T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 2, 2008, Vol. 12, No. 1 Headlines A.R.E.I. NEWHALL 9: Voluntary Chapter 11 Case Summary ACA CAPITAL: Balks at False Reports on Alleged Regulatory Control ACE MORTGAGE: Fitch Retains 'C' Ratings on Ten Cert. Classes ACE SECURITIES: Fitch Junks Ratings on Five Certificate Classes ACE SECURITIES: Moody's Junks Rating on Class 2004-FM1-M6 Certs. ACE SECURITIES: Moody's Places Low-B Ratings on Two Cert. Classes ALEXANDER PARK: Poor Credit Quality Cues Moody's Ratings Review AMERICAN HOME: Wants to Auction-Off Non-Performing Loans AMERICAN HOME: Court Extends Plan Filing Period Until March 3 AMERICAN TECH: Oct. 31 Balance Sheet Upside-Down by $1.2 Million AMS HEALTH: Files Bankruptcy Petition Over McCarty Judgment AMS HEALTH: Case Summary & 20 Largest Unsecured Creditors ANDREW CORP: Completes $2.65BB Merger Deal with CommScope Inc. APIDOS CDO: Cash Flow Diminution Cues Moody's to Put Ba2 Rating BANCO GMAC: Moody's Lowers Bank Financial Strength Rating to D- BARNHILL'S BUFFET: Gets Final OK to Use Wells Fargo's DIP Fund BARNHILL'S BUFFET: Wants Court Approval to Auction Restaurants BEAR STEARNS: Moody's Junks Rating on Class M-8B Certs. from Ba2 BELLEMONT VICTORIA: Moody's Holds Ba2 Rating on Subordinate Bonds BENTON BANKING: Shareholders Claim Stock is "Worthless" BENTON BANKING: First Volunteer Buys Shares for $18 Million BLUEGRASS ABS: Poor Credit Quality Cues Moody's Ratings Review CABIN CREEK: Voluntary Chapter 11 Case Summary CENVEO INC: Inks All Cash Acquisition Deal with Rex Corporation CENVEO INC: Elects Gerald S. Armstrong to Board of Directors COMMSCOPE INC: Completes $2.65BB Buyout Deal with Andrew Corp. COMMUNITY GENERAL: Moody's Holds Ba3 Rating on $8.5 Mil. Bonds CONSECO HOME: Fitch Cuts Rating on Class B-2 Certs. to B- from B+ CONSOLIDATED COMMS: Paying Quarterly Dividend on February 1 COOPER COS: Sets March 18 Annual Meeting of Stockholders COUNTRYWIDE: Fitch Takes Rating Actions on Various Transactions CSFB MORTGAGE: Moody's Cuts Ratings on 16 Certificate Classes CWABS INC: S&P Junks Ratings on Seven Certificate Classes DAVID CRAIG: Case Summary & 20 Largest Unsecured Creditors DELTA PETROLEUM: Inks $684 Million Investment Deal With Tracinda DUKE FUNDING: Moody's Reviews Ba3 Rating on $118.75 Mil. Notes EARTHFIRST TECH: Sept. 30 Balance Sheet Upside-Down by $11.3 Mil. EL PASO: Selling 25.5% Ruby Pipe Stake to PG&E Corp. for $2 Bil. EVEN CONSTRUTORA: Fitch Assigns 'B+' Foreign and Local IDRs FIELDSTONE MORTGAGE: Fitch Cuts Rating on Class M-8 Certs. to BB FORT DENISON: Event of Default Cues Moody's Ratings Review FOX HILLS 50: Voluntary Chapter 11 Case Summary FREMONT HOME: Moody's Junks Rating on Class M-10 Certs. from Ba1 FU DP REALTY: Voluntary Chapter 11 Case Summary GENESCO INC: Court Requires Finish Line to Close Merger Deal GSAMP TRUST: Moody's Cuts Ratings on Two Cert. Classes to Low-B H&H MEAT: Case Summary & 20 Largest Unsecured Creditors HARVEY ELECTRONICS: Files for Chapter 11 Protection in New York HARVEY ELECTRONICS: Voluntary Chapter 11 Case Summary HASCO: Fitch Downgrades Ratings on $19.2MM Certificates to B INDEPENDENCE I: Moody's Reviews B3 Rating on $50 Million Notes INDEPENDENCE II: Moody's Junks Rating on Class B Senior Notes INDEPENDENCE III: Moody's Reviews Low-B Ratings on Two Notes INGRESS CBO: Moody's Cuts Rating on $54 Million Notes to Ba1 IWT TESORO: Wants Court OK to Extend Exclusive Plan Filing Period JOHN AMOS: Case Summary & 16 Largest Unsecured Creditors JOHNSON RUBBER: U.S. Trustee Appoints Four-Member Creditors Panel JON ROBERTS: Case Summary & 17 Largest Unsecured Creditors LEVITT AND SONS: May Employ Ruden McClosky as Special Counsel LEVITT AND SONS: Panel Taps Genovese and Mr. Battista as Counsels LEVITZ FURNITURE: Panel Gets Partial OK to Retain Cooley Godward LEVITZ FURNITURE: Committee May Retain J.H. Cohn as Advisor LEVITZ FURNITURE: HSBC Amends Request to Lift Automatic Stay LOUISIANA LOCAL: Moody's Holds Low-B Ratings on Subordinate Bonds MACY'S INC: To Close Nine Stores in Six States MERRILL LYNCH: Moody's Junks Rating on Class B-3 Certificates MID OCEAN: Weak Credit Quality Prompts Moody's Rating Reviews MIGUEL PEREZ: Case Summary & Eight Largest Unsecured Creditors MILLER PETROLEUM: Oct. 31 Balance Sheet Upside-Down by $1.5 Mil. MOVIE GALLERY: Wants Plan Solicitation & Tabulation Protocols OK'd MOVIE HOLDINGS: Weak Operation Prompts S&P to Cut Rating to B- NASDAQ STOCK: Thomas Stemberg Leaves Board Effective December 31 NEUMANN HOMES: Court Approves Paul Hastings as Committee's Counsel NEUMANN HOMES: Can Sell 36 Trailers to CTPC for $631,208 NORTEL NETWORKS: Settles Patent Dispute With Vonage Holdings NORTEL NETWORKS: Unit Commences Exchange Offer for 3 Senior Notes PANITZ SIGNATURE: Files Chapter 7 After Unsuccessful Auction PERFORMANCE TRANS: Panel Taps Traxi LLC as Financial Advisors PERFORMANCE TRANS: Wants to Hire Reed Smith as Special Counsel POPE & TALBOT: Court Okays Rothschild Inc. as Financial Advisor POPE & TALBOT: May Hire FTI to Perform Financial Advisory Services POPE & TALBOT: Court Approves S. Rives as Special Outside Counsel QUEBECOR WORLD: Banks and Sponsors Grant Waivers Until March 31 QWEST COMMUNICATIONS: Jan Murley Joins Board of Directors RAINIER CBO: Fitch Lifts Rating on $3.84MM Notes to BBB from B+ REGENCY ENERGY: Inks $655 Million Buyout Deal with CDM Resource REMINGTON ARMS: Executes Agreement to Acquire Marlin Firearms ROBERT BINDSEIL: Case Summary & 30 Largest Unsecured Creditors SCAN INT'L: Blames Bankruptcy on Low Revenue and Lack of Funds SCAN INT'L: Court to Hear Wells Fargo DIP Financing Mid-January SCO GROUP: Gets Nasdaq Delisting Notice Due to Bankruptcy Filing SHILOH INDUSTRIES: Earns $4.3 Mil. in Quarter Ended October 31 SOUNDVIEW HOME: Fitch Chips Ratings on Two Cert. Classes to BB SOUTHERN PACIFIC: Fitch Retains Junk Rating on Class B-1F Cert. SOUTHERN STAR: Plans to Wind Down Business Operations SPARTA COMMERCIAL: Oct. 31 Balance Sheet Upside-Down by $3 Million SPECIALTY UNDERWRITING: Moody's Junks Ratings on Two Cert. Classes SR TELECOM: Sells Airstar and SR500 Product Lines to Duons Group SURPRISE LAKE: Case Summary & 15 Largest Unsecured Creditors UNITED RENTALS: S&P Holds BB- Rating on Terminated Merger Deal VERDE CDO: Moody's Reviews Ba3 Rating on $10 Mil. Class D Notes VONAGE HOLDINGS: Settles Patent Dispute With Nortel Networks WCI STEEL: Amends $150 Mil. Credit Pact With Harbinger Capital * Fitch Says Funding Pressures Likely to Persist Into 2008 * S&P Completes Review of Oil and Gas Exploration Companies * Upcoming Meetings, Conferences and Seminar ********* A.R.E.I. NEWHALL 9: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: A.R.E.I. Newhall 9, L.L.C. 5 Ike Court Novato, CA 94945 Bankruptcy Case No.: 07-15210 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- A.R.E.I. Newhall 5, L.L.C. 07-15211 A.R.E.I. Newhall 27, L.L.C. 07-15212 A.R.E.I. Newhall 32, L.L.C. 07-15213 A.R.E.I. Newhall 30, L.L.C. 07-15214 A.R.E.I. Newhall 16, L.L.C. 07-15215 A.R.E.I. Newhall 18, L.L.C. 07-15216 A.R.E.I. Newhall 29, L.L.C. 07-22209 A.R.E.I. Newhall 3, L.L.C. 07-15244 A.R.E.I. Newhall 4, L.L.C. 07-15246 Type of Business: The Debtors own and manages real estate. Chapter 11 Petition Date: December 27, 2007 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: David A. Tilem, Esq. 206 North Jackson Street, Suite 201 Glendale, CA 91206 Tel: (818) 507-6000 Fax: (818) 507-6800 Total Assets Total Debts ------------ ----------- A.R.E.I. Newhall 9, L.L.C. $6,788,861 $24,000,000 A.R.E.I. Newhall 5, L.L.C. $625,293 $24,000,000 A.R.E.I. Newhall 27, L.L.C. $771,417 $24,000,000 A.R.E.I. Newhall 32, L.L.C. $586,676 $24,000,000 A.R.E.I. Newhall 30, L.L.C. $277,722 $24,000,000 A.R.E.I. Newhall 16, L.L.C. $428,922 $24,000,000 A.R.E.I. Newhall 18, L.L.C. $1,343,520 $24,000,000 A.R.E.I. Newhall 29, L.L.C. $586,278 $24,000,000 A.R.E.I. Newhall 3, L.L.C. $911,007 $24,000,000 A.R.E.I. Newhall 4, L.L.C. $890,217 $24,000,000 The Debtors did not file lists of largest unsecured creditors. ACA CAPITAL: Balks at False Reports on Alleged Regulatory Control ----------------------------------------------------------------- ACA Capital Holdings, Inc., issued a statement in response to various stories that have run, on Dec. 27, 2007, in The New York Times, Bloomberg and other news sources with headlines suggesting that the Maryland Insurance Commissioner has "taken control" of its financial guaranty insurance subsidiary, ACA Financial Guaranty Corporation. "Despite the somewhat misleading headlines of these stories, the articles make clear in their texts that the events referred to are not the initiation of any type of formal delinquency proceedings by the Commissioner against ACA FG, but rather ACA FG's entry last week into a consent agreement and a representation letter with the Commissioner. The trigger for the press stories was ACA Capital's December 26 filing of a Form 8-K disclosing the events of last week, including the S&P downgrade, the forbearance agreement with derivative counterparties, and the two letters that ACA FG entered into with the Commissioner." As reported in the Troubled Company Reporter on Dec. 21, 2007, the regulatory filing stated that on Dec. 19, 2007, Standard & Poor's downgraded its financial strength rating of ACA FG to `CCC' (Developing Outlook) from `A' (CreditWatch Negative). That same day, ACA Capital and its direct and indirect subsidiaries entered into a forbearance agreement with its Structured Credit and other similarly situated counterparties. Under the agreement, the counterparties have waived all collateral posting requirements and termination rights relating to the rating of ACA FG under their respective transaction documents including any credit support annexes and similar agreements. The forbearance will remain in effect until Jan. 18, 2008. As such, ACA FG is not required to post collateral as a result of S&P's actions during the forbearance period. Prior to S&P's actions on December 19, ACA FG also entered into a Letter of Representations and Agreements and a Consent Order with the Insurance Commissioner for the State of Maryland, ACA FG's insurance regulator in its state of incorporation. Under the Letter Agreement, ACA FG agreed to provide certain documentation and other reports to the Maryland Insurance Administration. ACA FG also agreed not to engage in certain activities without providing prior notice and opportunity to object to the MIA including, without limitation, pledging or assigning any assets, paying dividends or engaging in certain material transactions. ACA FG is similarly limited under the forbearance agreement from engaging in activities consistent with the Letter Agreement and must also comply with financial covenants. Under the Consent Order, ACA FG agreed not to object to, and, if requested, to consent to, a petition by the Commissioner to institute delinquency proceedings in the event that S&P downgraded ACA FG's financial strength rating and the forbearance agreement was not signed by all of the counterparties. In view of the execution of the forbearance agreement, the Commissioner has not instituted any such proceedings. About ACA Capital ACA Capital Holdings Inc. (NYSE: ACA) (OTC BB: ACAH.PK) -- http://www.aca.com/-- is a holding company that provides financial guaranty insurance products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets. It also provides asset management services to specific segments of the structured finance capital markets. The company participates in its target markets both as a provider of credit protection through the sale of financial guaranty insurance products, for risk-based revenues, and as an asset manager, for fee-based revenues. ACA Capital has offices in New York, London, and Singapore. ACA Capital, through ACA Financial Guaranty Corporation, provides credit protection products. ACA Financial insures the principal and interest of bonds issued in the public finance market and targets the low investment grade ("BBB-") to high non-investment grade ("BB") portion of the public finance market. Typically, ACA Financial is paid one payment for insurance, up-front, based on the total amount of principal and interest insured. The payments received are held in reserve and earn out over the life of the related financial guaranty, nominally 30 years. At Sept. 30, 2007, ACA Financial had $7.0 billion of gross par exposure in its public finance business. ACA Capital's balance sheet as of Sept. 30, 2007, showed total assets of $4.9 billion, total liabilities of $5.8 billion, and minority interest of $9.5 million, resulting in total stockholders' deficit of $883.3 million. ACE MORTGAGE: Fitch Retains 'C' Ratings on Ten Cert. Classes ------------------------------------------------------------ Fitch Ratings has downgraded these Ace mortgage pass-through certificates. Downgrades total $243.1 million. Break Loss percentages and Loss Coverage Ratios for each class, rated 'B' or higher, are included with the rating actions as: Series 2006-SL2 -- $185.0 million class A downgraded to 'BB' from 'BBB-' (BL: 51.20, LCR: 0.96); -- $30.9 million class M-1 downgraded to 'B' from 'BB' (BL: 41.33, LCR: 0.78); -- $10.0 million class M-2A downgraded to 'C/DR6' from 'B'; -- $17.1 million class M-2B downgraded to 'C/DR6' from 'B'; -- $13.1 million class M-3 remains at 'C/DR6'; -- $11.8 million class M-4 remains at 'C/DR6'; -- $12.6 million class M-5 remains at 'C/DR6'; -- $5.0 million class M-6A remains at 'C/DR6'; -- $7.1 million class M-6B remains at 'C/DR6'; -- $11.8 million class M-7 remains at 'C/DR6'; -- $9.3 million class M-8 remains at 'C/DR6'; -- $0.0 million class M-9A remains at 'C/DR6'; -- $0.0 million class M-9B remains at 'C/DR6'; -- $0.0 million class B-1 remains at 'C/DR6'. Deal Summary -- Originators (Greater than 5%): Long Beach Mortgage Co. (60.17%) & Fremont Investment & Loan (30.53%); -- 60+ day Delinquency: 25.38%; -- Realized Losses to date (% of Original Balance): 14.14%; -- Expected Remaining Losses (% of Current Balance): 53.06%; -- Cumulative Expected Losses (% of Original Balance): 45.08%. Minimum LCR's specifically for subprime second lien transactions are as follows: 'AAA': 2.00; 'AA': 1.75; 'A': 1.50; 'BBB': 1.20; 'BB' 0.95; 'B': 0.75. ACE SECURITIES: Fitch Junks Ratings on Five Certificate Classes --------------------------------------------------------------- Fitch Ratings has affirmed 11 & downgraded 12 classes from the following Ace Securities Corporation mortgage pass-through certificates: Ace 2002-HE2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BB' from 'A'; -- Class M-3 remains at 'B-/DR1'; -- Class M-4 downgraded to 'CCC/DR1' from 'B-/DR1'. Ace 2004-HE1 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 downgraded to 'B' from 'BBB'; -- Class M-5 downgraded to 'CCC/DR1' from 'B'; -- Class M-6 downgraded to 'C/DR5' from 'CC/DR2'. Ace 2004-HS1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 downgraded to 'BBB+' from 'A-'; -- Class M-4 downgraded to 'B' from 'BBB'; -- Class M-5 downgraded to 'CC/DR3' from 'BB+'. Ace 2004-OP1 -- Class M-1 affirmed at 'AA' -- Class M-2 affirmed at 'A+' -- Class M-3 affirmed at 'A' -- Class M-4 affirmed at 'A-' -- Class M-5 downgraded to 'BBB' from 'BBB+'; -- Class M-6 downgraded to 'BB' from 'BB+'; -- Class B downgraded to 'C/DR4' from 'B'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $335.21 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $39.35 million in outstanding certificates. The pool factors range from approximately 6% to 16%, and the transactions are seasoned in a range of 43 months to 61 months. The amount of loans in the 60+ delinquency buckets range from approximately 20.82% to 37.11%, and cumulative losses range from 1.10% to 4.66%. ACE SECURITIES: Moody's Junks Rating on Class 2004-FM1-M6 Certs. ---------------------------------------------------------------- Moody's Investors Service has upgraded 17 certificates, downgraded 31 certificates and confirmed ratings of 5 certificates issued in 2004 and backed by Fremont originated subprime loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. All deals have very low pool factors and have stepped down. Seventeen classes of certificates are upgraded due to the fast pay down of the pool which led to strong build-up in credit enhancement for the most senior tranches that are still outstanding in the transactions. And the projected pipeline losses are not expected to significantly affect the credit support for these certificates. On the other hand, 31 classes of certificates are downgraded because the reduction in overcollateralization due to stepdown and higher loss severity at the tail end of the deals' life have made the bottom tranches more vulnerable to further pool deterioration. The complete rating actions are: Upgrade Issuer: -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-M1, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-1, Class M-1, Upgraded to Aaa from Aa1; -- Fremont Home Loan Trust 2004-1, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-1, Class M-3, Upgraded to Aa2 from Aa3; -- Fremont Home Loan Trust 2004-1, Class M-4, Upgraded to Aa3 from A1; -- Fremont Home Loan Trust 2004-1, Class M-5, Upgraded to A1 from A2; -- Fremont Home Loan Trust 2004-2, Class M-1, Upgraded to Aa from Aa1; -- Fremont Home Loan Trust 2004-2, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-B, Class M-1, Upgraded to Aaa from Aa1; -- Fremont Home Loan Trust 2004-B, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-C, Class M-1, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-C, Class M-2, Upgraded to Aa2 from Aa3; -- GSAMP Trust 2004-FM1, Class M-1, Upgraded to Aaa from Aa2; -- GSAMP Trust 2004-FM1, Class M-2, Upgraded to Aa2 from A2; -- GSAMP Trust 2004-FM2, Class M-1, Upgraded to Aa1 from Aa2; -- Merrill Lynch Mortgage Investors Trust, Series 2004-FM1, Class 2004-FM1-M2, Upgraded to Aa2 from A2; -- Merrill Lynch Mortgage Investors Trust, Series 2004-FM1, Class 2004-FM1-M3, Upgraded to Aa3 from A3. Downgrade Issuer: -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-M5, Downgraded to B1 from Baa2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-M6, Downgraded to Ca from Baa3; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-B1A, Downgraded to C from Ba2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-B1B, Downgraded to C from Ba2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-M6, Downgraded to Ba1 from Baa3; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-B, Downgraded to Caa2 from Ba2; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-6, Downgraded to Ba1 from Baa2; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-7, Downgraded to B2 from Baa3; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-8B, Downgraded to Caa2 from Ba2; -- Bear Stearns Asset Securities I Trust 2004-FR2, Class M- 8B, Downgraded to B3 from Ba2; -- Fremont Home Loan Trust 2004-2, Class M-9, Downgraded to Ba2 from Baa3; -- Fremont Home Loan Trust 2004-2, Class B-1, Downgraded to Ca from Ba1; -- Fremont Home Loan Trust 2004-4, Class M-6, Downgraded to Baa1 from A3; -- Fremont Home Loan Trust 2004-4, Class M-7, Downgraded to Baa3 from Baa1; -- Fremont Home Loan Trust 2004-4, Class M-8, Downgraded to Ba2 from Baa2; -- Fremont Home Loan Trust 2004-4, Class M-9, Downgraded to B3 from Baa3; -- Fremont Home Loan Trust 2004-4, Class M-10, Downgraded to Ca from Ba1; -- Fremont Home Loan Trust 2004-4, Class B, Downgraded to C from Ba2; -- Fremont Home Loan Trust 2004-A, Class B-3, Downgraded to Ba1 from Baa3; -- Fremont Home Loan Trust 2004-B, Class M-9, Downgraded to Ba2 from Baa3; -- Fremont Home Loan Trust 2004-D, Class M-6, Downgraded to Baa1 from A3; -- Fremont Home Loan Trust 2004-D, Class M-7, Downgraded to Baa3 from Baa1; -- Fremont Home Loan Trust 2004-D, Class M-8, Downgraded to Ba2 from Baa2; --- Fremont Home Loan Trust 2004-D, Class M-9, Downgraded to B1 from Baa3; -- Fremont Home Loan Trust 2004-D, Class M-10, Downgraded to Caa3 from Ba2; -- GSAMP Trust 2004-FM2, Class B-2, Downgraded to Ba1 from Baa2; -- GSAMP Trust 2004-FM2, Class B-3, Downgraded to Ba3 from Baa3; -- GSAMP Trust 2004-FM2, Class B-4, Downgraded to B1 from Ba1; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-8, Downgraded to Baa3 from Baa2; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-9, Downgraded to Ba2 from Baa3; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-10, Downgraded to Caa2 from Ba1. Confirm Issuer: -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-8A, current rating Ba2, Confirmed; -- Credit Suisse First Boston Mortgage Securities Corp. Series 2004-FRE1, Class B-2, current rating Baa2, Confirmed; -- Credit Suisse First Boston Mortgage Securities Corp. Series 2004-FRE1, Class B-3, current rating Baa3, Confirmed; -- Fremont Home Loan Trust 2004-2, Class M-3, current rating Aa3, Confirmed; -- Fremont Home Loan Trust 2004-2, Class M-4, current rating A1, Confirmed. ACE SECURITIES: Moody's Places Low-B Ratings on Two Cert. Classes ----------------------------------------------------------------- Moody's Investors Service assigned ratings ranging from Aaa to Aa2 to the senior certificates issued by ACE Securities Corp. Mortgage Loan Trust, Series 2007-D1 and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Delta Funding Corporation originated, adjustable-rate and fixed-rate, subprime residential mortgage loans acquired by DB Structured Products, Inc. The ratings are based primarily on the credit quality of the loans. These ratings will benefit from the protection against credit losses provided by subordination, excess spread, overcollateralization, and an interest-rate swap agreement provided by Deutsche Bank AG, New York Branch. Moody's expects collateral losses to range from 6.85% to 7.35%. Ocwen Loan Servicing, LLC will service the mortgage loans and Wells Fargo Bank will act as master servicer to the mortgage loans. Moody's has assigned Ocwen its servicer quality rating of SQ2- as a servicer of subprime mortgage loans. Moody's has assigned Wells Fargo its top servicer quality rating of SQ1 as a master servicer of mortgage loans. Complete Rating Actions ACE Securities Corp. Mortgage Loan Trust, Series 2007-D1 Home Equity Loan Asset-Backed Certificates, Series 2007-D1 Cl. A-1, Assigned Aaa Cl. A-2, Assigned Aaa Cl. A-3, Assigned Aaa Cl. A-4, Assigned Aaa Cl. A-M, Assigned Aa2 Cl. M-1, Assigned Aa2 Cl. M-2, Assigned Aa3 Cl. M-3, Assigned A1 Cl. M-4, Assigned A3 Cl. M-5, Assigned Baa1 Cl. M-6, Assigned Baa2 Cl. M-7, Assigned Baa2 Cl. M-8, Assigned Baa3 Cl. M-9, Assigned Ba1 Cl. M-10, Assigned Ba2 ALEXANDER PARK: Poor Credit Quality Cues Moody's Ratings Review --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Alexander Park CDO I, Ltd. on review for possible downgrade: Class Description: $37,500,000 Class A-2 Floating Rate Term Notes, Due 2039 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: Class Description: $22,000,000 Class B Floating Rate Term Notes, Due 2039 -- Prior Rating: Aa2 -- Current Rating: A2, on review for possible downgrade Class Description: $10,000,000 Class C Fixed Rate Term Notes, Due 2039 -- Prior Rating: A2 -- Current Rating: Baa2, on review for possible downgrade Class Description: $12,000,000 Class D-1 Floating Rate Term Notes, Due 2039 -- Prior Rating: Baa2 -- Current Rating: Caa1, on review for possible downgrade Class Description: $3,000,000 Class D-2 Fixed Rate Term Notes, Due 2039 -- Prior Rating: Baa2 -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of asset backed securities. AMERICAN HOME: Wants to Auction-Off Non-Performing Loans -------------------------------------------------------- American Home Mortgage Investment Corp. seeks permission from the U.S. Bankruptcy Court for the District of Delaware to sell pools of mortgages in which borrowers are behind in their payments and owe $164,000,000 in principal on the loans. Pursuant to Sections 105(a) and 363 of the Bankruptcy Code and Rules 2002, 6004 and 9014 of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to: -- approve certain procedures with respect to the proposed sale of the non-performing loans, pursuant to a loan sale and interim servicing agreement; -- authorize sale free and clear of liens and claims, pursuant to the Sale Agreement; -- authorize and approve the sale agreement; -- authorize and distribute certain of the sale proceeds to certain secured lenders, including Bank of America, N.A., as administrative agent and JPMorgan Chase Bank, N.A.; -- approve the payment of an expense reimbursement of reasonable costs and expenses in connection with the due diligence process by bidders in an amount not to exceed $150 for each Non-Performing Loan; -- schedule a hearing on the sale and setting objection and bidding deadlines with respect to the sale; and -- approve the form and manner of notice of an auction for the non-performing loans. The Non-Performing Loans to be sold are first-lien loans, in which the mortgagors have not fulfilled one or more of the terms, conditions or obligations required under the mortgages. Each Non-Performing Loan is greater than 60 days past due, and is owned by the Debtors. The Loans are subject to the liens of the Debtors' secured lenders and AH Mortgage Acquisition Co., Inc. The Debtors propose to pool and sell the Non-Performing Loans in three ways: (1) Non-Performing Loans owned by the Debtors, but subject to the liens of AHM Acquisition, and the other lenders under certain Debtor-in-Possession Loan and Security Agreement dated as of November 16, 2007. The Debtors propose to sell approximately 83 of this Unencumbered Non-Performing Loans with an aggregate unpaid principal balance of approximately $24,000,000; (2) Non-Performing Loans owned by the Debtors that constitute a portion of the collateral securing the obligations owing by certain of the Debtors to the Secured Lenders under the BofA Credit Agreement. BofA and its secured lenders were granted liens upon, and security interests in, among other assets, the BofA Non-Performing Loans, pursuant to certain Security and Collateral Agency Agreement and the final order authorizing the Debtors' limited use of cash collateral. The Debtors propose to sell approximately 208 BofA Non-Performing Loans with an aggregate unpaid principal balance of $14,000,000; and (3) Non-Performing Loans owned by the Debtors pursuant to the JPMorgan Credit Agreement. The Debtors propose to sell approximately 327 JPMorgan Non-Performing Loans with an aggregate unpaid principal balance of $127,000,000. The Debtors propose to sell around 618 Non-Performing Loans with unpaid principal amount aggregating to $164,000,000. The Debtors note that the number of the Non-Performing Loans may decrease or increase as a result of, for instance, mortgagors satisfying their loan obligations, or additional loans becoming greater than 60 days past due. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, contends that pooling the Non- Performing Loans creates the greatest likelihood of obtaining the maximum return for the bankruptcy estates, while ensuring that the rights of the Secured Parties are protected. He notes that the Debtors seek approval of the sale of each Pool through separate Sale Agreements with different purchasers to obtain the highest value for the Loans. Mr. Patton relates that pursuant to the Sale Agreement, the Debtors propose to sell, assign and transfer the Non-Performing Loans to successful bidders, free and clear of all liens, claims, interests and encumbrances, other than those expressly assumed by the Successful Bidder. He adds that all Liens will attach to proceeds of any sale received by the Debtors with the same validity and priority that the Liens had on the Non-Performing Loans immediately prior to the sale. Sale Procedures The Sale Procedures contemplate an auction process, pursuant to which bids for each Pool will be subject to higher or better offers. Only qualified bidders, who timely submit qualified bids may be eligible to participate in the Auction. The Debtors seek to have the Auction scheduled for February 13, 2008, at 10:00 a.m., and the Sale hearing scheduled for Feb. 14, at 11:00 a.m. Not later than two business days after the Court approves the Sale Procedures, the Debtors will serve copies of the Notice of Auction and the Sale Procedures to all entities known to have expressed a bona fide interest in the Non-Performing Loans and other parties-in-interest, Mr. Patton informs the Court. He says that the Debtors will publish the Notice of Auction in the national edition of The Wall Street Journal, and post a copy on the Bloomberg newswire service, within five days after the Sale Procedures' approval. The Debtors propose to accept indicative bids and formal, binding, unconditional, irrevocable bids. The purpose of the Indicative Bids will be to allow the Debtors, with the prior written consent of BofA or JPMorgan and in consultation with the Official Committee of Unsecured Creditors, to determine which of the bidders submitting Indicative Bids should be entitled to receive an Expense Reimbursement. The Debtors set a 12:00 noon on January 25, 2008 deadline to submit all Indicative Bids, and a 12:00 noon on February 11 deadline to submit all Bids. Expense Reimbursement The Debtors also seek authority to select not more than three parties to be entitled to be paid the reasonable costs and expenses in connection with their due diligence process in an amount not to exceed $150 for each Non-Performing Loan in the pool of assets for which each party has submitted a bid. Up to three Lead Bidders will be entitled to an Expense Reimbursement, provided however, that the payment is contingent on the Lead Bidder submitting a Qualified Bid, which must be in an amount that is no less than the Qualified Indicative Bid or, if lower, the Lead Bidder must provide reasonable justification for the decrease between the Qualified Indicative Bid and the Qualified Bid. The Debtors, in their sole discretion, will determine whether the decrease is reasonably justified. The Expense Reimbursement will be payable only from the proceeds received from the sale for which the Lead Bidder submitted the Qualified Bid, and from no other source. The Debtors, with the prior written consent of BofA or JPMorgan and in consultation with the Creditors Committee, reserve the right to seek Court approval of a stalking horse bidder and the terms of a stalking horse bid. 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. (American Home Bankruptcy News, Issue No. 21, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Court Extends Plan Filing Period Until March 3 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended American Home Mortgage Investment Corp. and its debtor-affiliates' exclusive periods to: (a) file a plan through March 3, 2008; and (b) solicit and obtain acceptances of that plan through May 5, 2008. As reported in the Troubled Company Reporter on Dec. 7, 2007, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, told the Court that since bankruptcy filing, the Debtors have made progress in administering the bankruptcy cases by, among other things, stabilizing their business operations, eliminating administrative costs arising from discontinued portions of the Debtors' business operations, and commencing, conducting, and concluding a hotly contested sale process for the Debtors' loan servicing business. Mr. Patton stated that, among other things, the Debtors: -- sought and obtained the Court's authority to establish procedures to effectuate the sale of certain assets related to their mortgage origination business, including real property leases, equipment leases, and furniture, fixtures and equipment at the premises; -- filed requests seeking to reject about 800 unexpired leases of nonresidential real property and numerous executory contracts; -- have closed and fully vacated numerous locations, within the first 90 days of the cases and avoided significant additional administrative rent liability by vacating the various locations in a timely manner; -- engaged in negotiations and stipulations with Federal Home Loan Mortgage Corp. and the Government National Mortgage Association permitting the Debtors to continue to service certain mortgage loans for sufficient periods of time to effectuate the orderly transfer of the servicing of the loans for value; and -- sought and obtained the Court's permission to sell their Servicing Business to AH Mortgage Acquisition Co., Inc. Mr. Patton related that as with other large and complex cases, the initial 120-day exclusive period did not provide the Debtors with an adequate opportunity to develop and negotiate a Chapter 11 plan. He added that the contested nature of nearly every facet of these cases has prevented the Debtors and their professionals from turning their attention to a Plan. He pointed out that the Debtors have been focused on stabilizing the their business operations in the wake of the unprecedented upheaval in the mortgage loan and mortgage-backed securities experienced nationwide. Additionally, Mr. Patton said, there are a variety of other tasks that lie ahead of the Debtors before a meaningful Plan can be proposed. He disclosed that the Debtors still have numerous assets that must be marketed and sold, including the their federally chartered thrift and bank, certain whole loans and construction loans, and certain other real estate holdings, like their corporate headquarters in Melville, New York. 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. (American Home Bankruptcy News, Issue No. 21, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN TECH: Oct. 31 Balance Sheet Upside-Down by $1.2 Million ---------------------------------------------------------------- American Technologies Group Inc.'s consolidated balance sheet at Oct. 31, 2007, showed $18.3 million in total assets and $19.5 million in total liabilities, resulting in a $1.2 million total stockholders' deficit. At Oct. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $12.4 million in total current assets available to pay $19.5 million in total current liabilities. The company reported a net loss of $766,339 on net sales of $8.7 million for the first quarter ended Oct. 31, 2007, compared with a net loss of $1.2 million on net sales of $7.6 million in the same period in the previous fiscal year. For the quarter ended Oct. 31, 2007, selling, general and administrative expenses totaled approximately $904,000. For the quarter ended Oct. 31, 2006, selling, general and administrative expenses were approximately $975,000. Operating income increased to $153,342 during the three months ended Oct. 31, 2007, versus operating income of $62,200 during the same period in the previous fiscal year. Interest expense decreased by $24,000 for the quarter ended Oct. 31, 2007, to $325,000 when compared to the quarter ended Oct. 31, 2006. Financing expense was $588,000 and $976,000 for the quarter ended Oct. 31, 2007, and 2006, respectively. Included in financing expenses was non-cash amortization related to notes payable discount of $588,000 and $976,000 for the quarters ended Oct. 31, 2007. and 2006, respectively. Liquidity and Capital Resources As of Oct. 31, 2007, the company had $460,000 in cash and equivalents. The company has utilized both its base of assets and its equity securities to finance the acquisitions of North Texas and Whitco. The North Texas acquisition transaction was highly leveraged. The company has indebtedness totaling in $10,806,000 payable in the form of convertible term notes $2,500,000 of which are due and payable on Dec. 31, 2007. The company's current operations are insufficient to service its existing debt and pay the administrative expenses incurred in connection with being a public enterprise, including legal and accounting services. The company has negotiated various extensions with Laurus Master Fund LTD, Gryphon Master Fund LP, and GSSF Master Fund LP to extend the time it has to make payments under the $2,000,000 Term B Note and the $500,000 in notes payable to GMF and GSSF, to waive prior defaults, and extend the time for the effectiveness of the SB-2 registration statement that the company is required to file. The current extension the company obtained on Oct. 31, 2007, from Laurus extends the payment date for the Term B note and the effectiveness date of its registration statement to Dec. 31, 2007. With respect to the indebtedness the company owes to to Gryphon and GSSF, on Nov. 12, 2007, GMF and GSSS agreed to extend the maturity dates of their convertible term notes from Sept. 30, 2007, to Dec. 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2007, are available for free at http://researcharchives.com/t/s?26a9 Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about American Technologies Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2007. The auditing firm reported that the the company has suffered recurring losses and is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About American Technologies Based in Fort Worth, Texas, American Technologies Group Inc. (NASDAQ: ATEG) -- was prior to 2001, engaged in the development, commercialization and sale of products and systems using patented and proprietary technologies including catalyst technology and water purification. The company ceased operations during 2001 and began focusing efforts on restructuring and refinancing. In September 2005, the company entered into various financing transactions and acquired North Texas Steel Company Inc., an AISC Certified structural steel fabrication company based in Fort Worth, Texas. On April 25, 2006, the company purchased certain assets of Whitco Company LP, a business conducting the sale and distribution of steel and aluminum lighting poles. The Whitco assets are held in a separate subsidiary called Whitco Poles Inc. AMS HEALTH: Files Bankruptcy Petition Over McCarty Judgment ----------------------------------------------------------- AMS Health Sciences Inc. has sought the protection of the U.S. Bankruptcy Court for the Western District of Oklahoma by filing a Chapter 11 petition for reorganization. The filing, according to AMS, was due to the verdict and subsequent judgment rendered against the company in its November 2007 jury trial relating to a 2005 acquisition of Heartland Cup Inc. Acquisition of Heartland Cup In September 2005, AMS Manufacturing Inc., a wholly owned subsidiary of the company, acquired approximately 83% of the capital stock of Heartland Cup Inc., a manufacturer of Styrofoam cups located in Allen, Oklahoma. The acquisition was effected through the purchase of shares from Truett McCarty, Heartland's controlling stockholder, who received shares of the company's common stock in consideration for the stock purchase. Over the following 15 months, the company loaned approximately $2,400,000, substantially all of its cash reserves, to Heartland to support the newly acquired subsidiary's ongoing manufacturing operations. Suit Against McCarty On Feb. 6, 2006, the company and AMS Manufacturing filed a lawsuit against Mr. McCarty in the District Court of Oklahoma County, Oklahoma. The AMS entities alleged that Mr. McCarty defrauded them in the sale of his stock in Heartland by failing to disclose the true amount of Heartland's accounts payable as well as a long-term liability of Heartland. In addition, the AMS entities alleged that this failure was a breach of the stock purchase agreement signed by Mr. McCarty. Mr. McCarty filed an answer denying the AMS entities' allegations and alleging that he had been defrauded with regard to the value of the AMS stock he received in exchange for his interest in Heartland. Additionally, Mr. McCarty alleged that the AMS entities had breached the terms of the stock purchase agreement by failing to take steps to remove Mr. McCarty as guarantor of certain promissory notes, that the AMS entities had tortiously interfered with a promissory note between Mr. McCarty and Heartland and that the AMS entities had tortiously interfered with an employment agreement between Mr. McCarty and Heartland. Mr. McCarty also sought to reform the stock purchase agreement in numerous respects, and to pierce the corporate veils of the Company and AMS Manufacturing in order to hold them liable for any breach by Heartland of the promissory note and employment agreement between Heartland and Mr. McCarty. Dismissal of AMS' Fraud Claim On Nov. 1, 2007, after the court had dismissed the AMS entities' fraud claim, the jury returned its verdict, which was later reduced to a judgment signed by the court and filed on Dec. 17, 2007. The jury denied the AMS entities' breach of contract claim against Mr. McCarty, found in Mr. McCarty's favor on his claim against the AMS entities for breach of the stock purchase agreement and found that Mr. McCarty was entitled to $800,000 against the company on his breach of contract claim. In addition, the jury found that Heartland had breached the employment agreement with Mr. McCarty and found that Mr. McCarty was entitled to $368. The jury also found that Heartland breached its promissory note with Mr. McCarty and that Mr. McCarty was entitled to $185,000. The jury found that the corporate veils of the Company and its subsidiaries should be pierced. The court allowed the jury to consider a fraud claim by Mr. McCarty against the AMS entities, even though the court had previously granted summary judgment in the AMS entities' favor on Mr. McCarty's fraud claim against them. The jury found for Mr. McCarty on the fraud claim, but did not award any additional actual damages for the claim. The jury returned a verdict in the AMS entities' favor on Mr. McCarty's claim for tortious interference and to reform the stock purchase agreement and, as noted above, awarded Mr. McCarty no damages on his claim against AMS for fraud. AMS Contests Against Verdict The company believes that certain legal errors rendered the verdict and judgment improper. The company has identified approximately 19 substantive points of error that it believes occurred in the trial and intends to pursue them in an appeal of the judgment. Since the company did not have the cash resources to satisfy the judgment rendered against it or to post an appellate bond pending the appeal of the judgment, every effort was made to settle and compromise Mr. McCarty's claim. Bankruptcy Filing AMS states that Mr. McCarty was repeatedly advised of the company's financial condition and that it would not be able to satisfy or respond to any efforts to enforce the judgment. Notwithstanding these repeated warnings and settlement efforts, Mr. McCarty declined to withhold or defer his right, in the absence of an appellate bond, to seek collection of the judgment. As a result, the company said it has been forced to seek bankruptcy protection. The company believes the action is in the best interests of the company and the direct selling network that markets AMS products. Without the filing of the Chapter 11 petition, which operates to stay all proceedings or attempts to enforce existing judgments, AMS argues that Mr. McCarty could attempt to disrupt the day-to- day operation of AMS by enforcing his judgment on the company's assets. The company's filing for the protection of the U.S. Bankruptcy Court was supported by its secured lender, Laurus Captial Management LLC. About AMS Health Sciences Oklahoma City-based AMS Health Sciences Inc. (OTC BB: AMSI) -- http://www.amsonline.com/-- sells more than 60 natural nutritional supplements, weight management products, and natural skincare products through independent distributors across the U.S. and Canada. AMS HEALTH: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: A.M.S. Health Sciences, Inc. 711 Northeast 39th Street Oklahoma City, OK 73105 Bankruptcy Case No.: 07-14678 Type of Business: The Debtor's 60 products consist of dietary supplements, weight management products, and hair and skin care products-- all of which are manufactured by third parties. A network of 11,000 independent distributors sell the products in Canada, Puerto Rico and the U.S. Its products are sold under the Advantage, A.M.S., Prime One, and ToppFast brands. It also markets and sells promotional material to its distributors. See http://www.amsonline.com/ Chapter 11 Petition Date: December 27, 2007 Court: Western District of Oklahoma (Oklahoma City) Judge: Richard L. Bohanon Debtor's Counsel: Shaun T. Riley, Esq. Resides & Resides, P.L.L.C. 615 North Broadway, Suite 203 Oklahoma City, OK 73102-6201 Tel: (405) 605-6547 Fax: (405) 605-6577 Total Assets: $6,800,000 Total Debts: $3,400,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Truett McCarty Judgment $984,000 R.R. 1 Box 348 Allen, OK 74825 John Hail Supplemental $303,296 3809 Coachman Retirement Edmond, OK 73013 U.P.S. 7X3444 Trade debt $77,991 Lockbox 577 Carol Stream, IL 60132-0577 McAfee & Taft Trade debt $74,761 Pouchtec Industries, L.L.C. Trade debt $53,479 Oklahoma County Treasurer Tax $31,827 Vaughn Feather Trademark Dispute $49,000 Settlement Day Edwards Prosper & Trade debt $29,951 Christensen, P.C. Nexgen Pharma, Inc. Trade debt $20,196 Royce & Janet Britt Lawsuit Settlement $16,000 Cole and Reed P.C. Trade debt $13,355 H.S.P.G. & Associates, P.C. Trade debt $10,355 Community Care H.M.O. Trade debt $9,080 eTech Solutions Trade debt $8,416 Naturtech Trade debt $8,388 Maier & Co., Inc. Trade debt $6,595 The Oil Center Trade debt $6,554 James Fields & Associates Trade debt $6,549 Connectship, Inc. Trade debt $6,290 Standley Systems Trade debt $4,115 ANDREW CORP: Completes $2.65BB Merger Deal with CommScope Inc. -------------------------------------------------------------- Andrew Corporation has completed its acquisition agreement with CommScope Inc. The transaction was valued for approximately $2.65 billion. Andrew will become a wholly owned subsidiary of CommScope. "We are delighted with the closing of the Andrew transaction, which marks a new chapter in the history of our company," said Frank M. Drendel, chairman and chief executive officer of CommScope. "We believe this combination will further enhance CommScope's position as a worldwide leader in 'last mile' solutions." "Combining our innovative technologies, premier brands and a top- tier customer base, we expect to expand our global service model and create an enhanced offering of communications infrastructure solutions that addresses a broader spectrum of customer needs," Mr. Drendel added. "With this acquisition, we are advancing CommScope's stated global 'last mile' strategy while creating important cost reduction and growth opportunities that we believe will drive increased shareholder value." "We look forward to working with Andrew's talented team to quickly and smoothly integrate their operations into CommScope," Mr. Drendel continued. "As we continue to invest in the combined business for profitable growth, the talented and dedicated employees of both Andrew and CommScope will continue to play a critical role in the success of the combined company. CommScope is a proven and successful integrator of strategic transactions and we expect to begin realizing the benefits of this combination immediately and enjoy them fully over the next few years." Andrew stockholders will receive, for each Andrew share, $13.50 in cash and 0.031543 shares of CommScope common stock. This fractional share of CommScope common stock was calculated according to the terms of the merger agreement by dividing $1.50 by $47.554, which was the volume weighted average of the closing sale prices for a share of CommScope common stock over the ten consecutive trading days ending on Dec. 24, 2007. Financing and Interest Rate Swap CommScope funded the transaction through a combination of senior secured credit facilities and available cash on hand. The $2.5 billion senior secured credit facilities consist of: -- a $1.35 billion seven-year senior secured term loan facility with an interest rate of London Interbank Offered Rate plus 250 basis points; -- a $750 million six-year senior secured term loan facility with an initial interest rate of LIBOR plus 225 basis points; and -- a $400 million six-year senior secured revolving credit facility with an initial interest rate of LIBOR plus 225 basis points. These debt commitments provide for a weighted average initial, variable interest rate of LIBOR plus approximately 241 basis points on the senior secured term loans. At closing, no funds had been borrowed from the revolving credit facility. CommScope also has entered into an interest rate swap in order to fix the LIBOR interest rate for an initial $1.5 billion of the overall credit facility. Through this swap CommScope fixed these amounts at a LIBOR rate of 4.07750%: -- $1.5 billion from Dec. 27, 2007 through Dec. 31, 2008; -- $1.3 billion from Jan. 1, 2009 through Dec. 31, 2009; -- $1.0 billion from Jan. 2, 2010 through Dec. 31, 2010; and -- $400 million from Jan. 1, 2011 through Dec. 31, 2011. Banc of America Securities LLC acted as financial advisor to CommScope in connection with this acquisition and Duff & Phelps LLC provided a fairness opinion to CommScope. Fried, Frank, Harris, Shriver & Jacobson LLP, Baker & McKenzie LLP and Robinson, Bradshaw & Hinson, P.A. acted as CommScope's outside legal counsel. Citi acted as the primary financial advisor to Andrew, and Merrill Lynch provided a fairness opinion. Mayer Brown LLP acted as Andrew's primary outside legal counsel. Banc of America Securities LLC and Wachovia Capital Markets, LLC acted as Joint Lead Arrangers and Joint Bookrunners in connection with the credit facilities. About CommScope Inc. Based in Hickory, North Carolina, CommScope Inc. (NYSE:CTV) -- http://www.commscope.com/-- is into infrastructure solutions for communication networks. CommScope's structured cabling systems for business enterprise applications includes SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands. It is also the manufacturer of coaxial cable for hybrid fiber coaxial applications. About Andrew Corporation Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ:ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the communications infrastructure market. Founded in 1937, the company serves operators and original equipment manufacturers from facilities in 35 countries. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Standard & Poor's Ratings Services affirmed its ratings on CommScope Inc. and Andrew Corp. and removed them from CreditWatch, where they were placed on June 27, 2007, with negative implications. S&P also affirmed the 'BB-' corporate credit and 'B' subordinated debt ratings for both companies. The outlook is stable. APIDOS CDO: Cash Flow Diminution Cues Moody's to Put Ba2 Rating --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Apidos CDO VI: (1)Aaa to the $181,500,000 Class A-1 Floating Rate Notes due 2019; (2)Aa2 to the $6,000,000 Class A-2 Floating Rate Notes due 2019; (3)A2 to the $13,000,000 Class B Deferrable Floating Rate Notes due 2019; (4)Baa2 to the $8,000,000 Class C Floating Rate Notes due 2019; and (5)Ba2 to the $9,500,000 Class D Floating Rate Notes due 2019. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of leveraged loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Apidos Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. BANCO GMAC: Moody's Lowers Bank Financial Strength Rating to D- --------------------------------------------------------------- Moody's Investors Service downgraded Banco GMAC S.A.'s bank financial strength rating to D- from D, as well as its global long-term local and foreign currency deposit ratings to Ba3 from Ba2. Moody's also downgraded the long-term national scale deposit rating of Banco GMAC to A2.br from Aa3.br. The negative outlook on the global deposit ratings of GMAC Brazil remained unchanged, and the outlook on the national scale ratings changed to negative from stable. The short-term national scale rating remains unchanged at BR-1. The actions follow Moody's downgrade of General Motors Acceptance Corporation, LLC long-term senior unsecured debt rating to Ba3 from Ba2, announced on Dec. 21, 2007. Moody's recognizes that the Brazilian operation of Banco GMAC is performing well on the back of positive macro conditions and resilient credit growth in Brazil, both reflected in the bank's adequate financial metrics and robust loan expansion. However, the rating agency noted, the current stress at GMAC LLC's level exposes the Brazilian subsidiary to uncertainties regarding the confidence sensitivity of its funding, as well as its capital adequacy going forward. Moody's recognizes Banco GMAC's significant business and strategic integration with its parent company as well as the effects that a lower-rated parent could have on Banco GMAC's predominantly wholesale funding base. Higher funding costs could hurt profitability and affect the bank's business strategy in the highly competitive car-financing segment in which it operates. Moreover, the bank's sound capital levels could be diminished draining forces from the bank's growth opportunities, if it were to be required to upstream dividends or repatriate capital to its parent company. Moody's acknowledges that Banco GMAC has a track record of adequate capital preservation, achieved through a conservative earnings retention policy throughout the years, and consistently superior asset quality relative to peers'. However, the current capital pressure at the GMAC LLC level may result in changes in this policy, with negative effects on the Brazilian subsidiary. Banco GMAC is headquartered in Sao Paulo, Brazil. As of September 2007, Banco GMAC reported total assets of R$5.47billion and equity of R$818.28 million. These ratings for Banco GMAC S.A. were downgraded: -- Bank financial strength rating - to D- from D, negative outlook; -- Global long-term local currency deposit ratings - to Ba3 from Ba2, negative outlook; -- Long-term foreign currency deposit ratings - to Ba3 from Ba2, negative outlook; -- Brazil long-term national scale deposit ratings - to A2.br from Aa3.br; negative outlook. BARNHILL'S BUFFET: Gets Final OK to Use Wells Fargo's DIP Fund -------------------------------------------------------------- The Hon. George C. Paine II of the U.S. Bankruptcy Court for the Middle District of Tennessee gave Barnhill's Buffet Inc. final authority to access Wells Fargo Bank NA's debtor-in-possession financing and cash collateral. Specifically, the Court authorized the Debtor to obtain secured postpetition financing consisting of a revolving credit loan up to an aggregate principal amount not to exceed $1,250,000 from Wells Fargo and to use the cash collateral securing the Debtor's prepetition obligations to the bank. The Debtor's rights granted under the DIP loan agreement to borrow money and to use cash collateral will expire on the earlier of: (a) an event of default or (b) Jan. 23, 2008, unless the right to use is extended by the Court. Wells Fargo Credit Agreement Adequate protection will be provided to Wells Fargo as secured lender to a credit agreement dated as of Feb. 11, 2005, and as amended on Sept. 21, 2005. The credit agreement was entered into by the Debtor, Dynamic Acquisition Group LLC (parent company), and Wells Fargo (administrative agent and secured lender). The Debtor and its parent company jointly owe Wells Fargo an aggregate amount of $23,256,526, plus interest accrued and accruing costs under the credit agreement. The final order allowing the Debtor access to Wells Fargo's postpetition fund overruled SCS General Contractor Inc.'s objection to the Debtor's motion to borrow from Wells Fargo and the Court's interim order on that motion. James R. Kelley, Esq., and Marc T. McNamee, Esq., at Neal & Harwell, PLC represent Wells Fargo. About Barnhill's Buffet Madison, Tennessee-based Barnhill's Buffet Inc., aka Barnhill's Buffet of Tennessee Inc., -- http://www.barnhills.com/-- operates a chain of restaurants, a total of 29 stores located in six states. Its parent company is Dynamic Acquisition Group LLC. It filed for chapter 11 bankruptcy on Dec. 3, 2007 (Bankr. M.D. Tenn. Case No. 07-08948) after it continued to suffer operating losses. William Caldwell Hancock, Esq., at The Hancock Law Firm represents the Debtor in its restructuring efforts. Attorneys at MGLAW PLLC represent the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $50 million. BARNHILL'S BUFFET: Wants Court Approval to Auction Restaurants -------------------------------------------------------------- Barnhill's Buffet Inc. asked the Hon. George C. Paine II of the U.S. Bankruptcy Court for the Middle District of Tennessee for authority to sell its property and assume and assign unexpired leases and executory contracts. The Debtor told the Court that its operating restaurant assets should be sold on an expedited basis to a successful overbidder due its continuing operating losses, substantial capital expenditures required to fund its business plan, and lack of internal resources from which to fund its cash requirements. According to the Debtor, it has ongoing discussions with Star Buffet Management Inc. regarding a proposed sale of 21 restaurants and related assets, leases and contracts. Under an asset purchase agreement with Star, the Debtor will sell its 21 restaurants in exchange for cash consideration of $7,500,000 and the assumption of specified liabilities. The restaurants will be sold as a group. The Debtor's remaining 8 restaurants not to be sold to Star will be sold at a "one, some or all" auction to be conducted concurrent with, but independent of, the auction sale of the 21 restaurants. Creditors, including Old South Properties Inc., H.M. Nowlin dba Nowlin Rentals, and Jacksonville Family Center LLC, have filed separate objections to the Debtor's motion to sell its property under Section 363(b) of the Bankruptcy Code. The Court has set a hearing for Jan. 11, 2008, at 9:00 a.m. to consider the Debtor's request. About Barnhill's Buffet Madison, Tennessee-based Barnhill's Buffet Inc., aka Barnhill's Buffet of Tennessee Inc., -- http://www.barnhills.com/-- operates a chain of restaurants, a total of 29 stores located in six states. Its parent company is Dynamic Acquisition Group LLC. It filed for chapter 11 bankruptcy on Dec. 3, 2007 (Bankr. M.D. Tenn. Case No. 07-08948) after it continued to suffer operating losses. William Caldwell Hancock, Esq., at The Hancock Law Firm represents the Debtor in its restructuring efforts. Attorneys at MGLAW PLLC represent the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $50 million. BEAR STEARNS: Moody's Junks Rating on Class M-8B Certs. from Ba2 ---------------------------------------------------------------- Moody's Investors Service has upgraded 17 certificates, downgraded 31 certificates and confirmed ratings of 5 certificates issued in 2004 and backed by Fremont originated subprime loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. All deals have very low pool factors and have stepped down. Seventeen classes of certificates are upgraded due to the fast pay down of the pool which led to strong build-up in credit enhancement for the most senior tranches that are still outstanding in the transactions. And the projected pipeline losses are not expected to significantly affect the credit support for these certificates. On the other hand, 31 classes of certificates are downgraded because the redcution in overcollateralization due to stepdown and higher loss severity at the tail end of the deals' life have made the bottom tranches more vulnerable to further pool deterioration. The complete rating actions are: Upgrade Issuer: -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-M1, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-1, Class M-1, Upgraded to Aaa from Aa1; -- Fremont Home Loan Trust 2004-1, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-1, Class M-3, Upgraded to Aa2 from Aa3; -- Fremont Home Loan Trust 2004-1, Class M-4, Upgraded to Aa3 from A1; -- Fremont Home Loan Trust 2004-1, Class M-5, Upgraded to A1 from A2; -- Fremont Home Loan Trust 2004-2, Class M-1, Upgraded to Aa from Aa1; -- Fremont Home Loan Trust 2004-2, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-B, Class M-1, Upgraded to Aaa from Aa1; -- Fremont Home Loan Trust 2004-B, Class M-2, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-C, Class M-1, Upgraded to Aa1 from Aa2; -- Fremont Home Loan Trust 2004-C, Class M-2, Upgraded to Aa2 from Aa3; -- GSAMP Trust 2004-FM1, Class M-1, Upgraded to Aaa from Aa2; -- GSAMP Trust 2004-FM1, Class M-2, Upgraded to Aa2 from A2; -- GSAMP Trust 2004-FM2, Class M-1, Upgraded to Aa1 from Aa2; -- Merrill Lynch Mortgage Investors Trust, Series 2004-FM1, Class 2004-FM1-M2, Upgraded to Aa2 from A2; -- Merrill Lynch Mortgage Investors Trust, Series 2004-FM1, Class 2004-FM1-M3, Upgraded to Aa3 from A3. Downgrade Issuer: -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-M5, Downgraded to B1 from Baa2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-M6, Downgraded to Ca from Baa3; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-B1A, Downgraded to C from Ba2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM1, Class 2004-FM1-B1B, Downgraded to C from Ba2; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-M6, Downgraded to Ba1 from Baa3; -- ACE Securities Corp. Home Equity Loan Trust, Series 2004- FM2, Class 2004FM2-B, Downgraded to Caa2 from Ba2; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-6, Downgraded to Ba1 from Baa2; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-7, Downgraded to B2 from Baa3; -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-8B, Downgraded to Caa2 from Ba2; -- Bear Stearns Asset Securities I Trust 2004-FR2, Class M- 8B, Downgraded to B3 from Ba2; -- Fremont Home Loan Trust 2004-2, Class M-9, Downgraded to Ba2 from Baa3; -- Fremont Home Loan Trust 2004-2, Class B-1, Downgraded to Ca from Ba1; -- Fremont Home Loan Trust 2004-4, Class M-6, Downgraded to Baa1 from A3; -- Fremont Home Loan Trust 2004-4, Class M-7, Downgraded to Baa3 from Baa1; -- Fremont Home Loan Trust 2004-4, Class M-8, Downgraded to Ba2 from Baa2; -- Fremont Home Loan Trust 2004-4, Class M-9, Downgraded to B3 from Baa3; -- Fremont Home Loan Trust 2004-4, Class M-10, Downgraded to Ca from Ba1; -- Fremont Home Loan Trust 2004-4, Class B, Downgraded to C from Ba2; -- Fremont Home Loan Trust 2004-A, Class B-3, Downgraded to Ba1 from Baa3; -- Fremont Home Loan Trust 2004-B, Class M-9, Downgraded to Ba2 from Baa3; -- Fremont Home Loan Trust 2004-D, Class M-6, Downgraded to Baa1 from A3; -- Fremont Home Loan Trust 2004-D, Class M-7, Downgraded to Baa3 from Baa1; -- Fremont Home Loan Trust 2004-D, Class M-8, Downgraded to Ba2 from Baa2; -- Fremont Home Loan Trust 2004-D, Class M-9, Downgraded to B1 from Baa3; -- Fremont Home Loan Trust 2004-D, Class M-10, Downgraded to Caa3 from Ba2; -- GSAMP Trust 2004-FM2, Class B-2, Downgraded to Ba1 from Baa2; -- GSAMP Trust 2004-FM2, Class B-3, Downgraded to Ba3 from Baa3; -- GSAMP Trust 2004-FM2, Class B-4, Downgraded to B1 from Ba1; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-8, Downgraded to Baa3 from Baa2; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-9, Downgraded to Ba2 from Baa3; -- MASTR Asset Backed Securities Trust 2004-FRE1, Class M-10, Downgraded to Caa2 from Ba1. Confirm Issuer: -- Bear Stearns Asset Backed Securities I Trust 2004-FR1, Class M-8A, current rating Ba2, Confirmed; -- Credit Suisse First Boston Mortgage Securities Corp. Series 2004-FRE1, Class B-2, current rating Baa2, Confirmed; -- Credit Suisse First Boston Mortgage Securities Corp. Series 2004-FRE1, Class B-3, current rating Baa3, Confirmed; -- Fremont Home Loan Trust 2004-2, Class M-3, current rating Aa3, Confirmed; -- Fremont Home Loan Trust 2004-2, Class M-4, current rating A1, Confirmed. BELLEMONT VICTORIA: Moody's Holds Ba2 Rating on Subordinate Bonds ----------------------------------------------------------------- Moody's Investors Service affirmed the Baa3 rating for Louisiana Local Government Environmental Facility and Community Development Authority Multifamily Housing Revenue bonds (Park East / Bellemont Victoria / Bellemont Victoria II Apartments) Senior Series 2002A. The Ba2 rating for Subordinate Series 2002C bonds has also been affirmed. The taxable Series 2002B bonds are no longer outstanding. The stable rating outlook reflects strong occupancy at the project and projected stable rental market in Baton Rouge in the near term. Legal Security: Special obligation of issuer. The bonds are secured by rental revenues derived from the operations of three multifamily properties in Baton Rouge. The Park East project was built in 1972 and consists of 188 units in 25 two-story buildings. Bellemont Victoria is a 195 unit project of 4 two-story buildings and the Bellemont Victoria II facility is made up of 27 buildings with 198 units. Both were built in 1972-3. Other pledged assets, including investment income and reserve funds, provide further security for bondholders. Strengths * Actual physical vacancy is very low at all three properties, although the Park East property did experience some higher economic vacancy in 2007 due to rental increases that have not been fully absorbed. Management expects, however, that all new leases will be signed at the higher rate in 2008. Management is currently signing 6 and 12 month leases only. * Moody's has consulted various sources, such as the 2006 Louisiana Health and Population Survey and reports published by the Louisiana Family Recovery Corps., to estimate continued impact of displaced residents from New Orleans on the Baton Rouge housing market. Moody's has also spoken with the property management company, which is responsible for management of several multifamily projects in the area. Moody's believes, per these resources, that there is enough evidence of under-supply in the Baton Rouge sub-market to support strong demand for affordable housing in the near term. * Rental revenue has grown by approximately 5% between audited 2006 financials and unaudited 2007 operating statements. * Very high reserves Challenges * Housing market data for the Baton Rouge area is not widely available, and although Moody's expects demand to be strong in the near term, it is difficult to assess longer term market trends. Further, the older build dates of these projects may make them more susceptible to any multifamily demand downturn. * Despite improvement in revenues, debt service coverage has not seen great improvement over the past year, mainly due to continued increases in expenses that exceed revenue gains. If vacancy were to increase even slightly, any coverage improvements would be absorbed quickly due to the properties' consistent expense growth. Between 2005 and Moody's unaudited 2007 data, expenses have risen 11%, while revenues have increased only 5%. Outlook The stable outlook reflects Moody's anticipation of continued strong affordable housing demand in the near term. What Could Change the Rating - Up Several reporting periods that show consistent revenue growth and continued strong occupancy. What Could Change the Rating - Down Erosion of the debt service coverage ratio; Increased vacancy that leads to a reversal of revenue growth trend. BENTON BANKING: Shareholders Claim Stock is "Worthless" ------------------------------------------------------- Benton Banking Company's shareholders found Thursday that the bank's stock is "worthless" when news broke that an officer had been issuing false loans of around $18 million, Seth Seymour writes for News Channel 9. Shareholders said Benton is "cheating" them after a meeting held Thursday in which they were informed that their millions of dollars worth of investment were lost, News Channel 9 relates. Prior to Thursday's news, Jimmy Goddard, former Benton president, was reported missing after issuing false loans in small increments; he was later seen in North Carolina, News Channel 9 reveals. Steve Morgan, investor, told News Channel 9 he is "greatly disappointed" after losing about $100,000 while some equity holders lost as much as $2 million. Several investors have already obtained legal counsels, the report adds. At Thursday's meeting, shareholders found that Benton has total assets of $11 million and a deficit of about $6 million, News Channel 9 says. The bank's stock used to trade at $91 per share but is now worth "very little," News Channel 9 reports, citing Casey Stokes, Esq., Cleveland counsel. The FBI is currently investigating the matter but refuses to disclose specifics, News Channel 9 adds. Benton Banking Company -- http://www.bentonbankingcompany.com/-- was established in Benton, Tennessee in 1906. Its company wide philosophy is that of quality customer service. It upholds its motto: "Customers are our primary reason for existence, and serving them is our principal focus." Through its Bentong Banking Mortgage Company, it provides full service home financing solutions. It also offers free online banking services. BENTON BANKING: First Volunteer Buys Shares for $18 Million ----------------------------------------------------------- Benton Banking Company equity holders elected Friday last week to sell the company to First Volunteer Bank for $18 million in order to recover as much money possible following news of lost investments, Mark Bruce writes for Eyewitness News. Despite the sale, Joe Waters, Benton Vice President, assures clients that their money and accounts "are fine", Eyewitness relates. Mr. Waters adds that Benton will continue to serve its clients the "same way" as it did over a hundred years ago, Eyewitness says. On the other hand, First Volunteer president told Eyewitness that he will help Benton investors get their money back. Benton Banking Company -- http://www.bentonbankingcompany.com/-- was established in Benton, Tennessee in 1906. Its company wide philosophy is that of quality customer service. It upholds its motto: "Customers are our primary reason for existence, and serving them is our principal focus." Through its Bentong Banking Mortgage Company, it provides full service home financing solutions. It also offers free online banking services. BLUEGRASS ABS: Poor Credit Quality Cues Moody's Ratings Review -------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade these notes issued by Bluegrass ABS CDO II Ltd.: Class description: $52,800,000 Class A-2 Floating Rate Notes due April 2039 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade Class description: $10,000,000 Type II Composite Notes due April 2039 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade In addition, Moody's also downgraded and left on review for possible downgrade these notes: Class description: $15,000,000 Class C-1 Floating Rate Notes due April 2039 -- Prior Rating: Baa2 -- Current Rating: Ba3, on review for possible downgrade Class description: $7,400,000 Class C-2 Floating Rate Notes due April 2039 -- Prior Rating: Baa2 -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which has exposure to residential mortgage-backed securities and collateralized debt obligation securities. CABIN CREEK: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Cabin Creek Properties, L.L.C. 14241 Northeast Woodinville-Duvall Road Woodinville, Wa 98072 Tel: (425) 637-3010 Bankruptcy Case No.: 07-04201 Chapter 11 Petition Date: December 27, 2007 Court: Eastern District of Washington (Spokane/Yakima) Debtor's Counsel: Jesse Valdez, Esq. Ruthford Valdez, P.L.L.C. 800 Bellevue Way Northeast, Suite 400 Bellevue, WA 98004 Tel: (425) 637-3010 Fax: (425) 462-6371 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. CENVEO INC: Inks All Cash Acquisition Deal with Rex Corporation --------------------------------------------------------------- Cenveo Inc. has signed a definitive agreement to acquire Rex Corporation, in an all-cash transaction. The transaction is expected to be completed in the first quarter of 2008 and to be accretive to earnings in 2008. The transaction is expected to be funded using the company's revolver. Closing of the transaction is also subject to other conditions, which were not disclosed. "The addition of Rex will strengthen our position in the specialty packaging marketplace," Robert G. Burton, Sr., chairman and chief executive officer of Cenveo Inc., stated. Rex's reputation as an outstanding manufacturer of high-quality packaging will enhance our existing global packaging network and will provide for sizable synergy opportunities as we integrate our operations. I look forward to working with Chipper and his team as we work toward a swift completion of this transaction." "As an innovative and lean enterprise in the folding carton industry, the combination of Rex with Cenveo and Cadmus Whitehall is a natural progression for our people and our customers," Y.E. "Chipper" Hall, president of Rex stated. "Cenveo and Rex share many common goals and workflows, which will offer our customers an unmatched value to support the growth of their businesses in the future, both domestically and globally. We look forward to working with the Cenveo and Cadmus Whitehall team to provide these increased benefits to our customers and our people." About Rex Corporation Located in Jacksonville, Florida, Rex Corporation is an independent manufacturer of premium and high-quality packaging solutions with over 35 years' industry experience. Rex, is provides "single source" packaging solution, with design, production, and distribution all handled from one location. Rex has 170 employees offer services in pharmaceutical, healthcare, cosmetics, personal care, food & beverage and apparel markets. About Cenveo Inc. Headquartered in Stamford, Connecticut, Cenveo Inc. (NYSE: CVO) -- http://www.cenveo.com/-- provides its customers with low-cost solutions within its core businesses of commercial printing and packaging, envelope, form, and label manufacturing, and publisher services; offering one-stop services from design through fulfillment. With 10,000 employees worldwide, Cenveo delivers everyday for its customers through a network of production, fulfillment, content management, and distribution facilities. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services raised its ratings on Cenveo Inc. The corporate credit rating was raised to 'BB-' from 'B+'. The rating outlook is stable. CENVEO INC: Elects Gerald S. Armstrong to Board of Directors ------------------------------------------------------------ Cenveo Inc. appointed Gerald S. Armstrong to the company's board of directors effective December 31. Mr. Armstrong is presently an executive vice president of EarthWater Global LLC, an exploration company. Mr. Armstrong is also a managing director of Arena Capital Partners LLC, a private investment firm. Mr. Armstrong served as president and chief operating officer of PACE Industries Inc., a holding company formed at the end of 1983 to effect the purchase, through a $1.7 billion leveraged buyout arranged by KKR with Merrill Lynch Capital Partners, of the manufacturing and printing assets of City Investing Company, including Rheem Manufacturing Co., World Color Press, Inc., UARCO, Inc. and Hayes International, Inc. The company also disclosed that effective December 31, Robert Kittel is no longer a director of the company due to increasing demands on his time and the expanded role he has assumed at Goodwood Inc. "I am extremely pleased to disclose the appointment of Jerry Armstrong as a director of the company," Robert G. Burton, Sr., chairman and chief executive officer of Cenveo Inc. stated. "I have known him since 1991 and couldn't think of a better fit. He brings with him great experience in the printing sector with close to 25 years of knowledge and hands-on experience, including working with me at World Color during the turnaround efforts at that company. Jerry will bring an important industry perspective to the board, and I want to personally welcome him to the team. Commenting on Mr. Kittel's resignation, Mr. Burton said, "Rob played a pivotal role in helping our team assume leadership and control of Cenveo as well as in bringing strong financial acumen to the board. Rob informed me that he wanted to spend 100% of his time focusing on his full time job at Goodwood Inc., which has grown substantially since our arrival at Cenveo, and I support his decision. On behalf of the entire Board, I want to thank Rob for his hard work, and look forward to continuing to work with him and the Goodwood team as they remain a large shareholder." About Cenveo Inc. Headquartered in Stamford, Connecticut, Cenveo Inc. (NYSE: CVO) -- http://www.cenveo.com/-- provides its customers with low-cost solutions within its core businesses of commercial printing and packaging, envelope, form, and label manufacturing, and publisher services; offering one-stop services from design through fulfillment. With 10,000 employees worldwide, Cenveo delivers everyday for its customers through a network of production, fulfillment, content management, and distribution facilities. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services raised its ratings on Cenveo Inc. The corporate credit rating was raised to 'BB-' from 'B+'. The rating outlook is stable. COMMSCOPE INC: Completes $2.65BB Buyout Deal with Andrew Corp. -------------------------------------------------------------- CommScope Inc. has completed its acquisition of Andrew Corporation for a total purchase price of approximately $2.65 billion. Andrew will become a wholly owned subsidiary of CommScope. "We are delighted with the closing of the Andrew transaction, which marks a new chapter in the history of our company," said Frank M. Drendel, chairman and chief executive officer of CommScope. "We believe this combination will further enhance CommScope's position as a worldwide leader in 'last mile' solutions." "Combining our innovative technologies, premier brands and a top- tier customer base, we expect to expand our global service model and create an enhanced offering of communications infrastructure solutions that addresses a broader spectrum of customer needs," Mr. Drendel added. "With this acquisition, we are advancing CommScope's stated global 'last mile' strategy while creating important cost reduction and growth opportunities that we believe will drive increased shareholder value." "We look forward to working with Andrew's talented team to quickly and smoothly integrate their operations into CommScope," Mr. Drendel continued. "As we continue to invest in the combined business for profitable growth, the talented and dedicated employees of both Andrew and CommScope will continue to play a critical role in the success of the combined company. CommScope is a proven and successful integrator of strategic transactions and we expect to begin realizing the benefits of this combination immediately and enjoy them fully over the next few years." Andrew stockholders will receive, for each Andrew share, $13.50 in cash and 0.031543 shares of CommScope common stock. This fractional share of CommScope common stock was calculated according to the terms of the merger agreement by dividing $1.50 by $47.554, which was the volume weighted average of the closing sale prices for a share of CommScope common stock over the ten consecutive trading days ending on Dec. 24, 2007. Financing and Interest Rate Swap CommScope funded the transaction through a combination of senior secured credit facilities and available cash on hand. The $2.5 billion senior secured credit facilities consist of: -- a $1.35 billion seven-year senior secured term loan facility with an interest rate of London Interbank Offered Rate plus 250 basis points; -- a $750 million six-year senior secured term loan facility with an initial interest rate of LIBOR plus 225 basis points; and -- a $400 million six-year senior secured revolving credit facility with an initial interest rate of LIBOR plus 225 basis points. These debt commitments provide for a weighted average initial, variable interest rate of LIBOR plus approximately 241 basis points on the senior secured term loans. At closing, no funds had been borrowed from the revolving credit facility. CommScope also has entered into an interest rate swap in order to fix the LIBOR interest rate for an initial $1.5 billion of the overall credit facility. Through this swap CommScope fixed these amounts at a LIBOR rate of 4.07750%: -- $1.5 billion from Dec. 27, 2007 through Dec. 31, 2008; -- $1.3 billion from Jan. 1, 2009 through Dec. 31, 2009; -- $1.0 billion from Jan. 2, 2010 through Dec. 31, 2010; and -- $400 million from Jan. 1, 2011 through Dec. 31, 2011. Banc of America Securities LLC acted as financial advisor to CommScope in connection with this acquisition and Duff & Phelps LLC provided a fairness opinion to CommScope. Fried, Frank, Harris, Shriver & Jacobson LLP, Baker & McKenzie LLP and Robinson, Bradshaw & Hinson, P.A. acted as CommScope's outside legal counsel. Citi acted as the primary financial advisor to Andrew, and Merrill Lynch provided a fairness opinion. Mayer Brown LLP acted as Andrew's primary outside legal counsel. Banc of America Securities LLC and Wachovia Capital Markets, LLC acted as Joint Lead Arrangers and Joint Bookrunners in connection with the credit facilities. About Andrew Corporation Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ:ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the communications infrastructure market. Founded in 1937, the company serves operators and original equipment manufacturers from facilities in 35 countries. About CommScope Inc. Based in Hickory, North Carolina, CommScope Inc. (NYSE:CTV) -- http://www.commscope.com/-- is into infrastructure solutions for communication networks. CommScope's structured cabling systems for business enterprise applications includes SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands. It is also the manufacturer of coaxial cable for hybrid fiber coaxial applications. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Standard & Poor's Ratings Services affirmed its ratings on CommScope Inc. and Andrew Corp. and removed them from CreditWatch, where they were placed on June 27, 2007, with negative implications. S&P also affirmed the 'BB-' corporate credit and 'B' subordinated debt ratings for both companies. The outlook is stable. COMMUNITY GENERAL: Moody's Holds Ba3 Rating on $8.5 Mil. Bonds -------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 rating on $8.5 million of bonds issued by Community-General Hospital of Greater Syracuse through the Onondaga County Industrial Development Authority. The outlook revision to stable from negative reflects Moody's expectation that operating performance will improve and liquidity will stabilize in fiscal year 2008. Legal Security: Bonds are secured by a pledge of gross receipts of the hospital. Interest Rate Derivatives: None Strengths * Modest amount of absolute debt ($12.8 million, of which $8.6 million rated) and good cash-to-debt coverage of 99.5% despite a decline in liquidity due to pay down of the Series 1993A debt; * Pursuing NY Berger Commission recommendation to close its 50- bed Skilled Nursing Facility and will receive a grant under the HEAL NY Program to convert the vacated SNF space into an acute care unit of private medical/ surgical rooms. The Commission's recommendations affected licensed long term care beds of CGH and the neighboring Van Duyn nursing home but did not change CGH's licensed acute care bed capacity; * Inpatient volumes relatively flat through nine months of fiscal year 2007 over the same period in FY 2006, but total surgeries are up 5.4% mainly driven by growth of the orthopedic service line; * Growing orthopedic service line that is starting to create leverage with vendors for improved rates; * Relatively large medical staff of 330 physicians, primarily private attendings. Challenges * Unrestricted cash balances declined by $4.9 million to a low $12.7 million (39.3 days cash on hand) through ten months of FY 2007 due to a required $8.6 million pension plan contribution; * Continued decline in operating cash flow through ten months of FY 2007 over the same period last year (20% decline); possible financial covenant violations by year-end 2007; * Competitive four-hospital market where CGH represents the smallest provider with a 14% market share; * Weak demographics in greater Syracuse market, characterized by population declines, high unemployment and low wealth indices. Difficulty in recruiting nurses particularly in the emergency and operating rooms, which is reflected in higher than optimal use of agency personnel and growth in expenses; * History of weak operating performance with large operating losses recorded in FY 2006 and YTD 2007. Recent Developments/Results Since Moody's last report, CGH has made progress on its campus master plan. The Berger Commission did not recommend that CGH merge or take over the Van Duyn nursing home, the County's financially troubled 526-bed nursing home, which shares a common campus with CGH and will continue to hold separate licenses and operate independently. Instead, a CGH dominated planning company will be created that will coordinate the creation of a ma