/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071213.mbx 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 million (4%) are secured by properties in Texas with a weighted average DSC of 0.81x. All of the loans were deemed to have a higher default risk and stressed accordingly. While the eighth-largest loan, Centerville Park Apartments ($15 million, 2%), is not on the watchlist, the property's reported DSC was 1.01x at year-end 2006. This loan is secured by a 530-unit multifamily property in West Carrollton, Ohio. The property was built in 1967 and renovated in 2001. The DSC has deteriorated because of an increase in operating expenses. As of year-end 2006 and occupancy was 91%. As of the Nov. 19, 2007, remittance report, the collateral pool consisted of 118 loans with an aggregate trust balance of $952.2 million, down from 141 loans with a $1.19 billion balance at issuance. The master servicer, Midland Loan Services Inc., reported financial information for 97% of the pool excluding defeased loans. Ninety-four percent of the servicer-reported information was full-year 2006 and partial-year 2007 data. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.40x, down from 1.84x at issuance. All of the loans in the pool are current, except for one that is 30-plus-days delinquent ($3.1 million) and one that is 90-plus-days delinquent ($4.3 million), which are discussed above. As noted, there are three loans totaling $9 million with the special servicer and ARAs totaling $1.4 million are in effect on two loans. To date, the trust has experienced four losses totaling $11.9 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $294.2 million (31%) and a weighted average DSC of 1.46x, compared with 1.42x at issuance. Two of the top 10 loans appear on the master servicer's watchlist and are discussed below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans; two were characterized as "excellent," and the rest were characterized as "good." Credit characteristics for the largest loan, Fashion Square Mall, remains consistent with that of an investment-grade obligation. This loan is secured by 450,490 sq. ft. of a 715,316-sq.-ft., fully enclosed mall located in Saginaw, Michigan. The mall was constructed in 1972 and partially renovated in 1993 and 2001. The mall is anchored by Macy's, Sears, and J.C. Penney. The year-end 2006 reported sales were $289 per sq. ft. for in-line tenants. As of Sept. 30, 2007, the property was 98% occupied. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2002-CP5 Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- M B+ BB- 2.02% N B- B 1.55% O CCC+ B- 1.06% P CCC- CCC 0.31% Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2002-CP5 Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 21.00% A-2 AAA 21.00% B AAA 16.64% C AAA 14.31% D AA+ 12.75% E AA- 10.89% F A+ 9.95% G A- 8.24% H BBB+ 6.68% J BBB- 4.35% K BB+ 3.73% L BB 2.79% A-X AAA N/A A-SP AAA N/A N/A - Not applicable. DANA CORP: Addresses Objections to Confirmation of Plan ------------------------------------------------------- Dana Corp. and its debtor-affiliates received only 11 timely objections to confirmation of their Joint Plan of Reorganization - - a remarkably small number considering the size and scope of the Debtors' Chapter 11 cases, Corinne Ball, Esq., at Jones Day, in New York, tells the U.S. Bankruptcy Court for the . She relates that the Debtors have endeavored to resolve the objections consensually, hence, only four objections remain unresolved. These are the Ad Hoc Committee of Asbestos Personal Injury Claimants together with Jose Angel Valdez' objections, the Lead Plaintiffs' objection and Ogre Holdings' objection. Thus, the Debtors have chosen to respond to these four objections. A. Ogre Holdings Ogre Holdings, Inc.'s objection to the allegedly discriminatory treatment accorded Tort Claim classified in Class 5B has been addressed by a proposed modification of the the Plan, which will more accurately effect the Debtors' intent of preventing a double recovery to holders of Tort Claims, Ms. Ball points out. In addition, Ms. Ball says that Ogre Holdings' allegation the the Plan has not been proposed in good faith within the meaning of Section 1129(a)(3) of the Bankruptcy Code has no basis in law. B. Lead Plaintiffs In their objection, the Lead Plaintiffs asserted that: (i) the Plan contains impermissibly broad releases and injunctions; and (ii) the Plan should not impact the rights of the Lead Plaintiffs or the securities class, either through injunctive relief or discharge, to pursue their securities claims to the extent of the proceeds of certain liability insurance policies the Debtors maintain in favor of their directors and officers. According to Ms. Ball, the Debtors have addressed the Lead Plaintiffs' first objection. With regard to the second objection, she adds that it has been partially addressed through a proposed addition to the Confirmation Order, which will assure that nothing in the Plan or its confirmation will prevent the Lead Plaintiffs from accessing the insurance available to the non-Debtor defendants in the Securities Litigation. C. Asbestos Claimants The Ad Hoc Committee and Jose Angel Valdez' objections, among other things, allege that: (i) the Debtors' implementation of the Restructuring Transactions, among other things, leaves Asbestos Personal Injury Claims impaired; and (ii) the Plan does not provide payment to holders of Asbestos Personal Injury Claims once these claims are allowed. There can be no question as to the impairment of Class 3 Asbestos Personal Injury Claims under the Plan, Ms. Ball says. She explains that the Asbestos Personal Injury claimants will be reinstated against a solvent Reorganized Dana in accordance with Section 1124(1) of the Bankruptcy Code. According to Ms. Ball, the Asbestos Personal Injury Claimants may also continue to prosecute, and settle if they so choose, precisely the same claims and cases they possessed before the Petition Date against the same entities with the same insurance resources and significantly improved balance sheets. "At the heart of the objection is the Asbestos Personal Injury Claimants' evident desire to receive a windfall -- that is, more than they could have recovered from the Debtors upon their disputed, contingent, unliquidated and unproven claims if these bankruptcy cases had not been filed -- at the expense of the Debtors' other creditors," Ms. Ball says. Ms. Ball asserts that the Asbestos Personal Injury claimants these Chapter 11 cases to obtain greater rights against the Debtors than they enjoyed before the Petition Date, hence, Court should overrule the Asbestos objections. About Dana Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed US$6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. The Court has set Dec. 10, 2007, to consider confirmation of the Plan. (Dana Corporation Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Bankruptcy Court to Confirm Reorganization Plan ---------------------------------------------------------- During a confirmation hearing on Dec. 12, 2007, for Dana Corp.'s Chapter 11 case, the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York disclosed that he will "entertain an appropriate order of confirmation" with respect to the company's Plan of Reorganization. The judge ruled that all Chapter 11 requirements for confirmation have been satisfied. The company is expected to submit the order of confirmation by Dec. 21, 2007. The company is positioned to emerge from bankruptcy by the end of January 2008. "This is another important step toward our emergence as a financially stable company that is positioned to compete vigorously in our global markets," said Dana Chairman and CEO Mike Burns. Headquartered in Toledo, Ohio, Dana Corporation (Pink Sheets: DCNAQ) -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed US$6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. (Dana Corporation Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Names Post-Bankruptcy Board of Directors --------------------------------------------------- Dana Corporation disclosed the selection of nine individuals who are expected to serve as members of the board of directors of Dana upon emergence from Chapter 11 reorganization. The board will include Dana Chairman and Chief Executive Officer Mike Burns, who is expected to be named Chief Executive Officer. At emergence, it is expected that the offices of Chairman and Chief Executive Officer will be separate. "We are pleased to welcome this group of highly respected individuals to the Dana team and look forward to benefiting from their perspective and guidance as we embark on our new beginning," Mr. Burns said. "The combined experience, business acumen, and high ethical standards represented by this board will provide a sound foundation for our future success." The board, which has been selected by creditors and new investors, assembles distinguished leaders from government, finance, and automotive backgrounds. Collectively, the board represents more than 170 years of automotive industry experience. Proposed New Board of Directors Upon confirmation of the company's Plan of Reorganization by the Court, the board of directors will take office on the effective date of the plan. Joining Mr. Burns on the board will be: Gary L. Convis, 65, retired in 2007 as the Chairman of Toyota Manufacturing, Kentucky and Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc., where he had served since 2002. Prior to serving in these roles, Mr. Convis spent 16 years at New United Motor Manufacturing, Inc. Mr. Convis also spent more than 20 years in various roles with General Motors Corporation and Ford Motor Company. Mr. Convis is also a board member of Cooper-Standard Automotive Inc. and Compass Automotive Group, Inc. John M. Devine, 63, is the former Vice Chairman and Chief Financial Officer of General Motors Corporation, where he served from 2001 to 2005. Prior to joining GM, Mr. Devine served as Chairman and Chief Executive Officer of Fluid Ventures, LLC. Previously, he spent 32 years at Ford Motor Company, where he last served as Executive Vice President and Chief Financial Officer. Mr. Devine is also currently a board member of Amerigon Incorporated. Mark T. Gallogly, 50, is Managing Partner of Centerbridge Partners, L.P., a multi-strategy private investment firm. Prior to co-founding Centerbridge, Mr. Gallogly served as a Senior Managing Director of The Blackstone Group from 1994 to 2005, heading the firm's Private Equity Group from 2003 to 2005. Richard A. Gephardt, 66, is a senior counsel in the Government Affairs practice group at DLA Piper, one of the world's largest law firms. Previously, Mr. Gephardt served as a Congressman for Missouri's Third Congressional District for 28 years. He was the leader of the House Democrats for more than a decade, serving as House majority leader from 1989 to 1994 and minority leader from 1995 to 2003. Stephen J. Girsky, 45, is President of Centerbridge Industrial Partners, LLC. Prior to joining Centerbridge, Mr. Girsky was the Special Adviser to the Chief Executive Officer and Chief Financial Officer of General Motors Corporation from 2005 to 2006. Prior to joining GM, Mr. Girsky was managing director at Morgan Stanley and the senior analyst of the Morgan Stanley Global Automotive and Auto Parts Research Team. Terrence J. Keating, 58, is Chairman of Accuride Corporation, one the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. He has served as CEO and a director of Accuride Corporation since 2002, and was named Chairman of the company earlier this year. He recently announced plans to retire from active employment as an officer of the company at the end of 2008. Mr. Keating also serves as Vice Chairman and a director of the Heavy Duty Manufacturers Association. Mark A. Schulz, 55, is the former President of International Operations of the Ford Motor Company, where he spent 32 years in a variety of global roles. Mr. Schulz serves as a member of several boards, including the National Committee of United States-China Relations, the United States-China Business Council, and the National Bureau of Asian Research. He is also a member of the International Advisory Board for the President of the Republic of the Philippines. Mr. Schulz is also currently a board member of YRC Worldwide Inc. Jerome B. York, 69, has served as Chief Executive Officer of Harwinton Capital LLC, a private investment company that he controls, since 2000. From 2000 to 2003, Mr. York was Chairman and Chief Executive Officer of MicroWarehouse, Inc. From 1995 to 1999, he served as Vice Chairman of Tracinda Corporation. He served as Senior Vice President and Chief Financial Officer of IBM Corporation from 1993 to 1995. Prior to that, Mr. York spent 14 years at Chrysler Corporation serving as its Chief Financial Officer from 1990 to 1993. Mr. York is also currently a director of Apple Inc. and Tyco International Ltd. All-Star Cast The Detroit Free Press notes that Dana is assembling "an all-star board of directors", with former top executives from the world's three biggest automakers, a former adviser to General Motors Corp. CEO Rick Wagoner, and Mr. Wagoner's onetime nemesis, Jerome York. Among the new directors and officers are former auto auto executives: * Gary Convis was retired chairman of Toyota Motor Corp.'s Toyota Manufacturing, Kentucky; * John Devine is a former vice chairman and chief financial officer of General Motors Corp.; and * Mark Schulz is a former president of International Operations of the Ford Motor Co. Mr. York is a former Chrysler Corp chief financial officer and has been an adviser to investor Kirk Kerkorian. Mr. York resigned from GM's board promptly after talks of a possible tie up with Nissan Motor Co. and Renault SA died down. Mr. Kerkorian's Tracinda Corp., who had pushed for the tie-up, later disposed of his shares in GM, which went as high as 9.9%. Mr. Girsky was a special adviser to the CEO and CFO of GM from 2005 to 2006. Burns Stepping Down as Chairman Mr. Burns is relinquishing his title as chairman of Dana. Mr. Burns is, however, to expected to remain with the company. According to documents submitted to the Court, Michael J. Burns will be the President, Chief Executive Officer and Chief Operating Officer for Dana Holding Corporation and Dana Limited. FutureoftheUnion.com notes that Judge Lifland had authorized the company to pay up to $6,750,000 in cash and stock to Mr. Burns when the company exits bankruptcy. Buffalo Business First recounts that Mr. Burns was a GM vice president in charge of Delphi Harrison Thermal Systems in Lockport from 1994 to 1996. He left the auto-maker to join Dana in 2004. A complete list of New Dana Holdco's directors and officers is available for free at: http://bankrupt.com/misc/NewDanaHoldco_D&O's.pdf About Dana Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed US$6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. The Court has set Dec. 10, 2007, to consider confirmation of the Plan. (Dana Corporation Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANIEL DOI: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Daniel Yoshio Doi 4025 Black Point Road Honolulu, HI 96816 Bankruptcy Case No.: 07-01304 Chapter 11 Petition Date: December 11, 2007 Court: District of Hawaii (Honolulu) Judge: Robert J. Faris Debtor's Counsel: Donald L. Spafford, Jr., Esq. Law Office of Donald L. Spafford, Jr. Pauahi Tower, Suite 470 1003 Bishop Street Honolulu, HI 96813 Tel: (808) 532-6300 Fax: 808.532.6309 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Doi, Florence Personal Loans $180,000 256 Kuliouou Road Honolulu, HI 96821 Takara, Noreen Personal Loans $110,000 3245 Lower Road Honolulu, HI 96822 Bank of Hawaii Personal Loan $79,273 Legal & Custody Dept. P.O. Box 2900 Honolulu, HI 97846 Chase Credit card charges $56,442 Franchise Tax Board Income Taxes $54,769 American Express Company Credit card purchase $48,306 Central Pacific Bank Personal Loan $47,972 Harley-Davidson Credit 2006 Harley $23,487 Davidson Ultra ($20,000 Classic motorcycle secured) Internal Revenue Service Payroll Taxes of $7,026 Estate Planners of America, Inc. Western Reserve Life Life Insurance $4,839 Premium First Hawaiian Bank Personal Loan $3,375 Hawaiian Electric Co. Inc. Electric Services $3,175 Leong, Steven Aquarium Maintenance $1,968 Aquarium Design Center and service City & County of Honolulu Water, sewer, and $1,474 Board of Water Supply garbage pick up services State of Hawaii Payroll taxes of $1,431 Department of Taxation Estate Planners of America, Inc. Cingular Wireless Cellular phone service $1,404 Seaside Pools Hawaii Pool Cleaning Services $1,222 Roger's Yard Service Yard Services $1,098 Diamond Head Sprinkler, Inc. Sprinkler system $869 repair services and parts DAVIDSON III: Sept. 30 Balance Sheet Upside-Down by $10.2 Million ----------------------------------------------------------------- Davidson Diversified Real Estate III LP's consolidated balance sheet at Sept. 30, 2007, showed $11.9 million in total assets and $22.1 million in total liabilities, resulting in a $10.2 million partners' deficit. The partnership reported a net loss of $412,000 on total revenues of $994,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $329,000 on total revenues of $994,000 in the same period of 2006. Total revenues increased for the three months ended Sept. 30, 2007, primarily due to an increase in rental income. The increase in net loss for the three months ended Sept. 30, 2007, is due to an increase in total expenses, partially offset by an increase in total revenues. 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?264b Going Concern Doubt As reported in the Troubled Company Reporter on April 11, 2007, Ernst & Young LLP expressed substantial doubt about Davidson Diversified Real Estate III LP's ability to continue as a going concern after auditing the partnership's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the partnership's recurring operating losses and accumulated deficit. As of Sept. 30, 2007, the partnership had approximately $5.8 million of advances and related accrued interest due to an affiliate of Davidson Diversified Properties Inc., the Managing General Partner. In a letter dated April 4, 2006, this affiliate of the Managing General Partner demanded payment in full of all outstanding advances owed by the Partnership to it, plus related accrued interest. The partnership does not have sufficient assets to repay the advances and related accrued interest. About Davidson Diversified Based in Greenville, S.C. Davidson Diversified Real Estate III LP's investment property consists of one apartment complex, Plainview Apartments, located in Louisville, Ky. DEJA FOODS: Court Confirms Modified Amended Reorganization Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, on Dec. 3, 2007, confirmed the Modified Amended Combined Plan of Reorganization of Deja Foods, Inc., and its wholly owned subsidiary, M&L Wholesale Foods, LLC. The Reorganization Plan will become effective on or about Friday, Dec. 14, 2007. Effect on Deja Foods At the time the Debtors filed their petitions, David Fox owned approximately 80% of the issued and outstanding shares of Deja Foods and public shareholders owned 20% of the issued and outstanding shares. Grocery Liquidators of America, LLC, a California limited liability company, is owned 33.33% by Greg Perlman and 66.66% by Coldwater Finance LLC. Coldwater in turn is owned 50% by David Fox and 50% by GH Capital LLC. Greg Perlman and David Fox also own all of the interests of B.A.R. Vanowen, LLC, a California limited liability company. GH Capital is owned 50% by Greg Perlman. Grocery Liquidators owns and operates two Buck-A-Roo$ discount stores in California. BAR owns a license from Grocery Liquidators to open and operate a Buck-A-Roo$ store in Van Nuys, California. On the Effective Date these transfers will occur: 1. Grocery Liquidators will transfer to reorganized Deja Foods all intellectual property which relates to the ownership, development and management of Buck-A-Roo$ stores; all know how of Grocery Liquidators related to the staffing, procurement of goods, store merchandising, and accounting procedures of Buck-A-Roo$ stores; and the exclusive rights of Grocery Liquidators to develop Buck-A-Roo$ stores; 2. Grocery Liquidators will terminate its relationship with those employees who are necessary to manage and operate the Buck-A-Roo$ business and permit reorganized Deja Foods to hire such employees; 3. Grocery Liquidators will enter into a license agreement with reorganized Deja Foods pursuant to which Grocery Liquidators will pay royalty income from its two existing Buck-A-Roo$ stores in California to Deja Foods at the rate of 5% of gross sales payable monthly in arrears; 4. BAR will contribute to reorganized Deja Foods all of its right to the operating Buck-A-Roo$ store located in Van Nuys, California, including the assignment of all related assets and leasehold interests; and 5. Deja Foods will assume $290,663 of unsecured outstanding indebtness owed by BAR to Grocery Liquidators with interest payable at 7.5%, and principal and interest amortized monthly in equal payments over six years. As of the Effective Date, Deja Foods will change its name to Buck- A-Roo$ Holding Corporation and amend and restate its articles of incorporation to authorize 25,000,000 shares of common stock and effect a 1 for 33 reverse stock split. Buck-A-Roo$ Holding will have 10,000,000 shares issued and outstanding. grocery Liquidators will receive 4,276,900 shares and BAR will receive 4,696,058 shares for their respective contribution of assets to Buck-A-Roo$ Holding. Laurus Master Fund, Ltd. the sole secured creditor of Deja Foods will receive 500,000 shares and the unsecured creditors will receive, pro rata in accordance with the amount of the respective claims, 500,000 shares. The remaining Deja Foods shareholders holding common stock prior to the Effective Date will hold 27,041 shares after a 1 for 33 reverse stock split, no fractional shares will be issued and any fractional amount shall be rounded down to the next whole share. The shares of common stock held by David Fox prior to the Effective Date will be canceled and no longer issued and outstanding. Effect on M&L Wholesale M&L, will be reorganized by converting from a limited liability company to a Nevada corporation and resuming the institutional sales and other business operations previously operated by Deja Foods. M&L will change its name to DFGS Deja Foods Government Services. DFGS will authorize 25,000,000 shares of common stock and will have 10,000,000 shares of common stock outstanding. Buck-A-Roo$ Holding will contribute $150,000 and the assets and liabilities related to its prior institutional sale business to DFGS in exchange for 9,000,000 shares of common stock. DFGS will issue 500,000 shares to Laurus and 500,000 shares, pro rata in accordance with the amount of respective claims, to unsecured creditors. On the Effective Date, Grocery Liquidators will loan Buck-A-Roo$ Holding $150,000 due Oct. 3, 2009, with interest payable at the prime rate as published by the Wall Street Journal on the first business day of each calendar quarter. The indebtedness will be secured by 9,000,000 shares of DFGS Common Stock. Under the terms of the Reorganization Plan, Buck-A-Roo$ Holding will be obligated to repay Grocery Liquidators $125,000 of indebtedness advanced by Grocery Liquidators to Deja Foods after the filing of the Chapter 11 proceeding. This indebtedness is classified as an Administrative Claim under the Bankruptcy Code and the Reorganization Plan. Buck-A-Roo$ Holding will make interest only payments on a quarterly basis, commencing on the first day of the first full calendar quarter following the Effective Date, provided however, that payments shall not begin until payment of all creditors and interest holders receive the distributions or payments they are entitled to under the Reorganization Plan. Under the Reorganization Plan, the final payment to creditors is due as late as Aug. 14, 2011. The principal shall be due on the first day of the first full month following the last payment due to creditors under the Reorganization Plan, but in no event sooner than Jan. 1, 2010. David Fox to Continue as CEO David Fox will continue as the Chief Executive Officer of Buck-A- Roo$ Holding and DFGS. He will receive a salary of $7,500 per month from each company and will split his time equally between the companies. He will be entitled to annual increases and bonuses as deemed appropriate by the board of directors of each company. He will be entitled to such other fringe benefits as are adopted by each company for the benefit of their employees generally. The management of Buck-A-Roo$ Holding and DFGS will be: -- David Fox, President and Chief Executive Officer and director, was a partner in LA Foods, a small, privately-held Los Angeles-based food liquidator from 1995 to 2003. At LA Foods, Mr. Fox was engaged in all aspects of the business including marketing, purchasing, sales import, finance, e-commerce and corporate matters. He left the firm in 2003, when its sales were approximately $20 million annually, to found Deja Foods, Inc. Mr. Fox is a member of Coldwater Finance LLC which owns and operates Grocery Liquidators of America LLC, which is a wholesale food and merchandise distributor and owner of two Buck-A-Roo$ stores and will supply Buck-A-Roo$ Holding Corporation some of its merchandise. -- Larry J. Kosmont, CRE, director, has been involved in real estate and investment since 1975. He founded Kosmont Companies, a full service real estate investment, development and advisory services firm, in 1986 and has been its Chief Executive Officer since that time. He served in the public sector from 1973 to 1986, and was the City Manager for the City of Bell Gardens and was the Director of Community Development for the City of Burbank. Mr. Kosmont is a former owner and board member of Growers Transplanting, the largest agricultural transplanting company in California. He is a former Commissioner of the Metropolitan Water District Board (representing Los Angeles) and presently serves as a State Commissioner on the California Economic Development Commission. He served on the Deja Foods, Inc. board of directors before resigning at the time the petition for Chapter 11 relief was filed by the company. -- Gregory Perlman, director, is the Principal of GH Capital, a diversified real estate investment company with holdings throughout the United States. GH Capital owns more than 10,000 apartment units in thirteen states, with a combined market value in excess of $400 million and is actively acquiring existing projects. In addition, GH Capital's Hospitality division owns and develops hotels and resort master planned communities in California. GH Capital is based in Sherman Oaks, California with offices in Cincinnati, Ohio and Greenville, South Carolina and through its wholly owned subsidiaries employs over 300 people throughout the United States. Prior to joining GH Capital, Mr. Perlman's career has encompassed a wide spectrum of real estate acquisitions and development throughout the United States. Mr. Perlman is a graduate from the Boston University School of Management. -- Barry S. Baer was appointed Chief Financial Officer on Oct. 1, 2007. Colonel Baer is a retired U.S. Army Colonel and a CPA. Colonel Baer's military service from 1965 to 1992 includes commanding an Armored Cavalry troop in Vietnam, Director of Accounting Systems for the US Army, Commander of the 18th Finance Group during Operation Desert Storm in the First Gulf War and Deputy Chief of Staff for Resource Management for the Army Material Command. His professional career includes serving as Director of Public Works for the City of Indianapolis from 1992 to 1993 and as Vice President and Chief Operating Officer from 1993 to 2000 for Pharmaceutical Corporation of America. Subsequently from 2000 to 2001, Colonel Baer served as the Executive Vice President and Chief Financial Officer for Apex Industries, a sheet metal product fabrication and installation firm. From 2002 to 2003, he served as Executive Vice President and Chief Financial Officer for Obsidian Enterprises, Inc., a publicly-traded holding company. Since 2003, Colonel Baer has served as a Consultant and Chief Financial Officer for Max Katz Bag Company, a privately-held plastics manufacturer. In 2006, he also became Chief Financial Officer of Ecotality, Inc., a publicly-traded renewable energy development stage company. Treatment of Common Stock At the time Deja Foods filed for relief under Chapter 11 of the Bankruptcy Code there were approximately 4,433,333 shares of common stock outstanding. After the Effective Date there will be 10,000,000 shares issued and outstanding. Pursuant to the Plan of Reorganization any options or warrant outstanding before the Effective Date will be canceled. About Deja Food Deja Foods, Inc., distributes food products to retailers, food banks, distributors, and government institutions on a wholesale level. The company and its wholly owned subsidiary, M&L Wholesale Foods LLC, filed for Chapter 11 protection on Aug. 14, 2006 (Bankr. C.D. Calif. Case Nos. 06-11351 & 06-11352). Daniel J. Weintraub, Esq., James R. Selth, Esq., and Summer Saad, Esq., at Weintraub & Selth, APC, represent the Debtors. At Sept. 30, 2006, the Debtors' balance sheet showed total assets of $434,452 and total debts of $9,422,859. DELTA FINANCIAL: Angelo Gordon Aborts Recapitalization Proposal --------------------------------------------------------------- Delta Financial Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on Dec. 7, 2007, it received written notice from AG Special Situation Corp., an affiliate of Angelo, Gordon & Co., that AGSSC had terminated its letter of intent with the company. As disclosed in a Nov. 16, 2007, SEC filing, AGSSC submitted a proposal to recapitalize Delta Financial through $100 million of financing, consisting of at least $50 million in new senior secured notes and the aggregate principal amount of the existing financing that is currently outstanding under the Securities Repurchase Agreement dated Aug. 13, 2007 between AG Delta Holdings, LLC and the company and certain of its affiliates, and the issuance by Delta of 40,000,000 shares of common stock in connection with such new senior secured notes. As previously reported in the Troubled Company Reporter, the company disclosed that it was unable to complete the transaction on satisfactory terms and didn't expect the Angelo Gordon transaction to be consummated. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. DELTA FINANCIAL: Discloses Plan to Terminate All Employees ---------------------------------------------------------- Delta Financial Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on Dec. 7, 2007, it notified substantially all of its employees that they would be terminated. These terminations result of the company's financial condition and its decision to suspend taking new mortgage loan applications. As previously reported in the Troubled Company Reporter, the company said that it does not believe it will be able to continue as a going concern. Furthermore, the company stated that it intends to file for protection under the federal bankruptcy code. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. DELTA FINANCIAL: Interlocutory Appeal for Fidelity Suit Denied -------------------------------------------------------------- The Hon. Gary L. Lancaster of the U.S. District Court for the Western District of Pennsylvania did not permit Delta Financial Corporation, parent of Fidelity Mortgage Inc., to file an interlocutory appeal on his May 2007 ruling, Bankruptcy Law360 reports. According to the report, Judge Lancaster gave the ruling based on Magistrate Judge Lisa Pupo Lenihan's recommendation to deny Fidelity's request because the Supreme and Circuit Courts and the Department of Labor do not consider companies in the financial sector as part of an exemption in the retail or service enterprise. FLSA Violation Suit In November 2004, the company received notice that it has been named in a lawsuit styled as a collective action filed in the Western District of Pennsylvania. The suit alleges that the company's subsidiary, Fidelity Mortgage, now a division of the company's other subsidiary, Delta Funding Corporation, did not pay its loan officers overtime compensation and minimum wage in violation of the Federal Fair Labor Standards Act. The complaint seeks: (1) an amount equal to the unpaid wages at the applicable overtime rate; (2) an amount equal to the minimum wages at the applicable minimum wage; (3) an equal amount as liquidated damages; (4) costs and attorneys' fees; (5) leave to add additional plaintiffs; and (6) leave to amend to add claims under applicable state laws. The company filed an answer and discovery has commenced. In April 2005, the plaintiff filed his motion for conditional class certification and in May 2005, Fidelity filed its opposition to that motion. In June 2005, the Magistrate Judge issued a report and recommended that the plaintiff's motion for conditional class certification be granted, and that plaintiff's motion to authorize judicial notice be granted. In July 2005, Fidelity filed with the District Court its objections to the Magistrate Judge's recommendation and the plaintiff filed its opposition to the objections. In July 2005, the District Court upheld the Magistrate Judge's report and recommendation. Any potential class members who desired to join the collective action were provided an opportunity to do so during an "opt-in" period that ended in October 2005. Approximately 180 individuals, virtually all of whom are former employees, are plaintiffs in the collective action. In April 2006, the plaintiffs filed a motion for summary judgment. By agreement in June 2006, the Court stayed the action while the parties engaged in non-binding mediation, and plaintiffs' motion for summary judgment was withdrawn without prejudice to it being re-filed. The matter was not resolved through mediation, the stay was lifted in August 2006, the plaintiffs' motion was re-filed and the company filed its opposition to the motion and a cross-motion for partial summary judgment. In September 2006, the plaintiffs filed their papers in response to the company's opposition to their motion and replied to the company's cross-motion. In October 2006, the company filed reply papers to the plaintiffs' opposition to the company's cross-motion. In March 2007, the Magistrate Judge rendered a report and recommendation that the plaintiffs' motion for summary judgment be granted, and the company's motion denied, as to the company's entitlement to a retail or service establishment exemption under the FLSA; that plaintiffs' motion be denied as to: (a) the company's entitlement to an administrative employee exemption under the FLSA; and (b) plaintiffs' entitlement to liquidated damages; and the company's motion be granted as to the sufficiency of the employees' compensation under the salary basis test, but denied as to the remaining two conditions of an administrative employee exemption. In April 2007, the company filed objections to the Magistrate Judge's report and recommendation, since it did not recommend the granting of the company's cross-motion for partial summary judgment, and the plaintiffs filed their opposition to the company's objections. In May 2007, the company filed a reply to the plaintiffs' opposition to the company's objections, on which the District Court issued an order adopting the Magistrate Judge's report and recommendation in May 2007. In July 2007, the company filed a motion for certification of an interlocutory appeal from the District Court's May 2007 order and the plaintiffs filed their opposition papers in July 2007; and the company filed a reply papers in August 2007. Bankruptcy Announcement As reported in the Troubled Company Reporter on Dec. 7, 2007, Delta Financial Corporation provided an update on Dec. 6, 2007, of its financial condition and current plans, including a possible filing of chapter 11 bankruptcy and an event of default under its warehouse facilities. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. DRI CORPORATION: Earns $499,000 in Third Quarter Ended Sept. 30 --------------------------------------------------------------- DRI Corporation reported net income of $499,000 on net sales of $13.9 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $1.0 million on net sales of $12.4 million in the comparable period last year. The net sales increase resulted from higher U.S. domestic sales of $1.1 million and an increase in international sales of $427,000. The increase in U.S. sales was a result of higher sales in TwinVision of North America Inc. and Digital Recorders Inc. Operating income increased to $906,000 during the three months ended Sept. 30, 2007, versus an operating loss of $710,000 in the comparable 2006 quarter. The increase in operating income is due to higher sales and lower selling, general and administrative expenses offset by higher cost of sales and higher research and development expenses. Other expense decreased $153,000 from $295,000 for the three months ended Sept. 30, 2006, to $142,000 for the three months ended Sept 30, 2007, mainly due to a $119,000 increase in foreign currency gain. The company recorded a net income tax expense of $138,000 for the three months ended Sept. 30, 2007, as compared with net income tax expense of $59,000 for the three months ended Sept. 30, 2006. On April 30, 2007, the company divested DAC, which comprised all the operations of the law enforcement and surveillance segment of the company. Since the divestiture of DAC occurred on April 30, 2007, there is no income or loss from discontinued operations reported for the third quarter of 2007, whereas income from discontinued operations of $212,000 were reported for the third quarter of 2006. For the nine months ended Sept. 30, 2007, sales increased by 13.1% to $40.8 million and net income was $432,000. This compares to sales of $36.1 million and a net loss of $1.9 million for the same period last year. At Sept. 30, 2007, the company's consolidated balance sheet showed $37.2 million in total assets, $17.6 million in total liabilities, $392,000 in minority interest in consolidated subsidiary, and $19.2 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2651 Laurus Credit Agreement The company has an asset-based lending agreement with Laurus which provides up to $6.0 million in borrowings under a revolving credit facility. This credit facility is secured by all tangible and intangible assets of the company in the U.S. The Laurus Credit Agreement contains no financial covenants. At Sept. 30, 2007, remaining borrowing availability under the revolving credit facility was approximately $1.5 million. The Laurus Credit Agreement has a maturity date of June 30, 2008. The company anticipates its cash resources will not be sufficient to make payment in full on the outstanding balance of this line of credit at the maturity date. Going Concern Doubt As reported in the Troubled Company Reporter on Apr. 5, 2007, PricewaterhouseCoopers LLP expressed substantial doubt about Digital Recorders Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. About DRI Corporation Based in DRI Corp. (Nasdaq: TBUS) -- http://www.digrec.com/-- formerly Digital Recorders Inc., is a digital communications technology company in the domestic and international public transportation and transit security markets. Its products include TwinVision(R) and Mobitec(R) electronic destination sign systems, Talking Bus(R) voice announcement systems, Digital Recorders(R) Internet-based passenger information and automatic vehicle location/monitoring systems, and VacTell(TM) video actionable intelligence systems. DUANE TILLIMON: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Duane J. Tillimon 5105 Tillimon Trail Toledo, OH 43623 Bankruptcy Case No.: 07-35365 Type of Business: The Debtor owns and manages the following: land investor Capital Acquisitions of Nevada, general contractor D.J.T., real estate broker Equity Preservation and land developers Indian River Estates and Ottawa Trail Estates. Chapter 11 Petition Date: December 10, 2007 Court: Northern District of Ohio (Toledo) Judge: Richard L. Speer Debtor's Counsel: Kenneth A. Blech, Esq. 10850 Pearl Road, Suite D3 Strongsville, OH 44136-3305 Tel: (440) 238-7887 Fax: (440)238-9532 Total Assets: $5,275,640 Total Debts: $26,335,595 Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bank of America $24,636,043 c/o Phillips & Cohan Associates, Ltd. 258 Chapman Road, Suite 205 Newark, DE 19702 Bank of America $131,163 c/o Wolpoff & Abramson Two Irvington Centre 702 King Farm Boulevard Rockville, MD 20850-5775 Department of the Treasury $68,756 Internal Revenue Service Cincinnati, OH 45999-0025 Huntington Bank $47,867 Chase Bank $31,255 Wells Fargo $20,876 Ohio Attorney General $13,046 Lucas County Treasurer $5,046 Bank of America $4,426 Wilmington, DE City of Toledo $2,105 DURA AUTOMOTIVE: Resolves Objections to Plan Confirmation --------------------------------------------------------- In a Dec. 5, 2007 pre-trial memorandum, DURA Automotive Systems, Inc., said that it has resolved objections filed by Second Lien Group, an ad hoc committee of holders of a substantial majority of the Debtors' prepetition second priority indebtedness; Karl Storrie and David Bovee; the U.S. Internal Revenue Service; Magna Donnelly Corporation; Robert Bosch LLC; Envision Graphics; and Toyota Motor Credit Corporation. According to a Dec. 10, 2007 notice served by the Debtors' counsel, the U.S. Trustee has been added to the list of parties who have withdrawn their objections to the confirmation of the Plan. The proposed Plan confirmation order filed by the Debtors on Dec. 7, 2007, contains provisions that address concerns by parties who previously filed objections to the Plan: -- The Second Lien Group has withdrawn its confirmation objection pursuant to an agreement, the salient terms of which are: (1) the Second Lien Facility Claims are allowed in the initial amount of $225 million plus outstanding interest, fees and expenses payable pursuant to the DIP Order, which amount the Debtors will finally and irrevocably pay, in cash in full, on the Effective Date; (2) unless otherwise resolved by the parties, the dispute between the Debtors and the Second Lien Group regarding the appropriate post-petition interest rate will be presented for oral argument at the Court's previously scheduled hearing on Jan. 24, 2008; and (3) pending resolution of the Interest Rate Dispute and notwithstanding the release and extinguishment of liens contemplated by the Plan and the occurrence of the Effective Date, the Second Lien Lenders will have a first priority security interest upon all of the Debtors' assets or Reorganized Debtors' in the amount of $2.1 million, which lien will be released and extinguished upon the payment by the Debtors of any amount, if any, that the Court determines is owed to the Second Lien Lenders regarding the Interest Rate Dispute. -- Any effective date of the rejection of the Transportation Service Agreement dated Feb. 15, 2005, between Hazen Transport, Inc., and Atwood Mobile Products, Inc., and the effect of any such effective date of rejection on any claims asserted by Hazen Transport for amounts due under the Transportation Service Agreement will be reserved and determined by the Court at the time such a claim, if any, is filed against the Debtors and brought before the Court for hearing. The Debtors reserve all rights and defenses with respect to the claim. -- Any effective date of the rejection of the Debtors' Supplemental Executive Retirement Plan, effective Jan. 1, 2003, as applicable to Karl Storrie and David Bovee, and the effect of any such effective date of rejection on the claims of Messrs. Storrie and Bovee for payments pursuant to the SERP will be reserved and determined by the Court at the time of the hearing on the motions of Messrs. Storrie and Bovee for allowance and payment of administrative expenses. -- Confirmation of the Plan will not affect any set-off and recoupment rights of the Internal Revenue Service. The total value of any Allowed Priority Tax Claims held by the IRS will include interest at the rate and method specified in 26 U.S.C. 6621 and 6622. -- Nothing in the Plan or Confirmation Order will ,among other things, release discharge, enjoin or impact in any way, the claims, counterclaims defenses or affirmative defenses of Magna Donnelly Corporation, in connection with a patent infringement lawsuit filed by the Debtors. About Dura Automotive Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expired on Sept. 30, 2007. On Aug. 22, 2007, the Debtors' filed their Plan of Reorganization and the Disclosure Statement explaining that Plan was approved on Oct. 3, 2007. (Dura Automotive Bankruptcy News, Issue No. 40 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Court Defers Plan Confirmation Hearing to Dec. 17 ------------------------------------------------------------------ The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware agreed to postpone Dura Automotive Systems, Inc., and its debtor-affiliates the confirmation hearing to Dec. 17, 2007, at 9:30 a.m. On behalf of the Debtors, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, submitted a notice stating that the Court has continued the Confirmation Hearing held on Dec. 10, 2007. The Associated Press notes that without the $425 million loan, the company's plan to raise up to $160 million in equity financing could unravel. Pacificor, LLC, has agreed to invest up to $160 million in reorganized Dura by buying shares of new common stock that were not purchased in an equity rights offering. As reported in the Troubled Company Reporter on Nov. 29, 2007, Judge Carey had canceled the confirmation hearing scheduled for Dec. 6, saying that there was no point moving forward with the hearing until Dura obtains the necessary exit financing. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expired on Sept. 30, 2007. On Aug. 22, 2007, the Debtors' filed their Plan of Reorganization and the Disclosure Statement explaining that Plan was approved on Oct. 3, 2007. (Dura Automotive Bankruptcy News, Issue No. 40 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Extends Marketing Period for $425 Mil. Exit Loan ----------------------------------------------------------------- DURA Automotive Systems, Inc. and its debtor-affiliates disclosed that they have syndicated a majority of its exit financing facility and has elected to extend the marketing period to complete the financing. This extension gives Goldman Sachs Credit Partners, L.P. and Barclays Capital, the investment firms engaged by DURA to arrange $425 million in credit facilities, additional time and flexibility to complete their syndication efforts. The Debtors have commenced discussions with its Debtor-in- Possession lenders regarding an extension of its DIP financing agreement to ensure that DURA's working capital financing is not impacted by an extended exit financing process. As reported in the Troubled Company Reporter on Nov. 12, 2007, The Debtors sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware of an engagement letter and a fee letter entered into with Goldman Sachs Credit Partners, L.P., and Barclays Capital, the investment banking division of Barclays Bank, PLC, for a $425 million financing to emerge from Chapter 11. DURA expects $300 million of the loan to be funded on the effective date of its Plan of Reorganization. The Court has approved the Engagement Letter and the Fee Letter in all respects. The Court's order did not specify whether the U.S. Trustee's concerns were addressed. Pursuant to the Engagement Letter, Goldman Sachs and Barclays, as arrangers, have offered to syndicate exit financing for Dura Operating Corp.: (a) a senior secured revolving credit facility in an amount up to $125 million; (b) a senior secured first-lien tranche B term loan facility in amount up to $225 million; and (c) a senior secured second-lien term loan facility in an amount up to $75 million. DURA's Chapter 11 case is in its final stages. In another confirmation-related development, on Friday, Dec. 7, 2007, the company took another significant step when the Bankruptcy Court issued an opinion enforcing the subordination provisions of the 9% Subordinated Notes Indenture, thereby effectively ending one of the few remaining major creditor challenges to confirmation of the Chapter 11 Plan. All other major creditor groups support confirmation. DURA is advised by AlixPartners, Kirkland & Ellis and Miller Buckfire in connection with its Chapter 11 reorganization. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors' exclusive plan-filing period expired on Sept. 30, 2007. On Aug. 22, 2007, the Debtors' filed their Plan of Reorganization and the Disclosure Statement explaining that Plan was approved on Oct. 3, 2007. (Dura Automotive Bankruptcy News, Issue No. 40 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DYNEA CANADA: Moody's Holds B2 Rating and Revises Outlook --------------------------------------------------------- Moody's Investors Service affirmed Dynea Canada Ltd.'s B2 corporate family rating and revised the outlook to negative due to the expected impact of weakening demand due to further housing- related softness in its main end-markets in 2008, concerns over the company's ability to remain in compliance with the financial covenants in its credit facility in 2008 and volatile methanol prices. Moody's projects that margins will likely decline in the fourth quarter due to a lagging ability to pass through rising methanol prices, but Moody's expects margins to rise in 2008 due to the company's ability to contractually pass through higher methanol prices and the belief that methanol prices will fall in the second half of 2008 due to new capacity and increased production in Chile toward year end 2008. However, sales volumes will likely decline further as downstream customers scale back production of wood products as a result of the severe downturn in housing and remodeling markets. Moody's expects the capacity utilization rate of the North American formaldehyde resin industry to fall and Dynea's new facility in Sexsmith, Alberta will likely add to the short-term oversupply situation. Outlook Actions: Issuer: Dynea Canada Ltd. -- Outlook, Changed To Negative From Stable The B2 corporate family rating reflects Dynea's high leverage with LTM September 2007 adjusted Debt/EBITDA of 6.5x (10.1x including $140 million of levered equity), limited product diversity, significant exposure to the housing and remodeling markets in North America, exposure to volatile raw materials, and the need to improve its accounting system to provide detailed information by customer and product to management. The ratings are supported by a sustainable position in the North American market as one of the three largest producers of formaldehyde resins, its leading market position in overlays, the regional characteristics of this business, its broad operational footprint, the ability to contractually pass through raw material increases in roughly 70% of its sales volumes, and the expectation that it will be able to expand its specialty products and applications. The negative outlook reflects the projected impact further housing-related softness in 2008 and the likely need to amend the covenants in its bank facility in 2008, which could have a meaningful impact on interest expense going forward. If EBITDA declines below $30 million Moody's would reassess the appropriateness of the B2 CFR. The outlook could be returned to stable if Dynea is able to achieve run-rate EBITDA of $40 million or it is able to obtain sufficient covenant relief to eliminate compliance issues through the end of 2009. Dynea Canada Ltd., headquartered in Mississauga, ON, is a vertically integrated manufacturer of adhesive resins and overlay products for use in adhesion and surfacing applications in the construction, furniture, and general industrial businesses. The company has two business units: Adhesive Resins (which accounted for 76% of revenues in 2006) and Overlays. Revenues were $596 million in 2006. Teachers' Private Capital acquired the company from Dynea Chemicals Oy in mid-July 2007 and is the majority owner. EARTH BIOFUELS: Court Dismisses Involuntary Bankruptcy Petition --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has dismissed the petition for involuntary bankruptcy filed against Earth Biofuels Inc. As reported in the Troubled Company Reporter on July 16, 2007, Five creditors filed an involuntary Chapter 7 petition against Earth Biofuels Inc. The creditors, with claims amounting to $33 million, are: * Castlerigg Master Investment Ltd.; * Evolution Master Fund Ltd., SPC; * Radcliffe SPC, Ltd.; * Cornell Capital Partners, LP; and * Portside Growth and Opportunity Fund. The creditors contended that the claims were for debts under the Senior Convertible Note issued by the company pursuant to the Securities Purchase Agreement dated as of July 24, 2007, that were past due. Settlement Agreement On Nov. 14, 2007, the company negotiated and executed a settlement agreement with the group of creditors who had petitioned for an involuntary bankruptcy. The settlement requires the creditors to dismiss their petition of bankruptcy. Under the terms of the agreement, Earth Biofuels will grant certain security interests to the creditors and will execute a restructuring plan within 120 days. The restructuring transaction is contemplated to require the parties involved, including the company and noteholders, to enter into these definitive documents: a) an interim restructuring agreement by and among the company, the noteholders, Dennis McLaughlin, the company's CEO, and the company's subsidiaries; b) a release agreement by and among the company, the company's subsidiaries, and the noteholders; c) a confession of judgment and accompanying affidavit of confession of judgment to be executed by the company in favor of each of the noteholders; d) a guaranty given by the subsidiaries of the company for the prompt payment of the total outstanding amount due and owing to the noteholders, upon the occurrence of certain trigger events outlined in the subsidiary guaranty; and e) an escrow agreement by and among Schulte Roth & Zabel LLP, the noteholders, the company, McLaughlin, and the company's subsidiaries, appointing SRZ to serve as the escrow agent to hold and release the original versions of all executed documents related to the restructuring transaction; In addition, Mr. McLaughlin has agreed to a limited personal guaranty in favor of the noteholders for a portion of the total amount due to such Noteholders. A detailed information on the settlement agreement is available for free on http://ResearchArchives.com/t/s?2658 The company is no longer involved with any bankruptcy proceedings and is moving forward with its restructuring and growth plan. That plan is focused on the expansion of company's liquefied natural gas business, the company's biodiesel production and marketing operations, the development of cellulosic ethanol production technologies, and the development of biofuels retail marketing and distribution. About Earth Biofuels Headquartered in Dallas, Texas, Earth Biofuels Inc. -- http://www.earthbiofuels.com/-- (OTC BB: EBOF) engages in the production, distribution, and sale of renewable fuels, with a focus on biodiesel fuel, in the United States. The company produces pure biodiesel fuel (B100) through the utilization of vegetable oils, such as soy and canola oil as raw material. The company distributes petroleum/biodiesel blended fuel, such as B20 through wholesale distributors, truck stops, and fueling stations. Earth Biofuels also produces and markets liquefied natural gas. On July 11, 2007, five creditors with claims of around $33 million filed an involuntary chapter 7 petition against the company (Bankr. D. Del. Case. No. 07-10928). Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represent the petitioners. A hearing to consider approval of an interim settlement agreement entered into by the company and its creditors is set for Dec. 10, 2007. The agreement provides for the dismissal of the involuntary chapter 7 petition in exchange for the Debtor admitting its liability under a $52 million loan. As reported in the Troubled Company Reporter on Nov. 26, 2007, Earth Biofuels Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $87.2 million in total assets and $107.7 million in total liabilities, resulting in a $20.5 million total stockholders' deficit. Going Concern Doubt Malone & Bailey P.C., in Houston, Texas, expressed substantial doubt about Earth Biofuels Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses and working capital deficit. EAST LINDA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: East Linda of Edgewater 227, L.L.C. 4772 Frontier Way, Suite 400 Stockton, CA 95215 Bankruptcy Case No.: 07-30711 Type of Business: The Debtor is a land developer. Chapter 11 Petition Date: December 10, 2007 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Gustavo M. Rios, Esq. 4772 Frontier Way, Suite 400 Stockton, CA 95215 Tel: (209) 466-4433 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor does not have any creditors who are not insiders. EDUCATE INC: S&P Puts B Credit Rating on Negative Watch ------------------------------------------------------- Standard & Poor's Rating Services placed its 'B' corporate credit rating on Educate Inc. on CreditWatch with negative implications. "The rating action is based on our concern about Educate's thin margin of compliance with its bank covenants," explained Standard & Poor's credit analyst Debbie Kinzer. Baltimore, Maryland-based Educate is the nationwide franchisor of Sylvan Learning Centers, and also provides tutoring and other supplemental education programs to schools through government- funded contracts. Total debt was about $275 million as of Sept. 30, 2007. Educate's profitability has been below S&P's expectations since the June 2007 acquisition of its surviving businesses by an investor group that includes Sterling Capital Partners L.P., Citigroup Capital Partners, and management. Progress with sales of its formerly-owned Sylvan centers, which were intended to repay Educate Inc. debt, has been slower than S&P had anticipated as well. These two factors have caused Educate's leverage to rise, and the company had a very narrow margin of compliance with its leverage covenant as of Sept. 30, 2007. In S&P's review, they will evaluate the company's strategies for reestablishing an appropriate margin of covenant compliance, particularly in light of the rapid tightening of covenant levels beginning in the second quarter of 2008. EIMSKIP HOLDINGS: Moody's Affirms B3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service, Inc. has affirmed Eimskip Holdings, Inc.'s corporate family rating at B3 as well as affirmed the company's senior secured revolver, first lien term loan, and second lien term loan ratings. The company's subordinated mezzanine facility was not rated by Moody's. The ratings outlook has been changed to positive from stable. Eimskip Holdings, Inc., the borrower of the proposed restructured facilities, is a wholly-owned indirect subsidiary established by Hf. Eimskipafelag Islands, a leading Icelandic shipping company, to acquire Versacold Income Fund. Eimskip Holdings is currently planning a sale leaseback of 20 of its Canadian facilities as well as restructuring its current credit facilities and mezzanine debt. The company also plans to convert its current shareholder loan to common equity. These ratings/assessments of Eimskip Holdings, Inc. have been affected: -- Corporate family rating, affirmed B3; -- Probability-of-default rating, affirmed B3; -- CDN$50 million senior secured revolving credit facility, affirmed at B1 (LGD2, 28%) from B1 (LGD2, 29%); -- CDN$333.7 million senior secured first lien term loan (previously Cdn $510 million), affirmed B1 (LGD2, 28%) from B1 (LGD2, 29%); -- CDN$165.6 million 2nd lien term loan (previously Cdn $140 million), affirmed at Caa1 (LGD5, 72%). The term loans will be funded primarily in U.S. dollars. The positive outlook reflects the anticipated improvement in the company's leverage to under 7x from almost 8x when the company was originally rated in July of this year. The outlook considers the additional collateral and servicing fee from Atlas Cold Storage, a sister company of Versacold. The B3 corporate family rating reflects the low level of anticipated free cash flow that Eimskip is anticipated to generate over the next couple of years. The rating is constrained by the ongoing litigation at Atlas. The ratings reflect the belief that Eimskip's refrigeration business is likely to be reasonably stable during most economic cycles. The ratings also reflect the significant amount of pledged assets. The company's stable revenue stream, strong market position as a top 3 competitor in each market it serves, as well as limited customer concentration and the growing trend of public refrigerated warehousing capacity are all considered. The change in ratings outlook relies on the receipt of final executed documentation consistent with that utilized in Moody's analysis. The ratings may deteriorate if free cash flow after capital expenditures to total debt was anticipated to turn negative on a projected annual basis or if the company's debt to EBITDA increases above 8.5 times. Although the company has few customers that represent over 3% of its business, the loss of its larger customers could have negative ratings implications depending on the severity of loss given that the business has a high level of fixed costs. An adverse ruling in the Atlas lawsuit could have negative ratings and/or outlook implications. The rating/outlook could improve if the company's debt to EBITDA was to decline meaningfully below 6.5 times and if free cash flow to total debt was to improve materially above 3% on a sustainable basis. The ratings incorporate the expectation that Atlas's pending lawsuit will be finalized in a manner which doesn't affect the proposed servicing fee that Versacold is anticipated to receive from Atlas or have any other adverse credit implications. Eimskip Holdings, Inc., through Versacold, is headquartered in Canada and is a global supplier of temperature controlled warehousing and logistic services to food producers, processors, as well as wholesale and retail distributors. Versacold maintains 72 facilities globally, with approximately 290 million cubic feet of temperature controlled capacity. Revenue for the fiscal year end October 31, 2007 was approximately Cdn. $716 million. ELECTRONIC DATA: Improved Legacy Issues Prompts Moody's Review -------------------------------------------------------------- Moody's Investors Service placed the senior unsecured note ratings of Electronic Data Systems Corporation on review for possible upgrade. The review was prompted by the company's improvement of legacy issues related to poor cash flow performance on certain large contracts, improving operating margins, and its continued conservatism toward the preservation of liquidity and debt leverage. Moody's review will focus on the company's strategies toward acquisition and share repurchase spending, as well as its prospects for free cash flow growth and the preservation of internal and external sources of liquidity. Since Moody's revised EDS' rating outlook to positive from stable in November 2006, the company has continued to achieve organic revenue growth, albeit modest in the low single digits, and operating margin expansion. In its quarter ended September 30, 2007, the company achieved year over year organic revenue growth and expanded its operating margin to approximately 6% from 4%. The company's free cash flow, defined as cash flow from operations less capital expenditures and dividends, is strong at about $700 million for the twelve months ended September 30, 2007. The company's unrestricted cash and marketable securities amounted to over $3 billion at September 2007. In addition, the company has external liquidity from a $1 billion five-year revolving credit facility expiring June 2011, and is in compliance with the financial covenants of this facility. On Dec. 4, 2007, the company announced its plans to repurchase up to $1 billion of its shares over the next 18 months, which Moody's expects will be executed within the context of its free cash flow after considering possible cash acquisitions. Ratings Placed On Review for Possible Upgrade: -- $700 million 7.125% Senior Unsecured Notes due 2009 Ba1 -- $690 million 3.875% Convertible Senior Unsecured Notes due 2023 Ba1 -- $1.1 billion 6% Senior Unsecured Notes due 2013 Ba1 -- Senior Unsecured Convertible Notes due 2021 Ba1 -- $300 million Senior Unsecured Notes due 2029 Ba1 Headquartered in Plano, Texas, Electronic Data Systems Corporation is a multinational I/T services provider. EQUIFIRST LOAN: Moody's Lowers Rating on Class B-3 Loans to B2 -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 3 tranches from EquiFirst Loan Securitization 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: EquiFirst Loan Securitization Trust 2007-1 -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa2, -- Cl. B-3, Downgraded to B2, previously Baa3. EURAMAX INT'L: Weak Performance Cues S&P to Cut Rating to B- ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Norcross, Georgia-based Euramax International Inc., including the corporate credit rating, which was lowered to 'B-' from 'B'. The company had total balance sheet debt of around $685 million as of Sept. 30, 2007. The outlook is negative. "The rating action reflects the company's weakened performance due to challenging market conditions in the domestic recreational vehicle and certain nonresidential construction markets," said Standard & Poor's credit analyst Dan Picciotto. The company's operating margin is below peak 2004 levels and could remain at this level if market conditions do not improve. Consequently, the risk of a covenant violation has increased. The ratings on Euramax reflect the firm's highly leveraged financial risk profile, which is tempered somewhat by leading niche market positions for some of the company's product lines, some geographic diversity, and limited maintenance capital requirements. Euramax manufactures aluminum, steel, and other products for the building construction and transportation markets. S&P could lower the ratings if operating performance deteriorates, if cash flow worsens, or if the company's liquidity is otherwise impacted. On the other hand, S&P could revise the outlook to stable if credit measures strengthen and operating performance and liquidity stabilize. FENDER MUSICAL: Planned Kaman Music Buy Cues Moody's Neg. Outlook ----------------------------------------------------------------- Moody's Investors Service revised Fender Musical Instrument Corporation's rating outlook to negative following the announcement of the proposed $117 million debt financed ($100 million term loan and $17 million revolver drawdown) acquisition of Kaman Music Corporation, a wholly-owned subsidiary of Kaman Corp. At the same time, Moody's rated the new senior secured term loan B2 and affirmed all of Fender's existing ratings. Kaman Music Corp. is a leading independent distributor of musical instruments and accessories in the United States, offering more than 20,000 products for amateurs and professionals. Kaman's instruments includes proprietary products, such as the Ovation(R) and Hamer(R) guitars, as well as an exclusive worldwide distributor agreement for premier products including Takamine(R) guitars. KMC also offers an extended line of percussion products and accessories through Latin Percussion(R) and has exclusive distribution agreements with Gretsch(R) drums and an exclusive U.S. sales agreement for Sabian(R) cymbals. "The negative outlook principally reflects Moody's concern that consumer spending will continue to soften in the near term and that Fender may be precluded from significantly delevering as they have done in the past" said Kevin Cassidy, Vice President/Senior Credit Officer at Moody's Investors Service. The negative outlook also reflects Fender's diminished financial flexibility due to the additional debt burden incurred to fund the acquisition with leverage, measured as adjusted debt/adjusted EBITDA, increasing by almost one turn to close to 5x from just under 4x, proforma for this transaction. Fender's June 2007 term loan credit agreement permitted an additional $100 million to be borrowed. The ratings for the term loan reflects both the overall probability of default of the company, to which Moody's has assigned a PDR of B1, and a loss given default of LGD 4 (58%). Both the unrated revolving credit facility and the term loan benefit from the full guarantees of the existing and future subsidiaries. The revolver has a 1st lien priority interest on inventory and accounts receivable and a 2nd priority lien on the remaining assets and the term loan has the inverse security interest. Moody's believes that the term loans collateral coverage approximates 25%, based on a combination of valuation techniques. This rating was assigned: -- $100 million senior secured term loan B2 (LGD4, 58%); These ratings were affirmed/assessment revised: -- Corporate family rating at B1; -- Probability of default rating at B1; -- $200 million senior secured term loan B2 (to LGD4, 58% from LGD4, 61%) Fender Musical Instruments Corporation, based in Scottsdale, Arizona, develops, manufactures and distributes musical instruments, principally guitars and amplifiers, to wholesale and retail outlets throughout the world. The company's proforma revenue for the twelve months ended Sept. 30, 2007, approximated $670 million. FGX INT'L: Sept. 29 Balance Sheet Upside-Down by $78.04 Million --------------------------------------------------------------- FGX International reported financial results for its third quarter and first nine months ended Sept. 29, 2007. These are the first results released since FGX International went public on Oct. 24, 2007. Highlights for the quarter include: -- net loss for the 2007 quarter was $18,000 compared to a net loss of $4.6 million in the quarter of the prior year; -- operating income increased 364% from $1.4 million in the third quarter of 2006 to $6.5 million in the current quarter; -- earnings before interest, taxes, depreciation and amortization increased 87% from $6 million in the third quarter of 2006 to $11.2 million in the third quarter of 2007. Highlights for the first nine months include: -- net income was $3.4 million in the first nine months of 2007 versus a net loss of $8.9 million in the first nine months of 2006; -- excluding certain charges, adjusted net income was $4.5 million in the first nine months of 2007 versus a loss of $8.0 million, in the first nine months of 2006; -- operating income increased 118% from $9.4 million in the first nine months of 2006 to $20.5 million in the comparable period of 2007. -- EBITDA increased 48% from $23.2 million in the first nine months of 2006 to $34.4 million in the comparable period of 2007. "We are pleased to report such strong growth in sales and earnings in our first disclosure as a public company, Alec Taylor, chief executive officer of FGXI stated. "Our operating income and gross margins increased significantly year over year, demonstrating a disciplined approach to managing our business. These results are consistent with our expectations in what is traditionally our lowest sales quarter of the year." "We have seen continued strong growth trends in the reading glasses and sunglasses markets, proving that our flagship brands, Foster Grant (R) and Magnivision (R), are well recognized by consumers," Mr. Taylor continued. Capital expenditures for the nine months ended Sept. 29, 2007 were $11.2 million compared to $6.4 million in the previous year, which was due to the company's continued capital investment in store displays to support incremental sales volume in 2007. At Sept. 29, 2007, the company's balance sheet showed total assets of $214.26 million, total liabilities of $292.3 million, resulting to a shareholders' deficit of $78.04 million. About FGX International Headquartered in Smithfield, Rhode Island, FGX International Holdings Limited (Nasdaq: FGXI) -- http://www.fgxi.com/-- is a designer and marketer of non-prescription reading glasses, sunglasses and costume jewelry with a portfolio of established, recognized eyewear brands including Foster Grant(R) and Magnivision(R). * * * As reported in the Troubled Company Reporter on Oct 10, 2007, Standard & Poor's Ratings Services revised its ratings outlook on optical accessories designer and marketer FGX International Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B' corporate credit rating. FINANCIAL MEDIA: Kabani & Company Raises Going Concern Doubt ------------------------------------------------------------ Kabani & Company, Inc., expressed substantial doubt about the ability of Financial Media Group, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2007. The auditor reported that the company has accumulated deficit of $9,672,076 as of Aug. 31, 2007 and has incurred net loss for the year ended Aug. 31, 2007 Financial Media posted a net loss of $5,937,675 on $7,090,042 of revenues for the year ended Aug. 31, 2007, as compared with a net loss of $1,608,268 on $6,631,631 of net revenues in the prior year. At Aug. 31, 2007, the company's balance sheet showed $4,049,371 in total assets and $7,561,058 in total liabilities, resulting in $3,511,687 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?264c About Financial Media Financial Media Group Inc. (OTC BB: FNGP.OB) -- http://www.financialmediagroupinc.com/-- is a diversified media and advertising company that owns and operates www.wallst.net, a branded financial consumer gateway that provides in-depth, original, multimedia editorial content, up-to-the-minute business news, and comprehensive financial tools and data for investors. In addition to WallSt.net, Financial Media Group owns and operates www.mywallst.net, the Web's first multimedia social network for the global financial community, and 'The Wealth Expo,' a leading producer of educational investor expositions that are held across the United States. FIRST NLC: Moody's Downgrades Ratings on Class M-9 Certs. to B3 --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 4 tranches from First NLC Trust Mortgage-Backed Certificates, Series 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: First NLC Trust Mortgage-Backed Certificates Series 2007-1 -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. M-7, Downgraded to Baa3, previously Baa1, -- Cl. M-8, Downgraded to Ba3, previously Baa2, -- Cl. M-9, Downgraded to B3 on review for possible further downgrade, previously Baa3. FORD MOTOR: Idles Light Truck Plants Two Weeks Ahead of Schedule ---------------------------------------------------------------- Ford Motor Company temporarily closes two light truck plants in Dearborn, Michigan and Louisville, Kentucky on Monday, 14 days earlier than their planned shuttering for the holidays, the Associated Press reports. The measure is a ploy to adjust supply of F-150 pickups and Explorer sport utility vehicles to meet fluctuating demand, according to AP citing company spokeswoman Anne Marie Gattari. Sales of Ford's F-series pickups, AP relates, fell 11.7% to 46,568 in November 2007. As reported in the Troubled Company Reporter on Dec. 7, 2007, Ford disclosed that due to low November sales, Ford plans a 7% car production decrease in the first quarter of 2008, expecting to produce only 685,000 vehicles. Analysts anticipate low annual sales in 2008, a drop in U.S. light vehicle sales to 3% to 15.6 million units, a record low since 1998. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. GREAT ATLANTIC: Moody's Confirms B3 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service confirmed A&P's ratings, including its corporate family rating at B3 and speculative grade liquidity rating of SGL-3. Moody's also assigned a B2 rating to the company's new $370 million senior secured bridge loan, as well as a prospective (P)Caa1 rating to a planned issue of senior unsecured convertible bonds. The outlook on all ratings is stable. This action concludes the review of A&P's ratings which was initiated on March 5, 2007 following A&P's announcement of its plan to acquire Pathmark Stores, Inc. Ratings confirmed: -- Corporate family rating at B3; -- Probability of default rating at B3. -- Senior unsecured notes at Caa1 (LGD 5, 72%); -- Senior Unsecured Shelf at (P)Caa1 (LGD 5, 72%); -- Subordinated Shelf at (P)Caa2 (LGD 6, 97%); -- JR. Subordinated Shelf at (P)Caa2 (LGD 6, 97%); -- Preferred Shelf at (P)Caa2 (LGD6, 97%). Ratings assigned: -- Senior secured bridge loan at B2 (LGD 3, 34%) -- Senior unsecured convertible bonds (P)Caa1 (LGD 5, 72%) The confirmation was based upon the material size of the transaction and the integration challenges that it will likely face -- particularly given the relatively weak operating performance both A&P and Pathmark have had over the recent past. Moody's has concluded that while the proposed synergies of $150 million may be achievable in a 12 to 18 month time frame, there is little room for delays or disruptions that may arise in a merger of this size. Given the uneven performance of the two companies on a stand alone basis, it is critical that the company achieve the proposed synergies. According to Ed Henderson, Senior Analyst at Moody's, "The deal makes sense in terms of scale in the NY/PA market place. Adequate liquidity is provided by the new $675 million asset based credit facility. Moody's need to see the improved performance and be satisfied that it will not take significant incremental investment to achieve the company's sales and earnings goals". A&P acquired Pathmark using cash on hand of $537 million, proceeds from a $370 million senior secured bridge facility, and drawings under a $675 million asset based revolving credit facility. The company plans to use proceeds from the convertible bonds to repay the bridge loan. If the convertibles bonds are not issued in a timely manner, A&P's existing senior unsecured notes will be downgraded to Caa2 from Caa1 and LGD rates adjusted. This is due to the larger proportion of secured debt that would remain in the capital structure under that scenario which has a superior position to this unsecured debt and hence reduces its recovery values. The Great Atlantic and Pacific Tea Company, headquartered in Montvale, New Jersey, operates 455 stores since its acquisition of Pathmark which are concentrated in the Northeastern U.S. with particular concentration in the NY/NJ/PA markets. Combined sales for the last 12 months ending 9/07 were approximately $9.5 billion. GREEN PASTURES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Green Pastures Christian Ministries, Inc. 5455 Flat Shoals Parkway Decatur, GA 30034 Bankruptcy Case No.: 07-80905 Type of Business: The Debtor owns and runs a church. See http://www.greenpastures.org/ Chapter 11 Petition Date: December 11, 2007 Court: Northern District of Georgia (Atlanta) Judge: James Massey Debtor's Counsel: Dorna Jenkins Taylor, Esq. 1401 Peachtree Street, Suite 500 Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. H&R BLOCK: 2nd Qtr. Net Loss Triples on Discontinued Operations --------------------------------------------------------------- H&R Block Inc. incurred a net loss of $502.3 million for the fiscal 2008 second quarter compared with a loss of $156.5 million in the year-ago period. According to the company, nearly all of the wider loss reflected results in its discontinued subprime mortgage business. The net loss from discontinued operations was $366.2 million for the fiscal 2008 second quarter, versus a loss of $35.5 million in last year's period. Continuing operations posted a net loss of $136.1 million for the fiscal 2008 second quarter, versus a loss of $121.0 million in the year-ago quarter. The company normally reports an operating loss for its fiscal first and second quarters due to seasonality in Tax Services and Business Services. Revenues from continuing operations for the fiscal 2008 second quarter ended Oct. 31 rose 10 percent to $434.8 million from $396.1 million in the prior-year period, reflecting increased revenues in all three of the company's ongoing business segments. Higher revenues were more than offset by higher operating costs. The company's consolidated balance sheet at Oct. 31, 2007, showed total assets of $7,106,771,000, total liabilities of $6,562,491,000, and total stockholders' equity of $544,280,000. Cerberus Deal On Dec. 4, H&R Block had agreed to terminate a purchase agreement it entered into in April 2007 under which an affiliate of Cerberus Capital Management, L.P. would have acquired Option One Mortgage Corporation, a wholly owned subsidiary of H&R Block. At that time, the company also said that it will close all origination activities of OOMC and pursue the sale of the loan servicing business. The company said it worked aggressively to reduce OOMC's mortgage exposure. After beginning the quarter with $2.3 billion of total loans on- and off-balance sheet and originating $721 million in loans during the second quarter (including more than $594 million in August 2007), the company sold or wrote down loans to a remaining total of $113 million, net of reserves, at Oct. 31. Reserves for potential losses on repurchases of loans previously sold totaled $86 million at Oct. 31. Commenting on the results, Richard C. Breeden, chairman of H&R Block, said, "We continue to move resolutely to end our participation in the subprime mortgage business. We have completed $3 billion of whole loan sales since Aug. 1 of this year. While we incurred a painful loss in exiting these positions, we determined to take our lumps and move forward." Six Months Results For the six months ended Oct. 31, 2007, H&R Block reported a net loss of $804.9 million compared with a loss of $287.8 million for the same period of fiscal 2007. Six-month revenues were $816.0 million in fiscal 2008 versus $738.9 million in the prior year. Discontinued operations in the first half of fiscal 2008 recorded a loss of $558.9 million compared with a loss of $49.0 million. Fiscal 2008 Outlook "For more than 50 years H&R Block has helped prepare and file nearly 500 million tax returns. We have earned a position of trust with millions of Americans, and we are excited to return to our roots with renewed focus on maximizing our considerable strengths in the tax business," said Mr. Breeden. The company reaffirmed its earnings guidance for fiscal 2008 of $1.30 to $1.45 per share from continuing operations. However, given that the company expects to incur incremental borrowing costs, it believes earnings will be toward the lower end of the guidance range. According to the company, no adjustment to the estimate has been made for the uncertain impact of Congressional action on the alternative minimum tax. Under most scenarios, the company said it does not expect a significant impact on overall returns and earnings, although the AMT action could affect the timing of those returns. "H&R Block is well-positioned in each of its ongoing businesses as we move into the key second half of our fiscal year," said Alan M. Bennett, interim chief executive officer. "Tax Services is geared up for a solid tax season, and we expect increased profits from both our Consumer Financial Services and Business Services segments." Though the company has substantially reduced mortgage loans held for sale and ceased originations, results for the discontinued mortgage operations will be affected by the additional restructuring expense and potentially by the impact of industry uncertainties on remaining operations. These remaining loan- servicing activities, assuming that increases in servicing advances are financed, are expected to be cash flow positive. Mr. Bennett added, "We are now undertaking a review of all expenses at H&R Block to realign our cost structure with what will be a smaller company post Option One, and to ensure that all of our businesses are positioned in the marketplace with competitive costs and the ability to earn a fair return on investment. We also need to instill improved cost discipline and a healthy cost culture, which are characteristics of high-performance companies." About H&R Block Headquartered in Kansas City, Mo., H&R Block Inc. (NYSE: HRB) -- http://www.hrblock.com/-- provides tax, financial, and accounting and business consulting services and products. Since 1955, the company has prepared more than 400 million tax returns. The company has continuing operations in three principal business segments: Tax Services (income tax return preparation and related services and products via in-office, online and software solutions); Business Services (accounting, tax and business consulting services primarily for midsized companies); and Consumer Financial Services (brokerage services, investment planning and related financial advice along with full-service consumer banking). H&R Block markets its continuing services and products under two leading brands - H&R Block and RSM McGladrey. H&R BLOCK: Delays Form 10-Q Filing on Pending Option One Review --------------------------------------------------------------- H&R Block Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that it cannot file its Form 10-Q for the quarter ended Oct. 31, 2007 within the initial 40 day required period. In its Form 12b-25 filing, the company reported that Deloitte & Touche LLP was engaged as its independent registered public accounting firm on Oct. 15, 2007. According to H&R Block, in light of the engagement of D&T at such a late stage during the fiscal quarter ending Oct. 31, 2007, and the time required for D&T to complete its transition work, D&T and the company have not been able to complete the work prior to the initial filing deadline. The company also said that D&T has not completed its review of the timing of recognition of mortgage loan sales by Option One Mortgage Corporation to loan warehouse trusts. The sales occurred principally in prior years and in the first quarter of the current fiscal year and relate entirely to the company's discontinued mortgage operations. The company does not believe that the matter will have a material impact on reported earnings for the quarter ended Oct. 31, 2007, or on its ending balance sheet as of such date. The company expects that it will be able to file its Form 10-Q no later than Friday, Dec. 14, 2007, although its ability to do so depends on D&T completing its review prior to such time. The company has postponed its analyst call previously scheduled for Dec. 11 at 8 a.m.. EST until a time to be announced following filing its Form 10-Q. About H&R Block Headquartered in Kansas City, Mo., H&R Block Inc. (NYSE: HRB) -- http://www.hrblock.com/-- provides tax, financial, and accounting and business consulting services and products. Since 1955, the company has prepared more than 400 million tax returns. The company has continuing operations in three principal business segments: Tax Services (income tax return preparation and related services and products via in-office, online and software solutions); Business Services (accounting, tax and business consulting services primarily for midsized companies); and Consumer Financial Services (brokerage services, investment planning and related financial advice along with full-service consumer banking). H&R Block markets its continuing services and products under two leading brands - H&R Block and RSM McGladrey. HARRAH'S ENT: Gets La. & Iowa Regulators Okay on Apollo/TPG deal ---------------------------------------------------------------- Harrah's Entertainment Inc. received approval from the Louisiana Gaming Control Board and the Iowa Racing and Gaming Commission for the proposed acquisition of Harrah's by affiliates of Apollo Management, L.P. and TPG Capital. The transaction remains subject to approval by other jurisdictions in which Harrah's subsidiaries operate and other conditions to closing set forth in the agreement and plan of merger entered into on Dec. 19, 2006. Harrah's expects the transaction to close in early 2008. About Apollo Management L.P. Based in New York, Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black. It also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. About TPG Capital Headquartered in Fort Worth, Texas, TPG Capital, also known as Texas Pacific Group -- http://www.texaspacificgroup.com/-- has staked its claim on the buyout frontier. The company, which does not get involved in the day-to-day operations of the companies in which it invests, usually holds onto an investment for at least five years, although consistent moneymakers may be kept indefinitely. About Harrah's Entertainment Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.(NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. * * * Harrah's Entertainment Inc. continues to carry Standard & Poor's "BB" long term foreign and local issuer credit ratings, which were placed in December 2006. HOLOGIC INC: S&P Holds 'BB-' Rating and Revises Outlook to Pos. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Hologic Inc. to positive from stable. S&P have also affirmed the 'BB-' corporate credit rating on the company. At the same time, Standard & Poor's raised its issue-level rating on Hologic's senior secured credit facilities to 'BB+' from 'BB'. S&P removed this rating from CreditWatch, where it was placed with positive implications July 2, 2007, in light of the possible replacement of a portion of the secured facility with unsecured borrowings. The recovery rating on this secured debt was revised to '1', indicating the expectation for very high (90%-100%) recovery in the event of a payment default, from '2'. The senior secured credit facilities consist of a $600 million term loan A facility, a $500 million term loan B facility, a $1.25 billion term loan X facility, and a $200 million revolving credit facility. After the refinancing, the term loan A will be reduced to $360 million and the term loan B to $150 million. The term loan X will be fully repaid and its rating withdrawn. "The outlook revision to positive reflects the improved cash flow and more rapid debt repayment provided by the convertible financing," said Standard & Poor's credit analyst David Lugg. HOME EQUITY: Moody's Cuts Rating on Two Certificates to B1 ----------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 7 tranches from Home Equity Loan Asset-Backed Certificates, Series 2007-FRE1. 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: Home Equity Loan Asset-Backed Certificates, Series 2007-FRE1 -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. M-7A, Downgraded to Baa3, previously Baa1, -- Cl. M-7B, Downgraded to Baa3, previously Baa1, -- Cl. M-8, Downgraded to Ba1, previously Baa2, -- Cl. M-9A, Downgraded to B1, previously Baa3, -- Cl. M-9B, Downgraded to B1, previously Baa3. INDYMAC HOME: Moody's Lowers Rating on 12 Tranches -------------------------------------------------- Moody's Investors Service has downgraded the ratings of 12 tranches from 2 deals issued by IndyMac Home Equity Mortgage Loan Asset-Backed Trust in 2007. Additionally, one 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: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series INABS 2007-A -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. M-7, Downgraded to Ba1, previously Baa1, -- Cl. M-8, Downgraded to Ba2, previously Baa1, -- Cl. M-9, Downgraded to B1, previously Baa2, -- Cl. M-10, Downgraded to Caa2, previously Ba1, -- Cl. M-11, Downgraded to C, previously Ba2. Issuer: Home Equity Mortgage Loan Asset-Backed Trust, Series INABS 2007-B -- Cl. M-6, Downgraded to A3, previously A2, -- Cl. M-7, Downgraded to Baa3, previously A3, -- Cl. M-8, Downgraded to Ba2, previously Baa1, -- Cl. M-9, Downgraded to B1, previously Baa2, -- Cl. M-10, Downgraded to B3 on review for possible further downgrade, previously Baa3, -- Cl. M-11, Downgraded to Ca, previously Ba2. INPHOHIC INC: Committee Prefers Liquidation Over Versa BuyOut ------------------------------------------------------------- The Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the District of Delaware to dismiss the chapter 11 case of InPhonic Inc. and its debtor-affiliates or, in the alternative, convert the case to a proceeding under chapter 7. As reported in the Troubled Company Reporter on Nov. 12, 2007, InPhonic filed a voluntary chapter 11 petition in Delaware to implement an agreement selling substantially all of its assets to an affiliate of Versa Capital Management. The company expected that shares of its common stock will have no value as a result of the chapter 11 filing. The Committee told the Court Monday that they prefer the liquidation of the company than be sold to Versa under a "farce" sale deal. The Committee contested that Versa's offer to buy InPhonic's $90 million bank loan for an undisclosed price will bar interested parties to bid on the company for cash. The Debtors' cases, the Committee said, were filed at the sole benefit and insistence of Adeptio INPC Funding LLC, the acquisition vehicle set up by Versa. The Committee also asked the Court to delay the sale hearing currently scheduled for today, Dec. 13, 2007, for thirty days and the Committee investigation period, which ended Tuesday, extended for thirty days. The Committee related that Adeptio and the Debtors were uncooperative in the Committee's investigation by either providing information and responsive documents just few days prior to investigation and the sale hearing or providing insufficient information needed in the investigation. According to the Committee, the Debtors and Adeptio "cannot force an expedited sale and investigation period upon their unsecured creditors, while at the same time stonewalling the Committee's efforts to obtain information" needed in the investigation. The Court has recognized investigation, the Committee reminded the Court, as greatly dependent on "Adeptio's cooperation in providing documents and information to a [C]ommittee." Nothing Sinister Meanwhile, Versa explained there is "nothing sinister" in its acquisition plan since it is the Debtors' largest secured creditor, the Associated Press says, citing court filings. Versa added that it is the only company ready to save the Debtors and that it has the right to use bankruptcy rules to maximize the recovery of its secured claims, AP adds. About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- is an online seller of wireless services in the United States. The company operates its business through three business segments: wireless activation and services; mobile virtual network enabler services, and data services. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Thomas R. Califano, Esq., at DLA Piper US LLP is the Debtors' bankruptcy counsel. Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, is the Debtors' co-counsel. Kurt F. Gwynne, Esq., Robert P. Simons, Esq., and Claudia Z. Springer, Esq., at Reed Smith LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. INPHONIC INC: Nasdaq Completes Delisting of Shares -------------------------------------------------- The NASDAQ Stock Market has completed the delisting of InPhonic Inc.'s stock upon filing a Form 25 with the Securities and Exchange Commission Wednesday, Dec. 12, 2007. InPhonic's stock has not been traded on NASDAQ since it was suspended on Nov. 20, 2007. The delisting will be effective ten days after the filing of Form 25. Interested parties may review the company's public filings or contact the company directly for news and additional information about the company, including the basis for the delisting and whether the company's securities are trading on another venue. About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- is an online seller of wireless services in the United States. The company operates its business through three business segments: wireless activation and services; mobile virtual network enabler services, and data services. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Thomas R. Califano, Esq., at DLA Piper US LLP is the Debtors' bankruptcy counsel. Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, is the Debtors' co-counsel. Kurt F. Gwynne, Esq., Robert P. Simons, Esq., and Claudia Z. Springer, Esq., at Reed Smith LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. INVERNESS MEDICAL: Inks Deal to Buy BBI Holdings' Share Capital --------------------------------------------------------------- Inverness Medical Innovations and BBI Holdings Plc have reached agreement on a proposal for Inverness to acquire all of BBI's outstanding share capital. The acquisition is expected to be implemented by way of a Court approved scheme of arrangement under Section 425 of the UK Companies Act, whereby BBI would become a wholly-owned subsidiary of IMI. Under the scheme of arrangement, Inverness would offer BBI shareholders 195 pence or approximately $3.95 per ordinary share, payable in IMI stock, with an option to select a cash alternative at 185 pence or approximately $3.75 per share. The acquisition is conditioned on court approval of the scheme and a favorable vote by BBI shareholders. Of the total 42,917,735 issued and outstanding BBI shares, 5,208,333 shares are already held by a subsidiary of Inverness. In addition, BBI employees also have options to purchase 5,303,349 shares. Inverness intends to offer each option holder the opportunity to exchange his or her existing BBI options for a new IMI option with the equivalent market value. "We are pleased to propose that BBI join the Inverness family of companies,' Ron Zwanziger, CEO of Inverness, said. "We have had a long and positive relationship with BBI, and Inverness strongly believes that their capabilities in developing novel lateral flow based rapid diagnostic products and in developing and manufacturing high performance reagents and biological materials for use in those products would greatly complement our existing business." "Teaming up with Inverness represents a great opportunity for BBI to expand its activities much more rapidly than it could as an independent company, and we are delighted that our past close working relationships have now culminated in the proposal for BBI to become part of Inverness," David Evans, Chairman of BBI, added. Inverness is represented by Wragge&Co in London and Foley Hoag in Boston. Inverness also retained IDJ International as financial advisor. BBI is represented by Berry Smith located in Cardiff and has retained Cenkos Securities as its financial advisor. About BBI Holdings Plc Located in the United Kingdom, BBI Holdings Plc (LON:BBI) -- http://www.bbigold.com/-- specializes in the development and manufacture of non-invasive lateral flow tests, or in IVD, and has achieved a reputation for manufacturing superior quality gold reagents. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * Moody's placed Inverness Medical's subordinated debt rating at 'Caa1' as well as the company's long term corporate family and probability of default ratings at 'B2' in June 2007. The ratings still hold to date with a stable outlook. ITC^DELTACOM: Board Sets Dec. 17 as Rights Offering Record Date --------------------------------------------------------------- ITC^DeltaCom Inc.'s board of directors has set Dec. 17, 2007, at the close of business as the record date for its rights offering. The company intends to distribute at no charge to each shareholder 1.167 non-transferable rights, subject to adjustment, for each share of common stock owned by such shareholder on the record date. Each right issued to shareholders will entitle the holder to purchase one share of the company's common stock at a purchase price of $3.03 per share. The exact number of rights to be issued to each shareholder may be adjusted from 1.167 per share based upon the number of outstanding shares held by persons eligible to participate in the rights offering as of the record date. Certain shareholders have agreed that they will not participate in the rights offering. No more than 13,604,455 shares of the company's common stock will be issued and sold in the rights offering. A copy of the company's prospectus relating to the rights offering and additional materials are expected to be mailed on or about the last week of December to shareholders of the company as of the record date. The rights offering is expected to conclude 20 business days thereafter. Shareholders who hold their shares through a broker or other nominee will receive the rights materials from their broker or other nominee. About ITC^DeltaCom Inc. Headquartered in Huntsville, Alabama, ITC^DeltaCom Inc. (OTC BB: ITCD.OB) -- http://www.deltacom.com/-- provides, through its operating subsidiaries, integrated telecommunications and technology services to businesses and consumers in the southeastern United States. ITC^DeltaCom has a fiber optic network spanning approximately 15,800 route miles, including more than 11,800 route miles of owned fiber, and offers a comprehensive suite of voice and data communications services, including local, long distance, broadband data communications, Internet connectivity, and customer premise equipment to end-user customers. * * * Moody's Investor Service placed ITC^DeltaCom's long term corporate family and probability of default ratings at 'B3' in July 2007. The ratings still hold to date with a stable outlook. JACUZZI BRANDS: Housing Downturns Cue S&P's Negative Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Chino, California-based Jacuzzi Brands Corp. to negative from stable. At the same time, S&P affirmed all ratings on the company, including the 'B' corporate credit rating. "The outlook revision reflects our increasing concerns about the length and severity of the current U.S. housing downturn and its impact on discretionary spending for Jacuzzi's bath and spa products," said Standard & Poor's credit analyst Thomas Nadramia. "We believe Jacuzzi will continue to be challenged in 2008 because of the depressed U.S. housing market." Revenues, operating profit, and EBITDA in 2007 have been less than amounts originally projected when Apollo Management L.P. acquired the company in February 2007. "We attribute this decline to the steep drop in U.S. residential construction. We estimate that about 20% of the company's U.S. sales, or about 10% of Jacuzzi's total revenues, are directly correlated to U.S. housing starts," Mr. Nadramia said. "We could lower Jacuzzi's ratings if the company's sales and EBITDA deteriorate further and restructuring efforts fail to return credit measures to levels more appropriate for the current rating. We could revise the outlook to stable if the company achieves its restructuring goals and reverses recent sales and margin deterioration." JEWELRY 47: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Jewelry 47 Inc. 19 West 45th Street, Suite 401 New York, NY 10036 Bankruptcy Case No.: 07-13908 Chapter 11 Petition Date: December 11, 2007 Court: Southern District of New York (Manhattan) Debtor's Counsel: Vincent M. Lentini, Esq. 600 Old Country Road, Suite 202 Garden City, NY 11530 Tel: (516) 228-3214 Fax: (516) 228-4232 Estimated Assets: $100,000 to $1 million Estimated Debts: $1 million to $100 million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Devi Diamonds Inc. $201,134 10 W. 46th Street New York, NY 10036 Nadmar Inc. $144,130 580 Fifth Avenue, Ste. 930 New York, NY 10036 J&R Islmaili Gem $72,000 10 W. 47th Street, Ste. 403A New York, NY 10036 Nexsen Pruet LLC $58,350 Raj Diamon Inc. $57,748 Marsani Jewelry $52,000 Zikri Eli Usa Inc. Inc. $46,500 Gideon Inc. $40,709 Benny Askenazi $36,827 Tilis & Lake $34,300 Belgium Diamonds $31,400 California Diamonds $25,059 Yakubov $23,885 A. Moscowitz $23,615 Metro Property & Casuakty Ins $21,825 Everrest Star Inc. $16,026 EDI $15,321 AA Diamonds $13,218 JP Morgan Chase $11,016 JOHNSON RUBBER: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Johnson Rubber Company, Inc. 16025 Johnson Street Middlefield, OH 44062 Bankruptcy Case No.: 07-19391 Type of Business: The Debtor designs, develops and manufactures polymer components. see. http://www.johnsonrubber.com/ Chapter 11 Petition Date: December 11, 2007 Court: Northern District of Ohio (Cleveland) Judge: Randolph Baxter Debtor's Counsel: William I Kohn, Esq. Benesch Friedlander Coplan & Aronoff LLP 2300 BP Tower 200 Public Square Cleveland, OH 44114-2378 Tel: (216) 363-4500 Fax: (216) 363-4588 http://www.bfca.com/ Total Assets: $15,346,607 Total Debts: $19,869,931 Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Columbian Chemicals $159,103 P.O. Box 75339 Charlotte, NC 28275 Tel: (800) 325-9701 ISP Elastormers $139,102 88286 Expidte Way Chicago, IL 60695-0001 Tel: (800) 321-9001 Fabriweld Corporation $111,635 360 East Park Drive Norwalk, OH 44857 Tel: (419) 668-3358 M F Cachat Company $106,800 E. C. Morris Corp. $106,662 Patrick Myers $100,000 Con-Way Services Inc. $94,577 Johnsonite $87,731 Gold Key Processing $82,141 Kecy Products Inc. $73,056 Ryan Alternative Staffing $62,201 JP MORGAN: Moody's Cuts Rating on Class M10 Trust to Ba2 from Ba1 ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 3 tranches from 2 deals issued by J.P. Morgan Mortgage Acquisition 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: J.P. Morgan Mortgage Acquisition Trust 2007-CH3, Asset- Backed Pass-Through Certificates, Series 2007-CH3 -- Cl. M-9, Downgraded to Ba1, previously Baa3. Issuer: J.P. Morgan Mortgage Acquisition Trust 2007-CH4, Asset- Backed Pass-Through Certificates, Series 2007-CH4 -- Cl. M9, Downgraded to Ba1, previously Baa3, -- Cl. M10, Downgraded to Ba2, previously Ba1. JP MORGAN: Moody's Holds Ba2 Rating on Class K Certificates ----------------------------------------------------------- Moody's Investors Service affirmed the ratings of J.P. Morgan Chase Commercial Mortgage Trust 2006-LDP6, Commercial Pass-Through Certificates, Series 2006-LDP6 as: -- Class A-1, $48,826,341, affirmed at Aaa -- Class A-1A, $204,214,321, affirmed at Aaa -- Class A-2, $155,873,000, affirmed at Aaa -- Class A-3B, $100,000,000, affirmed at Aaa -- Class A-3FL, $55,733,000, affirmed at Aaa -- Class A-4, $819,310,000, affirmed at Aaa -- Class A-J, $163,333,000, affirmed at Aaa -- Class A-M, $214,208,000, affirmed at Aaa -- Class A-SB, $103,671,000, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $48,197,000, affirmed at Aa2 -- Class C, $18,743,000, affirmed at Aa3 -- Class D, $34,808,000, affirmed at A2 -- Class E, $21,421,000, affirmed at A3 -- Class F, $29,454,000, affirmed at Baa1 -- Class G, $21,421,000, affirmed at Baa2 -- Class H, $21,420,000, affirmed at Baa3 -- Class J, $10,711,000, affirmed at Ba1 -- Class K, $10,710,000, affirmed at Ba2 -- Class L, $5,355,000, affirmed at Ba3 As of the Nov. 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by less than 1.0% to $2.13 billion from $2.14 billion at securitization. The Certificates are collateralized by 163 loans, ranging in size from less than 1.0% to 11.3% of the pool, with the top 10 loans representing 44.4% of the pool. The pool includes five shadow rated loans comprising 14.5% of the current outstanding balance. The pool has not experienced any losses to date and currently there are no loans in special servicing. Seventeen loans, representing 16.6% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 and partial-year 2007 operating results for 93.0% and 65.0%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 104.3%, essentially the same as at securitization, resulting in the affirmation of all classes. The largest shadow rated loan is the Smith Haven Mall ($180.0 million -- 8.5%), which is secured by the borrower's interest in a 1.1 million square foot regional mall located in Lake Grove, New York. The center is anchored by Macy's, Sears and J.C. Penney. As of June 2007 the inline space was 86.0% occupied, essentially the same as at securitization. Moody's current shadow rating is Aa2, the same as at securitization. The second shadow rated loan is the CenterPoint II Portfolio Loan ($67.4 million -- 3.2%), which represents a pari passu interest in a first mortgage loan totaling $70.4 million. The loan is secured by 19 industrial properties totaling 4.0 million square feet. The properties are located in Illinois (14) and Wisconsin (5). Four properties have been released since securitization. The portfolio was 100.0% occupied as of August 2007, compared to 89.6% at securitization. Moody's current shadow rating is Aa3, the same as at securitization. The remaining three shadow rated loans comprise 2.9% of the pool. The 215 Park Avenue South Loan ($38.0 million -- 1.8%), which is secured by a 311,000 square foot office building in New York City, is currently shadow rated Baa3, the same as at securitization. The Gainey Suites Hotel ($12.5 million -- 0.6%), which is secured by a 162 room hotel located in Scottsdale, Arizona, is currently shadow rated Baa2, compared to Baa3 at securitization. The upgrade in the shadow rating is due to improved REVPar since securitization. The 10 Stanton Loan ($10.5 million -- 0.5%), which is secured by a 146 unit multifamily property in New York City, is currently shadow rated Aaa, the same as at securitization. The top three conduit loans represent 20.5% of the pool. The largest loan is the Centro Portfolio Loan ($240.0 million -- 11.3%), which is secured by 12 retail properties totaling 2.6 million square feet. The properties are located in five states, with the largest concentrations in Pennsylvania (5) and New Jersey (3). The portfolio was 97.1% occupied as of June 2007, compared to 96.6% at securitization. Moody's LTV is 104.2%, the same as at securitization. The second largest conduit loan is the Gap Building Loan ($107.5 million -- 5.0%), which is secured by a 273,000 square foot office building located in San Francisco, California. The property is 100.0% leased to The Gap, Inc., through 2017. Moody's LTV is 98.4%, the same as at securitization. The third largest conduit loan is the Valley Mall Loan ($90.0 million -- 4.2%), which is secured by a 903,000 square foot retail center located in Haggerstown, Maryland. The center is anchored by J.C. Penney, Sears, Bon Ton and Macy's. The in-line space is 95.4% occupied, compared to 96.8% at securitization. Moody's LTV is 99.9%, the same as at securitization. KAMP RE: S&P Puts Default Rating on $190MM Floating-Rate Notes -------------------------------------------------------------- Standard & Poor's Ratings Services revised its 'CC' senior secured debt rating on KAMP RE 2005 Ltd.'s $190 million floating-rate principal-at-risk notes to 'D'. The rating had been on CreditWatch with negative implications. On Nov. 5, 2007, Standard & Poor's said that it had received a copy of a proof-of-claim notice from the administrator for KAMP RE 2005 Ltd. "This claim put the ultimate net losses associated with Hurricane Katrina in excess of the transaction's $1 billion trigger amount," explained Standard & Poor's credit analyst Gary Martucci. "KPMG Cayman Islands, the claims-review agent, has verified that the paid losses incurred by the cedent are in excess of the transactions trigger amount of $1 billion." On Dec. 14, 2007, the outstanding principal amount of the notes will be reduced by $29,739,094.44, and the remaining unpaid balance will be $160,260,905.56. S&P expect that the principal reductions will continue and that there will be a full loss of principal. The initial maturity date of the notes was Dec. 14, 2007, but it has been extended to Jan. 14, 2008, and can be extended monthly for an additional 35 months. The extension period will allow the actual losses paid by the cedent, Zurich American Insurance Co., to be settled and passed through to KAMP RE 2005 Ltd. LAM RESEARCH: S&P Says Rarings Remain on Negative CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services said that 'BB-' corporate credit rating on Lam Research Corp. remain on CreditWatch, where it was placed with negative implications on Aug. 27, 2007, following the company's announcement that it intends to acquire the SEZ Group for about $447 million net in cash, expected to close in the March 2008 quarter. Zurich, Switzerland-based SEZ is a major supplier of wafer cleaning equipment for the semiconductor industry. SEZ expects revenues of about $293 million for 2007. The wafer cleaning market is adjacent to Lam's core etching market segment, and both companies have leading positions in their respective segments. The rating initially was placed on CreditWatch following the company's announcement that it would be unable to timely file its 2007 form 10-K. The delay has been caused by a review of the company's historical stock option practices. While it is too early to assess the outcome of the investigations, Lam's liquidity (pro forma unrestricted cash and investments totaled about $650 million at March 25, 2007) should cushion the downside risk to the rating. The company's outstanding $250 million debt is secured 110% by restricted cash. "The CreditWatch listing reflects uncertainties regarding the outcome of the stock option review," said Standard & Poor's credit analyst Lucy Patricola. S&P will monitor the review to assess whether any potential material restatements, further investigation, or additional involvement of the SEC or other judicial authorities has an impact on the rating. Rating List Lam Research Corp. Rating Remains On CreditWatch Corporate credit rating BB-/Watch Neg/-- LB-UBS COMMERCIAL: S&P Holds Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 25 classes of commercial mortgage pass-through certificates from LB-UBS Commercial Mortgage Trust 2004-C7. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Nov. 19, 2007, remittance report, the trust collateral consisted of 90 mortgage loans with an outstanding principal balance of $1.35 billion, compared with a balance of $1.42 billion and the same number of loans at issuance. Excluding the $322.6 million (24%) of collateral in the pool that was defeased, the master servicer, Wachovia Bank N.A., reported financial information for 100% of the nondefeased loans in the pool. Ninety-eight percent of the servicer-reported information was full-year 2006 data. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.73x, up from 1.61x at issuance. Although all of the loans are current, one loan ($2.6 million) is with the special servicer, CWCapital Asset Management and is discussed below. The trust has experienced no losses to date. The top 10 exposures secured by real estate have an aggregate principal balance of $640.6 million (47%) and a weighted average DSC of 1.83x, up from 1.78x at issuance. One of the top 10 exposures is on the master servicer's watchlist and is discussed below. Although the seventh-largest exposure, the Guam Multifamily portfolio ($22.7 million, 2%), is not on the watchlist, the master servicer reported a weighted average DSC of 1.19x as of year-end 2006, attributable to a decrease in occupancy to 81% as of March 2007 from 87% at issuance. The loan is secured by 12 multifamily apartment complexes totaling 507 units and one 54,400-sq.-ft. retail center in Guam. Standard & Poor's reviewed the property inspection reports provided by Wachovia for the assets underlying the top 10 exposures, and all were reported to be in "good" condition. Three of the top 10 exposures and four additional exposures exhibited credit characteristics consistent with those of investment-grade obligations at issuance and continue to do so. Details of the three largest exposures are: -- The second-largest exposure in the pool, Westfield Shoppingtown Mission Valley ($150.0 million, 11%), is secured by 474,100 sq. ft. of a 1.4 million-sq.-ft. regional mall and 180,000 sq. ft. of an adjacent 214,900-sq.-ft. power center in San Diego, California. Wachovia reported a DSC of 2.66x for year-end 2006 and 98% occupancy as of June 2007. Standard & Poor's underwritten net cash flow is similar to its level at issuance. -- The third-largest exposure, Montgomery Mall ($91.1 million, 7%), is secured by 558,900 sq. ft. of a 1.1 million-sq.-ft. super-regional mall in Montgomery Township, Pennsylvania. The master servicer reported a DSC of 2.01x as of year-end 2006 and 91% occupancy as of September 2007. Standard & Poor's underwritten NCF is comparable to its level at issuance. -- The fourth-largest exposure, World Apparel Center, has a trust balance of $72.7 million (5%) and a whole-loan balance of $218.1 million. The pari passu loan is secured by a 1.2 million-sq.-ft. office property in Manhattan. For the year ended Dec. 31, 2006, DSC was 2.18x and occupancy was 93%. Standard & Poor's adjusted NCF is down 8% from its level at issuance. The sole asset with the special servicer, 3700 Santa Fe Avenue, is a 31,000-sq.-ft office building in Long Beach, California, which is encumbered by a $2.6 million loan that is current. The loan was transferred to CWCapital in June 2007 because it was sold and transferred twice without the lender's consent. The loan has since been corrected and returned to the master servicer in mid- November 2007. Wachovia reported a DSC of 0.96x as of May 2007 and 67% occupancy as of Dec. 2006. Wachovia reported a watchlist of 14 loans totaling $89.7 million (7%). The sixth-largest exposure, North Dekalb Mall ($27.7 million, 2%), is secured by 432,000 sq. ft. of a 628,700-sq.-ft. retail mall in Decatur, Georgia. The loan appears on the watchlist due to a low reported DSC of 0.89x as of the nine months ended Sept. 30, 2007. Occupancy was 95% as of November 2007. The remaining loans are on the watchlist due to low DSCs and low occupancies. 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 LB-UBS Commercial Mortgage Trust 2004-C7 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 11.40% A-2 AAA 11.40% A-3 AAA 11.40% A-4 AAA 11.40% A-5 AAA 11.40% A-6 AAA 11.40% A-1A AAA 11.40% B AA+ 10.61% C AA 9.57% D AA- 8.39% E A+ 7.47% F A 6.42% G A- 5.50% H BBB+ 4.59% J BBB 3.93% K BBB- 2.62% L BB+ 2.36% M BB 1.97% N BB- 1.70% P B+ 1.57% Q B 1.31% S B- 1.05% X-CL AAA N/A X-CP AAA N/A X-OL AAA N/A N/A - Not applicable. LEGENDS GAMING: Moody's Rates $160 Mil. Sr. Secured Notes at B1 --------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD-3, 41%) to Legends Gaming, LLC's $160 million senior secured notes due September 2012 and a Caa1 (LGD-5, 89%) to the company's $60 million senior secured subordinated notes due December 2012. The company's B2 corporate family rating and B2 probability of default rating were affirmed. The company's rating outlook was revised to negative from stable. Proceeds from the new $160 million senior secured notes and $60 million senior secured subordinated notes will be used to refinance Legends' revolver balance of $9.3 million, $137.1 million outstanding on the B1 (LGD-3, 35%) first lien term loan, $65.0 million outstanding on the Caa1 (LGD-5, 88%) second lien term loan and pay associated call premiums and fees. Ratings on the existing debt will be withdrawn once the new financing transaction closes. The affirmation considers the increased financial flexibility afforded by the proposed refinancing, and takes into account that despite the delayed transaction closing, higher than expected renovation requirement, and construction disruption, debt/EBITDA, at 6.4 times for the twelve-month period ended Sep. 30, 2007, continues to map within the 'B' indicated rating category. The B2 rating also takes into account that Legends' operates in Bossier City, Louisiana and Vicksburg, Mississippi, two long-established markets that have grown on a year-to-date basis. Key credit concerns include the company's high leverage, relatively small size, limited diversification and the expected increase in overall interest expense related to the company's proposed refinancing The negative rating outlook acknowledges, that while the company's leverage currently still maps to the 'B' indicated rating category, between 5.0 and 7.0x as defined by Moody's Global Gaming rating methodology, it is at the higher end of that range, and greater than what was initially expected when ratings were originally assigned in July 2006. Legends' ratings could be lowered if the company's recently completed renovation capital expenditures do not exhibit a favorable return through the first half of 2008 and it appears Debt/EBITDA will not improve below 6.0x within the next 2 years. Moody's previous rating action on Legends occurred on September 28, 2006 with the implementation of Moody's Loss Given Default methodology and related upgrade of Legends' first lien bank loan rating to B1 from B2. Legends Gaming, LLC, headquartered in Frankfort, Illinois, currently owns and operates two gaming properties located in Bossier City, Louisiana and Vicksburg, Mississippi under the DiamondJacks Casino brand. For the twelve-month period ended Sep. 30, 2007 the company generated approximately $150 million in net revenues. LEGENDS GAMING: S&P Revises Rating on $160MM Sr. Secured Notes -------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings on the proposed secured notes offering to be co-issued by Legends Gaming LLC and subsidiary Legends Finance Corp., following a change of terms to the deal, which was initially rated on Nov. 30. The proposed offering now comprises $160 million of senior secured notes and $60 million of senior subordinated secured notes, both due in 2012. The $160 million notes were rated 'B+' with a recovery rating of '2', indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. The $60 million notes were rated 'CCC+' with a recovery rating of '6', indicating that lenders can expect negligible (0% to 10%) recovery in the event of a payment default. Proceeds from the notes will be used to repay Legends existing senior credit facility, and for fees and expenses. Concurrent with the note sales, Legends is planning on entering into a $15 million revolving credit facility, which S&P anticipate will be undrawn at close. The corporate credit rating on Legends Gaming is 'B', and the rating outlook is stable. The 'B' rating reflects the company's high debt levels and small portfolio of gaming properties, as well as the competitive environments in both markets in which it operates. Legends' two facilities are located in Vicksburg, Mississippi and Bossier City, Louisiana; both are branded as "DiamondJacks." The stable rating outlook reflects credit measures that are in line with the current rating, although with no expectation for material improvement through 2009. In the event the company does not enter into a $15 million revolving credit facility as expected, rating downside potential exists given S&P's concerns surrounding Legends' liquidity position in the absence of that added cushion. Downside rating pressure could stem from additional marketing difficulty in either of Legends' markets that results in material underperformance given the company's highly leveraged balance sheet and modest liquidity cushion. Rating upside potential is unlikely in the intermediate term given S&P's view that there are no real catalysts for substantial market growth in either Bossier City/Shreveport or Vicksburg presently. Ratings List Legends Gaming LLC Corporate Credit Rating B/Stable/-- $160M Sr Secd Nts Due 2012 B+ Recovery Rating 2 $60M Sr Sub Secd Nts Due 2012 CCC+ Recovery Rating 6 LEVCOR INT'L: Sept. 30 Balance Sheet Upside-Down by $7.8 Million ---------------------------------------------------------------- Levcor International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $13.7 million in total assets and $21.5 million in total liabilities, resulting in a $7.8 million total stockholders' deficit. The company reported net income of $169,000 on net sales of $5.1 million for the third quarter ended Sept. 30, 2007, compared with net income of $1.2 million on net sales of $5.6 million in the corresponding period in 2006. The decrease in sales is attributable in part to the reorganization under Chapter 11 of one of the company's largest customers and the cancellation of two product lines by the company's largest customer. The decrease in sales in the third quarter of 2007 was offset by an annual modular change by a major customer. There was no such modular change for this customer in 2006. The company recorded a non-cash $1.7 million gain on the termination of the post retirement medical plan in the third quarter of 2006. There was no such gain in 2007. 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?264a About Levcor International Based in New York, Levcor International Inc. (LEVC.OB) engages in the manufacture, packaging, and distribution of buttons and other craft products for the home sewing and craft retail industry. Its products include buttons, embellishments, craft products and complimentary product lines, such as appliques, craft kits, and fashion and jewelry accessories. It sells its products to mass merchandisers, specialty chains, and independent retailers and wholesalers in the United States, Canada, and Europe. LEVITT AND SONS: Gets Court Nod to Abandon KeyBank Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorized Levitt and Sons, LLC and certain of its debtor- affiliates to abandon the real property collateral they entered via agreements with lenders Bank of America, N.A., KeyBank, N.A., and Wachovia Bank, N.A., effective as of Nov. 29, 2007. As an accommodation to KeyBank, the Debtors will, on or before Dec. 19, 2007, make available for KeyBank's retrieval copies of all site plans, contracts and other documents reasonably requested by the bank relating to the Abandoned Collateral in the Debtors' actual possession, without any representation or warranty by the Debtors as to the completeness, correctness or authenticity of the documents. A complete list of properties included in the KeyBank Abandoned Collateral is available for free at: http://researcharchives.com/t/s?2650 By agreement of the KeyBank Debtors and KeyBank, the Debtors' motion to abandon the KeyBank Collateral is deferred as to the collateral owned by Levitt and Sons of Lee County, LLC, as to which the Debtors and KeyBank have reached an agreement, in principle, with respect to a carve-out from the proceeds of the sale of the property owned by LAS Lee County. In the event that LAS Lee County and KeyBank do not reach a final agreement on the carve-out within a certain period of time, the Debtors are allowed to submit a supplemental order authorizing the abandonment of the collateral owned by LAS Lee County. The abandonment of the Abandoned Collateral will be deemed a satisfaction of any secured claim asserted against the KeyBank Debtors, relative to the Abandoned Collateral only, without prejudice to the right of KeyBank or any other putative secured creditor to assert an unsecured deficiency claim against the estates and the objections, offsets and defenses of the Debtors. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Wants to Hire Glankler Brown as Special Counsel ---------------------------------------------------------------- Debtors Levitt and Sons of Tennessee, LLC, Bowden Building Corporation, Levitt and Sons of Nashville, LLC, and Levitt and Sons of Shelby County, LLC, seek authority from the Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida to employ Glankler Brown, PLLC, as special counsel in their Chapter 11 cases, nunc pro tunc to Nov. 9, 2007. Glankler Brown will provide legal services in connection with closings, financing, land use and zoning, lien issues and litigation in Tennessee. The Tennessee Debtors also seek the Court's authority for the firm to apply funds held in trust to outstanding pre-bankruptcy fees and costs of $4,418. Before the bankruptcy date, Glankler Brown held $40,979 in escrow. The amount arose from a: -- $30,000 check to the firm, dated September 2006, drawn on the account of the attorneys for Regions Bank; -- $10,331 check, dated October 3, 2006, drawn on the account of First American Title Insurance Company; and -- $648 check, dated September 18, 2007, drawn on the account of First American Title Insurance Company. The escrow funds transferred by these checks were originally intended to be used as title premium payments for title policies and endorsements in connection with loans by Regions Bank to LAS Shelby County, Bowden and LAS Nashville. Prior to issuance of the title policies and endorsements, the firm received confirmation that the policies and endorsements would not be required and were not to be issued. Glankler Brown was subsequently authorized by the Tennessee Debtors to apply the escrow funds to its outstanding fees and costs, and $37,086 of the funds was applied on November 9, 2007. Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, relates that Glankler Brown represented the Tennessee Debtors before the Petition Date in connection with these matters. As a result, Glankler Brown is familiar with the matters the Tennessee Debtors are employing it for and has already devoted numerous hours in addressing these issues. The firm also has extensive experience and knowledge in these related fields, which is invaluable to the Tennessee Debtors in their reorganization efforts, Mr. Singerman adds. Mr. Singerman tells Judge Ray that the scope of services to be rendered by Glankler Brown will not be duplicative of the services to be rendered by Berger Singerman, P.A., the Debtors' general bankruptcy counsel in their Chapter 11 cases. The services of these counsel will not overlap. According to Mr. Singerman, Glankler Brown does not hold or represent any interest adverse to the Tennessee Debtors, their estates, or their creditors in the matters upon which the firm is proposed to be retained as special counsel. Although the firm, as of the Petition Date, holds a prepetition claim against the Tennessee Debtors for $23,867, he assures the Court that the matters on which Glankler Brown is to be employed are unaffected by the fact of that claim. The Tennessee Debtors will pay Glankler Brown in accordance with its standard hourly rates and reimburse reasonable and necessary expenses. The firm's rates, which, in the normal course of business, is revised on the 1st of February each year, are: Designation Hourly Rate ----------- ----------- Senior Partner $305 Junior Partner $225 Senior Associate $185 Paralegal $145 In addition to the escrow funds, Hunter Humphreys, a member of Glankler Brown, discloses that the firm received retainers of $10,000 each on October 13 and October 29, 2007, from Bowden. The retainer amounts were applied to outstanding prepetition fees and costs of Glankler Brown before the Petition Date. Mr. Humphreys assures the Court that Glankler Brown will not perform services for any person in connection with the Debtors' Chapter 11 cases, or have any relationship with any person, their attorneys or accountants that would be adverse to the Tennessee Debtors or their estates. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITZ FURNITURE: Court Approves Jones Day as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorized PLVTZ Inc., dba Levitz Furniture Inc. to employ Jones Day as its counsel, nunc pro tunc to the bankruptcy filing. He permitted the firm to: (a) continue to hold the retainer throughout the Debtor's Chapter 11 case; and (b) apply unused portion of any retainer it holds against allowed postpetition fees and expenses prior to payment under any carve-out provided for in cash collateral or financing orders entered in the case. Judge Gerber overruled the objection filed by Diana G. Adams, the United States Trustee for Region 2. As previously reported, the U.S. Trustee objected to the proposed employment of the firm, asserting that it represents General Electric Capital Corporation, the Debtor's prepetition lender and most significant creditor, and that it has connections with Levitz Home Furnishings Inc., and certain landlords of the Debtor. The U.S. Trustee argued that these connections cast doubt on all of Jones Day's prepetition negotiations as well as all postpetition acts Jones Day would take on behalf of the Debtor. In response, the Debtor told the Court that Jones Day's inability to sue GECC in no way precludes the firm's retention because, among other things, the Debtor has agreed not to sue GECC pursuant to the terms of the consensual cash collateral order and because the interests of the Debtor and GECC with respect to the key issue in the Chapter 11 case -- maximizing the value of the Debtor's assets -- are aligned. Furthermore, the fact that Jones Day represents two of the Debtor's numerous landlords in matters wholly unrelated to the case is of no consequence, particularly because the assumption or rejection decision in respect of the Debtor's leases likely will be made by the purchaser of the lease designation rights. "The U.S. Trustee's speculation that the Debtor "might" have causes of action arising out of the purchase of the assets of Levitz Home Furnishing Inc. and its affiliated debtors (collectively, "LHFI") is simply irrelevant. It is fundamental that interests are not considered "adverse" simply because it is possible to conceive of a situation where the interests clash," Paul D. Leake, Esq., at Jones Day, in New York, said. The firm can be reached at: Paul D. Leake, Esq. Brad B. Erens, Esq. Jones Day 222 East 41st Street New York, NY 10017 Tel: (212) 326-3939 Fax: (212) 755-7306 http://www.jonesday.com/ Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. The Debtors' exclusive period to file a chapter 11 plan expires on March 7, 2008. (Levitz Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: Gets Final Nod to Hire FTI as Crisis Manager -------------------------------------------------------------- PLVTZ Inc., dba Levitz Furniture Inc. obtainted permission from the Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York, on a final basis, to employ FTI Consulting Inc., as its crisis manager, nunc pro tunc to Nov. 8, 2007, The Court directed FTI Consulting to: -- maintain contemporaneous time records in tenth of an hour increments; and -- submit monthly invoices to the Debtor, the United States Trustee and the Official Committee of Unsecured Creditors instead of fee applications. FTI Consulting will also provide the personnel as the firm and the Debtor's chief executive officer agree are necessary to perform the services. Judge Gerber allowed the firm to apply unused portion of any retainer it holds against allowed postpetition fees and expenses prior to payment under any carve-out provided for in cash collateral or financing orders entered in the case. About Levitz Furniture Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. The Debtors' exclusive period to file a chapter 11 plan expires on March 7, 2008. (Levitz Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: Young Conaway Retention Request Gets Final OK --------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York gave PLVTZ Inc., dba Levitz Furniture Inc. final approval to employ Young Conaway Stargatt & Taylor, LLP, as its conflicts counsel, nunc pro tunc to the bankruptcy filing. Jude Gerber held that Young Conaway will be "compensated for its services and reimbursed for any expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules and any other applicable Court orders or procedures." Judge Gerber also permitted the firm to: (i) continue to hold the retainer throughout the Debtor's Chapter 11 case; and (ii) apply unused portion of any retainer it holds against allowed postpetition fees and expenses prior to payment under any carve-out provided for in cash collateral or financing orders entered in the case. About Levitz Furniture Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. The Debtors' exclusive period to file a chapter 11 plan expires on March 7, 2008. (Levitz Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LIBERTY TAX III: Sept. 30 Balance Sheet Upside-Down by $21.5 Mil. ----------------------------------------------------------------- Liberty Tax Credit Plus III LP's consolidated balance sheet at Sept. 30, 2007, showed $92.4 million in total assets, $114.6 million in total liabilities, and $1.6 million in minority interest, resulting in a $21.5 million total partners' deficit. The partnership reported net income of $79.9 million on total revenues of $2.7 million for the second quarter ended Sept. 30, 2007, compared with a net loss of $3.5 million on total revenues of $2.4 million in the same quarter ended Sept. 30, 2006. On June 13, 2007, the partnership's limited partnership interest in R.P.P. Limited Dividend Housing Association Limited Partnership was sold to an affiliate of the local general partner for an assumption of bond debt and mortgage which amounted to approximately $90.7 million at the date of the sale. The partnership has not received any cash from this sale. The sale resulted in a gain of approximately $81.3 million resulting from the write-off of the deficit basis in the local partnership at the date of the sale. Full-text copies of the partnership's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?264d About Liberty Tax Headquartered in New York City, Liberty Tax Credit Plus III L.P. is a limited partnership, which was formed under the laws of the State of Delaware on Nov. 17, 1988. Liberty Tax Credit Plus III L.P. invests in other limited partnerships, each of which owns one or more leveraged low- and moderate-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent, in local partnerships owning properties that are eligible for the historic rehabilitation tax credit. The partnership has invested all of the net proceeds of its original offering in 62 local partnerships. As of Sept. 30, 2007, the partnership has sold its partnership interest in nineteen local partnerships, the property and the related assets and liabilities of twelve local partnerships, two properties owned by a local partnership and transferred the deed to the property and the related assets and liabilities of one local partnership. In addition, as of Sept. 30, 2007, the partnership has entered into agreements to sell its limited partnership interests in two local partnerships and one local partnership has entered into an agreement to sell its property and related assets and liabilities. Liberty Tax Credit's general partners are Related Credit Properties III L.P., a Delaware limited partnership, and Liberty GP III Inc., a Delaware corporation. LYONDELL CHEMICAL: Fitch Lower Issuer Default Rating to B+ ---------------------------------------------------------- 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 07 EBITDA of USD4,9bn) 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. M FABRIKANT: Banks Balk at Joint Chapter 11 Liquidation Plan ------------------------------------------------------------ Several banks have asked the the U.S. Bankruptcy Court for the Southern District of New York to deny confirmation of the Chapter 11 Plan of Liquidation jointly filed by M. Fabrikant & Sons Inc., its debtor-affiliate, Fabrikant-Leer International Ltd., the Official Committee of Unsecured Creditors, and Wilmington Trust Company. As reported in the Troubled Company Reporter on Nov. 13, 2007, the Hon. Stuart M. Bernstein approved the Disclosure Statement explaining the Plan citing that it contained adequate information within the meaning of Section 1125 of the U.S. Bankruptcy Code. Judge Bernstein also set the confirmation hearing of the Plan for Dec. 19, 2007, at 10:00 a.m. JPMorgan Chase Bank, N.A., as one of the Original Lenders and "Collateral Agent," tells the Court that pursuant to the Final Cash Collateral Order dated Dec. 18, 2006, JPMorgan, along with other Other Lenders, ere granted super-priority allowed secured administrative expense claims for their respective attorneys' fees and expenses "arising from or related to ... all proceedings in connection with the interpretation, amendment, modification, enforcement, enforceability, validity or implementation of the Pre-Petition Agreements or this Order at any time..." JPMorgan discloses that also in December 2006, the Original Secured Claims held by these lenders against the Debtors were sold to a third party purchaser. On Oct. 1, 2007, JPMorgan relates, the Creditors Committee commenced an adversary proceeding against the Original Lenders asserting claims for the avoidance and/or recovery of various pre- petition claims, liens, obligations and/or transfers made or granted by the Debtors to the Original Lenders arising from and related to the Original Secured Claims. These claims are referred in the Plan as "Original Lender Litigation Claims." JPMorgan contends however that the Creditors Committee didn't include the "current" lenders who now hold the Original Secured Claims that are being challenged in the adversary proceeding. Further, the Plan also includes a settlement that seeks to settle and release these Current Lenders from any and all liability arising from their holding the Original Secured Claims. JPMorgan argues that the Court should deny confirmation of the Plan since it fails to mention, reserve for or treat JPMorgan's and the other Original Lenders' super-priority allowed secured administrative expense claims for their costs and expenses of defending the Adversary Proceeding. Had the Creditors Committee asserted the Original Lender Litigation Claims against the Current Lenders instead of the Original Lenders, then the Current Lenders would be the one entitled to recover their defense costs from estate assets pursuant to Final Cash Collateral Order, JPMorgan adds. Bank of America, N.A., also objected to the Plan and cited issues similar to those raised by JPMorgan. Further, BofA adds that the Plan failed to to place secured Administrative Claim in a separate class and identify its treatment. BofA contends that while Class 3 of the Plan includes "Other Secured Claims," its secured claim is not substantially similar to other secured claims and, without a clarifying court order, it is apparent that the several of the Plan Proponents have no intention of having its claims paid or placed within that class in any event. HSBC Bank USA, National Association, also asked the Court to deny confirmation of the Plan unless it is protected to the full extent contemplated by the Final Cash Collateral Order. Bank Leumi, USA, also one of the Original Lenders, filed a joinder to JPMorgan's objection. JPMorgan is represented in this proceeding by Steven J. Mandelsberg, Esq., and Joshua I. Divack, Esq., at Hanh & Hessen LLP. Bank Leumi is represented by Andrew C. Gold, Esq., and Frederick E. Schmidt, Esq., at Herrick, Feinstein LLP. HSBC is represented by William J. Brown, Esq., and Allan L. Hill, Esq., at Phillips Lytle LLP. Jeffrey D. Ganz, Esq., at Riemer & Braunstein LLP, represents Bank of America. About M. Fabrikant Headquartered in New York City, M. Fabrikant & Sons, Inc. -- http://www.fabrikant.com/-- sells diamonds and jewelries. The company and its affiliate, Fabrikant-Leer International Ltd., filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-12737). Mitchel H. Perkiel, Esq., Lee W. Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders LLP represent the Debtors in their restructuring efforts. Alan Kolod, Esq., Lawrence L. Ginsberg, Esq., and Christopher J. Caruso, Esq., at Moses & Singer LLP serve as counsel to the Official Committee of Unsecured Creditors. In schedules filed with the Court, M. Fabrikant disclosed total assets of $225,612,204 and total debts of $439,993,890. MARK IV: Operating Pressures Cue Moody's to Cut Rating to B3 ------------------------------------------------------------ Moody's Investors Service lowered the ratings of Mark IV Industries, Inc. -- Corporate Family, to B3 from B2; senior secured first lien facilities to B2 from Ba3, and the senior secured second lien term loan, to Caa2 from B3. The ratings remain under review for possible downgrade. The lowered ratings reflect Mark IV's operating pressures in its transportation and automotive businesses which have resulted in negative free cash flow generation and which are expected to continue over the near-term. With the weaker financial performance, the company could also come under covenant pressure in the near-term which may limit access to the $150 million revolving credit facility. Mark IV recently entered into an agreement with Sun Capital Partners, Inc., whereby an affiliate of Sun Capital will purchase 100% of the equity ownership of Mark IV from the existing private equity investors, but implementation of the plan requires certain amendments from the existing bank lenders. These amendments include, among other things, waiving the triggering of the change of control provision by the Sun Capital purchase, and the modification of the company's financial covenants. The final terms of the contemplated transaction with Sun Capital are yet to be determined. Nevertheless, the company's weak operating performance would not likely support a rating higher than B3 even if the transaction does occur. Absent the bank amendments that would accompany implementation of the transaction, Moody's believes that the rating could be subject to further downgrade. The review will consider the outcome of the contemplated transaction, the level of covenant flexibility gained, and the implications for financial metrics of any increased borrowing costs that could be required to obtain the bank amendments. Moody's remains concerned over operating pressures faced by Mark IV over the near term. These challenges include pricing pressures in the transportation segment, the effectiveness of any restructuring actions by Mark IV under its current or new owners, the timing of a recovery in the commercial vehicle market, and ongoing operating pressures in the North American automotive industry. While Moody's notes the moderate improvement in leverage as a result of application of net proceeds from recent asset sales, the company has not generated free cash flow over the past year. For the LTM period ended August 31, 2007, the company's EBIT/interest coverage approximated 1.2x. Mark IV's liquidity over the near-term is contingent on receiving the required votes to amend its bank credit facilities. Achieving these amendments would provide cushion for the company to implement needed operating improvements. While free cash flow will be limited due to the company's profitability levels and any cash costs associated with restructuring initiatives, at 8/31/07 there was approximately $62 million outstanding under the $150 million revolving credit and $70 million of cash on hand. These ratings were lowered: Mark IV Industries, Inc. -- Corporate Family Rating, to B3 from B2; -- Probability of Default Rating, to B3 from B2; Dayco Products, LLC -- Senior secured credit facilities to B2 (LGD3, 33%) from Ba3 (LGD3, 31%), consisting of: -- $150 million US/European revolving credit facility due 2010, and a -- $724 million (remaining balance) 7-year US term loan B due 2011. -- $150 million senior secured second lien term loan due 2011, to Caa2 (LGD5, 86%) from B3 (LGD5, 71%). Dayco Europe SrL -- $53 million remaining balance equivalent Euro denominated European term loan A due 2010 to B2 (LGD3, 33%) from Ba3 (LGD3, 31%). The last rating action was on Oct. 31, 2006 when the ratings were downgraded. Future events that have the potential to drive Mark IV's ratings lower include: inability to achieve the bank credit facility amendments needed to ensure adequate intermediate term liquidity, or inability to achieve near term improvement in margins and other core financial metrics. Consideration for a lower rating could arise if any combination of these factors results in leverage approaching 7x, or EBIT/ interest coverage below 1.0x. The ratings could be stabilized at B3 if the company is able to achieve the needed amendments to its bank facilities and implement actions to improve operating performance, sustaining EBIT/Interest of at least 1.0x. Any future upward movement of the rating or outlook would require consistent free cash flow generation, reduced leverage resulting in EBIT/Interest coverage of 1.5x or leverage consistently below 6x. Mark IV Industries is a diversified manufacturer of engineered systems and components utilizing radio frequency identification, information display system, mechanical power transmission, air admission, and other technologies that serve industrial, transportation and automotive markets. Mark IV manages and reports its operations into two categories: (i) Industrial/Distribution and (ii) Automotive OEM. Annual revenues approximate $1.3 billion. MARKOV CDO: Moody's Junks Ratings on Six Note Classes ----------------------------------------------------- Moody's Investors Service has downgraded ratings of eight classes of notes issued by Markov CDO I, Ltd. Five of these ratings were left on review by Moody's for possible further downgrade. The notes affected by today's rating actions are: Class Description: $80,000,000 Class A-3 Senior Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa1, on review for possible downgrade Class Description: $70,000,000 Class B Senior Floating Rate Notes due 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $25,000,000 Class C-1 Floating Rate Deferrable Notes due 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $10,000,000 Class C-2 Fixed Rate Deferrable Notes due 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $27,000,000 Class D Floating Rate Deferrable Notes due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $5,000,000 Class E Floating Rate Deferrable Notes due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $5,000,000 C Combination Notes due 2044 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $5,000,000 D Combination Notes due 2044 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Nov. 16, 2007, of an event of default caused by a failure of the Class A EOD Ratio to be satisfied, as required under Section 5.1(e) of the Indenture dated May 1, 2007. Markov CDO I, Ltd is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A EOD Ratio failed to meet the required level. As provided in Article 5 of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings of Class S, A-0, A-1, A-2, A-3, B, C-1, C-2 Notes and the Class C Combination Notes remain on review for possible downgrade. MOVIE GALLERY: Can Execute Amendments Under Restructuring Pacts --------------------------------------------------------------- In supplemental order, the Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia authorized Movie Gallery, Inc. and its debtor-affiliates to perform and enter into amendments under the restructuring agreements. Subject to the Agreements' terms, the Debtors are also authorized to pay expense reimbursements. According to Judge Tice, the Debtors are authorized to enter into and honor their obligations under the Jefferies Engagement Letter, including payment of Transaction Fee from the proceeds of the rights offering or other infusion of capital contemplated by the Agreements. Judge Tice also approved the Engagement Letter's indemnification provisions. If the backstop party becomes entitled to expense reimbursement under the Rights Offering Term Sheet and the Lock Up Agreement, it will be treated as allowed administrative claims in the Debtors' Chapter 11 cases pursuant to Sections 503(b) and 507(a)(1) of the Bankruptcy Code. The Debtors are authorized without further Court Order to pay, on a current basis, the reasonable and documented fees and expenses of the backstop party's legal and financial advisors, in accordance with the terms of the Agreement, the Term Sheet and the Engagement Letter. Judge Tice clarified that the Order does not: -- constitute an assumption of the Restructuring Agreements; and -- infer that the Official Committee of Unsecured Creditors agrees to, or waives any of its rights to object to, any aspect of the Reorganization Plan, as described in the Restructuring Agreements. The Debtors and Sopris Capital Advisors LLC agree to negotiate in good faith with the Committee with respect to the terms of a Plan. The Lock Up Agreements, to which the Committee is a non- party, will not prohibit the negotiation. Additionally, the Debtors and Sopris agree that, unless the Committee has previously agreed to the amounts and form of distributions to be made to non-noteholder general unsecured creditors under the Plan, any Plan filed on or before December 7, 2007, will not include references to the distribution amounts. Goldman Sachs Credit Partners LP tried to block approval of the the Debtors' request to pay professional expenses for Sopris' advisors. Goldman Sachs complained that the request was premature because there is no current agreement on a Plan of Reorganization. According Goldman Sachs, the Debtors have no legal authority to use estate funds to pay the professional fees of a single creditor, because: (1) there is no agreement binding the Debtors to pay to Sopris' advisors, as otherwise provided by Section 506(b) of the Bankruptcy Code; (2) Sopris' advisors do not represent a committee, but a single large creditor, as otherwise required by Section 1103(a) of the Bankruptcy Code; and (3) Sopris has not made a substantial contribution to the Debtors' cases, as no current agreement has been reached to contemplate a confirmable Plan. Sopris' commitments to convert its debt holdings to equity and to backstop a rights offering are entirely contingent upon agreements on other critical aspects of a Plan, including (i) an agreement by the $775,000,000 of DIP Financing and First Lien Claims, and (ii) the allocation of new stock in the Reorganized Debtors among the different classes outlined in the First Term Sheet. Goldman Sachs said Sopris has already received significant guarantees in the form of the Debtor's assurance to pay the $1,015,000 Commitment Fee and the $2,000,000 Termination Fee; therefore, Sopris should be required to wait on any agreement to pay its professional fees, including the Transaction Fee, until a final Plan is agreed upon. In response, Sopris told the Court that Goldman Sachs' argument is late, fraught with material inaccuracies, and is a blatant attempt to mislead the Court. Sopris' counsel, Paula S. Beran, Esq., at Tavenner & Beran, PLC, in Richmond, Virginia, argued that as the Debtors' single largest creditor -- which also agreed to provide $50,000,000 as additional liquidity for the Debtors' reorganization -- Sopris has every reason to be fully committed to the Plan. The monthly fees payable to Sopris' legal advisors, Sonnenschein Nath & Rosenthal LLP, and Tavenner & Beran, PLC, are solely for the firms' reasonable and documented hourly standard rates, which under the Agreements, the Debtors have agreed to pay, along with related out-of-pocket expenses incurred by the firms, Ms. Beran explained. Furthermore, the monthly fees and expense reimbursements payable to Jefferies under the Agreements are subject to the "reasonable and documented" limitation. The Debtors' agreement to pay the fees and expenses of Sopris' legal and financial advisors to support Sopris' efforts is of sound business judgment, Ms. Beran maintained. Similarly, the Debtors told Judge Tice that Goldman Sachs' objection fails because the Plan Term Sheet and the Rights Offering Term Sheet are both conditioned on the Debtors' timely and current payment of the expense reimbursements. The Debtors pointed out that they seek to pay the expense reimbursements and the Jefferies Transaction Fee not simply because Sopris is a major creditor, but because Sopris has proposed to backstop a $50,000,000 rights offering, equitize more than $70,000,000 in second lien debt, and sponsor the Debtors' Reorganization Plan. Moreover, the Debtors' said their request cannot be concluded as premature because in the absence of a Plan, the Restructuring Agreements -- a result of arm's-length negotiations between the Debtors, Sopris and the consenting holders -- is the best alternative available, benefiting the Debtors, their estates and their creditors, including the secured creditors. Based on these arguments, the Court overruled Goldman Sachs' objection. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. MOVIE GALLERY: Lease Action Directives on Auction Protocols Set --------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia granted Movie Gallery, Inc. and its debtor-affiliates' request as it relates to the sale, assumption, assignment or termination of certain leases in accordance with the Court-approved auction procedures. The Auction Procedures, according to Judge Tice, afforded a full, fair and reasonable opportunity for any entity, including any landlord, to make a higher or otherwise better offer to purchase the Leases. The Procedures were duly noticed, and the sale process was conducted in a non-collusive and fair manner. A reasonable opportunity has been given to any interested party to make a higher or otherwise better offer for the Leases. Judge Tice directed that in the event that a successful bid does not result in a closing, the backup bidder will proceed to closing no later than three days following the Notification Date by the Debtors of the successful bidder's default. Additionally, the Court approved the sale, assumption and assignment of the Leases to certain assignees as authorized by the Auction Procedures Order and pursuant to Sections 363 and 365 of the Bankruptcy Code. Each disposition of the Leases constitutes a sale free and clear of all liens, claims, interests or encumbrances. The interests to the disposition's proceeds are afforded with the same validity, extent and priority as the prior disposition. Each counterparty to a disposition is entitled to the protections afforded to good-faith purchasers, in accordance with Section 363(m) of the Bankruptcy Code. To the extent any Debtor acts as guarantor of another Debtor's obligations under the Leases, the Debtor-Guarantor's obligations with respect to the Lease will terminate upon the disposition's closing. The Debtors are deemed to have abandoned any personal property located at the Leases without administrative liability to any of the landlords or assignees for rental, occupancy or other charges as of the later of (i) the entry date of the Order, and (ii) the closing. The landlords or assignees may, in their sole discretion and without further notice, dispose of the abandoned property without liability to the Debtors or any third party claiming any interest in the property. In addition, Judge Tice also authorized and directed the Debtors to execute and deliver documents or other instruments that may be requested by the assignee to assume and assign the leases. The assigned Leases will be assigned to, and will remain in full force and effect for the benefit of the assignee, notwithstanding any provision in the assigned Lease that prohibits, restricts or conditions the assignment or transfer. Pursuant to Section 365(k) of the Bankruptcy Code, the Debtors and their estates will have no liability for any breach of the assigned Leases occurring after the Leases' assignment. The Court also approved the Debtors' transfer, surrender and termination of their interests in the Terminated Leases. Unless otherwise agreed to by the Debtors and the Landlords, the Debtors will have no liability arising under the terminated Leases after the Termination Date. Court Rules on Cure Amounts Judge Tice ruled that certain cure amounts will be deemed as the Debtors' entire obligation due and owing under the Leases pursuant to Section 365 of the Bankruptcy Code: Landlord Store Location Cure Amount -------- -------------- ----------- VNO Long Beach Oceanside, New York $38,000 Road, LLC Balboa Plaza Northbridge, 38,092 Investments, LLC California Upon payment of each Cure Amount, (i) the Debtors will have no further obligations or liability to the landlord or other parties-in-interest, arising under the assigned Lease prior to the Cure Date, and (ii) all defaults or other obligations of the Debtors arising under the assigned Lease attributable prior to the Cure Date will be deemed cured. Judge Tice directed the Debtors to pay the cure amounts no later than 10 days after the closing in accordance with the Auction Procedures Order. Except for the obligation of the Debtors to pay the cure amounts, each landlord for an assigned Lease is permanently barred, estopped and enjoined from asserting: -- any default existing as of the Cure Date against the Debtors, or the assignees; -- any counterclaim, defense or set-off against the Debtors; and -- any assignment fee, default, breach, claim or pecuniary loss or condition to assignment arising under or related to the assigned Lease existing as of, or arising by the closing, including, but not limited to, rent accelerations and rate increases, including advertising rates. Judge Tice further instructed the Debtors to pay all obligations arising under Section 365(d)(3) of the Bankruptcy Code with respect to the Leases arising after the Cure Date but before the closing. The Debtors' payments are applicable to obligations not satisfied by the cure amount payments, provided that reasonable documentation of the obligations are served upon the Debtors no later than 10 days after (i) the closing and (ii) the Debtors' receipt of the documentation. A copy of the Debtors' Terminated Leases Schedule is available for free at http://researcharchives.com/t/s?2652 A list of the Assigned Leases is available at no charge at: http://researcharchives.com/t/s?2653 About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. MOVIE GALLERY: Will Close Down Moviebeam Service on December 15 --------------------------------------------------------------- Movie Gallery, Inc. and its debtor-affiliates will close its MovieBeam set-top box download service on Dec. 15, 2007. According to reports, the service failed to achieve any critical mass, largely due to its high cost and unique delivery method that limited its ability to expand. Specifically, customers must pay $250 for the set-top box and $30 as activation fee. Pricing for movies ranges from $3.99 to $1.99, with a $1 surcharge for high-definition content. The service was also facing new competition from iTunes and Apple TV, among others. Movie Gallery acquired MovieBeam from the Walt Disney Co. and other investors early this year for $10,000,000, Betanews says. Disney reportedly spent $70,000,000 on the project and shut the service down in 2005. Moviebeam was relaunched in February 2006 with over $50,000,000 in venture capital from Mayfield Fund, Norwest Venture Partners, Cisco, Intel, Vantage Point Venture Partners and Disney's ABC. Reports note that newer customers may be eligible for a refund on the set-top box. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. MSB OF DESTIN: Gets Interim OK to Use Rewards' Cash Collateral -------------------------------------------------------------- MSB of Destin Inc. obtained interim authority from the U.S. Bankruptcy Court for the Northern District of Florida to use the cash collateral of Rewards Network Establishment Services Inc. until Dec. 17, 2007. The Debtor will use the cash collateral for its day-to-day operations including: a) compensation to employees through an employee leasing company; b) insurance; c) utilities, including electricity, water, garbage collection, sewage disposal and telephone service, well as any deposit necessary to provide adequate assurance to such utilities in order to maintain service to Debtor; d) postage and shipping; e) office Supplies; f) inventory and other supplies necessary to prepare and serve food and beverages; i) sales taxes; j) advertising and marketing expenses. As adequate protection to Rewards Network's cash collateral, the Debtor grants a replacement lien on all of the inventory, accounts, cash, deposit accounts, rights to payment from any credit card processor and other cash collateral, and all the proceeds thereof. The Debtor will also grant Rewards Network, a valid and perfected lien upon other collateral, such security interest or lien will remain a lien upon property of the Debtor. The final hearing to consider on the cash collateral will be held by telephone on Dec. 17, 2007, 9:00 a.m., CST. Headquartered in Destin, Florida, MSB of Destin Inc. dba AJ's Restaurant & Marina, aka Southside Investments Inc., operates a restaurant and bar. The Debtor filed a voluntary Chapter 11 petition on Nov. 26, 2007 (Bankr. N.D. Fla. Case No. 07-31149). John E. Venn, Esq. of John E. Venn, Jr., P.A. represents the Debtors in its restructuring efforts. The Debtor's financial condition as of Sept. 30, 2007 shows total assets of $39,041,476 and total debts of $9,114,105. MSB OF DESTIN: Taps Professionals to Pursue Insurance Claims ------------------------------------------------------------ MSB of Destin Inc. seeks permission from the U.S. Bankruptcy Court for the Northern District of Florida to employ and retain professionals essential to the recovery of the insurance claims from Lloyds of London. The Debtor says that the underwriters at Lloyds of London has refused to pay the claims on its real property, equipment losses and business interruption sustained due to Hurricane Ivan. In this connection, the Debtor has employed Chesser & Barr to pursue policies of insurance claims. Pursuant to the case filed against Lloyds of London, Chesser & Barr has requested the Debtor to employ a consultant and public insurance adjuster to assist in the appraisal process. The Debtor employed J. Greene Associates Inc. as a public insurance adjuster. The Debtor then employed Scott M. Favre, an independent appraiser, pursuant to Mr. Greene's employment. Mr. Favre required to employ an engineer to provide an opinion of damages. The Debtors employed Claudio Navia. The Debtor tells the Court that Chesser & Barr was employed on a contingency fee basis, and Chesser & Barr has agreed to reduce the fee due to it under its contingency fee agreement by the amount of the fees due to Mr. Greene and Mr. Favre. The Debtor relates that Mr. Favre's professional bill is $27,000, and Mr. Navia's is $5,074. The Debtor did not disclose the professional fee of Mr. Greene. The Debtor assures the Court that these professionals are "disinterested" as that term is defined in the Section 101(14) of the Bankruptcy Code. Headquartered in Destin, Florida, MSB of Destin Inc. dba AJ's Restaurant & Marina, aka Southside Investments Inc., operates a restaurant and bar. The Debtor filed a voluntary Chapter 11 petition on Nov. 26, 2007 (Bankr. N.D. Fla. Case No. 07-31149). John E. Venn, Esq. of John E. Venn, Jr., P.A. represents the Debtors in its restructuring efforts. The Debtor's financial condition as of Sept. 30, 2007 shows total assets of $39,041,476 and total debts of $9,114,105. MSB OF DESTIN: Wants Court to Approve $100,000 DIP Financing ------------------------------------------------------------ MSB of Destin Inc. seeks permission from the U.S. Bankruptcy Court for the Northern District of Florida to secure $100,000 debtor-in- possession financing from M. Scott Laird and Ronald E. Gaylor. The Debtor says that it needs funds to operate its business from November to February, which constitutes its off-season, but is unable to obtain unsecured credit. The Debtor tells the Court that M. Scott Laird, a relative of the shareholders and a former officer of Debtor, and his partner, Ronald E. Gaylor have agreed to lend the sum of $100,000, to finance its December operations. The Lenders will utilize their personal credit facilities to obtain the funds. $85,000 of the loan will be obtained from a line of credit at Regions Bank and the remaining $15,000 will be from cash withdrawals on credit cards. The Debtor relates that the $85,000 will have a monthly interest of 1% of the outstanding balance owed; and the $15,000 will have a 13.99% interest with minimum monthly payments of $300. As adequate protection to the credit, the Debtor proposes to grant the Lenders a security interest in or lien upon the liquor license. To the best of Debtor's knowledge, the liquor license is not secured by a valid and perfected lien. The Debtor assures the Court that the unsecured creditors will not be prejudiced by the extension of credit upon the terms and conditions because the assets of the Debtor far exceed the indebtedness owed by the Debtor. Headquartered in Destin, Florida, MSB of Destin Inc. dba AJ's Restaurant & Marina, aka Southside Investments Inc., operates a restaurant and bar. The Debtor filed a voluntary Chapter 11 petition on Nov. 26, 2007 (Bankr. N.D. Fla. Case No. 07-31149). John E. Venn, Esq. of John E. Venn, Jr., P.A. represents the Debtors in its restructuring efforts. The Debtor's financial condition as of Sept. 30, 2007 shows total assets of $39,041,476 and total debts of $9,114,105. NICHOLS BROTHERS: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Nichols Brothers Boat Builders Inc. submitted to the U.S. Bankruptcy Court for the Western District of Washington its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $999,005 B. Personal Property 2,414,490 C. Property Claimed as Exempt D. Creditors Holding $8,701,113 Secured Claims E. Creditors Holding 863,469 Unsecured Priority Claims F. Creditors Holding 34,385,405 Unsecured Nonpriority Claims ---------- ----------- TOTAL $3,413,495 $43,949,987 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. NICHOLS BROTHERS: U.S. Trustee Forms Seven-Member Committee ----------------------------------------------------------- Ilene J. Lashinsky, United States Trustee for Region 18 appointed seven creditors to serve in the Official Committee of Unsecured Creditors in the case of Nichols Brothers Boat Builders Inc. The members are: 1. Hornbeck Offshore Services LLC Attn: Samuel Giberga, General Counsel 103 Northpark Blvd., Suite 300 Covington, LA 70433 Tel: (985) 727-2000 Fax: (985) 727-2006 http://www.hornbeckoffshore.com/ 2. RGWT Inc. Attn: Greg Bombard, President Berth 95 San Pedro, CA 90731 Tel: (310) 519-7971, Ext. 1002 Fax: (310) 519-1347 http://www.catalinaexpress.com/ 3. Pacific Dawn LLC Attn: Burton C. Parker, Sr. Mgr. 2324 NW 90th Street Seattle, WA 98117 Tel: (206) 794-5513 Fax: (206) 297-2949 http://www.teleport.com/ 4. The Glosten Associates Inc. Attn: Paul S. Smith, Director of Finance 20 1201 Western Ave., Suite 200 Seattle, WA 98101-2921 Tel: (206) 624-7850 Fax: (206) 682-9117 http://www.glosten.com/ 5. Puget Sound Pipe & Supply Co. Attn: Neil Weinstein, Controller 7816 S. 202nd Street Kent, WA 98032 Tel: (253) 796-9350 Fax: (253) 796-9363 http://www.pspipe.com/ 6. Water Tectonics Inc. Attn: James Mothersbaugh, President 802 - 134th Street SW, Suite 110 Everett, WA 98204 Tel: (425) 742-2062 Fax: (425) 742-2453 http://www.watertectonics.com/ 7. Alaska Copper Companies Inc. Attn: Michael McDowell, Credit Manager P.O. Box 3546 Seattle, WA 98124-3546 Tel: (206) 682-5800 Direct: (206) 382-6556 Fax: (206) 382-7337 http://www.alaskancopper.com/ Freeland, Washington-based Nichols Brothers Boat Builders Inc. -- http://www.nicholsboats.com/-- provide expertise in the construction of steel and aluminium 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. NICHOLS BROTHERS: Can Access Ice Floe's DIP Fund on Interim Basis ----------------------------------------------------------------- The Hon. Samuel J. Steiner of the U.S. Bankruptcy Court for the Western District of Washington gave Nichols Brothers Boat Builders Inc. interim approval to access debtor-in-possession financing from Ice Floe LLC. Judge Steiner also gave the Debtor interim approval to use Ice Floe's cash collateral. The Debtor relates to the Court that it is currently unable to meet its post-petition payroll, rent, and other obligations. The Debtor also says that it is a party a lease for real property with Langley Properties. The leased property includes the land on which the Debtor's shipyard sits in Freeland, Washington, a dock, and two houses which the Debtor uses for offices. At the time of its filing, Nichols Bros. owed the Landlord rent for the month of November 2007, in the approximate amount of $32,000. The Debtor projects that it will need $598,000 to operate through the end of its budget period. The Debtor tells the Court that Ice Floe is prepared to offer DIP financing and advance to the Debtor up to $350,000 to meet its budgetary requirements through the earlier of Jan. 1, 2008, or until the sale of its assets is approved and consummated. Ice Floe is the Debtor's prepetition secured lender, and, at the time of filing, is owed approximately $4,245,000, including contingent claims for undrawn letters of credit. Its prepetition debt is secured by a blanket security interest in all of the Debtor's assets, and a deeds of trust encumbering the real property owned by the Debtor, including a parcel of property on which the Debtor's office sits. Terms of the DIP Financing The proposed terms of the DIP financing are: a. lender may, at its sole discretion, advance up to $350,000 to the Debtor, as necessary to meet the Debtor's cash needs; b. cash advances under the credit line will bear interest at 15% per annum; c. in order to secure the obligations due under the credit line, the Debtor will grant lender a blanket security interest in all of the Debtor's real and personal property assets. The Debtor will also grant the lender a security interest in all of its property and its estate as existing collateral; d. the security interest and lien granted are referred to as the postpetition security interests, which will be deemed to secure; (i) obligations under the credit line; and (ii) the remainder of existing debt to the extent of the dimunition of the value of the existing collateral; e. the postpetition security interests will be: (i) senior in rank, priority and right of payment to other liens on the executive office parcel, furniture and postpetition collateral; f. lender will be granted a superpriority claim for the debts of the Debtor to the lender under the credit agreement; g. lender will be permitted to credit bid the obligations due under the credit agreement at a Section 363 sale of the U.S. Bankruptcy Code. The Court is set to hear the matter today, Dec. 13, 2007. 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. NOVASTAR FINANCIAL: Wachovia Extends Waiver Until January 4 ----------------------------------------------------------- NovaStar Financial Inc. obtained an extension from Dec. 7, 2007, to Jan. 4, 2008, of a waiver relating to an adjusted tangible net worth covenant with Wachovia Bank, N.A. The agreements affected by the extended waiver agreement are: 1. Master Repurchase Agreement (2007 Residual Securities) dated as of April 18, 2007, among Wachovia Investment Holdings, LLC, Wachovia Capital Markets, LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 2. Master Repurchase Agreement (2007 Whole Loan) dated as of May 9, 2007, among Wachovia Bank, National Association, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial Inc., NFI Holding Corporation and NovaStar Mortgage, Inc. 3. Master Repurchase Agreement (2007 Non-investment Grade) dated as of May 31, 2007, among Wachovia Investment Holdings, LLC, Wachovia Capital Markets, LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 4. Master Repurchase Agreement (2007 Investment Grade) dated as of May 31, 2007, among Wachovia Bank, N. A., Wachovia Capital Markets, LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corp. 5. Master Repurchase Agreement (New York) dated as of July 6, 2007, between Wachovia Bank, National Association and NovaStar Mortgage, Inc. In addition to the financing agreements listed, Wachovia also routinely engages in other ordinary course financial transactions with the company, including but not limited to financial derivative transactions, and has acted as an underwriter for certain securitizations sponsored by the company. About NovaStar Headquartered in Kansas City, Missouri, NovaStar Financial Inc. (NYSE: NFI) -- http://www.novastarmortgage.com/-- is a specialty finance company that originates, purchases, securitizes, sells and invests in loans and mortgage-backed securities. The company also services a large portfolio of residential loans. NovaStar Financial's balance sheet as of Sept. 30, 2007, showed total assets of $4.54 billion, total liabilities of $4.62 billion, resulting in total stockholders' deficit of $80.7 million. NY WESTCHESTER: Wants Until April 14 to File Chapter 11 Plan ------------------------------------------------------------ New York Westchester Square Medical Center asks the United States Bankruptcy Court for the Southern District of New York to further extend its exclusive periods to: a) file a Chapter 11 plan until April 14, 2008; and b) solicit acceptances of that plan until June 11, 2008. The Debtor tells the Court that it needs more time to obtain the Court's approval of its proposed transition plan and heal grant application, which are remain under consideration by the Department of Health to date. The Debtor relates that the transition plan details its proposal for the closure and reconstitution of its facilities and the transition of its assets to New York Presbyterian Hospital. The Debtor explains that the heal grant application will allow the Debtor to obtain state funding specifically allocated for the purpose of meeting the expenses and costs incurred. The Debtor's exclusive period to file a plan will expire Friday Dec. 14, 2007. Headquartered in Bronx, New York, New York Westchester Square Medical Center -- http://www.nywsmc.org/-- is a not-for-profit, community acute care hospital and certified stroke center that has served a working class population in the Bronx community since 1929. Its primary facility, located at 2475 St. Raymond Avenue, Bronx, New York 10461, houses 205 beds and provides acute adult medical and surgical care, emergency medicine and ambulatory services. NYWSMC is a membership corporation whose members are selected by the New York-Presbyterian Healthcare System, Inc. The company filed for chapter 11 protection on Dec. 19, 2006 (Bankr. S.D.N.Y. Case No. 06-13050). Burton S. Weston, Esq., at Garfunkel, Wild & Travis, P.C., represents the Debtor. Louis A. Scarcella, Esq., and Robert C. Yan, Esq., at Farrell Fritz PC, represent the Official Committee Of Unsecured Creditors. The Debtor's schedules showed total assets of $49,283,477 and total debts of $35,502,088. OCEANIA CRUISES: Regent Seven Deal Cues S&P to Affirm Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Oceania Cruises Inc. to stable from positive. At the same time, Standard & Poor's affirmed its ratings on Oceania, including the 'B' corporate credit rating. The outlook revision and ratings affirmation follow the announcement by Apollo Management L.P. (the majority owner of Oceania Cruises) that it has agreed to acquire the Regent Seven Seas Cruises operations from Carlson. While terms of the acquisition have not been publicly disclosed, it has been announced that Regent Seven Seas Cruises and Oceania Cruises will be placed under the ownership of Prestige Cruise Holdings Inc., a corporation controlled by Apollo, and that they will be maintained as two independent brands. Still, given the expected strategic relationship between these entities within Apollo's portfolio of cruise operators, S&P will likely view the combined operations as a consolidated enterprise, despite the likelihood that distinct financing structures will be established. Operating lease-adjusted leverage across the consolidated entity will likely increase from current levels at Oceania, given EBITDA multiples recently paid for similarly positioned cruise operators. With this in mind, we have determined that a stable outlook at the 'B' rating is appropriate until S&P are able to fully review the proposed financing structure and management's strategy for the acquired business. Oceania Cruise Inc. is a guarantor and intermediate holding company for Insignia Acquisition LLC, Nautica Acquisition LLC, and Regatta Acquisition LLC, each of which is a joint and several borrower under the company's credit facilities. Miami, Florida-headquartered Oceania currently owns and operates three identical 698-passenger cruise vessels. The 'B' rating reflects the company's vulnerability within the cruise sector because of its small fleet and niche market strategy, minimal cash flow diversity with three ships, high debt leverage, the capital- intensive nature of the industry, and the travel industry's susceptibility to economic cycles and global political events. As a partial offset, the vessels are of high quality, S&P have a favorable view of the niche segment in which Oceania operates, and the company has good visibility into future bookings. While the acquisition of Regent will expand Apollo's cruise portfolio into the luxury segment, offering a broader fleet and more diversified target market, S&P view the luxury segment as slightly more volatile than Oceania's existing niche. Given its private-company status, Oceania does not publicly disclose its financial statements. Credit measures continue to trend in line with the current rating. While the recently announced acquisition of Regent could potentially weaken the credit quality of the consolidated entity, S&P expect that the proposed capital structure of the new, consolidated entity will remain be in line with the current 'B' rating. POPE & TALBOT: Court Gives Final Approval on DIP Financing ---------------------------------------------------------- The Hon. Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware granted Pope & Talbot Inc. and its debtor-affiliates authority, on a final basis, to borrow up to $18,000,000 in term loans and up to $71,062,301 in revolving credit from Wells Fargo Financial Corporation, as DIP administrative agent, and Ableco Financial LLC, as DIP collateral agent. The Debtors' obligations under the DIP facility are secured by a first priority, perfected security interest and lien on all of the Debtors' assets, including all claims and causes of action under Chapter 5 of the U.S. Bankruptcy Code. The DIP Liens are subject to a carve-out for payment of Clerk of Court fees, U.S. Trustee fees, and bankruptcy professionals' fees; and certain permitted liens. The DIP Facility will terminate on the earlier of: (i) Feb. 15, 2008; (ii) the date of both (x) the effective date and substantial consummation of a Chapter 11 plan of reorganization and (y) the effective date and implementation of a plan of compromise or arrangement in the CCAA Proceedings; (iii) the date on which the stay of the CCAA Proceedings expires; (iv) the date of the closing of a sale of all or substantially all of the the Debtors' assets pursuant to Section 363 of the Bankruptcy Code and the CCAA; and (v) an earlier date on which all DIP Loans and other extensions of credit will become due and payable in accordance with the terms of DIP Loan Agreement and other DIP Loan Documents. The Debtors will use the DIP Loan proceeds for working capital purposes and to repay $25,000,000 in prepetition revolving loan obligations to Wells Fargo Financial Corporation Canada, as administrative agent. Judge Sontchi also authorized the Debtors to pay the required fees under the DIP Facility. Pursuant to the DIP Credit Agreement and Final DIP Order, the Debtors are required to consummate a sale of their wood products business by Jan. 31, 2008. They are required to close a sale of their pulp business by February 15. A full-text copy of the Final DIP Order is available at no charge at http://researcharchives.com/t/s?264e A full-text copy of the Debtors' DIP Budget is available at no charge at http://researcharchives.com/t/s?264f As reported in the Troubled Company Reporter on Dec. 10, 2007, the Official Committee of Unsecured Creditors in the Debtors' bankruptcy cases asked the Court for to deny the Debtors' proposed DIP Financing or make modifications to accommodate its objections. Jason W. Staib, Esq., at Blank Rome LLP, in Wilmington, Delaware, the Creditors Committee's proposed counsel, contended that, both prior to and since the commencement of the Debtors' Chapter 11 cases, the actions of the Debtors' secured lenders have been motivated by one central, unwavering and inappropriate goal of forcing a liquidation of the Debtors' assets at the expense of the Debtors' other creditor constituents., 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. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Court Gives Final Okay to Use of Cash Collateral --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has granted Pope & Talbot Inc. and its debtor-affiliates authority, on a final basis, to use their prepetition lenders' cash collateral. The prepetition lenders are granted adequate protection liens for any diminution in value of the cash collateral as a result of its use by the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' bankruptcy cases or any other interested party may commence until Feb. 8, 2008, any action challenging the validity, perfection, enforceability and extent of the prepetition lenders' liens or the Debtors' prepetition loan obligations. The Debtors' authority to use the lenders' cash collateral may terminate in the event they default on their obligations under an $89,000,000 DIP Credit Facility with Wells Fargo Financial Corporation, as DIP administrative agent, and Ableco Financial LLC, as DIP collateral agent. As reported in the Troubled Company Reporter on Nov. 27, 2007, the Court granted the Debtors authority, on an interim basis, to use the lenders' cash collateral in the Debtors' existing bank operating accounts in an amount not to exceed $14,800,000. Pope & Talbot Inc. president and chief executive officer Harold N. Stanton said that the Debtors require the continued use of any cash that they may have, as well as any cash receipts from outstanding accounts that they receive after the bankruptcy filing, to continue to (i) finance their operations, (ii) make essential payments like employee wages, payroll and other taxes, and (iii) for the purchase of goods, materials and other general corporate and working capital purposes in the ordinary course of the Debtors' businesses. 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. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Canadian Debtors Must Review Sale Terms, PwC Says ---------------------------------------------------------------- PricewaterhouseCoopers Inc., as monitor of the proceedings commenced by Pope & Talbot Ltd. and its subsidiaries under the Companies' Creditors Arrangement Act, tells the British Columbia Supreme Court that one of the conditions to close the Debtors' asset purchase agreement with International Forest Products Limited, for the sale of certain of their wood products business assets is the approval under the Forest Act (BC) of the transfer of the timber tenure. To grant the approval, the Monitor explains, the Ministry of Forest and Range requires that the Canadian Debtors have an arrangement in place for the payment of stumpage that may be due after the close of the transaction, for any arrears related to the period prior to the Closing Date. "This may require a three-way arrangement between the Ministry, the purchaser, and P&T," Greg Watson, PricewaterhouseCoopers Inc. president, points out. Accordingly, the Monitor has requested that the Canadian Debtors begin to explore the requirements for this arrangement so that it does not delay the closing of the transaction. The Monitor reports that another approval that the Canadian Debtors will require from the Ministry of Forest and Range will be the transfer of one small parcel of private land within Tree Farm License #23. The Monitor says that once transferred, the private land will remain within the TFL; however, approval of the transfer may require certain consultation with the local First Nations. The Monitor has also requested that the Canadian Debtors begin to explore the requirements for the consultation so that it does not delay the closing of the transaction. As reported in the Troubled Company Reporter on Dec. 10, 2007, the Hon. Christoher S. Sontchi of the United States Bankruptcy Court for the District of Delaware approved the stalking horse purchase agreement the U.S. Debtors entered into with InterFor. The Monitor also commented that it is satisfied that, on balance and under the present circumstances, the Interfor APA was the best offer available to the Debtors and is appropriate as a stalking horse bid. 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. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). PORTOLA CLO: S&P Assigns 'BB' Rating on $16.5MM Class E Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Portola CLO Ltd./ Portola CLO LLC's $465.5 million floating-rate notes due November 2021. The preliminary ratings are based on information as of Dec. 11, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to the respective classes, and by the income notes and overcollateralization; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The collateral manager's experience; -- The coverage of interest rate risks through hedge agreements; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Portola CLO Ltd./Portola CLO LLC Class Rating Amount ----- ------ ------ A AAA $360,000,000 B-1 AAA $44,500,000 B-2 AAA $5,000,000 C A $22,000,000 D BBB $17,500,000 E BB $16,500,000 Income notes NR $39,150,000 NR -- Not rated. PRORHYTHM INC: Files for Chapter 11 Protection in Delaware ---------------------------------------------------------- ProRhythm Inc. filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware. The decision to proceed with Chapter 11 was a result of the inability to reach an agreement with all involved parties on financing terms and participation. The company intends immediately to seek relief from certain contractual restrictions or blocking rights, which currently are an impediment to its financing efforts. ProRhythm expects to file its Plan of Reorganization, and to emerge from Chapter 11 within 6 months. Subject to court approval, the company has bridge financing in place and expects to meet all of its financial obligations going forward and will continue during this time to work toward completion of the focusAF Clinical Trial for the treatment of atrial fibrillation with the HIFU Ablation System. Headquartered in Ronkonkoma, New York, ProRhythm Inc. -- http://www.prorhythm.com/-- develops medical H.I.F.U. products, including a device for the treatment of atrial fibrillation. PRORHYTHM INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: ProRhythm, Inc. aka Transurgical, Inc. 105 Comac Street Ronkonkoma, NY 11779 Bankruptcy Case No.: 07-11861 Type of Business: The Debtor develops medical H.I.F.U. products, including a device for the treatment of atrial fibrillation. See http://www.prorhythm.com/ Chapter 11 Petition Date: December 11, 2007 Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Chun I. Jang, Esq. Mark D. Collins, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street, P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ David E. Acker loan $2,207,220 175 Harbor Road St. James, NY 11780 Century Medical, Inc. loan $953,740 1-6-4 Osaki, Shinagawa-Ku Tokyo 141-8588, Japan St. Jude Medical, Inc. trade debt $529,873 22400 Network Place Chicag, IL 60673-1224 Lighthouse Capital Partners loan $320,344 500 Drake's Landing Road Greenbrae, CA 94904 Three Wire Inc. trade debt $51,546 Homolka Hospital trade debt $28,990 John Hopkins Hospital trade debt $27,257 Sentara Norfolk General trade debt $26,063 Hospital William Beaumont Hospital trade debt $22,198 Piedmont Hospital trade debt $18,780 University of Oklahoma Medical trade debt $18,478 Center University of California Los trade debt $15,593 Angeles, Cardiac Arrhythmia Center University of Oklahoma trade debt $10,540 Clevaland Clinic trade debt $8,629 Lahey Clinic trade debt $8,255 Hospital of the University of trade debt $7,326 Pennsylvania Agility Centralized Research trade debt $7,692 Services, Inc. Ohio State University Medical trade debt $6,065 Center T.F.X. Medical Ireland trade debt $5,686 T.R.S. Technologies trade debt $5,380 QUALITY DISTRIBUTION: $60MM Boasso Deal Cues S&P' s Dev. Watch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' long-term corporate credit rating on Quality Distribution Inc. and removed the rating from CreditWatch, where it was placed with developing implications on Aug. 24, 2007. The CreditWatch placement followed the tank truck carrier's announcement that it had entered into an agreement to acquire Boasso America Corp. for approximately $60 million. The outlook is positive. Boasso America, headquartered in Chalmette, Louisiana, is a leading provider of tank container and depot services, with facilities located throughout the U.S. For the most recent fiscal year ended March 31, 2007, Boasso generated more than $70 million in revenues. "We expect the acquisition to enhance Quality's presence in the chemical import-export market, which has historically grown at a rate higher than that of bulk chemical transportation," said Standard & Poor's credit analyst Anita Ogbara. In addition, Boasso's margins have typically been higher than those of Quality, with the acquisition expected to be immediately accretive to earnings upon its closing, anticipated in the fourth quarter of 2007. Ratings on Quality Distribution Inc. reflect its participation in a low-margin, fragmented industry, combined with a weak, albeit improving, financial profile. Quality Distribution is the largest bulk tank truck carrier in North America. Through a network of more than 160 terminals, Quality Distribution LLC, a wholly owned subsidiary, transports a broad range of chemical products. The company also provides customers and affiliates with supplemental services such as tank washing. Although the company benefits from a strong market share in an industry with high barriers to entry, its customers often have transportation alternatives, depending on the nature of the shipment. RADIO SYSTEMS: S&P Affirms All Ratings and Revises Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Knoxville, Tennessee-based Radio Systems Corp. to stable from positive. At the same time, Standard & Poor's affirmed all of its ratings on the company, including its 'B' corporate credit rating. Radio Systems Corp had about $182 million in funded debt outstanding as of Sept. 30, 2007. "The outlook revision reflects our view that given the company's weaker-than-expected operating performance and some tightness under its financial covenants, we no longer see the potential to raise the ratings over the outlook period," said Standard & Poor's credit analyst Christopher Johnson. "However, the company has reduced leverage since its acquisition of Invisible Technologies Inc. in September 2006 to levels more appropriate for the current ratings. We could consider a negative outlook if the company's covenant cushion tightens and further pressures liquidity." The ratings on Radio Systems reflect its exposure to technology risk, overall narrow product focus, a highly competitive operating environment, moderate customer concentration with the company's key retailers, and some vulnerability to weak economic and retail environments. Somewhat offsetting these risks are the company's leading market share in the niche pet containment and training industry as well as favorable demographic industry trends in pet ownership and spending. REALOGY CORP: Moody's Affirms B3 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service assigned an SGL-3 speculative grade liquidity rating to Realogy Corporation and changed the rating outlook from stable to negative. At the same time, Moody's affirmed the B3 corporate family rating and all other credit ratings. Although Moody's base case forecast anticipates that residential home sale volume and pricing will stabilize beginning in late 2008 or early 2009, the negative rating outlook considers the potential for a more severe and protracted real estate downturn. The SGL-3 speculative grade liquidity reflects an adequate liquidity profile with modestly negative free cash flow from operations and adequate headroom under financial covenants over the next four quarters. If the downturn in the real estate market is more severe than anticipated by Moody's base case forecast over the next four quarters, then Moody's could lower the SGL rating. In such a scenario, free cash flow from operations could turn sharply negative and compliance with the leverage covenant could be challenging. Realogy is one of the largest real estate service companies in the United States with reported revenues of about $6.2 billion for the twelve months ended Sept. 30, 2007. The company operates in four segments: real estate franchise services, company owned real estate brokerage services, relocation services and title and settlement services. The franchise brand portfolio includes Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby's International Realty. REGAL ENTERTAINMENT: Moody's Affirms Ba3 Corp. Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the Ba3 corporate family and Ba3 probability of default ratings for Regal Entertainment Group, as well as the instrument ratings as shown below. The outlook remains stable. Regal Entertainment Group, -- Affirmed Ba3 Corporate Family Rating -- Affirmed Ba3 Probability of Default Rating -- Affirmed B2 Rating on Senior Unsecured Convertibles, LGD 6, 95% Regal Cinemas Corporation -- Affirmed Ba2 rating on Senior Secured Bank Credit Facility, LGD3, 38% Regal's Ba3 corporate family rating reflects high leverage of approximately 5.2 times debt-to-EBITDA and expectations that dividends will continue to consume much of Regal's free cash flow. Furthermore, like all theater operators, Regal operates in a mature industry with low to negative growth potential, high fixed costs and increasing competition from alternative media, and the company remains vulnerable to the studios' ability to create product that will drive attendance. However, as the largest domestic operator Regal benefits from scale and geographic diversity. Good liquidity from internally generated cash flow, balance sheet cash and an undrawn revolver also supports the rating. This liquidity, combined with the incremental term loan facility established in October 2006, is ample to satisfy the $124 million of outstanding convertible notes that mature in May 2008. Finally, Moody's considers Regal's ownership in National CineMedia additive to its enterprise value. NCM remains outside the bank security package so lenders do not have a direct claim on it, but Regal continues to derive some cash flow from NCM. Regal Entertainment Group is the parent company of Regal Cinemas and its subsidiaries. Regal operates the largest theater circuit in the United States, consisting of 6,355 screens in 526 theaters in 39 states. The company maintains its headquarters in Knoxville, Tennessee. RICHMOND REDEV'T: Moody's Holds Ba3 Rating on $5.6MM Bonds ---------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 rating on the Richmond Redevelopment and Housing Authority's $5.6 million of outstanding Multi-Family Housing Revenue Bonds (Berkeley Place/Warwick Place Apartments) Series 1995A. The rating affirmation is based upon Moody's review of financial statements for 2006, interim financial statements through 10/31/2007 and occupancy reports from management. The stable outlook has also been affirmed based upon stable occupancy and debt service coverage consistent with this rating category. Legal Security: The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Credit Strengths -- Stable occupancy history -- Market forecasts for Richmond that indicate multi-family occupancy approximately 94% for the next three years and average annual rent growth of over 2.5% for the same time period Credit Challenges -- The building is older as it was constructed in 1963 -- Absence of a lock box payment system -- Absence of a reserve and replacement fund -- Debt service reserve sized to � maximum annual debt service Recent developments/results: Debt service coverage for the full year 2006 was 1.17x. Interim statements indicate debt service coverage will likely remain in the same range for the full year 2007. Occupancy continues to be credit strength for the properties as they have a weighted average of 95.5% in September 2006. Market data provided by Torto Wheaton Research indicate that multi-family occupancy in Central Richmond for 2007 is 94.5%. TWR forecasts that occupancy in the Richmond market will stay at or above 93.9% through 2009 and rent inflation will average 2.65% through the same time period. Moody's believes that the debt service coverage in 2006 and the forecast for 2007 are appropriate for the Ba3 rating category when considering a stable market balanced with credit challenges listed above. Outlook The outlook for the bonds is stable base upon a stable occupancy history and a stable market. RJO HOLDINGS: Increased Leverage Cues Moody's to Lower Rating ------------------------------------------------------------- Moody's Investors Service downgraded to B3 from B2 the corporate family rating of RJO Holdings Corp. The rating outlook is negative. The agency noted that the downgrade reflects the sizable increase in the company's cash-flow leverage as a result of both earnings weakness and $50 million of additional borrowing under RJO's revolving credit facility. RJO's second and third quarter results have been negatively affected by the risk aversion of its end- clients in the introducing broker segment. In many cases, RJO's clients have been reducing their trading activity and balances in the wake of unusually high market volatility. While Moody's considers this underperformance to be cyclical and not a reflection of any weakening in RJO's franchise strength, it does nevertheless put significant pressure on the company's ability to service its debt while remaining in compliance with indenture covenants. Furthermore, as a result of drawing on its revolving credit facility in order to maintain required regulatory capital at its regulated Futures Commission Merchant subsidiary, RJO is now faced with higher indebtedness and interest costs and, with the revolver now fully drawn, has fewer sources of external liquidity. . The negative rating outlook reflects Moody's expectations that RJO's financial flexibility will continue to be constrained by its high level of indebtedness. If earnings do not rebound over the next several quarters, the company may also have difficulty meeting its leverage covenant, short of seeking an additional infusion of equity into the firm. At the same time, RJO's scale and operating leverage mean that if business conditions recover, the firm should generate substantial amounts of free cash flow to reduce debt. The outlook would be changed to stable if this occurs and leverage returns to more normal levels. These ratings were lowered: RJO Holdings Corp.: -- Corporate Family Rating -- B3 from B2 -- $385 Million 7-Year First-Lien Term Loan -- B3 from B2 -- $50 Million 6-Year First-Lien Revolving Credit Facility -- B3 from B2 -- $150 Million 8-Year Second-Lien Term Loan -- Caa1 from B3 The outlook on all the ratings is negative. RJO Holdings Corp. is a holding company whose principal subsidiary, R.J. O'Brien & Associates, Inc., is among the largest US independent futures brokerage firms and is a full clearing member of all the major US futures exchanges. For the year ended Dec. 31, 2006, the company reported revenues of $325 million and over $2.1 billion in total segregated customer assets. SF CONCEPTS: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------ Debtor: S.F. Concepts, Inc. dba Simply Fondue 770 East Road to Six Flags Arlington, TX 76011 Bankruptcy Case No.: 07-42929 Type of Business: The Debtors own and manages a restaurant chain. See http://www.simplyfondue.com/ Chapter 11 Petition Date: December 11, 2007 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Eric A. Liepins, Esq. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's Four Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $1,768,160 Special Procedures Room 9A20 1100 Commerce Street, 5024 DAL Dallas, TX 75242 Metroplex Retail Concepts, I, $68,997 L.P. c/o James Billingsley 2800 Bank One Center Dallas, TX 75201 Advance Me, Inc. $19,711 600 Town Park Lane Suite 500 Kennesaw, GA 30144 Suez Energy $3,860 SHENANDOAH VIEW: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Shenandoah View Court, L.L.C. 4520 South Sherwood Forest Boulevard Suite 104-283 Baton Rouge, LA 70816 Bankruptcy Case No.: 07-11740 Chapter 11 Petition Date: December 11, 2007 Court: Middle District of Louisiana (Baton Rouge) Debtor's Counsel: William E. Steffes, Esq. Steffes, Vingiello & McKenzie, L.L.C. 13702 Coursey Boulevard, Building 3 Baton Rouge, La 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 Debtor's Financial Condition as of November 2007: Total Assets: $1,477,319 Total Debts: $1,841,057 Debtor's Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ 2121 Design $14,346 3388 Brentwood Drive Baton Rouge, LA 70806 Custom Design Builders $9,162 4520 South Sherwood Forest Boulevard, Suite 104-283 Baton Rouge, LA 70816 R. Wayne Pugh & Co. $6,800 7423 Picardy, Suite F Baton Rouge, LA 70808 Salley, Hite, Rivera & Mercer $5,238 Hannis T. Bourgeois $595 SHERMAN SENIOR: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Sherman SeniorHealth Services, Inc. dba Community Specialty Hospital 1111 Gallagher Drive Sherman, TX 75090 Bankruptcy Case No.: 07-42901 Type of Business: The Debtor operates a health care business. Chapter 11 Petition Date: December 7, 2007 Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Hughes Luce LLP Daniel I. Morenoff, Esq. Jeffrey R. Fine, Esq. 1717 Main Street, Suite 2800 Dallas, TX 75201 Tel: (214) 939-5645 Fax: 214-939-5849 Total Assets: $1,382,148 Total Debts: $6,266,950 Debtor's list of its 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Senior Health, Inc. $2,560,000 49 Music Square Nashville, TN 37203 Medical Provider Agreements $2,300,000 c/o Trailblazer Health Enterprises 8330 LBJ Expressway Executive Center III Dallas, TX 75243 Fuller Selle, Inc. $375,730 777 East Sonterra Boulevard San Antonio, TX 78258 Wilson N. Jones Memorial Hospital $346,530 Fifth Third Leasing Company $122,041 Owens & Minor $58,617 Champion Energy Services $47,257 Labcorp $41,593 American Express $38,603 Metro Linen Company $28,124 Spheris $20,814 Bank of America Texas Mutual Insurance Co. $19,797 Roadrunner X-Ray, Inc. $17,485 Amlin Pump Service $17,073 Express Services, Inc. $15,711 Corporate Express, Inc. $14,163 American National Insurance Co. $13,408 Xerox Corp $10,785 SILVERTON CASINO: S&P Withdraws Ratings at Company's Request ------------------------------------------------------------ Standard & Poor's Rating Services has withdrawn its ratings on Las Vegas-based Silverton Casino LLC at the company's request. Ratings List Ratings Withdrawn To From -- ---- Silverton Casino LLC Corporate Credit Rating NR B/Stable/-- Second Mortgage Notes NR B- (Recovery Rating: 5) SIMON WORLDWIDE: Sept. 30 Balance Sheet Upside-Down by $13.4 Mil. ----------------------------------------------------------------- Simon Worldwide Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $21.5 million in total assets, $1.5 million in total liabilities, and $33.4 million in redeemable preferred stock, resulting in a $13.4 million total stockholders' deficit. The company reported a a net loss of $553,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $408,000 in the same period last year. The company generated no sales or gross profits during the three months ended Sept. 30, 2007, and 2006. 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?2655 Going Concern Doubt BDO Seidman LLP, in Los Angeles, expressed substantial doubt about Simon Worldwide Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has a stockholders' deficit, has suffered significant losses from operations, has no operating revenue and faces significant legal actions. Since August 2001, the company has concentrated its efforts on reducing its costs and settling numerous claims, contractual obligations, and pending litigation. The Board of Directors of the company continues to consider various alternative courses of action for the company going forward, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions and will continue to do so until it can determine a course of action going forward to best benefit all shareholders, including the holder of the company's outstanding preferred stock. About Simon Worldwide Headquartered in Los Angeles, Calif., Simon Worldwide Inc. was a diversified marketing and promotion agency with offices throughout North America, Europe and Asia. The company had worked with some of the largest and best-known brands in the world and had been involved with some of the most successful consumer promotional campaigns in history. Through its wholly owned subsidiary, Simon Marketing Inc., the company provided promotional agency services and integrated marketing solutions including loyalty marketing, strategic and calendar planning, game design and execution, premium development and production management. In August 2001, McDonald's Corp, its principal customer, terminated its 25-year relationship with the company as a result of the embezzlement by a former employee of winning game pieces from McDonald's promotional games it administered. Other customers also terminated their relationships with the company. SOUNDVIEW HOME: Moody's Downgrades Ratings on 27 Tranches --------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 27 tranches and placed on review for possible downgrade the ratings of 11 tranches from 4 deals issued Soundview Home 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: Soundview Home Loan 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 A2, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Ba1, previously A3, -- Cl. M-7, Downgraded to Ba3, previously Baa1, -- Cl. M-8A, Downgraded to B3, previously Baa2, -- Cl. M-8B, Downgraded to B3, previously Baa2, -- Cl. M-9, Downgraded to Caa2, previously Baa3, -- Cl. M-10, Downgraded to C, previously Ba1. Issuer: Soundview Home Loan Trust 2007-NS1, Asset-Backed Certificates, Series 2007-NS1 -- 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. M-10, Downgraded to Caa2, previously Ba1. Issuer: Soundview Home Loan Trust 2007-OPT1 -- 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 Baa2, previously A2, -- Cl. M-6, Downgraded to Ba2, previously A3, -- Cl. M-7, Downgraded to B1, previously Baa1, -- Cl. M-8, Downgraded to B3, previously Baa2, -- Cl. M-9, Downgraded to Caa2, previously Baa3, -- Cl. M-10, Downgraded to C, previously Ba1. Issuer: Soundview Home Loan Trust 2007-WMC1 -- Cl. I-A-1 Currently Aaa on review for possible downgrade, -- Cl. II-A-1 Currently Aaa on review for possible downgrade, -- Cl. III-A-3 Currently Aaa on review for possible downgrade, -- Cl. III-A-4 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 B3, previously A1, -- Cl. M-5, Downgraded to Caa3, previously A2, -- Cl. M-6, Downgraded to Ca, previously A3, -- Cl. M-7, Downgraded to C, previously Baa1, -- Cl. M-8, Downgraded to C, previously Baa2, -- Cl. M-9, Downgraded to C, previously Baa3, -- Cl. M-10, Downgraded to C, previously Ba1. SUNDALE LTD: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Sundale, Ltd. fka Sundale Associates, Ltd. 9100 North Kendall Drive Miami, FL 33176 Bankruptcy Case No.: 07-21016 Type of Business: The Debtor is an operative builder. Chapter 11 Petition Date: December 12, 2007 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Peter D. Russin, Esq. Meland, Russin & Budwick, P.A. 200 South Biscayne Boulevard, Suite 3000 Miami, FL 33131 Tel: (305) 358-6363 Fax: (305) 358-1221 Estimated Assets: $50 Million to $100 Million Estimated Debts: $10 Million to $50 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Armando Codina Unknown 2855 LeJeune Road, 4th Floor Miami, FL 33134 C/C.S.M.B. Associates, Ltd. Unknown c/o Lawrence Gragg White and Case 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 C.S.M.B. Associates, Ltd. Unknown c/o Lawrence Gragg White and Case 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 Codina Group, Inc. Unknown 2855 LeJeune Road, 4th Floor Miami, FL 33134 Codina Realty Services, Inc. Unknown 2855 LeJeune Road, 4th Floor Miami, FL 33134 C.S.M.B. Condominium, L.L.C. Unknown c/o Lawrence Gragg White and Case 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 C.S.M.B. G.P., Inc. Unknown c/o Lawrence Gragg White and Case 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 F.P.&L. Utilities Unknown General Mail Facility Miami, FL 33188-0001 Miami Dade Water and Sewer Utilities Unknown Department P.O. Box 026055 Miami, FL 33102-6055 Miami-Dade County Tax Real Property Unknown Collector Taxes 140 West Flagler Street, 14th Floor Miami, FL 33130 TECUMSEH PRODUCTS: Completes $10 Mil. Auto & Specialty Biz Sale --------------------------------------------------------------- Tecumseh Products Company has completed the sale of its automotive & specialty business operations, to be known as Von Weise USA Inc., to an affiliate of Sun Capital Partners Inc. The purchase price was $10 million in cash. The transaction included Tecumseh's facilities in Eaton Rapids, Michigan; Nappanee, Indiana; Juarez, Mexico; and Cambridge, Ontario. The automotive & specialty business, which operated under the "Fasco" name prior to the sale of other divisions of the Electrical Components business segment to Regal Beloit Corporation, is conducting business as "Von Weise USA Inc." in the U.S., "TPC Motores de Mexico, S. de R.L. de C.V." in Mexico, and "Von Weise of Canada Company" in Canada, and will be doing business henceforth under the Von Weise brand. Rothschild Inc. served as financial advisor to Tecumseh. About Sun Capital Partners Inc. Sun Capital Partners Inc. is a private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital affiliates have invested in and managed more than 170 companies worldwide since Sun Capital's inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York, and affiliates with offices in London, Tokyo, and Shenzhen. About Tecumseh Products Company Headquartered in Tecumseh, Michigan, Tecumseh Products Company (Nasdaq: TECUA, TECUB) -- http://www.tecumseh.com/-- manufactures hermetic compressors for air conditioning and refrigeration products, gasoline engines and power train components for lawn and garden applications, submersible pumps, and small electric motors. The company has offices in Italy, United Kingdom, Brazil, France, and India. In March of 2007, the company's Brazilian engine subsidiary, TMT Motoco, was granted permission by the Brazilian courts to pursue a judicial restructuring, similar to a U.S. filing for Chapter 11 bankruptcy protection. The TMT Motoco filing in Brazil constituted an event of default with our domestic lenders. On April 9, 2007, the company obtained amendments to its First and Second Lien Credit Agreements that cured the cross-default provisions triggered by the filing in Brazil. TOM STYLES: Case Summary & Eight Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tom Styles Automotive dba Pensacola Polaris 1614 South Main Street Atmore, AL 36502 Bankruptcy Case No.: 07-13724 Type of Business: The Debtor is a car dealer. Chapter 11 Petition Date: December 11, 2007 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Michael B. Smith, Esq. P.O. Box 40127 Mobile, AL 36640 Tel: (251) 441-8077 Total Assets: $440,921 Total Debts: $1,028,321 Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Small Dealers Assistance value of collateral: $582,000 2700 Ridgewood Circle $128,571 Northwest Atlanta, GA 30327 Regions Bank Bank loan $117,563 598 East Church Street Atmore, AL 36502 Gulf States Auto Auction Trade debt; value $119,000 6615 Mobile Highway of collateral: Pensacola, FL 32526 $128,571; value of security: $9,571 Dr. Brent Thomas Bank loan $92,500 Whitney Bank Bank loan $65,547 Polaris Acceptance Corp. Trade debt $34,219 I.R.S. $11,492 State of Alabama $6,000 TRANSDIGM INC: Moody's Holds All Ratings with Stable Outlook ------------------------------------------------------------ Moody's affirmed all ratings of TransDigm, Inc. including the B1 Corporate Family Rating, Ba3 senior secured bank credit facilities rating, and B3 senior subordinated notes rating, and changed the outlook to stable from negative. Moody's stabilized the company's ratings outlook based on strong financial results for the fiscal year ending Sept. 30, 2007, which resulted in improved credit metrics and provided evidence that the integration of Aviation Technologies, Inc., the company's largest acquisition to date, is being successfully implemented. Leverage pro forma for a full year of ATI has improved to under five times while interest coverage is in the mid two-times range. The company maintained high operating margins for FY07 despite the dilutive impact of ATI, and generated substantial free cash flows despite a significant increase in debt and interest expense associated with the ATI acquisition. TransDigm's B1 Corporate Family Rating continues to reflect the company's high leverage as well as uncertainty about the size and funding of potential future acquisitions. The rating also considers TransDigm's demonstrated ability to maintain robust profit margins while growing revenues through acquisitions as well as organically. TransDigm's strong margins typically lead to substantial free cash generation, which, while supportive of the rating, is expected to be used primarily to fund future acquisitions or other shareholder enhancements rather than debt repayment. TransDigm's revenues, $630 million pro forma FY07, continue to benefit from strong and relatively stable commercial and military aerospace aftermarket demand and, following the integration of ATI, have achieved a volume such that risk associated with modest acquisitions in the future should be minimal. The stable outlook reflects Moody's expectation for steady operating margins based on strong aftermarket demand and successful integration of modestly-sized acquisitions over the near term. Ratings or their outlook could be negatively impacted if TransDigm were to significantly increase debt levels for a transformational acquisition or potential shareholder enhancement, such as share repurchases, or if margins were to systematically deteriorate resulting in the following metrics: -- Leverage of greater than 6.0 times; -- Interest Coverage less than 1.5 times; or -- Retained Cash Flow to debt of less than 5%. The ratings or their outlook could be revised upward if the company were to grow revenues while maintaining stable margins, or repay debt thereby sustaining metrics at these levels: -- Leverage of less than 4.5 times; -- Interest Coverage greater than 2.5 times; or -- Retained Cash Flow to debt of at least 10%. These ratings have been affirmed/revised: Issuer: TransDigm Inc. -- Senior secured revolving credit facility due 2012, at Ba3 (LGD2-29%) -- Senior secured term loan due due 2013, at Ba3 (LGD2-29%) -- Senior subordinated notes due 2014, at B3 (LGD5-84%) Outlook Actions: Issuer: TransDigm Inc. -- Outlook, Changed To Stable From Negative Headquartered in Cleveland, Ohio, TransDigm Inc. is a leading manufacturer of highly engineered aerospace components to commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the U.S. Government. TransDigm Inc. is the wholly-owned subsidiary of TransDigm Group Inc. TRANSGLOBAL PROPERTIES: Case Summary & Two Largest Creditors ------------------------------------------------------------ Debtor: Transglobal Properties, L.L.C. 555 East Ocean Boulevard, Suite 224 Long Beach, CA 90802-5050 Bankruptcy Case No.: 07-21581 Chapter 11 Petition Date: December 11, 2007 Court: Central District Of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Todd C. Ringstad, Esq. Ringstad & Sanders, L.L.P. 2030 Main Street, Suite 1200 Irvine, CA 92614 Tel: (949) 851-7450 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Armstrong & Brooks Consulting engineering services $65,998 Engineers, Inc. 1530 Consumer Circle, Suite B Corona, CA 92880 County of Riverside property taxes $10,000 Paul McDonnell, Treasurer P.O. Box 12005 Riverside, CA 92502-2205 TRIPLE H: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Triple H Auto & Truck Sales, Inc. 7141 Theodore Dawes Road Theodore, AL 36582 Bankruptcy Case No.: 07-13734 Type of Business: The Debtor sells used cars and trucks in retail. Chapter 11 Petition Date: December 11, 2007 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Michael B. Smith, Esq. P.O. Box 40127 Mobile, AL 36640 Tel: (251) 441-8077 Total Assets: $1,110,000 Total Debts: $654,368 Debtor's 13 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ New Horizon $27,600 P.O. Box 2966 Mobile, AL 36652 Chrysler Auto Finance $25,270 39200 West Six Mile Road Livonia, MI 48152 Hancock Bank $16,100 P.O. Box 4020 Gulfport, MS 39502 E.L.M. $16,000 Army Aviation $16,000 Hancock Bank $15,000 State Of Alabama $12,520 Citi Finance $12,246 Americredit $12,000 Chase Auto Finance $8,233 County Of Mobile $6,260 Harrison Finance $4,139 American General Auto $3,000 UNIVERSAL GUARDIAN: Posts $2.2 Million Net Loss in Third Quarter ---------------------------------------------------------------- Universal Guardian Holdings Inc. reported a net loss of $2,293,939 on net revenue of $4,451,909 for the third quarter ended Sept. 30, 2007, compared with a net loss of $2,959,656 on net revenue of $5,445,961 in the corresponding period a year ago. The decline in revenues for the three-month interim period ended Sept. 30, 2007, as compared to the corresponding interim period in fiscal 2006, was principally attributable to the inability of the company's Services Group to provide a number of services under existing contracts in Afghanistan due to delays in funding from the U.S. government and new government-imposed restrictions on private security travel. Selling, general and administrative expenses for the three-month interim period ended Sept. 30, 2007, was $2,727,643, as compared to $5,639,562 for the corresponding interim period in fiscal 2006. On July 30, 2007, the company eliminated significant operational and overhead costs by suspending U.S.- based operations. Interest expense for the three-month interim period ended Sept. 30, 2007 was $235,964, as compared to $423 for the corresponding interim period in fiscal 2006. Amortization of debt discount for the three-month interim period ended Sept. 30, 2007 was $565,157,as compared to $0 for the corresponding interim period in fiscal 2006. At Sept 30, 2007, the company's consolidated balance sheet showed $7,795,840 in total assets, $6,600,314 in total liabilities, and $1,170,262 in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $2,680,588 in total current assets available to pay $3,690,045 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2654 Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 30, 2007, AJ Robbins PC in Denver, expressed substantial doubt about Universal Guardian Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has experienced recurring losses and negative cash flows from operations and has a capital deficit at Dec. 31, 2006. About Universal Guardian Based in Newport Beach, Calif., Universal Guardian Holdings Inc. (OTC BB: UGHO.OB) -- http://www.UniversalGuardian.com/-- and its subsidiaries provide a comprehensive range of security products, systems, and services designed to mitigate terrorist and security threats worldwide. UNITED RENTALS: Tender Offer Expiration Date Extended to Dec. 21 ---------------------------------------------------------------- United Rentals, Inc., disclosed that the expiration time and date for the previously announced debt tender offers and consent solicitations being made by the company's wholly owned subsidiary, United Rentals (North America), Inc., have been extended to 12:00 midnight, New York City time, on December 21, 2007. The Offers, which are being conducted pursuant to URNA's Offer to Purchase and Consent Solicitation Statement and related Consent and Letter of Transmittal, dated Oct. 16, 2007, relate to URNA's outstanding: -- 6-1/2% Senior Notes due 2012; -- 7-3/4% Senior Subordinated Notes due 2013; and -- 7% Senior Subordinated Notes due 2014. The extension of these tender offers demonstrates that the company continues to fulfill all of its obligations under the merger agreement with affiliates of Cerberus Capital Management, L.P. As previously disclosed by the company, it stands ready to complete the merger transaction on the agreed-upon terms. As of 5:00 p.m., New York City time, on Dec. 7, 2007, URNA had received tenders of Notes and deliveries of related consents from holders of: -- approximately $999,138,850, or 99.91%, of the $1,000,000,000 aggregate principal amount of the 6-1/2 % Notes outstanding, -- approximately $517,994,000, or 98.67%, of the $525,000,000 aggregate principal amount of the 7 3/4 % Notes outstanding, and -- approximately $371,864,093, or 99.16%, of the $375,000,000 aggregate principal amount of the 7% Notes outstanding. The consent payment deadline relating to the Notes expired on Oct. 29, 2007 at 5:00 p.m., New York City time, and has not been extended. Except for the extension of the expiration time and date, the Offers and the Statements remain in full force. URNA's obligation to accept for purchase, and to pay for, Notes and consents validly tendered and not withdrawn pursuant to the Offers remains subject to the terms and conditions of the Statements. These include the satisfaction or waiver of certain conditions, including, among others, the consummation of the contemplated merger of RAM Acquisition Corp., an entity indirectly controlled by affiliates of Cerberus, with and into the Company pursuant to the terms of the merger agreement and URNA having sufficient available funds to pay the total consideration with respect to all Notes. In light of Cerberus' recent repudiation of its obligations under the merger agreement, there can be no assurances that the Merger will occur or that the Offers will be consummated. The company has recently initiated litigation in the Delaware Court of Chancery against RAM and its parent, RAM Holdings, Inc., seeking to compel the two RAM entities to complete the agreed-upon transaction. URNA has retained Credit Suisse Securities (USA) LLC, Banc of America Securities LLC, Morgan Stanley & Co. Incorporated and Lehman Brothers Inc. to serve as the Dealer Managers and Solicitation Agents for the Offers. Requests for documents may be directed to: D.F. King & Co., Inc. Tender Agent and Information Agent Tel: (800) 488-8095 (toll-free) or (212) 269-5550 (collect). Questions regarding the Offers may be directed to: * Credit Suisse Securities (USA) LLC, Tel: (212) 325-4951 (collect), * Banc of America Securities LLC Tel: (888) 292-0070 (toll-free) or (704) 388-9217 (collect), * Morgan Stanley & Co. Incorporated Tel: (800) 624-1808 (toll-free) or (212) 761-1864 (collect), or * Lehman Brothers Inc. Tel: (800) 438-3242 (toll-free) or (212) 528-7581 (collect). About United Rentals United Rentals Inc. -- http://www.unitedrentals.com/-- (NYSE: URI) is an equipment rental company with an integrated network of over 690 rental locations in 48 states, 10 Canadian provinces and one location in Mexico. The company's approximately 11,500 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent over 20,000 classes of rental equipment with a total original cost of $4.3 billion. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Standard & Poor's Ratings Services said that its 'BB-' corporate credit ratings on United Rentals Inc. and its wholly owned subsidiary United Rentals Inc. remain on CreditWatch with negative implications. VICTORY MEMORIAL: Gets Bridge Order Extending Exclusive Periods --------------------------------------------------------------- The Honorable Carla E. Craig of the United States Bankruptcy Court for the Eastern District of New York issued a bridge order extending Victory Memorial Hospital and its debtor affiliates' exclusive periods to: a) file a Chapter 11 liquidation plan until Feb. 11, 2008; and b) solicit acceptances of that plan until April 14, 2008. As reported in the Troubled Company Reporter on Nov. 30, 2007, the Debtors ask the Court to further extend their exclusive periods to file a Chapter 11 plan until March 11, 2008. The Debtors told the Court that they need more time to file and obtain court approval of proposed sale motion. The Debtors also need more time to liquidate their remaining assets, review secured and unsecured claims and prepare a liquidating plan and disclosure statement. According to the Debtors, they are in the process of negotiating a term sheet with a proposed stalking horse bidder that may result in approximately $64 million in value for their assets. The Debtors anticipated in filing a motion to approve bid and auction procedures under Section 363 of the Bankruptcy Code. Furthermore, the Debtors are waiting for the New York State Department of Health's decision with respect to: a) the need for an emergency department at the Debtors' facility; and b) the amount of the fund grant from the DOH to assist in impelementing the recomendations of the New York State Commission on healthcare facilities. Timothy W. Walsh, Esq., at DLA Piper U.S. LLP, says that the Debtors were advised that the DOH intended to provide additional funds to repay the Debtors' current DIP facility as well as additional DIP financing in addition to the $25 million funds already allocated to the Debtors. The DOH's commitment to repay the DIP financing with additional fund, Mr. Walsh notes, relieves the estates of significant administrative claims to the benefit of the Debtors' unsecured creditors. The Debtors' exclusive period to file a plan expired on Nov. 15, 2007. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. WILLIAMS PARTNERS: Completes $750 Million Wamsutter Buyout ---------------------------------------------------------- Williams Partners L.P. has completed its acquisition of certain membership interests in Wamsutter LLC, the limited liability company that owns the Wamsutter system, from Williams Companies Inc. for $750 million. The Wamsutter system includes an approximate 1,700-mile natural gas gathering system in the Washakie Basin in south-central Wyoming and the Echo Springs cryogenic processing plant near Wamsutter, Wyoming. Williams Partners completed the transaction after closing a public equity offering of 9.25 million common units that yielded net proceeds of approximately $335.2 million. The partnership financed the remainder of the purchase price through utilizing $250 million of term loan borrowings, issuing approximately $157.2 million of common units to Williams, and increasing its general partner's capital account by approximately $10.3 million to maintain its 2% general partner interest. The term loan is under Williams Partners' new $450 million five- year senior unsecured credit facility that became effective simultaneous with the closing of the Wamsutter transaction. The remaining $200 million of capacity under the new facility is available for revolving credit borrowings. The board of directors of the general partner of Williams Partners approved the transaction based on a recommendation from its conflicts committee. The conflicts committee, which is comprised of independent directors, retained independent legal and financial advisers to assist it in evaluating and negotiating the transaction. About Williams Companies Inc. Headquartered in Tulsa, Oklahoma, Williams Companies Inc.(NYSE: WMB) - http://www.williams.com/-- through its subsidiaries, finds, produces, gathers, processes and transports natural gas. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, and Eastern Seaboard. About Williams Partners L.P. Headquartered in Tulsa, Oklahoma, Williams Partners L.P. (NYSE: WPZ) - http://www.williamslp.com/-- is a publicly traded master limited partnership formed by The Williams Companies Inc. that owns natural gas gathering, transportation, processing and treating assets serving regions where producers require large scale and reliable services, including the Gulf of Mexico and the San Juan Basin in New Mexico and Colorado. The partnership also serves the natural gas liquids market through its NGL fractionating and storage assets. The general partner is Williams Partners GP LLC. * * * As reported in the Troubled Company Reporter on Nov. 14, 2007, Moody's Investors Service placed the Ba3 corporate family rating of Williams Partners L.P. and its affiliate, Williams Partners Finance Corporation, under review for possible upgrade. YAZAKI INT'L: S&P Withdraws 'B+' Rating at Company's Request ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B+' corporate credit rating on Yazaki International Corp. at the company's request. The Canton, Michigan-based automotive supplier has no rated debt. * Chadbourne & Parke-London Adds 3 Partners to Finance Practice -------------------------------------------------------------- Jon Nash, Sohail Barkatali and Agnieszka Klich are joining Chadbourne & Parke LLP's London office as partners and members of the project finance practice. The three are coming to Chadbourne from Berwin Leighton Paisner in London, where they had been partners working together on transactions in the finance department. "The addition of Jon, Sohail and Agnieszka is a major enhancement of Chadbourne's ability to serve our project finance clients," Chadbourne managing partner Charles K. O'Neill, said. "They are exceptionally experienced lawyers who have worked on major projects throughout the Middle East and Africa, across all sectors of project finance. They are a most welcome addition to our practice and the London office." The three lawyers are joining a practice that has substantially expanded its resources over the past year. In March 2007, three partners and three associates joined Chadbourne's project finance practice in the Los Angeles office and the group there has grown to 12 lawyers. In May, the firm opened an office in Dubai, the United Arab Emirates, to better serve energy and other clients in the Middle East. And in October, the firm elected three lawyers with project finance and energy experience to the partnership. Worldwide, Chadbourne has over 90 lawyers in its project finance practice. "We very much enjoyed our years at Berwin Leighton Paisner, but the opportunity to join a firm with such a deep history of energy and project finance work was one we could not ignore," Mr. Nash said. "We look forward immensely to contributing our part to such a prestigious worldwide practice." "We are delighted to welcome Jon to the firm and look forward to the arrival of Sohail and Agnieszka in due course," said Claude Serfilippi, Chadbourne's London office managing partner. "They have advised on some of the most notable project finance transactions to close over the last few months." The team's transactions include the Marafiq independent water and power project in Saudi Arabia, the Taweelah A10 refinancing in the Emirates, the Barka 2/Rusail project and Sur desalination projects in Oman. The three currently have roles on the Saudi Landbridge rail project, two Abu Dhabi wastewater projects and a Portuguese wastewater project. Mr. Nash has advised clients on projects in the Middle East, Africa, the United Kingdom, Europe and Asia, with a focus on energy, water and infrastructure in emerging markets. Mr. Nash holds an LL.B., honours, and an LL.M. in international law from Nottingham University, and he passed the Law Society Finals at the College of Law, York. Mr. Barkatali is a commercial lawyer with a focus on the energy and water sectors. He has worked on projects in the Middle East, Africa, the United Kingdom, Europe and Asia. His transactions have involved independent water and power producer projects, water and wastewater concessions, unbundling and restructuring electricity supply industries, production sharing arrangements, cross-border transportation agreements, sale and purchase agreements, the disposal of oil and gas interests and assets, regulatory matters and privatizations. Mr. Barkatali holds an LL.B., honours, and an LL.M. in commercial and corporate law from the London School of Economics and Political Science, and he passed the Law Society Finals at the College of Law, Lancaster Gate. Ms. Klich specializes in international project finance, with a focus on transactions in emerging markets involving oil and gas, mining, power and water. She has extensive experience with ECAs and multilateral financings. Ms. Klich has advised lenders, developers and equity investors on project financings. She holds a B.A. in history, summa cum laude, from the University of Houston, an M.A. in regional studies from Harvard University and a J.D. from Stanford University Law School. About Chadbourne & Parke LLP Headquartered in New York City, Chadbourne & Parke LLP -- http://www.chadbourne.com/-- is a law firm that provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, and Latin America. The firm has offices in New York, Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg, Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent, Beijing, and a multinational partnership, Chadbourne & Parke, in London. * Shearman & Sterling Adds 13 Associates and Counsel ---------------------------------------------------- The international law firm Shearman & Sterling LLP has elected 13 associates and counsel to the partnership across its worldwide platform. The new partners practice in nine offices -- Abu Dhabi, D�sseldorf, Frankfurt, Hong Kong, London, New York, Rome, Toronto and Washington, D.C. -- and in the asset management, bank finance, bankruptcy and reorganization, capital markets, mergers and acquisitions, project development and finance, property and tax practice areas. "It is a distinct pleasure to welcome this outstanding group of lawyers to the partnership," said Rohan Weerasinghe, Shearman & Sterling's senior partner. "The depth and breadth across geography and practice areas represent the increasingly broad scope of our practice and our clients globally." These lawyers were elected partner: Abu Dhabi and London Benjamin R. F. Shorten, who practices in the firm's project development and finance group in London and Abu Dhabi, completed the Legal Practice Course at The College of Law, London, in 1997, the Common Professional Examination (Diploma in Law) at The College of Law, London, in 1996, and received a B.A. (Hons) from the University of Cambridge, Downing College, in 1994. D�sseldorf Marco A. Sustmann, who practices in the firm's mergers and acquisitions group in D�sseldorf, completed his Second State Exam in 2000, received a Dr. iur., magna cum laude, from the University of Trier in 1999, and completed his First State Exam in 1996. Frankfurt Marc O. Plepelits, who practices in the firm's capital markets group in Frankfurt, received an LL.M. from New York University School of Law in 1997 and a Magister Juris from the University of Vienna Law School in 1995. Hong Kong Kyungwon (Won) Lee, who practices in the firm's capital markets group in Hong Kong, received a J.D. from Northwestern University School of Law in 1997, an M.B.A. from New York University in 1995, and a B.A., summa cum laude, from Ohio Wesleyan University in 1988. London Michael W. Benjamin, who practices in the firm's capital markets group in London, received a Bachelor of Commerce, with Merit, and a Bachelor of Laws from the University of New South Wales in 1997. New York Lisa M. Brill, who practices in the firm's property group in New York, received a J.D., cum laude, from Georgetown University Law Center in 1999, and an A.B., magna cum laude, from Bowdoin College in 1995. Geoffrey B. Goldman, who practices in the firm's asset management group in New York, received a J.D. in 1996 from Columbia Law School, where he was a Kent Scholar and a Stone Scholar, and an A.B. from Stanford University in 1993. Monica L. Holland, who practices in the firm's finance group in New York, received a J.D. from Columbia Law School in 1999 and an A.B. from Princeton University in 1996. Michael H. Torkin, who practices in the firm's bankruptcy and reorganization group in New York, received an LL.B. from Osgoode Hall Law School of York University (Ontario) in 1997 and a B.A. from the University of Western Ontario in 1993. Rome Fabio Fauceglia, who practices in the firm's mergers and acquisitions and capital markets groups in Rome, received an LL.M. from Columbia Law School in 2001 and a J.D. from The Luiss University (Rome) in 1994. Toronto Adam M. Givertz, who practices in the firm's capital markets and mergers and acquisitions groups in Toronto, received an LL.B. from Osgoode Hall Law School of York University (Ontario) in 2000, an M.A. from Queen's University in 1992, and a B.A. from the University of Toronto in 1990. Washington, DC Kristen M. Garry, who practices in the firm's tax group in Washington, D.C., received an LL.M. in Taxation from New York University School of Law in 2003, a J.D. from New York University School of Law in 1998, and a B.A., magna cum laude, from Cornell University in 1993. Craig J. Gibian, who practices in the firm's tax group in Washington, D.C., received a J.D., cum laude, from Harvard Law School in 1996 and an A.B., cum laude, from Princeton University in 1992. About Shearman & Sterling Shearman & Sterling LLP is a global law firm with approximately 1,000 lawyers in 20 offices in 12 countries around the world. The firm is a leader in mergers and acquisitions, capital markets, project development and finance, complex business litigation and international arbitration, asset management and tax. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Children's Angelcare Aid International, Inc. Bankr. S.D. Calif. Case No. 07-07015 Chapter 11 Petition filed December 4, 2007 See http://bankrupt.com/misc/casb07-07015.pdf In Re Yeshiva and Congregation Zanzer Klaus Bankr. S.D. N.Y. Case No. 07-23217 Chapter 11 Petition filed December 4, 2007 See http://bankrupt.com/misc/nysb07-23217.pdf In Re Joseph Carmen DiCaro Bankr. N.D. Ill. Case No. 07-22781 Chapter 11 Petition filed December 5, 2007 See http://bankrupt.com/misc/ilnb07-22781.pdf In Re Proscape Hardscape, L.L.C. Bankr. S.D. N.Y. Case No. 07-36936 Chapter 11 Petition filed December 5, 2007 See http://bankrupt.com/misc/nysb07-36936.pdf In Re Lisa Daisy Saraspi, R. Bankr. N.D. Calif. Case No. 07-44224 Chapter 11 Petition filed December 5, 2007 Filed as Pro Se In Re A.&B., Inc. Bankr. N.D. Tex. Case No. 07-60212 Chapter 11 Petition filed December 5, 2007 See http://bankrupt.com/misc/txnb07-60212.pdf In Re John O. Thornsen Bankr. W.D. Wis. Case No. 07-14819 Chapter 11 Petition filed December 5, 2007 See http://bankrupt.com/misc/wiwb07-14819.pdf In Re B.G. Computer Services, Inc. Bankr. D. Md. Case No. 07-22359 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/mdb07-22359.pdf In Re Deborah Lynn, Inc. Bankr. E.D. Mich. Case No. 07-23235 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/mieb07-23235.pdf In Re Diamond Elite Jewelers, Inc. Bankr. E.D. Mich. Case No. 07-64909 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/mieb07-64909.pdf In Re Mighty Car Wash, Inc. Bankr. M.D. Penn. Case No. 07-53192 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/pamb07-53192.pdf In Re Centre Inn, Ltd. Bankr. M.D. Penn. Case No. 07-53196 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/pamb07-53196.pdf In Re Pitzer's Townhouse, Inc. Bankr. W.D. Penn. Case No. 07-27725 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/pawb07-27725.pdf In Re Sobhani Center for Inner Peace Bankr. W.D. Wash. Case No. 07-44209 Chapter 11 Petition filed December 6, 2007 Filed as Pro Se In Re Torres Commercial Cleaning Service, L.L.C. Bankr. N.D. Tex. Case No. 07-36115 Chapter 11 Petition filed December 6, 2007 See http://bankrupt.com/misc/txnb07-36115.pdf In Re Gail Dossett Bankr. D. Ariz. Case No. 07-06615 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/azb07-06615.pdf In Re Billy Dossett Bankr. D. Ariz. Case No. 07-06617 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/azb07-06617.pdf In Re Eagle Grading, L.L.C. Bankr. D. Ariz. Case No. 07-06629 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/azb07-06629.pdf In Re J.K.H. Enterprises, Inc. Bankr. N.D. Calif. Case No. 07-54070 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/canb07-54070.pdf In Re Valley Corp. B Bankr. N.D. Calif. Case No. 07-54072 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/canb07-54072.pdf In Re Southern Hair Co. Bankr. M.D. Ga. Case No. 07-53042 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/gamb07-53042.pdf In Re Waste Not Grinding, Inc. Bankr. N.D. Ga. Case No. 07-80742 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/ganb07-80742.pdf In Re Allstar Cleaning, Inc. Bankr. W.D. Penn. Case No. 07-11975 Chapter 11 Petition filed December 7, 2007 See http://bankrupt.com/misc/pawb07-11975.pdf In Re Monjacircle, Ltd. Bankr. D. Nev. Case No. 07-18176 Chapter 11 Petition filed December 7, 2007 Filed as Pro Se In Re Sonia Kashyap Bankr. N.D. Calif. Case No. 07-31595 Chapter 11 Petition filed December 7, 2007 Filed as Pro Se In Re Southwest Commercial Group, L.L.C. Bankr. D. Nev. Case No. 07-18175 Chapter 11 Petition filed December 7, 2007 Filed as Pro Se In Re Cathy Daley Bankr. C.D. Calif. Case No. 07-14843 Chapter 11 Petition filed December 7, 2007 Filed as Pro Se In Re J.R.B. Food, Inc. Bankr. N.D. Tex. Case No. 07-36119 Chapter 11 Petition filed December 7, 2007 Filed as Pro Se In Re Consult America Cottage Hills, Inc. Bankr. N.D. Ala. Case No. 07-72200 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/alnb07-72200.pdf In Re Third Planet Grille, Inc. Bankr. M.D. Fla. Case No. 07-12151 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/flmb07-12151.pdf In Re eFileSolutions, Inc. Bankr. M.D. La. Case No. 07-11736 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/lamb07-11736.pdf In Re Charles Geschwind Bankr. E.D. N.Y. Case No. 07-46789 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/nyeb07-46789.pdf In Re Claude Harold Hicks Bankr. S.D. Ohio Case No. 07-59951 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/ohsb07-59951.pdf In Re Gildas A. Kaib, Jr. Bankr. W.D. Penn. Case No. 07-27770 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/pawb07-27770.pdf In Re Marco Patrizio Casas-Beaux Bankr. W.D. Wash. Case No. 07-15927 Chapter 11 Petition filed December 10, 2007 See http://bankrupt.com/misc/wawb07-15927.pdf In Re Technical Trouble Shooting, Inc. Bankr. C.D. Calif. Case No. 07-14881 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/cacb07-14881.pdf In Re Air Conditioning Doctor, L.L.C. Bankr. M.D. Fla. Case No. 07-12216 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/flmb07-12216.pdf In Re J.R. Holding Corp. Bankr. N.D. Ohio Case No. 07-19392 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/ohnb07-19392.pdf In Re Custom Colors Corp. Bankr. W.D. Okla. Case No. 07-14516 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/okwb07-14516.pdf In Re The Locker Room Bar & Grille, L.L.C. Bankr. W.D. Penn. Case No. 07-27790 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/pawb07-27790.pdf In Re M.J.J. Music, Inc. Bankr. E.D. N.Y. Case No. 07-46796 Chapter 11 Petition filed December 11, 2007 Filed as Pro Se In Re Kenneth L. Wiley Bankr. E.D. La. Case No. 07-12456 Chapter 11 Petition filed December 11, 2007 Filed as Pro Se In Re Crossville K.O.A., L.L.C. Bankr. M.D. Tenn. Case No. 07-09159 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/tnmb07-09159.pdf In Re Simply Fondue, Inc. Bankr. E.D. Tex. Case No. 07-42928 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/txeb07-42928.pdf In Re Dream Cafe L.P. I, Ltd. Bankr. N.D. Tex. Case No. 07-36141 Chapter 11 Petition filed December 11, 2007 See http://bankrupt.com/misc/txnb07-36141.pdf ********* 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 ***