T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 13, 2007, Vol. 11, No. 295 Headlines AARDVARK ABS: Moody's Junks Rating on $44.5MM Deferrable Notes ACCELLENT INC: Tight Liquidity Cues S&P's Negative CreditWatch ACCESS RENT: Case Summary & 20 Largest Unsecured Creditors ADELPHIA COMMS: Distributes $311 Mil. Cash and 1,714,365 Shares AMERICAN FINC'L: Moody's Puts Preferred Stock Rating at (P)Ba1 AMERICAN HOME: BofA Wants Stay Lifted to Sell Loan Collateral AMERICAN HOME: BoNY Resigns as Creditors' Committee Member AMERICAN HOME: GMAC Willing to Take Over as Loan Servicer AMSCAN HOLDINGS: S&P Holds Ratings and Removes Negative Watch ARVINMERITOR INC: Signs Deal to Acquire Mascot Truck BANC OF AMERICA: S&P Affirms Ratings on 21 Certificate Classes BASELL AF: Fitch Cuts Rating to B+ and Removes Negative Watch BIG A DRUG: Court Gives Interim Approval on PNC DIP Financing BIG A DRUG: May Enter into GOB Consulting Agreement with Hudson BLACK GAMING: Poor Performance Cues S&P to Cut Rating to B- BOSQUE POWER: S&P Rates Proposed $412MM Sr. Facilities at B+ BROTMAN MEDICAL: Can Hire Butler Snow as Special Labor Counsel BROTMAN MEDICAL: Court OKs McDermott as Special Medicare Counsel BSML INC: Posts $1.6 Million Net Loss in Quarter Ended Sept. 29 CALPINE CORP: 91% of Ballots Cast Vote to Accept Plan CAMPUS PARK: Case Summary & 20 Largest Unsecured Creditors CBA GROUP: S&P Puts 'B' Credit Rating Under Negative Watch CITIGROUP COMMERCIAL: Moody's Holds B3 Rating on $5.6MM Certs. CNS RESPONSE: Cacciamatta Accountancy Raises Going Concern Doubt CREDIT SUISSE: Credit Support Erosion Cues S&P to Lower Ratings DANA CORP: Addresses Objections to Confirmation of Plan DANA CORP: Bankruptcy Court to Confirm Reorganization Plan DANA CORP: Names Post-Bankruptcy Board of Directors DANIEL DOI: Case Summary & 19 Largest Unsecured Creditors DAVIDSON III: Sept. 30 Balance Sheet Upside-Down by $10.2 Million DEJA FOODS: Court Confirms Modified Amended Reorganization Plan DELTA FINANCIAL: Angelo Gordon Aborts Recapitalization Proposal DELTA FINANCIAL: Discloses Plan to Terminate All Employees DELTA FINANCIAL: Interlocutory Appeal for Fidelity Suit Denied DRI CORPORATION: Earns $499,000 in Third Quarter Ended Sept. 30 DUANE TILLIMON: Case Summary & 10 Largest Unsecured Creditors DURA AUTOMOTIVE: Resolves Objections to Plan Confirmation DURA AUTOMOTIVE: Court Defers Plan Confirmation Hearing to Dec. 17 DURA AUTOMOTIVE: Extends Marketing Period for $425 Mil. Exit Loan DYNEA CANADA: Moody's Holds B2 Rating and Revises Outlook EARTH BIOFUELS: Court Dismisses Involuntary Bankruptcy Petition EAST LINDA: Voluntary Chapter 11 Case Summary EDUCATE INC: S&P Puts B Credit Rating on Negative Watch EIMSKIP HOLDINGS: Moody's Affirms B3 Corporate Family Rating ELECTRONIC DATA: Improved Legacy Issues Prompts Moody's Review EQUIFIRST LOAN: Moody's Lowers Rating on Class B-3 Loans to B2 EURAMAX INT'L: Weak Performance Cues S&P to Cut Rating to B- FENDER MUSICAL: Planned Kaman Music Buy Cues Moody's Neg. Outlook FGX INT'L: Sept. 29 Balance Sheet Upside-Down by $78.04 Million FINANCIAL MEDIA: Kabani & Company Raises Going Concern Doubt FIRST NLC: Moody's Downgrades Ratings on Class M-9 Certs. to B3 FORD MOTOR: Idles Light Truck Plants Two Weeks Ahead of Schedule GREAT ATLANTIC: Moody's Confirms B3 Corporate Family Rating GREEN PASTURES: Voluntary Chapter 11 Case Summary H&R BLOCK: 2nd Qtr. Net Loss Triples on Discontinued Operations H&R BLOCK: Delays Form 10-Q Filing on Pending Option One Review HARRAH'S ENT: Gets La. & Iowa Regulators Okay on Apollo/TPG deal HOLOGIC INC: S&P Holds 'BB-' Rating and Revises Outlook to Pos. HOME EQUITY: Moody's Cuts Rating on Two Certificates to B1 INDYMAC HOME: Moody's Lowers Rating on 12 Tranches INPHOHIC INC: Committee Prefers Liquidation Over Versa BuyOut INPHONIC INC: Nasdaq Completes Delisting of Shares INVERNESS MEDICAL: Inks Deal to Buy BBI Holdings' Share Capital ITC^DELTACOM: Board Sets Dec. 17 as Rights Offering Record Date JACUZZI BRANDS: Housing Downturns Cue S&P's Negative Outlook JEWELRY 47: Case Summary & 19 Largest Unsecured Creditors JOHNSON RUBBER: Case Summary & 11 Largest Unsecured Creditors JP MORGAN: Moody's Cuts Rating on Class M10 Trust to Ba2 from Ba1 JP MORGAN: Moody's Holds Ba2 Rating on Class K Certificates KAMP RE: S&P Puts Default Rating on $190MM Floating-Rate Notes LAM RESEARCH: S&P Says Rarings Remain on Negative CreditWatch LB-UBS COMMERCIAL: S&P Holds Low-B Ratings on Six Cert. Classes LEGENDS GAMING: Moody's Rates $160 Mil. Sr. Secured Notes at B1 LEGENDS GAMING: S&P Revises Rating on $160MM Sr. Secured Notes LEVCOR INT'L: Sept. 30 Balance Sheet Upside-Down by $7.8 Million LEVITT AND SONS: Gets Court Nod to Abandon KeyBank Collateral LEVITT AND SONS: Wants to Hire Glankler Brown as Special Counsel LEVITZ FURNITURE: Court Approves Jones Day as Bankruptcy Counsel LEVITZ FURNITURE: Gets Final Nod to Hire FTI as Crisis Manager LEVITZ FURNITURE: Young Conaway Retention Request Gets Final OK LIBERTY TAX III: Sept. 30 Balance Sheet Upside-Down by $21.5 Mil. LYONDELL CHEMICAL: Fitch Lower Issuer Default Rating to B+ M FABRIKANT: Banks Balk at Joint Chapter 11 Liquidation Plan MARK IV: Operating Pressures Cue Moody's to Cut Rating to B3 MARKOV CDO: Moody's Junks Ratings on Six Note Classes MOVIE GALLERY: Can Execute Amendments Under Restructuring Pacts MOVIE GALLERY: Lease Action Directives on Auction Protocols Set MOVIE GALLERY: Will Close Down Moviebeam Service on December 15 MSB OF DESTIN: Gets Interim OK to Use Rewards' Cash Collateral MSB OF DESTIN: Taps Professionals to Pursue Insurance Claims MSB OF DESTIN: Wants Court to Approve $100,000 DIP Financing NICHOLS BROTHERS: Files Schedules of Assets and Liabilities NICHOLS BROTHERS: U.S. Trustee Forms Seven-Member Committee NICHOLS BROTHERS: Can Access Ice Floe's DIP Fund on Interim Basis NOVASTAR FINANCIAL: Wachovia Extends Waiver Until January 4 NY WESTCHESTER: Wants Until April 14 to File Chapter 11 Plan OCEANIA CRUISES: Regent Seven Deal Cues S&P to Affirm Ratings POPE & TALBOT: Court Gives Final Approval on DIP Financing POPE & TALBOT: Court Gives Final Okay to Use of Cash Collateral POPE & TALBOT: Canadian Debtors Must Review Sale Terms, PwC Says PORTOLA CLO: S&P Assigns 'BB' Rating on $16.5MM Class E Notes PRORHYTHM INC: Files for Chapter 11 Protection in Delaware PRORHYTHM INC: Case Summary & 20 Largest Unsecured Creditors QUALITY DISTRIBUTION: $60MM Boasso Deal Cues S&P' s Dev. Watch RADIO SYSTEMS: S&P Affirms All Ratings and Revises Outlook REALOGY CORP: Moody's Affirms B3 Corporate Family Rating REGAL ENTERTAINMENT: Moody's Affirms Ba3 Corp. Family Rating RICHMOND REDEV'T: Moody's Holds Ba3 Rating on $5.6MM Bonds RJO HOLDINGS: Increased Leverage Cues Moody's to Lower Rating SF CONCEPTS: Case Summary & Four Largest Unsecured Creditors SHENANDOAH VIEW: Case Summary & Five Largest Unsecured Creditors SHERMAN SENIOR: Case Summary & 18 Largest Unsecured Creditors SILVERTON CASINO: S&P Withdraws Ratings at Company's Request SIMON WORLDWIDE: Sept. 30 Balance Sheet Upside-Down by $13.4 Mil. SOUNDVIEW HOME: Moody's Downgrades Ratings on 27 Tranches SUNDALE LTD: Case Summary & 10 Largest Unsecured Creditors TECUMSEH PRODUCTS: Completes $10 Mil. Auto & Specialty Biz Sale TOM STYLES: Case Summary & Eight Largest Unsecured Creditors TRANSDIGM INC: Moody's Holds All Ratings with Stable Outlook TRANSGLOBAL PROPERTIES: Case Summary & Two Largest Creditors TRIPLE H: Case Summary & 13 Largest Unsecured Creditors UNIVERSAL GUARDIAN: Posts $2.2 Million Net Loss in Third Quarter UNITED RENTALS: Tender Offer Expiration Date Extended to Dec. 21 VICTORY MEMORIAL: Gets Bridge Order Extending Exclusive Periods WILLIAMS PARTNERS: Completes $750 Million Wamsutter Buyout YAZAKI INT'L: S&P Withdraws 'B+' Rating at Company's Request * Chadbourne & Parke-London Adds 3 Partners to Finance Practice * Shearman & Sterling Adds 13 Associates and Counsel * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AARDVARK ABS: Moody's Junks Rating on $44.5MM Deferrable Notes -------------------------------------------------------------- Moody's Investors Service placed these notes issued by AArdvark ABS CDO 2007-1 on review for possible downgrade: Class Description $1,320,000,000 Class A1 Senior Secured Floating Rate Notes Due January 2008 -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: Class Description: $78,000,000 Class A2 Senior Secured Floating Rate Notes Due July 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $47,000,000 Class B Senior Secured Floating Rate Notes Due July 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade In addition Moody's also announced that it has downgraded these notes: Class Description: $23,500,000 Class C Secured Floating Rate Deferrable Notes Due July 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3 Class Description: $21,000,000 Class D Secured Floating Rate Deferrable Notes Due July 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. ACCELLENT INC: Tight Liquidity Cues S&P's Negative CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit rating, for Wilmington, Massachussetts- based Accellent Inc. on CreditWatch with negative implications. "This action reflects the company's tight liquidity," noted Standard & Poor's credit analyst Cheryl Richer. Also, although Accellent amended its credit facility in April 2007 to provide additional cushion, the leverage ratio covenant will decline to 8.0x at year-end 2008. Accellent's current debt leverage was 8.2x (per the loan calculations) at the end of the 2007 third quarter. Despite its position as a leading participant in the niche medical device contract manufacturing business, Accellent's sales declined 4.5% for the first three quarters of 2007 over the 2006 period, although there has been sequential improvement in the past three quarters of 2007. EBITDA declined more steeply because of lower selling prices and a less favorable product mix. Year-to-date sales were negatively affected by the loss of the Boston Scientific contract ($11 million) and a $7 million decrease in sales volume. Orthopedic demand, which experienced a 40% decline in 2006, declined by over 19% for the first nine months of 2007 over the 2006 period. Because of the continued weakness in new orthopedic product launches by customers, Accellent took an $82 million charge in the first half of 2007. Per our adjustments, debt to EBITDA was just under 8x at Sept. 30, 2007, as a result of the KKR acquisition financing ($705 million of debt and $640 million of equity) and subsequent weakened sales growth over the past several quarters; EBITDA interest coverage has hovered at about 1.5x. While Accellent has no debt maturities prior to 2012, near-term liquidity remains a concern. The company had only $5 million of cash at Sept. 30, 2007, and free operating cash flow used $5 million for the nine months ended Sept. 30, 2007. Although the company had $55 million available on its revolving credit facility at the end of the third quarter, its ability to draw on the facility is constrained by limited headroom under its covenants. S&P will evaluate fourth quarter results, management strategies to improve operations and cash flow, and any potential sponsor (Kohlberg Kravis Roberts & Co.) support to determine if, and the extent to which, ratings will be lowered. ACCESS RENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Access Rent to Own, LLC PO Box 8049 Prairie Village, KS 66208 Bankruptcy Case No.: 07-22792 Type of Business: The Debtor is an equipment and car rental company. Chapter 11 Petition Date: December 11, 2007 Court: District of Kansas (Kansas City) Judge: Robert D. Berger Debtor's Counsel: Joanne B. Stutz, Esq. Evans & Mullinix P.A. 7225 Renner Road, Suite 200 Shawnee, KS 66217 Tel: (913) 962-8700 Total Assets: $745,481 Total Debts: $1,828,624 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gerald Washington loan; value of $1,524,493 10960 Highway 341 South security: $85,000 Randolph, MS 38864 Caye Home Furnishings LLC trade debt $16,507 dba Stratford Upholstery 1201 W. Bankhead New Albany, MS 38652 Autco Dist trade debt $15,767 10900 Midwest Industrial Blvd Saint Louis, MO 63132 Liberty Dist trade debt $10,380 Quick Trip Fleet Services services $8,214 Zurich Insurance services $6,587 Mittleman Furn. Dist. trade debt $3,926 Blue Cross/Blue Shield services $3,689 Kansas City Power and Light utilities $3,606 Nieman Plaza Shopping Center unpaid Rent $2,846 Richard F. Haitbrink attorneys fees $2,756 Blue Ridge 56th Street LLC unpaid Rent $2,660 Everest Connections telephone services $1,578 KCWE TV services $1,545 Kansas City Board utilities $1,411 Hightouch Inc. software services $1,269 Firestone trade Debt $623 Deffenbaugh Disposal services $554 XM Satellite Radio services $390 Active Telecom services $341 ADELPHIA COMMS: Distributes $311 Mil. Cash and 1,714,365 Shares --------------------------------------------------------------- Adelphia Communications Corporation reported subsequent distributions of $311 million in cash and 1,714,365 shares of TWC Class A Common Stock to holders of Allowed Claims against the parent Adelphia Communications Corporation pursuant to the First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of Adelphia Communications Corporation and Certain Affiliated Debtors, dated as of Jan. 3, 2007, as Confirmed. The 1,714,365 shares of TWC Class A Common Stock to be distributed have a "Deemed Value" under the Plan of $65 million and a fair market value as of Dec. 6, 2007, of $45 million. The amount and timing of such distributions as a result of the release of escrows, reserves and holdbacks are subject to the terms and conditions of the Plan and numerous other conditions and uncertainties, many of which are outside the control of Adelphia and its subsidiaries. Pursuant to a Nov. 2, 2007 order of the United States Bankruptcy Court for the Southern District of New York, DTC's use of its standard distribution procedures in connection with this distribution on account of cancelled ACC securities will be deemed in compliance with the Plan. Such order further provides that as of the close of business on Dec. 17, 2007, DTC may no longer recognize any changes in beneficial ownership of the right to receive distributions under the Plan. The order also provides that the company has retained the right to, in effect, withdraw the restriction prior to Dec. 17, 2007, if it determines such restriction is no longer necessary. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. AMERICAN FINC'L: Moody's Puts Preferred Stock Rating at (P)Ba1 -------------------------------------------------------------- Moody's Investors Service has upgraded the senior debt ratings for American Financial Group, Inc. and its wholly owned subsidiary, Great American Financial Resources, Inc to Baa2 from Baa3 as well as the insurance financial strength ratings of American Financial's leading property and casualty insurance subsidiaries to A2 from A3. This action concludes a review for possible upgrade that was initiated on Oct. 5, 2007. The outlook for the ratings is stable. According to Moody's, the upgrade for Great American Insurance Company, and its affiliated P&C pool members reflects the group's improved capital adequacy, higher levels of profitability and fixed charge coverage as well as the parent company's intention to maintain financial leverage at current levels. AFG's property & casualty insurance subsidiaries maintain strong niche positions in many specialty commercial lines with a focus on underwriting profitability. Moody's believes that management has instituted a performance driven compensation structure, with a significant contingent, deferred component which works well within the often volatile property and casualty industry. While the company's financial profile has improved significantly, key challenges remain high operational leverage, exposure to natural and man-made catastrophe losses, particularly a California earthquake, and concerns surrounding the company's corporate governance structure. Moody's also maintained the three notch spread between AFG's Baa2 senior debt rating and the A2 IFS ratings of its lead P&C operating subsidiaries, which is typical for U.S. based insurance holding company structures. While Moody's review also considered the ongoing organization restructuring following the acquisition of the minority interest in GAFRI, Moody's believes that the diversification of revenues and earnings from the smaller life operations was not sufficient to narrow the notching. According to Moody's, lower operating and financial leverage, stronger earnings that lead to continued improvements in risk adjusted capital, interest coverage levels consistently above 7x as well as significant improvement in the company's corporate governance structure could lead to a rating upgrade. Conversely, failure to sustain improved earnings and/or risk adjusted capitalization, adverse development in excess of 5% of reserves, increased operating or financial leverage or interest coverage levels below 6x could lead to a rating downgrade. Specifically as it relates to notching, a multinotch upgrade of the IFS ratings of the company's lead life companies as well as greater balance between P&C and life earnings and cashflow to service AFG debt could lead to a narrowing of the notching between the senior debt rating and the IFS ratings of AFG's lead P&C operating subsidiaries. Moody's confirmed the A3 insurance financial strength rating for AFG's leading stand-alone workers' compensation insurance company, Republic Indemnity Company of America. Republic Indemnity's rating reflects the monoline nature and often volatile business profile and its significant exposure to gross catastrophe losses, particularly from a California earthquake. Moody's also affirmed the A3 insurance financial strength rating and reiterated the positive outlook on American Financial's life insurance subsidiary, Great American Life Insurance Company. These ratings have been upgraded with a stable outlook: * American Financial Group, Inc. -- senior debt at Baa2; senior unsecured at (P)Baa2; subordinated unsecured at (P)Baa3; preferred stock at (P)Ba1; * AAG Holding Company, Inc. -- senior debt at Baa2; senior unsecured at (P)Baa2; subordinated unsecured at (P)Baa3; * American Financial Capital Trust II, III, IV -- preferred securities at (P)Baa3; * American Annuity Capital Trust II -- preferred securities at Baa3; * Great American Insurance Company -- insurance financial strength at A2; * Great American Alliance Insurance Company -- insurance financial strength at A2; * Great American Assurance Company -- insurance financial strength at A2; * Great American Contemporary Insurance Company -- insurance financial strength at A2; * Great American E&S Insurance Company -- insurance financial strength at A2; * Great American Fidelity Insurance Company -- insurance financial strength at A2; * Great American Insurance Company of New York -- insurance financial strength at A2; * Great American Protection Insurance Company -- insurance financial strength at A2; * Great American Security Insurance Company -- insurance financial strength at A2; * Great American Spirit Insurance Company -- insurance financial strength at A2; * Worldwide Casualty Insurance Company -- insurance financial strength at A2; These ratings have been confirmed with a stable outlook: * Republic Indemnity Company of America -- insurance financial strength at A3. These ratings have been affirmed with a positive outlook: * Great American Life Insurance Company -- insurance financial strength at A3. American Financial, located in Cincinnati, Ohio, (NYSE:AFG) is a diversified holding company that, through its operating subsidiaries, provides specialty commercial property and casualty insurance, as well as tax-deferred annuities and life insurance products. For the first nine months of 2007, American Financial reported $3.4 billion in total revenue and net income of $293 million. As of Sept. 30, 2007, shareholders' equity was $3.0 billion. AMERICAN HOME: BofA Wants Stay Lifted to Sell Loan Collateral ------------------------------------------------------------- Bank of America, N.A., the administrative agent for certain prepetition secured lenders, asks the U.S. Bankruptcy Court for the District of Delaware for relief from automatic stay to exercise its rights as a secured creditor to sell certain collateral, which includes outstanding construction-to-perm mortgage loans on single-family residences. The Construction- to-Perm Loans are residential loans supporting the construction or improvement of single-family homes, which convert to regular/ permanent mortgage loans, or which mature in anticipation of refinancing by third parties, once the home is built or the improvements are completed. A hearing to consider the request has been set for Dec. 21, 2007. Responses to the request must be filed no later than Dec. 14, at 4:00 p.m. Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, relates that as of Aug. 6, 2007, American Home Mortgage Investment Corp. and its debtor- affiliates owed approximately $1,104,550,000 to the Prepetition Secured Parties, pursuant to a certain prepetition credit agreement. In addition, pursuant to a security agreement, BofA holds first priority security interests in and liens upon certain of the Debtors' assets, including 85 Construction-to-Perm Loans, for the ratable benefit of the Prepetition Secured Parties. The Debtors' total committed principal amount with respect to the Construction-to-Perm Loans is $51,691,650, of which $30,478,019 has been funded and is outstanding. A maximum of $21,213,631 might still need to be advanced with respect to the loans, she says. Ms. Silverstein contends that when advances to contractors and subcontractors on the Construction-to-Perm Loans are disrupted, the value of the underlying collateral supporting the loans could be harmed. She notes that, prepetition, American Home Mortgage Servicing, Inc., funded the advances under the Credit Agreement, in which the Prepetition Secured Parties generally advanced 85% of the draw requests and the Debtors generally advanced the remaining 15%. Pursuant to the terms of the Final Cash Collateral Order, BofA agreed to allow the Debtors to use up to $3,000,000 of cash collateral from postpetition collections of the Construction-to- Perm Loans to fund additional advances under the loans. BofA allowed the arrangement to protect and preserve the properties and the other collateral securing the Construction-to-Perm Loans, Ms. Silverstein discloses. As of December 4, 2007, the Debtors used $2,493,288 of Cash Collateral since the Petition Date to fund additional advances under the Construction-to-Perm Loans. She points out that the Debtors have not funded any of the advances. Ms. Silverstein tells the Court that BofA and and the Prepetition Secured Parties are no longer required to fund advances under the Construction-to-Perm Loans, but, interested parties are demanding that advances be funded, like James D. Rucker, in El Dorado Hills, California. She discloses that a potential buyer is willing to purchase the Construction-to-Perm Loans and take over the funding obligations almost immediately. However, the Debtors have refused to entertain the offer despite the fact that the Debtors' prior Court-approved auction for the Construction-to- Perm Loans failed, she continues. The Debtors did not receive any bids for the Construction-to-Perm Loans that provided any value to the Debtors' estates by the bid deadline, resulting to the cancellation of the proposed auction, Ms. Silverstein reminds the Court. She relates that the Debtors have continued to market the Construction-to-Perm Loans and received an offer that would provide substantial value to the bankruptcy estates. In addition, the Potential Buyer would fund further advances shortly after a closing. However, despite the offer, she says that the Debtors inexplicably refused to provide reasonable due diligence to the Potential Buyer and have not agreed to sell the loans. Pursuant to 362(d)(2) of the Bankruptcy Code, the Court should lift the automatic stay as to the Construction-to-Perm Loans because the Debtors have no equity in the loans and the underlying C/P Loan Collateral, Ms. Silverstein contends. She adds that, among other things, the loans are not necessary to the Debtors' effective reorganization. Therefore, BofA asks the Court to (i) lift or modify the automatic stay, so that it may sell the Construction-to-Perm Loans, including, the underlying C/P Loan Collateral, and (ii) direct the Debtors to promptly provide reasonable due diligence required by the Potential Buyer. BofA also asks the Court for an expedited hearing on its request, pursuant to Rule 9006-1(e) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware. Debtors Object The Debtors contend that the Potential Buyer actually conducted significant due diligence with a team of four or five people at the Debtors' premises for several days, and had complete access to the loan files. They tell Judge Sontchi that they fully responded to requests for due diligence information, and engaged in good-faith discussions with the Potential Buyer to obtain an acceptable offer for the Construction-to-Perm Loans. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says that in addition to the discussions, the Debtors are also analyzing alternative strategies, which they believe may achieve greater value for the bankruptcy estates. Mr. Patton relates that the Debtors made a presentation to the Official Committee of Unsecured Creditors' professionals regarding the alternatives, and intend to make a similar presentation to BofA within days. He notes that requiring the Debtors to defend against BofA's request by the expedited deadline of December 12, 2007, will undermine the efforts to achieve maximum value. The issues raised in the request are extremely important and affect not only the Debtors and BofA, but various other creditor constituencies, Mr. Patton says. To the extent the Debtors, the Creditors Committee and BofA cannot agree upon an acceptable course of action regarding the Construction-to-Perm Loans in the next several days, the Debtors will need to devote substantial time and resources to prepare for the hearing on BofA's request, he argues. Accordingly, the Debtors ask the Court (i) to deny the request for an expedited hearing, and (ii) to hear the request on December 21, to afford them to explore other alternatives and, if necessary, adequately prepare for that hearing. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: BoNY Resigns as Creditors' Committee Member ---------------------------------------------------------- Representing the U.S. Trustee for Region 3, Joseph J. McMahon, Jr., informs the U.S. Bankruptcy Court for the District of Delaware that Bank of New York Trust Company resigned from the Official Committee of Unsecured Creditors in American Home Mortgage Investment Corp. and its debtor-affiliates' bankruptcy cases effective Nov. 13, 2007. Law Debenture Trust Company of New York is appointed to the Creditors Committee effective immediately. The Creditors Committee is now composed of: (1) Wilmington Trust Company Attn: James J. McGinley 520 Madison Avenue, 33rd Floor New York, New York 10022 Tel: (212) 415-0522 Fax: (212) 415-0513 (2) Deutsche Bank National Trust Co. Attn: Brendan Meyer 1761 East Street Andrew Place Santa Ana, California 92705 Tel: (212) 250-2921 Fax: (212) 797-0022 (3) Nomura Credit & Capital, Inc. Attn: Juliet F. Buck 2 World Financial Center, Building B New York, New York 10281 Tel: (212) 667-9368 Fax: (212) 667-1024 (4) Impac Funding Corporation Attn: Steve Wichmann 19500 Jamboree Road Irvine, California 92612 Tel: (949) 260-4549 Fax: (949) 221-4869 (5) Waldners Business Environments, Inc. Attn: John A. Marsicano 125 Route 110 Farmingdale, New York 11735 Tel: (631) 844-9368 Fax: (631) 694-6303 (6) United Parcel Service Attn: Steven Sass, RMS-Agent for UPS 307 International Circle, Suite 270 Hunt Valley, Maryland 21030 Tel: (410) 773-4040 Fax: (410) 773-4057 (7) Law Debenture Trust Company of New York Attn: James D. Heaney 400 Madison Avenue, 4th Floor New York, New York 10017 Tel: (212) 750-6474 Fax: (212) 750-1361 Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: GMAC Willing to Take Over as Loan Servicer --------------------------------------------------------- GMAC Mortgage LLC tells the U.S. Bankruptcy Court for the District of Delaware that as far as it is aware, American Home Mortgage Investment Corp. and its debtor-affiliates have not entered into any other agreements or filed any other requests to sell or address their servicing rights, if any, under a certain home equity line of credit servicing agreement among GMAC, as back-up servicer, American Home Mortgage Acceptance Inc., as servicer, American Home Investment Trust 2006-2, as issuing entity, and Deutsche Bank Trust Company Americas, as indenture trustee. Kimberly E. C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Delaware, notes that upon the final closing of the sale of the Debtors' mortgage loan servicing business, they will lack the ability to service the 2006-2 HELOCs since their entire servicing operation will be transferred to AH Mortgage Acquisition Co., Inc. She says that AHM Acceptance is no longer making loans to fund draw requests under the 2006-2 HELOCs, and that the HELOC borrowers have not received any notice from any Debtor that the 2006-2 HELOCs are "frozen," and that no further draw requests will be honored. The failure to notify HELOC Borrowers presents a very serious issue because they may be incurring obligations believing that they can draw on their HELOC to fund the obligations, she continues. Ms. Lawson says that GMAC can neither admit nor deny a number of factual allegations contained in CIFG Assurance North America, Inc.'s request, but, she assures the Court that GMAC is prepared to take over as servicer under the Servicing Agreement, provided that it is accorded the authority to do so by the Court and by AHM Acceptance, who currently possess the files, books, records and funds pertaining to the 2006-2 HELOCs. However, she clarifies that GMAC is only prepared to take over the servicing of the 2006-2 HELOCs, and not to advance any funds to meet draw requests made by HELOC Borrowers. GMAC tells the Court that it concurs with the request to the extent that CIFG seeks relief from the automatic stay, so that GMAC may take over as servicer. Therefore, GMAC asks the Court to: -- modify the automatic stay to permit CIFG, GMAC and any other non-Debtor parties to the Servicing Agreement to take all actions necessary to terminate AHM Acceptance as servicer; -- direct AHM Acceptance to comply with the Servicing Agreement as it relates to the transfer of servicing to GMAC, or any other successor servicer; and -- direct AHM Acceptance to send a notice to the HELOC Borrowers that the 2006-2 HELOCs are "frozen" and that no further loans will be made to them. Debtors Willing to Give Up Servicing Rights, But Oppose Payment Demands James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court that other than through an arrangement with AHM Acquisition, the Debtors are without the necessary resources to perform servicing under the Servicing Agreement. In addition, the Debtors believe that their Servicing Rights are of inconsequential value to the bankruptcy estates. Hence, the Debtors consent to the abandonment and termination of the Servicing Rights and seek to efficiently and timely permit GMAC to succeed to them. However, since the filing of the Debtors' response to CIFG's request, they have been unable to negotiate a consensual form of order granting relief to CIFG and to permit GMAC to succeed the Debtors. Instead, CIFG, and now GMAC, continue to demand relief well beyond that customarily granted by a court on a relief for relief from the automatic stay, Mr. Patton says. He points out that (i) CIFG improperly requests the Court to direct the Debtors to pay all costs and expenses related to the transition of the servicing to GMAC or the successor servicer, and (ii) GMAC demands that the Debtors pay for the cost and expense of the complete transfer of all servicing data and attorney's fees and disbursements. Mr. Patton contends that the law makes clear that a motion for relief is not designed to short circuit non-bankruptcy substantive and procedural requirements. He argues that the Debtors vehemently oppose the inappropriate attempts of CIFG and GMAC to go beyond the procedural and summary relief granted on a request for relief. If CIFG and GMAC seek substantive relief, like payment of administrative claims, then, the request should be procedurally proper, he continues. The Debtors, therefore, submit that any order on the request should simply provide for the termination of the automatic stay and preserve the rights with respect to the Debtors' assets. Given there is no authority for the language that CIFG and GMAC demand to be included in the proposed form of order that seeks to impose a significant administrative expense and burden on the estates, the Debtors ask Judge Sontchi to deny the relief sought. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMSCAN HOLDINGS: S&P Holds Ratings and Removes Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all of its ratings on Elmsford, New York-based Amscan Holdings Inc., including the 'B' corporate credit rating, and removed the ratings from CreditWatch, where they were placed with negative implications on Sept. 18, 2007. The CreditWatch placement followed the announcement that Amscan would acquire Factory Card & Party Outlet for about $72 million, including the assumption of FCPO's outstanding debt. The outlook is negative. The acquisition was financed with about $83 million of borrowings under the company's recently upsized $250 million asset-based revolving credit facility. In addition, on Nov. 2, 2007, Amscan announced the formation of Party City Franchise Group and the purchase of retail stores by Party City Corp. (a direct subsidiary of Amscan Holdings Inc.) and PCFG for about $80 million in cash and other considerations. "Despite the increased leverage from these transactions, we expect the company will be able to meaningfully reduce leverage in the coming quarters," said Standard & Poor's credit analyst Christopher Johnson. ARVINMERITOR INC: Signs Deal to Acquire Mascot Truck ---------------------------------------------------- ArvinMeritor Inc. has entered into an agreement to acquire Mascot Truck Parts Ltd. Terms of the acquisition were not disclosed. Mascot's 170 full-time employees, six remanufacturing locations, and current customer base will become part of the ArvinMeritor team. Mascot enjoys a customer satisfaction level with its loyal customers in Canada and the United States. "This expansion of our remanufacturing business makes sense for our customers and aligns with our business strategy to grow the aftermarket business," Carsten Reinhardt, president of ArvinMeritor's Commercial Vehicle Systems business, said. "Mascot has a similar passion for providing its customers with high- quality, dependable, remanufactured components - all of which complement the ArvinMeritor remanufacturing model." "Our reputation for quality, customer service, wholesale-only distribution, and extensive product knowledge are considerable assets that we have developed for many years. We believe this arrangement between ArvinMeritor and Mascot will offer the market products and services unmatched by our competition," Glenn Hanthorn, president of Mascot, said. Mascot's six Canadian remanufacturing locations - including three in Mississauga, Ontario; and one each in Edmonton, Alberta; Moncton, New Brunswick; and Boucherville, Quebec - well as its network of logistic centers across North America that provides customers with immediate availability of remanufactured products - will become integral to ArvinMeritor's remanufacturing business. ArvinMeritor established its axle carrier remanufacturing operation in 1982 at its Florence, Kentucky, national parts distribution center, and has since moved that operation into a major remanufacturing center that now includes brake shoes, transmissions and trailer axles, with 275,000 sq. ft. and 220 employees in Plainfield, Indiana. In late 2006, ArvinMeritor reached two remanufacturing milestones with production of its 10 millionth brake shoe and 50,000th axle differential carrier produced for North American customers. About Mascot Truck Parts Ltd. Based in Mississauga, Ontario, Canada, Mascot Truck Parts Ltd. is a remanufacturer of transmissions, drive axle carriers, steering gears and drivelines. Founded in 1936, these products are available from more than 20 facilities in Canada and the U.S., allowing delivery of quality products and service across North America. About Arvinmeritor Headquartered in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. * * * As reported in the Troubled Company Reporter on Oct. 9, 2007, Fitch Ratings downgraded its ratings on ArvinMeritor Inc. including Issuer Default Rating to 'BB-' from 'BB'; Senior secured revolver to 'BB' from 'BB+'; and Senior unsecured notes to 'B+' from 'BB-'. The rating outlook is negative. Standard & Poor's Ratings Services lowered its corporate credit rating and related ratings on ArvinMeritor Inc. to 'B+' from 'BB-'. The outlook is negative. Moody's Investors Service downgraded ArvinMeritor's Corporate Family Rating to B1 from Ba3 and maintained the outlook at stable. Moody's also lowered its ratings on the company's secured bank obligations (to Ba1, LGD-1, 8% from Baa3, LGD-2, 13%) and unsecured notes (to B2, LGD-4, 63% from B1, LGD-4, 63%). The Probability of Default is changed to B1 from Ba3, while the company's Speculative Grade Liquidity rating remains SGL-2. The outlook is stable. BANC OF AMERICA: S&P Affirms Ratings on 21 Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 21 classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Inc.'s series 2004-4. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Nov. 13, 2007, remittance report, the trust collateral consisted of 103 mortgage loans with an aggregate principal balance of $1.212 billion, compared with 108 loans totaling $1.296 billion at issuance. Excluding the $107.4 million (8%) of collateral in the pool that was defeased, the master servicer, Bank of America N.A., reported financial information for 97% of the nondefeased loans in the pool. Ninety-seven percent of the servicer-reported information was data for full-year 2006 or for the nine months ended Sept. 30, 2007. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.96x, up from 1.67x at issuance. All of the loans in the pool are current, and no loans are with the special servicer. The trust has not experienced a loss. The top 10 exposures secured by real estate have an aggregate outstanding balance of $514.2 million (42%) and a weighted average DSC of 2.06x, up from 1.80x at issuance. One of the top 10 exposures is on the master servicer's watchlist and is discussed below. Standard & Poor's reviewed the property inspection reports provided by the master servicer for the assets underlying the top 10 exposures, and all were reported to be in "good" or "excellent" condition. Three of the top 10 exposures exhibited credit characteristics consistent with those of investment-grade obligations at issuance and continue to do so. Details of these exposures 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 (12% of pooled balance), which supports the pooled certificate classes, and a junior participation of $103 million, which is the sole source of cash flow for the BC raked certificate classes. The A-1 junior participation is subordinate to the A-1 senior participation and the other pari passu notes. 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 third-largest exposure in the pool is secured by 3.2 million sq. ft. of the Dallas Market Center, which is a wholesale merchandise trade mart complex with over 5 million total sq. ft. in Dallas. The property is encumbered by a $136.4 million mortgage, which is split into two pari passu notes. The $88.7 million A-1 note is further split into a senior participation of $62.9 million (5% of pooled balance) that supports the pooled certificate classes, and a junior participation of $25.8 million, which is the sole source of cash flow for the DM raked certificate classes. The A-1 junior participation is subordinate to the A-1 senior participation and the other pari passu note. The master servicer reported a DSC of 2.66x as of year-end 2006 and 91% occupancy as of April 2007. Standard & Poor's underwritten NCF has increased approximately 21% since issuance due to higher rental income. -- The eighth-largest exposure in the pool, Northpointe Plaza ($30.9 million, 3%), is secured by a 360,800-sq.- ft. grocery-anchored power retail center in Spokane, Washington. Bank of America reported a DSC of 2.88x as of year-end 2006 and 97% occupancy as of June 2007. Standard & Poor's underwritten NCF is comparable to its level at issuance. The master servicer reported a watchlist of 13 loans totaling $93.9 million (8%). The largest loan on the watchlist, Precision Park ($20.4 million, 2%), is secured by a 723,800-sq.-ft. industrial property in North Kingstown, Rhode Island. The loan is on the watchlist due to a low DSC of 0.25x and a low occupancy of 28% as of the nine months ended Sept. 30, 2007. The borrower signed new leases during the fourth quarter of 2007, which are expected to bring the occupancy up to 42%. One of the four cross-collateralized and cross-defaulted loans that make up the fifth-largest exposure in the pool, the Sun Communities Crossed portfolio 1 ($39.5 million, 3%), is on the watchlist. The loans are secured by four manufactured housing communities with 1,744 pads located in Indiana, Florida, and Virginia. The Sun-Communities-Meadows loan ($7.3 million) is secured by a 330-pad community in Nappanee, Indiana. The loan is on the watchlist due to a low reported DSC of 1.03x and 61% occupancy as of the second quarter of 2007. Standard & Poor's stressed various assets in the mortgage pool as part of its analysis, including those on the watchlist or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the affirmed ratings. Ratings Affirmed Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2004-4 Class Rating Credit enhancement ----- ------ ---------------- A-2 AAA 13.90% A-3 AAA 13.90% A-4 AAA 13.90% A-5 AAA 13.90% A-6 AAA 13.90% A-1A AAA 13.90% B AA 10.96% C AA- 10.03% D A 8.29% E A- 7.49% F BBB+ 6.15% G BBB 5.21% H BBB- 3.88% J BB+ 3.34% K BB 2.81% L BB- 2.27% M B+ 2.01% N B 1.74% O B- 1.34% XC AAA N/A XP AAA N/A N/A -- Not applicable. BASELL AF: Fitch Cuts Rating to B+ and Removes Negative Watch ------------------------------------------------------------- Fitch Ratings has downgraded Basell AF SCA's and Lyondell Chemical Co.'s Long-term Issuer Default ratings to 'B+' from 'BB-' and removed them from Rating Watch Negative where they were originally placed on 17 July 2007. Stable Outlooks are assigned to the Long- term IDRs. Basell's Short-term IDR is also affirmed at 'B'. Fitch has also downgraded Basell's senior notes and Millenium America Inc's senior notes to 'B-'/'RR6' from 'B+' and 'BB'/'RR2', respectively, as well as assigned a 'B'/'RR5'rating to Lyondell Basell Finance Co's bridge facility. Fitch has taken further rating action involving various subsidiaries and debt instruments, as listed below in detail. Fitch's ratings actions follow substantial re-leveraging to facilitate the fully debt-funded merger of chemical companies Basell and Lyondell. Fitch believes that credit metrics of the combined new group, including net total leverage of approximately 4.9x, cash interest cover of approximately 2.4x, (ratios based on the pro forma unadjusted LTM September 7 EBITDA of $4,9bn) and available liquidity are commensurate with the Long-term IDRs of 'B+'. The group's credit profile will be supported by potential synergies and pricing power advantages gained from improved vertical integration and size increases, which may prove crucial as the global chemical industry continues to face serious challenges from volatile feedstock costs and economical uncertainties in its end markets. Following a special meeting of shareholders on 20 November 2007, Lyondell announced that shareholders approved the agreement and plan of merger, dated 16 July 2007, between Basell and Lyondell, pursuant to which Basell will acquire all of Lyondell's outstanding common shares for cash consideration of USD48 per share. The closing of the transaction is anticipated to occur on or about 20 December 2007. After completion of the acquisition, Basell will be renamed LyondellBasell Industries AF SCA. LBI will form the world's third-largest independent chemical company with combined revenues of around $42.8 billion and around 15,000 employees worldwide. The ratings are: Basell AF SCA and subsidiaries, to be renamed LyondellBasell Industries AF SCA: -- Long-term IDR: downgraded to 'B+' from 'BB-'; removed from RWN; Stable Outlook assigned -- Senior secured credit facilities: affirmed at 'BB+' and withdrawn -- Senior notes: downgraded to 'B-'/'RR6' from 'B+' Lyondell Chemicals Co. and subsidiaries: -- Long-term IDR: downgraded to 'B+' from 'BB-'; removed from RWN; Stable Outlook assigned -- Senior secured facilities: affirmed at 'BB+' and withdrawn -- Senior secured notes: affirmed at 'BB+' and withdrawn -- Senior unsecured notes: affirmed at 'BB-' and withdrawn -- Senior unsecured debentures: upgraded to 'BB+'/'RR1' from 'BB-' Lyondell Basell Finance Co: -- Bridge facility: 'B'/'RR5' Equistar Chemicals L.P.: -- Long-term IDR: affirmed at 'B+'; Outlook Stable -- Senior secured credit facility: affirmed at 'BB+'/'RR1' and withdrawn -- Senior unsecured notes: affirmed at 'BB-'/'RR3' and withdrawn -- Debentures: upgraded to 'BB+'/'RR1' from 'BB-'/'RR3' Millenium Chemicals Inc.: -- Long-term IDR: affirmed at 'B+' with Stable Outlook and withdrawn -- Convertible senior unsecured debentures: affirmed at 'BB'/'RR2' and withdrawn Millenium America Inc.: -- Long-term IDR: affirmed at 'B+'; Outlook Stable -- Senior unsecured notes: downgraded to 'B-'/'RR6' from 'BB'/'RR2' The above ratings are assigned subject to the completion of the transaction as well as review of the final documentation, conforming to present information. BIG A DRUG: Court Gives Interim Approval on PNC DIP Financing ------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California approved, on an interim basis, the request of Big A Drug Stores Inc. to enter into DIP Financing Arrangement with PNC Bank National Association, as Agent for the Lenders. The maximum amount by which all sums due to PNC from the Debtor may increase after taking into account all collections received by PNC and advances made, is $750,000. The Debtor may obtain credit extensions from PNC and to incur obligations pending a final hearing of the motion for DIP Financing in accordance with projections submitted by the Debtor for the period from Nov. 19, 2007, to Dec. 31, 2007. The credit extensions, to the extent expended by the Debtor on items that would require expenditures by the Debtor in the absence of any efforts to liquidate PNC's pre-petition collateral shall have priority over all other administrative expenses of the kind specified under Sec. 364(c) of the Bankruptcy Code. Debtor may utilize advances by PNC exclusively to pay for the expenses incurred by the Debtor as provided for in the projections. To secure all post-petition debt, the Debtor has granted to PNC, a security interest in all of the its post-petition collateral, excluding the Debtor's unencumbered leasehold interest and avoidance actions, to the same validity, extent and priority as PNC's pre-petition liens. As adequate protection, PNC is granted a replacement lien in and to all of the Debtor's post-petition collateral. 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., at The Law Offices of Steven R. Fox; and Lewis R. Landau, Esq., represent the Debtor. As of Nov. 18, 2007, the Debtor listed total assets of $18,788,648 and total debts of $54,424,646. BIG A DRUG: May Enter into GOB Consulting Agreement with Hudson --------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California has approved the request of Big A Drug Stores Inc. to enter into a going out of business Consulting Agreement with Hudson Capital Partners LLC. Of the four proposals received prior to bankruptcy filing from various companies in the business of providing GOB services, the Debtor told the Court that Hudson's offer was the at the lowest rate, the lowest expenses and appears to offer the greatest likelihood to maximize the return on the GOB sale. The GOB proposal states that Hudson will provide consulting services to the Debtor to manage and to dispose of the inventory and the furniture, fixtures and equipment in the context of a going out of business sale, to be conducted at the Debtor's remaining 19 stores. Under the Consulting Agreement, the Debtor will pay $2,675 weekly during the sale term to each of the five full-time supervisors to be provided by Hudson to conduct the sale, pay travel costs and to pay bonuses to the supervisors in an amount not to exceed $22,500 in whole. Actual expenses for payroll, advertising and other selling expenses shall be in accordance with a budget, which can only be exceeded with the Debtor's prior consent. Expenses over the budgeted amounts shall be offset from Hudson's fees. Hudson shall be paid $10,000 weekly as its base fee. If the recovery exceeds 45% of the retail value of the inventory, Hudson shall be paid an additional consulting fee of $1.96% of the gross sales less 50% of Hudson's base fees. Mr. James L. Schaye, Hudson's president and chief executive officer, assured the Court that Hudson Capital Partners LLC does not have or represent any interest materially adverse to the Debtor, its creditors or equity security holders. The Debtor told the Court that in its judgment a GOB sale is the best method of liquidating its remaining inventory because prior to bankruptcy filing, its attempts to find purchasers for its business locations as going concerns not successful. Likewise, net proceeds of the GOB Sale are anticipated to be approximately $2.5 million more that what would be recovered from a bulk sale of the inventory. 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., at The Law Offices of Steven R. Fox; and Lewis R. Landau, Esq., represent the Debtor. As of Nov. 18, 2007, the Debtor listed total assets of $18,788,648 and total debts of $54,424,646. BLACK GAMING: Poor Performance Cues S&P to Cut Rating to B- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Mesquite, Nevada-based Black Gaming LLC, including lowering the issuer credit rating to 'B-' from 'B'. The rating outlook is negative. At the same time, S&P affirmed the issue-level rating on Black Gaming's $125 million 9% senior secured notes due 2012 at 'B' and assigned a recovery rating of '2' to this issue, indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. The affirmation of the issue-level rating reflects Standard & Poor's revisions to its recovery rating scale and issue-level rating framework announced earlier this year. S&P also lowered its rating on the company's $66 million (accreted value) 12.75% senior subordinated discount notes to 'CCC' from 'CCC+'. "The downgrade reflects our concern regarding the company's deteriorating operating performance, reflected by a third consecutive quarter of declining EBITDA, and constrained liquidity position," explained Standard & Poor's credit analyst Guido DeAscanis. The company's diminished profitability largely stems from continued high levels of promotional spending as Black Gaming focused its marketing programs on growing the company's database with customers from outside the Mesquite area. In an attempt to reverse its negative operating trends, Black Gaming is refocusing its marketing strategy to reward its local customers, in order to drive this segment back to its properties. While this change in strategy will likely result in more efficient promotional spending, S&P anticipate Black Gaming will continue to face challenging operating conditions as high energy prices and weakness in the real estate sector negatively affect this local customer base. Consequently, S&P believe Black Gaming will continue to experience difficulty in meaningfully improving its cash flow generation. Moreover, as of January 2009, the company will be required to begin paying cash interest on its senior subordinated discount notes due 2013. The 'B-' issuer credit rating on Black Gaming reflects its highly leveraged financial profile, relatively small cash flow base, and reliance on a single market. BOSQUE POWER: S&P Rates Proposed $412MM Sr. Facilities at B+ ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary 'B+' credit rating to Laguna Park, Texas-based Bosque Power Co. LLC's proposed $412 million senior secured facilities. The credit facilities consist of a $25 million revolving credit facility due 2013 and a $387.5 million term loan B due 2015, of which there will be a $203 million construction sub-amount and a $95 million deposit LOC sub-amount. The senior secured credit facilities were assigned a recovery rating of '1', reflecting the expectation of full recovery of principal in a payment default scenario. The outlook is stable. All credit and recovery ratings are preliminary pending S&P's review of final project documentation. "Proceeds of the proposed debt issuance, along with equity contributed by the sponsors, will help fund the cost of acquisition, liquidity needs, as well as the construction cost of converting two simply-cycle generation turbines to combined-cycle operating mode," said Standard & Poor's credit analyst Chinelo Chidozie. The $95 million deposit LOC sub-amount will specifically support the project's gas purchase needs, and existing hedge agreement with Lehman Brothers Commodities Services. "On completion of the conversion, the 570 MW facility, which currently consists of a 245 MW combined-cycle unit and 325 MW simply-cycle units, is expected to increase to 802 MW of combined- cycle capacity, including 52 MW of duct-firing capacity," she continued. The outlook on Bosque Power Co. is stable. The stable outlook reflects near-term expectations for the project. An upgrade is possible on the successful completion of the conversion, and/or if the project can secure additional hedges that reduce cash flow volatility. A downgrade is likely if construction issues arise or if operational issues at the plant materially affect plant economics. BROTMAN MEDICAL: Can Hire Butler Snow as Special Labor Counsel -------------------------------------------------------------- Brotman Medical Center Inc. obtained authority from the United States Bankruptcy Court for the Central District of California to employ Butler, Snow, Mara, Stevens and Cannada, PLLC, as its special labor counsel. As reported in the Troubled Company Reporter on Nov. 22, 2007, Butler Snow is expected to: a) assist the Debtor in potentially negotiating a new collective bargaining agreement with the Service Employee International Union and the California Nurses Association and handling of all that may be encompassed by that, including represent of the Debtor in the board of inquiry process; b) represent the Debtor in labor, employment, and related issues arising from pre-existing collective bargaining agreements with SEIU and CNA, including handling grievance processing and arbitrations arising thereform, and providing legal advice concerning compliance with the collective bargaining agreements; and c) defend the Debtor with regard to any unfair labor practice charges filed by SEIU and CNA with the National Labor Relations Board. The firm's attorneys and their compensation rates are: Attorneys Hourly Rate --------- ----------- David P. Jaqua, Esq. $320 Bart N. Sisk, Esq. $295 J. Wilson Eaton, III, Esq. $225 Todd P. Photopulos, Esq. $235 Graham W. Askew $150 Non-attorney professionals $110 - $120 Bart N. Sisk, Esq., a member 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. Sisk can be reached at: Bart N. Sisk, Esq. AmSouth Plaza 210 East Capitol Street, Suite 1700 Jackson, MS 39201 Tel: (601) 948-5711 Fax: (601) 985-4500 http://www.butlersnow.com/ Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BROTMAN MEDICAL: Court OKs McDermott as Special Medicare Counsel ---------------------------------------------------------------- Brotman Medical Center Inc. obtained authority the United States Bankruptcy Court for the Central District of California for to employ McDermott Will & Emery LLP as its special medicare counsel. As reported in the Troubled Company Reporter on Nov. 22, 2007, McDermott Will is expected to represent the Debtor in regard with medicare overpayment liability for outlier payments, anticipated cost report payments and recovery actions and appeals, and other healthcare issues as may arise. The firm's professionals and their compensation rates are: Professionals Hourly Rate ------------- ----------- Timothy P. Blanchard, Esq. $715 Miles W. Hughes, Esq. $555 Peter R. Leone, Esq. $575 Arnold V. Pamplna, Esq. $445 Non-attorney Professionals $240 - $275 Timothy P. Blanchard, Esq., a partner of the firm, assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Court. Mr. Blanchard can be reached at: Timoty P. Blanchard, Esq. McDermott Will & Emery LLP 2049 Century Park East, 38th Floor Los Angeles, CA 90067-3218 Tel: (310) 551-9320 Fax: (310) 277-4730 http://www.mwe.com/ Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BSML INC: Posts $1.6 Million Net Loss in Quarter Ended Sept. 29 --------------------------------------------------------------- BSML Inc. reported a net loss of $1.6 million for the third quarter ended Sept. 29, 2007, compared with a net loss of $5.5 million in the same period last year. For the company's third quarter ended Sept. 29, 2007, revenues decreased approximately 15%, to $5.7 million, compared to $6.7 million in the third quarter of 2006. The decrease is in revenues was due to reduced whitening revenues, which fell 26% to $3.3 million in the third quarter of 2007, compared to $4.5 million in the third quarter of 2006. The company's net loss from continuing operations in the third quarter of 2007 was $716,000, compared to a net loss from continuing operations of $3.8 million in the third quarter of 2006. Operating and occupancy costs fell 7%, to $3.5 million in the third quarter of 2007 from $3.7 million in the third quarter of 2006. Selling, general and administrative expenses decreased to $2.8 million in the third quarter of 2007 from $6.8 million in the third quarter of 2006. This decrease was primarily due to reduced legal expense. Additionally, advertising expense of $1.1 million in the third quarter of 2007 was lower than the $1.4 million of expense the company recognized in the third quarter of 2006. In October of 2007, the company entered into a tentative settlement agreement with Discus Dental Inc. and Longlife Health Ltd. As a result of this settlement, the company recorded a loss from discontinued operations of $857,000 for the thirteen week period ended Sept. 29, 2007. At Sept. 30, 2007, the company's consolidated balance sheet showed $12.9 million in total assets, $12.8 million in total liabilities, and $143,000 in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $3.8 million in total current assets available to pay $11.1 million in total current liabilities. At Sept. 29, 2007, the company had $1.9 million in unrestricted cash and cash equivalents and $4.8 million in investments that are restricted as to use. Investments restricted as to use include $3.7 million in funds escrowed from the sale of the Associated Centers business. The Discus escrow was scheduled to be released in June 2007, but claims made by Discus in relation to the sale of the Associated Centers business and, further, in relation to Discus' costs of defense in the Oraceutical litigation have resulted in an indefinite delay in the release of the escrowed funds, except in relation to the settlement of a dispute with Longlife Health Ltd. In addition, it is possible that the company could have additional cash demands as a result of the legal claims against the company. 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?2656 Going Concern Doubt As reported in the Troubled Company Reporter on April 19, 2007, Stonefield Josephson Inc. expressed substantial doubt about BSML Inc.'s ability to continue as a going concern after auditing the company's consolidaed financial statements for the years ended Dec. 30, 2006, and Dec. 31, 2005. The auditing firm reported that the company has yet to achieve profitability and had an accumulated deficit of $171.5 million and a working capital deficiency of $3.0 million as of Dec. 30, 2006. In addition, the auditing firm said that the company incurred a net loss from continuing operations of $13.5 million and used cash for operating activities of $3.0 million for the fiscal year ended Dec. 30, 2006. About BSML Inc. Based in Walnut Creek, Calif., BSML Inc. (NasdaqCM: BSML) -- http://www.britesmile.com/-- markets teeth whitening technology and manages BriteSmile Professional Teeth Whitening Centers. CALPINE CORP: 91% of Ballots Cast Vote to Accept Plan ----------------------------------------------------- Calpine Corporation and its affiliated debtors and debtors-in- possession disclosed that the voting results for Calpine's Fourth Amended Joint Plan of Reorganization have been filed with the U.S. Bankruptcy Court for the Southern District of New York. Voting by classes of creditors entitled to vote on the Plan illustrate broad-based support for the Plan. Of the more than 2,400 ballots cast, 2,270 or 91% of all voting creditors aggregated across classes voted to accept the Plan (excluding ballots cast by Holders of Interests). Approximately 78.4% ($12,744,373,944.77) of the total amount voted by all creditors aggregated across classes voted to accept the Plan. Although no assurances can be made, Calpine believes that the Plan satisfies the requirements of the Bankruptcy Code and is confirmable notwithstanding the rejection of the Plan by certain classes. A confirmation hearing on the Plan is scheduled to begin on Dec. 17, 2007. "Calpine's reorganization has addressed a significant number of very complex issues," Robert P. May, Calpine's Chief Executive Officer, said. "As underscored by the support of many of our creditors, we believe our plan represents a fair and equitable outcome for all the creditors involved and is a testament to the dedication and tireless efforts of all those involved in the process." "Calpine is now poised to emerge from bankruptcy as a financially stable, stand-alone company with an improved competitive position in the energy industry," Mr. May added. "We could not have reached this point without the strong support provided by our customers, suppliers and the loyal employees who remained focused on our business and supportive during our bankruptcy." With regard to the vote, classes consisting of "Senior Note Claims," "ULC1 Settlement Claims," "Canadian Intercompany Claims," "Unsecured Makewhole Claims," and "Unsecured Convenience Class Claims" voted to accept the Plan. Classes consisting of "General Note Claims," "Subordinated Note Claims," "Canadian Guarantee Claims," "Rejection Damages Claims," "General Unsecured Claims" and "Interests" voted to reject the Plan. Other classes of creditors hold claims that are either "unimpaired" or completely impaired under the Plan and therefore are not entitled to vote on the Plan. These classes are "First Lien Debt Claims," "Second Lien Debt Claims," "Other Secured Claims," "Other Priority Claims," "Intercompany Claims, "CalGen Makewhole Claims," and "Intercompany Interests." Details of the voting results including votes on a class-by-class basis will be available on Dec. 12, 2007, at the Debtors' claims agent's Website: http://www.kccllc.net/calpine A full-text copy of the Fourth Amended Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?242a About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan begins Dec. 17, 2007. (Calpine Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CAMPUS PARK: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Campus Park Oklahoma State, Ltd. aka Campus Park aka Campus Park Apartment aka Campus Park Oklahoma 800 E. Hall of Fame Stillwater, OK 74075 Tel: 210-281-1469 Bankruptcy Case No.: 07-53285 Type of Business: The Debtor is a single asset real estate. Chapter 11 Petition Date: December 11, 2007 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: Debra L. Innocenti, Esq. Oppenheimer Blend Harrison & Tate Inc. 711 Navarro, Sixth Floor San Antonio, TX 78205 Tel: (210) 224-2000 Fax: (210) 224-7540 http://www.obht.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Stillwater utility $5,565 Utility Services Billing Stillwater, OK 74076-1449 Suddenlink Communications trade $5,525 P.O. Box 660371 Dallas, TX 75266-0371 Quality Water Services trade $2,908 P.O. Box 2075 Stillwater, OK 74076 Lad Co. trade $2,715 HD Supply Facilities trade $1,937 Maintenance Procare Irrigation trade $1,789 Willmar Industries Inc. trade $439 Backwoods Pest Services Inc. trade $390 Carpet Kleen of Oklahoma trade $385 Hocutt Inc. trade $351 Century Group Inc. trade $326 Oklahoma Natural Gas utility $286 Stillwater Building Center trade $245 Staple Business Advantage trade $232 Roto Rooter Service trade $203 Leslie's Pool Supplies Inc. trade $198 Realpage Inc. trade $151 Falco Communications trade $150 Peachtree Business Products trade $144 Falco Alarm Company trade $120 CBA GROUP: S&P Puts 'B' Credit Rating Under Negative Watch ---------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit and 'B+' senior secured ratings on Binghamton, New York-based CBA Group LLC on CreditWatch with negative implications, reflecting concerns that operating trends may not be tracking to expectations. CBA Group, with its light penetration of Asian- based, high volume manufacturing, was expected to experience some acceptance of new products introduced to this market. At the same time, the company was expected to sustain, if not improve, its operating margins. "Further, we remain concerned about covenant compliance under its credit agreement, which calls for step-downs in leverage for the September and December quarters," said Standard & Poor's credit analyst Lucy Patricola. S&P will meet with management to get an update on recent operating performance and outlook, along with ongoing compliance under the credit facility, in order to determine the final impact on the rating. CITIGROUP COMMERCIAL: Moody's Holds B3 Rating on $5.6MM Certs. -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of twenty one classes of Citigroup Commercial Mortgage Securities, Commercial Mortgage Pass-Through Certificates, Series 2006-C4 as: -- Class A-1, $67,727,517, affirmed at Aaa -- Class A-2, $152,713,000 affirmed at Aaa -- Class A-SB, $135,184,000, affirmed at Aaa -- Class A-3, $831,310,000, affirmed at Aaa -- Class A-1A, $383,961,499, affirmed at Aaa -- Class A-M, $226,353,000, affirmed at Aaa -- Class A-J, $164,107,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $50,929,000, affirmed at Aa2 -- Class C, $25,465,000, affirmed at Aa3 -- Class D, $31,124,000, affirmed at A2 -- Class E, $22,635,000, affirmed at A3 -- Class F, $28,294,000, affirmed at Baa1 -- Class G, $28,294,000, affirmed at Baa2 -- Class H, $25,465,000, affirmed at Baa3 -- Class J, $11,318,000, affirmed at Ba1 -- Class K, $8,488,000, affirmed at Ba2 -- Class L, $8,488,000, affirmed at Ba3 -- Class M, $5,659,000, affirmed at B1 -- Class N, $5,659,000, affirmed at B2 -- Class O, $5,659,000, affirmed at B3 As of the Nov. 19, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 0.6% to $2.2 billion from $2.3 billion at securitization. The Certificates are collateralized by 166 mortgage loans. The loans range in size from less than 1.0% to 8.7% of the pool, with the top 10 loans representing 33.9% of the pool. The pool includes one shadow rated loan, which represents 3.2% of the pool. There have been no loans defeased or liquidated from the pool. One loan, representing 0.1% of the pool, is in special servicing. Moody's is not estimating losses from the specially serviced loan at the present time. Eighteen loans, representing 11.5% of the pool, are on the master servicer's watchlist. Moody's was provided with calendar year 2006 operating results for 98.0% of the performing loans. Moody's loan to value ratio for the conduit component is 105.4%, compared to 104.2% at securitization. The largest shadow rated loan is Reckson II Office Portfolio Loan ($72.0 million -- 3.2%), which is secured by The loan is secured by seven office properties with a total of 915,558 square feet located in New York (6) and New Jersey (1). The loan is interest only for the entire term. Moody's current shadow rating is Baa3, the same as at securitization. The top three conduit loans represent 18.8% of the outstanding pool balance. The largest conduit loan is the ShopKo Portfolio Loan ($196.8 million - 8.7%), which is secured by a participation interest in a $536.9 million loan. The loan is secured by a first mortgage encumbering 112 cross-collateralized and cross-defaulted ShopKo retail stores, located in 12 states, with a total of 10,974,960 square feet. Each property is 100% net leased (expiration May 2026) to ShopKo Stores Inc. The largest concentration is in Wisconsin (41 properties; 36% NRA). Moody's LTV is 87.7% essentially the same as at securitization. The second largest conduit loan is the Olen Pointe Brea Office Park Loan ($133.0 million -- 5.9%), which is secured by a 637,000 square foot office building located in Brea, California. The largest tenant is ResMae Mortgage Corp. (21.0% NRA; lease expiration July 2016). The loan is interest only for the first 24 months. Moody's LTV is 111.2% the same as at securitization. The third largest conduit loan is the Reston Executive Center Loan ($93.0 million - 4.1%), which is secured by a 486,000 square foot office complex located in Reston, Virginia. The largest tenant is SAIC (27.0% NRA; lease expiration September 2020). The loan is interest only for 84 months. Moody's LTV is 113.4% the same as at securitization. CNS RESPONSE: Cacciamatta Accountancy Raises Going Concern Doubt ---------------------------------------------------------------- Cacciamatta Accountancy Corporation expressed substantial doubt about the ability of CNS Response, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm pointed to the company's continued operating losses and limited capital. CNS Response posted a net loss of $3,279,100 on $238,400 of revenues for the year ended Sept. 30, 2007, as compared with a net income of $82,600 on $175,500 of net revenues in the prior year. At Sept. 30, 2007, the company's balance sheet showed $6,012,400 in total assets, $659,300 in total liabilities and $5,353,100 stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2647 About CNS Response CNS Response, Inc., (Public, OTC:CNSO) -- http://www.cnsresponse.com/-- formerly Strativation, Inc., is engaged in seeking an acquisition, locating a new business opportunity, finding a business partner, or locating a qualified company as a candidate for a business combination. Commencing Jan. 1, 2004, the company ceased operations. The company has not generated revenues from the sale of any products. On Jan. 16, 2007, the company entered into an agreement and plan of merger with CNS Merger Corporation, a California corporation and wholly owned subsidiary of the registrant (MergerCo), and CNS Response, Inc. (CNRS), a California corporation. CNSR's business is focused on the commercialization of a system that aids physicians in the identification and determination of appropriate medications for patients with certain behavioral (mental or addictive) disorders. CREDIT SUISSE: Credit Support Erosion Cues S&P to Lower Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-CP5. Concurrently, S&P affirmed its ratings on 14 other classes from the same transaction. The lowered ratings reflect actual credit support erosion and concerns regarding several assets that are with the special servicer or on the master servicer's watchlist. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. Three assets ($9 million) are currently with the special servicer, Capmark Finance Inc., including the Colony Square II loan ($4.3 million), which is secured by a 28,428-sq.-ft. retail property in Louisville, Co. The loan was transferred to Capmark in June 2007 when it became 60-day-plus delinquent. A receiver was appointed in August 2007, and the property was foreclosed on Nov. 27, 2007. An appraisal reduction amount of $937,129 is in effect. The Meadows Apartments loan ($3.3 million) is secured by a 120- unit multifamily property in Lancaster, Texas. This loan was transferred to Capmark in April 2006 because of payment default. The borrower filed bankruptcy to prevent completion of a foreclosure sale. The borrower negotiated a re-organization plan and is performing under the plan. The loan will be returned to the master servicer in the near future. As of September 2007, the property was 90% occupied and had a debt service coverage of 1.3x. The Brookhollow MHP loan ($1.4 million) is secured by a 115-pad mobile home park in Tyler, Texas. The loan was transferred to Capmark in September 2007 because of payment default. The borrower has since cured the default, and the loan will be returned to the master servicer after a three-month monitoring period. The DSC was 0.90x as of year-end 2006 and the current occupancy is 95%. The Sutton Place Apartments loan ($5.2 million) was formerly with the special servicer due to maturity default, but was paid in full on Nov. 19, 2007. Midland reported a watchlist of 23 loans with an aggregate outstanding balance of $152.9 million (16%). The watchlist includes the sixth- and ninth-largest loans. The sixth-largest loan, Golden Triangle I & II ($26.2 million, 3%), is secured by a 241,942-sq.-ft. suburban office property in Greenbelt Maryland. The loan appears on the watchlist because it had an occupancy of 75% and a DSC of 1.06x as of June 30, 2007. This property is also subject to near-term rollover risk, as the lease for the largest tenant, Cingular (27% of the net rentable area), expires on May 31, 2008. The ninth-largest loan, 30 A&B Vreeland Road ($14.6 million, 2%), is secured by a 151,530-sq.-ft. office building in Florham Park, New Jaersey. This loan is on the watchlist because the office building's largest tenant, Mack-Cali Realty Corp., will vacate two units (70% of the NRA) when the corresponding leases expire in January 2008 and May 2008. The lease for the second-largest tenant, Ryan Beck, also expires in January 2008, but the lease renewal is under negotiation. As of June 30, 2007, the property was 91% occupied. DSC was 1.83x as of year-end 2006. The composition of the watchlist was also a concern as $78.4 million (8%) of the loans are secured by multifamily properties, with weighted average DSC of 0.83x. Of those loans, $41.5 mill