T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 26, 2007, Vol. 11, No. 304 Headlines ACE SECURITIES: Moody's Puts Ratings on Two Certs. Under Review ACE SECURITIES: Moody's Junks Four 2005-SL1 Certificate Classes ACTIVISION INC: Earns $698,000 in Second Quarter Ended Sept. 30 ACXIOM CORP: Elects Three Board Members at 2007 Annual Meeting ACXIOM CORP: Buyout Termination Prompts S&P to Affirm BB Rating AEGIS MORTGAGE: Wants Liens Released on Unfunded Loans AFFINITY GROUP: Sale Delay Prompts S&P's Stable Outlook ARKANSAS CATFISH: Auction for Assets Scheduled Tomorrow AMERICAN HOME: Wants Limited Recourse Funds Increased by $50 Mil. AMERICAN HOME: Wants Agreement with Texas Comptroller Approved AMERICAN HOME: 2nd ABN Construction Loans Sale Pact Approved AMP'D MOBILE: Pinnacle Wants Collection Contract Reviewed AMP'D MOBILE: Court Approves Deal with Valutech and Brightpoint ASSET BACKED: Fitch Junks Ratings on $7.2 Million Certificates ASSOCIATED MATERIALS: Earns $17.4 Million in Third Quarter ATSI COMM: Posts $293,000 Net Loss in Quarter Ended October 31 ATRIUM CORP: Operating Pressure Cues Moody's to Review Ratings AVADO BRANDS: Wants February 8 Set as Claims Bar Date AVISTA CORP: Debt Reduction Cue Moody's to Lift All Ratings AVNET INC: Completes Purchase of Acal IT Solution for $200 Mil. BAY COVE: Moody's Holds Ba2 Rating on $5 Mil. Outstanding Bonds BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates BEAR STEARNS: Moody's Junks Four Certificates' Ratings BOMBAY CO: Selling Intellectual Property to Bombay Brands BOYD GAMING: Moody's Holds Ratings and Revises Outlook to Stable BRANDYWINE REALTY: Closes $245.4 Mil. Sale of 29 Properties to DRA BROWN & COLE: Judge Steiner Approves Plan of Reorganization BURLINGTON COAT: Weak Revenue Cues Moody's to Revise Outlook CAVTEL HOLDINGS: Moody's Cuts Corporate Family Rating to B3 CENTRO NP: Financial Difficulties Cue Fitch to Junk Ratings CHARLES SCHWAB: Good Performance Prompts Fitch to Lift Rating CHEVY CHASE: High Delinquency Cues Moody's to Review Ratings CHRYSLER LLC: "Operationally" Bankrupt, CEO Nardelli Says COBALT CMBS: Limited Amortization Cues Fitch to Hold Ratings COINMACH SERVICE: Babcok & Brown Deal Cues S&P to Remove Watch COMMERCIAL CAPITAL: Fitch Holds 'BB' Rating on $10.8MM Loans DANA VILLAS: Section 341(a) Meeting Scheduled for January 17 DELTA FINANCIAL: Former Employees Say Debtors Violated WARN Act DILLON READ: Stable Performance Cues Fitch to Affirm Ratings DIVERSIFIED REIT: Fitch Affirms 'BB-' Rating on $150.3MM Notes DIVERSIFIED REIT: Fitch Holds Low-B Ratings on Three Classes DYNCORP INT'L: Bags Airlift Wing Support Contract for $357.9 Mil. EL PASO: Moody's Holds Ba3 Rating on $1.425 Mil. Junior Bonds EL POLLO: S&P Affirms B- Rating and Removes Negative CreditWatch EUROFRESH INC: Moody's Cuts Corporate Family Rating to Caa3 FGX INTERNATIONAL: Completes Bank Credit Facility Refinancing FIRST FRANKLIN: Moody's Junks Ratings on Two Loan Classes FIRST INTERNATIONAL: Fitch Retains Junk Ratings on Seven Classes FIRST MERCURY: Moody's Puts Ratings Under Review & May Upgrade FOREST CITY: S&P Affirms Low-B Ratings and Says Outlook is Stable FOUR STARS: Court Okays Day Brzustowicz as Bankruptcy Counsel GE BUSINESS: Fitch Holds 'BB' Ratings on Three Loan Classes GENESIS CLO: Moody's Assigns Low-B Ratings to Two Notes GIBSON GUITAR: Weak Credit Metrics Cue Moody's to Cut Ratings GILBERT TUSCANY: Section 341(a) Meeting Scheduled for January 22 GILBERT TUSCANY: Files List of 20 Largest Unsecured Creditors GINN-LA CS: Moody's Cuts Corporate Rating with Negative Outlook GLOBAL POWER: To Emerge from Chapter 11 by End of January 2008 GREAT ATLANTIC: Consummates Public Offering of Senior Notes GREENMAN TECH: Sept. 30 Balance Sheet upside-Down by $10.9 Mil. GREENPOINT MORTGAGE: Moody's Junks Ratings on Two Certificates GREENWICH CAPITAL: Fitch Holds Low-B Ratings on Six Cert. Classes GRUSAF LLC: Case Summary & 20 Largest Unsecured Creditors GSAMP 2005-HE4: Fitch Chips Rating on $18.3MM Certs. to BB GSAMP 2007-H1: Fitch Cuts Ratings on $57.6 Million 2007-H1 Certs. GSAMP TRUST: Moody's Junks Ratings on Three Classes of Certs. GS MORTGAGE: Fitch Downgrades Rating on Class M-2 Certs. to B- GSC ABS: Moody's Junks Ratings on Two Classes of Notes HARRAH'S ENT: Completes Regulatory Approvals on Merger Deal HARRAH'S ENT: Commences Tender Offers for Conv. Debt Securities HELLER SBA: Fitch Affirms 'BB' Rating on Class B Certificates HOUGHTON INT'L: Moody's Withdraws Ratings After Sale HOVNANIAN ENT: Posts $469 Mil. Net Loss in 4th Qtr. Ended Oct. 31 INERGY LP: Moody's Revises Outlook on Improved Financial Profile INTERNATIONAL POWER: Fitch Holds 'BB' Issuer Default Rating INTERTAPE POLYMER: Debt Reduction Prompts S&P to Upgrade Ratings KINGSWAY LINKED: LROC Preferred Units' Rating Cut by S&P to BB+ L-3 COMMS: Good Performance Cues Moody's to Revise Outlook LAKE AT LAS VEGAS: Moody's Cuts Corporate Family Rating to Caa3 LANDRY'S RESTAURANTS: Posts $4.3 Mil. Net Loss in 3rd Quarter 2007 LB-UBS: S&P Affirms Ratings on 24 Classes of Certificates LBREP/L SUNCAL: Moody's Downgrades Corporate Family Rating LEGENDS GAMING: Moody's Downgrades Corporate Family Rating to B3 LEGENDS GAMING: S&P Places Ratings on CreditWatch Negative LIN TV: S&P Holds Ratings and Revises Outlook to Stable LNR CFL: S&P Affirms Low-B Ratings on Four Classes of Certs. MAJESTIC STAR: Discloses Buffington Harbor Facility Dev't Plans MANOR CARE: Earns $39.4 Million in Third Quarter Ended Sept. 30 MASONITE INT'L: S&P Lowers Ratings and Says Outlook is Negative MAXJET AIRWAYS: Files for Bankruptcy Amid High Fuel Prices MAXJET AIRWAYS: Case Summary & 20 Largest Unsecured Creditors MAXUM PETROLEUM: S&P Assigns B- Rating to $155 Mil. Senior Loan MBS COS: Fitch Reviews Ratings on Imminent Default of 56 Loans MERIDIAN GOLD: Shareholders OKs Plan of Arrangement Completion MILACRON INC: Weak Credit Metric Cues Moody's to Cut Ratings MIRANT CORP: Cash Flow Improvement Cues Moody's to Lift Ratings MORGAN STANLEY: Moody's Downgrades Ratings on Two Certificates MOUNTAINEER GAS: Fitch Rates $90 Million Notes at BB MOVIE GALLERY: Files Joint Plan and Disclosure Statement NORTH AMERICAN: Offering $15.5 Million of Common Stock & Warrants NORTH CAROLINA MEDICAL: S&P Revises Outlook to Positive from Neg. NORTH PARK: Files List of 20 Largest Unsecured Creditors NORTH PARK: Files Schedules of Assets and Liabilities NORTH PARK: Wants to Hire Hebert Schenk as Bankruptcy Counsel NOVELL INC: Posts $17.9 Mil. Net Loss in Quarter Ended October 31 OMNICARE INC: Senior Unsecured Ratings Downgraded by S&P to B+ ORLANDO CITYPLACE: Judge Jennemann Consents to Two-Part Asset Sale PANHANDLE (TX): Moody's Downgrades Revenue Bonds' Ratings PERFORMANCE TRANS: Creditors Back Tight Budget on Professionals PERFORMANCE TRANS: Can Hire FTI Consulting as Financial Advisors PERFORMANCE TRANS: Can Employ Sitrick as Comms. Consultants PERKINS AND MARIE: Moody's Junks Corporate Family Rating PIKE NURSERY: Can Hire Scroggins & Williamson as Bankr. Counsel PIKE NURSERY: Taps BMC Group as Claims and Noticing Agent PLASTECH ENGINEERED: Moody's Places Ratings Under Review PUERTO RICO INDUSTRIAL: S&P Affirms BB- Rating with Stable Outlook PHARMED GROUP: Seeks Court OK on Bidding Procedure Sale of Assets PORTOLA CLO: Moody's Puts Ba2 Rating to $16.5 Mil. Class E Notes PREMIER WEALTH: Posts $368,899 Net Loss in Quarter Ended Sept. 30 RADIO ONE: Moody's Cuts Ratings on $800 Mil. Credit Facility RELIANT PHARMACEUTICALS: All Ratings Withdrawn by S&P RESOURCE REAL: Fitch Affirms Ratings From All Note Classes RURAL CELLULAR: Sept. 30 Balance Sheet Upside-Down by $792.1 Mil. SANMINA SCI: Moody's Downgrades Senior Notes' Ratings to B1 SANMINA-SCI: Calls for Redemption of $120 Million Senior Notes SENIOR HOUSING: S&P Affirms BB+ Ratings with Stable Outlook SOFA EXPRESS: Has Until January 17 to File Schedules as Statements SOUTHERN STAR MORTGAGE: Voluntary Chapter 11 Case Summary SPEEDWAY MOTORSPORTS: Moody's Lowers Sr. Credit Facility Rating STANADYNE HOLDINGS: Moody's Lifts Senior Notes Ratings' to B3 STRUCTURED ASSET: Fitch Junks Ratings on Two Cert. Classes STRUCTURED ASSET: Fitch Lowers Ratings on Three Classes to B- SUN-TIMES MEDIA: Sept. 30 Balance Sheet Upside-Down by $33.6 Mil. TAXABLE WORLD: Moody's Upgrades B3 Revenue Bond Rating to Baa3 TEEKAY CORP: Moody's Holds Ratings and Says Outlook is Stable TEMBEC INC: S&P Downgrades Corporate Credit Rating to CC TERWIN MORTGAGE: Moody's Junks Ratings on Two Certificates THORNBURG MORTGAGE: S&P Affirms Low-B Ratings on 6 Class Certs. TOPPS MEAT: Premio Foods Unit Wants to Buy Beef for $190,000 TRIBUNE CO: Closed Going Private Deal Cues Fitch to Cut Ratings TRIBUNE CO: S&P Cuts Ratings from B+ to B with Negative Outlook TRICADIA CDO: Moody's Junks Ratings on Five Classes of Notes UNITED RENTALS: Ends Merger Dispute With Cerberus WACHOVIA CRE: Fitch Affirms 'B-' Rating on $6.5MM Class O Notes WELLMAN INC: Posts $18 Million Net Loss in 3rd Qtr. Ended Sept. 30 WELLS FARGO: Fitch Rates $722,000 Class B-5 Certificates at B WESTWAYS FUNDING: Moody's Junks Ratings on Four Note Classes WILSON JONES MEDICAL: Moody's Lifts $80 Mil. Debt's Rating to Ba3 * 793 US Securities' Ratings Amounting to $22.92 Bil. Lowered * Upcoming Meetings, Conferences and Seminar ********* ACE SECURITIES: Moody's Puts Ratings on Two Certs. Under Review --------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade five certificates from two deals issued by ACE Securities Corp. in 2003. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, excess spread and mortgage insurance relative to the expected loss. The deals are backed by subprime, fixed and adjustable-rate mortgage loans. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2003-HS1 -- Class M-6, current rating Baa3, under review for possible downgrade; Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2003-NC1 -- Class M-3, current rating A3, under review for possible downgrade; -- Class M-4, current rating Baa1, under review for possible downgrade; -- Class M-5, current rating Ba3, under review for possible downgrade; -- Class M-6, current rating B2, under review for possible downgrade. ACE SECURITIES: Moody's Junks Four 2005-SL1 Certificate Classes --------------------------------------------------------------- Moody's Investors Service downgraded seven classes of certificates from a deal issued by Ace Securities Corp. Home Equity Loan Trust in 2005. The transaction is backed by closed-end second lien loans. The projected pipeline loss has been continuously increasing over the past few months and is likely to affect the credit support for these certificates. Furthermore, many underlying first lien loans are likely to have pending interest rate resets, which may cause an increase in delinquencies and defaults on the second lien loans in the pool. The certificates were downgraded as the bonds' current credit enhancement levels, including excess spread, compared to the current projected losses may not be consistent with the existing ratings on the bonds. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2005-SL1 -- Cl. M-2, Downgraded to Baa1 from A1 -- Cl. M-3, Downgraded to Ba1 from A2 -- Cl. M-4, Downgraded to B1 from A3 -- Cl. M-5, Downgraded to Caa2 from Baa1 -- Cl. M-6, Downgraded to C from Ba2 -- Cl. M-7, Downgraded to C from B3 -- Cl. B-1, Downgraded to C from Ca ACTIVISION INC: Earns $698,000 in Second Quarter Ended Sept. 30 --------------------------------------------------------------- Activision Inc. reported net income of $698,000 for the second fiscal quarter ended Sept. 30, 2007, as compared to a net loss of $24.3 million for the second quarter ended Sept. 30, 2006. Excluding the impact of expenses related to equity-based compensation, the company had net income of $4.9 million for the second quarter. This compares to a net loss of $21.3 million, excluding the impact of expenses related to equity-based compensation for the second quarter of last fiscal year. Net revenues for the second quarter were $317.7 million, a 69% increase, as compared to net revenues of $188.2 million reported for the same quarter last fiscal year. Robert Kotick, chairman and chief executive officer of Activision, stated, "Our second quarter net revenues were the highest in our company's history and we ended the quarter with $962 million in cash and short-term investments. We significantly strengthened our development capabilities through our acquisition of Bizarre Creations, a proven top-tier developer of racing games which will facilitate our entry into this important segment." Six-Month Results Net revenues for the six-month period ended Sept. 30, 2007, were $813.2 million, as compared to net revenues of $376.2 million reported for the six-month period of last fiscal year. Net income for the first six months was $28.5 million, as compared with a net loss of $42.6 million reported for the same period last fiscal year. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $1.96 billion in total assets, $431.6 million in total liabilities, and $1.53 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?268c About Activision Inc. Headquartered in Santa Monica, California, Activision Inc. (Nasdaq: ATVI) -- http://www.activision.com/ -- is a worldwide developer, publisher and distributor of interactive entertainment and leisure products. Founded in 1979, Activision has more than 2,000 employees worldwide. Activision maintains operations in the United States, Canada, the United Kingdom, France, Germany, Ireland, Italy, Scandinavia, Spain, the Netherlands, Australia, Japan and South Korea. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Activision Inc. on CreditWatch with positive implications, indicating the potential for an upward rating action, based on Activision's definitive agreement to combine with Vivendi Games, a unit of Vivendi S.A. (BBB/Stable/A-2). ACXIOM CORP: Elects Three Board Members at 2007 Annual Meeting -------------------------------------------------------------- Acxiom Corporation re-elected Dr. Mary L. Good and Stephen M. Patterson to its board of directors at its 2007 annual shareholders meeting held on December 21. In addition, Kevin M. Twomey was elected to his first term as a director, filling the board seat previously occupied by Rodger S. Kline. Additionally, shareholders approved a change to the company's 2005 Equity Compensation Plan to increase the pool of shares available for grant from 13.3 million to 20.3 million shares. The company also said it has purchased about 3.6 million shares of its stock pursuant to the repurchase program announced on Oct. 29, 2007. Headquartered in Little Rock, Arkansas, Acxiom Corporation, (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration technology, data, database services, IT outsourcing, risk mitigation, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States and Europe, and in Australia, China and Canada. * * * As reported in the Troubled Company Reporter on Dec. 17, 2007, Moody's Investors Service has confirmed Acxiom's Ba2 corporate family rating and assigned a negative rating outlook, concluding a review for possible downgrade initiated on May 17, 2007, following the company's announcement that it had entered into a definitive agreement to be acquired by Silver Lake and ValueAct Capital for $3 billion. On Oct. 1, 2007, Acxiom reached a settlement agreement with Silver Lake and ValueAct Capital to terminate the previously announced acquisition pursuant to which Acxiom received $65 million in cash. ACXIOM CORP: Buyout Termination Prompts S&P to Affirm BB Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirms its 'BB' corporate credit rating on Little Rock, Arkansas-based Acxiom Corp. and removes it from CreditWatch where it was placed with negative implications on May 17, 2007. The outlook is negative. At the same time, S&P raised its senior secured debt ratings to 'BB+' from 'BB', with a recovery rating of '2', indicating a substantial (70%-90%) expectation of recovery, and also removed it from CreditWatch. "The affirmation follows the termination of the $3 billion buyout by private-equity firm Silver Lake and hedge fund ValueAct Capital Partners L.P.," said Standard & Poor's credit analyst Philip Schrank. The company received $65 million related to the termination of the merger agreement, which is expected to be substantially more than one-time expenses related to the merger agreement. Acxiom's rating reflects the company's good niche market position and adequate cash flow generation. Business risk is tempered by Acxiom's expertise in managing its comprehensive consumer databases. More than half of its direct-marketing assignments are performed for long-term clients, and outsourcing contracts generally cover multiple years, offsetting a concentrated customer base and providing some revenue predictability. However, the company is still a relatively small participant in a growing and fragmented industry that may see the entrance of several much larger competitors. S&P believes channel partnerships and moderate acquisitions could continue, primarily to expand the company's participation in selected vertical markets, enhance its distribution capability, and provide additional operational diversity. Acxiom has implemented cost reduction actions to bolster profitability and to help offset sluggish revenue growth, primarily driven by the downturn in the financial services segment, which represents about one-fourth of its total business. Although Acxiom's current debt levels are moderate for the rating, in the 2x area, the company has exhibited a much more aggressive financial policy by its willingness to pursue an LBO, and could continue to pursue ongoing acquisitions and share repurchases. While S&P expects a near-term focus on improving operations, Acxiom's dissident shareholder, ValueAct Capital Partners L.P., retains its seat on Acxiom's board, and could continue to pursue a more aggressive shareholder oriented agenda. At the 'BB' rating level, S&P expects Acxiom to continue generating good free cash flow and manage its debt under 4x over the intermediate term. S&P will continue to monitor management's succession plans following the retirement of its CEO, and how it might affect the company's business strategy and financial policy. AEGIS MORTGAGE: Wants Liens Released on Unfunded Loans ------------------------------------------------------ Aegis Mortgage Corp. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to release liens and interests on loans, which they have never funded. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that although the Debtors already terminated their loan origination business, they may still have recorded liens on certain properties for loans that were never funded as a result of the termination, or loans purportedly assigned to them, but which the Debtors could not identify as a loan they formerly owned or serviced. "In some cases, the Debtors recorded liens on some properties that were the subject of the unfunded loans in preparation for the disbursement and funding of loans that were never made because of the termination of their loan origination business," Mr. O'Neill states. "In other cases, the Debtors' records do not show any ownership interest in certain unfunded loans that were allegedly assigned or transferred to the Debtors at one point in time, but which the Debtors believe do not constitute property of their estates." Mr. O'Neill says that certain borrowers may file lawsuits to compel the release of the Debtors' liens on the properties subject of the unfunded loans. He adds that if the Court approves the request, the Debtors will avoid spending unnecessary legal fees for responding to lawsuits. Mr. O'Neill contends that there is sufficient cause to grant the request. "If no funds were ever disbursed either by the Debtors or any other third party with respect to the unfunded loans, there is no loan amount for which the borrower is obligated to repay the Debtors," Mr. O'Neill points out. He adds that even if the Debtors at one time had an interest in unfunded loans, the Debtors' records indicate that the loans no longer belong to the Debtors and are not property of the estates. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. (Aegis Bankruptcy News, Issue No. 13, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AFFINITY GROUP: Sale Delay Prompts S&P's Stable Outlook ------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Affinity Group Holding Inc. and its operating subsidiary, Affinity Group Inc., to stable from positive. At the same time, S&P affirmed the ratings, including the 'B' corporate credit rating, on the company. Total debt outstanding was $395 million as of Sept. 30, 2007. "The outlook revision reflects the delay in the sale of the company's retail segment to FreedomRoads Holding Co. LLC and the related repayment of Affinity's term loan because of tight credit market conditions," explained Standard & Poor's credit analyst Tulip Lim. On April 16, 2007, Affinity Group announced that it had entered into a stock purchase agreement with FreedomRoads Holding Co. LLC, under which FreedomRoads would have acquired Affinity Group's retail segment, Camping World Inc., for $175 million. Affinity had planned to use the estimated net proceeds of $132 million from the sale to pay down its term loan. The proposed transaction would have improved Affinity's financial metrics. Although the retail segment contributes more than 50% of Affinity's total revenue, the segment has EBITDA margins lower than those of the company's membership and publishing segments and higher required capital expenditures, working capital usage, and operating lease expenses. The company announced in its third-quarter earnings call that the sale of the retail segment has been postponed because uncertainty in the capital markets has prevented FreedomRoads from achieving its optimal funding. S&P is concerned that these conditions will persist, hindering the prospects of completion for this transaction. Meanwhile, Affinity's term loan, of which $129 million was outstanding at Sept. 30, 2007, will mature on June 24, 2009. Affinity Group is a direct marketing firm targeting North American recreational vehicle owners and outdoor enthusiasts. Through its membership operations, books, and magazines, Affinity Group markets products and services targeting RV owners. The company's retail business consists of a chain of Camping World stores, mail- order catalogs, and Web sites. The ratings reflect weak operating performance at the company's Camping World stores, soft membership trends at Affinity Group's RV resort network and golf discount clubs, reduced liquidity, and high debt leverage. The company's good competitive position and the relatively stable earnings of its core RV clubs and publishing niches only modestly offset these factors. ARKANSAS CATFISH: Auction for Assets Scheduled Tomorrow ------------------------------------------------------- Special Commissioner Frank G. Power is selling, pursuant to an order of the Chancery Court of Washington County in Mississippi, Arkansas Catfish Growers, LLC,'s (dba SeaCat): a) accounts, accounts receivable, inventory, and deposit accounts, and furniture, fixtures, and equipment located at the facility in 1616 Rice Mill Road in Hollandale, Mississippi; and b) real property in Washington County, Mississippi, on Dec. 27, 2007, between 11:00 a.m. and 4:00 p.m. Central Standard Time at the Washington County Courthouse in Greenville, Mississippi. Arkansas Catfish Growers LLC dba SeaCat is a limited liability Corporation created and existing under the laws of the State of Arkansas. AMERICAN HOME: Wants Limited Recourse Funds Increased by $50 Mil. ----------------------------------------------------------------- American Home Mortgage Investment Corp., American Home Mortgage Corp., and American Home Mortgage Servicing Inc., previously obtained approval from the U.S. Bankruptcy Court for the District of Delaware to enter into a $50,000,000 debtor-in-possession loan and security agreement dated Nov. 16, 2007, among the Debtors- Borrowers, several lenders, and AH Mortgage Acquisition Co. Inc., in its capacity as lender and administrative agent. Accordingly, the Debtors-Borrowers seek the Court's authority to amend the limited recourse facility, so as to increase the financing commitment from $50,000,000 to $100,000,000, pursuant to and on the terms and conditions of an amended agreement among them and the lenders. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court that since operating the Debtors' mortgage loan servicing business from its initial closing without the use of the cash collateral, the Debtors determined that additional availability is necessary to satisfy the obligations associated with the Servicing Business. He contends that the necessity for additional funding is due to, among other reasons, the increased amount of servicing advances and other costs. The Debtors-Borrowers believe that by increasing the financing commitment, they will be able to meet the borrowing needs necessary to operate the Servicing Business to the final closing of its sale, and thus, enable them to operate the business as required under the Asset Purchase Agreement. 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. 20, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Wants Agreement with Texas Comptroller Approved -------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve their settlement agreement with Texas Comptroller of Public Accounts, pursuant to Sections 105, 362 and 553 of the Bankruptcy Code and Rules 4001(d) and 9019 of the Federal Rules of Bankruptcy Procedure. Prior to bankruptcy filing, the Debtors conducted operations in many states, including Texas. As part of the taxing obligations to Texas, the Debtors were required to pay certain franchise taxes. The Debtors and the Texas Comptroller determined that a franchise tax credit of $1,919,729, plus additional interest exists for the 2006 tax year. The interest is accruing at a rate of 5.066% from December 14 to 31, 2007, and at a certain rate set by Texas' Tax Code from January 1, 2008, through date of payment. The Parties also determined that a franchise tax liability of $134,939, plus additional interest accruing at 9.25%, exists for 2007 tax year. Pursuant to their agreement, the Parties agree that the automatic stay imposed by Section 362 of the Bankruptcy Code will be lifted for the sole and express purpose of permitting the set-off of the Tax Credit and the Tax Liability. As a result of the set-off, the Parties agree that the Debtors are owed $1,780,937, which amount is subject to slight variation because of the accruing interests. The Texas Comptroller has agreed to pay the Debtors in full and in cash within 10 business days upon the approval of the request. The Debtors believe that the Settlement Agreement avoids the administrative burden associated with requiring the Texas Comptroller to draft and file a request to exercise its set-off. Hence, they ask the Court to approve the Settlement Agreement. 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. 20, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: 2nd ABN Construction Loans Sale Pact Approved ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the second stipulation among American Home Mortgage Acceptance Inc., American Home Mortgage Corp., American Home Mortgage Investment Corp., American Home Mortgage Servicing Inc., and ABN AMRO Bank N.V. regarding postpetition advances and sale of construction loan portfolio. The parties' previous sale stipulation provided that (i) if there were no qualified bidder for certain mortgage loans, which were subject of a master repurchase agreement between the Parties, or (ii) if ABN AMRO exercised its right to notify the Debtors not to accept the successful bid at the auction, then: -- ABN AMRO would pay to the Debtors $700,000, which it did on November 8, 2007; and -- within 20 business days of the bid deadline, or other date as agreed to, the Debtors would transfer, convey and turn over to ABN AMRO all of their rights in and to the Mortgage Loans. ABN AMRO has previously asked that the applicable 20-day deadline be extended to provide it additional time to find a substitute servicer and transferee with respect to the Mortgage Loans. In addition, the Debtors have agreed to use commercially reasonable efforts to keep in place the construction loan servicing group to service the Mortgage Loans through the remainder of calendar 2007 and the first quarter of calendar 2008, as long as ABN AMRO (i) continues to make additional mortgagor advances and servicing payments in accordance with the provisions of the Parties' postpetition advances stipulation, and (ii) agrees the waiver of claims provision will be effective. Among the salient terms of the Second Stipulation are: -- The funding requests to ABN AMRO to fund additional mortgagor advances with respect to the Mortgage Loans, pursuant to the Postpetition Advances Stipulation is increased from $32,000,000 to $70,000,000; -- ABN AMRO will pay its pro-rata share of the 2008 budget amounts, on the same terms as provided in the Postpetition Advances Stipulation; -- The turnover of the Debtors' rights in the Mortgage Loans to ABN AMRO will: (a) be conditioned upon ABN AMRO's performance of each of the payment obligations contained in the Postpetition Advances Stipulation and the Second Stipulation; and (b) occur on the first business day that is 15 calendar days after ABN AMRO provides written notice to the Debtors and their counsel that it has obtained an acceptable substitute servicer or transferee, and upon the transfer and substitution of servicer, ABN AMRO will no longer be obligated to make any further servicing payments; and -- On the date the Debtors turnover and deliver possession of the Mortgage Loans and Servicing Rights to ABN AMRO, it will not retain, nor assert, a claim in the Debtors' bankruptcy estates, under or with respect to the ABN MRA Agreements, the Mortgage Loans, or the Servicing Rights, provided that ABN AMRO will retain the right to pursue recovery of any of the ABN advances applied or used by any of the Debtors in any manner inconsistent with the ABN MRA Agreements, the Postpetition Advances Stipulation, the Advances Order, or the Second Stipulation. Budget for Construction and Renovation Lending The Debtors submitted a budget for the servicing of the construction loan portfolio for first quarter of calendar year 2008: Projected Expenses Jan08 Feb08 Mar08 ------------------ ----- ----- ----- Inspections $10,900 $9,400 $5,100 Appraisals 2,362 2,126 1,913 Data Processing 1,500 1,500 1,500 Overnight & Postage 1,837 1,653 1,488 Facilities 4,500 4,500 4,500 Salaries 176,301 92,968 261,467 Benefits 6,000 6,000 6,000 Misc 5,000 5,000 5,000 ------- ------- ------- Total Expenses $208,400 $123,147 $286,968 Actual Expenses $128,822 $122,970 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. 20, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMP'D MOBILE: Pinnacle Wants Collection Contract Reviewed --------------------------------------------------------- Pinnacle Financial Group asks the U.S. Bankruptcy Court for the District of Delaware to review the contingency collection agreement entered with Amp'd Mobile Inc., and grant it a contingency fee that is reasonable based on the nature of collection work it provided to the Debtor. Pinnacle is a licensed inbound and outbound call center and collection agency that provides recovery and customer support. It serves as a collection agency for the Debtor. Pinnacle, complained that the information the Debtor provided during the parties' negotiations was inaccurate and misleading. Based on the misinformation the Debtor provided and due to their extremely poor forecasting, Pinnacle has incurred significant losses while servicing the Debtor's account, Mr. Michel tells the Court. To offset the deficit it incurred in servicing the Debtor, Pinnacle proposes two options: (a) Pinnacle should receive 21% on all payments made after July 31 on all of the Debtor's accounts; or (b) The contingency fee should be changed to 50% on all payments on the accounts placed after July 31. The fee should be retroactive to all payments made since the accounts were placed with Pinnacle. Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. (Amp'd Mobile Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AMP'D MOBILE: Court Approves Deal with Valutech and Brightpoint --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the supplemental agreement, Amp'd Mobile Inc. has entered with Valutech Outsourcing LLC, and Brightpoint North America LP, to settle disputes on the asserted liens on the Debtor's assets to be sold to Cellupage. The Court ruled that the purchase price for the Valutech Inventory, amounting to $195,030, that is currently held in escrow be immediately transferred to Kings Road Investment Ltd., the Debtor's secured lender. Under the terms of the agreement: (a) The Tucson Payment amounting to $100,000 be released from escrow to the Debtor. (b) Valutech will complete the repairs to the Mexico Work In Progress Inventory and deliver those units to Cellupage. Payment for the Mexico Inventory will be conducted in this manner: * Cellupage will pay $95,030 via wire transfer to the Debtor; and * Cellupage will pay $362,192 via wire transfer to Valutech. The Valutech Payment will serve as full and final payment for the Refurbishing Services. (c) The $100,000 Tucson Payment, the $95,030 Amp'd Payment, and the $362,192 Valutech Payment will constitute full and final payment for the Tucson and Mexico Inventories. (d) Upon receipt of payment, Valutech will remanufacture and refurbish the handsets to a state of working condition while the Debtor will supply the software that Valutech will install into the handsets. (e) Within 30 days upon receipt of the $362,192 payment, Valutech must deliver the remaining Work In Progress Inventory to the Calexico Warehouse, the warehouse designated by the parties as the pick up point for Cellupage. Valutech will shoulder shipment costs of the handsets. (f) Upon the delivery of the completed Mexico Inventory to the Calexico Warehouse, Amp'd or Cellupage will have 30 days to inspect and test the refurbished units. Any units found defective will be returned by Cellupage to Valutech, at Cellupage's cost, and will be repaired by Valutech, at Valutech's cost, within 10 days. (g) Upon the entry of a final Court order approving the Agreement and the receipt of all payments, the Debtor will cause the Adversary Proceeding to be dismissed, in its entirety, with prejudice. (h) Upon dismissal of the Adversary Proceeding, Valutech will immediately ship the remaining 7,000 completed phones to the Calexico Warehouse for Cellupage to pick up. Cellupage will shoulder shipment costs from the Calexico Warehouse to their location in Los Angeles. (i) The parties will exchange mutual releases. Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. (Amp'd Mobile Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ASSET BACKED: Fitch Junks Ratings on $7.2 Million Certificates -------------------------------------------------------------- Fitch Ratings has taken these rating actions on Asset Backed Funding Corp. mortgage pass-through certificates. Affirmations total $160.1 million and downgrades total $33.5 million. In addition, $11.6 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: ABFC, Series 2005-OPT1 -- $105.5 million class A affirmed at 'AAA' (BL: 55.12, LCR: 4.01); -- $22.1 million class M-1 affirmed at 'AA+' (BL: 43.52, LCR: 3.17); -- $19.9 million class M-2 affirmed at 'AA' (BL: 33.37, LCR: 2.43); -- $6.2 million class M-3 affirmed at 'AA-' (BL: 30.15, LCR: 2.19); -- $6.4 million class M-4 affirmed at 'A+' (BL: 26.72, LCR: 1.94); -- $6 million class M-5 downgraded to 'BBB+' from 'A' (BL: 18.41, LCR: 1.34); -- $6.2 million class M-6 downgraded to 'BBB-' from 'A-'; placed on Rating Watch Negative (BL: 16.01, LCR: 1.16); -- $5.4 million class M-7 downgraded to 'BBB-' from 'BBB+'; placed on Rating Watch Negative (BL: 15.87, LCR: 1.15); -- $3.5 million class M-8 downgraded to 'B' from 'BBB' (BL: 12.44, LCR: 0.90); -- $5.2 million class M-9 downgraded to 'B' from 'BBB-' (BL:10.55, LCR: 0.77); -- $4.2 million class B-1 downgraded to 'CC/DR2' from 'BB+'; -- $3 million class B-2 downgraded to 'C/DR4' from 'BB'. Deal Summary -- Originators: Option One Mortgage Corp. (100%); -- 60+ day Delinquency: 26.78%; -- Realized Losses to date (% of Original Balance): 0.82%; -- Expected Remaining Losses (% of Current Balance): 13.75%; -- Cumulative Expected Losses (% of Original Balance): 6.30%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. ASSOCIATED MATERIALS: Earns $17.4 Million in Third Quarter ---------------------------------------------------------- Associated Materials Incorporated reported net income of $17.4 million for the third quarter of 2007 ended Sept. 29, 2007, compared to net income of $14.6 million for the same period in 2006. For the nine months ended Sept. 29, 2007, net income was $29.8 million compared to net income of $31.0 million for the same period in 2006. Net sales for the quarter ended Sept. 29, 2007, were $349.6 million, a 1.8% increase from net sales of $343.4 million for the same period in 2006. For the nine months ended Sept. 29, 2007, net sales were $905.7 million, or 4.8% lower than net sales of $951.0 million for the same period in 2006. Adjusted EBITDA was $44.0 million for the third quarter of 2007 compared to adjusted EBITDA of $40.0 million for the same period in 2006. For the nine months ended Sept. 29, 2007, adjusted EBITDA was $93.5 million compared to adjusted EBITDA of $95.9 million for the same period in 2006. Tom Chieffe, president and chief executive officer, commented, "I am pleased with our performance given the current state of the housing market and building products industry. Our third quarter of 2007 marked the highest third quarter adjusted EBITDA in company history. The various cost reduction initiatives we have implemented across the entire business have allowed us to sustain our EBITDA performance and should position us for improved profitability when macroeconomic conditions improve." Net sales increased 1.8%, or $6.2 million, during the third quarter of 2007 compared to the same period in 2006 primarily due to growth in third party manufactured product sales, improved unit volumes in the company's vinyl window operations, and the benefit from the stronger Canadian dollar, partially offset by decreased unit volumes in the company's vinyl siding operations. Gross profit in the third quarter of 2007 was $91.6 million, or 26.2% of net sales, compared to gross profit of $85.1 million, or 24.8% of net sales, for the same period in 2006. Selling, general and administrative expense increased to $53.1 million, or 15.2% of net sales, for the third quarter of 2007 versus $50.7 million, or 14.8% of net sales, for the same period in 2006. Income from operations was $38.4 million for the third quarter of 2007 compared to $34.4 million for the same period in 2006. At Sept. 29, 2007, the company's consolidated balance sheet showed $842.8 million in total assets, $544.1 million in total liabilities, and $298.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 29, 2007, are available for free at http://researcharchives.com/t/s?2692 About Associated Materials Headquartered in Cuyahoga Falls, Ohio, Associated Materials Incorporated -- http://www.associatedmaterials.com/-- is a manufacturer of exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. AMI is a privately held, wholly-owned subsidiary of Associated Materials Holdings Inc., which is a wholly-owned subsidiary of AMH, which is a wholly-owned subsidiary of AMH II, which is controlled by affiliates of Investcorp S.A. and Harvest Partners Inc. * * * Associated Materials still carries Moody's Investors Service 'Ba3' Bank Loan Debt and 'B3' Subordinated Debt ratings which were placed on Sept. 22, 2006. Outlook is stable. ATSI COMM: Posts $293,000 Net Loss in Quarter Ended October 31 -------------------------------------------------------------- ATSI Communications Inc. reported net loss of $293,000 for quarter ended Oct. 31, 2007, compared to a net loss of $184,000 for the same period in the previous year. The first quarter operating highlights include: -- $3 million accounts receivable financing package entered with Wells Fargo; -- Joseph M. Troche appointed as sr. vice president of global sales; and -- becoming a member of Arbinet-thexchange Inc., a NASDAQ company, to buy, sell, deliver and settle VoIP transactions using Arbinet's Internet-based electronic platform. The company incurred $519,000 in non-cash expense during the quarter ended Oct. 31, 2007 vs. $429,000 during the quarter ended Oct. 31, 2006. Non-cash expenses incurred during the period include depreciation, amortization, interest, and stock compensation. "We are extremely pleased with our quarterly results," Arthur L. Smith, CEO of ATSI stated. "Our global VoIP strategy continues to pay-off as evidenced by increased voice communications traffic on our network and continued revenue growth. Against this backdrop, our trend for improvement in gross profit has continued and we are optimistic that our commitment to control expenses will contribute to stronger bottom-line results going forward." At Oct.31, 2007, the company's balance sheet showed total assets of $2.24 million and total liabilities of $2.66 million resulting to a total shareholders' deficit of $0.42 million. About ATSI Communications ATSI Communications Inc. -- http://www.atsi.net/-- (OTCBB: ATSX) operates through its two wholly owned subsidiaries, Digerati Networks, Inc., and Telefamilia Communications, Inc. Digerati Networks, Inc., is a premier global VoIP carrier serving rapidly expanding markets in Asia, Europe, the Middle East, and Latin America, with an emphasis on Mexico. Through Digerati's partnerships with established foreign carriers and network operators, interconnection and service agreements, and a NexTone powered VoIP network, ATSI believes it has clear advantages over its competition. Telefamilia Communications provides specialized retail communication services that include VoIP services to the high-growth Hispanic market in the United States. ATSI also owns a minority interest of a subsidiary in Mexico, ATSI Comunicaciones, S.A. de C.V., which operates under a 30-year government issued telecommunications license. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 22, 2007, Malone & Bailey PC in Houston, Tex., raised substantial doubt about ATSI Communications Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended July 31, 2007. The auditing firm stated that ATSI has a working capital deficit, has suffered recurring losses from operations and has a stockholders' deficit. ATRIUM CORP: Operating Pressure Cues Moody's to Review Ratings -------------------------------------------------------------- Moody's Investors service has placed Atrium Corp. and its holco on review for possible downgrade. The ratings action reflects the operating pressure from the homebuilding and remodeling market slowdown on Atrium's sales and cash flow generation, high leverage, and concerns that the company's cost cutting initiatives will not be sufficient to maintain positive free cash flow generation in 2008. These ratings for ACIH have been placed on review for possible downgrade: -- Corporate Family Rating, previously at B2; -- Probability of Default Rating, previously at B2; -- $174 million senior discount notes due 2012, previously at Caa1 (LGD6, 90%); -- Speculative Grade Liquidity Rating, downgraded to SGL-4 from SGL-3. These ratings/assessments for Atrium Companies, Inc. have been placed under review for possible downgrade: -- $378.5 million senior secured term loan B, due 2012, previously B1, at (LGD3, 35%); -- $50 million senior secured revolving credit facility, due 2011, previously B1, at (LGD3, 35%). The review will focus on the company's strategy to address weak demand including initiatives to sell more into the remodeling market, its cost cutting initiatives, and new product offerings. The review will also focus on the company's liquidity because the company's accounts securitization currently has a rating trigger. Atrium has access to a $50 million revolving credit facility that is used intermittently for working capital purposes. Were the account securitization facility to be called, the company would likely need to tap cash and draw from the revolver. The revolver's availability is affected by the company's covenants. As a result, the review will consider the level of room under the covenants and the likelihood that the company may trip its covenants. A renegotiation of the company's rating trigger or covenants would be considered a positive credit event. The downgrade in the speculative grade liquidity rating to SGL-4 reflects the expectation that the company's free cash flow generation will likely be weak over the next four quarters. The SGL rating also reflects reduced headroom under the company's covenants governing the senior secured credit facilities. Moody's notes that the company's fixed charge and debt leverage coverage covenants remain relatively tight particularly when one considers current market conditions. Headquartered in Dallas, Texas, Atrium Companies, Inc. is one of the largest window manufacturers in North America. Revenues for the LTM period ended 9/30/07 were $791 million. AVADO BRANDS: Wants February 8 Set as Claims Bar Date ----------------------------------------------------- Avado Brands Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to establish Feb. 8, 2008, at 4:00 p.m., prevailing Eastern Time, as the deadline for creditors to file proofs of claim arising before Sept. 5, 2007. The Debtor also ask the Court to set March, 3, 2008, at 4:00 p.m., prevailing eastern time, as the last day for all governmental units to file proofs of claim. All proofs of claim must be filed with: Avado Brands Inc. c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California 90245 Madison, Georgia-based Avado Brands Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. About 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. Scott L Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and David B. Stratton, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. AVISTA CORP: Debt Reduction Cue Moody's to Lift All Ratings ----------------------------------------------------------- Moody's Investors Service upgraded all of the debt ratings of Avista Corp. (Avista; senior unsecured to Baa3 from Ba1). The rating actions conclude a review for possible upgrade of Avista's debt ratings, which was initiated on June 22, 2007. The rating outlook for Avista is stable. The upgrades of Avista's ratings primarily reflect the sale of its unregulated subsidiary, Avista Energy, Inc., and the use of sale proceeds initially to reduce debt, in line with Moody's expectations. "Historically, it has been Moody's opinion that Avista needed to maintain stronger credit metrics than might otherwise be necessary for its former ratings in light of its higher degree of business risk; however, without Avista Energy, the company's current and expected key credit metrics should be adequate to support a Baa3 senior unsecured rating, according to Moody's Global Rating Methodology for Regulated Electric Utilities," said Mr. Kevin Rose, Vice President and Senior Analyst. "The rating actions also take into account the recent approval by the Washington Utilities and Transportation Commission of a settlement agreement to resolve Avista's latest general rate case, which we believe provides Avista with reasonable rate relief and an improved opportunity to bolster the utility division's earned returns on its investments in the Washington jurisdiction," said Mr. Rose. The sale of Avista Energy was completed on June 30, 2007, when Avista Energy sold substantially all of its contracts and ongoing operations to Coral Energy Holding, L.P. and certain of its subsidiaries, a subsidiary of Shell. The transaction involved the sale of Avista Energy's trading portfolio at net book value. The net assets, which were largely comprised of receivables and restricted cash and deposits with counterparties, generated proceeds that allowed Avista Energy to pay a cash dividend of $169 million to Avista Capital; Avista Capital then paid a cash dividend of $155 million to Avista Corp. At the same time, Avista Corp. liquidated assets not subject to the sale or transfer to Coral Energy. The completion of this transaction ends substantially all of Avista's operations in the energy trading and marketing business, which markedly reduces the volatility of Avista's overall earnings and cash flows and lowers Avista Corp.'s overall business risk profile which leaves it largely focused on the regulated electric and natural gas utility businesses operated through the Avista Utilities division. The lone remaining non-regulated business activity of any significance is now the facility and information and cost management services business conducted by Advantage IQ. The recent rate increases approved by the WUTC should enable Avista to improve its key credit metrics, especially as the company addresses the near term refinancing of a high cost debt issue (i.e., approximately $273 million of 9.75% senior unsecured notes due June 2008). In particular, Moody's expects Avista's cash flow from operations (before changes in working capital) to interest and debt to approach 3.0x or better and be maintained in the low- to mid-teens, respectively, over the next couple of years. At the same time, Moody's rating actions also incorporate the ongoing challenges that Moody's believes Avista still faces given its expected higher capital spending program over the next couple of years. Against this backdrop, Moody's is assuming that the company's regulators in its Washington, Idaho, and Oregon jurisdictions will continue to support timely and adequate recovery of, and return on, the capital investments through decisions in future general rate cases that Moody's expect will be filed on a regular basis. In Moody's overall assessment of regulatory risk, the degree of support from the WUTC is more heavily weighted than the degree of support from the other jurisdictions since Washington is the company's largest jurisdiction, by far. Avista's stable rating outlook reflects its favorable business risk profile centered on a back-to-basics strategy that focuses on less risky regulated utility operations, as well as expected progress in improving its earned returns from utility operations and shoring up its balance sheet, while maintaining sufficient liquidity. Avista's ratings upgraded include: -- senior secured debt to Baa2 from Baa3 -- senior unsecured debt and Issuer Rating to Baa3 from Ba1 -- senior secured shelf to (P)Baa2 from (P)Baa3 -- senior unsecured shelf to (P)Baa3 from (P)Ba1 -- preferred stock shelf to (P)Ba2 from (P)Ba3 -- AVA Trust III, trust preferred securities to Ba1 from Ba2 -- Avista Corp Capital II, trust preferred securities to Ba1 from Ba2 Avista Corp. is an energy company, primarily involved in the production, transmission and distribution of energy through its Avista Utilities division, as well as other modest-sized energy- related businesses. Avista's headquarters are in Spokane, Washington. AVNET INC: Completes Purchase of Acal IT Solution for $200 Mil. --------------------------------------------------------------- Avnet Inc. has completed its acquisition of the IT Solutions Division of Acal plc. The acquired business, which has annual revenues of approximately $200 million, is a leading European value-added distributor for Storage Networking, Networking, Security, Electronic Document Management, as well as managed and professional services. The division, which has operations in the UK, the Netherlands, Belgium, Germany, France and Sweden, will be integrated into Avnet Technology Solutions' EMEA business. Dick Borsboom, President of Avnet Technology Solutions EMEA, commented, "This acquisition extends our depth of expertise in the IT solutions and services arena by adding new competencies in high growth areas and expanding our ability to deliver multi- vendor solutions. The addition of 200 skilled employees and 2000 Acal resellers broadens our solutions-selling portfolio and creates additional opportunities for cross selling." Following on the recently completed acquisition of the Magirus Enterprise Division, Avnet Technology Solutions is substantially building its market presence in the areas of managed and professional services, SAN, Networking and Security solutions. The acquisition also opens new markets to Avnet Technology Solutions, such as Electronic Document Management today operating under the name Headway Technologies. "We are executing well on our goal to be the premier, value-add distributor in Europe," added Mr. Borsboom. "The acquisition of Acal is another clear affirmation of our vision to be the leader in delivering solutions that can accelerate the growth of our trading partners." About Avnet Electronics Avnet Electronics Marketing -- http://www.em.avnet.com/-- is an operating group of Phoenix-based Avnet, Inc. (NYSE:AVT), a Fortune 500 company. Avnet Electronics Marketing serves electronic original equipment manufacturers and electronic manufacturing services providers in more than 70 countries, distributing electronic components from leading manufacturers and providing associated design-chain and supply-chain services. About Avnet Inc. Headquartered in Phoenix, Arizona, Avnet, Inc. -- http://www.avnet.com/-- distributes electronic components and computer products, primarily for industrial customers. It has operations in the following countries: Australia, Belgium, China, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, New Zealand, Philippines, Singapore, and Sweden, Brazil, Mexico and Puerto Rico. * * * Moody's Investors Service affirmed Avnet's Ba1 corporate family long-term debt ratings in March 2007. Moody's said the outlook is positive. BAY COVE: Moody's Holds Ba2 Rating on $5 Mil. Outstanding Bonds --------------------------------------------------------------- Moody's Investors Service affirmed the Ba2 bond rating assigned to Bay Cove Human Services' $5.0 million of outstanding Series 1998 bonds issued by the Massachusetts Health & Educational Facilities Authority. The outlook has been revised to negative from stable, reflecting a decline in liquidity following the acquisition of another agency. Legal Security: The Series 1998 Bonds are secured by first mortgage liens on and security interests in certain real properties of Bay Cove, including the organization's main administrative building. Additionally, the bonds are secured by a lien on and security interest in the Department of Mental Retardation Contract Receivables. The bonds are also secured by a pledge of the DMR contract for the sole benefit of the bond Trustee, under which payments are to be made to Bay Cove annually in an amount not less than 150% of the Maximum Annual Debt Service (the Pledged Provider Contract). Interest Rate Derivatives: None. Strengths Position as a large human service provider of essential services in the Boston area, with specialization in services to individuals with multiple disabilities and ranked within the top ten human service providers in Massachusetts in terms of size and reputation . Acquisition of agency which provides senior care services (Kit Clark Senior Services, Inc.) increased revenue by 23% in fiscal year 2007 and adds complementary service lines and mental health clinic license. Historically stable financial results with consistent operating margins of 1.0% and 1.5% in fiscal years 2006 and 2007. Profitable operations throughout its 34-year history (a highly unusual accomplishment for the human service provider sector) due to disciplined management style. Kit Clark Senior Services, Inc. recorded a small operating deficit that management is seeking to reduce through operating efficiencies. Diverse revenue stream from different state departments (Departments of Mental Health, Mental Retardation, Public Health and Medicaid) as well as private funding mitigates its vulnerability to reductions to any one area of social service funding. Addition of elder care services adds a new funding source and further diversifies revenue base. Annual fundraising goals of close to one million dollars that supplements ongoing operations was met in 2007 and is expected to continue. Moody's includes these funds as other operating revenues since dollars are matched with current programs and are not designated for endowment or long term investment. Restructuring of its health benefits in July 2005 has controlled future benefit expense growth in this area. Stabilized staffing due to favorable benefits and training with minimal vacancies now noted. Challenges Dependence on state funding that could result in contract reimbursement reductions for Bay Cove if the state experiences budget shortfalls in future years. The majority of existing contracts lack revenue updates, and so do not provide adequate inflationary escalators for salary and benefit increases. Decline in liquidity to $2.7 million at fiscal year end 2007 from $4.4 million at FYE 2006 due to the acquisition of Kit Clark and increase in receivables, resulting in cash-on-hand declining to 18 days from a peak level of 35 days. Cash improved through the first five months of FY 2008 (Oct. 31, 2007) to $3.7 million (28 days), however, limited liquid resources provide minimal operating flexibility. Bay Cove views reserves more as providing flexibility for short-term strategic spending rather than as a long-term financial cushion that is anticipated to grow. Bay Cove had been building its cash reserves over the last four years for such an opportunity at the Kit Clark acquisition. However, the short term impact of liquidity decline affects credit quality and modest cash resources will be a limiting factor to pursuing future growth opportunities. Debt load increased by $3.9 million in FY 2007 weakening debt measures, with debt-to-cash flow high at 6.3 times yet maximum annual debt service coverage good at 2.42 times in FY 2007. Auditors reported certain significant deficiencies in internal control over financial reporting at Kit Clark that are being addressed. Outlook The negative outlook reflects a recent decline in liquidity as a result of the purchase of a complementary human service provider agency. While cash has improved in the current fiscal year, days cash-on-hand remains below historical levels and will need to improve to maintain the current rating. Our expectation is that Bay Cove will continue to leverage its market position as a provider of essential services and be able to demonstrate moderate annual growth and consistent financial performance. What could change the rating- Up Growth in liquidity reserves and an increased position as a sizable human service provider; improvement in operating results; greater security in funding sources What could change the rating- Down Budget shortfalls in the Commonwealth of Massachusetts that would force the state to scale back on important social and health services; operating losses; further deterioration of cash reserves; increase in debt load without a commensurate increase in cash flow Key Indicators Assumptions & Adjustments: -- Based on combined financial statements for Bay Cove Human Services, Inc. and Affiliates -- First number reflects audit year ended June 30, 2006 -- Second number reflects audit year ended June 30, 2007 -- Investment returns normalized at 6% unless otherwise noted Total operating revenues: $46.7 million; $57.4 million Moody's adjusted net revenue available for debt service: $2.2 million; $3.0 million Total debt outstanding: $9.5 million; $13.9 million Maximum annual debt service (MADS): $1.1 million; $1.2 million MADS Coverage with reported investment income: 1.77 times; 2.18 times Moody's adjusted MADS Coverage with normalized investment income: 1.97 times; 2.42 times Debt-to-cash flow: 6.0 times; 6.3 times Days cash on hand: 36 days; 18 days Cash-to-debt: 46%; 20% Operating margin: 1.0%; 1.5% Operating cash flow margin: 3.8%; 4.4% Debt Outstanding (as of June 30, 2007) -- Series 1998, $4.8 million outstanding; Ba2 rating BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 22 classes of Bear Stearns Commercial Mortgage Securities Trust Series 2006- PWR12. Commercial Mortgage Pass-Through Certificates are: -- Class A-1, $56,262,929, affirmed at Aaa -- Class A-2, $49,000,000, affirmed at Aaa -- Class A-3, $150,500,000, affirmed at Aaa -- Class A-AB, $119,800,000, affirmed at Aaa -- Class A-4, $873,250,000, affirmed at Aaa -- Class A-1A, $192,265,378 affirmed at Aaa -- Class A-M, $207,903,000, affirmed at Aaa -- Class A-J, $161,124,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $44,180,000, affirmed at Aa2 -- Class C, $18,191,000, affirmed at Aa3 -- Class D, $33,785,000, affirmed at A2 -- Class E, $20,790,000, affirmed at A3 -- Class F, $25,988,000, affirmed at Baa1 -- Class G, $20,790,000, affirmed at Baa2 -- Class H, $25,988,000, affirmed at Baa3 -- Class J, $7,796,000, affirmed at Ba1 -- Class K, $7,797,000, affirmed at Ba2 -- Class L, $7,796,000, affirmed at Ba3 -- Class M, $5,198,000, affirmed at B1 -- Class N, $5,197,000, affirmed at B2 -- Class O, $5,198,000, affirmed at B3 As of the Dec. 13, 2007 distribution date, the transaction's aggregate principal balance has decreased by approximately 0.7% to $2.06 billion from $2.08 billion at securitization. The Certificates are collateralized by 213 loans, ranging in size from less than 1.0% to 7.6% of the pool, with the top ten loans representing 32.3% of the pool. The pool includes one shadow rated loan, which represent 7.6% of the pool. No loans have defeased, been liquidated from the pool or are in special servicing. Twelve loans, representing 6.0% of the pool, are on the master servicer's watchlist. Moody's was provided with full year 2006 operating results for 98.0% of the performing loans. Moody's weighted average loan to value ratio for the conduit component is 102.4% compared to 100.9% at securitization. The shadow rated loan is the 1675 Broadway Loan ($155.0 million -- 7.5%), which is secured by a 35-story, 761,092 square foot office building located in the Midtown West submarket of New York City. There is also a junior non-trust component of $25.0 million. The loan is interest only for the first 60 months of its term and thereafter amortizes on a 360 month schedule. Moody's current shadow rating is Baa3, the same as at securitization. The top three conduit exposures represent 14.3% of the pool. The largest conduit loan is the Woodland Mall Loan ($156.5 million -- 7.6%), which is secured by the borrower's interest in a 1.2 million square foot (397,897 square feet is collateral) regional mall located in Grand Rapids, Michigan. The mall is anchored by J.C. Penney, Sears, Marshalls and Kohl's. The loan is interest only for 36 months and then amortizes on a 360 month schedule. Moody's LTV is 110.9% compared to 107.7% at securitization. The second largest conduit exposure is the Orange Plaza Loan ($90.5 million -- 4.4%), which is secured by a 765,390 square foot retail property located in Middletown, New York. The loan is interest only for 24 months and then amortizes on a 360 month schedule. Moody's LTV is 108.9%, the same as at securitization. The third largest conduit exposure is the Broken Sound Portfolio Loan ($47.0 million -- 2.3%), which is secured by the fee interest in a cross-collateralized and cross-defaulted portfolio of five office/retail buildings with a total of 369,444 square feet located in Boca Raton and Deerfield Beach, Florida. The loan is interest only for the entire term. Moody's LTV is 107.5%, the same as at securitization. BEAR STEARNS: Moody's Junks Four Certificates' Ratings ------------------------------------------------------ Moody's Investors Service has downgraded and maintained on review for further downgrade 1 class of certificates, placed on review for possible downgrade 1 class of certificates, and downgraded 6 certificates from Bear Stearns Second Lien Trust 2007-1. The transaction is backed by home equity lines of credit loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The underlying pool of loans has seen a high rate of early default with continued growth in the delinquency pipeline despite the realization of losses. As of November 2007, the pool has $36,091,254 of loans that are 60 or more days delinquent, in bankruptcy, foreclosure or REO. The complete rating actions are: Issuer: Bear Stearns Second Lien Trust 2007-1 Downgrade and Review for Possible Downgrade: -- Class I-M-4, Downgraded to B3 from A3 and on review for possible further downgrade. Review for Possible Downgrade: Class I-M-1, current rating Aa3, on review for possible downgrade. Downgrade: -- Class I-M-2, Downgraded to B1 from A1; -- Class I-M-3, Downgraded to B2 from A2; -- Class I-B-1, Downgraded to Ca from Baa1; -- Class I-B-2, Downgraded to C from Baa2; -- Class I-B-3, Downgraded to C from Baa3; -- Class I-B-4, Downgraded to C from Ba1. BOMBAY CO: Selling Intellectual Property to Bombay Brands --------------------------------------------------------- The Bombay Company Inc. has agreed to sell its intellectual property, which includes the Bombay brand name, to Bombay Brands LLC, a joint venture of Hilco Consumer Capital and Gordon Brothers Group. In a transaction structure, The Bombay Company bankruptcy estate retains a 25% interest in Bombay Brands. The acquisition is subject to approval by the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division. Hilco Consumer Capital will assume day-to-day brand management responsibilities and will immediately undertake a strategic brand rebuilding program designed to leverage the intrinsic value of the Bombay name. Through licensing strategies with retailers, wholesalers and franchisees, a broad-range of new consumer products will be created and marketed internationally. Assistance will be provided by The Bombay Company estate and the respected brand strategies and marketing firm, Graj + Gustavsen, also a partner in the joint venture group. John Collins, an executive with Hilco Consumer Capital, was named president and chief marketing officer of Bombay Brands. Mr. Collins is also president of Hilco TAG, owner of Tommy Armour Golf and RAM Golf. He has more than 25 years of experience in managing and marketing famous-name brands, including Nike, Bauer, Tommy Armour Golf, Volant Ski, Canon Inc., and Kubik. "The Bombay brand differentiates itself through a lifestyle approach in the home furnishings category," Mr. Collins stated. "It offers terrific opportunities for expansion and development into a whole new range of highly desirable and affordable consumer lifestyle products. Our plan will generate new products through licensed wholesalers and bring them to market through strategic retail and brand franchisee partners." "We are fortunate to have made the acquisition with Gordon Brothers Group," James "Jamie" Salter, chief executive officer of Hilco Consumer Capital, said. "We are also happy that we were able to structure the transaction in a way that allows the creditors of The Bombay Company Inc. to participate in the overall success of our strategy." "We are very pleased that the Bombay name will have the opportunity to flourish under the new venture," Elaine D. Crowley, SVP, CFO & Treasurer of The Bombay Company, noted. "We believe the expertise that Hilco Consumer Capital brings creates a unique opportunity to rebuild the Bombay brand and will ultimately provide loyal Bombay customers a solution for their home decorating needs. We look forward to working with the venture partners to rebuild the Bombay brand." About Hilco Consumer Capital Hilco Consumer Capital - http://www.hilcocc.com/-- was formed in 2006 to make private equity investments in consumer brands and build significant, additional value in them through innovative product development, creative marketing and licensing strategies. HCC is a unit of The Hilco Organization -- http://www.hilcotrading.com/-- a privately-held, diversified financial services firm specializing in appraising, purchasing, selling, financing and enhancing the performance of tangible and intangible business assets through a platform of 22 integrated business units located in North America and the European Union. About Gordon Brothers Gordon Brothers Group -- http://www.gordonbrothers.com/-- is an advisory, restructuring and investment firm specializing in the retail, consumer products, real estate and industrial sectors. Founded in 1903, Gordon Brothers provides asset valuations and appraisals, dispositions, real estate consulting, lending and advisory services. About Bombay Company Based in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall d�cor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BOYD GAMING: Moody's Holds Ratings and Revises Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed Boyd Gaming Corporation's Ba2 corporate family rating and probability of default rating. At the same time, the company's rating outlook was revised to stable from positive, and its $900 million of senior subordinated debt was lowered to B1 (LGD-5, 89%) from Ba3 (LGD-5, 83%). Boyd's speculative grade liquidity rating remains at SGL-2. The affirmation of Boyd's Ba2 corporate family rating reflects the company's significant and geographically diverse portfolio of casino assets, strong operating performance despite increased competition in some markets, and moderate leverage. Adjusted Debt/EBITDA for the 12-month period ended Sept. 30, 2007 was 4.0x and falls in the middle of the 'Ba' indicated rating category as defined in Moody's Global Gaming methodology. Boyd's rating also considers the company's favorable regulatory risk profile. Approximately half of the company's wholly-owned property level EBITDA comes from the Las Vegas locals market in Nevada which has a "Low" regulatory risk designation. Key credit concerns include the ongoing development risks inherent in Echelon, particularly given its size, scope, and strategic importance to Boyd. Also considered is the negative impact on the Blue Chip facility from August 2007 opening of the Four Winds Casino in New Buffalo, Michigan which is located approximately fifteen miles from Blue Chip. The downgrade to B1 of Boyd's $900 million senior subordinated notes results from a re-application of Moody's Loss Given Default Methodology recognizing that the larger $4.0 billion un-rated revolver, which was successfully syndicated in May 2007, is in a superior position relative to the company's senior subordinated debt, which results in a higher recovery rate and depresses the recovery rate for the senior subordinated notes. The outlook revision to stable from positive considers that the recent increase in competition in the Midwest and Northeast regions, coupled with relatively flat year-to-date results in the company's Las Vegas locals business segment and a $400 million increase in the Echelon budget announced earlier this year, will make it more difficult for Boyd to achieve and maintain the credit metrics need to achieve a higher corporate family rating. Boyd's SGL-2 speculative grade liquidity rating acknowledges that the company will generate positive cash flow after interest, taxes, dividends and maintenance capital expenditures, but will also be a net borrower through fiscal 2008 as a result of continued investment in Echelon. Boyd wholly-owns and operates gaming entertainment facilities located in Nevada, Mississippi, Illinois, Louisiana, Indiana and Florida. The company is also 50% partner in a joint venture that owns a limited liability company, operating Borgata Hotel Casino and Spa in Atlantic City, New Jersey, which is accounted for using the equity method. The company is also entered into two joint ventures associated with its Echelon development. BRANDYWINE REALTY: Closes $245.4 Mil. Sale of 29 Properties to DRA ------------------------------------------------------------------ Brandywine Realty Trust has completed the sale and contribution of 29 suburban Philadelphia office properties to a joint venture consisting of DRA Advisors LLC with an 80% interest and affiliates of Brandywine Realty Trust with a 20% interest. An 89% interest was sold in three of the properties, while 100% interests were sold or contributed in the rest. The portfolio valuation of $245.4 million (reflecting 100% interests throughout) represents a capitalization rate of approximately 7.4% GAAP and 7.2% cash based on trailing twelve-month net operating income (NOI) through Sept. 30, 2007 and approximately 7.9% cash based on preliminary 2008 NOI projections. The 29 properties, which are listed below, comprise approximately 1.6 million square feet and were 95.3% occupied and 96.4% leased (reflecting future executed leases) as of September 30, 2007. The joint venture has secured $184 million of seven-year, non- recourse, property financings at a rate of 5.78% with an initial, thirty-six month interest-only period followed by monthly principal and interest payments pursuant to a 30-year principal amortization schedule until the January 1, 2015 maturity date. As a result of the sales and contribution transactions, the proceeds from the property financings, the joint venture s payment of its transaction expenses and certain other financial transactions between the parties, Brandywine has realized $235.4 million of gross proceeds and $230.9 million of net proceeds after deducting its own transaction expenses. Brandywine will use the net proceeds from the transaction to reduce outstanding indebtedness under its unsecured revolving credit facility. A subsidiary of Brandywine will be responsible for the management and leasing of the joint venture properties under a separate agreement. Brandywine does not expect that it will declare a special distribution on account of this transaction, subject to a final review of its calendar year 2007 taxable income. "We are delighted to complete this transaction with DRA Advisors," Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust, stated. "Working with DRA to structure and close this joint venture has enabled us to get to know this fine organization and benefit from its impressive track record in public-private transactions. The capital we have raised enhances our balance sheet flexibility and will ultimately get recycled into a variety of growth opportunities in our target markets including our current and planned development projects. By retaining a 20% ownership stake and managing the properties, we will share in the upside from this portfolio and contribute to its future success. Overall, this transaction demonstrates the strength of our properties and creates significant value for our stockholders. "DRA is excited to close on this joint venture with Brandywine," David Luski, Executive Vice President of New York-based DRA Advisors LLC, said. "Brandywine has an excellent reputation in the marketplace and we are looking forward to expanding this relationship in the future. The Philadelphia office of CB Richard Ellis served as Brandywine s exclusive marketing advisor for the transaction. Three properties, aggregating 260,000 square feet, were previously excluded from the joint venture transaction and have been retained by Brandywine." Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust (NYSE: BDN), http://www.brandywinerealty.com/-- is one of the full-service, integrated real estate companies in the United States and is focused primarily on the ownership, management and development of class A, suburban and urban office buildings in selected markets aggregating approximately 42 million square feet. * * * Fitch assigned a 'BB+' rating on Brandywine Realty Trust's Preferred Stock. The outlook is positive. BROWN & COLE: Judge Steiner Approves Plan of Reorganization ----------------------------------------------------------- The Hon. Samuel J. Steiner of the U.S. Bankruptcy Court for the Western District of Washington approved Brown and Cole Stores LLC's plan of reorganization on Dec. 20, 2007, Dave Gallagher of The Bellingham Herald reports. Under the Debtor's reorganization plan, the Debtor will continue operations at its main office and intends to keep its current workers and stores, as well as employment agreements, Bellingham Herald relates. The Debtor received funding from Hancock Park Associates of California for store developments in exchange of about $43 million equity interest, Bellingham Herald says. President and CEO Craig Cole told Bellingham Herald that Brown & Cole now has a "solid financial backing" for the company to keep operating "for years to come." Bellingham, Washington-based Brown and Cole Stores LLC -- http://www.brownandcole.com/-- is Washington state's oldest grocery company, founded in 1909. The Debtor currently operates 20 supermarkets across the state and has 1,200 employees. The Debtor filed for chapter 11 petition on Nov. 7, 2006 (Bankr. W.D. Wa. Case No. 06-13950). Aimee S. Willig, Esq., Armand J. Kornfeld, Esq., Gayle E. Bush, Esq., and Katriana L. Samiljan, Esq., at Bush Strout & Kornfeld represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets between $1 million and $100 million and liabilities of more than $100 million. BURLINGTON COAT: Weak Revenue Cues Moody's to Revise Outlook ------------------------------------------------------------ Moody's Investors Service changed Burlington Coat Factory Warehouse, Inc.'s rating outlook to negative from stable and affirmed all the company's existing ratings. The change in outlook to negative is as a result of the company's weak revenue and earnings performance that has led to a weakening in credit metrics. These ratings are affirmed: -- Corporate family rating at B2, -- Probability of default rating at B2, -- $900 million senior secured term loan at B2 (LGD 4, 51%), -- $305 million of senior unsecured guaranteed notes at B3 (LGD 5, 74%), -- Speculative grade liquidity rating at SGL-2. -- The rating outlook is negative. The corporate family rating is constrained by the company's weak financial metrics as a result of its leveraged buyout by Bain Capital in 2006 which also results in financial policies that will likely favor shareholders going forward. The rating is also constrained by the company's low level of profitability (EBITA margin of 3.2%) that is well below the average of its retail apparel peers. The corporate family rating reflects the company's secondary competitive position in the off-price retail segment against TJX, its very high seasonality with nearly 98% of its cash flow from operations being generated during the second fiscal quarter, and the moderately high product volatility associated with the off-price apparel and home goods segments. Lending support to the corporate family rating is company's concentration in the off-price retail segment which has generated solid performance and is more resilient to negative macro economic consumer pressures than the full price channel for apparel and home fashions. Ratings are also supported by its good liquidity, its national diversification, and the company's well recognized brand name. The negative outlook reflects the company's weak sales and earning performance which has resulted in credit metrics that are weak for the rating category and weaker than Moody's original expectation. Ratings could be downgraded should the company's performance continue to be weak making it likely that debt/EBITDA will be sustained over 6.75x , should EBITDA/interest expense less capital expenditures likely be sustained below 1.2 times, or should liquidity erode. Burlington Coat Factory Warehouse Corporation, headquartered in Burlington, New Jersey, is a nationwide off-price apparel retailer that operates approximately 384 stores in 44 states under the nameplates of Burlington Coat Factory, Cohoes, MJM, and Baby Depot. Revenues for the LTM period ended Sept. 1, 2007 were approximately $3.4 billion. CAVTEL HOLDINGS: Moody's Cuts Corporate Family Rating to B3 ----------------------------------------------------------- Moody's Investors Service downgraded CavTel Holdings, LLC.'s corporate family rating to B3, from B2, and the B2 rating of the Company's senior secured credit facilities to B3. Moody's had assigned the ratings in November 2006 in connection with Cavalier's acquisition of TalkAmerica Holdings, which closed in December 2006. The outlook for ratings remains stable. The downgrade reflects Cavalier's weaker-than-expected revenue and free cash flow generation due to operational challenges in integrating Talk America and intense competitive pressures. Cavalier's 2007 debt to EBITDA leverage is expected to exceed Moody's previously indicated downward trigger of 4.0x and the rating agency is concerned about the Company's residential churn rates of close to 5% (Moody's leverage calculations include 75% of preferred stock accounted as debt and capitalized operating leases, in accordance with Moody's methodology). In addition, Moody's is concerned about potential covenant violations in the Company's credit facility in 2008. Although Cavalier continues to realize expected cost synergies from the integration of Talk America, weaker sales to residential and commercial customers, higher churn of residential customers due to poor credit quality and related bad debt expenses, have contributed to free cash flow falling short of the rating agency's previous projections. Moody's now expects Cavalier's YoY revenue to remain flat in 2008 and increase by mid-single digits in 2009. As a result of revised expectations of weaker EBITDA growth and free cash flow generation, Moody's expects Cavalier's leverage of 3.8x at year- end 2008 -- slightly more than a turn above previous projections. - Issuer: CavTel Holdings, LLC -- Corporate Family Rating: Downgraded to B3, from B2 -- Probability of Default Rating: Downgraded to Caa1, from B3 -- Senior 1st lien secured Revolving Credit Facility Due 2011: Downgraded to B3, LGD3 -- 32%, from B2, LGD3 -- 31% -- Senior 1st lien secured Term Loan Due 2012: Downgraded to B3, LGD3 -- 32%, from B2, LGD3 -- 31% -- Outlook: Stable The B3 corporate family rating reflects Cavalier's reduced financial flexibility amid intense competition and increased capital spending on the Company's IPTV initiative, and the Company's financial risk. The rating incorporates the complexity of integrating Talk America, which Cavalier acquired in December 2006, and the inherent risk of Cavalier's greater exposure to the residential telephony market relative to its CLEC peers, as residential customers typically have higher churn rates. The stable outlook reflects Moody's expectations that the Cavalier's revenue will stabilize in 2008 and the Company will generate free cash flow of 1% of its adjusted debt. Richmond, Virginia- based Cavalier is a competitive local exchange carrier servicing approximately 750,000 access lines and generated nearly $680 million in annualized revenues. CENTRO NP: Financial Difficulties Cue Fitch to Junk Ratings ----------------------------------------------------------- Fitch Ratings has downgraded the ratings for Centro NP LLC (formerly New Plan Excel Realty Trust) as: -- Issuer Default Rating to 'CCC' from 'BBB+'; -- $350 million revolving bank credit facility to 'CC/RR6' from 'BBB+'; -- $830 million senior unsecured notes to 'CC/RR6' from 'BBB+'. Centro NP LLC remains on Rating Watch Negative by Fitch. Fitch has withdrawn its New Plan Excel Realty Trust preferred stock rating as these securities were redeemed in connection with the acquisition of New Plan by affiliates of Centro Property Group. The downgrade of Centro NP LLC ratings is due to the financial difficulties of the entity's Australian based parent company Centro Property Group in connection with the refinancing of over $2.3 billion of indebtedness due to dislocations in the credit markets. CNP has negotiated an extension on its maturing facilities to Feb. 15, 2008; however, given the current state of the credit markets, there is a great deal of uncertainty surrounding CNP's ability to refinance this indebtedness. Centro NP bondholders are protected by several financial covenants in its bond indentures including total debt to total historical book assets less than 65%; debt service coverage ratio greater than 1.5 times; secured debt to total historical book assets under 40% and unencumbered historical book assets to unsecured debt greater than 1.0x. However, Fitch is concerned that Centro NP assets could be consolidated in a CNP liquidation scenario and the covenants waived. The ratings concerns center on CNP liquidity issues and do not pertain to the operating performance of Centro NP. The portfolio of needs-based, grocery-anchored shopping centers across the U.S. is performing well and expected to be well positioned in an economic slowdown. The strong geographic and tenant diversity of the portfolio helps insulate the company from regional downturns or tenant credit deterioration. Furthermore the company has seasoned executive and regional management teams and a strong regional infrastructure. Fitch expects the Rating Watch Negative will be resolved once there is more clarity regarding CNP's financial stability. Centro NP is a $5.9 billion total assets real estate company focusing on the ownership, management and development of community and neighborhood shopping centers. Centro NP operates a national portfolio of community and neighborhood shopping centers across the U.S. with approximately 67 million square feet of GLA. Centro Properties Group is a Melbourne-based company (ASX: CNP) focusing on the ownership, management, and development of retail shopping centers. Centro has AUD26.6 billion of retail property assets. CHARLES SCHWAB: Good Performance Prompts Fitch to Lift Rating ------------------------------------------------------------- Fitch Ratings affirms the long-term Issuer Default Rating of Charles Schwab Corp. at 'A'. The Individual rating is upgraded to 'B' from 'B/C'. The Rating Outlook is Stable. The upgrade of the Individual rating was based on SCHW's improved financial performance in the past several quarters. The stronger earnings characteristics are attributed to a steady trend of rising asset-related revenues and the renewed focus on its core businesses. SCHW's ratings are based on the company's strong franchise in online brokerage, modest leverage and overall sound financial position. Potential upgrades to SCHW's ratings depend on sustained earnings growth and ability to garner client assets. The Structured Investment Vehicles exposure is not viewed as a current rating concern, though Fitch will monitor the impact of exposure levels and/or potential losses on the firm's overall franchise and reputation. Financial leverage at SCHW is prudent with sufficient cash flows at the parent supporting outstanding long-term debt of $625 million as of Sept. 30, 2007. Capital is appropriate for the SCHW's risk profile. The recent buybacks and dividends conducted concurrent with the sale of U.S. Trust did not materially change Fitch's view of the adequacy of the capital base. Fitch affirms these ratings: The Charles Schwab Corporation -- IDR 'A'; -- Senior unsecured debt 'A'; -- Short-term issuer 'F1'; -- Short-term debt 'F1'; -- Support '5'; -- Support Floor 'NF'; Rating Outlook Stable. SCHWAB Capital Trust I -- Preferred 'A-'; Fitch upgrades this rating: The Charles Schwab Corporation -- Individual to 'B' from 'B/C'. CHEVY CHASE: High Delinquency Cues Moody's to Review Ratings ------------------------------------------------------------ Moody's Investors Service has placed under review for possible downgrade the ratings of ten tranches from four transactions issued by Chevy Chase Funding LLC, in 2006. The collateral backing these classes consists of primarily first lien, adjustable-rate negative amortizing Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2006-1 -- Cl. B-5 Currently B2 on review for possible downgrade, Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2006-2 -- Cl. B-4 Currently Baa3 on review for possible downgrade, -- Cl. B-5 Currently B2 on review for possible downgrade, Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2006-3 -- Cl. B-3 Currently A2 on review for possible downgrade, -- Cl. B-3I Currently A2 on review for possible downgrade, -- Cl. B-3NA Currently A2 on review for possible downgrade, -- Cl. B-4 Currently Baa3 on review for possible downgrade, -- Cl. B-5 Currently B2 on review for possible downgrade, Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2006-4 -- Cl. B-4 Currently Baa3 on review for possible downgrade, -- Cl. B-5 Currently B2 on review for possible downgrade. CHRYSLER LLC: "Operationally" Bankrupt, CEO Nardelli Says --------------------------------------------------------- Chrysler LLC is "operationally" bankrupt, was how chief executive officer Robert Nardelli described the company's status at a meeting held earlier this month, The Wall Street Journal reports, citing an account by two people present that meeting. "The only thing that keeps us from going into bankruptcy is the $10 billion investors entrusted us with," Mr. Nardelli said at the meeting, WSJ's sources relate. As reported in the Troubled Company Reporter on Dec. 7, 2007, various papers cited Mr. Nardelli as saying that Chrysler is in for a wider financial loss of $1.6 billion. It would be the Chrysler's second consecutive year of losses if Mr. Nardelli's forecast is right, according to the Associated Press citing an unnamed source. The company reported a loss of $618 million in 2006 but disclosed earnings of $1.8 billion in 2005. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. COBALT CMBS: Limited Amortization Cues Fitch to Hold Ratings ------------------------------------------------------------ Fitch Ratings has affirmed Cobalt CMBS Commercial Trust commercial mortgage pass-through certificates, series 2006-C1, as: -- $41.1 million class A-1 at 'AAA'; -- $358.7 million class A-2 at 'AAA'; -- $138.9 million class A-AB at 'AAA'; -- $102.3 million class A-3 at 'AAA'; -- $723.7 million class A-4 at 'AAA'; -- $400.9 million class A-1A at 'AAA'; -- Interest-only class IO at 'AAA'; -- $253.1 million class A-M at 'AAA'; -- $208.8 million class A-J at 'AAA'; -- $50.6 million class B at 'AA'; -- $28.5 million class C at 'AA-'; -- $34.8 million class D at 'A'; -- $22.1 million class E at 'A-'; -- $28.5 million class F at 'BBB+'; -- $25.3 million class G at 'BBB'; -- $34.8 million class H at 'BBB-'; -- $6.3 million class J at 'BB+'; -- $9.5 million class K at 'BB'; -- $9.5 million class L at 'BB-'; -- $3.2 million class M at 'B+'; -- $6.3 million class N at 'B'; -- $6.3 million class O at 'B-'; -- $18 million class AMP-E1 at 'BB'; -- $7 million class AMP-E2 at 'BB'. The $31.6 million class P is not rated by Fitch. The affirmations are the result of limited amortization and stable pool performance since issuance. As of the November 2007 distribution report the transaction's principal balance has decreased 0.3% to $2.55 billion from $2.56 billion at issuance. There are no delinquent or specially serviced loans. Fitch reviewed the most recent operating statement analysis reports and occupancy figures for the five shadow rated loans in the transaction: Ala Moana Portfolio (8.9%), Fortress/Ryan's Portfolio (2.5%), Manoa Marketplace (0.8%), Wesco Self Storage (0.4%) and Cerritos Nissan (0.2%). Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. The largest shadow rated loan, Ala Moana Portfolio (8.9%), is collateralized by a two million square foot mixed use retail and office property located in Honolulu, Hawaii. Retail anchors include Sears, Macy's, Shirokiya and Old Navy. Major tenants include Barnes & Noble, Longs Drugs, Kaiser Foundation and Gap. In-line tenants include Tiffany, Cartier, Louis Vuitton, Chanel, Dior, Banana Republic, Prada, Williams Sonoma, Apple and Disney. The retail portion of the collateral is occupied by nearly 275 tenants while the office portion is occupied by 184 tenants. The property benefits from the experienced sponsorship and management of GGP LP, a real estate investment trust which currently owns and manages a portfolio of 200 regional malls totaling 200 million sf. Occupancy as of July 1, 2007, has increased slightly to 97.1% from 96.9% since issuance. The second largest shadow rated loan, Fortress/Ryan's Portfolio (2.5%), is collateralized by a portfolio consisting of 114 fee and 16 leasehold interests in a total of 130 retail properties located in 22 different states. As of June 30, 2007, occupancy has remained stable at 100% since issuance. COINMACH SERVICE: Babcok & Brown Deal Cues S&P to Remove Watch -------------------------------------------------------------- Standard & Poor's affirmed its 'B' corpora