T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 4, 2008, Vol. 12, No. 3 Headlines 13 EAST: Voluntary Chapter 11 Case Summary 888 TACTICAL: Moody's Junks Ratings on Four Classes of Notes A.R.E.I. NEWHALL: Voluntary Chapter 11 Case Summary A&M DEVELOPMENT: Voluntary Chapter 11 Case Summary ACANDS INC: Judge Fitzgerald Approves Disclosure Statement AIRTRAN AIRWAYS: To Keep Orlando Headquarters and Add Jobs ALPHA OMEGA: Files for Chapter 11 Bankruptcy in Massachusetts ALPHA OMEGA: Case Summary & 20 Largest Unsecured Creditors ALTERNATIVE A: Third Quarter Issuance Drops Dramatically, S&P Says ARNOLD SMITH: Case Summary & 14 Largest Unsecured Creditors ASPEN EXECUTIVE: Court Denies U.S. Trustee's Ch. 7 Conversion Plea ASSET BACKED: S&P Junks Four Certificate Ratings from Low-B BERNARD REAL ESTATE: Case Summary & Three Largest Unsec. Creditors BIOENERGY OF AMERICA: Case Summary & 19 Largest Unsec. Creditors BLACKHAWK AUTOMOTIVE: Committee Taps Frost Brown as Counsel BOOTIE BEER: Files Voluntary Chapter 7 Petition in Florida BRIAN KARN: Case Summary & Four Largest Unsecured Creditors BROTMAN MEDICAL: Hires Hooper as Corporate and Litigation Counsel BUFFETS INC: Fails to Pay $293-Million Coupon Payment CHITTENDEN TRUST: Moody's Junks Bank Financial Strength Rating CHRYSLER LLC: U.S. Sales Increased 1 Percent in December COLONIAL CONSTRUCTION: Case Summary & 15 Largest Unsec. Creditors COMPLETE RETREATS: Emerges from Chapter 11 in Connecticut DANA CORP: Plaza Tire Wins Bid for Cape Girardeau Property DELPHI CORP: Completes $40 Mil. Sale of North American Brake DELPHI CORP: Court Approves Unit's Sale to Inteva for $106 Mil. DELPHI CORP: IUE-CWA Objects to Employee Compensation Programs DUNMORE HOMES: Committee Taps Morrison & Foerster LLP as Counsel DUNMORE HOMES: Obtains Final Nod to Employ Pachulski as Counsel DUNMORE HOMES: Court Approves Sale of Stone Mitigation Property E*TRADE FIN'L: Mitchell Caplan Resigns, Gets $10.9MM Severance Pay EL PASO: Unit Completes $125 Mil. Offering of 5.95% Senior Notes FAYE PATTERSON: Voluntary Chapter 11 Case Summary FISHER COMMS: Completes $55 Mil. TV Station Purchase from Westwind FLORIDA'S SPORT: Case Summary & Four Largest Creditors FORD MOTOR: 2007 Sales Down by 12% at 2.57 Million FORD MOTOR: Overall Sales in Canada Down 11.8% to 15,163 Units FORD MOTOR: Singles Out Luxury Brands Bidder Tata Motors GENERAL MOTORS: Lays-Off 450 Workers in St. Catharines, Ontario GENERAL MOTORS: Reports 3.87 Million Vehicle Sale in 2007 GENERAL MOTORS: Canada 2007 Sales Down 4.2% to 403,410 Units GENESCO INC: Merger Order Cues S&P to Retain Developing Watch GLOBAL TRANSPARK: Cherry Bekaert Expresses Going Concern Doubt GRAN TIERRA: Earns $1.1 Million in Third Quarter GRANT FOREST: Moody's Withdraws B2 Corporate Family Rating GVI SECURITY: Earns $474,000 in Third Quarter HAIGHTS CROSS: S&P Maintains 'CCC+' Corporate Credit Rating HAVEN HEALTHCARE: Committe Wants Neubert Pepe as Co-Counsel HERITAGE CHRISTIAN: Case Summary & Largest Unsecured Creditor IMAX CORP: U.S. Bank Denies Catalyst Fund's Default Claims INFOUSA INC: Creates Special Panel for Internal Investigation KATHLEEN FAIRHURST: Voluntary Chapter 11 Case Summary KEYERA FACILITIES: Discloses Completion of Internal Reorganization KLEROS PREFERRED: Moody's Junks Rating on $32 Mil. Notes from B3 KLEROS PREFERRED: Moody's Junks Ratings of Six Note Classes MARINER ENERGY: Completes $122.5 Mil. Buyout of Spraberry Stake MARK IV: Sun Capital Deal Cues S&P to Retain B Corporate Rating MBS-THE CHANCELLOR: Voluntary Chapter 11 Case Summary MERITAGE MORTGAGE: S&P Junks Ratings on Five Certificate Classes MERRILL LYNCH: Fitch Rates $5.4 Million Class B-2 Certs. at B MICHAEL DARDAN: Voluntary Chapter 11 Case Summary MOVIE GALLERY: Wants Removal Period Extended Until July 14 MQ ASSOCIATES: Commences Tender Offer for 12-1/4% Senior Notes MTI TECHNOLOGY: Wants To Hire CMA Business as Auctioneer NEO CDO: Event of Default Prompts Moody's Ratings Downgrade ORION 2006-2: Pending Indenture Resolution Cues Moody's Rating Cut OVERLAND PROPERTIES: Case Summary & 20 Largest Unsecured Creditors PEOPLE'S UNITED: Moody's Holds C+ Financial Strength Rating PERFORMANCE TRANS: Panel Can Hire Traxi LLC as Fin'l. Advisors PERFORMANCE TRANS: Court OKs Hodgson Russ as Bankr. Co-Counsel PHOENIX FOOTWEAR: Sells Altama Military Footwear for $15 Million POLYONE CORP: Completes Acquisition of GLS Corporation REAL ESTATE VII: Sept. 30 Balance Sheet Upside-Down by $17.7 Mil. REDWOOD CAPITAL: Moody's Attaches Low-B Ratings on Four Notes REMY WORLDWIDE: Court Issues Final Decree Closing 27 Bankr. Cases ROYCE RESOURCES: Sale of Substantially All Assets Completed SAAN STORES: Seeks Protection from Creditors Under CCAA SALON MEDIA: Posts $308,000 Net Loss in Second Qtr. Ended Sept. 30 SALVATORE CRISAFI: Case Summary & Six Largest Unsecured Creditors SOUNDVIEW HOME: Credit Enhancement Cut Cues S&P's "D" Cert. Rating SPORTSTUFF INC: Case Summary & 20 Largest Unsecured Creditors SPX CORP: Completes Acquisition of APV from Invensys PLC STACK 2007-1: Poor Credit Quality Cues Moody's to Cut Ratings STRUCTURED ASSET: S&P Lowers Three Certificate Ratings to 'D' TALSAL LLC: Case Summary & Four Largest Unsecured Creditors TECHALT INC: Reports Progress in Debt Reduction Plan THE LAKE CLUB: Case Summary & Seven Largest Unsecured Creditors TIMOTHY D'ALESSANDRI: Voluntary Chapter 11 Case Summary TRITON OPERATIONS: Case Summary & 20 Largest Unsecured Creditors TRW AUTOMOTIVE: Arm Completes Buyout of Delphi Corp.'s NA Brake TWO HUNDRED: Case Summary & Eight Largest Unsecured Creditors WATERFORD EQUITIES: Hires Murtha Cullina as Healthcare Counsel WELDED FIXTURES: Case Summary & 20 Largest Unsecured Creditors WILLIAM JACKSON: Case Summary & 19 Largest Unsecured Creditors * ABI Says Consumer Bankruptcy Nears 40% in Year 2007 * Critics See Loopholes in Canada's Amended Bankruptcy Law * NHB Names Donald Hawthorne as Managing Director * Quadrangle Debt Changes Name to Monarch Alternative * Saul Ewing Promotes Ten Attorneys as New Partners * S&P Downgrades Ratings on 74 Certificates from 10 Issuers * BOOK REVIEW: Financial Planning for High Net Worth Individual ********* 13 EAST: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 13 East 124th Street, L.L.C. 13 East 124th Street New York, NY 10035 Bankruptcy Case No.: 07-14104 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: December 31, 2007 Court: Southern District of New York (Manhattan) Debtor's Counsel: Robert R. Leinwand, Esq. Robinson, Brog, Leinwand, Greene, Genovese & Gluck, P.C. 1345 Avenue of the Americas, 31st Floor New York, NY 10105 Tel: (212) 586-405 Total Assets: $3,486,300 Total Debts: $842,111 The Debtor did not file a list of its largest unsecured creditors. 888 TACTICAL: Moody's Junks Ratings on Four Classes of Notes ------------------------------------------------------------ Moody's Investors Service downgraded ratings of seven classes of notes issued by 888 Tactical Fund, Ltd., and left on review for possible further downgrade ratings of three of these classes of notes. The notes affected by this rating action are: Class Description: $39,200,000 Class S Floating Rate Notes due 2015 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa2, on review for possible downgrade Class Description: Up to $500,000,000 Class A1 Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $200,000,000 Class A2 Floating Rate Notes due 2050 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $120,000,000 Class A3 Floating Rate Notes, due 2050 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca Class Description: $75,000,000 Class A4 Floating Rate Notes due 2050 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $50,000,000 Class B Deferrable Floating Rate Notes due 2050 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $35,000,000 Class C Deferrable Floating Rate Notes due 2050 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca The rating actions taken and since the Closing Date reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Dec. 13, 2007, of an event of default caused by a failure of the Principal Coverage Ratio relating to the Class A Notes to equal or exceed 94.5%, as required under Section 5.1(d) of the Indenture dated March 15, 2007. 888 Tactical Fund, Ltd. is a collateralized debt obligation backed primarily by a portfolio of ABS CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, noteholders may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class S, Class A1, and the Class A2 Notes remain on review for possible downgrade. A.R.E.I. NEWHALL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Lead 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 on January 2, 2008: Entity Case No. ------ -------- A.R.E.I. Newhall 24, L.L.C. 08-10013 A.R.E.I. Newhall 20, L.L.C. 08-10018 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 Debtors' 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 Financial Condition of Debtors filing separate Chapter 11 petitions on January 2, 2008: Total Assets Total Debts ------------ ----------- A.R.E.I. Newhall 24, L.L.C. $462,861 $24,000,000 A.R.E.I. Newhall 20, L.L.C. $200,880 $24,000,000 The Debtors did not file lists of largest unsecured creditors. A&M DEVELOPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: A.&M. Development, Inc. 10556 Combie Road, Suite 6386 Auburn, CA 95602 Bankruptcy Case No.: 07-31342 Chapter 11 Petition Date: December 27, 2007 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: W. Steven Shumway, Esq. 2140 Professional Drive, Suite 250 Roseville, CA 95661 Tel: (916) 789-8821 Total Assets: $4,890,000 Total Debts: $2,410,829 The Debtor does not have any creditors who are not insiders. ACANDS INC: Judge Fitzgerald Approves Disclosure Statement ---------------------------------------------------------- The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved ACandS Inc.'s disclosure statement explaining its plan of reorganization, The Associated Press reports. The plan contemplates on paying $500 million insurance to settle asbestos claims, $45 million of which will go to Gilbert Randolph LLC pursuant to a contingency fee agreement, AP relates. Documents submitted to the Court state that the Debtor's asbestos claimants can recover up to 6%, AP says. Travelers Cos. currently holds about $449 million trust fund to be paid to asbestos claim holders, AP reports. The Court has also ordered the Debtor to commence the solicitation of votes to accept or reject the plan, after which a confirmation hearing will be set, AP adds. Gilbert Randolph represents the Debtor in litigations demanding rightful allocation and entitlement from insurers for asbestos liabilities. About Gilber Randolph Based in Washington, DC, Gilbert Randolph LLP -- http://www.gilbertrandolph.com/-- specializes in four primary areas of law: Complex Dispute Resolution, Insurance Recovery, Strategic Risk Management, and Bankruptcy Representation. About ACandS Headquartered in Lancaster, Pennsylvania, ACandS Inc. was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. ACandS is a unit of Lancaster, Pennsylvania-based Irex Corp. The company filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl & Jones PC, represent the Debtor in its restructuring efforts. Also representing the Debtor are Bruce L. Ahnfeldt, Esq., at Law Offices of Bruce L. Ahnfeldt, George C. Greatrex, Jr. , Esq., at Shivers, Spielberg Gosnay & Greatrex LLC and Sheldon K. Rennie, Esq., at Fox Rothschild LLP. Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. When the Debtor filed for protection from its creditors, it estimated debts and assets of over $100 million. AIRTRAN AIRWAYS: To Keep Orlando Headquarters and Add Jobs ---------------------------------------------------------- AirTran Airways, a subsidiary of AirTran Holdings Inc., will build a permanent, hurricane-hardened Systems Operations Control center at Orlando International Airport, keep its existing Orlando headquarters, and add high-paying jobs in Florida. "Orlando will remain our nerve center for our fast-growing network as well as our headquarters city," Robert. L. Fornaro, AirTran Airways president and chief executive officer, said. "We are proud to call Orlando home. Orlando is a great city with a business-friendly climate, growing business and leisure passenger base and livability. It's a place skilled Crew Members want to come to work and raise their families -- and we'd like to thank Florida Governor Charlie Crist, Enterprise Florida, Orlando Mayor Buddy Dyer, the City of Orlando, the Metro Orlando Economic Development Commission and the Greater Orlando Aviation Authority for forming a partnership that will benefit AirTran Airways and, we believe, Central Florida for many, many years." AirTran Airways has rapidly added flights and new routes at its home base and now operates 449 weekly flights to 33 nonstop destinations from Orlando. The company plans to add 121 jobs at an average salary of $45,000 to its 300- member Orlando workforce. Many of the new jobs are tied to the AirTran Airways SOC, the airline's technologically advanced nerve center, where dispatchers, schedulers and resource planners control all aspects of airline operations. The existing SOC was extensively damaged in 2004 by Hurricane Charley. "This is great news for our state since the aviation industry and headquarters operations are critical to our plans for economic growth," Florida Governor Charlie Crist said. "I am thankful to AirTran Airways for realizing the value of continuing its business base in Florida, and I congratulate our partners at the Greater Orlando Aviation Authority and the City of Orlando for their successful efforts in retaining this business that is important to the Central Florida market as well as the state." AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * Moody's Investors Service assigned a B2 senior secured debt rating to Airtran Airways Inc. on April 2003. The rating still holds to date. Airtran Holdings Inc.'s 7% Convertible Notes due 2023 carry Moody's Investors Service and Standard & Poor's junk ratings. ALPHA OMEGA: Files for Chapter 11 Bankruptcy in Massachusetts ------------------------------------------------------------- Alpha Omega Jewelry sought protection under chapter 11 with the U.S. Bankruptcy Court for the Eastern District of Massachusetts on Jan. 2, 2008, Nicole C. Wong writes for The Boston Globe. The filing calls for a public sale of the Debtor's assets on Jan. 22, 2008, with Tiger Capital and Gordon & Co. bidding at 70.25% of the Debtor's inventory, Boston Globe says. The owners, Raman and Nilda Handa, who elected for the bankruptcy filing reportedly fled to India days before Christmas, Boston Globe reports. Richard E. Mikels, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo who filed for bankruptcy on behalf of the missing owners, could not determine the worth of the Debtor's assets and liabilities, Boston Globe relates. The Debtor is said to have been accumulating debts for half a year and on Dec. 22, 2007, Bank of America Corp.'s affiliate, LaSalle Business Credit, took over the Alpha Omega's inventory, Boston Globe says. Mr. Mikels told Boston Globe that with LaSalle's financing, the Debtor's consumer programs and employee benefits will continue. About Alpha Omega Cambridge, Massachusetts-based Alpha Omega Jewelry -- http://www.alphaomegajewelers.com/-- is a watch and diamond specialist since 1976. It runs stores serving high profile customers, including film star Ben Affleck, former Red Sox pitcher Pedro Martinez, and former President Clinton. The Debtor's flagship store in Harvard Square, and also runs stores in Boston's Prudential Center, in Burlington and Natick Collection malls. Records show that Alpha Omega owner, Raman Handa, placed his personal assets, including his $2 million home in Lexington, in exchange for funding from parent company, Lexington Jewelers Exchange. Mr. Handa also has loans and mortgages from National City Bank, Leader Bank of Arlington, and Middlesex Savings Bank, among others. ALPHA OMEGA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Alpha Omega Jewelers aka Lexington Jewelers Exchange, Inc. 625 Mount Auburn Street Cambridge, MA 02138 Bankruptcy Case No.: 08-10042 Type of Business: The Debtor owns and manages watch retail shops. See http://www.alphaomegajewelers.com/ Chapter 11 Petition Date: January 2, 2008 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Adrienne Kotowski Walker, Esq. Kevin J. Walsh, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Tel: (617) 542-6000 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rolex Watch U.S.A., Inc. trade $1,456,379 665 Fifth Avenue New York, NY 10022 Boston Globe-Retail trade $1,151,322 Boston Globe Advertising P.O. Box 4074 Woburn, MA 01888 Swatch Group U.S. trade $665,985 1200 Harbor Boulevard Weehawken, NJ 07087 International Watch Co., Ltd. trade $572,494 3 Enterprise Drive Shelton, CT 06484 Lange Uhren GmbH trade $484,425 Altenberger Street 15 01768 Glashutte, Germany Concord Watch Co. trade $364,024 650 From Road Paramus, NJ 07652 Lazare Kaplan trade $345,976 19 West 44th Street New York, NY 10036 Bulgari Corp. of America trade $335,803 625 Madison Avenue New York, NY 10022 Jaeger-Lecoultre trade $331,444 3 Enterprise Drive Shelton, CT 06484 Vacheron Constantin trade $325,739 3 Enterprise Drive Shelton, CT 06484 Maharaja Designs trade $318,850 5055 Sirkiwalan Hauz Qazi, Delhi 110 006 India Chanel trade $309,898 885 Centennial Avenue Piscataway, NJ 08855 Tag Heuer trade $289,565 966 Springfield Avenue Springfield, NJ 07081 Daniel Roth trade $274,257 Attention: Bulgari SpA Lungotevere Marzio 11 11186 Rome, Italy Mumbai Namaste trade $246,040 P.J.E., Inc. trade $245,270 Fifth Avenue Luxury Group trade $242,558 Celtics trade $207,500 Milus U.S.A., Inc. trade $191,550 Boston Magazine trade $176,654 ALTERNATIVE A: Third Quarter Issuance Drops Dramatically, S&P Says ------------------------------------------------------------------ Standard & Poor's Ratings services said that following a second quarter in which issuance of Alternative-A mortgages reached heights previously unseen, it decreased sharply in third-quarter 2007. The dramatic drop, to $39.3 billion in issuance from the previous quarter's all-time high of $109.5 billion, is the result of unprecedented credit and liquidity disruptions-affecting both borrowers and lenders-that emerged in the U.S. residential mortgage market over the summer in response to the rapidly deteriorating housing sector. Severe delinquencies in the 2006 and 2007 subprime and Alt-A vintages have risen at an extremely high and unexpected rate in recent months, especially during the latter part of the second quarter and through the third quarter, and there are no signs of the trend abating in the near term. In response, investor demand for U.S. residential mortgage-backed securities has fallen sharply, which has limited a key source of funding available to originators and issuers from the secondary market. Though a typical Alt-A borrower is of prime credit quality, other loan characteristics-such as non-traditional loan products, low- or no-income documentation underwriting, high combined loan-to- value ratio, and investor occupancy-contribute additional layered risks to Alt-A mortgages. However, fewer borrowers are qualifying for new loans because originators have curtailed many loan programs in response to low RMBS investor demand. As the non-agency Alt-A market slows,originators are retooling loan production for increasing sales to government-sponsored enterprises. The simultaneous reduction in supply of and RMBS investor demand for Alt-A mortgages contributed to the substantially lower issuance levels of third-quarter 2007 and poses a threat to many borrowers who may be faced with the risk of loan rate reset or loan recast in the near term. Standard & Poor's Ratings Services expects Alt-A issuance to further decline during fourth-quarter 2007 and into early 2008 as the industry continues to feel the effects of limited liquidity in the U.S. RMBS market. This limited availability of credit and liquidity to borrowers could exacerbate defaults. Following a second quarter in which issuance of Alternative-A (Alt-A) mortgages reached heights previously unseen, it decreased sharply in third-quarter 2007. The dramatic drop, to $39.3 billion in issuance from the previous quarter's all-time high of $109.5 billion, is the result of unprecedented credit and liquidity disruptions-affecting both borrowers and lenders-that emerged in the U.S. residential mortgage market over the summer in response to the rapidly deteriorating housing sector. Severe delinquencies in the 2006 and 2007 subprime and Alt-A vintages have risen at an extremely high and unexpected rate in recent months, especially during the latter part of the second quarter and through the third quarter, and there are no signs of the trend abating in the near term. In response, investor demand for U.S. residential mortgage-backed securities has fallen sharply, which has limited a key source of funding available to originators and issuers from the secondary market. Though a typical Alt-A borrower is of prime credit quality, other loan characteristics-such as non- traditional loan products, low- or no-income documentation underwriting, high combined loan-to- value ratio, and investor occupancy-contribute additional layered risks to Alt-A mortgages. However, fewer borrowers are qualifying for new loans because originators have curtailed many loan programs in response to low RMBS investor demand. As the non-agency Alt-A market slows, originators are retooling loan production for increasing sales to government-sponsored enterprises. The simultaneous reduction in supply of and RMBS investor demand for Alt-A mortgages contributed to the substantially lower issuance levels of third-quarter 2007 and poses a threat to many borrowers who may be faced with the risk of loan rate reset or loan recast in the near term. Standard & Poor's Ratings Services expects Alt-A issuance to further decline during fourth-quarter 2007 and into early 2008 as the industry continues to feel the effects of limited liquidity in the U.S. RMBS market. This limited availability of credit and liquidity to borrowers could exacerbate defaults. The market disruption that began in July was severe. In the period between June 2007 and September 2007, monthly Alt-A issuance volume fell by more than 75%, and issuance in third- quarter 2007 was less than half the average of either third- quarter 2005 or third-quarter 2006. Yet, despite the sharp decline in production volume, alternative mortgages still accounted for a substantial 28% of total mortgage origination during the third quarter-the same level of market penetration as two years ago. Hybrid IO, POA Loans Dominate Market Notwithstanding the large drop in total Alt-A issuance, homeowners' mortgage preferences appear to have remained relatively unchanged over the past several quarters. Hybrid interest-only (IO) and payment option-ARM loans dominate the Alt-A market, but borrowers continue to opt for longer initial fixed- rate periods (mostly 5/1 and 10/1 hybrid-ARMs). POA borrowers, in particular, are beginning to flock to hybrid POA products, which offer the security of additional interest-rate stability. During third-quarter 2007, more than 60% of POA loans included initial fixed-rate periods of five years or longer, compared with 47.8% in the previous quarter and only 5.0% during third-quarter 2006, as lenders scale back or eliminate traditional POA loans based on RMBS investor demand. Separately, a similar trend is also occurring (to a lesser extent) in the hybrid IO product, as more borrowers opt for seven-year, 10-year, and fixed- rate Ios. S&P expects this migration toward products with longer initial fixed-rate periods to continue, as borrowers and lenders continue to grapple with the need for interest-rate stability amid the current housing downturn. In addition, the shape of the yield curve allowed borrowers to lock in interest rates with longer initial fixed-rate periods at relatively low incremental costs. FICO scores and average CTLV ratios improved substantially in second- and third-quarter 2007. In third-quarter 2007, the average CTLV ratio fell to 91.6% from 93.3% during the previous quarter and 94.7% at year-end 2006. This represents a material reduction in risk because of a movement away from simultaneous second loans, which in part resulted from lenders' requirements that homeowners build equity in their homes. In other words, in order to obtain a first-lien, Alt-A loan, the average borrower with a second-lien loan is now required to have, on average, 8.4% equity in the home versus 5.3% at the end of 2006. At the same time, FICO scores (a key indicator of a borrower's credit quality) are also improving. In third-quarter 2007, the average FICO score for Alt-A borrowers was 712 compared with 709 in the previous quarter and 702 at year-end 2006. Income Sources Documentation Limited income documentation has been the hallmark of the Alt-A market for several years. In most cases, the borrower states his income on the loan application and the lender obtains verbal verification of employment; actual income level isn't confirmed, although lenders' underwriting processes may require them to test the reasonableness of such assertions. This practice has come under increased scrutiny in recent months as mortgage performance has worsened. In third-quarter 2007, S&P saw full income documentation underwriting increase quarter over quarter. Full income documentation (at least 12 months of income documentation) was required in 22.1% of Alt-A loans during third- quarter 2007. This represents a material change from the second- quarter 2007 level of 16.8%, which was near an all-time low. The reversal in this trend seems to be a direct effect of the tightened underwriting guidelines implemented by many lenders in response to the weakening delinquency performance over the past two quarters and declining RMBS investor demand for the stated product. Standard & Poor's expects this trend to accelerate through 2008, as guidelines tighten further. Refinance Loans Are On The Rise Refinance loans continue to steadily increase their share of Alt-A issuance, grabbing 25.1% of the Alt-A market in third-quarter 2007 compared with only 15.1% during the same quarter in 2006. Historically, spikes in non-cashout refinance loans occur during low interest rate periods as borrowers recognize the strong economic incentives to refinance. Despite the Federal Reserve's recent interest-rate cuts, however, one main reason for the increase in Alt-A refinancings seems to be borrowers' desires to achieve longer-term interest-rate stability when faced with the prospect of upcoming interest-rate resets and even-tighter underwriting guidelines for hybrid products with short fixed-rate periods. During first-quarter 2006, more than 50% of refinance issuance was in mortgage loans with monthly adjusting interest rates (mostly in traditional option-ARM loans). In third-quarter 2007, however, borrowers were refinancing into products with significantly longer fixed-rate periods (five years or longer). As discussed earlier, much of this activity has been focused in the option-ARM market, where new product innovations, such as the hybrid option ARM, have been popular. However, similar trends are occurring in the fully amortizing and IO products as well. The spike in refinance activity has been coupled with an offsetting reduction in purchase loan activity. Purchase loans fell to 37% of the Alt-A market in third-quarter 2007 from almost 50% in first-quarter 2006. Lower purchase loan volume reflects the nationwide trend of fewer home sales, as housing supply continues to outpace demand in many areas. In addition, among other things, lenders have been tightening underwriting guidelines since late 2006, with particular emphasis on certain high-CLTV purchase money loans, which have been highly correlated to early delinquencies and defaults in the 2006 vintage. Standard & Poor's release has substantially increased the credit enhancement required to obtain particular ratings of securities backed by high- CLTV purchase loans. Segments of the purchase market, such as loans with stated documentation underwriting and loans to first-time homeowners, have slowed substantially, contributing to the lower purchase issuance trend. Alt-A Delinquencies Continue to Rise S&P believes the proliferation of layered risk within the Alt-A market and stagnant or declining home price appreciation appear to be the leading causes of the current performance downturn. The number of delinquencies within the 2006 vintage is more than double that of the 2005 vintage, and more than four times that of the 2004 and 2003 vintages. According to data obtained from LoanPerformance, a division of First American CoreLogic Inc., the 2006 vintage's 90-plus-day delinquency rate (including loans in foreclosure and bankruptcy and loans representing real-estate- owned assets) after 18 months' seasoning was 4.71% versus 1.97% for the 2005 vintage and 1.07% for the 2004 vintage. Delinquencies for the 2007 vintage are also up sharply at a very early stage. While it's far too soon to draw a conclusion regarding ultimate 2007-vintage performance, early data suggests that the 2007 deterioration may be the worst ever for the Alt-A market. Still, given the limited seasoning of the 2006 and 2007 vintages, the spike in severe delinquencies is unprecedented. S&P remains concerned that an extended housing downturn could lead to a prolonged period of high delinquencies and, ultimately, high cumulative losses. Average losses are currently lower than the 'B' (a speculative-grade rating category) enhancement levels. Typically, 'BBB' (an investment-grade rating category) enhancement is three to four times the 'B' enhancement. Although individual transactions will exhibit different behavior, it will take a prolonged period of higher losses to breach the investment-grade credit enhancement levels across the universe of Alt-A securities. Required Credit Enhancement Levels Increased In light of high delinquencies beginning in mid-2005 and continuing throughout 2006 and 2007,Standard & Poor's has steadily increased credit enhancement required for securities issued in the Alt-A category. This is particularly true where underlying assets include loans with layered risks, which have been highly correlated to elevated delinquency levels. On Nov. 9, S&P released the latest update to S&P's LEVELS model, which further increases credit enhancement levels required to obtain particular ratings for securities backed by loans with layered risks, including high- CLTV purchase loans and loans with reduced income documentation. For layered-risk loans S&P has reduced the impact of a high FICO score to offset risk factors elsewhere within a particular loan. Delinquencies Spur Ratings Actions In August, Standard & Poor's downgraded 158 classes from 89 Alt-A RMBS transactions as a result of high delinquencies and realized losses. In November, Standard & Poor's placed on CreditWatch with negative implications 484 classes of U.S. RMBS backed by first-lien Alt-A mortgage loans issued from the beginning of 2005 through the end of 2006. In addition, Standard & Poor's placed on CreditWatch with negative implications its ratings on 63 classes of U.S. net interest margin securities transactions backed by the affected U.S. first-lien Alt-A mortgage securities. ARNOLD SMITH: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Arnold Smith Mary J. Smith 819 Pinecreek Drive Dayton, OH 45458 Bankruptcy Case No.: 08-30020 Type of Business: The Debtor owns and manages real estate for rent. Chapter 11 Petition Date: January 3, 2008 Court: Southern District of Ohio (Dayton) Debtor's Counsel: Ira Rubin, Esq. Goldman, Rubin & Shapiro 1340 Woodman Drive Dayton, OH 45432 Tel: (937) 254-4455 Total Assets: $11,712,127 Total Debts: $10,596,977 Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saxon real estate; value $201,947 4708 Mercantile Drive, North of security: $114,920 Fort Worth, TX 76137 Washington Mutual real estate; value $180,222 2210 Enterprise Drive of security: $122,390 Florence, SC 29501 Popular Mortgage Service, Inc. real estate; value $108,725 121 Woodcrest Road of security: $75,780 Cherry Hill, NJ 08003 Liberty Savings Bank real estate; value $105,775 of security: $70,320 Option One real estate; value $85,360 of security: $61,360 Weller Mortgage real estate; value $26,553 of security: $4,850 A.S.C. real estate; value $67,300 of security: $48,000 HomEq Servicing real estate; value $65,233 of security: $30,000 National City Credit Card $51,000 Fifth Third Bank real estate; value $32,453 of security: $11,270 Universal One Credit Union, Cashiers Check $20,000 Inc. Lowe's Credit Card $20,000 Home Depot Revolving Account $18,000 Chase Card Services Credit Card $16,000 ASPEN EXECUTIVE: Court Denies U.S. Trustee's Ch. 7 Conversion Plea ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware denied the motion of Kelly Beaudin Stapleton, the United States Trustee for Region 3, seeking conversion of Aspen Executives Air LLC's chapter 11 case into chapter 7. Papers filed with the Court did not disclose reasons for the denial. As reported in the Troubled Company Reporter on Nov. 30, 2007, the U.S. Trustee alleged that the Debtor failed to fulfill its primary fiduciary duty to act in the best interests of general creditors. The U.S. Trustee told the Court that the proposed buyer for the Debtor's business is an insider, given that a postpetition financing lender will be acquiring interest in the buyer after the sale. The U.S. Trustee illustrated that the Debtor is owned 99% by Calim Venture Partners II and 1% by Calim Private Equity LLC. CPE is the sole Manager of the Debtor. John P. Calamos, Sr. owns 50% of CPE, and 6.25% of CVP. Mr. Calamos and CVP are the Debtor's postpetition financing lenders. According to the U.S. Trustee, the Debtor's proposed procedures for the sale of its business to Pinnacle Air LLC gives Mr. Calamos right to acquire a controlling interest in Pinnacle, hence, Pinnacle is an insider. Additionally, the U.S. Trustee noted that the Debtor did not disclose in its schedules customer deposit funds held by its escrow agent, Reviewer LLC. The U.S. Trustee argued that the current management effectuated what appears to be a prima facie fraudulent transfer on the eve of its bankruptcy filing by diverting funds from the estate to Reviewer LLC. The transfer, the U.S. Trustee avers, took place immediately subsequent to a judgment levy by a judgment creditor and within one month of the bankruptcy filing. Bankruptcy Analyst Supports Conversion In support of the U.S. Trustee's motion, Diane M. Giordano, Bankruptcy Analyst for the Office of the United States Trustee for Region 3, stated that no accounting was made on the deposit funds held by Reviewer LLC, as escrow agent, as of Nov. 15, 2007. In reviewing the agreements relating to the funds, Ms. Giordano told the Court that she found no indication that members are notified that their deposits are transferred to a non-debtor entity escrow agent, or of the disposition of funds once transferred from the Debtor to the escrow agent. Ms. Giordano also noted that no clauses in the agreements require the Debtor to escrow the deposit funds. In addition, Ms. Giordano told the Court that there were inconsistencies in the Debtor's monthly operating report for the period Sept. 14, 2007, to Sept. 30, 2007. Specifically, she noted that: -- the Debtor received insider funds from Mr. Calamos; -- there is a $112,906.55 disparity between the amount disclosed by the Debtor in its Accounts Receivable Reconciliation and Aging report ($895,842.74) and the gross revenue reflected in its Statement of Operations ($782,936.19); and -- the cash revenues in the Debtor's postpetition financing budget and the actual revenues on its monthly operating report do not match. Furthermore, Ms. Giordano stated that the Debtor utilized Community Banks of Colorado for its prepetition banking and intended post petition banking. Despite requests for the Debtor to seek an alternate banking institution, no changes have been made, she said. About Aspen Executive Based in Basalt, Colorado, Aspen Executive Air, L.L.C., aka AEXJet -- http://www.aexjet.com/-- is a private jet travel company. The company filed for chapter 11 protection on Sept. 14, 2007 (Bankr. D. Del. Case No. 07-11341). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., and Curtis A. Hehn, Esq., at Pachulski Stang Ziehl & Jones LLP represent the Debtor. The Debtors have selected Administar Services Group LLC as claims, noticing and balloting agent. Donald J. Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection form its creditors, it listed assets between $1 million and $100 million. The Debtor's list of 20 largest unsecured creditors showed claims of more than $20 million. ASSET BACKED: S&P Junks Four Certificate Ratings from Low-B ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 20 classes of asset-backed certificates issued by eight Asset Backed Securities Corp. Home Equity Loan Trust deals. S&P removed two of these ratings from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining 62 classes from these transactions and from series 1999-LB1 and 2005-HE6. The downgrades reflect a reduction in credit enhancement as a result of monthly realized losses. As of the November 2007 remittance date, cumulative realized losses for the downgraded classes, as a percentage of the original pool balances, ranged from 0.79% (series 2004-HE8) to 8.44% (series 2004-HE4). Severe delinquencies (90-plus days, foreclosures, and REOs), as a percentage of the current pool balances, ranged from 10.72% (series 2003-HE6) to 27.60% (series 2004-HE8). For the transactions with downgrades, losses have outpaced excess interest over the past six months by an average of 2.3x. Series 2004-HE4, in particular, saw losses outpace excess interest by approximately 4.2x. S&P removed its ratings on two classes from CreditWatch negative because S&P downgraded the classes to 'CCC'. The affirmations reflect sufficient credit enhancement available to support the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Subordination, overcollateralization, and excess spread provide credit support for these transactions. In addition, the A-1 class from series 2004-HE6 and 2004-HE7, the A-1F, A-2F, A-5A, and A-3A classes from series 1999-LB1, as well as the A-2D class from 2005- HE6 are wrapped with bond insurance. MBIA Insurance Corp. is the insurance provider for series 1999-LB1; Financial Security Assurance Inc. is the insurance provider for series 2004-HE6 and 2004-HE7; and CIFG Assurance North America Inc. is the insurance provider for series 2005-HE6. The collateral for these transactions originally consisted primarily of closed-end, fixed- and adjustable-rate, first- and second-lien mortgage loans. Ratings Lowered Asset Backed Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-HE1 M-2 BBB A 2003-HE5 M-3 BBB- A- 2003-HE5 M-4 B BB 2003-HE6 M-6 BB- BBB- 2004-HE4 M-4 BBB A 2004-HE4 M-5 BB A- 2004-HE4 M-6 B- BBB+ 2004-HE4 M-7 CCC BB 2004-HE6 M-6 BB BBB- 2004-HE6 M-7 B BBB- 2004-HE7 M-9 B BB+ 2004-HE8 M-5 BB BBB 2004-HE8 M-6 B BBB- 2004-HE8 M-7 CCC BB+ 2004-HE9 M-3 BBB- A- 2004-HE9 M-4 BB BBB+ 2004-HE9 M-5 B BBB 2004-HE9 M-6 B- BBB- Ratings Lowered and Removed from CreditWatch Negative Rating ------ Series Class To From ------ ----- -- ---- 2003-HE5 M-5 CCC B/Watch Neg 2004-HE9 M-7 CCC BB+/Watch Neg Ratings Affirmed Asset Backed Securities Corporation Home Equity Loan Trust Series Class Rating ------ ----- ------ 1999-LB1 A-1F, A-2F, A-3A AAA 1999-LB1 A-5A AAA 2002-HE1 M-1 AA 2002-HE1 B CCC 2003-HE5 M-1 AA 2003-HE5 M-2 A 2003-HE6 A-1, A-2, A3-B AAA 2003-HE6 M-1 AA 2003-HE6 M-2 A 2003-HE6 M-3 A- 2003-HE6 M-4 BBB+ 2003-HE6 M-5 BBB 2004-HE4 A-1 AAA 2004-HE4 M-1, M-2 AA 2004-HE4 M-3 AA- 2004-HE4 M-8 CCC 2004-HE6 A-1, A-2 AAA 2004-HE6 M-1 AA 2004-HE6 M-2 A 2004-HE6 M-3 A- 2004-HE6 M-4 BBB+ 2004-HE6 M-5 BBB 2004-HE7 A-1, A-2, A-4 AAA 2004-HE7 M-1 AA 2004-HE7 M-2 A+ 2004-HE7 M-3 A 2004-HE7 M-4 A- 2004-HE7 M-5 BBB+ 2004-HE7 M-6, M-7 BBB 2004-HE7 M-8 BBB- 2004-HE8 A-1 AAA 2004-HE8 M-1 AA+ 2004-HE8 M-2 A 2004-HE8 M-3 A- 2004-HE8 M-4 BBB+ 2004-HE9 M-1 AA 2004-HE9 M-2 A 2005-HE6 A-1, A-1A, A-2B AAA 2005-HE6 A-2C, A-2D AAA 2005-HE6 M-1 AA+ 2005-HE6 M-2 AA 2005-HE6 M-3 AA- 2005-HE6 M-4 A+ 2005-HE6 M-5 A 2005-HE6 M-6 A- 2005-HE6 M-7 BBB+ 2005-HE6 M-8 BBB 2005-HE6 M-9 BB 2005-HE6 M-10, M-11 B BERNARD REAL ESTATE: Case Summary & Three Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Bernard Real Estate and Development, L.L.C. 7302 East Keim Drive Scottsdale, AZ 85250 Bankruptcy Case No.: 08-00029 Type of Business: The Debtor owns and develops real estate. Chapter 11 Petition Date: January 2, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 North 16th Street, Suite 103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Total Assets: $1,144,500 Total Debts: $1,407,000 Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Malbur Properties, L.L.C. $251,000 Malbur Investments, L.L.C. Attention: Stephen C. Yost 101 North First Avenue, Suite 2500 Phoenix, AZ 85003 Galbut & Hunter $15,000 2425 East Camelback Road, Suite 1020 Phoenix, AZ 85016 Arizona Public Service $14,000 400 North 5th Street Phoenix, AZ 85004 BIOENERGY OF AMERICA: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Bioenergy of America, Inc. 30 Executive Drive Edison, NJ 08817 Bankruptcy Case No.: 08-10087 Type of Business: The Debtor specializes in producing biofuel alternatives. See http://www.bioenergyofamerica.com/ Chapter 11 Petition Date: January 3, 2008 Court: District of New Jersey (Trenton) Debtor's Counsel: Richard E. Weltman, Esq. Weltman & Moskowitz, L.L.P. 8-14 Saddle River Road Fairlawn, NJ 07410 Tel: (201) 794-7500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Paragon Biofuels, L.L.C. $7,600,000 Attention: Marc Ostiquy M.S.D. Capital, L.P. 645 Fifth Avenue, 21st Floor New York, NY 10022 M.P.A. $2,301,581 399 Roycefield Road Hillsborough, NJ 08844 Donnelly Construction $517,009 26 North Center Street Orange, NJ 07050 J.V. Franco Associates-A.I.A. $250,766 1937 Washington, Valley Road Martinsville, NJ 08836 S./K. Edison I $170,000 Wintek Corp. $77,659 Paragon Gas Services, L.L.C. $33,865 PriMedia, Inc. $30,000 Liquiflo, Inc. $7,830 Akron Roofing Co., Inc. $7,211 Inspectorate America Corp. $6,024 Advance Process Technology $4,718 Moye White, L.L.P. $3,299 Hendry Construction Services, $2,200 Inc. New York Oil Heating $1,000 Association, Inc. Breetz Landscaping $749 B.H. Security $497 W.B. Mason Co., Inc. $330 Allister Business Solutions $251 BLACKHAWK AUTOMOTIVE: Committee Taps Frost Brown as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Blackhawk Automotive Plastics Inc. and its debtor-affiliates' bankruptcy cases asks the United States Bankruptcy Court for the Northern District of Ohio for authority to retain Frost Brown Todd LLC as its counsel, nunc pro tunc to Nov. 1, 2007. Frost Brown is expected to: a) advise the Committee with respect to its powers, duties and responsibilities in these cases; b) provide assistance in the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' business and desirability of the continuance of the business, and any other matters relevant to the cases or to the negotiation and formulation of a plan; c) prepare on behalf of the Committee all necessary pleadings and other documentation; d) advise the Committee with respect to the Debtors' formulation of a plan(s), the Debtors' proposed plans with respect to the prosecution of claims against various third parties and any other matters relevant to the cases or to the formulation of a plan(s) in these cases; e) provide assistance, advice and representation, if appropriate, with respect to the employment of a Trustee or Examiner, should the action become necessary, or any other legal decision involving interests represented by the Committee; f) represent the Committee in hearings and proceedings involving the Committee; and g) perform other legal services as may be necessary and in the interest of the creditors and this Committee. Paper filed with the Court did not disclose the firm's compensation rates. Ronald E. Gold, Esq., a member of the firm, assures the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Gold can be reached at: Ronald E. Gold, Esq. Frost Brown Todd LLC 2200 PNC Center 201 East Fifth Street Cincinnati, Ohio 45202-4182 Tel: (513) 651-6156 Fax: (513) 651-6981 http://www.frostbrowntodd.com/ Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. provides the Debtors with claims, noticing, balloting and distribution services. No Official Committee of Unsecured Creditors has been appointed in either of the Debtors' cases. The Debtors' schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BOOTIE BEER: Files Voluntary Chapter 7 Petition in Florida ---------------------------------------------------------- Bootie Beer Company, subsidiary of TMT Capital Corp., has filed a voluntary petition under the provisions of Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court, Middle District of Florida, on Dec. 31, 2007. Only Bootie filed for bankruptcy protection, and not TMT Capital Corporation or any of its other subsidiaries. Bootie's creditors will be notified in writing how to contact the trustee. "This action is the necessary and a responsible step to preserve TMT Capital Corporation's value for our creditors, customers, employees, subsidiaries, business partners and other stakeholders," Tania Torruella, Chief Executive Officer of TMT Capital, said. "We are saddened by this action and the circumstances that necessitated it, but our first priority remains our shareholders. We are committed to provide them shareholder value and this action will improve operations by permitting an independent trustee to investigate and process Bootie's assets and liabilities." Headquartered in Winter Park, Florida, Bootie Beer Corporation -- http://www.bootiebeer.com/-- brews and produces malt beverage products in La Crosse, Wisconsin. The company brewery has approximately a 20 million case capacity. The first brand developed, in the company portfolio of beers, is Bootie Beer and Bootie Light. TMT Capital Corporation operates as a holding company representing various industries and companies. Currently, TMT and its subsidiaries are involved in multiple focused business activities including Wireless Communications and Real Estate. Our mission is to grow shareholder equity by acquiring companies with unique business models and capitalizing on current trends in multi- billion dollar industries. BRIAN KARN: Case Summary & Four Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Brian Joseph Karn 232 Deer Mountain Road Walnut Shade, MO 65771 Bankruptcy Case No.: 07-61897 Chapter 11 Petition Date: December 31, 2007 Court: Western District of Missouri (Springfield) Judge: Arthur B. Federman Debtor's Counsel: Raymond I. Plaster, Esq. Raymond I. Plaster P.C. 3275 East Ridgeview Street, Suite C Springfield, MO 65804 Tel: (417) 862-3704 Fax: (417) 862-1936 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Four Largest Unsecured Creditors: Entity Claim Amount ------ ------------ SPCP Group, LLC $3,900,000 c/o Laureate Capital, LLC P.O. Box 890862 Charlotte, NC 28289-0862 HFC $6,000 P.O. Box 4153-K Carol Stream, IL 60197 Capital One Services $501 P.O. Box 6000 Seattle, WA 98190 JC Penny $15 BROTMAN MEDICAL: Hires Hooper as Corporate and Litigation Counsel ----------------------------------------------------------------- Brotman Medical Center Inc. obtained authority from the United States Bankruptcy Court for the Central District of California to employ Hooper Lundy and Bookman Inc. as its corporate and litigation counsel. Hooper Lundy will: a) advise the Debtor regarding matters of healthcare law, including any and all regulatory, corporate or litigation matters that may arise in that context and during the pendency of the Debtor's bankruptcy case; and b) represent the Debtor in proceedings or hearing involving matters related to any of that foregoing. The firm's professionals and their compensation rates are: Professionals Hourly Rates ------------- ------------ Robert W. Lundy, Esq. $655 Glenn E. Solomon, Esq. $545 Jonathan P. Neustadler, Esq. $540 David A. Hatch, Esq. $385 Karl A. Schmitz, Esq. $365 Designations Hourly Rates ------------ ------------ Principals $450-$655 Associates $270-$435 Paralegals $195-$225 Robert W. Lundy, Esq., a member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Lunch can be reached at: Robert W. Lundy, Esq. Hooper Lundy and Bookman Inc. 1875 Century Park East, Suite 1600 Los Angeles, CA 90067 Tel: (310) 551-8180 http://www.health-law.com/ Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BUFFETS INC: Fails to Pay $293-Million Coupon Payment ----------------------------------------------------- Buffets Inc. missed a coupon payment on a debt totalling $293 million, Caroline Salas of Bloomberg News reports. Matthew Lee, the debt trustee and customer service representative at U.S. Bank NA, told Bloomberg that the company was not able to pay interest on its 12.5 percent notes maturing in 2014. According to Bloomberg, the missed interest payment sent bond prices to another low and increased fears that corporate defaults are starting to rise. "Default rates are going to start to increase this year," Katalin Kutasi, a principal and investment manager for distressed debt at hedge fund Kellner DiLeo & Co. in New York, told Bloomberg. "A lot of them are going to be consumer-sensitive companies." About Buffet Inc. Based in Eagan, Minnesota, Buffets Inc., operates and franchises steak-buffet style restaurants principally under the "Old Country Buffet", "Hometown Buffet" brand names and grill/buffet format restaurants under the brand names "Ryan's" and "Fire Mountain". The company is the second largest family dining restaurant in the industry, operating 643 restaurants in 42 states. Total reported revenues as of Sept. 19, 2007 were approximately $1.55 billion. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Moody's Investors Service lowered Buffets Inc.'s corporate family rating to Caa2 from Caa1, senior secured credit facilities rating to Caa1 from B2, and senior unsecured notes rating to Caa3 from Caa2. The rating outlook remains negative. Approximately $940 million of debt securities were affected. The rating action reflected Buffets' heightened probability of default as the company approached a covenant violation on its maximum leverage ratio, primarily stemming from a further deterioration in its operating performance. The action also reflected increasing uncertainty over the company's capital structure now that the company has engaged Houlihan, Lokey, Howard & Zukin Capital to review its capital structure and business plan. CHITTENDEN TRUST: Moody's Junks Bank Financial Strength Rating -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of People's United Bank (bank financial strength at C+, long-term deposits at A2) and assigned first-time ratings to its parent company, People's United Financial, Inc. (issuer at A3). In the same rating action, Moody's downgraded the ratings of Chittenden Corporation (subordinated debt to Baa1 from A3) and its affiliates including Chittenden Trust Company (bank financial strength to C+ from B-, deposits to A2 from A1). The outlook on all entities is positive. The rating action concludes the review of Chittenden Corporation and its subsidiaries for possible downgrade that was initiated on June 28, 2007. Moody's said the rating action follows the Jan. 1, 2008 acquisition of Chittenden Corporation by People's United Financial, Inc. After the downgrade, the ratings of Chittenden Corporation and its affiliates mirror those of People's United Financial, Inc. and its affiliates. Moody's added that it would shortly withdraw the issuer rating of the holding company, Chittenden Corporation, because that legal entity is being merged into People's United Financial, Inc. Moody's said that the affirmation of People's ratings reflects the integration challenges, which could offset the franchise benefits that come with the acquisition. Moody's noted that Chittenden represents a substantial acquisition relative to the size of People's balance sheet, and that People's has not been active in acquiring and integrating banks in recent years. Missteps in the integration could lead to client attrition and negatively impact revenues and profitability. This heightened integration risk should be reduced by the decision to maintain Chittenden's multi-bank structure, according to Moody's. On the other hand, People's acquisition of Chittenden will result in a broadened franchise at the expanded company. Moody's observed that People's footprint now stretches from Maine through New Hampshire, Vermont, Massachusetts, Connecticut and into New York's Westchester County. In addition, the acquisition has furthered the reorientation of the company towards that of a commercial bank. The positive outlook reflects Moody's view that a successful integration of Chittenden increases the possibility of a future rating upgrade. The positive outlook assumes that People's will maintain a strong capital position through the integration of Chittenden into the organization. In Moody's view, People's strong capital position affords the company flexibility in managing through any potential adverse developments that may occur in its loan portfolio and in particular, the enlarged commercial real estate portfolio. This asset class represented a credit concentration at Chittenden prior to its acquisition, Moody's added. The positive outlook also anticipates that People's will maintain prudent capital levels subsequently by managing balance sheet needs and uses for potential acquisitions. Moody's reiterated that successful integration of Chittenden and maintenance of improved financial fundamentals thereafter would be the principal determinants of future rating action on People's. People's United Financial, Inc. headquartered in Bridgeport, Connecticut, reported assets of $14 billion as of September 2007. Chittenden Corporation, headquartered in Burlington, Vermont, reported assets of $7 billion as of the same date. CHRYSLER LLC: U.S. Sales Increased 1 Percent in December -------------------------------------------------------- Chrysler posted a 1% rise in December sales to 191,423 units, up from 190,415 in December the previous year. We talked to Steven Landry, Executive Vice President of North American Sales, about the results. "December is always a little unpredictable," Mr. Landry said. "We're very happy with our sales being up 1%. I will also add inside that 1% sales, our fleet was down and our retail number was up, so it's all going in the right direction. In the month of December, it looks like we will gain market share." Not all automakers have posted results yet, precise market share figures are not available. "Our forecast estimate is that we will pick up half a point of market in the month of December," he said. Mr. Landry said that Chrysler has momentum going into January, and the new "Zero Plus" incentive program should help. Under that program, qualified customers can choose 0% APR financing for 36 months or 3.9% APR financing for 60 months PLUS consumer cash allowance amounts of up to $2,500. The program runs through Feb. 29, 2008. "We're providing the opportunity for some consumers to have that down payment, that elusive down payment, that is important for consumers to get a deal done today," Mr. Landry said. "With the banks and the financial institutions the way they are today, they like to see a bigger down payment, it makes it easier for them to do financing." The all-new Chrysler Town & Country and Dodge Grand Caravan minivans recorded strong results in December, which also gives Mr. Landry confidence for 2008. About Chrysler LLC 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. COLONIAL CONSTRUCTION: Case Summary & 15 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Colonial Construction & Remodeling Co. 191 Rose Ridge Drive Canton, GA 30115 Bankruptcy Case No.: 07-82077 Type of Business: The Debtor is a builder. Chapter 11 Petition Date: December 31, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: B. Glen Johnson, Esq. Johnson & Dickinson, L.L.C. 1925 Marietta Highway, Suite 201 Canton, GA 30114 Tel: (770) 479-5566 Fax: (770) 479-5568 Estimated Assets: Unstated Estimated Debts: $1 Million to $10 Million Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ American Express $93,692 P.O. Box 297871 Ft. Lauderdale, FL 33329-7871 Daniel DiCicco $30,000 343 Evie Lane Canton, GA 30115 Spectrum Kitchens $13,185 1050 Northfield Court, Suite 365 Roswell, GA 30076 First National Bank of Omaha $13,101 Metro Kitchen Cabinet $7,750 Installers H.D. Supply $5,699 Twin Oaks Landscape Service $3,232 R.T.M.S., Inc. $3,000 Satterfield & Association $2,100 Discover Card $1,583 John Deere Landscape $1,171 Seaman Accounting Service $810 RussCorp. Signs, Inc. $662 Edward Haight, P.E. $546 Fullhouse Inspections $500 COMPLETE RETREATS: Emerges from Chapter 11 in Connecticut --------------------------------------------------------- Complete Retreats LLC and its debtor affiliates' First Amended Joint Plan of Liquidation became effective on Dec. 31, 2007. The First Amended Plan was confirmed by the Bankruptcy Court on Nov. 30, 2007. Each of the Debtors, except for DR Abaco LLC, Retreats Europe, Ltd., and DR Umbria, Ltd., have merged into Complete Retreats or have otherwise been dissolved, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, says. DR Abaco, on the other hand, became a wholly owned subsidiary of Complete Retreats. Pursuant to the Plan, the Debtors will establish the "Complete Retreats Liquidating Trust" for the primary purpose of liquidating and distributing the Debtors' assets. On the Effective Date, the Debtors and the Liquidating Trustee executed the Liquidating Trust Agreement, pursuant to which: (a) the Liquidating Trust came into effect; (b) Joel S. Lawson III was appointed Liquidating Trustee; and (c) Brian W. Anderson, Michael A. Freedman, and Christopher Swann were appointed members of the Plan Advisory Committee. In addition, the single equity interest in Complete Retreats was transferred to the Liquidating Trust in accordance with the terms of the Plan and the Plan Confirmation Order. Moreover, all of the Liquidating Trust Assets are deemed transferred by the Debtors to the Liquidating Trust. A full-text copy of the final version of the Liquidating Trust Agreement is available for free at: http://bankrupt.com/misc/CR_Final_LiquidatingTrustPact.pdf The Debtors delivered the Final Liquidating Trust Agreement to the Court on Jan. 2, 2008. On the same day, the Debtors also submitted to Judge Schiff final versions of the notes and related agreements among their retained professionals, the professionals retained by the Official Committee of Unsecured Creditors, and the Liquidating Trustee. Full-text copies of the Professional Fees Notes and Agreements are available for free at: http://bankrupt.com/misc/CR_ProFeesNotes.pdf According to the Liquidating Trustee, the net fair market value, as of the Effective Date, of all of the Liquidating Trust Assets is zero. As per the terms of the Liquidation Trust Agreement, the "Zero" Determined Value will be used by the Debtors, the Liquidating Trust, the Liquidating Trustee, the Plan Advisory Committee, and the Beneficiaries for all federal income tax purposes. Any distributions to be received by any person or entity under the Plan will be in full satisfaction, settlement, and release of, and in exchange for, that entity's Allowed Claim. As of the Confirmation Date, all persons and entities are permanently enjoined from commencing or continuing any action or proceeding on account of any claim, right, obligation, liability, or cause of action released pursuant to the Plan. The United States Government or any of its agencies and any state and local authority are not enjoined from bringing any claim, suit, action, or other proceedings against the Released Parties, as defined under the Plan, for any liability. Mr. Daman relates that on or before the Effective Date, the Debtors paid, or otherwise satisfied, all Allowed Administrative Expense Claims, Priority Tax Claims, Outstanding Secured Claims, Convenience Claims, and Priority Non-Tax Claims. To the extent any Claims are subject to previously filed and pending objections, the Debtors, after consultation with the Creditors Committee, have reserved for the payment of disputed claims subject to resolution of the objections. Any and all remaining Executory Contracts to which any Debtor is still a party is deemed rejected as of the Effective Date, except for: (a) those of the Debtors' agreements with Ultimate Resort, LLC, then still in force and effect; and (b) any executory contract that (i) has been assumed or rejected pursuant to a final Court Order entered prior to the Effective Date, or (ii) is subject to a separate motion to assume, assume and assign, or reject filed under Section 365 of the Bankruptcy Code by the Debtors prior to the Effective Date. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Plaza Tire Wins Bid for Cape Girardeau Property ---------------------------------------------------------- Plaza Tire Service Inc. won the bidding for the industrial building that formerly housed Dana Corp.'s production facility in Cape Girardeau, the Southeast Missourian reports, citing Plaza Tire Service's vice president Scott Rhodes. As reported in the Troubled Company Reporter on Dec. 18, 2007, Rhodes Development Company, LLC, had expressed interest in purchasing the Cape Girardeau property at a purchase price higher than that of Schaefer's Power Panels, Inc., hence, it had asked the Debtors to consider its offer. As previously reported, the Debtors had asked authority from the U.S. Bankruptcy Court for the Southern District of New York the to sell a 15-acre parcel of real estate and a 150,000 square-foot building located at 2075 Corporate Circle in Cape Girardeau, Missouri, to Schaefer's Power Panels, Inc., for $2,841,750. According to the Southeast Missourian, Plaza Tire edged out an offer from Schaefer's Electrical Enclosures, which had strong support from city and economic development leaders. Bidders submitted their best price to the U.S. Bankruptcy Court for the Southern District of New York, and the Dana court deemed Plaza's bid the best offer, Southeast Missourian's Rudi Keller reports. The facility will house corporate offices and a distribution center for Plaza Tire's 49 stores in Missouri and Illinois, according to Southeast Missourian. Details of the transaction were not immediately available, Southeast Missourian notes. Plaza Tire Service consists of 49 tire stores and is listed as the 28th largest independently owned tire retailer in North American by Tire Business' magazine, according to information posted on the company's Web site. About Dana Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed $6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial