January 2007
downgrade.
Moody's Senior Credit Officer, Diana Lee, commented, "Accellent's
new senior management team must quickly take steps to shore up
weak liquidity." The company will need to increase margins or see
higher sales from improvements in its end-users' markets to
reverse negative operating trends.
The negative outlook reflects our belief that tight covenants and
weak cash flow generation limit the company's ability to draw
under its revolver over the near term. Further, Moody's believe
the likelihood of a covenant violation is relatively high even
absent any additional draws.
Accellent Inc.
Ratings downgraded:
-- Corporate family rating to Caa1 from B3
-- Secured revolver to B2 (LGD2, 29%) from B1 (LGD2, 29%)
-- Secured term loan to B2 (LGD2, 29%) from B1 (LGD2, 29%)
-- Sr. subordinated notes to Caa3 (LGD5, 83%) from Caa2
(LGD5, 83%)
-- PDR to Caa1 from B3
-- Speculative grade liquidity rating to SGL-4 from SGL-3
Accellent Inc., headquartered in Wilmington, Massachussetts, is an
outsource manufacturer of medical products, primarily serving the
cardiology, endoscopy, and orthopedic markets.
ACE SECURITIES: Fitch Junks Ratings on Two Certificate Classes
--------------------------------------------------------------
Fitch has taken rating actions on Ace Securities Corporation
mortgage pass-through certificate:
Ace 2003-NC1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'A+';
-- Class M-3 affirmed at 'BBB+';
-- Class M-4 downgraded to 'BB' from 'BBB-';
-- Class M-5 downgraded to 'CC/DR3' from 'BB';
-- Class M-6 downgraded to 'C/DR5' from 'BB-'.
The affirmations, affecting approximately $90.9 million of the
outstanding balances, are taken as a result of a satisfactory
relationship of credit enhancement to expected losses. The
downgrades, affecting approximately $6.4 million of the
outstanding balances, are taken as a result of a deteriorating
relationship between expected losses and credit enhancement.
The collateral of the above transaction consists of fixed- and
adjustable-rate subprime mortgage loans secured by first and
second liens on residential properties. As of the October 2007
distribution date, delinquencies are 25.99%, with 1.03% losses to
date. Ace 2003-NC1 is seasoned 48 months with a pool factor of
12%. Wells Fargo Bank is the master servicer of the loans (rated
'RMS1' by Fitch).
ACE SECURITIES: Fitch Lowers Ratings on $52.1 Million Certs.
------------------------------------------------------------
Fitch Ratings has taken these rating actions on three series of
Ace Securities Corporation mortgage pass-through certificates.
Affirmations total $671.9 million and downgrades total $52.1
million. In addition, $51.9 million was either placed on or
remains on Rating Watch Negative. Break Loss percentages and Loss
Coverage Ratios for each class are included with the rating
actions as:
Ace 2005-HE2
-- $19.1 million class A affirmed at 'AAA' (BL: 93.99, LCR:
7.22);
-- $70.7 million class M-1 affirmed at 'AA+' (BL: 79.99, LCR:
6.15);
-- $39 million class M-2 affirmed at 'AA' (BL: 66.45, LCR:
5.11);
-- $23.7 million class M-3 affirmed at 'AA-' (BL: 58.12, LCR:
4.47);
-- $21.3 million class M-4 affirmed at 'A+' (BL: 50.59, LCR:
3.89);
-- $20.7 million class M-5 affirmed at 'A+' (BL: 43.27, LCR:
3.32);
-- $18.2 million class M-6 affirmed at 'A' (BL: 36.67, LCR:
2.82);
-- $15.2 million class M-7 affirmed at 'A-' (BL: 31.02, LCR:
2.38).
-- $15.2 million class M-8 affirmed at 'BBB+' (BL: 25.31,
LCR: 1.94);
-- $12.1 million class M-9 rated 'BBB', and placed on Rating
Watch Negative (BL: 20.50, LCR: 1.58);
-- $12.1 million class M-10 rated 'BBB-', remains on Rating
-- $16.4 million class B-1 downgraded to 'C/DR3' from 'BB'
(BL: 9.46, LCR: 0.73);
Watch Negative (BL: 15.63, LCR: 1.20);
-- $7.3 million class B-2 downgraded to 'C/DR5' from 'BB-'
(BL: 7.44, LCR: 0.57).
Deal Summary
-- Originators: 83% Freemont
-- 60+ day Delinquency: 44.29%
-- Realized Losses to date (% of Original Balance): 0.90%;
-- Expected Remaining Losses (% of Current Balance): 13.02%;
-- Cumulative Expected Losses (% of Original Balance): 4.08%.
Ace 2005-HE3
-- $112.7 million class A affirmed at 'AAA' (BL: 79.97, LCR:
5.38);
-- $58.3 million class M-1 affirmed at 'AA+' (BL: 59.91, LCR:
4.03);
-- $35.4 million class M-2 affirmed at 'AA' (BL: 49.50, LCR:
3.33);
-- $22.3 million class M-3 affirmed at 'AA-' (BL: 40.99, LCR:
2.76);
-- $19.6 million class M-4 affirmed at 'A+' (BL: 36.46, LCR:
2.45);
-- $18.5 million class M-5 affirmed at 'A' (BL: 31.16, LCR:
2.10);
-- $17.9 million class M-6 affirmed at 'A-' (BL: 25.75, LCR:
1.73);
-- $14.1 million class M-7 affirmed at 'BBB' (BL: 21.31, LCR:
1.43);
-- $13 million class M-8 rated 'BBB-', and placed on Rating
Watch Negative (BL: 17.23, LCR: 1.16);
-- $10.9 million class M-9 downgraded to 'BB-' from 'BB' (BL:
13.66, LCR: 0.92);
-- $6.5 million class B-1 downgraded to 'B' from 'BB-' (BL:
11.42, LCR: 0.77);
-- $10.9 million class B-2 downgraded to 'C/DR5' from 'B+'
(BL: 7.88, LCR: 0.53).
Deal Summary
-- Originators: Various
-- 60+ day Delinquency: 38.54%
-- Realized Losses to date (% of Original Balance): 1.40%;
-- Expected Remaining Losses (% of Current Balance): 14.87%;
-- Cumulative Expected Losses (% of Original Balance): 5.96%.
Ace 2005-RM2
-- $25.2 million class A affirmed at 'AAA' (BL: 97.58, LCR:
11.16);
-- $20.9 million class M-1 affirmed at 'AA+' (BL: 79.20, LCR:
9.06);
-- $18.6 million class M-2 affirmed at 'AA+' (BL: 66.43, LCR:
7.60);
-- $11 million class M-3 affirmed at 'AA' (BL: 58.82, LCR:
6.73);
-- $10.1 million class M-4 affirmed at 'AA-' (BL: 51.74, LCR:
5.92);
-- $9.6 million class M-5 affirmed at 'A+' (BL: 45.06, LCR:
5.16);
-- $9.3 million class M-6 affirmed at 'A' (BL: 26.00, LCR:
2.97);
-- $7.6 million class M-7 affirmed at 'A-' (BL: 23.03, LCR:
2.64);
-- $5.9 million class M-8 affirmed at 'A-' (BL: 20.61, LCR:
2.36);
-- $5.3 million class M-9 affirmed at 'BBB+' (BL: 18.53, LCR:
2.12);
-- $5 million class M-10 affirmed at 'BBB' (BL: 16.56, LCR:
1.89);
-- $5.6 million class M-11 rated 'BBB-', and placed on Rating
Watch Negative (BL: 14.48, LCR: 1.66);
-- $8.7 million class B-1 rated 'BB', remains on Rating Watch
Negative (BL: 10.66, LCR: 1.22).
Deal Summary
-- Originators: 100% ResMae
-- 60+ day Delinquency: 25.67%
-- Realized Losses to date (% of Original Balance): 1.53%;
-- Expected Remaining Losses (% of Current Balance): 8.74%;
-- Cumulative Expected Losses (% of Original Balance): 3.88%.
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
ACTIVISION INC: Kotick and Kelly to Get $10MM Cash Bonuses Each
---------------------------------------------------------------
Activision Inc. entered into an replacement bonus agreement with
its chairman and chief executive, Bobby Kotick, and co-chairman,
Brian Kelly dated as of Dec. 1, 2007.
The RBA replaces the original employment agreement dated May 22,
2000 between the company and the two executive officers as a
result of a merger agreement between Vivendi SA and Activision.
Replacement Bonus
Messrs. Kotick and Kelly will each be entitled to two cash bonuses
payable as: (i) first bonus of $5,000,000 will be paid in a cash
lump sum not later than Dec. 31, 2007; and (ii) second bonus of
$5,000,000 will be paid in a cash lump sum on the date the
combination transactions are consummated provided that Messrs.
Kotick and Kelly are continuously employed by the company Group
through the consummation date.
In addition, Messrs. Kotick and Kelly will each receive restricted
stock unit bonuses. On the consummation date, the company will
each grant Messrs. Kotick and Kelly 363,637 RSUs pursuant to the
company's 2007 incentive plan.
The RSUs will vest in full on Dec. 31, 2010, provided that Messrs.
Kotick and Kelly are continuously employed by the company through
the vesting date.
If the combination transactions or an alternative transaction is
not consummated on or prior to June 30, 2009, Messrs. Kotick and
Kelly will each have no entitlement to the second bonus or the RSU
bonus.
Waiver of Rights
Both executives have waived their rights under an amended
employment agreement in connection with the combination
transactions to:
(i) elect to receive a cash payment in respect of all stock
options held equal to, as to each share of company common
stock subject to the stock options, the excess of the
closing price of the company common stock on the date of
the combination transactions over the option exercise
price;
(ii) accelerated vesting of all unvested stock options on the
date of the combination transactions; and
(iii) resign for any reason during the six month period
following the three month anniversary of the combination
transactions and receive a severance payment equal to
five times the sum of their base salary and most recent
annual bonus, a pro-rata annual bonus for the year of
resignation and two years of health insurance
continuation.
Vivendi and Activision Merger
As reported in the Troubled Company Reporter on Dec. 3, 2007,
Activision and Vivendi have signed a definitive agreement to
combine Vivendi Games, Vivendi's interactive entertainment
business -- which includes Blizzard Entertainment's World of
Warcraft(R), the world's #1 multi-player online role-playing game
franchise -- with Activision, creating the world's largest pure-
play online and console game publisher.
The new company, Activision Blizzard, is expected to have
approximately $3.8 billion in pro forma combined calendar 2007
revenues and the highest operating margins of any major third-
party video game publisher. On closing of the transaction,
Activision will be renamed Activision Blizzard and will continue
to operate as a public company traded on NASDAQ under the ticker
ATVI.
About Vivendi
Vivendi (Euronext Paris: VIV) -- http://www.vivendi.com/-- is a
global provider of digital entertainment like music, TV, cinema,
mobile, internet, and games through its ownership of Universal
Music Group, Canal+ Group, SFR, Maroc Telecom and Vivendi Games.
In 2006, Vivendi had revenues of over EUR20 billion and a global
headcount of 39,000. Listed on the Paris Stock market, Vivendi is
a member of the CAC 40.
About Vivendi Games
Vivendi Games globally develops, publishes and distributes
multiplatform interactive entertainment. The company is the
leader in the subscription-based massively multi-player online
role-playing games (MMORPG) category and is building on its
position in the PC, console and handheld games markets. Vivendi
Games has a global presence, a history of franchise success,
development teams around the world and a catalog of its own
original and licensed material. Vivendi Games has approximately
4,000 employees and is driven by four creative divisions: Blizzard
Entertainment, Sierra Entertainment, Sierra Online and Vivendi
Games Mobile. Irvine, California-based Blizzard, creator of the
Warcraft, StarCraft and Diablo games series, is by far the largest
of the four entities with approximately 2,300 employees.
About Blizzard Entertainment
Blizzard Entertainment Inc. -- http://www.blizzard.com/-- a
division of Vivendi Games, is a premier developer and publisher of
entertainment software renowned for creating some of the
industry's most critically acclaimed games. Blizzard
Entertainment's track record includes ten #1-selling games and
multiple Game of the Year awards. It is best known for
blockbuster hits including World of Warcraft and the Warcraft,
StarCraft, and Diablo series. The company's online-gaming
service, Battle.net(R), is one of the largest in the world, with
millions of active users.
About Activision Inc.
Headquartered in Santa Monica, California, Activision Inc.
(Nasdaq: ATVI) -- http://www.activision.com/-- is a worldwide
developer, publisher and distributor of interactive entertainment
and leisure products. Founded in 1979, Activision posted net
revenues of $1.5 billion for the fiscal year ended March 31, 2007.
Activision has more than 2,000 employees worldwide. Activision is
best known for its top-selling franchises, including Guitar
Hero(R), Call of Duty(R) and the Tony Hawk series, as well as
Spider-Man(TM), X-Men(TM), Shrek(R), James Bond(TM) and
TRANSFORMERS(TM).
Activision maintains operations in the United States, Canada, the
United Kingdom, France, Germany, Ireland, Italy, Scandinavia,
Spain, the Netherlands, Australia, Japan and South Korea.
* * *
As reported in the Troubled Company Reporter on Dec. 10, 2007,
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating on Activision Inc. on CreditWatch with positive
implications, indicating the potential for an upward rating
action, based on Activision's definitive agreement to combine with
Vivendi Games, a unit of Vivendi S.A. (BBB/Stable/A-2).
AMSCAN HOLDING: Moody's Confirms Ba3 Rating on Credit Facility
--------------------------------------------------------------
Moody's Investors Service confirmed the ratings on Amscan Holding,
Inc's secured revolving credit facility at Ba3 (LGD 2, 29%),
secured term loan at B1 (LGD 3, 35%), the 8.75% senior
subordinated notes (2014) at Caa1 (LGD 5, 87%), and the corporate
family rating at B2. Review of the ratings was prompted by the
pending purchase of Factory Card & Party Outlet for total
consideration of $83 million. The revolving credit facility was
upsized to $250 million from $200 million as part of financing the
transaction. The confirmation of the rating reflects Moody's
opinion that the company will quickly obtain meaningful post-
merger operating efficiencies at the newly-acquired stores and
that the expected modest deterioration in credit metrics will be a
temporary phenomenon. This rating action concludes the review
that commenced on Sept. 24, 2007.
Ratings confirmed are:
-- $250 million secured revolving credit facility at Ba3 (LGD
2, 29%);
-- $375 million secured term loan at B1 (LGD 3, 35%).
-- $175 million 8.75% senior subordinated notes (2014) at
Caa1 (LGD 5, 87%);
-- Corporate family rating at B2;
-- Probability of default rating at B2.
Moody's does not rate the $50 million bank loan of PCFG.
The corporate family rating of B2 balances certain strong
qualitative rating drivers with important quantitative attributes
that are solidly non-investment grade. In particular, driving
down the ratings are the high leverage, low fixed charge coverage,
and limited free cash flow. Also constraining the ratings are the
company's relatively small size and aggressive financial policy,
in which a considerable portion of discretionary cash flow is
invested in growth. Partially offsetting these risks are Moody's
expectation that going forward the company will use some
discretionary cash flow to repay debt ahead of schedule, Amscan's
leading position in the narrow market of decorative party goods,
and the diversity of wholesale and retail revenue. Amscan and
Party City Franchise Group LLC are financed separately without
cross-guarantees between the two. Moody's does not rate the $50
million bank loan of PCFG, but for analytic purposes we consider
PCFG as effectively part of Amscan.
Amscan Holdings, Inc, with headquarters in Elmsford, New York,
manufactures decorative party goods and is the largest
manufacturer of metallic balloons in the world. The company's
products are sold at about 950 owned or franchised Party City and
Party America retail locations, as well as to external customers.
The company purchased Factory Card & Party Outlet, an operator of
184 retail stores specializing in decorative party goods and
social expression products, in November 2007. Pro forma revenue
for the twelve months ending Sept. 30, 2007 was about $1.5
billion.
APIDOS CDO: S&P Assigns 'BB' Rating on Class D (PIK) Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Apidos CDO VI's $218 million floating-rate notes due
2019.
The preliminary ratings are based on information as of Dec. 10,
2007. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The credit enhancement provided to each class of notes
through the subordination of cash flows to the more
junior classes and the subordinated notes;
-- The transaction's cash flow structure, which was
subjected to various stresses requested by Standard &
Poor's; and
-- The transaction's legal structure, including the
issuer's bankruptcy remoteness.
Preliminary Ratings Assigned
Apidos CDO VI
Class Rating Amount
----- ------ ------
A-1 AAA $181,500,000
A-2 AA $6,000,000
B (PIK) A $13,000,000
C (PIK) BBB $8,000,000
D (PIK) BB $9,500,000
Subordinated notes NR $22,000,000
PIK -- Payment-in-kind.
NR -- Not rated.
ATARI INC: Amends Credit Facility to Increase Borrowing by $4 Mil.
------------------------------------------------------------------
Atari Inc. has entered into an amendment to the Senior Secured
Credit Facility with BlueBay High Yield Investments (Luxembourg)
S.A.R.L. that will increase its borrowing capacity under the
facility from $10 million to $14 million.
The additional $4 million in availability under the Credit
Facility will enable Atari Inc. to meet its holiday season
financing needs. BlueBay is a significant shareholder of
Infogrames Entertainment S.A., Atari Inc.'s majority stockholder.
Simultaneously with and as a condition to the increase in the
availability under the Credit Facility, Atari Inc. terminated its
existing distribution agreements with Infogrames and has entered
into a new distribution agreement covering the distribution by
Atari Inc. of interactive entertainment software games produced or
acquired by Infogrames and its affiliates in North America.
This new distribution agreement covers the distribution of
Infogrames' products in North America for the next three years,
subject to reduction to two years if certain performance targets
are not met, and has provisions for automatic renewals on an
annual basis unless terminated by either party in accordance with
the agreement.
The new distribution agreement provides that Atari Inc. will
retain 30% of the net receipts from the distribution of
Infogrames' products as consideration for its services. The
agreement also provides that the parties will enter into an
agreement on the same terms for the distribution by Infogrames of
Atari, Inc.'s products outside North America.
Additionally, as part of this agreement, Atari Inc. has licensed
back to Infogrames the use of the "Atari" trademark in North
America in connection with the URL http://www.atari.com/ for the
purposes of a online initiative to be lead by Infogrames.
In light of the repositioning of Atari Inc.'s business and the new
distribution arrangements, Atari Inc. has also terminated its
existing corporate management and service contracts with
Infogrames.
This is anticipated to enable Atari Inc. to further streamline its
corporate structure. Atari Inc. will provide certain
administrative functions to Infogrames on a transitional basis
over an approximate 7 to 10 month period for an annualized fee of
approximately $2.6 million.
In addition, the parties terminated the agreement under which
Infogrames provided certain management services to Atari Inc. It
is expected that the termination of this agreement will result in
annualized cost savings to Atari Inc. of approximately $3 million.
As part of the termination of the corporate management service
contracts and the reduction of production and development
activities at Atari Inc., Atari Inc. agreed to the transfer of
certain employees, with such employees' acceptance, from the
production and development businesses of Atari Inc. to Infogrames.
Atari Inc. disclosed a reduction in its workforce, which
included the production and development employees being
transferred to Infogrames, that is expected to result in savings
on current payroll and related costs of an estimated $5.3 million
per year of which $1.3 million relates to the transfer of
employees to Infogrames.
About Atari Inc.
Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) --
http://www.atari.com/-- develops interactive games for all
platforms and is a third-party publisher of interactive
entertainment software in the U.S. Atari Inc. is a majority-owned
subsidiary of France-based Infogrames Entertainment SA, an
interactive games publisher in Europe.
Going Concern Doubt
New York-based Deloitte & Touche LLP expressed substantial doubt
about Atari's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended March 31, 2007. The auditing firm pointed to the
company's significant operating losses.
AXIA INC: Weak Earnings Prompt S&P to Junk Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on Duluth, Georgia-based Axia
Inc. to 'CCC+' from 'B-'. At the same time, the ratings were
removed from CreditWatch, where they were placed with
negative implications on June 7, 2007. The outlook is negative.
"The downgrade reflects our assessment that materially weaker
earnings driven by the deterioration in the company's end markets
over the past few quarters, will continue, potentially making it
difficult for Axia to meet its interest and fixed payment
obligations," said Standard & Poor's credit analyst Sean
McWhorter. "In addition, we are concerned that the company could
violate its bank agreement covenants."
Axia manufactures automatic tape finishing tools for drywall
joints under the Ames name, with revenues of $86 million for the
12 months ended Sept. 30, 2007.
Axia is very highly leveraged. Its concentration in Florida and
California has left it vulnerable to the slowdown in residential
construction in those states.
"We could lower the ratings if liquidity falls from its current
levels or if Axia violates its covenants and is unsuccessful at
receiving a waiver from its lenders," Mr. McWhorter said. "We
could revise the outlook to stable if end-market conditions
materially improve, causing a sustained improvement in earnings."
BANC OF AMERICA: S&P Affirms Ratings on 20 Certificate Classes
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
B and C commercial mortgage pass-through certificates from Banc of
America Commercial Mortgage Inc.'s series 2004-6. Concurrently,
S&P affirmed its ratings on 20 classes from this transaction.
The upgrades of the class B and C certificates reflect the
defeasance of 11% of the pool and increased credit enhancement
levels. The affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
As of the Nov. 13, 2007, remittance report, the collateral pool
consisted of 76 loans with an aggregate trust balance of
$920.9 million, compared with 79 loans totaling $956.6 million at
issuance. The master servicer, Bank of America N.A., reported
financial information for 98% of the nondefeased loans. Ninety-
nine percent of the servicer-provided information was full-year
2006 data. Using this information, Standard & Poor's calculated a
weighted average debt service coverage of 1.68x, up from 1.43x at
issuance. All of the loans in the pool are current, and there are
no loans with the special servicer. To date, the trust has not
experienced any losses.
The top 10 exposures secured by real estate have an aggregate
outstanding balance of $415.9 million (45%) and a reported
weighted average DSC of 1.78x, up from 1.53x at issuance. The
third-largest loan in the pool is on the watchlist and is
discussed below. Standard & Poor's reviewed property inspections
provided by the master servicer for all of the assets underlying
the top 10 exposures; one property was characterized as
"excellent" and the remaining properties were characterized as
"good."
Bank of America reported a watchlist of 10 loans ($112.5 million,
12%). The Simon - Upper Valley Mall loan ($47.9 million, 5%) is
the largest loan on the watchlist and the third-largest exposure
in the pool. The loan is secured by 496,895 sq. ft. of a 750,377-
sq.-ft. regional mall in Springfield, Ohio. The loan appears on
the watchlist because the property reported a DSC of 1.06x for the
period ending June 30, 2007. None of the remaining loans on the
watchlist had a principal balance of greater than $20.0 million.
Standard & Poor's stressed the loans on the watchlist and the
other loans with credit issues as part of its analysis. The
resultant credit enhancement levels support the affirmed rating.
Ratings Raised
Banc of America Commercial Mortgage Inc.
Commercial mortgage pass-through certificates series 2004-6
Rating
------
Class To From Credit enhancement
----- -- ---- ----------------
B AA+ AA 12.60%
C AA AA- 11.56%
Ratings Affirmed
Banc of America Commercial Mortgage Inc.
Commercial mortgage pass-through certificates series 2004-6
Class Rating Credit enhancement
----- ------ ----------------
A-1 AAA 20.78%
A-2 AAA 20.78%
A-3 AAA 20.78%
A-4 AAA 20.78%
A-5 AAA 20.78%
A-AB AAA 20.78%
A-J AAA 14.67%
D A 9.61%
E A- 8.57%
F BBB+ 7.01%
G BBB 5.97%
H BBB- 4.54%
J BB+ 3.90%
K BB 3.38%
L BB- 2.86%
M B+ 2.47%
N B 2.08%
O B- 1.56%
XC AAA N/A
XP AAA N/A
N/A -- Not applicable.
BANC OF AMERICA: S&P Holds Low-B Ratings on Six Cert. Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
B and C commercial mortgage pass-through certificates from Banc of
America Commercial Mortgage Inc.'s series 2004-5.
Concurrently, S&P affirmed its ratings on 19 classes from the same
transaction.
The upgrades of the certificates reflect the defeasance of 11% of
the pool and increased credit enhancement levels. The affirmed
ratings reflect credit enhancement levels that provide adequate
support through various stress scenarios.
As of the Nov. 13, 2007, remittance report, the collateral pool
consisted of 105 loans with an aggregate trust balance of $1.332
billion, compared with 109 loans totaling $1.362 billion at
issuance. The master servicer, Bank of America N.A., reported
financial information for 98% of the nondefeased loans. All of
the servicer-provided information was full-year 2006 data. Using
this information, Standard & Poor's calculated a weighted average
debt service coverage of 2.00x, up from 1.64x at issuance. All of
the loans in the pool are current, and there are no loans with the
special servicer. To date, the trust has not experienced any
losses.
The top 10 exposures secured by real estate have an aggregate
outstanding balance of $589.9 million (46%) and a weighted average
DSC of 2.23x, up from 1.94x at issuance. Standard & Poor's
reviewed property inspections provided by the master servicer for
all of the assets underlying the top 10 exposures; two properties
were characterized as "excellent," and the remaining properties
were characterized as "good."
Credit characteristics for the Bank of America Center, Ocean
Residences, Charles Square, Rentar Plaza, and the Princeton Arms &
Court loans are consistent with those of investment-grade
obligations. Details of these loans are:
-- The largest exposure in the pool, Bank of America
Center, is secured by a 1.5 million-sq.-ft. class A
office building, a 228,200-sq.-ft. class B office
building, and a 64,000-sq.-ft. bank branch building in
San Francisco, California. The properties are
encumbered by a $520.0 million interest-only mortgage
that is split into three pari passu notes. In
addition, the borrower's equity interests in the real
estate secure a $178.3 million mezzanine loan. The
$253.0 million A-1 note is further split into a senior
participation of $150 million and a junior
participation of $103 million. The A-1 junior
participation is subordinate not only to the A-1 senior
participation, but also to the other pari passu notes.
The $130 million A-3 note (10%) supports the pooled
certificates. The master servicer reported a DSC of
2.40x for the six months ended June 30, 2007, and 95%
occupancy as of September 2007. Standard & Poor's
underwritten net cash flow has increased 3% since
issuance.
-- The second-largest exposure in the pool, Ocean
Residences, has a balance of $90.0 million (7%). The
interest-only loan is secured by the fee interest in
one unit of a three-unit mixed-use condominium in
downtown Manhattan. The collateral consists of a 492-
unit multifamily complex, 16,000 sq. ft. of retail and
office space, and a 98-space underground garage. For
the year ended Dec. 31, 2006, the in-trust DSC was
2.41x and occupancy was 94%. Standard & Poor's
adjusted NCF for this loan is comparable to its level
at issuance.
-- The third-largest exposure in the pool, Charles Square,
has a trust balance of $75.5 million (6%) and a whole-
loan balance of $80.9 million. The whole loan consists
of a $75.5 million A note and a participated $5.4
million junior note. Additionally, the borrower's
equity interest in the property secures a $43.5 million
mezzanine loan. The loan is secured by the fee
interest in a mixed-use property in Cambridge,
Massachussetts. The collateral consists of a 293-room
hotel, 109,295 sq. ft. of office space, 29,739 sq. ft.
of retail space, a 9,811-sq.-ft. conference center, and
a 568-space underground garage. For the year ended
Dec. 31, 2006, the in-trust DSC was 3.59x, and
occupancy at the office and retail space was 100%.
Standard & Poor's adjusted NCF for this loan is up 21%
from its level at issuance.
-- The fourth-largest exposure in the pool, Rentar Plaza,
has a trust balance of $52.0 million (5%) and a whole-
loan balance of $66.0 million. The whole loan consists
of a $52.0 million A note and a $14.0 million B note.
The interest-only loan is secured by the fee interest
in a mixed-use property in Queens, New York. The
collateral consists of 935,623 sq. ft. of warehouse
space and 631,585 sq. ft. of retail space. For the
year ended Dec. 31, 2006, the in-trust DSC was 2.60x
and occupancy was 100%. Standard & Poor's adjusted NCF
for this loan is comparable to its level at issuance.
-- The 13th-largest exposure in the pool, Princeton Arms &
Court, has a balance of $21.2 million (2%). The loan
is secured by the fee interest in two multifamily
properties totaling 592 units in Hamilton Township,
New Jersey. For the year ended Dec. 31, 2006, the DSC
was 0.38x and occupancy was 89%. The loan appears on
the watchlist because of the low reported DSC, which
was caused by a large increase in operating expenses.
Standard & Poor's adjusted NCF for this loan is
comparable to its level at issuance.
Bank of America reported a watchlist of 12 loans ($106.7 million,
8%). The Omega Corporate Center loan ($22.7 million, 2%) is the
largest loan on the watchlist. The loan is secured by a 284,723-
sq.-ft. office property in Pittsburgh, Pennsylvania. The loan
appears on the watchlist because the property reported a year-end
2006 DSC of 0.90x and occupancy of 66%.
Standard & Poor's stressed the loans on the watchlist and the
other loans with credit issues as part of its analysis. The
resultant credit enhancement levels support the raised and
affirmed ratings.
Ratings Raised
Banc of America Commercial Mortgage Inc.
Commercial mortgage pass-through certificates series 2004-5
Rating
------
Class To From Credit enhancement
----- -- ---- ----------------
B AA+ AA 11.06%
C AA AA- 10.01%
Ratings Affirmed
Banc of America Commercial Mortgage Inc.
Commercial mortgage pass-through certificates series 2004-5
Class Rating Credit enhancement
----- ------ -----------------
A-1A AAA 21.07%
A-2 AAA 21.07%
A-3 AAA 21.07%
A-4 AAA 21.07%
A-AB AAA 21.07%
A-J AAA 14.09%
D A 8.30%
E A- 7.37%
F BBB+ 6.06%
G BBB 5.14%
H BBB- 3.42%
J BB+ 2.90%
K BB 2.37%
L BB- 2.11%
M B+ 1.71%
N B 1.45%
O B- 1.19%
XC AAA N/A
XP AAA N/A
N/A -- Not applicable.
BIG A: Committee Taps Liner Yankelevitz as Bankruptcy Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Big A Drug Stores
Inc. and its debtor-affiliates' bankruptcy cases asks the United
States Bankruptcy Court for the Central District of California for
authority to retain Liner Yankelevitz Sunshine & Regentstreif LLP
as its bankruptcy counsel.
Liner Yankelevitz is expected to:
a) assist, advise, and represent the Committee in its
consultations with the Debtor regarding the administration of
this case;
b) assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities, investigating the extent and
validity of liens and participating in and reviewing any
proposed asset sales, any asset dispositions, financing
arrangements and cash collateral stipulations or proceedings;
c) assist, advise and represent the Committee in any manner
relevant to reviewing and determining the Debtor's rights and
obligations under leases andother executory contracts;
d) assist, advise and represent the Committee in investigating
the acts, conduct, assets, liabilities and financial
condition of the Debtor, the Debtor's operations and any
other matters relevant to this case or to the formulation of
a plan;
e) assist, advise and represent the Committee in its
participation in the negotiation, formulation and drafting of
a plan of liquidation or reorganization;
f) advise the Committee on the issues concerning the appointment
of a trustee or examiner under Sectior 1104;
g) assist, advise and represent the Committee in understanding
its powers and its duties under the Bankruptcy Code and the
Bankruptcy Rules and in performing other services as are in
the interests of those represented by the Committee;
h) assist, advise and represent the Committee in the evaluation
of claims and on any litigation matters; and
i) provide other services to the Committee as may be necessary
in this case.
As compensation for their services, the firm's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Julia W. Brand, Esq. Partner $475
Enid Colson, Esq. Associate $415
Charles Liu, Esq. Associate $375
Ms. Brand assures the Court that the firm does not hold any
interest adverse to the Debtors or the Debtors' estate, and that
the firm is a "disinterested person" as that term is defined under
Section 101(14) of the Bankruptcy Code.
Ms. Brand can be reached at:
Liner Yankelevitz Sunshine & Regenstreif LLP
Attn: Julia W. Brand, Esq.
1100 Glendon Avenue, 14th Floor
Los Angeles, California 90024
Tel No: (310) 500-3500
Fax No: (310) 500-3501
Headquartered in South Gate, California, Big A Drug Stores Inc. --
http://www.bigadrug.com/-- operates a chain of 21 retail drug
stores, located throughout California. The company's stores offer
full service pharmacies and over-the-counter drugs, cigarettes,
optical products, liquor, general merchandise, groceries, beer and
wine, and beverages. The company filed for Chapter 11 protection
on Nov. 19, 2007 (Bankr. C.D. Calif. Case No. 07-20699). Steven
R. Fox, Esq., of Encino, California, is the Debtor's proposed lead
counsel. As of Nov. 18, 2007, the Debtor listed total assets of
$18,788,648 and total debts of $54,424,646.
BIG A: U.S. Trustee Elects 2 Additional Members to Creditors Panel
------------------------------------------------------------------
Peter C. Anderson, the United States Trustee for Region 16, has
appointed two more creditors to serve on the Official Committee of
Unsecured Creditors in Big A Drug Stores Inc. and its debtor-
affiliates' bankruptcy cases.
The newly appointed Committee members are:
1. Focal Point Partners LLC
Attn: James A. Skelton
Managing Director
11766 Wilshire Blvd., Suite 1270
Los Angeles, CA 90025
2. Coca-Cola Enterprises Bottling Companies
c/o William Kaye
Senior Bankruptcy Advisor
31 Rose Lane
East Rockaway, NY 11578
The existing membership of the Creditors Committee is composed of:
AmerisourceBergen Drug Corp., American Greetings Corp., Core-Mark
International Inc., L&R Distributors Inc. and Forrester and Vos
Co.
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense. They may investigate the Debtors' business
and financial affairs. Importantly, official committees serve
as fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject
to the terms of strict confidentiality agreements with the
Debtors and other core parties-in-interest. If negotiations
break down, the Committee may ask the Bankruptcy Court to
replace management with an independent trustee. If the
Committee concludes reorganization of the Debtor is impossible,
the Committee will urge the Bankruptcy Court to convert the
Chapter 11 cases to a liquidation proceeding.
Headquartered in South Gate, California, Big A Drug Stores Inc. --
http://www.bigadrug.com/-- operates a chain of 21 retail drug
stores, located throughout California. The company's stores offer
full service pharmacies and over-the-counter drugs, cigarettes,
optical products, liquor, general merchandise, groceries, beer and
wine, and beverages. The company filed for Chapter 11 protection
on Nov. 19, 2007 (Bankr. C.D. Calif. Case No. 07-20699). Steven
R. Fox, Esq., of Encino, California, is the Debtor's proposed lead
counsel. As of Nov. 18, 2007, the Debtor listed total assets of
$18,788,648 and total debts of $54,424,646.
BOSQUE POWER: Moody's Assigns (P)B1 Rating on $412.5MM Facility
---------------------------------------------------------------
Moody's Investors Service has assigned a provisional rating of
(P)B1 with a stable outlook to Bosque Power Company LLC's
$412.5 million first lien senior secured credit facility. The
credit facility will consist of a $25 million 5-year revolving
credit facility and a $387.5 million 7-year term facility, which
will include a $203 million construction sub-amount and a
$95 million deposit letter of credit sub-amount used to cash
collateralize letters of credit. The debt will be secured by a
first lien interest in all the assets and equity of the borrower.
Proceeds of the term loan will be used together with a
$348.3 million equity contribution to acquire the Bosque gas-fired
electric generating facility from Broadway Gen. The construction
sub-amount will be used to finance the conversion of the
facility's two simple-cycle combustion turbines into a
significantly more efficient 558 MW 2x1 combined cycle unit. The
conversion is expected to be complete by March 2009. The facility
is located about 85 miles from Dallas in Laguna Park, TX, and
dispatches into the ERCOT North region. It currently consists of
a 245MW 1x1 combined cycle gas turbine constructed in 2001 and two
simple cycle combustion turbines with a combined capacity of 325
MW operational since 2000.
According to Moody's analyst Aaron Freedman, "the B1 rating
reflects the plant's significant merchant exposure, with just 30%
of the facility's post-conversion capacity hedged for three
years." In addition, the rating considers construction and
operating risks associated with the facility's conversion process,
which is being undertaken by an unrated albeit experienced
contractor and relies on the use of unused grey market equipment
with no performance guarantees. These considerations are somewhat
offset by the project's significant equity contribution, which
results in low leverage and strong projected financial metrics.
The merchant exposure is further mitigated by the plant's
efficient operating profile, which should help ensure that it
dispatches a high percentage of the time in the tightening ERCOT
North market, where gas is on the margin 70%-90% of the time; the
facility's strong management team, which has significant industry
experience and familiarity with the ERCOT market; and standard
project finance structural protections.
This provisional rating is based upon Moody's current
understanding of the proposed terms and conditions of the
transaction and is subject to Moody's receipt and review of final
documentation. The rating considers a potential change to the
proposed capital structure entailing a $30 million decrease in the
deposit letter of credit sub-amount while keeping the size of the
term facility constant, which would effectively result in a
corresponding increase in funded debt.
Bosque Power will be a special purpose entity whose sole asset
will be the Bosque generating facility. It will be 97% owned by
Arcapita, a private equity firm, and 3% by Fulcrum, an energy
services and investment company founded in 2003 by three former
Dynegy employees that will also serve as asset and energy manager
for the project.
BROADCAST INT'L: Sept. 30 Balance Sheet Upside-Down by $3,685,278
-----------------------------------------------------------------
Broadcast International Inc.'s consolidated balance sheet at
Sept. 30, 2007, showed $5,190,744 in total assets and $8,876,022
in total liabilities, resulting in a $3,685,278 total
stockholders' deficit.
At Sept. 30, 2007, the company's consolidated balance sheet showed
strained liquidity with $3,105,916 in total current assets
available to pay $6,827,621 in total current liabilities.
Broadcast International Inc. reported a net loss of $6,981,166 on
net sales of $834,320 for the third quarter ended Sept. 30, 2007,
compared with a net loss of $2,116,838 on net sales of $3,914,108
in the same period last year.
The increase in the net loss is primarily due to an an increase
in derivative valuation loss of $4,401,700, a decrease in gross
margin due to lower revenues, increased operating expenses, and
increased interest expense.
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?2648
Going Concern Doubt
HJ & Associates LLC, in Salt Lake City, expressed substantial
doubt about Broadcast International Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the years ended June 30, 2007. The
auditing firm pointed to the company's operating losses and lack
of working capital.
About Broadcast International
Headquartered in Salt Lake City, Broadcast International Inc.
(OTC: BCST) -- http://www.brin.com/-- provides video-powered
business solutions, including IP and digital satellite, Internet
streaming, and other types of wired/wireless network distribution.
CAPITAL AUTOMOTIVE: S&P Affirms 'BB+' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit and senior secured ratings on Capital Automotive LLC and
Capital Automotive L.P. Additionally, S&P affirmed the recovery
rating of '3' on CARS' $2.1 billion secured credit facility. The
outlook remains stable.
"The ratings on CARS reflect a highly leveraged capital structure,
weak debt coverage measures, and a concentrated tenant base," said
credit analyst George Skoufis. "These weaknesses are mitigated by
the good stability of its portfolio of auto dealership properties
located in growth markets." Mr. Skoufis added that the ratings
are also supported by the continuity of management and strategy
following the company's acquisition by Flag Fund V LLC, a limited
liability company advised by DRA Advisors LLC.
Despite weak coverage measures, cash flow has been fairly stable
and is supported by solid rent coverage, long-term leases, and
good quality properties that are geographically diversified in
growth markets across the U.S. However, S&P would lower the
ratings if already low debt coverage measures become stressed, or
if the company's distributions exceed cash flow (debt financed).
Conversely, positive ratings momentum is unlikely in the near
term, as debt protection measures are not yet poised for any
meaningful improvement.
CARBIZ INC: Begins Operations in Sioux City & Council Bluffs Area
-----------------------------------------------------------------
CarBiz Inc. has received a dealer license for the state of Iowa.
CarBiz has begun full operations at two Iowa locations in Sioux
City and Council Bluffs.
CarBiz has expanded its Buy Here - Pay Here business in the US
after an acquisition last month. The deal included 26 dealerships
in seven Midwestern states including Illinois, Indiana, Nebraska,
Iowa, Kentucky, Oklahoma and Ohio. The two remaining states to
receive a dealer license are Oklahoma and Nebraska.
Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB:
CBZFF.OB)-- http://www.carbiz.com/-- owns and operates the chain
of "buy-here pay-here" dealerships through its CarBiz Auto Credit
division. The company is also a provider of software, training
and consulting solutions to the United States automotive industry.
CarBiz's suite of business solutions includes dealer software
products focused on the "buy-here pay-here," sub-prime finance and
automotive accounting markets. Capitalizing on expertise
developed over 10 years of providing software and consulting
services to "buy-here pay-here" businesses across the United
States, CarBiz entered the market in 2004 with a location in
Palmetto, Florida. CarBiz has added two more credit centers since
- in Tampa and St. Petersburg - and recently acquired a regional
chain in the Midwest, bringing the total number of dealerships to
26 in eight states.
Going Concern Doubt
Christopher, Smith, Leonard, Bristow & Stanell P.A., in Sarasota,
Florida, expressed substantial doubt about Carbiz Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements as of the years ended Jan. 31,
2007, and 2006. The auditing firm pointed to the company's
recurring losses from operations and net capital deficiency.
At July 31, 2007, the company's balance sheet showed total assets
of $1.8 million and total liabilities of $8.2 million, resulting
to a total shareholders' deficit of $6.4 million.
CARLOS CARABALLO-ORTIZ: Case Summary & 21 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Carlos Ruben Caraballo-Ortiz
Iris Nancy Rivera-Ramos
P.O. Box 7999 P.M.B. 187
Mayaguez, PR 00681
Tel: (787) 826-6645
Bankruptcy Case No.: 07-07254
Chapter 11 Petition Date: December 10, 2007
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: Winston Vidal-Gambaro, Esq.
P.O. Box 193673
San Juan, PR 00919-3673
Tel: (787) 751-2864
Fax: (787) 763-611
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Westerbank trade debt $1,185,000
P.O. Box 490
Mayaguez, PR 00680
Internal Revenue Services taxes $215,850
Mercantil Plaza Building
R-2 Avenue Ponce de Leon
San Juan, PR 00918-1693
C.F.S.E. taxes $121,206
Ofic Regional de Mayaguez
P.O. Box 1570
Mayaguez, PR 00681-1570
Departamento del Trabajo y taxes $110,577
Recursos Hum
Departamento de Hacienda de taxes $91,582
Puerto Rico
Banco Popular de Puerto Rico bank loan $49,000
Banco Santander de Puerto Rico bank loan $35,000
Wellsfargo bank loan $31,087
Melissa Sales Corp. trade debt $28,583
B.B.V.A. trade debt $24,300
Bank of America trade debt $8,202
Citifinancial trade debt $6,580
M.A.P.F.R.E. trade debt $6,000
E.D. Distributors, Inc. trade debt $5,000
Municipio de Anasco taxes $4,794
Gordon's trade debt $2,131
Radio Shack trade debt $1,946
C.R.I.M. trade debt $1
Dennis Berrios Martinez trade debt $1
Carlos J. Montijo trade debt $1
Anamir Jimenez Irizarry trade debt $1
CETUS ABS: S&P Places Ratings Under Negative CreditWatch
--------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-1B, S, A-2, B, C-1, C-2, D-1, D-2, E, and X notes issued by
Cetus ABS CDO 2006-3 Ltd. on CreditWatch with negative
implications.
Standard & Poor's noted that Cetus ABS CDO 2006-3 Ltd. triggered
an event of default on Dec. 7, 2007, under section 5.1(h) of the
indenture dated Nov. 28, 2006, when the net outstanding portfolio
collateral balance plus the market value swap account excess was
less than the sum of the commitment amount plus the aggregate
outstanding amount of the class A-1A, A-1B, and A-2 notes.
When Standard & Poor's receives EOD notices, S&P place all of the
affected note ratings on CreditWatch with negative implications.
Ratings Placed on Creditwatch Negative
Cetus ABS CDO 2006-3 Ltd.
Rating
------
Class To From
----- -- ----
A-1B AA+/Watch Neg AA+
S AAA/Watch Neg AAA
A-2 A+/Watch Neg A+
B A-/Watch Neg A-
C-1 BB+/Watch Neg BB+
C-2 BB-/Watch Neg BB-
D-1 CCC+/Watch Neg CCC+
D-2 CCC/Watch Neg CCC
E CCC-/ Watch Neg CCC-
X BB-/Watch Neg BB-
Other Outstanding Rating
Cetus ABS CDO 2006-3 Ltd.
Class Rating
----- ------
A-1A AAA
CHAMPION ENTERPRISES: S&P Lifts Rating on Sr. Notes to B+ from B
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Champion
Enterprises Inc.'s senior notes due 2009 and on Champion Home
Builders Co.'s senior secured credit facility to 'B+' from 'B'.
At the same time, S&P upgraded the recovery ratings on the senior
notes and the credit facility to '3' from '5'. Concurrently, S&P
affirmed the 'B+' corporate credit ratings. The outlook for both
entities is stable.
"The raised issue ratings reflect improved recovery expectations
following the close of an unsecured convertible note offering and
the subsequent substantial repayment of senior secured debt," said
Standard & Poor's credit analyst James Fielding. "The corporate
credit ratings continue to acknowledge extremely challenging
market conditions in the company's core manufactured housing and
domestic modular construction segments." Mr. Fielding
acknowledged, however, that Champion's manufacturing platform now
appears to be appropriately scaled for current housing conditions,
and that the company has sufficient liquidity to fund fixed
obligations and pursue modestly sized acquisitions in the modular
housing and commercial construction segments.
The stable outlook acknowledges Champion's improved profitability
and good liquidity position. Standard & Poor's would revise its
outlook to positive, or potentially raise the ratings, if
profitability continues to strengthen as a consequence of improved
housing fundamentals and prudent external growth. Conversely,
deterioration in credit measures, either because of worsening
domestic housing conditions or leveraged acquisitions, would
adversely affect the outlook and/or rating.
CITIMORTGAGE ALTERNATIVE: Fitch Cuts Ratings on Two Classes to B
----------------------------------------------------------------
Fitch Ratings has taken rating actions on these CitiMortgage
Alternative Loan Trust mortgage pass-through certificates:
Series 2006-A5
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 downgraded to 'A-' from 'A';
-- Class B3 downgraded to 'BB+' from 'BBB'.
-- Class B4 downgraded to 'B' from 'BB';
-- Class B5 downgraded to 'CCC/DR2' from 'B'.
Series 2006-A7
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 downgraded to 'A-' from 'A';
-- Class B3 downgraded to 'BB+' from 'BBB'.
-- Class B4 downgraded to 'B' from 'BB';
-- Class B5 downgraded to 'CCC/DR2' from 'B'.
The affirmations, affecting approximately $1.02 billion of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss. The downgrades, affecting
approximately $26.2 million of the outstanding certificates, are
taken as a result of a deteriorating relationship between credit
enhancement and expected loss.
Classes B-2 through B-5 of the above transactions were downgraded
because of current trends in the relationship between serious
delinquency and credit enhancement. The 90+ DQ of series 2006-A5
is 1.76% of the current collateral balance, while the current CE
for the B-5 bond is 0.35%. The 90+ DQ of series 2006 A7 is 1.61%,
while the current CE for the B-5 bond is 0.34%.
The collateral of the above transactions consists of 10- to 30-
year, fixed rate mortgages extended to Alt-A borrowers, secured by
first-liens on one- to four- family residential properties. The
loans are serviced by CitiMortgage (rated 'RPS1' by Fitch).
CLAYMONT STEEL: $565MM Evraz Deal Cues Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed Claymont Steel Inc.'s ratings
under review for possible upgrade following the announcement that
Evraz Group S.A. (Evraz, Ba2 corporate family rating), through its
wholly owned subsidiary Titan Acquisition Sub, Inc., has entered
into a definitive agreement under which Evraz will acquire
Claymont Steel for $23.50 per share, for an aggregate purchase
price of approximately $565 million, including debt. The board of
directors of Claymont has unanimously recommended that the
shareholders accept the offer. H.I.G. Capital LLC, which owns
approximately 42.6% of Claymont's common stock, has committed to
tender its shares in the offer. The offer is subject to customary
conditions, including antitrust and shareholder approvals.
Moody's review will focus on the legal structure and financing
arrangements for the acquisition and the strategic fit of the two
companies. If Claymont's debt is retired as a result of the
transaction, its ratings will be withdrawn.
These ratings were placed under review for possible upgrade:
* B2 -- corporate family rating
* B2 -- probability of default rating
* B3 -- $105 million of 8.875% senior unsecured notes due
2015
The company's SGL-1 speculative grade rating was affirmed.
Claymont Steel, Inc. is a small discrete plate producer located in
Claymont, Delaware. The company sells primarily to end-users in
the bridge making, ship building, heavy equipment, railcar, and
tool and die industries.
Evraz Group is one of Russia's largest vertically-integrated steel
companies. In 2006, Evraz produced 16.1 million tones of crude
steel and had sales of $8.3 billion. Evraz's principal assets
include three steel plants in Russia, one in Italy, one in the
Czech Republic, and two in the US (Oregon Steel Mills), as well as
three iron ore mining and processing facilities.
CLAYMONT STEEL: S&P Places All Ratings Under Positive Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed all of its ratings,
including its 'B' corporate credit rating, on Claymont Steel Inc.
on CreditWatch with positive implications.
"The positive implications indicate the potential for an upward
rating action, based on Claymont's definitive agreement to be
acquired by Evraz Group S.A. (BB-/Positive/--)," said Standard &
Poor's credit analyst Sherwin Brandford.
Upon the close of the proposed transaction, Claymont Steel Inc.,
based in Claymont, Delaware, will be a wholly owned subsidiary of
Evraz Group, based in Russia, which will continue to be a publicly
traded entity.
The aggregate purchase price is approximately $564.8 million,
including debt and net of cash. The acquisition, which remains
subject to customary conditions, will expand Evraz Group's North
American operations and complement the company's previous
acquisition of unrated Oregon Steel Mills Inc. Claymont will now
be a part a much larger commodity producer with a significant
international presence.
"We expect to resolve the CreditWatch when more details are
available and we are able to determine the impact of the
transaction on all of Claymont's debt holders," Mr. Brandford
said. "If all of the debt is refinanced as part of the
acquisition, we will withdraw our ratings on Claymont when the
transaction closes."
COGNIGEN NETWORKS: Completes Acquisition of Commission River
------------------------------------------------------------
Cognigen Networks Inc. has completed an asset purchase agreement
to acquire substantially all of the assets of Commission River
Inc.
As reported in the Troubled Company Reporter on Nov. 7, 2007,
Cognigen signed a Letter of Intent to acquire Commission River.
Cognigen acquired the Commission River assets in exchange for
16,000,000 shares of Cognigen's common stock. Commission River's
current managers, Adam Edwards and Patrick Oborn, have joined
Cognigen's executive team and will direct affiliate marketing-
related activities for Cognigen and Commission River.
Cognigen's CEO, Bob Bench, stated, "We believe this is a great
event for Cognigen's agent network, shareholders, and product
vendors. The combination of Cognigen's affiliate marketing agent
base with Commission River's affiliate marketing technology and
programs will arm our agents with the tools, training, and support
they need to grow their businesses. We believe the thousands of
agents who have signed up for our affiliate marketing program will
now receive immediate attention and support from a team of
experienced, professional Internet marketers. This also gives us
a platform on which to add new products and deliver a stream of
marketing tools."
"This is an exciting time for Commission River and Cognigen," said
Adam Edwards, Commission River President, "and for both affiliate
programs. I believe the combined company has the experience and
capability to accelerate the growth initiatives we have planned
for the upcoming year. Commission River brings an in-depth
understanding of managing affiliate programs and how to market
products through the Internet to small businesses and local
community markets. Adding this capability to Cognigen's existing
agent base creates a tremendous opportunity for all involved."
Cognigen intends to continue offering its affiliate program and
activities under the direction of the Commission River team.
Cognigen anticipates that Commission River's program will be added
to Cognigen's current service offerings.
About Commission River
Headquartered in Draper, Utah, Commission River Inc. --
http://www.commissionriver.com/-- is an online pay-per-action
marketing network that gathers customers for select vendors.
Commission River provides marketing tools, training, and tracking
that enables online affiliates the ability to drive leads using
blogs, paid search, and organic search engine optimization
techniques. Commission River likewise creates software that
enables affiliates the ability to coordinate, cross-link, and
share ideas with each other in a close-knit community whose
emphasis is on mutual success. The company was founded in 2005.
About Cognigen Networks
Based in Mountlake Terrace, Washington, Cognigen Networks Inc.
(OTC BB:CGNW.OB) -- http://www.cognigen.net/-- operates as an
Internet and relationship enabled marketer. It offers a range of
telecommunication services and related technology products. The
company offers domestic and international long distance telephone
and personal communication services. The company also sells
prepaid calling cards/pins, and paging, wireless communications,
and computers and Internet-based telecommunications products.
In addition, the company, through its wholly owned subsidiary,
Cognigen Business Systems Inc., provides integrated broadband
voice, data, video, and management communication and control
support services to the quick service retail industry through an
integrated suite of services, known as Retail Technologies CO-Op.
* * *
As reported in the Troubled Company Reporter on Oct. 22, 2007,
Ehrhardt Keefe Steiner & Hottman PC raised substantial doubt
about Cognigen Networks Inc.'s ability to continue as a going
concern after it audited the company's financial statements for
the year ended June 30, 2007.
At June 30, 2007, the company's balance sheet showed $1,015,490 in
total assets, $2,316,869 in total liabilities, resulting in
$1,301,379 stockholders' deficit.
The company posted a net loss of $680,228 on $5,619,892 of revenue
for the year ended June 30, 2007, as compared with a net loss of
$1,308,483 on $6,245,275 of revenue in the prior year.
COMPASS DIVERSIFIED: Amends Credit Pact; Gets New $150MM Term Loan
------------------------------------------------------------------
Compass Diversified Holdings and Compass Group Diversified
Holdings LLC has expanded its outstanding credit facility, by
amending its existing Credit Agreement, originally dated
Nov. 21, 2006, among a group of lenders led by Madison Capital
Funding LLC as agent for all of the Lenders.
The amended Credit Agreement provides for a $325 million
revolving line of credit, subject to borrowing base restrictions,
as well as a new $150 million term loan. The amended Credit
Agreement includes a provision that allows the company to increase
the revolving credit commitment by up to $25 million and the term
loan by up to $150 million, subject to certain restrictions, over
the next two years.
The revolving line of credit matures on Dec. 7, 2012. The term
loan requires quarterly repayments of $500,000 commencing on
March 31, 2008, with a final payment of all remaining principal
and interest due on the maturity date of Dec. 7, 2013.
The revolving line of credit under the original Credit Agreement
was $300 million. The company used the funds from its new term
loan to repay $44 million of the previously outstanding revolving
line of credit borrowings and to pay approximately $5 million of
related transaction fees and expenses.
As a result of the refinancing and increase of the amount
available under the Credit Agreement, the company increased its
cash balance by approximately $101 million. The company intends
to use this cash, as well as the availability under the revolving
line of credit to pursue acquisitions of additional businesses,
including add-on acquisitions for existing subsidiaries, provide
for future working capital requirements of the Company's
subsidiaries and for other general corporate purposes.
"We are pleased to have expanded our credit facility at a time
when we anticipate significant opportunities to acquire attractive
businesses on favorable terms and at valuations that are accretive
to our cash flow," Jim Bottiglieri, the company's chief financial
officer, said.
About Compass Diversified Holdings
Headquartered in Westport, Connecticut, Compass Diversified
Holdings - http://www.compassdiversifiedholdings.com/-- (Nasdaq
GS: CODI) is a Delaware statutory trust that was formed on
Nov. 18, 2005, to acquire and manage a group of middle market
businesses that are headquartered in North America. CODI provides
public investors with an opportunity to participate in the
ownership and growth of companies which have historically been
owned by private equity firms, wealthy individuals or families.
Compass Group Diversified Holdings LLC, a Delaware limited
liability company, was also formed on Nov. 18, 2005. In
accordance with the Trust Agreement, Compass Diversified Holdings
is the sole owner of 100% of the trust's Interests of Compass
Group Diversified Holdings LLC. Compass Group Diversified
Holdings LLC is the operating entity with a board of directors and
other corporate governance responsibilities, similar to that of a
Delaware corporation.
Compass Diversified Holdings is managed by Compass Group
Management LLC, which was established in 1998 as a private equity
manager for an offshore philanthropic foundation established by J.
Torben Karlshoej, the late founder of Teekay Shipping Corporation.
* * *
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Compass Group Diversified Holdings LLC. The
outlook is stable. At the same time, S&P assigned bank loan and
recovery ratings to Compass's $200 million first-lien term loan
due 2013. The loan is rated 'BB-' with a recovery rating of '4',
indicating S&P's expectation of average (30%-50%) recovery in the
event of a payment default.
CONSOLIDATED COMMS: Cash/Stock Election Deadline is December 27
---------------------------------------------------------------
Consolidated Communications Holdings Inc. and North Pittsburgh
Systems Inc. disclosed that the deadline for North Pittsburgh
shareholders to elect the form of merger consideration they wish
to receive in connection with the pending merger between North
Pittsburgh and a subsidiary of Consolidated will be 5:00 p.m. New
York City time on Thursday, Dec. 27, 2007. The companies have
scheduled Monday, Dec. 31, 2007 as the closing date for the
merger.
The companies also disclosed that on Dec. 5, 2007, the
Pennsylvania Public Utility Commission approved the transfer of
control to Consolidated of North Pittsburgh's subsidiaries that
are regulated by the Pennsylvania PUC, North Pittsburgh Telephone
Company and Penn Telecom, Inc. This approval satisfied a
condition to the completion of the merger.
Pursuant to the merger agreement between North Pittsburgh and
Consolidated, each record holder of North Pittsburgh common stock
may submit an election, at or prior to the Election Deadline, to
have the holder's North Pittsburgh shares converted at the
effective time of the merger into the right to receive either:
-- $25.00 in cash, without interest, per North Pittsburgh
share, or
-- 1.1061947 shares of Consolidated common stock (including
cash in lieu of any fractional Consolidated share), per
North Pittsburgh share, or
-- cash consideration with respect to a portion of the
shareholder's North Pittsburgh shares and stock
consideration with respect to the balance of the
shareholder's North Pittsburgh shares,
in each case subject to proration so that 80% of the North
Pittsburgh shares outstanding immediately prior to the effective
time of the merger are converted into the right to receive cash
consideration and 20% of the North Pittsburgh shares outstanding
immediately prior to the effective time of the merger are
converted into the right to receive stock consideration.
In order to make an election, the properly completed and signed
Form of Election and Letter of Transmittal must be received by the
Exchange Agent for the merger, Computershare Trust Company N.A.,
at or prior to the Election Deadline in accordance with the
instructions accompanying the Form of Election and Letter of
Transmittal. The Form of Election and Letter of Transmittal must
be accompanied either by certificate(s) representing all the
shares of North Pittsburgh common stock covered by the Form of
Election and Letter of Transmittal or by a properly completed and
signed notice of guaranteed delivery, as described in such
instructions.
If a record holder of North Pittsburgh common stock submits a Form
of Election and Letter of Transmittal at or prior to the Election
Deadline that is accompanied by a notice of guaranteed delivery,
the Exchange Agent will consider such Form of Election and Letter
of Transmittal to be effective only if the certificate(s)
representing the North Pittsburgh shares for which such election
was made are received by the Exchange Agent by 5:00 p.m. New York
City time on Wednesday, Jan. 2, 2008 (or if confirmation of a
book-entry transfer of such shares into the Exchange Agent's
account is received by such date and time).
If a North Pittsburgh shareholder does not submit a properly
completed and signed Form of Election and Letter of Transmittal
(together with any stock certificates representing the shares of
North Pittsburgh common stock covered by the election, or a
properly completed and signed notice of guaranteed delivery), the
shareholder will have no control over the type of merger
consideration received. North Pittsburgh shareholders who fail to
make an election are likely to receive the form of consideration
having the lower value.
Any North Pittsburgh shareholder who holds North Pittsburgh shares
in "street name" through a bank, broker or other nominee should
follow the instructions given by such bank, broker or other
nominee for making an election with respect to those shares.
Any North Pittsburgh shareholder of record who has properly made
an election may change the election by submitting a revised and
later-dated Form of Election and Letter of Transmittal, properly
completed and signed, that is received by the Exchange Agent at or
prior to the Election Deadline. Any North Pittsburgh shareholder
of record who has properly made an election may revoke the
election by written notice that is received by the Exchange Agent
at or prior to the Election Deadline. North Pittsburgh
shareholders who hold their shares in "street name" should contact
their broker for instructions regarding changes or revocations of
their existing elections.
Record holders of North Pittsburgh common stock may obtain
additional copies of the Form of Election and Letter of
Transmittal prior to the Election Deadline by calling MacKenzie
Partners, Inc., collect at (212) 929-5500 or toll-free at (800)
322-2885.
North Pittsburgh shareholders are encouraged to obtain current
market quotations for Consolidated common stock before deciding
what elections to make.
About Consolidated Communications
Based in Mattoon, Illinois, Consolidated Communications Holdings,
Inc. (Nasdaq: CNSL) -- http://www.consolidated.com/-- is a rural
local exchange company providing voice, data and video services to
residential and business customers in Illinois and Texas. Each of
the operating companies has been operating in their local markets
for over 100 years. With approximately 241,000 local access lines
and over 43,000 digital subscriber lines, the Company offers a
wide range of telecommunications services, including local and
long distance service, custom calling features, private line
services, dial-up and high-speed Internet access, digital TV,
carrier access services, and directory publishing. Consolidated
Communications is the 17th largest local telephone company in the
United States.
* * *
As reported in the Troubled Company Reporter on Oct. 19, 2007,
Moody's Investors Service affirmed the B1 corporate family rating
for Consolidated Communications Holdings Inc. and assigned a B1
rating to the proposed $950 million senior secured credit
facilities at the company's direct subsidiaries, Consolidated
Communications Acquisition Texas Inc., Consolidated Communications
Inc., and Fort Pitt Acquisition Sub Inc.
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Consolidated Communications Holdings Inc. and the
'BB' rating on the company's existing bank loan. These ratings
were removed from CreditWatch, where they had been placed with
negative implications on July 3, 2007, following the proposed
acquisition of incumbent telephone company North Pittsburgh
Systems Inc. The outlook is negative.
S&P also assigned a 'BB-' rating and '3' recovery rating to
$950 million of secured bank loans to be issued by Consolidated
Communications Inc., Consolidated Communications Acquisition Texas
Inc., and Fort Pitt Acquisition Sub Inc. These are intermediate
holding companies for Consolidated Communications Holdings, a
rural local exchange carrier. Proceeds of the new facilities will
be used to fund the acquisition of North Pittsburgh and refinance
existing bank debt. Upon completion of this transaction, the 'BB'
rating of the existing bank loan will be withdrawn.
Meanwhile, the 'B' rating on the outstanding $130 million of 9.75%
unsecured notes at Consolidated remains on CreditWatch, but the
implications have been revised to positive from negative.
CONSTRUCTION RESOURCES: Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Construction Resources Link, Inc.
16915 West Highway 335
Abbeville, LA 70510
Tel: (337) 643-7690
Bankruptcy Case No.: 07-51458
Type of Business: The Debtor fabricates structural metal for ships
welding and brazing and soldering services.
www.constructionresourceslink.net.
Chapter 11 Petition Date: December 8, 2007
Court: Western District of Louisiana (Lafayette/Opelousas)
Debtor's Counsel: D. Patrick Keating, Esq.
POB 61550
Lafayette, LA 70596
Tel: (337) 984-8020
Fax: (337) 984-7011
Total Assets: $3,221,710
Total Debts: $2,532,375
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Tulsa Gamma Ray $276,000
1127 South Lewis Avenue
Tulsa, OK 74104
Eagle Marine Brokers $270,000
P.O. Box 100
Amelia, LA 70340
Internal Revenue Service 3Q and 4Q 2007 $212,000
1555 Poydras Street 941 taxes
Suite 220
Stop 31
New Orleans, LA 70130
Blue Fin Services $175,000
Babin Marine $144,500
Gulf South Oilfield Rentals $130,250
Whitco Supply $124,000
Process Piping Industries $47,500
T.P. Thompson $37,000
Applied Industrial $28,000
Accurate NDE & Inspectors $27,500
Southern Steel Supply $26,600
Hertz Equipment Rental $26,000
NI Welding Supply $25,700
Coastal Logistics $19,300
TNT $19,250
Furmantie America $18,400
Airgas $18,500
Gator Equipment Rentals $17,500
Malone Industrial Machine $16,720
CSFB HOME: Moody's Lowers Ratings on 19 Tranches
------------------------------------------------
Moody's Investors Service has downgraded the ratings of 19
tranches and placed on review for possible downgrade the ratings
of 3 tranches issued by CSFB Home Equity Asset 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 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: CSFB Home Equity Asset Trust 2007-1
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa1, previously A1,
-- Cl. M-5, Downgraded to Ba1, previously A2,
-- Cl. M-6, Downgraded to B1, previously A3,
-- Cl. M-7, Downgraded to B3 on review for possible further
downgrade, previously Baa1,
-- Cl. M-8, Downgraded to Ca, previously Baa2,
-- Cl. B-1, Downgraded to C, previously Baa3,
-- Cl. B-2, Downgraded to C, previously Ba1,
-- Cl. B-3, Downgraded to C, previously Ba2.
Issuer: CSFB Home Equity Asset Trust 2007-2
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Ba1, previously A3,
-- Cl. M-7, Downgraded to B2, previously Baa1,
-- Cl. M-8, Downgraded to Caa2, previously Baa2,
-- Cl. M-9, Downgraded to Ca, previously Baa3.
Issuer: CSFB Home Equity Asset Trust 2007-3
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa3, previously A3,
-- Cl. M-7, Downgraded to Ba3, previously Baa1,
-- Cl. M-8, Downgraded to B2, previously Baa2,
-- Cl. M-9, Downgraded to Caa3, previously Baa3.
CWABS: Moody's Lowers Ratings on 70 Tranches
--------------------------------------------
Moody's Investors Service has downgraded the ratings of 70
tranches and placed on review for possible downgrade the ratings
of 21 tranches from 12 deals issued by CWABS Asset-Backed
Certificates Trust in 2007. Additionally, 6 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: CWABS Asset-Backed Certificates Trust 2007-1
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A3, previously A1,
-- Cl. M-5, Downgraded to Baa3, previously A2,
-- Cl. M-6, Downgraded to Ba3, previously A3,
-- Cl. M-7, Downgraded to B3 on review for possible further
downgrade, previously Baa1,
-- Cl. M-8, Downgraded to Caa1, previously Baa2,
-- Cl. M-9, Downgraded to Ca, previously Baa3,
-- Cl. B, Downgraded to C, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-2
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa1, previously A1,
-- Cl. M-5, Downgraded to Ba1, previously A2,
-- Cl. M-6, Downgraded to Ba3, previously A3,
-- Cl. M-7, Downgraded to B3, previously Baa1,
-- Cl. M-8, Downgraded to Caa3, previously Baa2,
-- Cl. M-9, Downgraded to C, previously Baa3,
-- Cl. B, Downgraded to C, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-3
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa2, previously A1,
-- Cl. M-5, Downgraded to Ba2, previously A2,
-- Cl. M-6, Downgraded to B2, previously A3,
-- Cl. M-7, Downgraded to Caa1, previously Baa1,
-- Cl. M-8, Downgraded to C, previously Baa2.
Issuer: CWABS Asset-Backed Certificates Trust 2007-5
-- Cl. M-3 Currently Aa2 on review for possible downgrade,
-- Cl. M-4 Currently Aa3 on review for possible downgrade,
-- Cl. M-5, Downgraded to A3, previously A1,
-- Cl. M-6, Downgraded to Baa3, previously A2,
-- Cl. M-7, Downgraded to Ba3, previously A3,
-- Cl. M-8, Downgraded to B3 on review for possible further
downgrade, previously Baa1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-6
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa3, previously A1,
-- Cl. M-5, Downgraded to Ba2, previously A2,
-- Cl. M-6, Downgraded to B2, previously A3,
-- Cl. M-7, Downgraded to Caa2, previously Baa1,
-- Cl. M-8, Downgraded to C, previously Baa2.
Issuer: CWABS Asset-Backed Certificates Trust 2007-7
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Baa3, previously A3,
-- Cl. M-7, Downgraded to Ba2, previously Baa1,
-- Cl. M-8, Downgraded to B1, previously Baa2,
-- Cl. M-9, Downgraded to B3 on review for possible further
downgrade, previously Baa3.
Issuer: CWABS Asset-Backed Certificates Trust 2007-8
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa1, previously A3,
-- Cl. M-7, Downgraded to Baa3, previously Baa1,
-- Cl. M-8, Downgraded to Ba2, previously Baa2,
-- Cl. M-9, Downgraded to B1, previously Baa3,
-- Cl. BV, Downgraded to B3 on review for possible further
downgrade, previously Ba1,
-- Cl. BF, Downgraded to B3 on review for possible further
downgrade, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-9
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa2, previously A3,
-- Cl. M-7, Downgraded to Ba1, previously Baa1,
-- Cl. M-8, Downgraded to Ba2, previously Baa2,
-- Cl. M-9, Downgraded to B2, previously Baa3,
-- Cl. B, Downgraded to B3 on review for possible further
downgrade, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-11
-- Cl. M-9, Downgraded to Ba1, previously Baa2,
-- Cl. B, Downgraded to Ba3, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-BC1
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa1, previously A1,
-- Cl. M-5, Downgraded to Ba2, previously A2,
-- Cl. M-6, Downgraded to B2, previously A3,
-- Cl. M-7, Downgraded to Caa3, previously Baa1,
-- Cl. M-8, Downgraded to C, previously Baa2,
-- Cl. M-9, Downgraded to C, previously Baa3,
-- Cl. B, Downgraded to C, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-BC2
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Ba1, previously A3,
-- Cl. M-7, Downgraded to B1, previously Baa1,
-- Cl. M-8, Downgraded to B3, previously Baa1,
-- Cl. M-9, Downgraded to Ca, previously Baa2,
-- Cl. B, Downgraded to C, previously Ba1.
Issuer: CWABS Asset-Backed Certificates Trust 2007-BC3
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa3, previously A3,
-- Cl. M-7, Downgraded to Ba2, previously Baa1,
-- Cl. M-8, Downgraded to B2, previously Baa2,
-- Cl. M-9, Downgraded to Caa2, previously Baa3,
-- Cl. B, Downgraded to C, previously Ba1.
DANA VILLAS ASSOCIATES: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Dana Villas Associates, L.L.C.
P.O. Box 2849
Mission Viejo, CA 92690
Bankruptcy Case No.: 07-14228
Chapter 11 Petition Date: December 11, 2007
Court: Central District Of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Richard J. Reynolds, Esq.
Turner, Reynolds, Greco & O'Hara
16845 Laguna Canyon Road, Suite 250
Irvine, CA 92618
Tel: (949) 474-6900
Fax: (949) 474-6907
Total Assets: $40,850,000
Total Debts: $27,500,000
The Debtor does not have any creditors who are not insiders.
DEL FRISCO'S: S-1/A Filing Cues S&P to Put Ratings Under Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B' corporate credit rating, on the Wichita, Kansas-based Del
Frisco's Restaurant Group LLC (formerly LSF5 Wagon Investments
LLC) on CreditWatch with positive implications. The action
follows the company's filing an S-1/A for an IPO. The exact terms
of the transaction are not known, but S&P expect some proceeds of
the IPO to be used to pay down borrowings on the company's
existing credit facility and a note due to an affiliate.
"We will monitor the terms of the transaction as they become
available and assess the financial risk associated with the
company's new capital structure," said Standard & Poor's credit
analyst Charles Pinson-Rose. S&P will resolve the CreditWatch
listing following the completion of the IPO.
DUKE FUNDING: EOD Notices Prompt Fitch to Junk Ratings
------------------------------------------------------
Fitch has downgraded these ten classes of notes from Duke Funding
High Grade II-S/EGAM I, LTD.:
-- $120,000,000 class A-2 notes to 'C' from 'CCC';
-- $60,000,000 class B-1 notes to 'C' from 'CC';
-- $78,000,000 class B-2 notes to 'C' from 'CC';
-- $48,000,000 class C notes to 'C' from 'CC';
-- $21,000,000 class D notes to 'C' from 'CC';
Series 2:
-- $50,000,000 class A-2 notes to 'C' from 'CCC';
-- $25,000,000 class B-1 notes to 'C' from 'CC';
-- $32,500,000 class B-2 notes to 'C' from 'CC';
-- $20,000,000 class C notes to 'C' from 'CC';
-- $8,750,000 class D notes to 'C' from 'CC'.
All classes are removed from Rating Watch Negative
The rating actions result from notices provided by the Issuer that
Events of Default have occurred. The Issuer is a market value
structure that closed Mar. 15, 2006 and is managed by Ellington
Global Asset Management, LLC, a majority owned subsidiary of
Ellington Management Group, LLC. The proceeds of the notes were
used to acquire a diversified portfolio of 'AAA' rated, primarily
floating-rate private-label prime, mid-prime, and sub-prime
residential mortgage-backed securities. The portfolio is levered
using reverse repurchase agreements.
The issuer has provided notice of an Event of Default under the
Indenture due to the inability to make payments as required under
a hedge agreement to an interest rate hedge counterparty. In
addition, the Issuer has also provided notice of a default on
payment of interest due on the class A-2 Notes, class B-1 notes
and class B-2 notes as well as the class A-2 Notes, series 2, the
class B-1 Notes, series 2 and the class B-2 notes, series 2 on the
Monthly Distribution Date that occurred on Dec. 4, 2007.
The Events of Default have resulted from declines in the market
value of the portfolio which have left the Issuer unable to meet
margin calls from repurchase counterparties. The resulting margin
deficits caused the repurchase counterparties to give notice of an
Event of Default under their Master Repurchase Agreements. All
funds available to the Issuer for this purpose were paid to
repurchase counterparties to partially satisfy these deficits.
Upon an Event of Default the repurchase counterparties may
accelerate the repurchase date and require the Issuer to pay
immediately the repurchase price. The repurchase counterparties
may also sell the collateral and apply the proceeds for the
payment of the unpaid repurchase price.
-- 'Fitch Downgrades 5 Classes of Duke Funding High Grade II-
S/EGAM I, LTD.' (Nov. 29, 2007);
-- 'Fitch Downgrades 5 Classes of Duke Funding High Grade II-
S/EGAM I, LTD.; Rating Watch Negative' (Nov. 15, 2007);
-- 'Fitch Downgrades 4 Classes of Duke Funding High Grade II-
S/EGAM I, LTD.' (Sep. 19, 2007).
EL POLLO: Court Decision Prompts S&P's Negative CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the Costa
Mesa, California-based El Pollo Loco Inc., including the 'B-'
corporate credit rating, on CreditWatch with negative
implications.
The action follows a decision by the U.S. District Court in Texas
in the trademark dispute between El Pollo Loco S.A. de C.V. and El
Pollo Loco in which the court awarded El Pollo Loco-Mexico damages
of $20.3 million.
El Pollo Loco announced its intentions to appeal the ruling, but
the company would likely have to post collateral for bond to the
approximate amount of the damages during the appeal process, which
could greatly limit its liquidity position.
At the end of the company's third quarter (Sept. 30, 2007), El
Pollo Loco had $6.1 million in cash and $17.4 million of available
borrowings on its $25 million revolving credit facility. This
facility also has a $15 million LOC sub-limit and as of Sept. 30,
2007, available LOC was $7.4 million.
"Therefore, if El Pollo Loco needed to post a LOC as collateral,
it would need to procure alternative forms of financing in the
very near term," said Standard & Poor's credit analyst Charles
Pinson-Rose.
EPICOR SOFTWARE: Moody's Affirms B1 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service affirmed Epicor Software Corporation's
B1 corporate family rating, SGL-1 liquidity assessment, and stable
outlook. Additionally, Moody's upgraded Epicor's $100 million
senior secured revolving credit facility to Ba1 from Ba3. The
upgrade to the individual debt rating was determined using Moody's
Loss Given Default Methodology and reflects the company's capital
structure post the unrated $230 million 2.375% convertible senior
unsecured note offering. A portion of the proceeds from the
convertible note offering were utilized to repay the remaining
balance on the company's $100 million senior secured term loan.
These ratings were affirmed:
-- Corporate Family Rating -- B1
-- SGL-1
These ratings were upgraded:
-- Probability of Default Rating -- to B1 from B2
-- $100 million Senior Secured Revolving Credit Facility due
2009 to Ba1, LGD1 (8%) from Ba3, LGD2 (27%)
These ratings were withdrawn:
-- $100 million Senior Secured First Lien due 2012 rated Ba3,
LGD2 (27%)
The outlook is stable.
Epicor's B1 corporate family rating was first assigned in March
2006 in conjunction with the company's efforts to refinance its
acquisition of CRS Retail Systems, Inc., its largest acquisition
to date. Since that time, the company has successfully integrated
CRS, significantly grown Moody's adjusted cash from operations and
free cash flow levels to $64 million and $49 million respectively
(for last twelve months as of September 30, 2007), and experienced
double digit, organic software growth rates on average over the
past six quarters. The B1 rating reflects the company's strong
market position within several key mid-market vertical markets,
reasonably strong credit metrics and stable revenue and cash
generating capabilities. Although the company's aggregate
performance since the CRS acquisition may suggest a higher rating,
the company's rating is constrained by management's potential
acquisition appetite, potential cyclicality of the business,
flattening license revenues in the second and third quarter of
2007, and continued competition from much larger, well capitalized
software firms such as SAP and Oracle.
The company's recent convertible debt offering and subsequent
refinancing of its bank term loan moderately increased leverage to
greater than 3x Moody's adjusted debt to EBITDA for last twelve
months as of Sept. 30, 2007. On a net debt basis however,
leverage was less than 1x . The remaining proceeds of the
convertible offering post the refinancing of the bank term loan
contributed to cash balances of approximately $215 million at end
of the third quarter. These funds are likely to be utilized by
management to finance acquisitions.
Epicor is a leading provider of enterprise resource planning,
customer relationship management, and supply chain management
software and solutions to mid-market companies (revenue of $10
million to $1 billion) worldwide. The company had revenues of
$415 million for last twelve months as of Sept. 30, 2007. Epicor
is headquartered in Irvine, California.
FIELDSTONE MORTGAGE: Moody's Junks Ratings on Three Classes
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of six
tranches and placed on review for possible downgrade the ratings
of three tranches from Fieldstone Mortgage Investment Trust 2007-
1. 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: Fieldstone Mortgage Investment Trust 2007-1
-- Cl. M1 Currently Aa1 on review for possible downgrade,
-- Cl. M2 Currently Aa2 on review for possible downgrade,
-- Cl. M3 Currently Aa3 on review for possible downgrade,
-- Cl. M4, Downgraded to Baa2, previously A1,
-- Cl. M5, Downgraded to Ba2, previously A2,
-- Cl. M6, Downgraded to B3, previously A3,
-- Cl. M7, Downgraded to Ca, previously Baa1,
-- Cl. M8, Downgraded to C, previously Baa2,
-- Cl. M9, Downgraded to C, previously Baa3.
FIRST FRANKLIN: Moody's Cuts Rating on Class M-5 to B1 from A2
--------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 13
tranches and placed on review for possible downgrade the ratings
of 7 tranches issued by First Franklin 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: First Franklin Mortgage Loan Trust 2007-FF1
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A3, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Ba2, previously A3,
-- Cl. B-1, Downgraded to B2, previously Baa1,
-- Cl. B-2, Downgraded to Caa1, previously Baa2,
-- Cl. B-3, Downgraded to C, previously Baa3
Issuer: First Franklin Mortgage Loan Trust Mortgage Loan Asset-
Backed Certificates, Series 2007-FF2
-- Cl. A-1 Currently Aaa on review for possible downgrade,
-- Cl. A-2C Currently Aaa on review for possible downgrade,
-- Cl. A-2D Currently Aaa on review for possible downgrade,
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Ba1, previously A1,
-- Cl. M-5, Downgraded to B1, previously A2,
-- Cl. M-6, Downgraded to Caa3, previously A3,
-- Cl. B-1, Downgraded to C, previously Baa1,
-- Cl. B-2, Downgraded to C, previously Baa2,
-- Cl. B-3, Downgraded to C, previously Baa3,
-- Cl. B-4, Downgraded to C, previously Ba1.
GLOBAL GEOPHYSICAL: Moody's Rates $150MM Credit Facilities at B2
----------------------------------------------------------------
Moody's assigned a B2 rating and LGD 3 (37%) to Global Geophysical
Services, Inc.'s the company's new $150 million first lien senior
secured credit facilities ($30 million revolving credit facility
and $120 million term loan) and a Caa2 rating and LGD 5 (87%) to
the company's $50 million second lien term loan. Simultaneously,
Moody's affirmed B3 corporate family rating and the B3 probability
of default rating. The outlook remains stable.
Proceeds from the new term loans will be used to refinance the
existing term loans and revolver borrowings. The new term loans
will also fund up to $10 million of stock repurchases for
employees wishing to monetize a portion of their holdings, and
growth capex of nearly $40 million. Moody's will withdraw the
ratings on the existing first lien and second lien facilities upon
closing of the new facilities.
The ratings for the secured credit facilities loan reflect both
the overall probability of default of the company which is B3, and
a loss given default of LGD 5. The first lien facility is rated
one-notch above the CFR reflect a lower expected loss driven
largely by the additional debt cushion provided by the $50 million
second lien term. This second lien term loan is rated two notched
below the CFR due to higher expected loss given the relative
junior position in the pro forma capital structure.
The affirmation of the B3 rating reflects the company's progress
in meeting its aggressive growth targets in terms of crew size,
revenues, and EBITDA over the past two years. The B3 also
reflects the seasoned management team with long sector experience
and currently supportive industry fundamentals which are expected
to remain favorable into 2008 as the company moves forward on its
ambitious growth plans. The company's current backlog of business
adds support to the rating as it creates visibility of projected
earnings and cashflows into the 2008.
The B3 also considers the company's still young history with a
still limited operating track record, particularly during softer
market conditions. The sector possesses inherent volatility in
the business, and margins can be particularly pressured in weaker
market conditions, which in turn could have a disproportionate
impact on GGS' earnings and cashflows. The B3 also factors in the
aggressive growth strategy that is utilizing a fairly high level
of debt that is expected to remain high over the near term.
Although this debt is helping fund growth, a portion is also
partially funding a stock repurchase. While the repurchase is
being done to provide liquidity for employees and not simply
management or the equity sponsor Kelso cashing in a portion of
their ownership position, it is nonetheless a debt funded
repurchase that is adding leverage to the company without any
additional cash flow in return.
Despite its significant growth and its niche position within the
industry, GGS remains relatively small compared to some of its
peers and considerably smaller than the larger players in the
sector. In addition, the company is focused on the land and
transition zone markets, which are currently solid, however, those
markets still lag the marine market in terms of activity and
margin expansion and in Moody's view has a higher likelihood of
facing pressure over the medium term compared to the marine
market.
The stable outlook assumes the company continues to meet its
earnings and growth targets and reduces leverage ahead of less
supportive sector fundamentals. It also assumes that the
company's entrance into the data library part of the business
continues to carry substantial pre-funding levels so as not put a
significant amount of GGS' capital at risk. The stable outlook
also assumes that as the company potentially looks to diversify
into the 2-D streamer market. It also assumes it does not take on
significant newbuild risk and would fund this endeavor with some
equity so as not to add significant leverage.
A positive outlook and/or upgrade would be considered if the
company reduces total debt and maintains upcycle leverage in under
the 3.0x range with continued momentum for further debt reduction
especially given the inherent volatility of the business. A
positive outlook and/or upgrade would also be considered if the
company were to pursue any consolidation opportunities with ample
equity funding. However, if the company were to complete a
substantially debt funded acquisition it could pressure the
outlook and/or ratings.
The company's liquidity position is adequate given the company
will have a $30 million undrawn revolver at close with the
expectation that it will remain undrawn over the next twelve
months. Although the company is aggressively growing the number
of crews it operates, this financing along the expected cash flows
over the next year are expected to cover those capital outlays.
In addition, since this business is not very capital intensive,
GGS maintains significant flexibility in its capital spending
program and curtail it fairly easily to preserve its liquidity.
Global Geophysical Services, Inc. is headquartered in Houston,
Texas.
GREAT ATLANTIC: S&P Lifts Corp. Credit Rating to B from B-
----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on the Great Atlantic & Pacific Tea Co. Inc. to 'B' from
'B-' and removed all of the ratings from CreditWatch, where they
were placed with positive implications on Sept. 17, 2007.
At the same time, S&P assigned these ratings:
-- A 'B-' rating to A&P's $355 million secured bridge
facility with a recovery rating of '5', indicating a
modest (10%-30%) recovery of principal in the event of a
payment default;
-- A 'B-' rating to A&P's proposed $150 million of senior
unsecured convertible notes due 2011; and
-- A 'B-' rating to A&P's proposed $230 million of senior
unsecured convertible notes due 2012.
In addition, S&P withdrew all its ratings on Pathmark Stores Inc.
given the successful closure of the acquisition on Dec. 3, 2007.
At the same time, S&P affirmed the current senior unsecured 'B-'
ratings on A&P's senior unsecured 9.375% notes due 2039 and 9.125%
notes due 2011.
To finance the acquisition of Pathmark, Montvale, New Jersey-based
A&P used proceeds from the secured bridge facility, along with
proceeds from the sale of Metro shares, borrowings under its bank
credit facility, equity issued in Pathmark, and other sources.
Proceeds from the expected sale of convertible bonds will be used
to fully repay the borrowings under its bridge facility and for
other working capital and corporate purposes. The senior
unsecured rating of 'B-' is one notch below the 'B' corporate
credit rating on the company, reflecting the meaningful amount of
priority debt ahead of it in the capital structure. The outlook
is stable.
"We anticipate that A&P will be able to achieve meaningful credit
metric improvement through the recognition of synergies over the
next few years," said Standard & Poor's credit analyst Stella
Kapur.
HELIX ENERGY: Moody's Rates Proposed $500MM Senior Notes at B3
--------------------------------------------------------------
Moody's Investors Service is assigning a B3 (LGD4, 68%) rating to
Helix Energy Solutions Group, Inc.'s proposed $500 million of
fixed and floating rate senior unsecured notes. Simultaneously,
Moody's upgraded Helix's existing term loan B and senior secured
revolving credit facility ratings to Ba2 (LGD 2, 20%) from B1 (LGD
3, 37%) and affirmed the company's B2 corporate family rating and
B2 probability of default rating. Moody's is also assigning a
speculative grade liquidity rating of SGL-3. The outlook is
changed to positive from stable.
Proceeds from the notes will pay down the existing term loan
leaving approximately $424 million outstanding under the term
loan. Under Moody's Loss Given Default methodology which
incorporates a family recover rate of 50%, the senior unsecured
notes are rated one notch below the CFR. However, the new
$500 million notes combined with the $300 million senior unsecured
convertible notes provide significant debt cushion for the reduced
secured term loan lenders, resulting in the rating for term loan
going to Ba2 from B1, now three notches above the CFR.
The positive outlook reflects the company's forward momentum in
the exploration and production business acquired from Remington in
2006 as well as the favorable fundamentals of the services
business which should provide cash to support the E&P business if
needed, and the plans to monetize non-core assets that could
generate significant cash to repay debt. While the E&P business
is still considered lumpy in terms of reserve and production
growth, Helix has grown annual production with the addition of
some shallow Gulf of Mexico prospects and is in the process of
developing the Phoenix, Danny and Noonan prospects, which if
converted as planned, would significantly ramp up production in
2008 and into 2009.
Meanwhile, the services business continues to benefit from the
capital spending of the overall E&P sector and in particular the
deepwater GOM, where the company has built a significant backlog
of business. This should help in providing the company with
strong cash flows into 2008 as the company focuses on converting
its largest E&P prospects over the next year. In addition, the
company has minority interests in the Independence Hub and Marco
Polo GOM production facilities which it is considering some type
of monetization. The company is also considering selling a
portion of its interest in the Danny/Noonan prospects as it had
done with Phoenix to raise cash and reduce its capital spending.
Further, the company has its 59% interest in Cal Dive
International, Inc. which is not subject to any restrictions and
could be sold down to raise cash to repay debt.
However, the upgrade to a B1 CFR would require that the company
meet its aggressive timetable for these prospects and converts
them into the proven developed stage and begin flowing production
at rates in the second half of 2008; and that the company meets
its debt reduction targets for 2008 either through organic means
or through the monetization of non-core assets. An upgrade to B1
would also require the company to bring these prospects on line at
competitive costs while continuing to add reserves through the
drillbit especially as some of these prospects have very flush
production and therefore a short PD reserve life.
The B2 CFR reflects the combination of a small and highly
leveraged E&P business and a solid oilfield services business.
Under Moody's E&P methodology, Helix's E&P business currently maps
to a Caa1/B3 profile given the still small size, very high
leverage, and lumpy nature of the reserve and production growth.
While its total full cycle costs are in-line with similarly rated
E&P peers, the company's finding and development costs have
benefited from booking the proven undeveloped reserves from
Phoenix, Danny and Noonan. Moody's expects 2008 F&D to be
materially higher as the company's capital program will be
predominantly spent on converting them to the developing stage
with only a small portion earmarked for exploration.
Under Moody's methodology for oilfield services, Helix's business
maps to a Ba3/Ba2 given its solid earnings and cash flow growth, a
leverage profile in-line with similarly rated services companies,
and its outlook for the deepwater part of the business. This
business continues to benefit from the spending by the E&P sector
primarily in the GOM, but also as it expands internationally in
places like the North Sea and Southeast Asia where it has recently
won new contracts. The company's ability to provide an array of
services that extend through the life of a well, provide it with a
fairly durable earnings and cash flow stream that will benefit
from the growing focus on the increasingly active deepwater GOM.
While Moody's recognizes the merits of the company's strategy of
an integrated services and E&P business model, the long-term
advantages of the model has yet to be determined. Currently,
about 95% of the company's services capacity is working for third
parties and provides good visibility into 2008 which serves as an
offset to the very capital intensive E&P business.
The SGL-3 reflects the expectation that the company's cash flow
will be sufficient to cover capex, working capital needs and
interest expense over the next four quarters. However, Moody's
notes that the projected cash flows are tied to the company's
ability meet its aggressive timeline and bring its major E&P
prospects on-line as planned. Any material delays in doing so
could cause cash flows to be much lower than anticipated and thus
result in additional revolver borrowings during the year. The
SGL-3 also considers the company's $300 million senior secured
revolver which provides ample external liquidity and the room
under the facilities maintenance covenants which ensures
accessibility over the next year. The SGL also incorporates the
alternate sources of liquidity from its ownership of Cal Dive's
shares and its interest in the GOM production facilities which
could provide significant cash if sold.
Helix Energy Solutions Group, Inc. is headquartered in Houston,
Texas.
HOLLINGER INC: Black Gets a Modest 6-1/2 Years Jail Term for Fraud
------------------------------------------------------------------
Prosecutors were disappointed over the modest jail sentence of
Conrad Black, former chief executive officer of Hollinger
International Inc., nka Sun-Times Media Group Inc., who stole
millions of dollars from the company, various sources report. The
Honorable Amy St. Eve of the U.S. District Court for the Northern
District of Illinois imposed a jail term of 6 and 1/2 years, about
a quarter of the maximum originally sought by prosecutors, and a
fine of $125,000.
Judge St. Eve also ordered the former CEO, a member of Great
Britain's House of Lords, to return $6.1 million to the company,
a far cry from the $32 million the prosecutors were asking for
Hollinger's losses, Stephanie Kirchgaessner in Washington and Hal
Weitzman in Chicago of the Financial Times relate.
Various sources say that the judge also passed out sentences to
Mr. Black's co-defendants, former chief executive officer Jack
Boultbee, who got 2 years and 3 months jail term, and former vice
president and general counsel Peter Atkinson, who got 2 years jail
time.
Former counsel Mark Kipnis, a minor player in the fraud scheme,
was sentenced to 5 years probation and 6 months house arrest.
As reported in the Troubled Company Reporter on July 17, 2007,
Mr. Black was found guilty for three counts of mail fraud and one
count of obstruction of justice. In March 2007, he was accused of
17 counts of fraud, money-laundering, tax evasion, obstruction of
justice and racketeering, which could have resulted to 101 years
in jail, $164 million in fines, and $92 million in possible
forfeitures.
Betting Odds
In a previous report published in the TCR, BetUS.com, an online
sportsbook, posted these odds regarding the outcome of Lord
Black's trial.
* What will be the outcome of Conrad Black's trial?
-- He will be found guilty on all charges - 2/1
-- He will be found guilty on some charges - 1/3
-- He will be found not guilty on all charges - 10/1
-- Mistrial will be declared - 20/1
-- Other outcome - 30/1
* Will Conrad Black be sentenced to jail time if found guilty
of any charge?
-- Yes - 1/50
-- No - 25/1
* If Conrad Black is sentenced to jail time, how long will it
be?
-- Over 5 Years - 5/6
-- Under 5 Years - 5/6
== Note prop refers to jail time sentenced not served
* How Much Money will Conrad Black be ordered to pay if
convicted of any wrong doings?
-- Over 2 million - 5/6
-- Under 2 million - 5/6
== Note Forfeitures do not count
* If forced to serve jail time, will Conrad Black serve his
sentence (even in part) in Canada?
-- Yes - 3/1
-- No - 1/5
Free on Bail
Judge St. Eve, papers recount, has allowed Mr. Black out on bail
until March 3, 2008. The former CEO has plans of appealing his
case.
About Hollinger Inc.
Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX:
HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately
70.1% voting and 19.7% equity interest in Sun-Times Media Group
Inc. (formerly Hollinger International Inc.), a media company with
assets which include the Chicago Sun-Times newspaper and
Suntimes.com and a number of community newspapers and websites
serving communities in the Chicago area.
The company, along with two affiliates, 4322525 Canada Inc. and
Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007
(Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger
also initiated Court-supervised restructuring under the Companies'
Creditors Arrangement Act (Canada) on the same day.
Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris,
Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S.
proceedings.
Hollinger Inc.'s consolidated balance sheet at Sept. 30, 2007,
showed CDN$84.5 million in total assets and CDN$217.5 million in
total liabilities, resulting in a CDN$133.0 million total
shareholders' deficit.
HOLOGIC INC: Completes $1.7 Bil. Offering of Conv. Senior Notes
---------------------------------------------------------------
Hologic Inc. has closed its offering of $1.725 billion original
principal amount of convertible senior notes due 2037, which
amount included the exercise in full by the underwriters of the
$225 million overallotment option granted to them by Hologic.
The convertible senior notes mature in 2037 and will pay interest
semiannually at a rate of 2.00% per annum until Dec. 15, 2013,
after which their principal will accrete at a rate of 2% per
annum. Commencing with the interest period beginning Dec. 15,
2013, the notes will also pay contingent interest under certain
circumstances based on the trading price of the notes.
The notes have an initial conversion rate of 12.9555 shares of
common stock per $1,000 original principal amount of notes,
equivalent to a conversion price of approximately $77.1875 per
share, subject to adjustment. The initial conversion price
represents a 25% premium over the closing sale price of Hologic's
common stock on Dec. 4, 2007. The notes were sold at par.
The net proceeds from the offering of approximately $1.69 billion,
after deducting the underwriters' discounts and estimated offering
expenses payable by Hologic, were used to repay a portion of
Hologic's outstanding senior secured indebtedness.
The offer and sale of the convertible senior notes was made
pursuant to an effective shelf registration statement filed with
the Securities and Exchange Commission.
Goldman, Sachs & Co. acted as the sole book-running manager of the
offering. Copies of the final prospectus supplement relating to
the convertible notes offering may be obtained from:
Goldman, Sachs & Co.
Attn: Prospectus Dept.
85 Broad Street
New York, NY 10004
Fax (212)902-9316
Email prospectus-ny@ny.email.gs.com
About Hologic Inc.
Headquartered in Bedford, Massachussetts, Hologic Inc.
(NASDAQ:HOLX) -- http://www.hologic.com/-- is a diversified
diagnostic and medical product and device company dedicated to
serving the healthcare needs of women. In October 2007, the
company completed its business combination with Cytyc Corporation,
a company that develops, manufactures and markets a complementary
product line covering a range of cancer and women's health
applications, including cervical cancer screening, treatment of
excessive menstrual bleeding, and radiation treatment of early-
stage breast cancer.
* * *
As reported in the Troubled Company Reporter on Sept. 14, 2007,
Standard & Poor's Rating Services assigned its 'BB-' corporate
credit rating to Hologic Inc. with a stable outlook.
ICONIX BRAND: S&P Rates Proposed $60MM Add-On Term Loan at BB
-------------------------------------------------------------
Standard & Poor's Ratings Service assigned its bank loan and
recovery ratings to apparel brand manager and licensor Iconix
Brand Group Inc.'s proposed $60 million add-on term loan facility.
The add-on was rated 'BB', two notches above the corporate credit
rating, with a '1' recovery rating, indicating the expectation of
very high (90%-100%) recovery in the event of a default.
At the same time, Standard & Poor's raised the rating on the
existing $212.5 million loan facility to 'BB', from 'BB-', and
revised the recovery rating to '1' from '2'. "The ratings
revision is based on the additional royalty income stream
resulting from the additional collateral, namely the Royal Velvet,
Cannon, Fieldcrest, Charisma, Mossimo and (pending) Starter
brands," said Standard & Poor's credit analyst Susan Ding.
At the same time, Standard & Poor's affirmed the 'B+' corporate
credit rating on Iconix. The outlook is negative. Iconix had
about $642.2 million in debt at Sept. 30, 2007.
The ratings on New York City-based Iconix reflect its
participation in the highly competitive and volatile fashion
apparel industry, a high degree of licensing contract renewal risk
(a substantial portion of contracts were acquired within the last
12 months), an aggressive acquisition strategy, and
ownership of some brands that require revitalization. The ratings
also incorporate the lack of track record under its relatively new
royalty-based business model. Partially offsetting these factors
is the diversity and strong recognition of the brands, and the
company's high margin, high cash flow, and royalty income-based
business model.
INDYMAC BANCORP: S&P Lowers Credit Rating to BB+/B from BBB-/A-3
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Indymac
Bancorp and its subsidiaries, including lowering the counterparty
credit rating on Indymac to 'BB+/B' from 'BBB-/A-3'. The outlook
is negative.
"This action was taken in response to concerns about Indymac's
exposure to deteriorating housing markets and the effect credit
losses will have on capital levels. The company has announced
that continued credit performance deterioration will result in a
loss for the fourth quarter," said Standard & Poor's credit
analyst Robert B. Hoban, Jr.
S&P expect fourth-quarter nonperforming assets to increase
materially on both a percentage and dollar basis from third
quarter's already very high 3.65% of loans + OREO. Because
Indymac's profitability was already depressed by the cyclical
decrease in mortgage finance activity and reduction in its gain-
on-sale margin, there is increased likelihood that this will lead
to further quarterly losses. S&P's concern regarding weaker
profitability is heightened, given its potential to affect capital
levels during this period when capital is needed as a buttress
against high credit losses. S&P currently
consider capital to be adequate, but further losses could make
capital a primary concern. Encouragingly, management has been
able to raise common equity, including $68 million in October
alone, through its direct stock purchase plan, which will soften
the capital impact of the fourth-quarter loss.
In addition, continued losses will likely result in Indymac no
longer meeting the regulatory dividend earnings test. This would
require Indymac to apply for permission to pay any dividends out
of the bank, either to the holding company or on the bank-level
perpetual preferred. This is usually just a formality, and if S&P
believe that the bank's ability to dividend is threatened in any
way, S&P would downgrade the holding company and bank-level
preferred stock.
A large portion of Indymac's nonperformers is in higher risk
mortgage products that it all but stopped originating earlier in
2007. However, credit performance of the core alt-A portfolio has
also deteriorated to higher-than-normal levels. Historically,
Indymac would sell off most of its originations of higher risk
products, but with the secondary loan and securitization markets
for these products all but shut down, Indymac had accumulated $366
million of NPLs in its held-for-sale portfolio, in addition to
$463 million of other NPAs as of Sept. 30, 2007. Indymac's high
percentage of more-recent-vintage loans and level of exposure to
the more-at-risk California market will likely lead to higher-
than-peer loss severity.
S&P's ratings on Indymac reflect the company's good funding and
liquidity profile, adequate capitalization, and earnings that are
heavily dependent on conditions in the very cyclical housing
finance market. Indymac's depository funding and access to FHLB
advances provide it with continued access to
readily available unsecured liquidity, allowing the company to
maintain good liquidity, despite the widespread tightening of
credit available to the mortgage finance sector. Indymac
continues to rely on the sale of loans to support the bulk of its
origination activity, but management has shifted its production
mix to mostly agency-eligible loans. This allows the vast
majority of loans to be sold directly to the agencies, reducing
Indymac's funding needs.
The negative outlook incorporates S&P's expectation that Indymac
will continue to maintain prudent contingent liquidity, especially
in light of management's origination volume goals. S&P expect
profitability to remain depressed during the near term because of
higher credit costs and lower gain-on-sale margins. If credit
losses result in erosion of capitalization, or the company
experiences increased funding and liquidity pressure, ratings
could be lowered. Given S&P's concerns about the housing and
mortgage finance markets, there is little upward momentum to the
ratings at this time. That said, if credit loss levels abate to
the point where the company returns to even a modest level of
profitability, while maintaining adequate capitalization and
liquidity levels, the outlook would return to stable.
Indymac is a $33.7 billion thrift headquartered in Pasadena,
California. Its primary business is the origination, servicing,
and holding of mostly prime and Alt-A home mortgages and mortgage-
related products. Alt-A loans represent incremental credit risk
to standard conforming mortgages. Indymac relies mostly on
intermediaries to source production, and it is the ninth-largest
mortgage originator in the U.S.
INSIGNIA VESSEL: Moody's Holds B2 Rating with Stable Outlook
------------------------------------------------------------
Moody's Investors Service affirmed Insignia Vessel Acquisition,
LLC, B2 corporate family rating and stable outlook. Insignia is a
wholly owned operating subsidiary of Oceania Cruises, Inc. (that
is in turn owned by Prestige Cruise Holdings, Inc. (f/k/a Oceania
Cruise Holdings, Inc.), a company controlled by Apollo Management
L.P. Apollo agreed to acquire Regent Seven Seas Cruises
operations from Carlson for an undisclosed amount. Regent Seven
Seas Cruises and Oceania Cruises will be placed under ownership of
Prestige. The transaction is expected to close in the first
quarter of 2008.
Although the acquisition will result in higher consolidated
leverage, debt to be incurred to acquire Regent is expected to be
financed on a largely standalone basis at the Regent operating
subsidiary level secured by three Regent cruise ships. Oceania's
operations are expected to continue to support and secure its
existing debt. Currently Oceania's operating subsidiaries
Insignia Vessel Acquisition, LLC, Regatta Acquisition, LLC and
Nautica Acquisition, LLC are joint and several obligors under the
existing $415 million bank facilities secured by the company's
three cruise ships.
Insignia's ratings or rating outlook could come under pressure if
the acquisition financing is not structured on a largely
standalone basis without reliance upon credit support from Oceania
Cruises.
Oceania Cruises Inc. owns three identical passenger cruise ships
through three separate special purpose companies that each own a
single 698 berth ship. Oceania has two new ships on order for
delivery in 2010 and 2011. The Company targets the upper premium
segment of the cruise industry with destination-oriented cruises
that maximize on-shore activities.
Regent Seven Seas Cruises operates four luxury cruise ships that
visit over 300 ports on all seven continents. Regent is owned by
Carlson, a global operator of branded hotels, restaurants,
business and leisure travel companies.
IXI MOBILE: Sept. 30 Balance Sheet Upside-Down by $15.5 Million
---------------------------------------------------------------
IXI Mobile Inc.'s consolidated balance sheet at Sept. 30, 2007,
showed $47.4 million in total assets and $62.9 million in total
liabilities, resulting in a $15.5 million total stockholders'
deficiency.
The company reported a net loss of $8.5 million on revenues of
$4.8 million for the third quarter ended Sept. 30, 2007, compared
with a net loss of $5.3 million on revenues of $3.6 million in the
same period last year.
The revenues for the three months ended Sept. 30, 2007, included
approximately $4.0 million from sale of Ogo devices, approximately
$690,000 from hosted services and approximately $40,000 from non-
recurring engineering contracts. The revenues for the three
months ended Sept. 30, 2006, included $3.3 million from sale of
Ogo devices, approximately $220,000 from hosted services and
approximately $50,000 from non-recurring engineering contracts.
Operating expenses were $12.8 million, compared to $7.8 million in
the third quarter of 2006. Research and Development expenses for
the quarter were $4.7 million, which included approximately
$2 million of engineering costs related to the development of
Ogo2.0 CT-25E and CT-25C and other enhancements to the Ogo family
that the company expects to introduce in 2008.
Operating loss for the quarter was $8.1 million, compared to
$4.2 million in the third quarter of 2006.
The company's net loss for the three months ended Sept. 30, 2007,
includes $473,000 stock based compensation expenses for employees
and consultants and expenses recorded in connection with the
issuance of stock and incentive plans to IXI's management, and
$656,000 of financial expenses recorded in connection with the
recent merger with IXI Mobile (USA) Inc.
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?2641
About IXI Mobile
Headquartered in Belmont, Calif., IXI Mobile Inc. (OTC BB:
IXMO.0B) -- http://www.ixi.com/-- provides devices and hosted
services to mobile operators, mobile virtual network operators,
and Internet service providers in a number of international
markets.
JP MORGAN: Fitch Affirms 'B-' Rating on $2.8MM Class P Certs.
-------------------------------------------------------------
Fitch Ratings affirms J.P. Morgan's commercial pass-through
certificates, series 2004-CIBC9 as:
-- $29.6 million class A-1 at 'AAA';
-- $146 million class A-2 at 'AAA';
-- $103.7 million class A-3 at 'AAA';
-- $466.3 million class A-4 at 'AAA';
-- $161.1 million class A-1A at 'AAA';
-- Interest-only class X at 'AAA';
-- $27.5 million class B at 'AA';
-- $13.8 million class C at 'AA-';
-- $20.7 million class D at 'A';
-- $11.0 million class E at 'A-';
-- $15.2 million class F at 'BBB+';
-- $9.6 million class G at 'BBB';
-- $17.9 million class H at 'BBB-';
-- $2.8 million class J at 'BB+';
-- $4.1 million class K at 'BB';
-- $5.5 million class L at 'BB-';
-- $5.5 million class M at 'B+';
-- $2.8 million class N at 'B';
-- $2.8 million class P at 'B-'.
Fitch does not rate the $13.8 million class NR.
The affirmations reflect stable pool performance and limited
paydown (3.8%) since issuance. As of the November 2007
distribution date, the pool's aggregate principal balance is $1.06
billion compared to $1.10 billion at issuance. Loans with full or
partial interest-only periods comprise 32.6% of the transaction.
There is one loan (0.5%) in special servicing with losses
expected. The loan is secured by three industrial properties in
Portage, Michigan and is 90+ days delinquent. The loan
transferred to special servicing in April 2006 due to delinquency.
Fitch-projected losses on the specially serviced loan are expected
to be absorbed by the nonrated class NR.
Fitch reviewed the shadow ratings of both the Centro Retail
Portfolio II (13.5%) and Grace Building (11.0%). Both loans
maintain investment-grade shadow ratings.
The Centro Retail Portfolio is secured by seven, cross-
collateralized anchored retail properties in Northern and Southern
California. Servicer provided occupancy as of June 2007 is 99%.
The Grace Building is secured by a 1,518,210 sf office building
located in New York, New York. Only the A-1 note is included in
the trust; the pari-passu A-2 and A-3 notes and a subordinate B-
note are held outside the trust. The interest-only period of the
loan has expired and the borrower is now making principal and
interest payments. Servicer provided occupancy as of September
2007 is 100%, up from 98% at issuance.
K-SEA TRANSPORTATION: S&P Holds 'BB-' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its corporate credit
rating on K-Sea Transportation Partners L.P. at 'BB-'. At the
same time, ratings were removed from CreditWatch, where they were
placed with negative implications on July 13, 2007. The outlook
is now stable. The East Brunswick, New Jersey-based shipping
company has about $336 million in lease-adjusted debt.
K-Sea was placed on CreditWatch with negative implications
following the company's announcement in July 2007 that it was
acquiring Smith Maritime Ltd. and Sirius Maritime LLC, two tank
barge companies located in Hawaii and Seattle, Washignton,
respectively, in a debt-financed transaction. "The ratings
affirmation reflects K-Sea's improved balance sheet and liquidity
following the issuance of 3.5 million new common units, proceeds
of which were used to pay down most of the borrowings related to
the Smith Maritime Group acquisition and the refinance of existing
debt," said Standard & Poor's credit analyst Funmi Afonja.
Standard & Poor's ratings on K-Sea are based on the company's
aggressive financial profile and participation in the highly
competitive and fragmented shipping industry. Positive credit
factors include K-Sea's relatively stable and predictable cash
flows from time charter agreements and its participation in the
protected U.S. domestic shipping sector.
KALISPEL TRIBE: Fitch Assigns Issuer Rating at B+
-------------------------------------------------
Fitch Ratings has assigned an initial rating to the Kalispel Tribe
of Indian's priority distribution bonds and assigned an initial
Issuer Rating as:
-- Issuer Rating 'B+';
-- Priority distribution bonds 2008 'BB'.
The Rating Outlook is Stable.
Approximately $37.1 million priority distribution bonds are
expected to price via negotiation with Wells Fargo on Dec. 13 and
are due Jan. 1, 2018, 2028 and 2038. The bonds are subject to
monthly mandatory sinking fund payments sufficient to amortize the
bonds by maturity.
The 'B+' IR for the Kalispel Tribe is supported by the stable
operating performance of its existing casino operation, which is
the tribe's main economic driver and primary source of cash flows.
The tribe currently operates the Northern Quest Casino, located in
the Spokane, Washington metro area, which has been in operation
since 2000. The tribe does not have the ability to open another
casino on tribal trust lands, thereby limiting the potential for
diversification of the operation.
A 'BB' rating is assigned to the priority distribution bonds, two
notches above the IR. Bondholders have a security interest in the
priority distribution provided by NQC to the tribe, which is
required to be paid from the net cash flows of NQC; net cash flow
is essentially defined as earnings before interest, taxes,
depreciation, and amortization in the bond documents, and so is an
amount prior to any debt service. All future debt issuance must
comply with the restriction of the priority distribution
agreement, which provides for payment of the priority distribution
amount from the net cash flow of NQC. Therefore, the priority
distribution bonds are the most senior piece of debt in the
capital structure. The priority distribution amount is set at an
amount equal to debt service on the bonds. Debt issuance on this
lien is limited to an amount equal to annual principal and
interest requirements of $6 million.
The Tribe is issuing $37.1 million of priority distribution bonds
to finance governmental projects including the Camas Path Wellness
Center, a public safety building, a foster care facility, and
road, water and sewer improvements on the reservation. The Tribe
plans to issue up to an additional $15 million of priority
distribution bonds in 2008 to finance capital improvements to
infrastructure on tribal land adjacent to NQC and on the
reservation in Usk, Washington. This issuance will increase total
annual debt service requirements to approximately $4.5 million
annually, below the additional bonds limit of $6 million.
There are two main concerns in Kalispel's credit profile: a lack
of visibility regarding an NQC expansion project, and the
potential for increased competition pending regulatory approvals.
The Tribe is planning an expansion of the facilities at NQC to
create a more complete resort and entertainment complex. The
scope of the contemplated project has been drastically reduced
since the initial concept, which would have included a four-
diamond hotel property with extensive non- gaming amenities in an
attempt to create a destination resort offering. Upon receiving
construction bids, the tribe significantly scaled back the project
but has not yet determined the details of the plan of finance.
The current ratings incorporate the expectation that the Tribe
will issue a total of $52 million in priority distribution debt
and $150 million to fund phase one of the NQC expansion. Based on
management's projection of NQC EBITDA, total debt/EBITDA would be
roughly 2.8 times in fiscal 2010. Total debt/EBITDA is expected
to peak at 3.74 in fiscal 2009, prior to the generation of cash
flow by the expansion project. Debt service coverage is expected
to be between 2x and 3x between fiscal 2009 and 2012. Better
viability of the project scope, financing plan, and its impact on
credit metrics could have a positive affect on the rating.
The Spokane Tribe has purchased approximately 145 acres of land
near NQC where it has said it intends to build a casino. The
Spokane Tribe has signed a gaming compact with the State of
Washington, but has not yet begun the process of obtaining federal
approval for the off-reservation gaming site. Given the current
regulatory environment, Fitch believes it is unlikely the Spokane
Tribe will gain federal approval to operate gaming on an off-
reservation site. However, should the Spokane Tribe be permitted
to conduct gaming in NQC's immediate market area, it would likely
have a severe detrimental effect on the facility, and so would
likely be considered a negative credit event.
KEYSTONE AUTOMOTIVE: Weak Performance Cues S&P to Cut Rating
------------------------------------------------------------
On Dec. 10, 2007, Standard & Poor's Ratings Services lowered its
corporate credit rating on Exeter, Pennsylvania-based Keystone
Automotive Operations Inc. to 'B-' from 'B'. Standard & Poor's
also lowered the senior secured and subordinated debt ratings a
notch, to 'B' and 'CCC', respectively. The outlook is stable.
"The downgrade reflects Keystone's continued weak operating
performance resulting in much lower EBITDA, higher leverage, and
much thinner cash flow protection," said Standard & Poor's credit
analyst Kenneth Shea. Sales during the nine months ended Sept.
30, 2007, rose only 1.4% over the same period a year earlier,
primarily reflecting more competitive conditions in the specialty
parts and accessory marketplace, higher-than-expected customer
attrition experienced during the period, and overall weak consumer
spending on discretionary items. Margins have also been impacted
by these conditions. The trend of lease-adjusted EBITDA is
tracking well below Standard & Poor's expectations. In addition,
Standard & Poor's is concerned about the company's high leverage
and diminished cash flow protection.
The ratings on Keystone reflect the company's relatively small
EBITDA base, high leverage that results in weak cash flow
protection, and acquisitive history. The company has a good niche
position in the highly competitive and fragmented specialty
equipment segment of the automotive aftermarket industry.
However, this specialty equipment segment represents a relatively
small part of the total automotive aftermarket industry, most of
which consists of replacement parts.
LEINER HEALTH: Strategic Plans Prompt S&P to Cut Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Carson,
California-based Leiner Health Products Inc., including its
corporate credit rating to 'CCC' from 'CCC+'. The outlook is
negative.
"The downgrade follows Leiner's recent announcement that it has
hired an advisor and is considering strategic alternatives and
that its financial sponsors are expected to contribute
$6.5 million of capital," said Standard & Poor's credit analyst
Bea Chiem.
The company has been challenged to maintain adequate liquidity
following its March 2007 voluntary suspension of production and
recall of its over-the-counter products, and has experienced
increased costs associated with its plant consolidations and
implementation of stricter manufacturing requirements in its
vitamins, minerals, and supplements business.
If revolving credit availability plus cash on the balance sheet
total less than $10 million, the financial sponsors had previously
committed to contributing an additional $6.5 million in equity to
Leiner. "Although the company had $8.4 million in cash and
$19.6 million available on its $50 million revolver as of
Sept. 30, 2007, we believe the sponsor's plans to contribute this
equity indicate that liquidity will significantly weaken during
the quarter ending Dec. 31, 2007," said Ms. Chiem. "We also
believe that the company will be challenged to meet its financial
covenants for that quarter and maintain adequate cushion in 2008."
The ratings on Leiner reflect the company's highly leveraged
capital structure, customer concentration, lack of pricing
flexibility in the highly competitive private-label vitamin
market, and the segment's vulnerability to adverse publicity.
Leiner is the largest U.S. private-label vitamins VMS
manufacturer, a sector that accounts for about 60% of company
sales, with the remainder coming from OTC drugs (30%) and contract
manufacturing (10%).
LL&E ROYALTY: Reports Cash Loss of $166,944 in Third Quarter
------------------------------------------------------------
LL&E Royalty Trust reported a cash loss of $166,944 for the third
quarter ended Sept. 30, 2007, compared with cash earnings of
$390,597 for the same period last year.
During the third quarter 2007 and 2006, the Trust received cash of
$163,563 and $689,169, respectively, from the Working Interest
Owners with respect to the Royalties from the Properties.
Administrative expenses incurred by the Trust increased to
$330,507 for the quarter ended Sept. 30, 2007, compared to
$298,572 for the quarter ended Sept. 30, 2006.
There were no distributions made to the Unit holders for the 2007
third quarter and $383,018 for the 2006 Third Quarter. As a
result of the uncertainty of future proceeds from properties in
which the Trust has an interest, the Trustee has reserved $462,000
in proceeds that otherwise would have been distributed to the Unit
holders for the payment of the Trust's likely expenses in the
foreseeable future. The Trustee intends to hold these funds for
use in the payment of future Trust expenses until it becomes
reasonably clear that they are no longer necessary.
At Sept. 30, 2007, LL&E's statement of Assets, Liabilities and
Trust Corpus showed $2,217,166 in in total assets, zero
liabilities, and $2,217,166 in Trust Corpus.
Full-text copies of the Trust's financial statements for the
quarter ended Sept. 30, 2007, are available for free at:
http://researcharchives.com/t/s?2646
Going Concern Doubt
KPMG LLP, in Houston, expressed substantial doubt about LL&E
Royalty Trust's ability to continue as a going concern after
auditing the Trust's financial statements as of the years ended
Dec. 31, 2006, and 2005. The auditing firm reported that net
revenues in 2006 fell below the $5,000,000 Termination Threshold
stipulated by the Trust Agreement, thus triggering year one of the
termination provision.
The Trust Agreement provides that the Trust will terminate in the
event that the net revenues fall below $5,000,000 for two
successive years.
As a result of the damages to production facilities for properties
in which the Trust has an interest, and depending on a variety of
factors, including the timing and costs of repairs, future
production and drilling activities, oil and gas prices and other
matters, net revenues to the Trust in 2007 may also be below the
Termination Threshold. If net revenues for 2007 are below the
Termination Threshold, the Trust will terminate.
Upon termination of the Trust, the Trustee will sell for cash all
the assets held in the Trust estate and make a final distribution
to unit holders of any funds remaining after all Trust liabilities
have been satisfied or funds have been set aside for their
payment.
About LL&E Trust
LL&E Royalty Trust (NYSE: LRT) operates as an investment trust in
the United States. The trust owns 99% interest in a partnership,
which holds net over-riding royalty interests in oil and gas
properties located in Alabama, Florida; and in federal waters
offshore Louisiana. The partnership also holds 3% royalty
interests in approximately 400,000 acres of south Louisiana fee
lands. LL&E Royalty Trust was founded in 1983 and is based in
Austin, Texas.
MATTRESS GALLERY: Court Sets December 15 as Claims Filing Deadline
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware established
Dec. 15, 2007, 4:00 p.m. Eastern Time, as the deadline for
Gallery Corp. dba Mattress Gallery's creditors to file their
proofs of claims against the Debtor.
The bar date applies to claims that arose prior to the Debtor's
bankruptcy filing and to administrative expense claims accruing
after the Debtor's bankruptcy filing.
In addition, the Court set April 29, 2008, 4 p.m. Eastern Time, as
the as the last day for governmental units to file their proofs of
claims for unpaid taxes that arose from prepetition tax years or
prepetition transactions to which the Debtors were a party.
As reported in the Troubled Company Reporter on Nov. 8, 2007,
Sandra G.M. Selzer, Esq., at Greenberg Traurig LLP, told the
Court that the Debtor anticipates that its Chapter 11 case will
move promptly toward the confirmation of a plan. In order to
facilitate the confirmation and implementation of the plan that
the Debtor will propose, the Debtor must be able to ascertain the
full nature, extent and scope of the claims that will be asserted
against it and its estate in this Chapter 11 case, Ms. Selzer
relates.
Headquartered in Commerce, California, Gallery Corp. dba Mattress
Gallery filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. D.
Del. Case No. 07-11628). Donald J. Detweiler, Esq., and Sandra
G.M. Selzer, Esq., at Greenberg Traurig, LLP, represent the Debtor
in its restructuring efforts. The Debtors selected Kurtzman
Carson Consultants LLC as their claims and noticing agent. The
U.S. Trustee for Region 3 has appointed five members to serve on
an Official Committee of Unsecured Creditors. Klehr, Harrison,
Harvey, Branzburg & Ellers LLP is the Committee's proposed
counsel. When the Debtor filed for protection from its creditors,
it listed total assets and debts between $1 million and
$100 million.
MBIA INC: Inks $1 Billion Stock Purchase Deal with Warburg Pincus
-----------------------------------------------------------------
MBIA Inc. has entered into a definitive agreement with Warburg
Pincus, which will commit to invest up to $1 billion in MBIA
through a direct purchase of MBIA common stock and a backstop for
a shareholder rights offering.
MBIA said the investment will increase MBIA's substantial capital
and claims-paying resources and enable MBIA to grow its business
profitably at a time when market conditions present it with
attractive opportunities.
Under the agreement, Warburg Pincus will make an initial
investment of $500 million in MBIA through the acquisition of
16.1 million shares of MBIA common stock at a price of $31 per
share, which represents a 3% premium to the $30 a share closing
price of MBIA common stock on the New York Stock Exchange on
Dec. 7, 2007.
Subsequent to its initial common stock purchase, Warburg Pincus
will backstop a shareholder rights offering of up to
$500 million that the company expects to undertake during the
first quarter of 2008. In connection with its investment and
backstop commitment, Warburg will receive warrants to purchase
8.7 million shares of MBIA common stock at a price of $40 per
share and "B" warrants, which, upon obtaining certain approvals,
will become exercisable to purchase 7.4 million shares of common
stock at a price of $40 per share. The term of the warrants is
seven years.
In addition, all of the securities purchased by Warburg Pincus are
subject to significant transfer restrictions for a minimum of one
year and up to three years.
The company's senior management team has also committed to invest
a total $2 million in the company's common stock at the same price
as Warburg.
"We believe this investment in our common stock by Warburg Pincus,
one of the most respected and successful private equity firms, is
a validation of the strength and integrity of our business," Gary
Dunton, MBIA's chairman and chief executive officer, said.
"As we have stated, we have been evaluating various alternatives
to further strengthen our capital position, particularly in light
of the rating agencies' pending reviews of residential mortgage-
backed securities and collateralized debt obligations transactions
that we have insured," he said. "We believe this investment by
Warburg Pincus represents an ideal outcome as it not only provides
additional capital, but also allows us to join forces with a
growth-oriented, long-term investor that understands the business
model and shares our vision for growing our business profitably."
Mr. Dunton added that the company continues to have available
additional capital management options including reinsurance,
issuance of debt and the issuance of hybrid securities.
"We always look for unique opportunities to invest in
differentiated franchises with talented management teams," David
A. Coulter, a Warburg Pincus managing director, commented. "MBIA
is well positioned at this juncture to drive the business forward.
The company's high quality and liquid investment portfolio and the
'pay-as-you-go' nature of its insurance liabilities give it a
strong liquidity profile. Our investment further solidifies
MBIA's capital strength to enable the company to withstand, but
more importantly, take advantage of, the current volatile credit
environment. "
"We are pleased to have the opportunity to partner with MBIA to
build the company and drive shareholder value over the long term,"
Kewsong Lee, a Warburg Pincus managing director and member of the
firm's executive management group, added. "As the market leader,
MBIA has built an impressive embedded book of business which will
provide a significant and stable revenue stream moving forward,
even before new growth opportunities that we believe are
attractive. We look forward to working with Gary, his management
team, and the board to support the company's business plan moving
forward."
As part of the agreement, MBIA's board size will increase by two
members to a new total of thirteen, with Warburg Pincus having the
right to nominate two directors.
The transaction is subject to Hart-Scott-Rodino approval, well as
the approvals of the various regulatory authorities, including
insurance approvals in New York, Illinois, the United Kingdom, and
France.
Profit Warning
MBIA also disclosed that as a result of continued deterioration in
the performance of residential mortgage-backed securities, in
particular, prime home equity lines of credit and closed-end
second mortgage-backed securities the company estimates that it
will establish case basis loss reserves of between $500 million
and $800 million in the fourth quarter related to those exposures.
The company's case basis loss reserves reflect the company's
estimate of probable and estimable losses. Since the expected
increase in case basis loss reserves substantially exceeds its
unallocated loss reserve, the company expects the after-tax effect
of the establishment of such reserves to reduce its net income for
the fourth quarter.
The final amount of such case basis loss reserves will not be
determined until the end of the fourth quarter and could differ
materially from the stated estimates.
In addition, in the fourth quarter of 2007, the company has
observed a further widening of market spreads and credit ratings
downgrades of collateral underlying certain MBIA-insured CDO
tranches. As of Oct. 31, 2007, the pre-tax change in fair value
of insured derivatives from Sept. 30, 2007, was approximately
$850 million.
As a consequence of continued spread volatility, including a
substantial widening in commercial mortgage-backed security
spreads and the deterioration of credit ratings in collateral
underlying multi-sector collateralized debt obligations, the
company expects to have a mark-to-market loss in the fourth
quarter of 2007 significantly greater than that of the third
quarter. The mark-to-market for the fourth quarter will depend on
future market developments.
The company believes that mark-to-market losses are not predictive
of future claims, and that in the absence of claims, the
cumulative marks will net to zero over the remaining life of the
bonds insured. The company has not paid losses on any of the
marked transactions. The mark-to-market also does not affect
rating agency evaluations of the company's capital adequacy.
About Warburg Pincus
Warburg Pincus -- http://www.warburgpincus.com/-- is a private
equity investor since 1971. The firm has more than $20 billion of
assets under management with an additional $10 billion available
for investment. Warburg Pincus invests in a range of sectors
including financial services, consumer and retail, industrial,
business services, healthcare, energy, real estate and technology,
media and telecommunications. Warburg Pincus has raised 12
private equity investment funds which have invested more than $27
billion in approximately 585 companies in 30 countries. Warburg
Pincus has offices in Beijing, Frankfurt, Hong Kong, London, San
Francisco, Mumbai, New York, Shanghai and Tokyo.
About MBIA
Based in Armonk, New York, MBIA Inc. -- http://www.mbia.com/-- is
a financial guarantor and a leading provider of fixed-
income investment management services. The Company's core business
is credit enhancement of municipal bonds and asset-and mortgage-
backed transactions in the new issue and secondary markets. The
company holds offices in New York, Denver, San Francisco, Paris,
London, Madrid, Milan, Sydney and Tokyo.
MBIA INC: Barclays Sees $4.2 Bil. Losses Despite Warburg's Help
---------------------------------------------------------------
Despite Warburg Pincus LLC's infusion of $1 billion in additional
capital in MBIA Inc., MBIA's troubles are not yet over, a research
result conducted by Barclays Capital said, as cited by Christine
Richard of Bloomberg News.
Bloomberg relates that according to Barclays, MBIA will likely
incur losses of up to $4.2 billion in residential mortgage-backed
securities, inclusive of the already declared $800 million losses
by the company.
Barclays added that MBIA might also declare fourth quarter mark-to
market losses that may further widen its credit-default swaps,
Bloomberg relates.
"It is too soon" for the company to say its financial woes are
over, Bloomberg says, citing Barclays.
About Warburg Pincus
Warburg Pincus -- http://www.warburgpincus.com/-- is a private
equity investor since 1971. The firm has more than $20 billion of
assets under management with an additional $10 billion available
for investment. Warburg Pincus invests in a range of sectors
including financial services, consumer and retail, industrial,
business services, healthcare, energy, real estate and technology,
media and telecommunications. Warburg Pincus has raised 12
private equity investment funds which have invested more than $27
billion in approximately 585 companies in 30 countries. Warburg
Pincus has offices in Beijing, Frankfurt, Hong Kong, London, San
Francisco, Mumbai, New York, Shanghai and Tokyo.
About MBIA
Based in Armonk, New York, MBIA Inc. -- http://www.mbia.com/-- is
a financial guarantor and a leading provider of fixed-
income investment management services. The Company's core business
is credit enhancement of municipal bonds and asset-and mortgage-
backed transactions in the new issue and secondary markets. The
company holds offices in New York, Denver, San Francisco, Paris,
London, Madrid, Milan, Sydney and Tokyo.
MBIA INC: Fitch Provides Commentary on Capital-Raising Activity
---------------------------------------------------------------
Fitch Ratings is providing updated commentary about MBIA Inc.'s
(the parent company of MBIA Insurance Corp.) new capital-raising
activities announcement, as well as additions to claims reserves
related to exposure to impaired residential mortgage-backed
securities and market-to-market losses on a large portion of its
pooled credit default swaps. Fitch notes that it will consider
both the positive impact of the capital addition, as well as the
negative implications of the noted losses, in its ongoing analysis
of the impact of MBIA's subprime mortgage exposures on its capital
position, which Fitch expects to complete in the next week.
Fitch's analysis will not only include its current views of MBIA's
exposure to structured finance collateralized debt obligations
backed by subprime RMBS and CDO-squared securities, which totaled
$29.9 billion at Sept. 30, 2007, but will also factor in
deterioration that has taken place in its direct RMBS portfolio,
particularly with the company's exposure to prime second-lien
mortgage securitizations, which totaled $22.8 billion.
MBIA stated it would be raising $1 billion in new common equity to
help bolster its existing equity position, and that it believes it
has numerous other capital management options including
reinsurance, issuance of debt, and the issuance of hybrid
securities that it can use to bolster its capital position. MBIA
received the capital investment from Warburg Pincus Private Equity
X, L.P. through a direct infusion of $500 million of new capital
as well as a commitment to backstop a shareholder rights offering
of $500 million that will take place in the near future.
Additionally, the company announced it would be setting aside
reserves of up to $500-$800 million against future claims to be
realized in the company's direct RMBS exposures, in particular
prime second-lien mortgages. The company also announced that it
is expecting to take a significantly higher mark-to-market loss
against its pooled synthetic CDO portfolio in the fourth quarter
of 2007 compared to the previous quarter due to continued spread
widening across most asset sectors and specific downgrades to the
collateral backing certain SF CDOs insured by MBIA.
On Nov. 5, 2007, Fitch announced it would be reviewing SF CDOs
insured by certain 'AAA' rated financial guarantors to ultimately
determine the impact on each company's capital position and
rating. In the commentary on Nov. 5, Fitch segmented the 'AAA'
financial guarantors into four 'probability' categories (High,
Moderate, Low or Minimal). MBIA was placed in the 'Low'
probability category, based on a relatively large exposure to SF
CDOs offset by a very healthy excess capital position.
Fitch acknowledges the $1 billion infusion in new capital will
effectively increase the company's adjusted claims-paying
resources by that amount, improving its overall financial
position.
Although disappointed by the size of reserves and the expected
mark-to-market charge to be taken by the company, Fitch believes
these reserves and mark-to-market losses will not be isolated to
MBIA. Fitch's announcement on Nov. 5 was driven in part by
recognition that there was rapid deterioration occurring in parts
of the insured portfolios of a number of the 'AAA' financial
guarantors, particularly those assets exposed or related to U.S.
subprime mortgages. Deterioration in the underlying credit
portfolios related to prime second-lien mortgages has further
increased the risk profile and capital requirements for MBIA and
several other players in the financial guaranty industry. Fitch
notes that today's announcement by MBIA demonstrates a proactive
step by management to augment its capital position in light of the
deterioration in several asset classes within its insured
portfolio.
MERRILL LYNCH: S&P Affirms 'B+' Rating on Class F Certificates
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
C, D, and E commercial mortgage pass-through certificates from
Merrill Lynch Financial Assets Inc.'s series 1998-Canada1.
Concurrently, S&P affirmed its ratings on the other four classes
from this transaction, including the 'AAA' ratings on classes A-2,
B, and X.
The raised and affirmed ratings reflect increased credit support
due to principal paydowns, as well as credit enhancement that
provides adequate support through various stress scenarios.
As of the Nov. 16, 2007, remittance report, the collateral pool
consisted of 13 loans with an aggregate principal balance of $67.4
million, down from 32 loans with a balance of
$182.1 million at issuance. The reduced principal balance is due
to amortization and loan payoffs. Approximately $49.2 million
(73%) of the loans in the trust will mature in 2008 and early
2009, and many exhibit strong debt service coverage. The master
servicer, Midland Loan Services Inc., provided full-year 2006
financial information for 100% of the pool. Using this
information, Standard & Poor's calculated a weighted average DSC
of 1.58x, up from 1.56x at issuance. All of the loans in
the pool are current, there are no loans with the special
servicer, and the trust has not suffered any losses to date.
The top 10 loans have an aggregate outstanding trust balance of
$62.8 million (93%). The weighted average DSC for the top 10
loans is 1.57x, up from 1.32x at issuance. The increase in DSC is
primarily attributable to the improved performance of the seventh-
, eighth-, and 10th-largest loans. Standard & Poor's reviewed the
property inspections provided by the master servicer for the
properties securing the top 10 loans, and all were characterized
as "good" or "excellent," with the exception of the properties
securing the eighth, ninth, and 10th-largest loans, which were
characterized as "fair."
As of the November 2007 remittance report, Midland reported four
loans with an aggregate outstanding balance of
$24.7 million (37%) on the watchlist. Portage Place Shopping
Centre ($12.7 million; 19%), the largest loan on the watchlist, is
secured by a 280,489-sq.-ft. retail mall in Winnipeg, Manitoba.
The loan is on the watchlist because the borrower sold the
property without the lender's consent. Hotel Manoir Victoria
($6.8 million; 10%), the second-largest loan on the watchlist, is
secured by a 145-room full-service hotel in Quebec City, Quebec.
The loan is on the watchlist because of a low DSC, which was 1.02x
at year-end 2006.
The underlying loan collateral for this transaction is located in
five provinces in Canada. By allocated loan balance, 29% is in
Ontario, 28% is in Manitoba, 24% is in Alberta, 17% is in Quebec,
and 1% is in Saskatchewan. The property concentrations are in
retail (62%), office (15%), lodging (14%), and multifamily (9%)
assets.
Standard & Poor's stressed the loans with credit issues as part of
its pool analysis. The resultant credit enhancement levels
support the raised and affirmed ratings.
Ratings Raised
Merrill Lynch Financial Assets Inc.
Commercial mortgage pass-through certificates series 1998-
Canada1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
C AAA AA+ 39.19%
D AA A 27.03%
E BBB BB+ 12.16%
Ratings Affirmed
Merrill Lynch Financial Assets Inc.
Commercial mortgage pass-through certificates series 1998-
Canada1
Class Rating Credit enhancement
----- ------ -----------------
A-2 AAA 70.28%
B AAA 56.77%
F B+ 7.03%
X AAA N/A
MGM MIRAGE: Board Approves Amendment and Restatement of Bylaws
--------------------------------------------------------------
MGM Mirage dislosed in a regulatory Form 8-K filing with the
Securities and Exchange Commission dated Dec. 7, 2007, that its
Board of Directors approved the amendment and restatement of the
company's Amended and Restated Bylaws effective as of Dec. 4,
2007, which:
(i) authorizes the Board to designate not less than three nor
more than twelve of their number to constitute an Executive
Committee of the Board of Directors;
(ii) authorizes the Board to appoint one of the members of the
Executive Committee to be Chairman of the Executive
Committee; and
(iii) added the position of Chief Design and Construction Officer
as an elected officer of the Company.
The Board of Directors of the company appointed the following
directors to the Executive Committee: Robert H. Baldwin, Kirk
Kerkorian, J. Terrence Lanni, Anthony Mandekic, Rose McKinney-
James, James J. Murren, Daniel J. Taylor and Melvin B. Wolzinger,
and appointed Mr. Lanni to serve as the Chairman of the Executive
Committee.
A full-text copy of the company's Amended and Restated Bylaws is
available for free at http://researcharchives.com/t/s?2643
About MGM MIRAGE
Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.
It owns and operates 17 properties located in Nevada, Mississippi
and Michigan, and has investments in three other properties in
Nevada, New Jersey and Illinois.
* * *
As reported in the Troubled Company Reporter on Oct. 12, 2007,
Standard & Poor's Ratings Services affirmed the 'BB' corporate
credit rating on MGM MIRAGE and removed them from CreditWatch,
where they were placed with positive implications Aug. 22, 2007.
The rating outlook is positive.
MONITOR OIL: Can Borrow $1 Million from $5 Million Financing
------------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York gave Monitor Oil PLC and its debtor-
affiliates permission to borrow $1 million under a $5 million
financing deal, the Associated Press reports.
The report adds that a group led by Credit Suisse will provide the
$5 million amount with Stonehenge Partners' SOF Investments LP
providing the interim amount of $1 million.
The AP relates that the U.S. Trustee for Region 2, as well as a
group of bondholders, objected to the Debtors' request for
financing citing the "wildly inappropriate" terms of the
financing.
Monitor Oil, P.L.C. -- htpp://www.monitoroil.com/ -- an oil and
gas service company that provides oil and gas production
solutions, offshore services and engineering services. The
company and two of its affiliates, Monitor Single Lift 1, Ltd.,
and Monitor US FinCo, Inc., filed for Chapter 11 Protection on
Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez
Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the
Debtor. As of June 30, 2007, the company disclosed total assets
of 130,000,000 and total debts of $247,800,0003.3710.
MORGAN STANLEY: Limited Amortization Cues Fitch to Hold Ratings
---------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Capital I Inc.'s commercial
mortgage pass-through certificates, series 1998-XL2 as:
-- $464.6 million Class A-2 at 'AAA';
-- Interest-only Class X at 'AAA';
-- $75.9 million Class B at 'AAA';
-- $42.4 million Class C at 'AA+';
-- $45.9 million Class D at 'A+';
-- $21.2 million Class E at 'BBB';
-- $10.6 million Class F at 'BB'.
Class A-1 has been paid in full.
The affirmations are the result of limited amortization and stable
pool performance since Fitch's last review. As of the December
2007 distribution report the transaction's principal balance has
decreased 6.6% to $659.9 million from $706.5 million at issuance.
Fitch reviewed the most recent operating statement analysis
reports and occupancy figures for all of the loans in the
transaction. Based on stable performance six of the seven loans
maintain their investment grade shadow ratings. All of the loans
have anticipated repayment dates in 2008. Interest rates range
from 6.20% to 6.95%.
The certificates are collateralized by seven fixed rate mortgage
loans: two interest-only retail portfolio loans, Edens & Avant I
(18.9%) and II (10.6%); four loans on regional malls: Grapevine
Mills (22.0%) in Grapevine, Texas, Mall of New Hampshire (14.4%)
in Manchester, New Hampshire, Westside Pavillion (14.0%) in Los
Angeles, California, and Northtown Mall (11.3%) in Spokane,
Washington; and one office property, Crystal Park IV, (8.9%)
located in suburban Virginia/Washington D.C. The six retail loans
all have investment grade shadow ratings and all of the mall loans
have shown improved performance since issuance. As of Dec. 2007,
27.9% of the Edens & Avant portfolio has been defeased.
The Crystal Park IV office loan is secured by a class A suburban
office building located in the Crystal City submarket of
Arlington, Virginia. U.S. Air, the largest tenant, vacated in
March 2006. The property manager has been actively marketing the
space and occupancy at the property has increased to 71.5% as of
YE 2007, up from 51% at YE 2006. Fitch continues to monitor
leasing activity at the property as the loan moves closer to
maturity.
MTI TECHNOLOGY: Court OKs Manatt Phelps as Special SEC Counsel
--------------------------------------------------------------
MTI Technology Corporation obtained authority from the Honorable
Erithe A. Smith of the United States Bankruptcy Court for the
District of Delaware to employ Manatt, Phelps & Philipps LLP as
its special SEC and corporate counsel, nunc pro tunc to Nov. 1,
2007.
As reported in the Troubled Company Reporter on Nov. 13, 2007,
Manatt Phelps is expected to:
a. analyze, advise, report and disclose required to comply
with SEC rules and regulations and for communication with
the SEC as necessary and appropriate; and
b. advise, assist, negotiate and document corporate transaction
on behalf of the Debtor.
The firm's professionals and their compensation rates are:
Professionals Designation Hourly Rate
------------- ----------- -----------
David M. Grinberg, Esq. Partner $520
Ivan L. Kallick, Esq. Partner $590
Jason Taketa, Esq. Associate $415
Ivan L. Kallick, Esq., a partner of the firm, assured the Court
that the firm does not hold any interest adverse to the Debtor's
estate and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.
Mr. Kallick can be reached at:
Ivan L. Kallick, Esq.
Manatt, Phelps & Philipps, LLP
1215 K. Street, Suite 1900
Sacramento, CA 95814
Tel: (916) 552-2300
Fax: (916) 552-2323
http://www.manatt.com/
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq.,
at Clarkson, Gore & Marsella, A.P.L., represents the Debtor.
The Debtor selected Omni Managmeng Group LLC as its claims and
noticing agent. The Trustee for Region 26 has not appointed an
Official Committee of Unsecured Creditors to date in this case.
When the Debtor filed for protection against its creditors, it
listed assets and debts at $64,002,000.
MUSICLAND HOLDING: Panel Wants to Avoid Payments to 10 Creditors
----------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks to avoid and
recover preferential and fraudulent payments made by Musicland
Holding Corp. and its debtor-affiliates to 10 creditors pursuant
to Sections 547 and 550 of the Bankruptcy Code.
Transferee Transfer Amount
----------- ---------------
Accenture LLP $139,125
Balzout, Inc. 54,788
Grant Thornton LLP 132,020
Great Eastern Entertainment Co. 225,075
Koch International Corp. 1,318,591
Musicrama, Inc. 431,364
Select-O-Hits, Inc. 415,634
Interlock Structures International Inc. 198,505
Uline, Inc. 61,560
Walking Billboards, Inc. 69,582
Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, relates
that the Transfers were made within 90 days prior to the Petition
Date while the Debtors were insolvent or became insolvent as a
result of the Transfers.
The Transfers enabled the Defendants or suppliers to receive more
than the Defendants would receive if:
-- the Debtors' cases were cases under Chapter 7 of the
Bankruptcy Code;
-- the Transfers had not been made; and
-- the Defendants received payment on account of the debt paid
by the Transfers to the extent provided by the provisions
of the Bankruptcy Code.
Mr. Power says that the Transfers constitute preferential
transfers which should be avoided pursuant to Section 547 and are
recoverable from the Defendant pursuant to Section 550.
The Transfers also constitute fraudulent transfers which should
be avoided pursuant to Section 548 and are recoverable from the
Defendants pursuant to Section 550, Mr. Power asserts. The
Debtors received less than a reasonably equivalent value in
exchange for the Transfers.
To the extent that the Defendants currently possess filed or
scheduled claims against the Debtors, whether prepetition or
administrative claims, the Committee wants the Claims disallowed
until the Transfers are repaid in full to the Debtors pursuant to
Section 502(d).
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. At March 31, 2007, the Debtors
disclosed $20,121,000 in total assets and $321,546,000 in total
liabilities.
On May 12, 2006, the Debtors filed their Joint Plan of Liquidation
with the Court. On Sept. 14, 2006, they filed an amended Plan and
a Second Amended Plan on Oct. 13, 2006. The Court approved the
adequacy of the Amended Disclosure Statement on Oct. 13, 2006.
The hearing to consider confirmation of the 2nd Amended Joint Plan
started on Nov. 28, 2006.
(Musicland Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
NEUMANN HOMES: Committee Taps Paul Hastings as Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors of Neumann Homes
Inc. and its debtor-affiliates' bankruptcy cases seeks authority
from the United States Bankruptcy Court for the Northern District
of Illinois to retain Paul, Hastings, Janofsky & Walker LLP as its
counsel, nunc pro tunc to Nov. 7, 2007.
The Creditors Committee selected Paul Hastings because of its
expertise on bankruptcy and restructuring, finance, labor and
employment, litigation, real estate, among others.
As the Creditors Committee's counsel, the firm is expected to:
(a) advise the Creditors Committee concerning its rights,
powers and duties under Section 1103 of the Bankruptcy
Code;
(b) give advice concerning the administration of the
Debtors' Chapter 11 cases;
(c) advise the Creditors Committee concerning any efforts by
the Debtors or other parties to collect and recover
property beneficial to the estates;
(d) give counsel in connection with the formulation,
negotiation, and confirmation of a plan or plans of
reorganization or liquidation and related documents;
(e) review the nature, validity, and priority of liens
asserted against the Debtors' property and advise the
Creditors Committee concerning the liens' enforceability;
(f) investigate, if necessary, any actions pursuant to
Sections 542-550 and 553 of the Bankruptcy Code;
(g) prepare legal documents, review financial and other
reports filed in the cases on behalf of the Creditors
Committee;
(h) give advice concerning, and prepare responses to, motions,
applications, notices, among others, that may be filed in
the cases;
(i) advise and assist the Creditors Committee in connection
with the disposition of the bankruptcy estates' property;
(j) advise and assist the Creditors Committee concerning
proposed executory contract and unexpired lease
assumptions, assumptions and assignments, and rejections;
(k) assist in claims analysis and resolution matters;
(l) commence and conduct litigation necessary to assert rights
on behalf of the Creditors Committee; and
(m) perform other legal services.
Paul Hastings will be paid on an hourly basis, plus reimbursement
of out-of-pocket expenses incurred related to any work
undertaken.
Paul E. Harner, Esq., at Paul Hastings assures the Court that the
firm does not hold or represent any interest adverse to the
Committee or any other parties-in-interest. He adds that the
firm is a disinterested person as that phrase is defined in
Section 101(14).
Headquartered in Warrenville, Illinois, Neumann Homes Inc. --
http://www.neumannhomes.com/-- develops and builds residential
real estate throughout the Midwest and West US. The company is
active in the Chicago area, southeastern Wisconsin, Colorado, and
Michigan. The company have built more than 11,000 homes in some
150 residential communities. The company offer formal business
training to employees through classes, seminars, and computer-
based training.
The company filed for Chapter 11 protection on Nov. 1, 2007
(Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at
Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the
Debtors to represent them in these cases. When the Debtors filed
for protection against its creditors, they listed assets and debts
of more than $100 million.
(Neumann Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).
NEUMANN HOMES: Gets Initial OK to Use Lenders' Cash Collateral
--------------------------------------------------------------
The Honorable Eugene R. Wedoff of the United States Bankruptcy
Court for the Northern District of Illinois authorized Neumann
Homes Inc. and its debtor-affiliates to use the Cash Collateral of
Guaranty Bank; Cole Taylor Bank; IndyMac Bank; RBC Centura Bank;
and Residential Funding Company, LLC, pursuant to Section
362(c)(2) of the Bankruptcy Code, in accordance with projected
cash receipts and disbursements on a weekly basis.
Judge Wedoff allowed the Debtors to immediately borrow and obtain
from the Postpetition Lenders an aggregate of $1,299,343 in DIP
loans, of which $575,000 will be used to fund an account for the
sole benefit of the professionals employed and retained by the
Debtors and the Official Committee of Unsecured Creditors, and
for the sole purpose of paying professional fees authorized to be
paid in the Debtors' cases up to the accrued amounts under the
Approved Budget.
In exchange for the DIP Loans, the Debtors agree to waive and all
Section 506(c) surcharge rights with respect to professional fees
related to the Pushback Program. Any additional advances
contemplated by the DIP Term Sheet must be approved by a further
Court order. The Postpetition Lenders may fund or pay, with the
Debtors' consent, additional amounts that the lenders deem
necessary to preserve or maintain their collateral.
Judge Wedoff ruled that the full amount of each Postpetition
lender's DIP loans, as well as all accrued interest, will be
immediately due and payable within 190 days after the Petition
Date or at the time the last project, which comprises the
lenders' prepetition collateral, is disposed.
DIP Liens
To secure the DIP Loans owing to each Postpetition Lender and as
adequate protection for each of lender's interests in its
prepetition collateral, Judge Wedoff grants each Postpetition
Lender certain liens and security interests in and to all real
and personal property that constitutes prepetition collateral and
all real and personal property acquired by any Debtor or any
successor trustee or other estate representative in any case or
successor case on or after the Petition Date of the same
category, type, nature and project location as the Postpetition
Lender's prepetition collateral.
The DIP Lien will be pari passu with the Postpetition Lender's
existing prepetition liens and security interests in and to its
prepetition collateral.
Judge Wedoff ruled that the DIP Lien on the DIP Collateral will
be valid and enforceable notwithstanding:
-- the validity, enforceability, priority, avoidability or
any other infirmity of the Postpetition Lender's
prepetition liens and security interests in its prepetition
collateral; or
-- the termination of DIP financing authority for any reason.
DIP Super-Priority Claims
In addition to its DIP Lien, Judge Wedoff irrevocably grants each
Postpetition Lender a super-priority administrative claim with
priority equivalent to a claim under under Section 364(c)(1) in
an aggregate amount of its DIP Loans and all accrued interest.
The DIP Super-Priority Claim will have priority over all other
administrative costs, and will at all times be senior to the
rights of any Debtor, any successor trustee or other estate
representative in any case or successor case. The claim is also
valid and enforceable notwithstanding the termination of DIP
financing authority for any reason.
The Postpetition Lenders will refrain from taking any adverse
action with respect to their DIP Collateral or the Debtors'
estates.
About Neumann Homes
Headquartered in Warrenville, Illinois, Neumann Homes Inc. --
http://www.neumannhomes.com/-- develops and builds residential
real estate throughout the Midwest and West US. The company is
active in the Chicago area, southeastern Wisconsin, Colorado, and
Michigan. The company have built more than 11,000 homes in some
150 residential communities. The company offer formal business
training to employees through classes, seminars, and computer-
based training.
The company filed for Chapter 11 protection on Nov. 1, 2007
(Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at
Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the
Debtors to represent them in these cases. When the Debtors filed
for protection against its creditors, they listed assets and debts
of more than $100 million.
(Neumann Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).
NICHOLS BROS: Inks $20 Mil. Consortium with Todd and Martinac
-------------------------------------------------------------
Matt Nichols of Nichols Brothers Boat Builders Inc. entered into a
consortium with Todd Pacific Shipyards and Martinac Boat Works
Ltd. to construct a new vessel worth $20 million in one year,
Susan Gilmore writes for the Seattle Times.
However, Department of Transportation Secretary, Paula Hammond,
was skeptical and said that it will take more than a year to build
a vessel that will survive the Keystone waters, the Seattle Times
reveals.
Washington State officials told the Seattle Times that they were
dismayed on the length of time it will take before the
transportation services along the route of Port Townsend-Keystone
to return to normal.
With only the Snohomish ferry serving the Port Townsend-Keystone
route, Mayor Mark Welch expressed disappointment for the
inadequate service along the route, which transports around
778,000 people and 370,000 vehicles annually, Seattle Times says.
Repair jobs of four Steel Electronics ferries formerly traversing
the route were halted after state inspection found out that the
ferries are no longer viable for repair and should be replaced due
to serious damages, Seattle Times relates.
Governor Christine Gregoire, upon recommendation of the Joint
Transportation Committee, is set to disclose a ferry safety plan
at the Todd Shipyards Thursday, Seattle Times notes.
Ms. Hammond assured the community that the government will come
out with a plan to fix the transportation problem at Port Townsend
and Whidbey Island, the report adds.
About Martinac Boat Works
Tacoma, Washington-based Martinac Boat Works Ltd., aka J.M.
Martinac Shipbuilding Corporation, --
http://www.martinacboatworks.com/and http://www.martinacship.com/
-- has a self-contained manufacturing facility where it constructs
and repairs sea vessels. The Martinac family started building
boats since 1924. In 2004, it launched the BoatWorks(TM) program
to pursue the high-end recreational market. Its team of
shipbuilders apply the custom yacht technology to the smaller,
more versatile boats demanded by sportsmen, adventurers, and
professionals. Presently, it boasts of its M36 Sport Yacht, a
Doug Zurn-designed, twin turbo-powered luxury machine.
About Todd Pacific Shipyards
Seattle, Washington-based Todd Pacific Shipyards, --
http://www.toddpacific.com/-- which has been in business for
since 1916, engages in ship repair and new construction. The
company has facilities capable of dry-docking vessels up to 800
feet in length and beam of 110 feet, and capable of berthing
anything that can get into Puget Sound. Major customers/markets
includ repair of barges, tug boats, fishing vessels, container
ships and other ships, including US Navy and Washington State
Ferries.
About Nichols Brothers
Freeland, Washington-based Nichols Brothers Boat Builders Inc. --
http://www.nicholsboats.com/-- provide expertise in the
construction of steel and aluminum vessels. The Debtor filed for
chapter 11 bankruptcy on Nov. 16, 2007 (W.D. Wa. Case No. 07-
15522). David C. Neu, Esq., and Marc L. Barreca, Esq., at
Kirkpatrick & Lockhart Preston Gates Ellis LLP represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection, it listed total assets of $3,413,495 and total debts
of $43,949,987.
OBLAST OF KIROV: Moody's Assigns Ba3 Issuer Rating
--------------------------------------------------
Moody's Investors Service assigned an issuer rating of Ba3 (global
scale, local currency) to the Oblast of Kirov. The rating outlook
is stable. At the same time, Moody's Interfax Rating Agency,
which is majority-owned by Moody's, assigned an Aa3.ru national
scale credit rating to the Oblast.
The ratings are driven by rapid tax revenue growth underpinned by
a healthy and comparatively diversified economy and tax base, and
a low debt burden. At the same time, the ratings are constrained
by (1) an inadequate tax base and low flexibility in tax revenue;
(2) weak operating balances; and (3) rapid growth in inflexible
operating expenditure, coupled with significant infrastructure
needs which are likely to result in an increase in the Oblast's
debt.
Moody's notes that the Oblast's tax revenue grew by 28% in 2005
and 33% in 2006, reflecting the improved financial health of local
taxpayers and the redistribution of tax revenue between regional
and municipal authorities. The Oblast's direct debt has been low
in recent years, corresponding to 12.8% of operating revenue at
the end of 2006, while the ratio of debt service to operating
revenues was around 5%.
Moody's also notes that the gross operating balance-to-operating
revenues ratio averaged only 1.8% in the three years 2004-2006.
Planned debt burden growth is moderate; however, the expected
growth of short-term bank loans in the Oblast's debt structure
would increase exposure to refinancing risks and potential
volatility in the financial market.
The Oblast's economy is still underdeveloped, with GRP per capita
less than half that of Russia. Moody's also notes that, over the
long term, the rapid decline and ageing of the Oblast's population
could have a constraining effect on economic growth and the
Oblast's operating expenditures.
The Oblast's ratings also reflects the application of Moody's
Joint-Default Analysis methodology for regional and local
governments, with a baseline credit assessment of 14 (on a scale
of 1 to 21, in which 1 represents the lowest credit risk), and a
low likelihood that the federal government would act to prevent a
default by the region. The assumed low likelihood of
extraordinary support reflects past instances of regional and
local government defaults and a federal government policy stance
that does not favour interventions to prevent defaults by lower
tier governments on a timely basis.
The Oblast of Kirov is situated in north-eastern European Russia
and has around 1.4 million inhabitants (1% of Russia's
population). Local industry is concentrated in machinery
building, chemistry and timber industries.
National Scale Ratings
Moody's Interfax Rating Agency's National Scale Ratings are
intended as relative measures of creditworthiness among debt
issues and issuers within a country, enabling market participants
to better differentiate relative risks. NSRs in Russia are
designated by the ".ru" suffix. NSRs differ from global scale
ratings, as assigned by Moody's Investors Service, in that they
are not globally comparable to the full universe of Moody's rated
entities, but only to other rated entities within the same
country.
OSHUN DEVELOPMENT: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Oshun Development Group, L.L.C.
197 Woodland Parkway, Suite 104-126
San Marcos, CA 92069-3020
Bankruptcy Case No.: 07-19372
Chapter 11 Petition Date: December 10, 2007
Court: Northern District of Ohio (Cleveland)
Judge: Pat E. Morgenstern-Clarren
Debtor's Counsel: Kenneth J. Freeman, Esq.
515 Leader Building
526 Superior Avenue
Cleveland, OH 44114-1903
Tel: (216) 771-9980
Fax: (216) 771-9978
Estimated Assets: $628,920
Estimated Debts: $1,197,168
Debtor's 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Angela Thi Bennett Debtor's rental real $20,550.00
3041 Torrington Road estate located at
Shaker Heights, OH 44122 2114 Noble Road
East Cleveland,
OH; value of
security:
$600,000; value of
senior lien:
$818,901
A.T.&T. Utility service $153
Bank of America Cash advances & $19,375
credit card
purchases
Brian Stanich Debtor's rental real $14,161
estate located at
2114 Noble Road
East Cleveland,
OH; value of
security:
$600,000; value of
senior lien:
$739,240
Chase Cash advances $14,775
and credit card
purchases
CitiBusiness Platinum Select Cash advances & $1,628
Card Credit card
purchases
City of East Cleveland Utility service $116
Dominion East Ohio Utility service $9,212
Protection One Security service $316
Ross Elevator, Inc. Repair $791
Schneider, Smeltz, Ranney & Attorney's fees $5,573
LaFond
Seeley, Savidge, Ebert & Attorney's fees $6,256
Gourash
SimplexGrinnell Security system $652
repair
The Eastern Star Home of Debtor's rental real $250,000
Cuyahoga County, Inc. estate located at
9027 Columbia Road 2114 Noble Road
Olmsted Falls, OH 44138 East Cleveland,
OH; value of
security:
$600,000; value of
senior lien:
$489,294
The Illuminating Co. Utility service $2,165
Tony Bennett Debtor's rental real $65,500
3041 Torrington Road estate located at
Shaker Heights, OH 44122 2114 Noble Road
East Cleveland,
OH; value of
security:
$600,000; value of
senior lien:
$753,401
Total Roofing Services, L.L.C. Repair $240
Wells Fargo Businessline Cash advances $9,213
OWENS-ILLINOIS: Debt Reduction Cues Fitch to Lift IDR to B+
-----------------------------------------------------------
Fitch Ratings has upgraded Owens-Illinois, Inc.'s IDR to 'B+'
following the company's improved operating results year-to-date,
and debt reduction after the sale of its plastics business. Other
ratings within the capital structure have been changed as:
Owens-Illinois, Inc.:
-- Issuer Default Rating to 'B+' from 'B';
-- Senior unsecured notes to 'B-/RR6' from 'B-/RR5';
-- Preferred stock to 'B-/RR6' from 'CCC+'/'RR6'.
Owens Brockway Glass Container Inc.
-- IDR to 'B+' from 'B';
-- Senior secured credit facilities to 'BB+/RR1' from
'BB/RR1';
-- Senior unsecured notes to 'BB/RR2' from 'BB-/RR2';
OI European Group, B.V.
-- Senior unsecured notes to 'BB/RR2' from 'BB-/RR2'.
Fitch has withdrawn this rating:
Owens Brockway Glass Container Inc.
-- Senior secured notes 'BB/RR1'.
The Rating Outlook is Positive. Approximately $3.6 billion of
debt is affected by the ratings action.
The upgrade of the IDR is based on improved operating performance
year-to-date and the completion of OI's debt reduction plan, which
was executed with the proceeds from the Plastics divestiture. The
company's pricing and operating initiatives have achieved better
than expected results this year. Profitability has improved with
EBITDA margin expansion of 220 basis points from Dec. 31, 2006 to
Sept. 30, 2007. Higher EBITDA has been accompanied by better
operating and free cash flow generation as the company has done a
better job of recovering cost inflation and reducing working
capital. Rolling twelve-month free cash flow has swung $427
million in three quarters from a $64 million loss at FYE2006 to a
$363 million gain LTM Sept. 30, 2007. This is after unusually
high asbestos payments in 2007 with cash payments of $226 million
so far this year, $86 million of which were accelerated payments.
The trend in new asbestos claims has not changed, but OI has
sought to accelerate resolution of existing claims.
The Positive Outlook reflects the improving trend in the
fundamentals of the business, and the company's continued focus on
operating improvements and pricing initiatives, as well as asset
realignment going forward. Further improvement in credit metrics
is likely in 2008 as Fitch anticipates improving cash flow
generation.
Fitch's recovery analysis has been updated to reflect the
reduction of secured debt at OB and the reduction in the estimated
asbestos liability factored into the estimated estate value
available for distribution to creditors in a distressed scenario.
The asbestos liability assumption has been reduced from $850
million to $600 million as a result of the significant payments OI
has made and the declining asbestos liability accounts on the
balance sheet. These changes and the upgrade of the IDR have led
to ratings upgrades for the senior secured bank debt, senior
unsecured notes at OB, and the convertible preferred stock. The
distribution of estate value has changed from Fitch's previous
analysis, and leads to recovery estimates consistent with the
'RR2' rating for the unsecured notes at OB and OI European Group,
B.V. and RR6 rating for the senior unsecured notes at OI, Inc.
OI's ratings continue to be supported by the company's leading
market positions, global footprint, technology leadership, and
long-term customer relationships with large, stable customers.
Ratings concerns remain focused on higher energy costs, other cost
inflation, and to a lesser extent asbestos liabilities. The
company's biggest energy exposure comes in the form of natural
gas. Natural gas prices have been moderate and less volatile in
2007, but higher prices going forward are possible. Fuel is
another large cost component, as shipping glass containers is
expensive. This cost is likely to move higher in coming months
with the rise in oil prices. OI's energy risks are somewhat
mitigated through the use of hedging, as well as the global nature
of its operations. Nevertheless, OI faces ongoing inflationary
pressures, which could get worse in 2008.
The company has done a good job in 2007 of emphasizing price over
volume. At some point though, the pricing strategy could lead to
lost volume, a possibility OI fully anticipates and a sacrifice
management is willing to make. Given the industry's low volume
growth this could negatively affect revenue for OI, accelerating
the need for capacity rationalization.
OI's cash flow is beginning to improve, and if the company is able
to show stabilized operating margins and sustain the recent trend
in better cash generation over the intermediate term, the current
ratings could be reviewed for a possible upgrade. Credit metrics
should continue to improve in 2008, and further deleveraging is
possible through debt reduction and earnings growth. In 2008,
Fitch expects lower cash asbestos payments, and higher capital
spending and other costs as the company continues certain
restructuring initiatives.
The primary ratings constraint in recent years has been limited or
negative free cash flow, coupled with the inability to recover
inflationary costs. With the previous ratings action in June,
Fitch acknowledged the significant debt reduction and improved
balance sheet strength that would result from the plastics
divestiture, as well as management's commitment to strengthening
the balance sheet and credit quality of the firm. However, cash
flows in the core glass operations were not yet exhibiting the
strength expected and Fitch had some concerns about the EBITDA
that would be lost with the sale of the plastics business
(estimated at about $180 million) although much of that loss would
be offset in cash flows by a reduction of cash interest expense.
However, two additional quarters have shown material progress on
the company's productivity, mix, and pricing initiatives such that
revenues and operating profit lost with the sale of plastics
should largely be made up in the glass business by the end of
2007, which is much sooner than Fitch anticipated.
Asbestos litigation remains an ongoing diversion of cash. OI's
strategy in 2007 has been to accelerate settlement of claims and
increase payments ($226 million YTD 2007 vs. $163 million FY2006).
This is a prudent use of cash for liability reduction in Fitch's
view. Payments should come down in 2008, but it is possible the
company will direct more cash towards asbestos than funded debt
going forward.
With better operating results, OI's liquidity profile has
strengthened over recent quarters. At Sept. 30, the company had
over $1.5 billion of cash and over $800 million available under
it's revolver. Pro-forma for debt repayments and discharge in
October and November, Fitch estimates the company's cash and
short-term investments would be around
$160 million, with no revolver drawn. Given OI's cash generation,
Fitch estimates year-end cash balances could be higher than usual,
even after additional assumed asbestos payments of $90 million in
fourth-quarter, and assuming no additional debt repayments.
Debt repayments due in 2008 consist of about $250 million of 7.35%
notes at Owens-Illinois, Inc. that mature in May. Amortization of
the company's bank debt has been prepaid through December 2010 and
no quarterly payments will be required until 2011. Bank debt
payments consist of: Tranche B (quarterly US$ at .25% of
principal); Tranche D (quarterly E0.5 million); Tranche A
(Australian $3.75 million); and Tranche C (Canadian $1.725
million). The latter two tranches were to begin payment in
September 2008.
In 2007 the company has paid off $450 million of 7.75% notes, due
2011; $625 million of 8.75% notes, due 2012; and repurchased or
discharged through defeasance $850 million of 8.875% notes due
2009. These bonds were senior secured obligations of the Owens-
Brockway subsidiary. By year end, OI will have about $3.6 billion
of total debt compared to about $5.5 billion at Dec. 31, 2006.
Fitch projects a total leverage ratio of about 2.5x by FYE2007
compared to 4.5x at FYE 2006. EBITDA interest coverage is
expected to improve to around 4.0x by year end compared to 2.5x at
FYE2006.
PCI GAMING: Moody's Rates $185MM Muti-Draw Term Facility at B1
--------------------------------------------------------------
Moody's Investors Service assigned a B1 (LGD-4, 54%) rating to PCI
Gaming Authority's $185 million senior secured multi-draw term
facility due 2012. A B1 corporate family rating and B1
probability of default rating was also assigned. The rating
outlook is stable.
Proceeds from PCI's proposed $185 million senior secured multi-
draw term facility along with cash flow from its existing casinos
will be used to fund the development and construction of the Wind
Creek Atmore Casino and Hotel. This new hotel facility will
replace PCI's existing facility in Atmore, Alabama. The existing
facility will remain in operation until the new facility opens.
The ratings consider PCI's high margin cash flow from existing
operations, low peak construction and pro forma leverage, and lack
of meaningful competition in its immediate market area. The
Poarch Band of Creek Indians, the owner of PCI, is the only
federally recognized Indian Tribe in the State of Alabama.
Additionally, the construction of the Wind Creek Atmore Casino and
Hotel should improve PCI's regional attraction and ability to
defend its market share against the continued post-Katrina ramp-up
of the Gulf Coast, MS gaming market.
Key credit concerns include PCI's small size and single market
asset profile, as well as the increasing competitive pressure from
the rapidly improving post-Katrina Gulf Coast gaming market. Also
considered are construction and development risks, and that the
construction contingency will not be pre-funded with proceeds from
the note offering. The construction contingency will be funded
from existing operating cash flow as project amounts are spent.
The stable rating outlook considers the Bureau of Indian Affairs
and National Indian Gaming Commission inquiries into the land
status of PCI's Tallapoosa Entertainment Center. The NIGC and BIA
have informally asked the Tribe to explain the basis for gaming on
these lands which were taken into trust, although no enforcement
action has been taken or threatened, and there is no pending
litigation.
PCI Gaming Authority owns three Class II gaming facilities in
Alabama: Creek Entertainment Center, Riverside Entertainment
Center and Tallapoosa Entertainment Center. PCI Gaming is an
unincorporated instrumentality of the The Poarch Band of Creek
Indians and does not publicly disclose financial information.
PHOENIX FOOTWEAR: Earns $11.1 Million in Third Quarter
------------------------------------------------------
Phoenix Footwear Group Inc. reported net income of $11.1 million
for the third quarter ended Sept. 29, 2007, compared with net
income of $343,000 for the third quarter of fiscal 2006. Net
income for the third quarter of fiscal 2007 included a one-time
after-tax gain of $14.1 million from the July 2, 2007, sale of the
Royal Robbins brand. Net income for the third quarter of fiscal
2006 included net income of $717,000 from the discontinued
operations of the Royal Robbins brand.
Net sales from continuing operations for the third quarter of
fiscal 2007 decreased 5.0% to $26.0 million, compared to
$27.3 million for the third quarter of fiscal 2006. The decline
was primarily attributable to a 25% decrease in the company's
Chambers business and was partially offset by increases in the
company's H.S. Trask, SoftWalk and Tommy Bahama brands with the
growth in Tommy Bahama totaling 119%.
Gross margin from continuing operations for the third quarter of
fiscal 2007 was 22.0%, compared to 31.6% for the third quarter of
fiscal 2006. The decrease in gross margin was primarily related
to increased off-price sales and markdowns, and underabsorbed
production costs.
Operating expenses were $9.2 million for the third quarter of
fiscal 2007, compared to $8.6 million for the third quarter of
fiscal 2006. This increase was attributable to costs related to
the hiring of a new CEO as well as increased spending on
consulting and brand design, marketing and advertising.
As of Sept. 29, 2007, Phoenix Footwear's cash and cash equivalents
totaled $494,000 and working capital was $10.0 million. As of
Sept. 29, 2007, the company had $20.4 million in bank debt,
including its outstanding line of credit.
At Sept. 29, 2007, the company's consolidated balance sheet showed
$89.0 million in total assets, $45.9 million in total liabilities,
and $43.1 million in toal stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 29, 2007, are available for
free at http://researcharchives.com/t/s?2645
Going Concern Doubt
Grant Thornton LLP exressed substantial doubt about Phoenix
Footwear Group Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements as of
Dec. 30, 2006, and Dec. 31, 2005. Grant Thornton cited the
company's net loss of $20.4 million for the year ended Dec. 30,
2006, and the company's deficit in working capital of $9.5 million
at Dec. 30, 2006. The auditing firm also added that the company
did not meet the financial covenants under its credit agreement as
of Dec. 30, 2006.
As of Sept. 29, 2007, the company was not in compliance with the
financial covenants under its existing credit agreement which have
not been revised to reflect the Royal Robbins sale. The company
has not requested a waiver for the Sept. 29, 2007, default in
connection with discussing with its bank a replacement facility.
Additionally, the company expects that it will not meet certain of
these financial covenants during the remainder of 2007.
About Phoenix Footwear
Headquartered in Carlsbad, California, Phoenix Footwear Group Inc.
(AMEX: PXG) -- http://www.phoenixfootwear.com/-- designs,
develops and markets a diversified selection of men's and women's
dress and casual footwear, belts, and other accessories. The
company's moderate-to-premium priced brands include the Tommy
Bahama Footwear(R), Trotters(R), SoftWalk(R), Strol(R), H.S.
Trask(R), and Altama(R) footwear lines, and Chambers Belts(R).
POPE & TALBOT: Remaining Wood Products Sale Procedures Opposed
--------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
asks the United States Bankruptcy Court for the District of
Delaware to deny Pope & Talbot Inc. and its debtor-affiliates'
proposed Sale Procedures for the remaining wood products business.
The U.S. Trustee also asks the the Debtors to confirm that it is
their burden to address any and all issues related to consumer
privacy under Section 363(b)(1) of the Bankruptcy Code, and
consumer fraud under Section 363(o) of the Bankruptcy Code,
through any order seeking approval of a Sale.
The Debtors had previously sought Court approval of uniform
bidding and sale procedures with respect to the sale of certain
wood products assets not contemplated to be sold to International
Forest Products and the assumption of related liabilities.
The principal assets of the Remaining Wood Products Business
include the mills located in Fort Saint James, British Columbia
and Midway, British Columbia, and the receivables generated by
the Wood Products Business that are held by P&T Factoring Limited
Partnership.
The U.S. Trustee complains that under the proposed sale
procedures, the Debtors appear to seek tentative authority to
provide to any subsequently-selected stalking horse bidder certain
bid protections. "Having the proposed bid protections outlined in
the order approving the Bidding Procedures is inappropriate and
misleads prospective stalking horse bidders into believing that
[the] amounts have been pre-approved by this Court," William K.
Harrington, Esq., of the office of the U.S. Trustee, asserts.
As the stalking horse bidder has not yet been identified and no
information has been disclosed regarding the value of the
transaction, approval of a break-up fee is not warranted at this
time, Mr. Harrington argues.
Mr. Harrington asserts that the Debtors must acknowledge in the
sale order that their proposed sale will not be free and clear of
claims and defenses that are related to a consumer credit
transaction subject to the Truth in Lending Act or any consumer
credit contract as defined by Section 363(o) of the Bankruptcy
Code.
Moreover, the U.S. Trustee points out, the Debtors did not
provide sufficient information to determine whether a consumer
privacy ombudsman needs to be appointed to protect personally
identifiable information about individuals, pursuant to Section
363(b)(1) of the Bankruptcy Code.
Creditors Committee
The Official Committee of Unsecured Creditors asks the Court to
revise the proposed Remaining Wood Business Bidding Procedures by:
(a) deleting any reference to the amounts and types of stalking
horse protections the Debtors are willing to grant; and
(b) allowing it to participate in any sale process.
The Creditors Committee is concerned that the Debtors' proposed
bidding procedures for their remaining wood business invite
excessive break-up fees and expense reimbursements.
The Creditors Committee's proposed counsel, Jason W. Staib, Esq.,
at Blank Rome LLP, in Wilmington, Delaware, tells the Hon.
Christopher S. Sontchi that the Creditors Committee has
significant issues and concerns with respect to any bid
protections to be granted to a potential purchaser of the Debtors'
Remaining Wood Business, but sees no need to address the issues at
this time.
While the Debtors may have already created false expectations
among potential stalking horse bidders, those expectations should
not be perpetuated, the Creditors Committee asserts.
About Pope & Talbot
Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business. Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada. Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.
The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007. The Debtors' CCAA Stay expires
on Jan. 16, 2008.
The company and fourteen of its debtor-affiliates filed for
Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case
No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang,
Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.
The Debtors' exclusive period to file a plan expires on March 18,
2008.
Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels. If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding. (Pope & Talbot
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
POPE & TALBOT: Trade Creditors Ask Court to Secure Goods Payment
----------------------------------------------------------------
About 23 of Pope & Talbot Inc. and its Canadian debtor-affiliates'
postpetition trade creditors ask the British Columbia Supreme
Court:
-- for a "charge" in all of the Canadian Debtors' property as
security payment of all amounts the Debtors owe them, of up
to $5,000,000, for goods and services they provided to the
Debtors;
-- to compel the Canadian Debtors to timely pay for the
reasonable fees and expenses of their legal and
financial advisors; and
-- to extend the benefit of the Initial Order's administration
charge, to include their legal and financial advisors, and
increase the aggregate amount of the Administration Charge
to $3,500,000.
Linda A. Widdup, Esq., at MacPherson Leslier & Tyerman LLP, in
Regina, Saskatchewan, informs the Court that the Postpetition
Trade Creditors are small and medium-sized logging contractors in
Interior, British Columbia, who services the Debtors' sawmill and
timber operations.
According to Ms. Widdup, the Postpetition Trade Creditors, who
have organized themselves into a logging contractors' committee,
are unwilling or unable to supply the Debtors with materials and
services without the certainty that they will be paid in full for
the supply. "The materials and services provided by the
Postpetition Trade Creditors are essential to sustain the
Debtors' ongoing operations. The participation of the
Postpetition Trade Creditors in the CCAA Proceedings is important
for all stakeholders," she avers.
It will be difficult for the Postpetition Trade Creditors to
continue to pay for the legal and financial advice they need to
adequately participate in the CCAA Proceedings without assurances
that the fees and disbursements of their legal and financial
advisors will be paid in full, Ms. Widdup points out.
The 23 Postpetition Trade Creditors are Lime Creek Logging Ltd.,
Crescent Bay Construction Ltd., Pattom Services Ltd., Mountain
Meadow Contracting Ltd., GL & T Logging Ltd., Koert Dieterman
Contracting Ltd., P & D Logging Ltd., Galena Contractors Ltd., D
& B/W Logging Ltd., MacDonald Creek Logging Ltd., R & A Logging
Ltd., Barry Abbott Logging Ltd., Covergent Management Group Ltd.,
Arrow Lakes Logging Ltd., Big Ledge Contracting Ltd., 513251 B.C.
Ltd. d/b/a Mid-Boundary Contracting, E & F Logging Ltd., Balcaen
Consolidated Contracting Ltd., Cougar Valley Ventures Ltd.,
Nakusp Logging Co. Ltd., John Bosovich d/b/a John Bosovich
Trucking, Barry Areschenkoff d/b/a Areschenkoff Trucking and GGR
Enterprises Ltd.
About Pope & Talbot
Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business. Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada. Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.
The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007. The Debtors' CCAA Stay expires
on Jan. 16, 2008.
The company and fourteen of its debtor-affiliates filed for
Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case
No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang,
Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.
The Debtors' exclusive period to file a plan expires on March 18,
2008.
Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels. If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding. (Pope & Talbot
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
PROBE MFG: Sept. 30 Balance Sheet Upside-Down by $309,938
---------------------------------------------------------
Probe Manufacturing Inc.'s consolidated balance sheet at Sept. 30,
2007, showed $1,908,099 in total assets, and $2,218,037 in total
liabilities, resulting in a $309,938 total stockholders' deficit.
At Sept. 30, 2007, the company's consolidated balance sheet also
showed strained liquidity with $1,659,466 in total current assets
available to pay $1,882,599 in total current liabilities.
The company reported net income of $3,234 on sales of $1,566,499
for the third quarter ended Sept. 30, 2007, compared with net
income of $40,325 on sales of $2,551,236 in the comparable period
in 2006.
Lower revenue was due to refocusing sales on more diverse
industries such as medical device, aerospace, and alternative
energy industries that are more stable and committed to long term
partnerships.
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?2642
Going Concern Doubt
Jaspers + Hall P.C. expressed substantial doubt about Probe
Manufacturing Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the fiscal years ended Dec. 31, 2006, and 2005.
The auditor pointed to the company's accumulated deficit from
operations and its difficulties in maintaining sufficient working
capital.
About Probe Manufacturing
Based in Lake Forest, California, Probe Manufacturing, Inc.
(OTC BB: PMFI) -- http://www.probemi.com/-- was founded in 1995
and is one of Southern California's Electronics Manufacturing
Services companies. Probe Manufacturing Inc. provides a full
range of electronics manufacturing and supply chain management
services to the some of the world's leading aerospace, industrial,
automotive, alternate energy, hybrid, and medical device
manufacturing firms. The company is also in the process of
developing alternative energy technologies that enables vehicles
and generators to operate on clean-burning alternative fuels.
PROVIDENCE SERVICE: Deal Change Cues Moody's to Withdraw Rating
---------------------------------------------------------------
Moody's Investors Service withdrew Providence Service
Corporation's B1 rating on its $40 million delayed draw term loan
following a change in the company's deal structure. Concurrently,
Moody's affirmed Providence Service's B2 Corporate Family Rating
and the existing debt ratings. The ratings outlook remains
stable.
The B2 Corporate Family Rating reflects the pro forma high
leverage, customer contract concentration with Medicaid and
government payers, acquisitive nature of Providence Service, and
inherent seasonality. Additionally, the B2 Corporate Family
Rating also considers the company's pro forma leading market
positions, stability in the renewal of contracts and stable free
cash flow generation.
Instead of the delayed draw term loan, the credit agreement will
contain a $40 million accordion feature that can be used to fund
the LogisitiCare earn-out payment.
Ratings are subject to review of final documentation.
This rating was withdrawn:
-- B1 (LGD3/37%) on a $40 million Delayed Draw Term Loan due
2013.
These ratings were affirmed:
-- B2 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- SGL-3 Speculative Grade Liquidity Rating;
-- B1 rating (LGD3/37%) on a $40 million Senior Secured
Revolver; and
-- B1 rating (LGD3/37%) on a $173 million Senior Secured Term
Loan.
Headquartered in Tucson, Arizona, Providence Service Corporation
is a provider and manager of government sponsored social services.
For the twelve months ended Sept. 30, 2007, the company reported
approximately $226 million in revenues.
REAL MEX: Poor Liquidity Cues Moody's to Cut CFR to B3 from B2
--------------------------------------------------------------
Moody's Investors Service downgraded Real Mex Restaurants, Inc.'s
corporate family rating to B3 from B2 and the $105 million senior
secured notes to Ba3 from Ba2. At the same time, the SGL-3
speculative grade liquidity rating was lowered to SGL-4 and the
rating outlook remains negative.
The downgrade of the corporate family rating to B3 reflects the
company's recently weakened debt protection metrics and
deteriorating liquidity. The weak credit metrics, such as
increasingly high leverage, poor interest coverage and negative
free cash flow, are driven by Real Mex's sliding operating trends
primarily stemming from escalating cost pressures as well as soft
guest traffic patterns. The margin pressure has been mainly
arising from commodity price inflation and minimum wage increases.
"Although the entire casual dining category has been plagued by
some unfavorable macro economic environment such as high gasoline
prices and a housing slump, Real Mex's challenge has been
exacerbated in part due to its store concentration in California,
where the foreclosure rate has been among the highest." said
Moody's analyst, John Zhao.
The negative outlook encompasses the ongoing challenges in the
current operating environment and Real Mex's limited prospects for
a near-term rebound in performance. The outlook also reflects
concern regarding the company's liquidity position given that the
continuation of negative free cash flow generation and high
leverage could result in potential covenant violations.
"Real Mex's current credit metrics are weak even for a B3
corporate family rating," added Zhao.
Moody's expects the company to scale back capital spending to
conserve cash in an effort to improve its credit metrics and
protect its weak liquidity position. A failure to stabilize
operations and improve credit metrics in the near or intermediate
term or a potential breach of financial covenant, could lead to
further rating action
The downgrade to SGL-4 is prompted by the company's weakening
liquidity profile, highlighted by its negative free cash flow and
very tight cushion under its financial covenants under the bank
credit agreement and limited access to its revolving credit
facility. Moody's notes, that the company's prospective ability
to remain in compliance with its financial covenants over the next
twelve months is uncertain. The continued weak operating
performance may force the company to seek a waiver or amendment
from its lenders in order to avoid a covenant breach.
Ratings downgraded with a negative outlook:
Real Mex Restaurants, Inc.
-- Corporate family rating to B3 from B2
-- Probability of default rating to B3 from B2
-- $105 million senior secured notes to Ba3 (LG2-14%) from
Ba2 (LGD2-15%)
-- Speculative Grade Liquidity rating to SGL-4 from SGL-3
Real Mex Restaurants, Inc., headquartered in Cypress, California,
is a leading Mexican-themed restaurant chain operator that owns,
operates and franchises casual dining restaurants primarily under
the El Torito, Chevys Fresh Mex and Acapulco Mexican Restaurant
concepts. At Dec. 31, 2006, Real Mex operated 195 restaurants and
franchised 32 Chevy's restaurants with the majority of units
concentrated in California. Total revenues for fiscal 2006 were
approximately $564 million.
RENAISSANCE HOME: Moody's Lowers Rating on Class M-8 to B3
----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 12
tranches and placed on review for possible downgrade the ratings
of one tranche issued by Renaissance Home Equity 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: Renaissance Home Equity Loan Trust 2007-1
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A3, previously A1,
-- Cl. M-5, Downgraded to Baa2, previously A2,
-- Cl. M-6, Downgraded to Ba2, previously A3,
-- Cl. M-7, Downgraded to B2, previously Baa1,
-- Cl. M-8, Downgraded to Ca, previously Baa2,
-- Cl. M-9, Downgraded to C, previously Baa3.
Issuer: Renaissance Home Equity Loan Trust 2007-2
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Baa3, previously A3,
-- Cl. M-7, Downgraded to Ba3, previously Baa1,
-- Cl. M-8, Downgraded to B3, previously Baa2,
-- Cl. M-9, Downgraded to Ca, previously Baa3.
ROBERT NIEBAUER: Case Summary & 18 Largest Unsecured Creditor
-------------------------------------------------------------
Debtor: Robert L. Niebauer
dba Professional Realty and Development Corporation
aka PRDC
8616 Blackwolf Drive
Madison, WI 53717
Bankruptcy Case No.: 07-14853
Chapter 11 Petition Date: December 7, 2007
Court: Western District of Wisconsin (Madison)
Judge: Robert D. Martin
Debtor's Counsel: Claire Ann Resop, Esq.
Brennan, Steil & Basting, S.C.
22 East Mifflin Street, Suite 400
P.O. Box 990
Madison, WI 53701-0990
Tel: (608) 251-7770
Fax: (608) 251-6626
Estimated Assets: $100,000 to $500,000
Estimated Debts: $10 Million to $50 Million
Debtor's list of its 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
BB Syndication Services, Inc. Deficiency $5,584,092
7700 Mineral Point Road undetermined for
Suite 310 Mortgage on Property
Madison, WI 53717 of 100 Block, LLC
Winnebago Co. Circuit
Court Case No. 07-CV-935
City of Appleton TIF TIF-Development $5,000,000
102 North Appleton Street Agreement
Appleton, WI 54911
Rapid Funding LLC Outgamie Co. $3,353,499
200 Spruce Street, Suite 200 Case No. 06CV1242
Denver, CO 80230 Co-creditor/plaintiff:
ACM LLC.
Deficiency for
Richmond Terrace
property
State of Colorado $280,000
District Court
Case No. 06CV11563
Deficiency judgment
for Wyoming, MI
property
City of Oshkosh 100 Block $2,225,946
Attn: City Attorney Warren P. Development
Kraft Agreement with City
215 Church Street of Oshkosh
Oshkosh, WI 54902-1130 Winnebago Co.
Circuit Court Action
Case No. 07CV1375
Gully, Virgina L. Debt of PRDC $2,000,000
5119 Farmington Close
Rockford, IL 6114
PCRL Investments, LP Debt of Richmond $1,500,000
200 Spruce Street, Suite 200 Terrace, LLC
Denver, CO 80230
Luther, Alan and Lynda $1,200,286
342 Hillside Road
Colgate, WI 53017
City of Menasha TIF-Funding $1,200,000
1410 Main Street Development
Menasha, WI 54952 Agreement between
City of Menasha and
Menasha Housing
Partners LLC
Godfrey, William and Loyola Collateral $1,173,684
S53 W26445 Foxvale Court Assignment of
Waukesha, WI 53186 Brookfield Square
Acquisition Company,
LLC Docketed Judgment
Case No. 06CV2956
Uptown Brass Development, LLC Debt of PRDC- $1,000,000
11019 North Towne Square Road Kenosha Co. real
Suite 8 estate Kenosha Co.
Mequon, WI 53092 Circuit Court Action
Case No. 07CV1170
Winnebago County Treasurer Taxes on property $184,000
100 North Main Street owned by Menasha
Oshkosh, WI 54902 Housing Partners
Property owned by $146,890
100 Block LLC
Cassiani, C. Vincent Debt of Angelus $310,000
2050 Windsor Court Management Services;
Kaukauna, WI 54130 Outgamie Co.
Circuit Court, Case
No. 06CV1532
DSI Real Estate Group Inc. Debt of Stonecroft $300,000
2800 Royal Avenue, Suite 302 of Mendota, LLC
Madison, WI 53713
H.J. Martin & Son, Inc. Outgamie Co. Case $287,600
c/o Atty James T. Joannes No. 2005CL0059
Recka & Joannes SC Debt of PRDC
P.O. Box 933 Richmond Terrace,
Green Bay, WI 54305 PRDC, Richmond Terrace
Condominium Assn, Inc.
and/or Richmond
Terra LLC
Hearthstone Retirement Debt of Professional $221,582
Community, LLC Realty & Development
Corporation (PRDC)
Winnebago-2006CV1510
Gervasi, Dennis Debt of PRDC $172,000
Gervasi, Joe Debt of PRDC $172,000
Gervasi, Vito V.J. Debt of PRDC; owed $172,000
jointly to Dennis
and Joel Gervasi
ROCKY ROBINSON: Can Employ Sheridan-MacMahon as Sales Agent
-----------------------------------------------------------
The Honorable Stephen S. Mitchell of the U.S. Bankruptcy Court for
the Eastern District of Virginia gave Rocky Robinson authority to
employ Sheridan-MacMahon Ltd. as its sales agent.
Sheridan will assist in the sales and marketing of Debtor's
residence.
The Debtor will pay the firm a commission at 6% of the sale price.
The Debtor believes that the firm is a disinterested person within
the meaning of Section 327 of the U.S. Bankruptcy Code.
The firm can be reached at:
Paul MacMahon
Sheridan-MacMahon Ltd.
230 Mason's Lane
Leesburg, VA 20175
Tel: (540) 687-5588
Fax: (540) 687-3720
http://www.sheridanmacmahon.com/
Based in Leesburg, Virginia, Rocky Robinson filed for chapter 11
protection on Sept. 26, 2007 (Bankr. E.D. Va. Case No. 07-12701).
When the Debtor filed for protection from its creditors, it
disclosed estimated assets and debts between $1 million and
$100 million. Thomas P. Gorman, Esq., at Tyler, Bartl, Gorman &
Ramsdell PLC represents the Debtor in its restructuring efforts.
The Debtor's list of its 20 largest unsecured creditors showed
claims aggregating to more than $20 million.
ROCKY ROBINSON: Judge Mitchell OKs Marcher Consultants as Advisor
-----------------------------------------------------------------
Rocky Robinson obtained approval from the Honorable Stephen S.
Mitchell of the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ Marcher Consultants Inc. as its financial
advisor.
Marcher will:
a. assist the Debtor in the administration of its financial
affairs while the Debtor's bankruptcy case is pending.
b. coordinate with Debtor and Debtor's counsel in the
preparation of the schedules and potentially the plan of
reorganization and disclosure statement.
c. be prepared to provide testimony as requested from time
to time by Debtor's counsel.
d. provide other financial consulting services that may be
requested from time to time by the Debtor or its counsel.
The firm will bill at the maximum rate of $175.00 per hour for
principals, $125.00 for senior associates, and $75.00 for
analysts, subject to review by the Court.
The Debtor will also pay Marcher $10,000 advance retainer, which
has been placed in trust in October.
The Debtor believes that Marcher is a disinteresteed person
within the meaning of Section 101(14) of the U.S. Bankruptcy Code
and has had substantial experience in bankruptcy matters.
The firm can be reached at:
Stephen Wexler, Vice President
Marcher Consultants Inc.
8230 Leesburg Pike, Suite 610
Vienna, VA 22182
Based in Leesburg, Virginia, Rocky Robinson filed for chapter 11
protection on Sept. 26, 2007 (Bankr. E.D. Va. Case No. 07-12701).
When the Debtor filed for protection from its creditors, it
disclosed estimated assets and debts between $1 million and
$100 million. Thomas P. Gorman, Esq., at Tyler, Bartl, Gorman &
Ramsdell PLC represents the Debtor in its restructuring efforts.
The Debtor's list of its 20 largest unsecured creditors showed
claims aggregating to more than $20 million.
ROCKY ROBINSON: Submits Schedules of Assets and Liabilities
-----------------------------------------------------------
Rocky Robinson submitted to the U.S. Bankruptcy Court for the
Eastern District of Virginia its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property $2,300,000
B. Personal Property 16,170,242
C. Property Claimed
as Exempt 0
D. Creditors Holding $10,866,516
Secured Claims
E. Creditors Holding 1,649,094
Unsecured Priority
Claims
F. Creditors Holding 20,761,123
Unsecured Nonpriority
Claims
---------- -----------
TOTAL $18,470,242 $33,276,733
Based in Leesburg, Virginia, Rocky Robinson filed for chapter 11
protection on Sept. 26, 2007 (Bankr. E.D. Va. Case No. 07-12701).
When the Debtor filed for protection from its creditors, it
disclosed estimated assets and debts between $1 million and
$100 million. Thomas P. Gorman, Esq., at Tyler, Bartl, Gorman &
Ramsdell PLC represents the Debtor in its restructuring efforts.
The Debtor's list of its 20 largest unsecured creditors showed
claims aggregating to more than $20 million.
SAFENET INC: Lt. Gen. Steven Boutelle Joins Board of Directors
--------------------------------------------------------------
SafeNet Inc. has appointed Lieutenant General Steven Boutelle
(Ret.), former CIO for the U.S. Army, to its board of directors.
Lt. Gen. Boutelle has been a force for change, transforming the
role of the CIO to include business and policy leadership, in
addition to his nearly three decades of program management
experience in the information security industry. He has overseen
programs for hardware development of satellite terminals and radio
systems; software systems for intelligence, logistics, missiles,
air defense and personnel; development of Information Assurance.
"I have always advocated the adaptation of commercial technologies
to help transform the government," said Lt. Gen. Boutelle. "I am
pleased to join SafeNet - a company that has ambitiously put that
to practice for many years. As a board member, I look forward to
strengthening the common security bonds between the government and
critical industries."
"Steven's deep knowledge of the security technology industry and
the government sector will be an enormous asset to SafeNet as the
company continues its strong growth and remains a leader in the
information security industry," Chris Fedde, SafeNet president and
COO, said. "Myself and the other members of the Board of
Directors look forward to Steve enhancing our strong leadership
team."
About SafeNet Inc.
headquartered in Belcamp, Maryland, SafeNet Inc. --
http://www.safenet-inc.com/-- is an information security.
Founded more than 20 years ago, the company provides complete
security utilizing its encryption technologies to protect
communications, intellectual property and digital identities, and
offers a spectrum of products including hardware, software, and
chips.
* * *
Moody's Investor Services placed SafeNet Inc.'s long term
corporate family and probability of default ratings at 'B2' in May
2007. The ratings still hold to date with a negative outlook.
SALEM CAPITAL: Exclusive Plan Filing Period Expires on February 22
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia set
Feb. 22, 2008, as the last day for Rocky Robinson to exlusively
file its chapter 11 plan and disclosure statement.
Within that period, other parties are barred from filing any
plan.
Lake Forest, Illinois-based Salem Capital Group Inc. provides
financial services to public and private entities relating to
municipal bonds. The Debtor filed for chapter 11 bankruptcy on
Oct. 27, 2007 (Bankr. N.D. Ill. Case No. 07-19825). The LauraLee
K. Bell - 1993 Trust is the Debtor's largest unsecured creditor
with $29,000,000 claim.
SALEM CAPITAL: Gets Court OK to Hire Shaw Guissis as Counsel
------------------------------------------------------------
Rocky Robinson obtained authority from the Honorable John H.
Squires of the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ Shaw Guissis Fishman Glantz and Wolfson &
Towbin LLC as its general bankruptcy counsel.
Shaw Guissis will:
(a) give the Debtor legal advice with respect to its rights,
powers, and duties as debtor-in-possession in connection
with the administration of its estate and disposition of
its property;
(b) take other action as may be necessary with respect to
claims that may be asserted against the Debtor and
property of its estate;
(c) prepare applications, motions, complaints, orders, and
other legal documents as may be necessary in connection
with the appropriate administration of the Debtor's case;
(d) represent the Debtor with respect to inquiries and
negotiations concerning creditors of its estate and
property of its estate;
(e) initiate, defend, or otherwise participate on behalf of
the Debtor in all proceedings before the Court or any
other court of competent jurisdiction; and
(f) perform other legal services on behalf of the Debtor that
may be required to aid in the proper administration of
its estate.
The Debtor will pay the firm at its standard hourly rates. As of
June 1, 2007, Shaw Gussis' hourly rates ranged from $350 to $580
for members and $230 to $315 for associates. Shaw Gussis reviews
its rates annually and expects those rates to be adjusted on or
after Jan. 1, 2008.
Prior to bankruptcy, the Debtor provided Shaw Gussis with a
prepayment totaling $25,000 on account of fees and services
rendered to the Debtor, of which approximately $11,000 relates to
prepetition services.
To the best of the Debtor's knowledge, Shaw Gussis is a
"disinterested person" within the scope of Section 101(14) as
required by Section 327(a) of the U.S. Bankruptcy Code.
The firm can be reached at:
Brian L. Shaw, Esq.
Janice A. Alwin, Esq.
Shaw Guissis Fishman Glantz and Wolfson & Towbin LLC
321 North Clark Street, Suite 800
Chicago, IL 60610
Tel: (312) 541-0151
Fax: (312) 980-3888
http://www.shawgussis.com/
Lake Forest, Illinois-based Salem Capital Group Inc. provides
financial services to public and private entities relating to
municipal bonds. The Debtor filed for chapter 11 bankruptcy on
Oct. 27, 2007 (Bankr. N.D. Ill. Case No. 07-19825). The LauraLee
K. Bell - 1993 Trust is the Debtor's largest unsecured creditor
with $29,000,000 claim.
SALEM CAPITAL: Submits Schedules of Assets and Liabilities
----------------------------------------------------------
Rocky Robinson submitted to the U.S. Bankruptcy Court for the
Eastern District of Virginia its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property $0
B. Personal Property 12,116,117
C. Property Claimed
as Exempt 0
D. Creditors Holding $0
Secured Claims
E. Creditors Holding 0
Unsecured Priority
Claims
F. Creditors Holding 30,645,029
Unsecured Nonpriority
Claims
---------- -----------
TOTAL $12,116,117 $30,645,029
Lake Forest, Illinois-based Salem Capital Group Inc. provides
financial services to public and private entities relating to
municipal bonds. The Debtor filed for chapter 11 bankruptcy on
Oct. 27, 2007 (Bankr. N.D. Ill. Case No. 07-19825). The LauraLee
K. Bell - 1993 Trust is the Debtor's largest unsecured creditor
with $29,000,000 claim.
SAXON ASSET: Moody's Cuts Rating on Cl. B-3 to B2 from Baa3
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 8 tranches
issued Saxon Asset Securities 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: Saxon Asset Securities Trust 2007-1, Mortgage Loan Asset
Backed Certificates, Series 2007-1
-- Cl. M-6, Downgraded to Baa1, previously A3,
-- Cl. B-1, Downgraded to Baa3, previously Baa1,
-- Cl. B-2, Downgraded to Ba2, previously Baa2,
-- Cl. B-3, Downgraded to B2, previously Baa3.
Issuer: Saxon Asset Securities Trust 2007-2
-- Cl. M-6, Downgraded to Baa2, previously A3,
-- Cl. B-1, Downgraded to Ba1, previously Baa1,
-- Cl. B-2, Downgraded to Ba3, previously Baa2,
-- Cl. B-3, Downgraded to B3, previously Baa3.
SEA CONTAINERS: SCSL Panel Wants to Set Record Staring on Progress
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Sea Containers
Services Ltd., disagrees with Sea Containers Ltd. and its debtor-
affiliates' statement that Sea Containers Ltd. has made
substantial progress towards finalizing a Reorganization Plan.
As reported in the Troubled Company Reporter on Nov. 29, 2007, the
Debtors asked the Court to further extend their exclusive periods
to file a Chapter 11 plan through and including Feb. 20, 2008, and
to solicit acceptances of that plan through and including April
19.
Sean T. Greecher Esq., at Young Conaway Stargatt & Taylor, LLP,
related that since their last request to extend the exclusive
periods, the Debtors have made substantial progress towards
developing a viable chapter 11 plan.
"The Exclusivity Motion contains a number of overly
optimistic statements regarding the plan negotiation process and
the potential for settlement of inter-debtor disputes," David B.
Stratton, Esq., at Pepper Hamilton LLP, in Wilmington Delaware,
says.
Mr. Stratton informs the Court that the Debtors' statement
claiming that they are "in the late stages", and are about to
reach a "final settlement" with regard to the inter-debtor
dispute resolution process, does not reflect the current posture
of negotiations, or the pendency of claims litigation.
Currently, he says, the Official Committee of Unsecured Creditors
of Sea Containers Ltd. continue to assert its objection against
the claims of the Sea Containers 1983 and 1990 Pension Schemes,
and continues to seek discovery from the U.K Pension Schemes and
the SCSL Committee via document requests. Unfortunately, the
Discovery Requests have been going through a lot of objections,
responses and extensions. The deadlines, Mr. Stratton says,
"loom as ominous clouds over the negotiating table".
While the SCSL Committee has continued to negotiate in good
faith, and believes that there has been some progress on inter-
debtor issues to date, it has yet to receive a settlement
proposal before it could agree that indeed a Reorganization Plan
is "within reach," Mr. Stratton tells the Court.
"At this juncture, there is no cause to conclude that there is
light at the end of Sea Containers' tunnel," Mr. Stratton says.
The SCSL Committee does not object to the extension of the
Debtors' exclusive periods to file and solicit votes for the
Chapter 11 plan; it simply wants to ensure the the record is
balanced and not misleading, Mr. Stratton explains.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP. In its schedules filed
with the Court, Sea Containers disclosed total assets of
$62,400,718 and total liabilities of $1,545,384,083. The Debtors'
exclusive period to file a chapter 11 plan expires on Dec 21,
2007. (Sea Containers Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
SEA CONTAINERS: Wins GE Seaco Arbitration Case
----------------------------------------------
Sea Containers Ltd., which owns half of the common equity in GE
SeaCo SRL, one of the world's largest container leasing companies
has won the arbitration case brought against it by GE Capital, the
co-owner of GE SeaCo.
In September last year, GE Capital of Stamford, Connecticut,
contended that when Mr. James Sherwood, the company's founder,
stood down from his duties as Chairman of the Board of Directors
of Sea Containers in March 2006, there had been a change of
control at Sea Containers that allowed GE to buy out Sea
Containers' interests in GE SeaCo.
Sea Containers welcomes the decision by the Arbitrator of the
Commercial Arbitration Tribunal in the International Institute for
Conflict Prevention and Resolution. The Arbitrator found that,
for numerous reasons, when Mr. Sherwood stepped down from his
position at Sea Containers, there was no change of control that
might have triggered any right of GE Capital to purchase Sea
Containers' interest in GE SeaCo.
The favorable arbitration ruling is a major step forward in Sea
Containers' efforts to advance its financial reorganization.
Sea Containers looks forward to working with GE Capital to
maximize the value of GE SeaCo.
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP. In its schedules filed
with the Court, Sea Containers disclosed total assets of
$62,400,718 and total liabilities of $1,545,384,083. The Debtors'
exclusive period to file a chapter 11 plan expires on Dec 21,
2007. (Sea Containers Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
SEARS HOLDINGS: Inks Privacy Contract with Restoration Hardware
---------------------------------------------------------------
Sears Holdings Corporation and Restoration Hardware Inc. entered
into a confidentiality agreement, in connection with the possible
business combination transaction.
Under the terms of the agreement, Restoration Hardware is required
to disclose these information:
(i) all oral and written communications that contain
information concerning Restoration Hardware, any of its
subsidiaries or affiliates or the transaction, together
with asset lists, financial statements or other
materials or information;
(ii) the proposed terms and conditions of the transaction,
including any financial terms and conditions, and all
information related to the transaction, including the
status thereof; and
(iii) the existence, context, and scope of this agreement.
Sears Holdings and Restoration Hardware agree that, all
information will be kept confidential, including any information
about the terms or conditions or any other facts relating to a
possible transaction between Sears Holdings and Restoration
Hardware.
All information provided by the Restoration Hardware is entitled
to protection under the attorney-client privilege, work product
doctrine or other applicable privilege.
If either the Sears Holdings and Restoration Hardware determines
that it does not wish to proceed with the transaction, such party
will promptly advise the other party of that decision. In such
case, or if a transaction is not otherwise consummated, Sears
Holdings will promptly destroy or return to Restoration Hardware
all copies of the information.
Moreover, under the terms of the agreement, Sears Holdings will
commence a tender offer for all the voting securities of
Restoration Hardware at a cash price per share that is at least
$.05 per share more than the cash price per share to be paid to
stockholders of Restoration Hardware.
About Sears Holdings Corporation
Based in Hoffman Estates, Illinois, Sears Holdings Corporation
(NASDAQ: SHLD) - http://www.searsholdings.com/-- parent of Kmart
and Sears, Roebuck and Co., is a broadline retailer with
approximately 3,800 full-line and specialty retail stores in the
United States and Canada.
* * *
Moody's Investor Service placed Sears Holdings Corporation's
probability of default rating at 'Ba1' in September 2006. The
rating still hold to date with a stable outlook.
SOURCE MEDIA: Moody's Affirms B1 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has affirmed the B1 Corporate Family
rating of Source Media Inc. and the B1 Corporate Family rating of
Accuity Inc., while changing the rating outlook to positive.
Details of the rating actions are:
Ratings affirmed:
Source Media Inc.'s
-- $30 million senior secured revolving credit facility, due
2010 -- B1, LGD3, 35%
-- $89 million senior secured term loan B, due 2011 -- B1,
LGD3, 35%
-- Corporate Family rating -- B1
Accuity Inc.'s
-- $5 million senior secured revolving credit facility, due
2010 -- B1, LGD3, 35%
-- $70 million senior secured term loan B, due 2011 -- B1,
LGD3, 35%
-- Corporate Family rating -- B1
Ratings lowered:
Source Media Inc.'s
-- Probability of Default rating to B2 from B1
Accuity Inc.'s
-- Probability of Default rating to B2 from B1
The rating outlook for Source Media and Accuity is changed to
positive from stable.
The affirmation of the B1 Corporate Family ratings is supported by
the companies' dependable free cash flow, relatively good
liquidity profile, the predictable of revenues, the severability
of their assets and the reputation of Source Media's flagship
publications, including "American Banker" and "Bond Buyer", which
attract loyal readership and steady circulation. However, the
ratings remain constrained by the companies' high financial
leverage and tightening covenant headroom, the competition they
face from other print and online rivals, and their vulnerability
to the banking and financial services sectors for a significant
contribution to their business.
The change in rating outlook to positive from stable reflects
Moody's expectation that the companies will continue to generate
sufficient cash to meaningfully reduce debt and leverage in spite
of expected cut-backs in their customers' advertising and
circulation based budgets.
The downgrade of the companies' Probability of Default ratings
largely reflects Moody's use of an improved family LGD (to 65%
from 50%) since Source has retired its unrated holdco notes, and
all of its current debt is represented by senior secured first
lien loans.
Source Media and Accuity are both headquartered in New York City.
Source Media Inc. provides multimedia information to professionals
in the banking, financial services and related technology markets.
Accuity Inc. provides subscription based solutions mainly to the
banking and financial services markets. For the LTM period ended
Sept. 30, 2007, the companies generated $198 million in combined
revenues.
SOUTHAVEN POWER: Seeks Court's Approval on Asset Sale Procedure
---------------------------------------------------------------
Southaven Power LLC asks the United States Bankruptcy Court for
the Western District of North Carolina to approve its proposed
bidding procedure for the sale of certain of its assets to
Tennessee Valley Authority, subject to higher and better offers.
On Nov. 30, 2007, the Debtor and Tennessee Valley entered into an
asset purchase agreement for the sale of the Debtor's assets for a
base purchase price of $260 million.
The Debtor has also entered into a termination agreement with
Tennessee Valley that provides, among other things, the
termination of certain operation and maintenance agreement dated
Aug. 29, 2000, and support agreement dated May 24, 2001.
Interested parties seeking to participate in the auction must
submit, among other things, a good faith deposit equal to 10% of
the bidder's gross purchase price and a current audited financial
statements no later than 11:00 a.m., on March 19, 2008.
The Debtor has yet to determine the auction date.
The sale agreement provides a break-up fee of $10 million to
Tennessee Valley, if the Debtor consumates an alternative
transaction.
A sale hearing has been set on March 26, 2008, to consider the
Debtor's request.
About Southaven Power LLC
Headquartered in Charlotte, North Carolina, Southaven Power LLC
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi. The company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power L.P, now known as
NEGT Energy Trading - Power L.P. No official committee of
unsecured creditors has been appointed in the Debtor's case. When
the Debtor filed for protection from its creditors, it estimated
assets and debts of more than $100 million.
The Debtor's exclusive period to file a plan is set to expire on
Jan. 15, 2007.
ST MARY LAND: S&P Holds 'BB-' Rating and Revises Outlook to Pos.
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on oil and
gas exploration and production company St. Mary Land & Exploration
Co. to positive from stable and affirmed its 'BB-' corporate
credit rating on the company. "The company's good operating
results thus far in 2007 and its adherence to moderate financial
leverage measures spurred the outlook change," said Standard &
Poor's credit analyst David Lundberg. As of Sept. 30, 2007,
Denver, Colorado-based St. Mary had
$443 million in debt.
The ratings on St. Mary reflects the company's midsize reserve
base and average cost structure and the E&P industry's highly
cyclical and capital-intensive nature. These weaknesses are
partially offset by the company's good track record of internal
reserve replacement and production growth, balanced production mix
between natural gas and oil, and moderate financial leverage.
STRUCTURED ASSET: Moody's Downgrades Ratings on 51 Tranches
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 51
tranches and placed on review for possible downgrade the ratings
of 10 tranches issued by Structured Asset Securities Corp Trust in
2007. Additionally, 2 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: Structured Asset Securities Corp Trust 2007-BC1
-- Cl. M2 Currently Aa2 on review for possible downgrade,
-- Cl. M3 Currently Aa3 on review for possible downgrade,
-- Cl. M4, Downgraded to A3, previously A1,
-- Cl. M5, Downgraded to Baa2, previously A2,
-- Cl. M6, Downgraded to Ba2, previously A3,
-- Cl. M7, Downgraded to Ba3, previously Baa1,
-- Cl. M8, Downgraded to B2, previously Baa1,
-- Cl. M9, Downgraded to Caa2, previously Baa2,
-- Cl. B1, Downgraded to Ca, previously Ba1,
-- Cl. B2, Downgraded to C, previously Ba2.
Issuer: Structured Asset Securities Corp Trust 2007-BC2
-- Cl. M2 Currently Aa2 on review for possible downgrade,
-- Cl. M3 Currently Aa3 on review for possible downgrade,
-- Cl. M4, Downgraded to A2, previously A1,
-- Cl. M5, Downgraded to Baa1, previously A2,
-- Cl. M6, Downgraded to Baa3, previously A3,
-- Cl. M7, Downgraded to Ba2, previously A3,
-- Cl. M8, Downgraded to B3, previously Baa1,
-- Cl. M9, Downgraded to Caa2, previously Baa2,
-- Cl. B1, Downgraded to C, previously Ba1,
-- Cl. B2, Downgraded to C, previously Ba2.
Issuer: Structured Asset Securities Corp Trust 2007-BC3
-- 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 B2, previously Baa3,
-- Cl. B1, Downgraded to Caa2, previously Ba1,
-- Cl. B2, Downgraded to C, previously Ba2.
Issuer: Structured Asset Securities Corp Trust 2007-MLN1
-- Cl. M1 Currently Aa1 on review for possible downgrade,
-- Cl. M2 Currently Aa2 on review for possible downgrade,
-- Cl. M3 Currently Aa3 on review for possible downgrade,
-- Cl. M4, Downgraded to Baa3, previously A1,
-- Cl. M5, Downgraded to Ba3, previously A2,
-- Cl. M6, Downgraded to B3, previously A3,
-- Cl. M7, Downgraded to Caa2, previously Baa1,
-- Cl. M8, Downgraded to C, previously Baa2,
-- Cl. M9, Downgraded to C, previously Baa3,
-- Cl. B1, Downgraded to C, previously Ba1.
Issuer: Structured Asset Securities Corp Trust 2007-OSI
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa2, previously A2,
-- Cl. M-7, Downgraded to Ba1, previously A3,
-- Cl. M-8, Downgraded to B1, previously Baa1,
-- Cl. M-9, Downgraded to B3 on review for possible further
downgrade, previously Baa2,
-- Cl. M-10, Downgraded to C, previously Baa3,
-- Cl. B, Downgraded to C, previously Ba1.
Issuer: Structured Asset Securities Corp Trust 2007-WF1
-- Cl. M7, Downgraded to Baa1, previously A3,
-- Cl. M8, Downgraded to Baa2, previously Baa1,
-- Cl. M9, Downgraded to Ba2, previously Baa2,
-- Cl. B1, Downgraded to B1, previously Baa3,
-- Cl. B2, Downgraded to B3 on review for possible further
downgrade, previously Ba1,
-- Cl. B3, Downgraded to Caa3, previously Ba2.
Issuer: Structured Asset Securities Corp. Trust 2007-EQ1
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Baa3, previously A3,
-- Cl. M-7, Downgraded to Ba2, previously Baa1,
-- Cl. M-8, Downgraded to Ba3, previously Baa2,
-- Cl. M-9, Downgraded to B3, previously Baa3,
-- Cl. B-1, Downgraded to Caa3, previously Ba1,
-- Cl. B-2, Downgraded to C, previously Ba2.
SUPERMERCADOS BONANZA: Files Schedules of Assets and Liabilities
----------------------------------------------------------------
Supermercados Bonanza Nieves Inc. submitted to the U.S. Bankruptcy
Court for the District of Puerto Rico its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property $0
B. Personal Property 1,112,027
C. Property Claimed
as Exempt 0
D. Creditors Holding $56,271
Secured Claims
E. Creditors Holding 135,065
Unsecured Priority
Claims
F. Creditors Holding 4,799,544
Unsecured Nonpriority
Claims
---------- -----------
TOTAL $1,112,027 $4,990,880
Aguada, Puerto Rico-based Supermercados Bonanza Nieves Inc., aka
Selectos Nieves Inc., and Familia Nieves Inc. filed for chapter 11
bankruptcy on Oct. 29, 2007 (Bankr. D. PR Case Nos. 07-06344 and
07-06345). Winston Vidal-Gambaro, Esq., represents the Debtors in
their restructuring efforts. When the Debtors filed for
bankruptcy, they listed assets and debts between $1 million and
$100 million.
SUPERMERCADOS BONANZA: Section 341(a) Meeting Reset to January 14
-----------------------------------------------------------------
The United States Trustee for Region 21 reset the meeting of
creditors of Supermercados Bonanza Nieves Inc. at 10:30 a.m., on
Jan. 14, 2008, at 341 Meeting Room, Ochoa Building, 500 Tanca
Street, First Floor in San Juan, Puerto Rico.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Aguada, Puerto Rico-based Supermercados Bonanza Nieves Inc., aka
Selectos Nieves Inc., and Familia Nieves Inc. filed for chapter 11
bankruptcy on Oct. 29, 2007 (Bankr. D. PR Case Nos. 07-06344 and
07-06345). Winston Vidal-Gambaro, Esq., represents the Debtors in
their restructuring efforts. When the Debtors filed for
bankruptcy, they listed assets and debts between $1 million and
$100 million.
THORNBURG MORTGAGE: S&P Removes 'B' Rating from Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B' long-term
counterparty credit rating on Thornburg Mortgage Inc. from
CreditWatch Negative, where it had been placed on Aug. 10, 2007.
The outlook is negative.
"The CreditWatch removal reflects the success of Thornburg's
ongoing efforts to stabilize its funding and liquidity due to
heightened market risk. At this point the company has greatly
reduced its dependence on recourse borrowings, which lessens any
immediate concerns about the unsteady state of financial markets,"
said Standard & Poor's credit analyst Adom Rosengarten. Continued
access to securitization financing and the ability to raise
additional preferred stock provides Thornburg with sufficient
funding for current business volumes.
The negative outlook reflects the challenges that Thornburg still
faces in rebuilding its balance sheet and maintaining its access
to funding and liquidity until financial markets normalize. In
addition, while the company has traditionally had exemplary asset
quality, the continued stress in the housing market could lead to
some deterioration in portfolio quality.
If the company faces additional funding pressures, liquidity
becomes severely strained, or asset quality does not hold up to
its traditional high standards, there could be downward pressure
on the rating. On the other hand, if funding markets stabilize
and Thornburg continues to maintain sufficient access to
diversified funding sources, leverage remains at reasonable
levels, and the company demonstrates the ability to raise new
equity capital, the outlook could move to stable.
U.S. DRY: Completes Initial Closing of $3.5 Mil. Conv. Financing
----------------------------------------------------------------
U.S. Dry Cleaning Corporation has completed the initial closing of
its senior secured convertible note financing of approximately
$3.5 million, part of its $20 million private placement to advance
the acquisition of five additional, profitable dry cleaning
chains, as disclosed in October 2007.
Among the five dry cleaning chains targeted for acquisition, two
have signed Purchase Agreements with U.S. Dry Cleaning and three
have signed Memorandums of Understanding.
The five acquisitions are expected to add $27 million in revenue
to the company's growing revenue base. After completion of the
acquisitions, U.S. Dry Cleaning's annualized revenue is expected
to total over $37 million.
"We are extremely pleased that our investment bankers are moving
so efficiently to secure this financing," Robert Y. Lee, CEO of
U.S. Dry Cleaning, said. "The funds will allow U.S. Dry Cleaning
to expand beyond our current markets of Hawaii and Southern
California, a significant step toward our goal of becoming the
first nationwide premier dry cleaning chain."
About US Dry Cleaning
Headquartered in Palm Springs, California, US Dry Cleaning
Corporation (OTC:UDRY) fka First Virtual Communications Inc. --
http://www.usdrycleaning.com/-- is engaged in laundry and dry
cleaning business and operates in Honolulu and Palm Springs.
Incorporated in October 1993, U.S. Dry Cleaning is focused on
acquiring profitable businesses that hold a leading share in their
individual markets.
Going Concern Doubt
On Nov. 14, 2006, Squar Milner Miranda & Williamson LLP, in
Newport Beach, California, expressed substantial doubt about US
Dry Cleaning Corporation's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Sept. 30, 2006. The auditors pointed to the
company's recurring losses from operations and an accumulated
deficit of approximately $6.9 million.
VILLAGE WALK LLC: Case Summary & Three Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Village Walk, L.L.C.
161 East Main Street
Clinton, CT 06413
Tel: (860) 669-4445
Bankruptcy Case No.: 07-32930
Chapter 11 Petition Date: December 10, 2007
Court: District of Connecticut (New Haven)
Debtor's Counsel: Robert M. Singer, Esq.
2572 Whitney Avenue
Hamden, CT 06518
Tel: (203) 248-8278
Fax: (203) 407-0602
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Three Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
J.&N. Electric $90,000
71 Wheaton Road
East Haven, CT 06512
Floriano Plumbin $50,000
1798 Dixwell Avenue
Hamden, CT 06413
Ciaramella Construction $16,000
45 Pennsylvania Avenue
East Haven, CT 06512
WARD WHITE: Discloses Intention to Dissolve
-------------------------------------------
Ward White, Inc., on Dec. 10, 2007, gave notice that pursuant to
the provisions of Delaware General Corporation Law, Section 280,
has filed a certification of dissolution with the Delaware
Secretary of State.
All claimants should present their claims against Ward White
within 60 days from the date of publication of the Notice, or
thereafter the claim of any claimant against the dissolved
corporation may be barred as provided by Delaware General
Corporation Law, Section 280(a)(1)(d).
All claims against the assets of the dissolved corporation must be
presented in writing and must contain sufficient information
reasonably to inform Ward White of the identity of the claimant
and the substance of the claim such as the name of the claimant,
the claim amount, the date the claim originated, and an
explanation of the basis for the claim, please include all
supporting documentation.
Over the last three years Ward White has distributed dividends in
an aggregate amount of $32,000,000 and may make distributions to
other claimants and the corporation's sole stockholder without
further notice to any claimants.
All claims must be mailed to this address:
Ward White, Inc.
Attn: Mr. Andrew Parkin
6 Landmark Square, Suite 300
Stamford, CT 06901
WARP 9: Sept. 30 Balance Sheet Upside-Down by $572,431
------------------------------------------------------
Warp 9 Inc.'s consolidated balance sheet at Sept. 30, 2007, showed
$1,151,194 in total assets and $1,723,625 in total liabilities,
resulting in a $572,431 total stockholders' deficit.
The company reported net income of $26,744 on revenue of $604,494
in the first quarter ended Sept. 30, 2007, compared with a net
loss of $356,883 on revenue of $432,676 in the same period ended
Sept. 30, 2006.
The increase in revenue was primarily the result of an increase
in monthly fees from the comany's e-commerce software as a result
of new Warp 9 Software-as-a-Service clients, and a general
increase in professional services.
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?2649
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 8, 2007,
HJ Associates & Consultants LLP expressed substantial doubt about
Warp 9, Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended June 30, 2007. The auditing firm reported that the
company has suffered recurring losses from operations and
recurring negative cash flows from operations.
About Warp 9
Based in Santa Barbara, Calif., Warp 9, Inc. (OTC BB: WNYN) --
http://www.warp9inc.com/-- is a provider of e-commerce platforms
and services for the catalog and retail industry. Its suite of
software platforms are designed to help online retailers maximize
the Internet channel by applying Warp 9's advanced technologies
for online catalogs, e-mail marketing campaigns, and interactive
visual merchandising.
WASHINGTON MUTUAL: To Close WaMu Capital; Cuts Staff by 22%
-----------------------------------------------------------
Washington Mutual Inc. will close WaMu Capital Corp., its
institutional broker-dealer business, well as its mortgage banker
finance warehouse lending operation. The company will
substantially adjust and resize its home loans business and also
reduce corporate support expense. WaMu will:
-- discontinue all remaining lending through its subprime
mortgage channel;
-- close approximately 190 of 336 home loan centers and
sales offices;
-- close nine Home Loans processing and call centers;
-- eliminate approximately 2,600 Home Loans positions, or
about 22% of its Home Loans staff; and
-- eliminate approximately 550 corporate and other support
positions.
These expense reduction steps will result in approximately
$140 million in additional expenses in the fourth quarter. WaMu
is targeting company-wide noninterest expense at or below $8
billion for 2008.
The company also disclosed a series of actions designed to address
the unprecedented challenges in the mortgage and credit markets by
strengthening the company's capital and liquidity and accelerating
the alignment of its Home Loans business with its retail banking
operations. These actions include:
-- a capital offering of convertible preferred stock with
aggregate proceeds of approximately $2.5 billion;
-- a major reduction in company-wide noninterest expense of
approximately $500 million for 2008 as a result of a
substantial resizing of its Home Loans business and
reduced corporate support expense; and
-- a significant change in the strategic focus of its home
loans business in response to a changed market.
In addition, the company's board of directors intends to reduce
the quarterly dividend rate to $0.15 per share from its recent
quarterly dividend rate of $0.56 per share.
"A substantial infusion of new capital, significant expense
reductions, the major change in our home loans business, and our
planned dividend reduction all combine to further fortify WaMu's
strong capital and liquidity position," Kerry Killinger, WaMu
chairman and chief executive officer, said. "These actions will
also better position us to pursue various initiatives,
particularly in our leading retail banking business - which is at
the core of our business strategy."
The company will generate approximately $3.7 billion of tangible
equity as a result of the proposed capital issuance and the
intended reduction in the common dividend in 2008.
The company believes these actions, together with a significant
reduction in noninterest expense, would ensure that it has the
financial strength to address difficult conditions in the credit
and housing markets in 2008.
Resizing Home Loans Business to Adapt
to Changed Conditions
WaMu remains committed to providing mortgage products to its
customers. However, the mortgage market is undergoing a
fundamental shift due to credit dislocation and a prolonged period
of reduced capital markets liquidity. As a result, WaMu expects
national mortgage originations to shrink to $1.5 trillion in 2008,
down about 40% from an estimated $2.4 trillion this year.
The resizing of its Home Loans business will be accompanied by an
acceleration in WaMu's strategy to expand its focus on mortgage
lending directly to customers through its retail banking stores
and other retail distribution channels. It will also add bank
loan consultants to support its profitable retail store network.
Non-cash Charge to Write Down Goodwill
As a result of the fundamental shift in the mortgage market and
the actions the company is taking to resize its Home Loans
business, WaMu will incur a fourth quarter after-tax charge of
approximately $1.6 billion for the writedown of all the goodwill
associated with the Home Loans business. This non-cash charge
will result in a net loss for the fourth quarter of 2007, but will
not affect the company's tangible or regulatory capital or
liquidity.
Increasing Loan Loss Provision
Ahead of Charge-Offs
Continued deterioration in the mortgage markets and declining
housing prices have led to increasing fourth quarter charge-offs
and delinquencies in the company's loan portfolio. As a result,
the company now expects its fourth quarter provision for loan
losses to be between $1.5 and $1.6 billion, approximately twice
the level of expected fourth quarter net charge-offs.
The company expects its first quarter 2008 provision for loan
losses to be in the range of $1.8 to $2.0 billion, reflecting an
increase in provision well ahead of charge-offs, which are also
expected to increase significantly during the quarter. The first
quarter range reflects the company's current view that prevailing
adverse conditions in the credit and housing markets will persist
through 2008.
The company also expects quarterly loan loss provisions through
the end of 2008 to remain elevated, generally consistent with its
expectation for the first quarter of 2008. The company noted that
there may be some additional variation depending on the level of
credit card securitization activity during any quarter.
The company has also commenced a capital offering of an aggregate
of $2.5 billion in a new series of convertible preferred stock.
Lehman Brothers, Morgan Stanley & Co., Credit Suisse Securities
(USA) and Goldman, Sachs & Co. are serving as joint book-running
managers of the offering.
A copy of the final prospectus relating to the offering may be
obtained by contacting:
a)Lehman Brothers Inc.
c/o Broadridge, Integrated Distribution Services
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: 1-888-603-5847
Fax (631)254-7140
or
b) Morgan Stanley & Co. Incorporated
Prospectus Department
2nd Floor, 180 Varick Street
New York, NY 10014
Tel 1-866-718-1649
Email prospectus@morganstanley.com
c) Credit Suisse Prospectus Department
One Madison Avenue
New York, NY 10010
Tel 1-800-221-1037
d) Goldman Sachs & Co.
Attn: Prospectus Department
85 Broad Street
New York, NY 10004
Tel 1-866-471-2526
Email: prospectus-ny@ny.email.gs.com
About Washington Mutual
Headquartered in Seattle, Washington Mutual Inc. (NYSE:WM) --
http://newsroom.wamu.com/-- is a group of consumer and small
business banks. At June 30, 2007, WaMu and its subsidiaries
reported total assets of $312.22 billion. The company's
subsidiary banks currently operate approximately 2,700 consumer
and small business banking stores throughout the United States.
* * *
Fitch placed Washington Mutual Inc.'s short term issuer default
rating at 'F2' and individual rating at 'B/C' in Dec. 10, 2007.
The rating outlook is negative.
WASHINGTON MUTUAL: Moody's Cuts FS Rating to C- from C+
-------------------------------------------------------
Moody's Investors Service downgraded by two notches the long-term
ratings of Washington Mutual, Inc. (senior to Baa2 from A3) and
its subsidiaries including the lead thrift Washington Mutual Bank
(financial strength rating to C- from C+ and long-term deposits to
Baa1 from A2). The short-term rating at the thrift was lowered to
Prime-2 from Prime-1. Washington Mutual, Inc.'s short-term rating
remains unchanged at Prime-2. Moody's placed a stable rating
outlook on all Washington Mutual entities. Moody's actions
follows WaMu's announcement in which it stated these:
-- WaMu expects to increase its loan loss provision in the
4Q07 between $1.5 and $1.6 billion, up from previous
guidance of $1.3 billion in response to continuing
deterioration in its large residential mortgage
portfolio. WaMu also expects its 1Q08 loan-loss
provision to be in the range of $1.8 to $2.0 billion.
-- WaMu will attempt to reduce 2008 non-interest expenses by
$500 million by eliminating 3,150 employees, primarily in
its mortgage operation. This action will result in
approximately $140 million in additional expenses in the
4Q07.
-- WaMu will take a $1.6 billion after-tax charge against
goodwill associated with past acquisitions in its mortgage
operations.
-- WaMu will cut its dividend by 73% to a quarterly dividend
of $129 million from $482 million.
-- WaMu plans to issue convertible preferred stock with
aggregate proceeds of approximately $2.4 billion. WaMu
expects these hybrid securities to receive high equity
content from Moody's.
Moody's said that the downgrade was based on its view that credit
losses from WaMu's mortgage operations will be noticeably higher
than previously estimated. Of particular concern is WaMu's
approximately $43 billion second-lien-home-equity portfolio.
Moody's said that higher provisions are likely to lead to poor
reported results throughout 2008 and 2009. Moody's previously
expected WaMu's profitability to begin to recover in 2009;
however, Moody's now believes this will not occur until 2010.
Moody's added that the ability for WaMu to absorb higher
provisions over a protracted period is supported by WaMu's capital
initiative that it just announced. "Going forward, the capital
initiatives will help to stabilize WaMu's credit profile by
increasing its current capital base with the new issuance, helping
to sustain that base with limited dividend payments, and boosting
an already good holding company liquidity profile," said Moody's
Senior Vice President, Sean Jones. "For these reasons, we placed
a stable outlook on the company" said Mr. Jones.
The write-down of goodwill, Moody's said, had no negative impact
on liquidity or capital. It is a non-cash charge and Moody's
evaluates capital adequacy by excluding goodwill and other
intangibles.
Moody's said that the write-down of goodwill associated with
WaMu's mortgage operations is reflective of franchise impairment,
which was an additional factor in the rating downgrade. Even
before the credit crunch, WaMu's mortgage operation was a
noticeable underperformer due to a number of strategic miscues.
However, its sizable market share provided a potential foundation
to improve its competitive standing. The profitability issue
facing WaMu now diminishes this potential.
Moody's said that earnings diversity from Wamu's retail bank and
credit card operations is a key credit strength. Moody's believes
that the retail bank will remain a sizable contributor to
earnings.
Earnings from credit card operations are expected to come under
pressure because of increased loss provisioning, but the company
has the flexibility to support earnings in this business by
temporarily reducing marketing expenses. "Outside its troubled
mortgage loan portfolios, WaMu has franchise value in its banking,
credit card, and mortgage servicing operations that support the
new rating level," said Mr. Jones.
Moody's said additional sizable provisions are likely given
WaMu's: $20 billion sub-prime mortgage portfolio; its $59 billion
home-equity portfolio, of which nearly 75% is second lien; and its
$55 billion option-adjustable-rate-mortgage portfolio. Moody's
said it expects the greatest losses to be taken against WaMu's
sub-prime exposure and its second-lien-home-equity portfolio.
Moody's also warned that the Option ARMs portfolio, originated in
2006 and 2007, is prone to heightened provisions, because such
loans are more exposed to home price depreciation. In addition,
market practice resulted in a high percentage of these loans being
originated with low documentation, which increases the possibility
of losses. Moody's view of possible future provisions is captured
in the current ratings.
Moody's noted that the investigation by the New York Attorney
General's Office into the business practice of independent
appraisal firms used by WaMu creates additional uncertainties.
Currently, there is no clarity on what effect these investigations
will have on WaMu or other mortgage participants.
Washington Mutual, Inc. is headquartered in Seattle, Washington,
and its reported assets at Sept. 30, 2007 were $330 billion.
Downgrades:
Issuer: Bank United
-- Subordinate Regular Bond/Debenture, Downgraded to Baa2
from A3
Issuer: Great Western Financial Trust II
-- Preferred Stock Preferred Stock, Downgraded to Baa3 from
Baa1
Issuer: Providian Capital I
-- Preferred Stock Preferred Stock, Downgraded to Baa3 from
Baa1
Issuer: Providian Financial Corporation
-- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to
Baa3 from Baa1
Issuer: Washington Mutual Bank
-- Bank Financial Strength Rating, Downgraded to C- from C+
-- Issuer Rating, Downgraded to Baa1 from A2
-- OSO Rating, Downgraded to P-2 from P-1
-- Deposit Rating, Downgraded to P-2 from P-1
-- OSO Senior Unsecured OSO Rating, Downgraded to Baa1 from
A2
-- Multiple Seniority Bank Note Program, Downgraded to a
range of Baa2 to P-2 from a range of A3 to P-1
-- Subordinate Regular Bond/Debenture, Downgraded to Baa2
from A3
-- Senior Unsecured Deposit Note/Takedown, Downgraded to Baa1
from A2
-- Senior Unsecured Regular Bond/Debenture, Downgraded to
Baa1 from A2
-- Senior Unsecured Deposit Rating, Downgraded to Baa1 from
A2
Issuer: Washington Mutual Bank FSB
-- Bank Financial Strength Rating, Downgraded to C- from C+
-- Issuer Rating, Downgraded to Baa1 from A2
-- OSO Rating, Downgraded to P-2 from P-1
-- Deposit Rating, Downgraded to P-2 from P-1
-- OSO Senior Unsecured OSO Rating, Downgraded to Baa1 from
A2
-- Senior Unsecured Deposit Rating, Downgraded to Baa1 from
A2
Issuer: Washington Mutual Capital I
-- Preferred Stock Preferred Stock, Downgraded to Baa3 from
Baa1
Issuer: Washington Mutual Capital Trust 2001
-- Preferred Stock Preferred Stock, Downgraded to Baa3 from
Baa1
Issuer: Washington Mutual Pfd Funding (Cayman) I Ltd
-- Preferred Stock Preferred Stock, Downgraded to Ba1 from
Baa2
Issuer: Washington Mutual Preferred Funding Trust I
-- Preferred Stock Preferred Stock, Downgraded to Ba1 from
Baa2
Issuer: Washington Mutual Preferred Funding Trust II
-- Preferred Stock Preferred Stock, Downgraded to Ba1 from
Baa2
Issuer: Washington Mutual Preferred Funding Trust III
-- Preferred Stock Preferred Stock, Downgraded to Ba1 from
Baa2
Issuer: Washington Mutual, Inc.
-- Multiple Seniority Shelf, Downgraded to a range of (P)Ba1
to (P)Baa2 from a range of (P)Baa2 to (P)A3
-- Preferred Stock Preferred Stock, Downgraded to Ba1 from
Baa2
-- Subordinate Regular Bond/Debenture, Downgraded to Baa3
from Baa1
-- Senior Subordinated Regular Bond/Debenture, Downgraded to
Baa3 from Baa1
-- Senior Unsecured Regular Bond/Debenture, Downgraded to
Baa2 from A3
Outlook Actions:
Issuer: Bank United
-- Outlook, Changed to Stable from Negative
Issuer: Great Western Financial Trust II
-- Outlook, Changed to Stable from Negative
Issuer: Providian Capital I
-- Outlook, Changed to Stable from Negative
Issuer: Providian Financial Corporation
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Bank
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Bank FSB
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Capital I
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Capital Trust 2001
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Pfd Funding (Cayman) I Ltd
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Preferred Funding Trust I
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Preferred Funding Trust II
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual Preferred Funding Trust III
-- Outlook, Changed to Stable from Negative
Issuer: Washington Mutual, Inc.
-- Outlook, Changed to Stable from Negative
WCI COMMUNITIES: Gets Limited Waiver Extension Until January 7
--------------------------------------------------------------
WCI Communities Inc. reported that the limited waiver of
performance that was granted by its banks has now been extended to
Jan. 7, 2008.
On Nov. 7, 2007, the company initially obtained a limited waiver
of performance under the Fixed Charge Coverage covenant of the
Senior Secured Revolving Credit Agreement, and the Term Loan
Agreement, and this waiver was originally set to expire on Dec. 7,
2007.
During the extended waiver timeframe, the company expects to
finalize discussions regarding the anticipated longer-term
amendment that would provide financial flexibility, including
modification of the fixed charges coverage covenant, and obtain
approval of lenders participating in these facilities.
Default Warning
Until finalized it is not certain that the company will reach
agreement or obtain approval of the anticipated longer-term
amendment. This amendment will be expensive and there can be no
assurance that the company will able to comply with the amended
covenants and other requirements.
If WCI is unable to obtain the amendment or comply with its terms,
the lenders would have the right to exercise remedies specified in
the loan agreements, including foreclosing on certain collateral
and accelerating the maturity of the loans, which could result in
the acceleration of substantially all of its other outstanding
indebtedness.
In such a situation, there can be no assurance that the company
would be able to obtain alternative financing. In addition, if
the company is determined to be in default of these loan
agreements, it may be prohibited from drawing additional funds
under the Credit Facility and the Tower Loan, which could impair
its ability to maintain sufficient working capital. Either
situation could have a material adverse affect on the solvency of
the company.
About WCI Communities
Headquartered in Florida, WCI Communities Inc. (NYSE: WCI) --
http://www.wcicommunities.com/-- is a home builder catering to
primary, retirement, and second-home buyers in Florida, New York,
New Jersey, Connecticut, Maryland and Virginia. The company
offers both traditional and tower home choices and features a wide
array of recreational amenities in its communities. In addition
to homebuilding, WCI generates revenues from its Prudential
Florida WCI Realty Division and its recreational amenities, well
as through land sales and joint ventures. The company currently
owns and controls developable land on which the company plans to
build about 20,000 traditional and tower homes.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2007,
Moody's lowered the ratings of WCI Communities Inc., including its
corporate family rating to Caa2 from B3 and the ratings on its
senior subordinated notes to Caa3 from Caa2. The ratings outlook
is negative.
WELLS FARGO: Fitch Affirms Ratings on 148 Certificate Classes
-------------------------------------------------------------
Fitch Ratings affirms 148, downgrades 2 and places 5 classes on
Rating Watch Negative from thess Wells Fargo mortgage backed
securities pass-through certificates:
Wells Fargo 2005-2 Group 1
-- Class A affirmed at 'AAA';
-- Class I-B-1 affirmed at 'AA';
-- Class I-B-2 affirmed at 'A';
-- Class I-B-3 affirmed at 'BBB';
-- Class I-B-4 affirmed at 'BB';
-- Class I-B-5 affirmed at 'B'.
Wells Fargo 2005-2 Group 2
-- Class A affirmed at 'AAA';
-- Class II-B-1 affirmed at 'AA';
-- Class II-B-2 affirmed at 'A';
-- Class II-B-3 affirmed at 'BBB';
-- Class II-B-4 affirmed at 'BB';
-- Class II-B-5 affirmed at 'B'.
Wells Fargo 2005-3
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 rated 'B' is placed on Rating Watch Negative.
Wells Fargo 2005-4
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 rated 'B' is placed on Rating Watch Negative.
Wells Fargo 2005-5
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-6
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-7
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-8
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 rated 'B' is placed on Rating Watch Negative.
Wells Fargo 2005-9
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-10
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-11
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-12
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-13
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-14 Group 1
-- Class A affirmed at 'AAA';
-- Class I-B-1 affirmed at 'AA';
-- Class I-B-2 affirmed at 'A';
-- Class I-B-3 affirmed at 'BBB';
-- Class I-B-4 affirmed at 'BB';
-- Class I-B-5 affirmed at 'B'.
Wells Fargo 2005-14 Group 2
-- Class A affirmed at 'AAA';
-- Class II-B-1 affirmed at 'AA';
-- Class II-B-2 affirmed at 'A';
-- Class II-B-3 affirmed at 'BBB';
-- Class II-B-4 affirmed at 'BB'.
Wells Fargo 2005-15
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-16
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-17
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-18 Group 1
-- Class A affirmed at 'AAA';
-- Class I-B-1 affirmed at 'AA';
-- Class I-B-2 affirmed at 'A';
-- Class I-B-3 affirmed at 'BBB';
-- Class I-B-4 affirmed at 'BB';
-- Class I-B-5 affirmed at 'B'.
Wells Fargo 2005-18 Group 2
-- Class A affirmed at 'AAA';
-- Class II-B-1 affirmed at 'AA';
-- Class II-B-2 affirmed at 'A';
-- Class II-B-3 affirmed at 'BBB';
-- Class II-B-4 rated 'BB' is placed on Rating Watch
Negative;
-- Class II-B-5 downgraded to 'C/DR4' from 'B'.
Wells Fargo 2005-AR2
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-AR4
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-AR5
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-AR6
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Wells Fargo 2005-AR10
-- Class A affirmed at 'AAA'.
Wells Fargo 2005-AR15
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'.
Wells Fargo 2005-AR16 Group 7
-- Class A affirmed at 'AAA';
-- Class VII-B-1 affirmed at 'AA';
-- Class VII-B-2 affirmed at 'A';
-- Class VII-B-3 affirmed at 'BBB';
-- Class VII-B-4 rated 'BB' is placed on Rating Watch
Negative;
-- Class VII-B-5 downgraded to 'C/DR4' from 'B'.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $15.63 billion of outstanding certificates. The
downgrades affect approximately $1.55 million of the outstanding
certificates. The assignment of Rating Watch Negative on certain
of the B-5 classes affects approximately $4.1 million of
outstanding certificates.
The negative rating actions reflect deterioration in the
relationship between CE and future loss expectations. As of the
October 2007 distribution date, for the 2005-2 Group 1, 2005-3,
2005-4, 2005-8, 2005-9, 2005-11 and 2005-AR16 transactions,
approximately 0.26%, 0.45%, 0.23%, 0.30%, 0.15%, 0.31% and 0.45%,
respectively, are more than sixty days delinquent with minimal or
no losses to date.
All the transactions are seasoned between 22 (2005-16, 2005-17 and
2005-18 Groups 1 & 2) and 32 (2005-AR2) months. The pool factors
(current principal balance as a percentage of original) range
approximately from 68% (2005-AR2) to 91% (2005-14 Group 2).
The underlying collateral for Wells Fargo Asset Securities Corp.
transactions consists of prime fixed and adjustable-rate mortgage
loans secured primarily by one- to four- family residential
properties. All of the mortgage loans were generally originated
in conformity with underwriting standards of Wells Fargo Home
Mortgage, Inc.
Wells Fargo Bank, N.A., rated 'RMS1' by Fitch, is the master
servicer for all of the above transactions.
WELLS FARGO: Moody's Downgrades Ratings on 12 Tranches
------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 12
tranches and placed on review for possible downgrade the ratings
of one tranche from 2 deals issued by Wells Fargo Home Equity
Asset-Backed Securities 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: Wells Fargo Home Equity Asset-Backed Securities 2007-1
Trust
-- Cl. M-6, Downgraded to Baa1, previously A3,
-- Cl. B-1, Downgraded to Baa3, previously Baa1,
-- Cl. B-2, Downgraded to Ba3, previously Baa2,
-- Cl. B-3, Downgraded to Caa1, previously Baa3.
Issuer: Wells Fargo Home Equity Asset-Backed Securities 2007-2
Trust
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A2, previously A1,
-- Cl. M-5, Downgraded to A3, previously A2,
-- Cl. M-6, Downgraded to Baa2, previously A3,
-- Cl. M-7, Downgraded to Ba2, previously Baa1,
-- Cl. M-8, Downgraded to B1, previously Baa2,
-- Cl. M-9, Downgraded to B3, previously Baa3,
-- Cl. B-1, Downgraded to Ca, previously Ba1,
-- Cl. B-2, Downgraded to C, previously Ba2.
WENDY'S INTERNATIONAL: Says Financial Performance is "Improving"
----------------------------------------------------------------
Wendy's International Inc. told shareholders Monday in a
regulatory filing with the Securities and Exchange Commission that
the company's financial performance is "improving."
Wendy's said that its strong financial results for the third
quarter of 2007 reflect continuing turnaround of its business.
3rd Quarter Highlights
Excluding expenses related to the Board's Special Committee and
restructuring charges, the company reported for the third quarter
of 2007:
-- The 6th consecutive quarter of positive same-store sales.
-- Adjusted income from continuing operations of $38.6 million
compared to $24.9 million in the third quarter of 2006.
-- Adjusted EBITDA for the third quarter 2007 was
$95.0 million, up 57.3% from the third quarter of 2006.
-- U.S. company-operated restaurant EBITDA margins improved 330
basis points to 12.6% in the third quarter of 2007,
reflecting positive sales, including menu price increases
tied to the company's market-based pricing strategy and
labor efficiencies.
Wendy's expects to report 2007 full-year EBITDA near the higher
end of the outlook it provided to investors in June, which was a
range of $295 million to $315 million. The company also expects
to report full-year EPS near the high end of the range provided
earlier, which was $1.09 to $1.23. The ranges exclude expenses
related to the Board's Special Committee activities and
restructuring charges.
Commenting on the results, Kerrii Anderson, Wendy's chief
executive officer and president, said, "This performance is the
result of our 'Recipe for Success' strategy launched in October
2006 to focus on initiatives to revitalize the brand while growing
sales and profits in every restaurant in our system. There's no
question that the foundation of our business is stronger today
thanks to the performance of our restaurant crews, managers,
franchisees, and field and corporate employees. With that said,
our business results and store economics must improve. We have
much more to accomplish."
About Wendy's International
Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/,http://www.wendys.com/-- and
its subsidiaries operate, develop, and franchise a system of quick
service and fast casual restaurants in the Americas, Asia, the
Pacific Rim, Europe and the Middle East.
* * *
As reported in the Troubled Company Reporter on June 21, 2007,
Moody's Investors Service lowered all ratings of Wendy's
International Inc. and placed all ratings on review for further
possible downgrade. Affected ratings include the company's
Ba2 corporate family rating which was lowered to Ba3.
Additionally, Standard & Poor's Ratings Services lowered its
corporate credit and senior unsecured debt ratings on Wendy's
International Inc. to 'BB-' from 'BB+'.
WENDY'S INTERNATIONAL: Gives Update on Strategic Review Process
---------------------------------------------------------------
There continues to be many questions and concerns surrounding the
strategic review conducted by a special committee of Wendy's
International Inc.'s Board of Directors, the company disclosed
Monday in a regulatory filing with the Securities and Exchange
Commission.
In that filing, Wendy's told shareholders that the Special
Committee process is complicated for several reasons:
* The stock market has fluctuated widely since the committee
was formed.
* There have been reports in the media about complex financing
transactions and potential bidders that include Wendy's
franchisees, private equity firms and one entity that owns a
competing concept in the quick-service restaurant industry.
* The sub-prime mortgage problems have rocked the world's
credit markets and greatly curtailed merger and acquisition
activity.
Wendy's also disclosed facts regarding the Committee's process:
-- On April 25, 2007, Wendy's announced that its Board formed a
Special Committee of independent directors to investigate
strategic options for the company. The options include,
among other things, evolution of Wendy's strategic plan; a
possible recapitalization; and, a possible sale/merger of
the company.
-- In May 2007, the company announced the members of the
Special Committee led by Chairman of the Board Jim Pickett -
Tom Keller, Dave Lauer, Jim Millar and John Thompson.
-- The Special Committee also announced in May that it had
engaged JP Morgan as lead advisor and Lehman Brothers Inc.
as co-advisor for the process.
-- Chairman Pickett has stated publicly that there is no
specific timeframe to complete the review of strategic
options and that the Special Committee will comment when it
is appropriate.
"We understand your frustration about the uncertainty this process
is creating. Throughout this process, Wendy's management team and
our franchisees and employees have remained committed to operating
great restaurants, taking care of our customers, building our
brand and growing profitable sales," Kerrii Anderson, Wendy's
chief executive officer and president, said.
About Wendy's International
Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/,http://www.wendys.com/-- and
its subsidiaries operate, develop, and franchise a system of quick
service and fast casual restaurants in the Americas, Asia, the
Pacific Rim, Europe and the Middle East.
* * *
As reported in the Troubled Company Reporter on June 21, 2007,
Moody's Investors Service lowered all ratings of Wendy's
International Inc. and placed all ratings on review for further
possible downgrade. Affected ratings include the company's
Ba2 corporate family rating which was lowered to Ba3.
Additionally, Standard & Poor's Ratings Services lowered its
corporate credit and senior unsecured debt ratings on Wendy's
International Inc. to 'BB-' from 'BB+'.
WENDY'S INT'L: Ian Rowden Steps Down as Chief Marketing Officer
---------------------------------------------------------------
Wendy's International Inc. is conducting an aggressive national
search for a new Chief Marketing Officer to replace Ian Rowden,
who is resigning as CMO to return to his native Australia for
personal reasons.
Over the past six months, Wendy's has accelerated its focus on
improving brand recognition, particularly among younger consumers,
with its "That's Right" campaign featuring its iconic red wig.
Moving forward, the company intends to capitalize on the momentum
generated from the campaign to accelerate same-store sales and
further improve profits at every restaurant in the Wendy's system.
"Ian was instrumental in re-awakening the Wendy's brand and
driving innovation, and he has agreed to work with me to help
transition marketing as we search for our next CMO," said Chief
Executive Officer and President Kerrii Anderson. "We wish Ian and
his family well in the future."
Wendy's Will Accelerate Next Phase of
Branding and Marketing
"We will take the success of our `That's Right' campaign and
expand it to include more back-to-basics messages that are at the
heart of Wendy's positioning - quality, fresh food, innovation and
a great consumer experience," said Mr. Anderson. "We will evolve
our marketing efforts to drive sales and resonate more powerfully
with our customers, franchisees and employees."
Wendy's will continue to work with Saatchi and Saatchi and
kirshenbaum bond to develop the evolution of its marketing
campaign. The campaign will continue to be an important element
of the company's strategy to revitalize the Wendy's brand and
build sales and profit momentum.
"There is a great deal of work ahead of us," said Mr. Anderson.
"We've delivered six consecutive quarters of positive same-store
sales and significant profit improvement at the restaurant and
corporate level. That said, our store economics are still not
where they need to be. We have more opportunity to drive sales,
innovate with our superior quality positioning and further improve
restaurant operations. Our strategic plan, which we launched a
year ago, put a strong foundation in place. Phase 2 of our
strategic plan, launched this fall, is laser-focused on Doing
What's Right for Our Customers. This will be clearly articulated
in every aspect of our marketing."
Kershisnik and Holtcamp to Lead
Wendy's Marketing on Interim Basis
Paul Kershisnik, senior vice president of marketing strategy and
innovation, and Bob Holtcamp, vice president of brand management,
will lead Wendy's marketing on an interim basis and report
directly to Anderson.
Kershisnik is responsible for research and development, strategic
insights and innovation. His 21-year career includes positions
with some of the world's best-known consumer brands, including
Pizza Hut/PepsiCo, General Mills and Sprint. Most recently, he
served as Vice President of New Product Innovations and Research &
Development for Mrs. Fields Famous Brands in Salt Lake City.
Kershisnik holds an M.B.A. from Brigham Young University and a
B.S. from the University of Utah.
Holtcamp will continue to manage Wendy's brand group, its new
product-driven menu strategy and the consumer-driven restaurant
experience. He will also continue to manage the creative and
messaging strategy with the company's advertising agencies, and he
will oversee field marketing. Before joining Wendy's, Holtcamp
worked for Aurora Foods' Van de Kamp seafood brand, Mrs. Paul's
Seafood, Miller Brewing Company and held account executive roles
at various advertising agencies. Holtcamp holds an M.B.A. from
Washington University and a B.A. from University of Illinois.
About Wendy's International
Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/,http://www.wendys.com/-- and
its subsidiaries operate, develop, and franchise a system of quick
service and fast casual restaurants in the Americas, Asia, the
Pacific Rim, Europe and the Middle East.
* * *
As reported in the Troubled Company Reporter on June 21, 2007,
Moody's Investors Service lowered all ratings of Wendy's
International Inc. and placed all ratings on review for further
possible downgrade. Affected ratings include the company's
Ba2 corporate family rating which was lowered to Ba3.
Additionally, Standard & Poor's Ratings Services lowered its
corporate credit and senior unsecured debt ratings on Wendy's
International Inc. to 'BB-' from 'BB+'.
WR GRACE: Deadline to File Opposition to Daubert Briefs is Dec. 21
------------------------------------------------------------------
The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware directed parties-in-interest to file
oppositions to the initial Daubert briefs and submit a list of
trial exhibits and witnesses, and pre-trial briefs by December 21,
2007.
The Official Committee of Asbestos Personal Injury Claimants and
David Austern, the Court-appointed Future Claims Representative
have notified Judge Fitzgerald at an omnibus hearing that they
would provide a written statement providing the subject areas of
expected testimony of each of Stephen Snyder, Peter Kraus, John
Cooney and Theodore Goldberg.
The Court authorized the PI Committee to file under seal the
unredacted versions of the expert rebuttal reports of Dr.
Peterson and Mr. Snyder.
The Court also directed the Owens Corning/Fibreboard Asbestos PI
Trust to produce the electronic datasets, claimant information,
claims processing information and other information to the
Debtors. The Owens Corning information will be used solely in
connection with the Grace estimation proceeding. The Debtors
will bear the costs incurred by the Owens Corning Trust in
extracting the information to be produced.
Parties File Daubert Motions
The Debtors, the PI Committee, the FCR, and the Official Committee
of Equity Security Holders filed motions to exclude or limit,
pursuant to Daubert and Rules 702 and 703 of the Federal Rules of
Evidence, testimony related to the Debtors' asbestos personal
injury liabilities.
The Debtors seek to exclude from evidence these expert reports
and testimonies:
-- The reports, testimony, and opinions of PI Committee
experts Mark A. Peterson, the Peterson Rebuttal Report,
the Stephen M. Snyder Rebuttal Report, and the Daniel P.
Myer and Mark T. Eveland Rebuttal Report;
-- The reports, testimony, and opinions of FCR experts
Jennifer Biggs, Biggs Supplemental Report, Biggs Rebuttal
Report, P.J. Eric Stallard, Stallard Supplemental Report,
Marshall Shapo Rebuttal Report, and Jacob Jacoby Rebuttal
Report;
-- Any opinions, evidence, or testimony seeking to establish
exposure to asbestos based on any "settled-dust analysis;"
-- Any opinions, evidence, or testimony seeking to establish
exposure to asbestos based on any "indirect-preparation
method;"
-- Any opinions, evidence, or testimony seeking to establish
causation of asbestos-related disease based on anecdotal
evidence, including but not limited to, case reports or
case series;
-- Any opinions, evidence, or testimony seeking to establish
causation of an asbestos-related disease not supported by
epidemiological evidence showing a relative risk greater
than 2.0, the confidence interval for which does not
include a relative risk of 1.0;
-- Any opinions, evidence, or testimony seeking to establish
the causation of an asbestos-related disease based on a
"no-threshold" or "zero-threshold" theory of causation,
including but not limited to, any calculations derived
from or relying on those theories to those causation; and
-- Any opinions, evidence, or testimony seeking to establish
the occurrence or incidence of non-malignant asbestos-
related disease based on diagnoses that do not include an
exposure history with an appropriate latency period, chest
radiograph evidence or small irregular opacities with an
appropriate profusion as evaluated under ILO standards, a
PFT revealing a restrictive impairment and below-normal
diffusion capacity, a physical examination showing signs
and symptoms, and a differential diagnosis of asbestosis
that reliably rules out alternative causes of the disease.
In a memorandum supporting their Daubert Motion, the Debtors
assert that the PI Committee and the FCR's expert testimonies are
not "fit" under Rule 702 and 408 because the expert testimonies
measure the wrong thing -- Grace's hypothetical cost to resolve
cases in the state-court tort system rather than Grace's legal
liability.
The PI Committee and the FCR's experts did not assume that Grace
has filed for bankruptcy and, thus neither the company's
bankruptcy nor any implications that flow from the application of
bankruptcy law or procedures has any impact or effect on the
estimates, David M. Bernick, P.C., Esq., at Kirkland & Ellis,
LLP, in Chicago, Illinois, points out.
Mr. Bernick also asserts that the PI Committee and the FCR's
expert opinions are barred under the reliability prong of Rule
702 as the PI Committee and the FCR's experts cannot show that
their measurements are performed using "scientifically reliable"
methods because they rely on historical settlement amounts rather
than on "established, objective methods" of industrial hygience
and epidemiology.
A full-text copy of the 85-page Debtors' Memorandum is available
for free at http://bankrupt.com/misc/grace_daubertmemorandum.pdf
Equity Committee Supports Debtors
The Equity Committee, which represents holders of more than
70,000,000 shares of Grace common stock, supports the Debtors'
Daubert Motion in its entirety.
According to Teresa K.D. Currier, Esq., at Buchanan Ingersoll &
Rooney, PC, in Wilmington, Delaware, at the current market price
of about $26, the market capitalization of Grace's equity is more
than $1,800,000,000. There's no question about Grace's solvency,
she says.
The Equity Committee contends that evidence to be presented to
the Court in the coming estimation trial will demonstrate that,
as a matter of logic and epidemiological science, the number of
individuals who could realistically have developed true asbestos-
related disease from Grace products is diminishingly small.
The Equity Committee says the Court should estimate the Debtors'
"real" liability on "legitimate" PI claims caused by Grace
product. The Equity Committee adds that the Court should rely on
"legitimate and scientifically defensible" methods in estimating
the PI liabilities.
The Equity Committee tells the Court that it has obtained the
expert report of Dr. James Heckman to analyze the expert reports
prepared by Dr. Peterson and Ms. Biggs. Dr. Heckman, in his
expert report, concludes that Dr. Peterson and Ms. Biggs did not
use a reliable methodology but rather "employ simple
extrapolation of trends and ad hoc adjustments," which do "not
meet the criteria of scientific method."
A full-text copy of the 86-page Heckman Report is available for
free at http://bankrupt.com/misc/grace_HeckmanRebuttalReport.pdf
PI Committee & FCR's Daubert Motions Under Seal
In separate filings with the Court, the PI Committee and the FCR
sought permission to file their Daubert motions under seal. The
PI Committee and the FCR said their Daubert Motions and exhibits
contain testimony, documents, reports and other information that
are protected from public disclosure by either a Court order or
by a confidentiality agreement with the Debtors.
Representing the PI Committee, Mark T. Hurford, Esq., at Campbell
& Levine, LLC, in Wilmington, Delaware, says the Committee's
Daubert Motion quotes and summarizes information that has been
identified or marked as confidential by the Debtors. The PI
Committee's Daubert Motion sought to exclude from evidence the
expert reports prepared by, among others, the Debtors' expert,
Drs. B. Thomas Florence, Elizabeth Anderson and Suresh
Moolgavkar.
The FCR sought to exclude the reports prepared by the Debtors'
experts, Drs. Florence, Anderson, Moolgavkar, Peter S.J. Lees,
and Richard J. Lee.
The PI Committee and the FCR noted that the Debtors have provided
them information pursuant to confidentiality agreements. Mr.
Hurford points out that Dr. Florence's deposition has been marked
confidential by the Debtors and at least one of his expert
reports has not been publicly disclosed by the Debtors. The
expert reports of Drs. Anderson and Moolgavkar have also not been
publicly disclosed.
The PI Committee and the FCR said their Daubert Motions have been
served to the U.S. Trustee, the Debtors, the Official Committee
of Unsecured Creditors, and the Official Committee of Equity
Security Holders.
Court Won't Admit Further Evidence on Libby Claims
Judge Fitzgerald won't permit any evidence to be introduced or
accepted for introduction, any further discovery to be conducted,
any statements to be made by counsel, or any finding or other
determination to be made concerning:
(a) medical characteristics of the alleged asbestos diseases
of the claimants asserting personal injury resulting from
the Debtors' Libby, Montana vermiculite mining operations,
including, if any, to which they may have medical
characteristics distinct from other asbestos disease; or
(b) the portion of the Debtors' aggregate liability that is
attributable to claims and demands for Libby Claimant's
alleged asbestos disease.
Nothing, however, the Court ruled, will prevent introduction into
evidence of opinions and testimony contained in the reports and
reliance materials of the estimation experts of Jennifer L. Biggs
and Dr. Mark Peterson, or the Debtors' rebuttal of the Biggs and
Peterson expert reports.
Judge Fitzgerald noted that no party in the estimation
proceedings has produced an expert report separately quantifying
the Debtors' liabilities for the Libby Claimants except for Ms.
Biggs who has produced various geographically based calculations
and estimates, including a quantification for Libby. The Court,
however, finds that Ms. Biggs' quantification is not based on the
extent, if any, to which asbestos-related disease diagnosed in
the Libby Claimants has medical characteristics distinct from
other asbestos-related disease.
The introduction in the estimation proceedings, Judge Fitzgerald
held, of evidence concerning medical and statistical issues
specific to the Libby Claimants would not assist the Court in its
estimate of the Debtors' aggregate PI liabilities. Exclusion of
medical and statistical evidence, she added, separately
addressing Libby Claimants' alleged asbestos disease and claims
and demands resulting therefrom "could significantly shorten the
estimation proceeding trial -- serving the goal of judicial
economy and resulting in material savings to the Debtors' estate
and to the parties -- without any adverse effect on the Court's
ability to estimate the aggregate liabilities."
Drs. Arthur Frank, M. Laurentius Marais, William Wecker, and Alan
Whitehouse won't be allowed to testify or be subject to further
discovery in the estimation proceeding, and their reports will
not be part of the record in the estimation proceeding, Judge
Fitzgerald further ruled.
In addition, Drs. Elizabeth Anderson, Steven Harber, Daniel
Anthony Henry, Grover Hutchins, Richard Lee, John Parker, Suresh
Moolgavakar, Joseph Rodricks, and David Weill will not testify or
be subject to further discovery in the estimation proceeding
concerning the Libby Claimants' alleged asbestos disease and
their reports will not be part of the record in the estimation
proceeding insofar as they address the Libby Claimants' alleged
asbestos disease.
Moreover, the persons listed by the Libby Claimants as potential
fact witnesses in connection with the estimation proceeding won't
be allowed to testify or be subject to further discovery in the
estimation proceeding, the Court added.
James Jay Flynn, Alan Whitehouse and Patrica Sullivan, as non-
expert witnesses, will not be allowed to testify concerning the
Libby Claimants' alleged asbestos disease.
Judge Fitzgerald further ruled that the Libby Claimants will not
appear in, or in connection with, the estimation proceeding as a
separate party from the Official Committee of Asbestos Personal
Injury Claimants.
All parties' rights are reserved on all issues, including but not
limited to (i) the medical criteria for the Libby Claimants'
alleged asbestos disease, (ii) the extent, if any, to which these
alleged disease has medical characteristics distinct from other
asbestos disease, and (iii) whether and in what amount any
particular claim and demand based on the Libby Claimants' alleged
asbestos disease should be allowed.
No party, including the Libby Claimants, Judge Fitzgerald held,
may challenge the Court's findings and conclusions in the
estimation proceedings, including its findings of aggregate
asbestos liability, on the grounds that (a) the Libby Claimants
did not participate in the estimation proceedings, or (b) the
Court did not consider the Libby Claimants' allegations.
This Order may not be used for any other purposes other than to
exclude medical and statistical evidence separately addressing
the Libby Claimants' alleged asbestos disease, and will not be
used by any party, including the U.S. Government, for any other
purpose or proceeding, including the pending criminal proceeding
against the Debtors and its officers in the U.S. District Court
for the District of Montana, the Court clarified.
In a separate order, Judge Fitzgerald denied the Debtors' request
for relief from the pre-trial schedule to the extent that the
expert witnesses John Cooney, Peter Kraus, Ted Goldberg, Robert
Horkovich, Stephen Snyder and any other attorney listed in the PI
Committee's fact witness list make themselves available for
deposition. If those witnesses will not voluntarily make
themselves available for deposition, the Debtors may ask for
reconsideration of the denial of their request, the Court noted.
Debtors Seek to Exempt Certain Creditors
from Filing Claims
Certain individuals have filed claims against the Debtors before
the April 2, 2001, Bar Date. The Court established November 15,
2006, as the Bar Date for non-settled prepetition asbestos-
related personal injury claims filed against the Debtors.
The Debtors and the law firm Thornton & Naumes, who represents
the Claimants, have agreed that the claimants do not need to file
proofs of claim on or before the November 15 Bar Date because
they do not hold any prepetition PI Claim. They also agree that
the Claimants are exempt from the PI case management order
because they do not hold PI Claims.
Accordingly, the Debtors ask the Court to rule that the Thornton
Claimants are exempt from the November 15 Bar Date and the PI
CMO.
A list of the Exempted Claimants is available free of charge at:
http://bankrupt.com/misc/grace_ExemptClaimants.pdf
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, Esq., at Kirkland & Ellis, LLP, and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence,
Pennsylvania. Elihu Inselbuch, Esq., at Caplin & Drysdale,
Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC,
represent the Official Committee of Asbestos Personal Injury
Claimants. The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon,
LLC, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
will commence on Jan. 14, 2008. (W.R. Grace Bankruptcy News,
Issue No. 145; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
WR GRACE: Rehearing Plea on Libby Conspiracy Charge Denied
----------------------------------------------------------
The United States Court of Appeal for the Ninth Circuit denied
the request of W.R. Grace & Co. and six of its former executives
for an en banc rehearing of the September 2007 decision of a
three-judge panel composed of Circuit Judge Betty Fletcher, Harry
Pregerson, and Warren Ferguson reinstating conspiracy charges
against Grace and its executives relating to the alleged asbestos
poisoning in Libby, Montana.
In late September, the 9th Circuit panel overturned a decision by
District Judge Molloy in the U.S. District Court for the District
of Montana and reinstated the conspiracy charges filed by the
U.S. Government against Grace and its officers. The Government,
in 2005, commenced a criminal case against Grace and its officers
for alleged conspiracy in violation of environmental laws and
obstruction of federal agency proceedings relating to asbestos
poisoning of residents in Libby, Montana.
According to Tricia Bishop of The Baltimore Sun, an en banc
rehearing would have further delayed the trial of the case.
"The denial of an en banc rehearing moves the case a step closer
to trial assuming Grace does not ask the [U.S.] Supreme Court to
review the issue," Allen M. Bradender, Esq., who is among the
Justice Department attorneys prosecuting the case, told Baltimore
Sun.
"Grace is disappointed, and the company is evaluating its
options," Greg Euston, Grace's spokesman related to the Sun.
A second Grace request for appeal, which will determine whether
certain government witnesses may testify against the company, was
granted earlier this year and will be heard next week by the full
11-judge panel of the 9th Circuit Court of Appeals, the Sun says.
In its form 10-Q filing with the U.S. Securities and Exchange
Commission in August 2007, Grace said it may face as much as
$280,000,000 in fines, if convicted in the criminal case. Its
officers may also be sentenced to as many as 15 years in prison
if convicted.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, Esq., at Kirkland & Ellis, LLP, and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence,
Pennsylvania. Elihu Inselbuch, Esq., at Caplin & Drysdale,
Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC,
represent the Official Committee of Asbestos Personal Injury
Claimants. The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon,
LLC, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
will commence on Jan. 14, 2008. (W.R. Grace Bankruptcy News,
Issue No. 145; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
XEROX CORP: S&P Lifts Rating on Preferred Trust to BBB- from BB
---------------------------------------------------------------
Fitch has upgraded Xerox Corp.'s and its subsidiary's debt as:
-- Issuer Default Rating to 'BBB' from 'BBB-';
-- Senior unsecured credit facility to 'BBB' from 'BBB-';
-- Senior unsecured debt to 'BBB' from 'BBB-';
-- Trust preferred securities to 'BBB-' from 'BB'.
Approximately $9.1 billion of securities, including the
$2 billion credit facility, are affected by Fitch's action. The
Rating Outlook is Stable.
The upgrades reflect:
-- Fitch's expectations that Xerox's gradual improvement in
post-sale revenue trends will continue and, in conjunction
Xerox Corpwith the operating leverage embedded in the
financial model and strong expense management, will result
in steady core cash flow (non-financing) growth in excess
of revenue growth;
-- Xerox's strengthening operating EBITDA margin, which
increased to 14.3% for the latest 12 months ended
Sept. 30, 2007 from 13.2% in the year-ago period; and
-- Greater-than-expected decline of secured debt in the
capital structure, with secured debt declining to
approximately 10% of total debt at Sept. 30, 2007 from
nearly 27% at year-end 2006, including $620 million of
trust preferred securities, and Fitch's expectation that
it will decline further to approximately 5% at year-end
2007.
Positive rating actions could occur if Xerox's:
-- Credit protection measures trend positively; improving the
company's interest coverage metrics through growth in
operating profits and/or redemption of older debt with
considerably higher coupon payments relative to recent
debt issuance is key;
-- Recurring revenue model limits the financial stress from a
less favorable macro-economic environment, particularly in
the United States, which accounts for approximately 50% of
the company's total revenue; and
-- Financing business progresses toward a duration matching
funding model over the next few years.
Negative rating actions could occur if:
-- Xerox's financial performance declines materially in the
event of an economic downturn in the U.S., indicating a
less resilient business model relative to Fitch's
expectations;
-- Significant debt-financed acquisitions with considerable
integration risk and/or unrelated to core business; and
-- Xerox's color equipment installs, primarily in the
Production segment, fail to offset declines in black and
white equipment installs, leading to deteriorating
operating and financial fundamentals.
The ratings continue to reflect Xerox's:
-- Significant recurring post-sale revenue from its growing
installed base of equipment;
-- Consistent financial and operational performance;
-- Highly diversified revenue base from a customer, industry
and geographic perspective;
-- Commitment to balance investments in share repurchases and
acquisitions funded with free cash flow; and
-- Strong brand name and broad product portfolio.
Fitch's rating concerns center on:
-- Consistent equipment pricing pressure, particularly in the
office segment, due to strong competition;
-- Limited, but gradually improving, organic revenue growth;
-- Risk of more aggressive, and potentially debt-financed,
shareholder-friendly initiatives and acquisitions; and
-- Significant annual research and development
expenditures associated with the industry (5.4% of Xerox's
total revenues).
Fitch believes the financial performance of Xerox's core business
has strengthened despite volatility in free cash flow associated
with changes in the company's financing asset portfolio and the
cash conversion cycle. For the LTM ended Sept. 30, 2007, Fitch
estimates adjusted funds flow from operations, which excludes
changes in Xerox's financing asset portfolio, and core FFO, which
also excludes the estimated after-tax operating profit on the
financing business, increased to $1.7 billion (+16% year/year) and
$1.4 billion (+23% year/year), respectively.
The majority of Xerox's credit protection measures, on both a core
and consolidated basis, improved slightly year-over-year due to
earnings growth, offsetting the increase of core debt attributable
to the acquisition of Global Imaging Systems Inc. in the second
quarter of 2007. Fitch estimates the financing business accounts
for 85% of total debt at Sept. 30, 2007 and is expected to
increase to approximately 90% of total debt by year-end due to a
$500 million-$600 million reduction of core debt. Xerox's
leverage declined to approximately 3.6 times compared with 3.8x
and 4.1x for the LTM ended Sept. 30, 2006 and 2005, respectively.
Similarly, Fitch estimates Xerox's core leverage at Sept. 30, 2007
declined to approximately 0.4x compared with 0.6x and 0.9x for the
LTM ended Sept. 30, 2006 and 2005, respectively.
In addition, the company's overall interest coverage was 4.1x,
while Fitch estimates core interest coverage was approximately
7.1x for the LTM ended Sept. 30, 2007 compared with 6.7x and 5.4x
for the LTM ended Sept. 30, 2006 and 2005, respectively.
The company's liquidity at Sept. 30, 2007, consisted of
approximately $848 million of cash, a $2 billion unsecured bank
facility revolver expiring April 30, 2012 with $1.3 billion of
availability and consistent free cash flow in excess of
$1 billion annually. Fitch believes Xerox could draw on the
credit facility to support ongoing increases of internally funded
financing assets. Fitch believes Xerox has more than sufficient
liquidity and financial flexibility to meet upcoming debt
maturities and absorb a reasonable adverse monetary outcome from
any currently outstanding litigation.
To support business growth, Xerox also has access to a secured
eight-year $5 billion U.S. credit facility provided by General
Electric Vendor Financial Services expiring in December 2010.
This facility is used for secured loans backed by U.S. finance
receivables arising from the sale of Xerox's products. At Sept.
30, 2007, approximately $4.6 billion was available under this
facility. As Fitch anticipated, Xerox has fully repaid the
outstanding secured debt balances on nearly all of its non-U.S.
committed secured funding facilities in 2007 financed with
unsecured debt. At Oct. 12, 2007, the company's Canadian
facility, with total capacity of $740 million, was the last non-
U.S. funding facility. Fitch expects Xerox's usage of the
aforementioned secured financing facilities will continue to
decline as the company reduces its reliance on secured financing
programs by maintaining a leverage ratio of 7:1 against finance
assets through the issuance of unsecured debt in lieu of the
secured funding facilities.
As of Sept. 30, 2007, total debt with equity credit was
$8.7 billion, consisting of $7.2 billion of senior unsecured debt,
$620 million of liabilities to subsidiary trusts issuing preferred
securities and approximately $883 million of debt secured by
finance receivables. Debt secured by finance receivables
accounted for approximately 10% of total debt with equity credit
as of Sept. 30, 2007, down from 27% at year-end 2006. Xerox's net
finance receivables and equipment on operating leases totaled $8.4
billion at Sept. 30, 2007. Debt maturities in the fourth quarter
of 2007 consist solely of $569 million of secured debt, including
$469 million of secured facility borrowings in France that matured
on Oct. 12, 2007 and were refinanced with an unsecured floating
rate bank bridge loan due March 31, 2008. For 2008, $1 billion of
debt matures, of which $600 million is unsecured debt.
In addition to Xerox Corp., the IDR and unsecured debt ratings for
Xerox Credit Corp. are also affected.
XM SATELLITE: SEC Won't Take Any Action On Stock Option Practices
-----------------------------------------------------------------
The Staff of the Division of Enforcement of the U.S. Securities
and Exchange Commission notified XM Satellite Radio Holdings Inc.
that it does not intend to recommend any enforcement action
relating to its August 2006 investigation into the company.
The investigation explored various matters including the company's
historic practices regarding subscriber data and stock options.
About XM
Based in Washington, D.C., XM Satellite Radio Holdings Inc. --
http://www.xmradio.com/-- parent of XM Satellite Radio Inc.
(Nasdaq: XMSR), is a satellite radio company, with more than
8.5 million subscribers. XM delivers entertainment and data
services for the automobile market through partnerships with
General Motors, Honda, Hyundai, Nissan, Porsche, Ferrari, Subaru,
Suzuki and Toyota.
* * *
Standard & Poor's assigned CCC+ long-term foreign and local issuer
credit ratings to XM Satellite Radio Holdings Inc. on February
2007.
XM Satellite Radio Holdings Inc. also holds Moody's Investors
Services' Caa1 long-term corporate family rating (assigned June
2003), Caa3 senior unsecured debt rating (assigned February 2005),
and Caa1 probability of default rating (assigned September 2006).
These three ratings still hold to date.
At Sept. 30, 2007, XM's balance sheet reflected total assets of
$1.7 billion, total liabilities of $2.4 billion, and a
stockholders' deficit of $790 million, compared to $1.8 billion of
total assets, $2.2 billion of total liabilities, and a
stockholders' deficit of $397 million at Dec. 31, 2007.
* Fitch Expects Steel Industry Will See Further Consolidation
-------------------------------------------------------------
Fitch Ratings expects the global steel industry will see further
consolidation in 2008 as producers seek to diversify
geographically, rationalize production, and gain additional access
to raw materials. The overall ratings outlook on the industry is
stable.
Globally, strong consumption trends in developing nations are
offsetting weakness in the United States. The stage is set for
steel price increases in most markets in 2008 but tight raw
materials markets are likely to cause margin compression for
producers who don't control their sources of iron ore, coke, pig
iron and scrap. Increased iron ore, coke and freight costs are
expected to add $60-$70 per metric ton to costs of blast furnace
steel without vertical integration.
While growth in global steel demand is expected to run about 6%-7%
annually over the next 12-18 months, excess production could drag
on pricing and further pressure tight raw material markets.
Regional variations in pricing and profitability will re-emerge
given high freight rates and protectionism.
Fitch expects steel prices to rise on average US$30-$50/mt, or
half of what would be needed to pass through expected increased
costs due to robust demand from emerging markets and supply
discipline in China.
Key 2008 Themes/Events:
BHP Billiton Ltd's efforts to acquire Rio Tinto plc could
exacerbate tightness in the seaborne iron ore market and to a
lesser extent in the metallurgical coal market where each company
has strong market share and the merged company would have the
leading share.
Fitch expects the U.S. economy to stay out of recession despite
continued weakness in residential construction and emerging
weakness in consumption. Further credit tightness that results in
cutting non-residential construction or manufacturing expenditures
would reduce U.S. demand for steel. Steel demand in the U.S. has
been soft with prices currently supported by low shipments and low
inventories as well as reduced imports.
The U.S. dollar may weaken with further interest rate cuts. Given
the weak dollar coupled with high freight rates, the U.S. market
will become fairly isolated. Europe, with the strong Euro will
likely be the preferred destination for exports but even then
freight rates may be a limiting factor.
Production in China has exceeded domestic demand since the end of
last year, weighing on domestic pricing as well as pricing in
Europe and the U.S. for some products for some periods of time.
Increased domestic consumption in Russia has cut net exports there
and the Middle East has been a robust market for exports resulting
in fairly balanced markets overall. Continued excess production
drives the raw materials costs up while weighing on pricing.
Government measures in addition to cost pressures should result in
closure of inefficient production capabilities and constrain the
growth of China's net exports.
* Fitch Expects US Airlines Credit Recovery Will Be Slow in 2008
----------------------------------------------------------------
As U.S. airlines plan for another year of very high jet fuel
prices and weaker air travel demand growth in 2008, Fitch expects
the pace of recovery in U.S. airline credit fundamentals to slow.
While a favorable domestic supply-demand relationship and robust
international demand patterns have allowed the largest carriers to
effectively meet the challenge of high fuel prices during 2007,
industry revenue and fuel cost trends look far less encouraging
moving into next year. Indeed, as concerns mount over the
resilience of the U.S. consumer in the face of a prolonged housing
downturn and tight credit conditions, airline unit revenue
prospects in domestic markets have taken a decidedly negative turn
over the last few months.
Taking domestic revenue softness and still-high jet fuel prices as
the backdrop for 2008, Fitch expects U.S. airline profit margins
and free cash flow generation patterns to weaken next year.
Softer operating trends, coupled with increasing aircraft capital
spending levels linked to re-fleeting programs and modest growth
in available seat mile capacity, will likely limit debt reduction
and constrain credit quality improvement for the entire industry.
After two solid years of industry cash flow and debt reduction,
2008 is therefore shaping up as a year of growing financial
uncertainty when attention will return to the need for strict
industry capacity discipline, tighter non-fuel cost control and
liquidity preservation. In light of this, Fitch expects ratings
for U.S. airlines to remain relatively stable next year, with a
continuation of the recent rating improvement trend depending on
the resilience of travel demand patterns and the timing of any
changes in industry structure.
Industry Structure and Consolidation:
The timing and direction of moves toward industry consolidation
will likely remain the issue of greatest interest to creditors
during 2008. Despite recent public pressure exercised by
shareholders to accelerate merger discussions among some legacy
carriers (notably United, Delta and/or Northwest), airline
management teams will likely remain circumspect in evaluating the
financial implications of various airline combinations. In
addition to the well-understood obstacles to consolidation related
to antitrust reviews by the U.S. Department of Justice and the
need for labor union participation in the development of credible
integration plans, management teams will need to evaluate the
wisdom of any debt-financed transactions at a time when credit
market upheaval may keep borrowing costs high for an extended
period - potentially beyond 2008. Accordingly, heavy reliance on
equity instead of debt in the financing of potential 2008 mergers
represents the best option for carriers in preserving credit
quality post-consolidation.
Some merger-related synergies are clearly achievable in most
legacy carrier combinations - particularly on the revenue side
with post-merger capacity rationalization supporting long-term
passenger yield growth. Still, execution risk related to industry
merger and acquisition activity remains high in light of organized
labor's desire to capture a greater share of the financial upside
in any prospective merger transaction. Labor cooperation in any
successful merger plan will be assured only through greater equity
participation by unionized employees or, alternatively, through
increased pay and benefit levels post-consolidation.
In Fitch's view, industry consolidation could lay the foundation
for more rational capacity decision-making in highly competitive
domestic markets and should mitigate the impact of economic cycles
on airline cash flow. Should a large airline merger be announced
over the next few months - necessarily well before the end of the
Bush Administration and a transition period at the Justice
Department - all legacy carriers are likely to move quickly to
take part in follow-on merger deals. It appears likely that any
antitrust review during 2008 would involve the announcement of
more than one legacy carrier merger.
The openness of debt capital markets moving into 2008 will be a
critical factor in determining whether legacy carrier deals can be
financed efficiently without layering on substantially higher debt
service obligations after the mergers are closed. While post-
merger industry economics should improve as a result of capacity
rationalization and better pricing, transition costs could limit
near-term margin improvement in the merged entities and keep post-
consolidation leverage high across the industry. Efforts to
quickly de-lever balance sheets could be hindered further by a
weak macroeconomic environment and generally soft domestic demand.
Given the relatively solid liquidity positions of all U.S.
carriers prior to consolidation, however, it is very likely that
post-consolidation carriers would have strong enough cash
positions to weather a period of turmoil in the operating
environment tied to weak macroeconomic trends.
Other key factors to consider with regard to changes in the
relative credit quality of U.S. airlines during 2008 include
these:
Margin Deterioration:
As domestic air travel patterns weaken in response to slower U.S.
economic growth, airlines are likely to see some margin
deterioration next year that will lead to unfavorable earnings and
operating cash flow comparisons. Although no clear signs of
advanced bookings weakness have yet emerged, some softening in
demand patterns, in both business and leisure segments, can be
expected if U.S. economic growth slows markedly early in 2008.
Investors should focus on monthly trends in passenger revenue per
available seat mile for indications of demand and/or pricing
weakness that would undermine margins. Fitch expects business
travel demand patterns to soften early in 2008 as the volume of
high-yielding business slows in response to weaker corporate
profits. Corporate travel demand softening is likely to be most
acute among financial services firms, where weaker earnings and
reduced deal activity should pressure corporate travel budgets
through much of 2008.
A significant reduction in free cash flow generating power,
particularly for carriers that will be funding large amounts of
aircraft capital spending in 2008, will pressure debt balances if
unrestricted liquidity levels are to be maintained at or near
current levels. For carriers that have delayed new aircraft
orders, notably AMR and United, relatively modest capital budgets
will support free cash flow generation next year. Still, Fitch
expects some deterioration in free cash flow margins across the
legacy carrier group.
High Fuel Prices and Capacity Rationalization:
The rapid run-up in crude oil and refined product prices since
late summer has once again forced U.S. carriers to push through
fare increases in an attempt to cover higher costs. With the
notable exception of Southwest Airlines, which has approximately
80% of expected 2008 jet fuel purchases hedged at crude oil
equivalent prices of about $50 per barrel, all of the large U.S.
carriers are facing average jet fuel prices of
$2.50 per gallon or higher moving into 2008. If weak demand
patterns linked to a sluggish U.S. economy limit average fare
increases over the next few months, significant operating losses
will likely result during the seasonally weak first quarter.
In anticipation of this trend, many large carriers have already
begun the process of pulling back planned domestic capacity growth
for 2008. Capacity revisions announced by Southwest, Continental
and Delta in early December are likely to be followed by other
carriers contemplating unacceptable operating performance on
marginal routes when jet fuel prices remain at or near record
highs.
Liquidity:
Industry liquidity is stronger than at any time since the late
1990s, driven by robust free cash flow generation and bankruptcy
reorganizations. Cash on the balance sheet, in some cases
supplemented by additional availability on revolving credit
facilities, offers U.S. carriers a substantial cushion to absorb
future revenue and fuel price shocks. Strong liquidity also
reduces the need for new financings at a time when capital market
access is more challenging.
Substantial calls on cash flow will persist in 2008 as large
scheduled debt maturities and pension obligations are funded out
of expected free cash flow (in particular at AMR). However, Fitch
expects most large carriers to target and retain over 20% of
annual revenues as unrestricted cash on the balance sheet.
Labor:
With open union contracts at Southwest and AMR, attention will be
focused on these carriers' ability to keep unit labor cost
inflation low at a time when fuel cost pressure is intense and the
revenue outlook is weakening. Union calls for significant wage
hikes, however, suggest a long and difficult negotiating period -
particularly at AMR. Labor negotiations are likely to take on
special significance in 2008 if consolidating transactions force
managements to secure labor's endorsement of any merger-related
integration plan. Fitch expects some longer-term unit labor cost
pressure to occur as a result of management's need to ensure labor
peace in any viable merger deal.
Divestitures:
Recent speculation surrounding the possible sale or spin-off of
strategic assets such as loyalty programs, maintenance services
units and wholly owned regional airlines will likely continue into
2008- particularly as shareholder pressure mounts in a tough
industry operating environment. Carriers reviewing such
transactions (including United and AMR) have not been explicit
about the use of cash proceeds, but Fitch expects most or all of
the proceeds to be directed toward shareholders in the form of
share repurchases or special dividends. Return of cash to
shareholders would clearly put pressure on credit quality and
ratings, particularly as core airline margins and cash flow
generation weaken in a post-divestiture scenario. Deployment of
some cash toward core airline debt reduction, therefore, will be
required if ratings pressure is to be avoided.
Re-Fleeting Capital Needs:
As the average age of U.S. airline fleets continues to move
higher, the pressing need for aging aircraft replacement and re-
fleeting becomes more obvious. Most large carriers, with the
notable exception of AMR and United, have undertaken at least
partial re-fleeting programs as new, fuel-efficient aircraft
replace retiring jets. With ongoing fleet capital spending levels
likely to increase in 2008 before moving substantially higher into
the next decade, Fitch expects free cash flow generation to weaken
and aircraft debt levels to rise. The magnitude of any such
change will of course be driven by the form of any future
consolidation, and mergers may ultimately dampen demand for new
aircraft as capacity and hub rationalization occurs.
Fitch-Rated Issuers
-- AMR Corp. (American Airlines) ('B-'/Outlook Positive)
-- Continental Airlines, Inc. ('B-'/Outlook Stable)
-- Delta Air Lines, Inc. ('B'/Outlook Stable)
-- JetBlue Airways Corp. ('B'/ Outlook Stable)
-- Southwest Airlines Co. ('A'/ Outlook Negative)
-- UAL Corp. (United Airlines) ('B-'/ Outlook Positive)
-- US Airways Group, Inc. ('B-'/ Outlook Positive)
* Fitch Says Prime and Subprime Losses Climbed Further in November
------------------------------------------------------------------
Losses on U.S. prime and subprime auto asset-backed securities
climbed further in November posting both higher month-over-month
and year-over-year levels. In particular, prime annualized net
losses spiked by nearly 25% month over month though from a
relatively low base. As previously stated by Fitch, both the
prime and subprime U.S. auto sectors are experiencing increasing
pressure and weaker performance is expected to continue in 2008.
Though positive rating actions will certainly decline, negative
rating actions should be muted by the low level of losses on an
absolute basis, manageable levels of lender competition, and deal
structures that de-lever relatively quickly.
Prime & Subprime Losses Near Three Year High
In the prime sector, 60+ days delinquencies were 0.65% in
November, virtually unchanged over October and September's levels.
However, November's delinquency rate was 22.6% above November
2006. Prime ANL spiked 24.7% in November to 1.16% versus October,
the highest level since January 2005 (1.32%). On a year-over-year
basis, ANL were 33% higher than in the same period in 2006 which
produced record low performance. Current ANL remains slightly
weaker than 2005 performance but below levels reached in 2003-
2004.
Subprime 60+ days delinquencies improved slightly in November to
3.52% versus October (3.55%), but were up 33% from November 2006
levels. Subprime ANL jumped 10.5% in November over October to
7.35%, the highest level since February 2005 (7.75%). ANL were
nearly 16% higher in November compared to the same period in 2006,
after being as much as 26% higher back in September.
Auto delinquencies and losses have increased steadily over the
past six months. As a result, Fitch expects the rate of upgrades
to diminish in 2008. Negative rating actions, however, are
expected to be limited as current levels of losses and
delinquencies remain within historical levels produced in the
2001-2005 period.
* Fitch Says US Gaming Industry Has Stable Outlook
--------------------------------------------------
The outlook for the US gaming industry is stable, supported by the
growing acceptance and popularity of gaming as a mainstream form
of entertainment, says Moody's Investors Service. Trends checking
improvement in credit quality are that the supply of gaming is
increasing more rapidly than before and that the industry is
likely to become more capital-intensive.
Companies will be investing heavily in the quantity and quality of
their products, limiting opportunities to decrease leverage, says
Moody's.
"There is increasing need for capital spending to develop non-
gaming amenities like hotel rooms, restaurants, entertainment, and
glitz to draw a broader crowd, even in the more local markets.
This is no longer limited to Las Vegas and Atlantic City," says
Moody's Vice President Keith Foley.
Areas where competition for existing casinos from neighboring
jurisdictions is increasing include Atlantic City, where the
introduction of gaming in Pennsylvania has become a real threat,
says Moody's.
An additional key development affecting the outlook is the
continued impact of smoking bans in certain jurisdictions such as
Atlantic City and Nevada, as well as the smoking bans in Colorado
and Illinois that will take effect in January 2008.
The stable outlook also considers that the gaming industry remains
highly regulated and has significant barriers to entry.
As the gaming industry matures, operating efficiencies and
improvements gained through technology will take on increased
importance, says the analyst.
As for the game manufacturers, "Moody's expects rating stability
in the near-term while upward rating momentum depending on
operator and customer receptivity to new technologies is possible
in the intermediate-term," says Foley.
At this time, none of the rated US gaming issuers is on review for
possible upgrade, says Moody's.
* Linda Grant Williams Joins as Dreier LLP's Corporate Partner
--------------------------------------------------------------
Linda Grant Williams has joined Dreier LLP as a partner in the
corporate & securities department.
Prior to joining the firm, Ms. Grant was of counsel
to Greenberg Traurig LLP in New York, and was a partner at
Pillsbury Winthrop Shaw Pittman LLP.
"We are delighted and very fortunate to have Linda Grant Williams
join Dreier LLP," Marc S. Dreier, founder and managing partner of
Dreier LLP, stated. "Her expertise in advising public-private
partnerships complements our current capabilities representing
capital providers in the construction and financing of major real
estate holdings."
Ms. Grant Williams will continue her practice in representing
banks, pension funds and other capital providers in the
construction and permanent financing of hotels, shopping centers,
office buildings, industrial complexes, multifamily projects,
cogeneration and other energy projects.
Some of her notable real estate and construction projects include
the financing of The Forum at Caesar's Palace, Two Rodeo Drive and
One Colorado Shopping Centers in Southern California and the
Greenwich Office Park in Greenwich, Connecticut.
"Joining Dreier LLP enables me to provide clients with the
litigation expertise, relationships and wide-ranging capabilities
of a full service law firm," Ms. Grant Williams stated. "I also
share Marc Dreier's vision of a cutting edge, entrepreneurial firm
that applies creative thinking to
client issues."
Ms. Grant Williams was instrumental in structuring financings for
the Oakland Raiders, Golden State Warriors, and in the renovation
of the Rose Bowl in Pasadena, California. She was recognized by
Sports Business Journal as one of the country's leading sports
executives and credited with the creation of sports
securitization, utilized at both the Pepsi Center in
Denver, Colorado and The Staples Center in Los Angeles,
California.
Ms. Grant Williams created a groundbreaking method for a more
cost effective method of financing U.S. airports, resulting in
greater bankruptcy protection for bondholders and dramatically
lowering financing costs for airlines. This patent-pending
business method innovation has been generally approved for use at
the tri-state area airports by The Port Authority of New York and
New Jersey.
Ms. Grant Williams received a B.S. in Political Science from the
University of Arizona in 1974 and a J.D., cum laude, from Loyola
Law School in 1979, where she was a member of the Loyola Law
Review and received the American Jurisprudence Constitutional Law
Award.
Ms. Grant Williams is a member of the Bar of the States of New
York and California and was recently appointed to the Association
of the Bar of the City of New York Structured Finance Committee.
About Dreier LLP
Dreier LLP represents a wide range of institutional,
entrepreneurial and individual clients in diverse sectors of
financial, industrial and service-oriented markets. Founded in
1996, the firm's principal practices are commercial litigation,
real estate, bankruptcy and corporate reorganization, employment,
corporate and securities, entertainment, intellectual property,
matrimonial and tax. Dreier LLP's Los Angeles affiliate, Dreier
Stein & Kahan LLP, has its principal practice in entertainment and
commercial litigation and corporate transactions. The firm's
affiliate Schlesinger Gannon & Lazetera LLP has an extensive
practice in the area of trusts and estates law. Pitta & Dreier
LLP is an affiliate which specializes in labor law, and Pitta,
Bishop, Del
Giorno & Dreier LLP specializes in government relations. In the
10 years since its founding, Dreier LLP, with its affiliate
members, has grown to more than 200 attorneys, with its principal
office at 499 Park Avenue in Manhattan, and additional offices in
Los Angeles; Santa Monica, California; Albany, New York; and
Stamford, Connecticut.
* Beard Audio Conferences Presents
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* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Dec. 13, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Colorado Chapter Annual Brew Pub & Pool Social
Wynkoop Brewing Company, Denver, Colorado
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Dec. 13, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Extravaganza - TMA & CFA
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Dec. 13, 2007
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Dec. 19, 2007
LEXISNEXIS CONFERENCES
Mealey's Asbestos Bankruptcy Conference
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Dec. 19, 2007
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South Florida Dinner
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Jan. 7, 2008
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Views from the Bench
Omni Hotel, New Haven, Connecticut
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Jan. 10, 2008
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Distressed Debt Panel
University Club, Jacksonville, Florida
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Jan. 10, 2008
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NJTMA Holiday Party
Iberia Tavern & Restaurant, Newwark, New Jersey
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Jan. 11, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Annual Lenders Panel
Westin Buckhead, Atlanta, Georgia
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Jan. 14-15, 2008
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
VALCON: Liquidity, LBOs, Risk and Restructurings
Marriott Harbor Beach Resort & Spa, Fort Lauderdale,
Florida
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Jan. 10, 2008
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Member Appreciation FREE Happy Hour
Dave & Busters, Jacksonville, Florida
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Jan. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Current Outlook: Workouts, Lending and Turnarounds
Marriott North, Fort Lauderdale, Florida
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Jan. 17, 2008
BEARD AUDIO CONFERENCES
Corporate Bankruptcy Bootcamp: Fundamentals of BAPCPA
Proceedings
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
Jan. 17-18, 2008
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Insolvency Symposium
Westin Diplomat, Hollywood, Florida
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Jan. 24, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Winter Warm-up
Belgo Brasserie, Calgary, Alberta
Contact: 403-294-4954 or www.turnaround.org
Jan. 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Finding Money: Int'l Asset Search and
Recovery Methods for Collecting Judgments
Centre Club, Tampa, Florida
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Jan. 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Member Appreciation FREE Happy Hour
The Lime, Tampa, Florida
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Jan. 29, 2008
WEST LEGALWORKS
Southeastern Distressed M&A Summit
Westin Buckhead, Atlanta, Georgia
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Jan. 30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Year 2008 Kick-Off Party
Oak Hill Country Club, Rochester, New York
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Jan. 31, 2008
BEARD AUDIO CONFERENCES
Partnerships in Bankruptcy: Unwinding the Deal
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Feb. 7, 2008
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PowerPlay
Philips Arena, Atlanta, Georgia
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Feb. 7, 2008
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Breakfast Event
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Feb. 7, 2008
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PowerPlay
Philips Arena, Atlanta, Georgia
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Feb. 14-16, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 20, 2008
TURNAROUND MANAGEMENT ASSOCIATION
13 Week Cash Flow
Courtyard Marriott, Dania Beach, Florida
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Feb. 20, 2008
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Member Appreciation FREE Happy Hour
Islamorada Fish Company, Dania, Florida
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Feb. 22, 2008
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Fairmont Miramar, Santa Monica, California
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Feb. 23-26, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Litigation Seminar I
Park City, Utah
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Feb. 25, 2008
FINANCIAL RESEARCH ASSOCIATES LLC
Financial Services Mergers & Acquisitions Deals Forum
Harvard Club, New York, New York
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Feb. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Member Appreciation FREE Happy Hour
One Eyed Jacks, Orlando, Florida
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Feb. 26, 2008
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Retail Panel
Citrus Club, Orlando, Florida
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Feb. 27-28, 2008
EUROMONEY INSTITUTIONAL INVESTOR
6th Annual Distressed Investing Forum
Union League Club, New York, New York
Contact: http://www.euromoneyplc.com/
Feb. 27 - Mar. 1, 2008
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CTP Courses
Holland & Knight, Atlanta, Georgia
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Mar. 6-8, 2008
ALI-ABA
Fundamentals of Bankruptcy Law
Mandalay Bay Resort, Las Vegas, Nevada
Contact: http://www.ali-aba.org/
Mar. 8-10, 2008
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
St. John's University School of Law, New York
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Mar. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Rick Cieri of Kirkland & Ellis
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Bankers Club of Miami, Florida
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Mar. 25, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Dearfoam Slipper Turnaround
Centre Club, Tampa, Florida
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Mar. 25-29, 2008
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TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
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Mar. 27-30, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Litigation Seminar II
Las Vegas, Nevada
Contact: http://www.nortoninstitutes.org/
Apr. 3, 2008
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
Annual Spring Luncheon
Renaissance Hotel, Washington, District of Columbia
Contact: 703-449-1316 or www.iwirc.org
Apr. 3, 2008
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - East
The Renaissance, Washington, District of Columbia
Contact: http://www.abiworld.org/
Apr. 3-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
26th Annual Spring Meeting
The Renaissance, Washington, District of Columbia
Contact: http://www.abiworld.org/
Apr. 7-8, 2008
PRACTISING LAW INSTITUTE
30th Annual Current Developments in
Bankruptcy & Reorganization
PLI Center New York, New York
Contact: http://www.pli.edu/
Apr. 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Assignment for Benefit of Creditors
University Club, Jacksonville, Florida
Contact: www.turnaround.org
Apr. 25-27, 2008
NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES
NABT Spring Seminar
Eldorado Hotel & Spa, Santa Fe, New Mexico
Contact: http://www.nabt.com/
Apr. 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Why Prospects Become Clients
Citrus Club, Orlando, Florida
Contact: www.turnaround.org/
May 1-2, 2008
TURNAROUND MANAGEMENT ASSOCIATION
2nd Annual Credit & Bankruptcy Symposium
Foxwoods Resort Casino, Ledyard, Connecticut
Contact: www.turnaround.org/
May 1-2, 2008
AMERICAN BANKRUPTCY INSTITUTE
Debt Symposium
Hilton Garden Inn, Champagne/Urbana, Illinois
Contact: 1-703-739-0800; http://www.abiworld.org/
May 9, 2008
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - NYC
Alexander Hamilton U.S. Custom House, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12, 2008
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millennium Broadway Hotel & Conference Center, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12-13, 2008
PRACTISING LAW INSTITUTE
30th Annual Current Developments in
Bankruptcy & Reorganization
PLI Center San Francisco, California
Contact: http://www.pli.edu/
May 13-16, 2008
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University, New Orleans, Louisiana
Contact: 1-703-739-0800; http://www.abiworld.org/
May 18-20, 2008
INTERNATIONAL BAR ASSOCIATION
14th Annual Global Insolvency & Restructuring Conference
Stockholm, Sweden
Contact: http://www.ibanet.org/
May 21, 2008
TURNAROUND MANAGEMENT ASSOCIATION
What Happened to My Money - The Restructuring of a Loan
Servicer
Marriott North, Fort Lauderdale, Florida
Contact: www.turnaround.org/
June 4-7, 2008
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
24th Annual Bankruptcy & Restructuring Conference
J.W. Marriott Spa and Resort, Las Vegas, Nevada
Contact: http://www.airacira.org/
June 12-14, 2008
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: http://www.abiworld.org/
June 19-21, 2008
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Omni Hotel, San Francisco, California
Contact: http://www.ali-aba.org/
June 24, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Fraud Panel
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
June 26-29, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Seminar
Jackson Hole, Wyoming
Contact: http://www.nortoninstitutes.org/
July 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Cynthia Jackson of Smith Hulsey & Busey
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
July 10-13, 2008
AMERICAN BANKRUPTCY INSTITUTE
16th Annual Northeast Bankruptcy Conference
Ocean Edge Resort
Brewster, Massachussets
Contact: http://www.abiworld.org/events
July 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Employment Issues Following Hurricanes & Disasters
Centre Club, Tampa, Florida
Contact: http://www.turnaround.org/
July 31 - Aug. 2, 2008
AMERICAN BANKRUPTCY INSTITUTE
4th Annual Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay
Cambridge, Maryland
Contact: http://www.abiworld.org/
Aug. 16-19, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Southeast Bankruptcy Workshop
Ritz-Carlton, Amelia Island, Florida
Contact: http://www.abiworld.org/
Aug. 20-24, 2008
NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES
NABT Convention
Captain Cook, Anchorage, Alaska
Contact: http://www.nabt.com/
Aug. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Do's and Don'ts of Investing in a Turnaround
Citrus Club, Orlando, Florida
Contact: www.turnaround.org/
Sept. 4-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 4-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 17, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Real Estate / Condo Restructuring Panel
Marriott North, Fort Lauderdale, Florida
Contact: www.turnaround.org/
Sept. 24-26, 2008
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC 15th Annual Fall Conference
Scottsdale, Arizona
Contact: http://www.ncbj.org/
Sept. 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Desert Ridge Marriott, Scottsdale, Arizona
Contact: http://www.iwirc.org/
Sept. 30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Private Equity Panel
Centre Club, Tampa, Florida
Contact: www.turnaround.org/
Oct. 9, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Luncheon - Chapter 11
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
Oct. 28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
State of the Capital Markets
Citrus Club, Orlando, Florida
Contact: www.turnaround.org/
Oct. 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott New Orleans, Louisiana
Contact: 312-578-6900; http://www.turnaround.org/
Nov. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Interaction Between Professionals in a
Restructuring/Bankruptcy
Bankers Club, Miami, Florida
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
20th Annual Winter Leadership Conference
Westin La Paloma Resort & Spa
Tucson, Arizona
Contact: http://www.abiworld.org/
May 7-10, 2009
AMERICAN BANKRUPTCY INSTITUTE
27th Annual Spring Meeting
Gaylord National Resort & Convention Center
National Harbor, Maryland
Contact: http://www.abiworld.org/
June 11-13, 2009
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
June 21-24, 2009
INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
BANKRUPTCY PROFESSIONALS
8th International World Congress
TBA
Contact: http://www.insol.org/
July 16-19, 2009
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Mt. Washington Inn
Bretton Woods, New Hampshire
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
BEARD AUDIO CONFERENCES
2006 BACPA Library
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com;
http://researcharchives.com/t/s?20fa
BEARD AUDIO CONFERENCES
BAPCPA One Year On: Lessons Learned and Outlook
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Carve-Out Agreements for Unsecured Creditors
Contact: 240-629-3300; http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
China\u2019s New Enterprise Bankruptcy Law
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Deepening Insolvency \u2013 Widening Controversy: Current
Risks,
Latest Decisions
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Diagnosing Problems in Troubled Companies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Claims Trading
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Market Opportunities
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation under the New
Code
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Equitable Subordination and Recharacterization
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Handling Complex Chapter 11
Restructuring Issues
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Homestead Exemptions under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Hospitals in Crisis: The Insolvency Crisis Plaguing
Hospitals Across the U.S.
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
IP Rights In Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
KERPs and Bonuses under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Non-Traditional Lenders and the Impact of Loan-to-Own
Strategies on the Restructuring Process
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Partnerships in Bankruptcy: Unwinding The Deal
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Privacy Rights, Protections & Pitfalls in Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Real Estate Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergers\u2014the New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Second Lien Financings and Intercreditor Agreements
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Surviving the Digital Deluge: Best Practices in E-Discovery
and Records Management for Bankruptcy Practitioners
and Litigators
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Technology as a Competitive Advantage For Today\u2019s Legal
Processes
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Battle of Green & Red: Effect of Bankruptcy
on Obligations to Clean Up Contaminated Property
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Subprime Sector Meltdown:
Legal Developments and Latest Opportunities
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Twenty-Day Claims
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Using Virtual Data Rooms to Expedite M&A and Insolvency
Proceedings
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
When Tenants File -- A Landlord's BAPCPA Survival Guide
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, Joseph Medel C. Martirez, and Peter A.
Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***