T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 8, 2008, Vol. 12, No. 6 Headlines ARROWHEAD GENERAL: Soft Market Conditions Cue S&P's Neg. Outlook AQUILA INC: Earns $40.5 Million in Third Quarter ASPEN INSURANCE: Earns $117.2 Million in Third Quarter ATHEROGENICS INC: Securities Value Falls Below Nasdaq Criteria AUTOMOTIVE GLASS: Terminated Deal Cues Moody's to Withdraw Ratings BOB VOLKSWAGEN: Voluntary Chapter 11 Case Summary BOSTON SCIENTIFIC: Completes Sale of Stake in Auditory Business BOWNE & CO: Earns $804,000 in Third Quarter BUFFETS HOLDINGS: Failure to Pay Interest Cues S&P's Rating Cut BUFFETS INC: Unpaid Debt Interest Prompts Moody's Rating Cuts CALUMET SPECIALTY: Completes $267 Million Buyout of Penreco CASA GRANDE NV: Voluntary Chapter 11 Case Summary CATHOLIC CHURCH: Davenport to Shoulder $13.6 Million of Settlement CATHOLIC CHURCH: Spokane Raises $8 Mil. for Sexual Abuse Victims CATHOLIC CHURCH: Tucson Panel Wants Approval on $3MM Distribution CLEAR CHANNEL: Gets Consents in Tender Offers for Senior Notes COLFAX CORP: Registers Common Stock Initial Public Offering COMPUSA INC: Selling Selected Assets & Stores to Systemax Inc. COMUNITY LENDING: Case Summary & 20 Largest Unsecured Creditors CONVERGENCE ETHANOL: Files Voluntary Chapter 7 Petition in Texas CONVERGENCE ETHANOL: Voluntary Chapter 7 Case Summary DAYTON SUPERIOR: S&P Puts BB- Rating on Proposed $100 Mil. Loan DB ISLAMORADA: Files Schedules of Assets and Liabilities DB ISLAMORADA: Wants Stearns Weaver as Bankruptcy Counsel DEERFIELD CAPITAL: Posts $23.2 Million Net Loss in Third Quarter DELPHI CORP: Court Approves Downer and Co. as Financial Advisor DELPHI CORP: Reaches Settlement with Ad Hoc Trade Committee DELTA FINANCIAL: U.S. Trustee Appoints Unsecured Creditors' Panel DELTA FINANCIAL: U.S. Trustee Sets Sec. 341 Meeting for Feb. 5 DELTA FINANCIAL: Files Amended List of Unsecured Creditors DELTA PETROLEUM: 5 New Employees Get 22,542 Common Share Incentive E*TRADE ABS: Moody's Cuts and Reviews Low-B Ratings on Two Notes E*TRADE ABS: Moody's Cuts Ratings on 4 Note Classes to C from Ca EL PASO: Moody's Retains "Ba3" Rating on Junior Subordinate Bonds FAIRVIEW PARK: Files Schedules of Assets and Liabilities GALLERIA CBO: Moody's May Downgrade Ba1 Rating on Two Note Classes GARY BURIVAL: Files Schedules of Assets and Liabilities GARY BURIVAL: Brings In Needler and Associates as Counsel GENERAL MOTORS: Offers Incentive Financing on Selected Vehicles GIUSEPPE PAESE: Case Summary & 14 Largest Unsecured Creditors GLOBAL HOMES: Can Now Solicit Votes on Second Amended Plan GOLDEN STATE: S&P Upgrades BB+ Rating on $127.1 Million Notes GOODYEAR TIRE: Jamaican Subsidiary Won't Make Dividend Payments GREEN TREE: Dubitable Repayments Prompt S&P to Cut Ratings to 'D' FIRST BANCORP: Acquisition Bid for VI Community Bank Wins FORD MOTOR: To Equip Vehicles With Fuel-Efficient EcoBoost Engine HANCOCK FABRICS: Court Extends Exclusive Plan-Filing Period HEARTLAND AUTOMOTIVE: Voluntary Chapter 11 Case Summary HMSC CORP: Highly Leveraged Capital Prompts S&P to Hold 'B' Rating HOWARD ENGLISH: Case Summary & 12 Largest Unsecured Creditors IDAHO HOUSING: S&P Attaches BB+ Ratings on 2008 Revenue Bonds ING RE UK LTD: Chapter 15 Petition Summary JOHN ANDERSON: Case Summary & Eight Largest Unsecured Creditors JOHNSON RUBBER: Section 341(a) Meeting Scheduled for January 11 JOHNSON RUBBER: Wants To Hire Benesch Friendlander as Counsel JOHNSON RUBBER: Taps Development Specialist as Financial Advisor JP MORGAN: Moody's Maintains Low-B Ratings on Six Certificates KATHERINE FUINA: Voluntary Chapter 11 Case Summary KRISPY KREME: James Morgan Replaces D. Brewster as President & CEO LANCER FUNDING: Moody's May Cut Ba1 Rating on Class A1S Notes LEVITT AND SONS: Weinstock Okayed as Affiliates' Special Counsel LODGENET ENT: Sept. 30 Balance Sheet Upside-Down by $18 Million MAGUIRE PROPERTIES: S&P Cuts Corporate Credit Rating to B+ MATTRESS GALLERY: Files Schedules of Assets and Liabilities MCCLATCHY COMPANY: Posts $1.35 Billion Net Loss in Third Quarter MIRANT CORP: Court Enters Final Decree Closing 21 Chap. 11 Cases MOSAIC COMPANY: Elects James L. Popowich to Board of Directors MTI TECHNOLOGY: Asks Court to Set April 4 as Claim Bar Date MUSICLAND HOLDING: Court Moves Show Cause Hearing to January 24 NATIONAL RV: U.S. Trustee Appoints Seven Member Creditors Panel NORTHLAKE CDO: Moody's May Cut Ratings Due to Poor Credit Quality ORCHID STRUCTURED: Poor Credit Quality Cues Moody's Ratings Review PASSPORT CARPETS: Case Summary & 20 Largest Unsecured Creditors PROTECTIVE FINANCE: Moody's Holds Ba2 Ratings on 3 Cert. Classes QT INC: Appellate Court Upholds Ruling on Q-Ray Bracelets RAMP SERIES 2004: Moody's Junks Ratings on Three Trust Classes RAMP SERIES 2004-KR1: Moody's Junks Ratings on Two Trust Classes RAMP SERIES 2004-KR2: Two Trust Classes Gets Moodys's Junk Ratings RITCHIE RISK: Court Approves Deal on Life Settlement Policies SATURN VENTURES: Moody's Reviews Ba1 Rating for Possible Cut SCO GROUP: Wants Until May 11 to File Chapter 11 Plan SOFA EXPRESS: U.S. Trustee Appoints Seven Member Creditors Panel SOUTHWESTERN ENERGY: S&P Puts BB+ Rating on Proposed $400MM Notes SUNDALE LTD: Section 341(a) Creditors Meeting Set for January 17 SYNOVA HEALTHCARE: Obtains Interim OK to Use Cash Collateral SYNOVA HEALTHCARE: Wants to Hire Fox Rothschild as Bankr. Counsel SYNOVA HEALTHCARE: Taps Blank Rome as Special Corporate Counsel TOUSA INC: Missed Interest Payments on $300MM and $185MM Sr. Notes TOUSA INC: S&P Cuts Rating to "D" on Missed Interest Payments UNBRIDLED ENERGY: Posts $1.1 Mil. Net Loss in Qtr. Ended Oct. 31 VIKING SYSTEMS: Deflects Bankr. Warning; Executes Recapitalization WCI COMMUNITIES: Banks Extend Limited Waiver Until January 16 WEEKS STREET: Can Hire Stanley Zlotoff as Bankruptcy Counsel WT TESORO: BofA Balks at Exclusive Periods Extension XM SATELLITE: Inks Termination & Release Pact with Starbucks Corp. XOMA LTD: Earns $21.8 Million in Third Quarter * Texas Headquarters Moves to "Demystify" Personal Bankruptcy * S&P Assigns Ratings on 149 Tranches from 43 Cash Flows and CDOs * Large Companies with Insolvent Balance Sheet ********* ARROWHEAD GENERAL: Soft Market Conditions Cue S&P's Neg. Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on San Diego, California-based Arrowhead General Insurance Agency Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' counterparty credit rating on Arrowhead as well as its 'B' first-lien senior secured bank loan and first-lien revolving credit facility ratings and its 'CCC+' second-lien junior secured bank loan rating on Arrowhead's outstanding issues. Standard & Poor's also affirmed its recovery rating of '3' on Arrowhead's first-lien secured bank loan and revolving credit facility and its recovery rating of '6' on Arrowhead's second-lien junior secured bank loan. "The change in outlook reflects Standard & Poor's concerns about the ongoing impact of softer-than-anticipated market conditions on Arrowhead's financial performance," said Standard & Poor's credit analyst Michael Gross, "including the company's prospective ability to meet its bank loan covenants. The company's bank covenants become more restrictive during 2008, even as it is becoming more difficult for the company to maintain its commission and revenue growth in the face of declining insurance premium rates." For the first nine months of 2007, Arrowhead reported a net loss of $2.9 million. The company reported total revenue of $85 million for the period, which was relatively unchanged compared with the same period in 2006. Because of a leveraged majority investment in 2006, the company maintains a weaker capital position, and cash flow is more strained. The company is expected to meet all of its bank covenants. If the company remains challenged to meet Standard & Poor's original performance expectations for the current rating level, which include fixed-charge coverage of 2.0x and adjusted EBITDA of 2.4x, the ratings could be lowered by at least one notch in 2008. If management were to produce meaningful expense efficiencies and improved and sustainable earnings, the outlook could be revised to stable. AQUILA INC: Earns $40.5 Million in Third Quarter ------------------------------------------------ Aquila Inc. reported net income of $40.5 million for the third quarter ended Sept. 30, 2007, compared to net income of $115.7 million in 2006. Repositioning activities in the third quarter of 2006, including gains on the sale of gas utilities, were the primary reasons for the decline in current quarter earnings. Sales for the quarter were $357.7 million in 2007 versus $316.6 million in 2006. "We are pleased with our third quarter results and the strong utility performance, said Richard C. Green, Aquila chairman and chief executive officer. "It's evident that Aquila employees remain dedicated to delivering energy and service to our customers even while preparing for the transition of our businesses to Great Plains Energy and Black Hills." Results for the nine-month period ending Sept. 30, 2007, were net income of $1.5 million, compared to a 2006 year-to-date net loss of $40.4 million. Non-recurring repositioning activities (including the company's exit from the Elwood tolling agreements and debt tender offer) that occurred last year and rate relief at the utility operations this year were the primary reasons for the improvement in nine month earnings. Year-to-date sales increased to $1.10 billion, an increase of $70.0 million over 2006 sales of $1.03 billion. The company reported year-to-date EBITDA of $181.6 million in 2007 compared to loss before interest, taxes, depreciation and amortization of $132.0 million in 2006. Discontinued Operations Discontinued Operations includes the company's former Kansas electric utility operations; its former Michigan, Minnesota, and Missouri gas utility operations; its former Merchant Services peaking plants in Illinois; and its former Everest Connections telecommunications business. The company's discontinued operations reported EBITDA of $2.9 million for the quarter in 2007, which was a $137.8 million decrease from $140.7 million reported in 2006. The EBITDA decrease was due primarily to the gains recognized in 2006 on the sale of the gas utility properties. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $2.91 billion in total assets, $1.57 billion in total liabilities, and $1.34 billion in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26cf About Aquila Inc. Headquartered in Kansas City, Missouri, Aquila Inc. -- http://www.aquila.com/-- owns electric power generation and operates electric and natural gas transmission and distribution networks serving over 900,000 customers in Colorado, Iowa, Kansas, Missouri and Nebraska. * * * Aquila Inc. still carries Moody's Investors Service's Ba2 corporate family, Ba3 Senior Unsecured Debt, and Ba3 probability- of-default ratings. ASPEN INSURANCE: Earns $117.2 Million in Third Quarter ------------------------------------------------------ Aspen Insurance Holdings Limited reported net income of $117.2 million on total revenues of $487.5 million for the third quarter ended Sept. 30, 2007, compared with net income of $95.0 million on total revenues of $468.6 million in the same quarter last year. In the third quarter of 2007, the company generated net investment income of $72.4 million, compared with $47.3 million in 2006. The $25.1 million increase in investment income was due to gains from the company's investment in funds of hedge funds of $7.9 million, higher book yields on the company's fixed income portfolio and a $956.0 million increase in cash and invested assets between Sept. 30, 2006 and Sept. 30, 2007, as a result of positive operating cash flow. In the third quarter of 2007, income before tax was $137.9 million and is comprised of $65.1 million of underwriting profit, $72.4 million in net investment income, $7.3 million of net exchange and investment gains, $4.2 million of interest payable and $2.7 million of other expenses. In the third quarter of 2006, income before tax was $118.7 million and comprised $81.6 million of underwriting profit, $47.3 million in net investment income, $1.5 million of net exchange and investment gains, $4.6 million of interest payable and $7.1 million of other expenses. The company's lower underwriting profit in the quarter compared to the prior period was mainly due to lower gross written premium in the quarter partially offset by lower losses. Chris O'Kane, chief executive officer, commented, "These strong results reflect our ongoing focus on managing, diversifying and leveraging our underwriting platforms and the excellent performance of the investment portfolio. We will continue to manage the business to ensure that we remain appropriately positioned for long term profitability and disciplined growth." For the first nine months ended Sept. 30, 2007, total revenues increased to $1.51 billion, versus total revenues of $1.39 billion in the same period last year. Net income was $353.8 million compared to net income of $258.6 million in the corresponding nine months of 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $7.32 billion in total assets, $4.59 billion in total liabilities, and $2.73 in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26d4 About Aspen Insurance Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings Limited (NYSE: AHL) -- http://www.aspen.bm/-- provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly owned subsidiaries and offices in Bermuda, France, the United States, the United Kingdom, and Switzerland. * * * Aspen Insurance Holdings Limited still carries Moody's Investors Services 'Ba1' Preferred Stock rating which was placed on Dec. 21, 2005. Outlook is Stable. ATHEROGENICS INC: Securities Value Falls Below Nasdaq Criteria -------------------------------------------------------------- AtheroGenics Inc. received a Staff Determination Letter from the NASDAQ Listing Qualification Department indicating that the company has not regained compliance with the continued listing requirements of the NASDAQ Global Market because the market value of the company's listed securities has fallen below $50 million for ten consecutive business days, pursuant to Rule 4450(b)(1)(A) of the NASDAQ Marketplace Rules, and that its securities are, therefore, subject to delisting from the NASDAQ Global Market. Pursuant to NASDAQ rules, AtheroGenics will request a hearing before a NASDAQ Listing Qualifications Panel. At the hearing, the company will request continued listing pending completion of its plan to demonstrate compliance. The company expects to meet the listing standard when it issues its 2007 financial statements, which are expected to have total assets and total revenue in excess of $50 million for the 2007 fiscal year. The company's request for a hearing will stay the delisting of the company's common stock, and, as a result, the company's securities will continue to be listed on the NASDAQ Global Market under the symbol AGIX until the panel issues its decision following the hearing. About AtheroGenics Inc. Based in Alpharetta, Georgia, AtheroGenics Inc. (NASDAQ: AGIX) -- http://www.atherogenics.com/-- is a pharmaceutical company that focuses on the discovery, development and commercialization of novel drugs for the treatment of chronic inflammatory diseases, including heart disease (atherosclerosis), rheumatoid arthritis and asthma. AtheroGenics also has preclinical programs in rheumatoid arthritis and asthma utilizing its proprietary vascular protectant(R) technology. * * * At Sept. 30, 2007, the company's balance sheet showed total assets of $119.42 million total liabilities of $300.15 million, resulting to a total shareholders' deficit of $180.73 million. AUTOMOTIVE GLASS: Terminated Deal Cues Moody's to Withdraw Ratings ------------------------------------------------------------------ Moody's Investors Service has withdrawn the ratings on Automotive Glass & Services. The withdrawal is based on the uncompleted transaction whereby affiliates of Platinum Equity LLC were to purchase AG&S for $500 million from PPG Industries Inc. The rated senior secured facilities were to be used to partially finance the transaction along with $156.5 million in equity from Platinum. Published reports have indicated that PPG Industries Inc. has been notified that affiliates of Platinum intended to terminate their purchase agreement after Dec. 31 2007. Ratings Withdrawn: -- Corporate Family Rating, B2 -- Probability of Default, B2 -- $75 million senior secured asset based revolving credit facility, B1 (LGD3, 37%) -- $225 million senior secured first lien term loan, B1 (LGD3, 37%) -- $125 million senior secured second lien term loan, Caa1 (LGD5, 83%) Automotive Glass and Services manufactures, fabricates and delivers glass products and solutions to automotive OEMs directly or through third party suppliers; manufactures replacement auto glass and distributes glass and related sundries to the glass replacement aftermarket and; provides a suite of software and services that manages the auto glass insurance claim process and inventory and work flow for glass retailers. BOB VOLKSWAGEN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Bob Lewis Volkswagen dba Bob Lewis Suzuki dba Bob Lewis Hyundai 951 Foothill Road San Jose, CA 95123 Bankruptcy Case No.: 08-50015 Chapter 11 Petition Date: January 2, 2008 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Charles B. Greene, Esq. 84 West Santa Clara Street, Suite 770 San Jose, CA 95113 Tel: (408) 279-3518 Total Assets: $5,771,771 Total Debts: $7,013,790 The Debtor does not have any creditors who are not insiders. BOSTON SCIENTIFIC: Completes Sale of Stake in Auditory Business --------------------------------------------------------------- Boston Scientific Corporation has completed the sale of the controlling interests in its auditory business and drug pump development program to former principals and shareholders of Advanced Bionics. As part of a new schedule of consolidated, fixed earnout payments, Boston Scientific has paid former Advanced Bionics shareholders $650 million. A final payment of $500 million will be paid in March 2009. The former Advanced Bionics principals and shareholders have paid Boston Scientific $150 million for the controlling interests in the auditory business and drug pump development program. Under the amended merger agreement, Boston Scientific obtains sole management control of the Pain Management business, including the emerging indications program. The Pain Management business includes spinal cord stimulation technologies, as well as emerging technologies such as a variety of applications of the bion(R) microstimulator. The Pain Management business and emerging indications program will operate as Boston Scientific Neuromodulation under the leadership of Michael Onuscheck, currently head of the Pain Management business. The business will continue to be headquartered in Valencia, California. As part of the transactions, the parties have agreed to dismiss pending litigation between Boston Scientific and former Advanced Bionics shareholders. Boston Scientific acquired Advanced Bionics in 2004. The sale coincides with the closing of the amended merger agreement with Advanced Bionics disclosed on Aug. 9, 2007. About Advanced Bionics Headquartered in Sylmar, California, Advanced Bionics -- http://www.advancedbionics.com/-- makes the HiResolution Bionic Ear System, which includes a cochlear implant, sound processor, and other equipment that together can restore hearing to the deaf. The company also makes the Precision spinal cord stimulator, which can block pain signals. About Boston Scientific Headquartered in Natick, Massachusetts, Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. The company has offices in Argentina, Chile, France, Germany, and Japan, among others. * * * As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its ratings on Boston Scientific Corp., including the 'BB+' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications Aug. 3, 2007. The rating outlook is negative. BOWNE & CO: Earns $804,000 in Third Quarter ------------------------------------------- Bowne & Co. Inc. reported net income of $804,000 in the third quarter ended Sept. 30, 2007, compared with a net loss of $11.8 million, including loss from discontinued operations, net of tax of $12.1 million, in the same period last year. Revenue of $181.4 million in the third quarter of 2007 compared to $175.1 million in 2006. Gross margin improved to 34.7% from 33.8%. Income from continuing operations increased to $884,000 million from $296,000. For the nine months ended Sept. 30, 2007, revenue was $654.9 million up from $641.2 million reported in the comparable 2006 period. Gross margin increased $21.8 million, or 9.7%, and as a percentage of revenue improved to 37.4% from 34.8% in the nine months ended Sept. 30, 2006. Income from continuing operations increased $14.8 million, or 124%, to $26.8 million from $11.9 million reported in 2006. Net income was $27.2 million, compared with a net loss of $4.0 million, including loss from discontinued operations, net of tax of $15.9 million, in the same period last year. "We continue to be pleased with our overall performance," said David J. Shea, Bowne chairman, president and chief executive officer. "Our margin and profitability improvement is a direct result of the effective implementation of our strategic initiatives to grow non-transactional revenue and improve the efficiency and utilization of our operations. "We're also excited about the acquisition of Alliance Data Mail Services, an affiliate of Alliance Data Systems Corporation, which directly supports our strategy to grow non-transactional revenue with strategic, bolt-on acquisitions and accelerate our growth in marketing and business communications services by expanding our geographic reach and industry verticals, while adding new technology capabilities." Restructuring, Integration and Asset Impairment Charges Restructuring, integration and asset impairment charges totaled $2.1 and $12.2 million for the 2007 third quarter and year-to-date respectively, compared to $1.9 and $12.1 million in the comparable 2006 periods. Third quarter 2007 charges include $1.4 million related to the previously disclosed consolidation of the digital Milwaukee facility into the existing South Bend manufacturing facility, creating the company's first fully-integrated offset and digital distributive platform. Year-to-date 2007 charges include facility exit costs and asset impairment charges related to the consolidation of leased space at 55 Water Street in New York City, severance, integration and facility costs related to the integration of the St Ives Financial business and the aforementioned consolidation of the Milwaukee facility. Cash Flow For the nine months ended Sept. 30, 2007, cash and marketable securities of $82.4 million declined $3.2 million from year-end 2006. This includes the funding of $40.1 million in stock repurchases, $12.6 million for acquisitions, $14.3 million in capital expenditures and a $3.3 million contribution to the company's pension plan. The cash expenditures above were funded by an increase in net cash provided by operations of $72.0 million. Net cash provided by operating activities of $57.0 million for the nine months ended Sept. 30, 2007, compared to net cash used in operating activities of $15.1 million for the nine months ended Sept. 30, 2006. This significant increase is primarily due to improved operating results, reduced accounts receivable and decreases in income taxes paid and in the funding of the company's pension plans in 2007 as compared to 2006. At Sept. 30, 2007, the company has no borrowings outstanding under its $150.0 million five-year senior, unsecured revolving credit facility, maturing in May 2010. Share Repurchase Program In the 2007 third quarter, the company spent $21.4 million repurchasing 1.3 million shares of its common stock at an average price per share of $16.71. During the nine months ended Sept. 30, 2007, the company repurchased 2.4 million shares of its common stock for $40.1 million. From December 2004, the inception of the company's share repurchase program, through Sept. 30, 2007, Bowne has spent approximately $185.3 million to repurchase 12.3 million shares at an average price per share of $15.08. As of Nov. 5, 2007, $5.8 million of its share repurchase authorization remained. Total shares outstanding as of Nov. 1, 2007, were 26,691,860. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $497.7 million in total assets, $239.9 million in total liabilities, and $257.8 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26d1 About Bowne & Co. Inc. Headquartered in New York City, Bowne & Co. Inc. (NYSE: BNE) -- http://www.bowne.com/ -- provides financial, marketing and business communications services around the world. The company has 3,200 employees and 60 offices worldwide. * * * Bowne & Co. Inc. still carries Moody's 'Ba3' corporate family rating which was affirmed in January 2007. The outlook remains positive. BUFFETS HOLDINGS: Failure to Pay Interest Cues S&P's Rating Cut --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on Buffets Holdings Inc. and its subsidiary, Buffets Inc., to 'D' from 'CCC'. The downgrade is based on the Eagan, Minnessota-based company's failure to pay its interest on its 12.5% senior notes due in 2014. S&P lowered the rating on these notes to 'D' from 'CC'. The indenture stipulates that the company has 30 days after the interest was due to make the payment before an "Event of Default" occurs. However, given the company's weak liquidity and operating trends, S&P does not expect it to make the payment. "Buffets, the country's largest operator of buffet-style restaurants, has seen its operating cash flows fall sharply in the past year," said Standard & Poor's credit analyst Charles Pinson- Rose, "as a result of declining customer traffic and higher labor and commodity costs." Standard & Poor's will continue to monitor the situation and make updates as additional information becomes available. BUFFETS INC: Unpaid Debt Interest Prompts Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service lowered Buffets, Inc.'s corporate family rating to Caa3 from Caa2, senior secured facilities rating to Caa2 from Caa1, and senior unsecured notes to Ca from Caa3. The rating outlook remains negative. The rating action reflects Buffets' further heightened probability of default primarily stemming from its deteriorating liquidity given its inability of making interest payment on time and its extremely tight covenant level. On Jan. 3, 2008, Buffets disclosed that it missed interest payment due Jan. 2, 2008 on its 12.5% Senior Notes due Nov. 1, 2014. The aggregate amount of the missed interest payment is approximately $18.75 million. Buffets' liquidity remains weak as a result of negative free cash flow, limited or no access to its external liquidity facility due in-part to tight covenants, and limited alternate sources of liquidity. Moody's expects that the company's internally generated cash will likely not be sufficient to fund working capital, maintenance and growth capital expenditures, and debt payment over the next twelve month. Further, Buffets will likely breach its financial covenants under its credit agreement in the near term in the absence of a significant improvement in operating performance and EBITDA, which Moody's views as unlikely at this time given the challenging operating environment that continues to persist in the family dining segment of the restaurant industry. These ratings were affected: Buffets, Inc. -- corporate family rating, downgraded to Caa3 from Caa2 -- probability of default rating, downgraded to Caa3 from Caa2 -- $40 million revolver maturing in 2011, downgraded to Caa2(LGD2, 29%) from Caa1(LGD2, 29%) -- $70 million synthetic letter of credit facility maturing in 2013, downgraded to Caa2(LGD2, 29%) from Caa1(LGD2, 29%) -- $530 million term loan B maturing in 2013, downgraded to Caa2(LGD2, 29%) from Caa1(LGD2, 29%) -- $300 million senior unsecured notes, downgraded to Ca(LGD4, 69%) from Caa3(LGD4, 69%) Buffets, Inc., headquartered in Eagan, Minnesota, 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 626 restaurants in 39 states. Total reported revenues as of Sept. 19, 2007 were approximately $1.55 billion. CALUMET SPECIALTY: Completes $267 Million Buyout of Penreco ----------------------------------------------------------- Calumet Specialty Products Partners L.P. closed the acquisition of Penreco on Jan. 3, 2008, for approximately $267 million in cash, excluding customary post-closing purchase price adjustments. The acquisition includes plants in Karns City, Pennsylvania and Dickinson, Texas, well as several long-term supply agreements with ConocoPhillips Company. The transaction, which was disclosed on Oct. 22, 2007, was funded through a portion of the combined proceeds from a public equity offering and a new term loan agreement. The company issued 2,800,000 common units at $36.98 on Nov. 14, 2007, for net proceeds of approximately $100 million, including Calumet's general partner's proportionate capital contribution. On Jan. 3, 2008, the Partnership closed a new $435 million senior secured first lien term loan facility which includes a $385 million term loan and a $50 million prefunded letter of credit facility to support crack spread hedging. The remaining proceeds of the term loan facility and equity offering were used to refinance existing term loan debt, for payment of debt financing transaction expenses, and will be used both to fund the anticipated growth in working capital and remaining capital expenditures associated with the Shreveport refinery expansion project well as for general corporate purposes. Merrill Lynch & Co. and Schnitzius & Vaughan LLC acted as financial advisors to Calumet in the acquisition. About Penreco Headquartered in Dickinson, Texas, Penreco -- http://www.penreco.com/-- manufactures and markets highly refined products and specialty solvents including white mineral oils, petrolatums, natural petroleum sulfonates, cable-filling compounds, refrigeration oils, food-grade compressor lubricants and gelled products. The company was owned by ConocoPhillips Company and M.E. Zukerman Specialty Oil Corporation. Penreco About Calumet Specialty Products Partners Based in Indianapolis, Indiana, Calumet Specialty Products Partners L.P. -- http://www.calumetspecialty.com/-- (Nasdaq: CLMT) is an independent producer of high-quality, specialty hydrocarbon products in North America. Calumet processes crude oil into customized lubricating oils, solvents, and waxes used in consumer, industrial, and automotive products. Calumet also produces fuel products including gasoline, diesel fuel and jet fuel. Calumet is and has three plants located in northwest Louisiana. * * * As reported in the Troubled Company Reporter on Nov. 16, 2007, Standard & Poor's Ratings Services revised its outlook on Calumet Specialty Products Partners L.P. to positive from stable, and affirmed its 'B' corporate credit rating on the company. CASA GRANDE NV: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Casa Grande N.V. J.E. Irausquin Boulevard, Suite 250 Oranjestad, FL 33130 Bankruptcy Case No.: 08-10060 Chapter 11 Petition Date: January 4, 2008 Court: Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: David C. Profilet, Esq. P.O. Box 402768 Miami Beach, FL 33140 Tel: (305) 531-8741 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. CATHOLIC CHURCH: Davenport to Shoulder $13.6 Million of Settlement ------------------------------------------------------------------ The Diocese of Davenport's financial report for the month ended Nov. 30, 2007, disclosed that the Diocese will shoulder $13,605,000 of the $37,000,000 settlement amount for sexual abuse claims. Counsel for the Diocese, Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport, Iowa, told The Quad-City Times that Davenport's insurer, Travelers Companies, Inc., will contribute $19,500,000 of the Settlement Amount. Sale of the Diocese's headquarters and the St. Vincent Center will also generate around $3,900,000. Mr. Davidson declined to disclose how the Diocese will come up with the $13,600,000 to complete the Settlement Amount, said The Quad-City Times. Although the Settlement released the Diocesan schools and parishes from liability, The Times reported that some of them may contribute to the Settlement. The Diocese's plan of reorganization will detail all aspects of payment of the claims and the sources of payment for the Settlement Amount. Chapter 11 Plan Judge Lee M. Jackwig of the U.S. Bankruptcy Court for the Southern District of Iowa has ordered the Diocese to file its Plan and disclosure statement by January 31, 2008. The Court will convene a hearing on March 5, 2008, 1:30 p.m. to consider approval of the Disclosure Statement. As reported in the Troubled Company Reporter on Dec. 17, 2007, the Hon. Lee M. Jackwig of the U.S. Bankruptcy Court for the Southern District of Iowa ordered the Diocese to file its plan of reorganization and disclosure statement by Jan. 31, 2008. The Court will convene a hearing on March 5, 2008, 1:30 p.m. to consider approval of the Disclosure Statement. Judge Jackwig notes that the hearing is a "no testimony hearing." About the Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Iowa Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Debtor was unable to file a Chapter 11 Plan of Reorganization when its exclusive plan-filing period expired on Nov. 16, 2007. (Catholic Church Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Spokane Raises $8 Mil. for Sexual Abuse Victims ---------------------------------------------------------------- The parishes in the Catholic community of eastern Washington has raised $8,000,000 of the $10,000,000 pledged to help pay for the $48,000,000 settlement of the cases of victims of clergy sexual abuse asserting claims against the Diocese of Spokane. The raised funds surpass expectations, The Spokesman-Review notes. According to the report, Robert Hailey, lay co-chair of the Association of Parishes, said the fund-raising campaign of the 82 parishes in 13 counties "could have been very divisive." However, the fund-raiser brought people together. "We're overwhelmed by their generosity," he said. "We were getting $100, $500 and $1,000 at a time from people at all parishes," Mr. Hailey added. "It was truly made possible by the gifts of many." The successful fund-raising campaign also enables the independent trust, which was established to receive the Settlement Amount, to finish disbursing payments to victims in February 2008, instead of October 2009, according to the request filed by the Diocese and the Plan Trustee, Gloria Z. Nagler, Esq., with the U.S. Bankruptcy Court for the Eastern District of Washington. "People came together because we needed to do it," Mr. Hailey said. "The message we took to the people was this: We must make the sacrifice for someone else's wrongs. God's idea of fairness is not always the same as yours and mine." About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's 2nd Amended Joint Plan. That plan became effective on May 31, 2007. (Catholic Church Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Tucson Panel Wants Approval on $3MM Distribution ----------------------------------------------------------------- The Official Committee of Tort Claimants of the Diocese of Tucson asks the U.S. Bankruptcy Court for the District of Arizona to authorize the trustee of the bankruptcy settlement trust to distribute $3,000,000 from the funds remaining in the unknown claims reserve, in accordance with the Weighted Distribution Ratio, among allowed claims in Tiers 1 to 4, and the California Tier, whose claims have not already been fully satisfied. Christopher Graver, Esq., at Stinson Morrison Hecker LLP, in Phoenix, Arizona, relates that the Court has previously approved two interim distributions from funds in the Settlement Trust. Under the Committee's proposed third interim distribution, which for the first time proposes distributing funds in the Unknown Claims Reserve, all Tiers will share in the distribution. In light of the time that has passed and the nature and disposition of the few unknown tort claims that have been asserted since the effective date of the Diocese's Third Amended and Restated Plan of Reorganization, there are ample funds in the Unknown Claims Reserve to fully protect any Unknown Tort Claimants once the proposed distribution is made, Mr. Graver assures the Court. He notes that according to the Trustee's report, the balance of the funds in the Settlement Trust is about $5,007,000, which constitutes the Unknown Claims Reserve. In the two-plus years since the Unknown Claims Reserve was established, a total of four Unknown Tort Claimants have asserted claims, in which two claims were promptly settled for $265,000, and the third claim has been denied by the Diocese's special arbitrator, Judge Lina S. Rodriguez, and the fourth remains pending. The Committee is currently moving for summary judgment before Judge Rodriguez that the alleged events of the fourth claim never took place, Mr. Graver discloses. He notes that the Committee is unaware of any other potential Unknown Tort Claim, asserted or unasserted. Proposed Distribution The Plan provides that the Unknown Claims Reserve may be reduced from time to time, after notice and a hearing, and the freed-up funds distributed to Allowed Claims, which had been assigned to Tiers 1 to 4 and the California Tier, Mr. Graver relates. He says that the Committee was an active participant in the negotiation of the Unknown Claims Reserve and is highly sensitive to the need to protect Unknown Claimants with legitimate claims, if any still exist. However, given the history of claims against the Unknown Claims Reserve over the past two years, the Committee believes that the Unknown Claims Reserve is being maintained at a level significantly in excess of what is required to protect Unknown Claimants. The Committee believes that $1,500,000 to $2,000,000 is a sufficient Unknown Claims Reserve, and therefore, requests that the Court reduce the Unknown Claims Reserve by $3,000,000, so that Tort Claimants assigned to the Tiers will receive further compensation for their injuries. The ratio for the distribution is: Tier 1 - 1: Tier 2 - 2: Calif. Tier - 3.5: Tier 3 - 5: Tier 4 - 7 The Committee notes that, under the Plan and the terms of various Court-approved settlements, not all Tort Claimants with Allowed Tort Claims will receive a distribution. The claims not entitled to an additional distribution include: -- Tort Claimants, who received compromise claims; -- holders of relationship Tort Claims; -- holders of California Tier Tort Claims, whose recovery in California litigation, when added to the amount received from the Settlement Trust in the bankruptcy case, exceeds what a Tier 3 Tort Claimant has received; and -- Tort Claimants, who settled for a certain sum and waived any further distributions. On information and belief, the Committee says that on account of recoveries in California litigation, only one California Tier Tort Claimant will receive a distribution. Pursuant to a certain sharing arrangement under the Plan, 80% of the $3,000,000 will be distributed to the Tort Claimants, and 20% will be given to the Diocese for use solely in certain special projects, the Committee reminds the Court. The Committee also suggests that for the proposed distribution, funds should be reserved for the remaining unresolved claims against the Settlement Trust. The Committee relates that two claims against the Unknown Claims Reserve, Claims Nos. 2 and 3, asserted by Lawrence Eugene Gomes and Beverly Gomes, have been denied by Judge Rodriguez. Another claim, which is currently pending, also has no merit, but the Committee intends to provide appropriate protection for that claim and any others, which may be asserted in the future. The Committee assures the Court that under its proposal, even after the distribution of $3,000,000, the Unknown Claims Reserve will still have ample funds available for future Unknown Claimants, if any meritorious Unknown Claims still exist, Mr. Graver notes. Unknown Claims Rep Objects A. Bates Butler III, the Unknown Claims Representative, relates that the Unknown Claims Reserve was established to provide a fund to protect potential holders of tort claims, which had not been asserted prior to the Diocese's claims bar date. He notes that as of the Plan's effective date, there were no Unknown Claims. In connection with the Plan, Mr. Butler estimated 12 to 15 valid potential holders of tort claims to be paid from the Unknown Claims Reserve. He notes that two years after the Effective Date, the Committee is seeking the release of $3,000,000, or approximately three-fifths of the Unknown Claims Reserve. "This is too much, too soon. In the last two years, two claimants have come forward and been paid from the Unknown Claims Reserve," Mr. Butler tells the Court. He estimates that possibly 10 to 13 claimants remain, and for those who may have been minors, the statute of limitations has not yet run. For this reason, Mr. Butler opposes the distribution at this time, but supports a distribution of $1,000,000 from the Unknown Claims Reserve. About the Diocese of Tucson The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. Tucson's Third Amended and Restated Plan of Reorganization became effective on Sept. 20, 2005. (Catholic Church Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CLEAR CHANNEL: Gets Consents in Tender Offers for Senior Notes -------------------------------------------------------------- Clear Channel Communications Inc. has received tenders and consents representing a majority of its outstanding 7.65% Senior Notes due 2010 (CUSIP No. 184502AK8). The company also announced that its subsidiary, AMFM Operating Inc., has received tenders and consents representing a majority of its outstanding 8% Senior Notes due 2008 (CUSIP No. 158916AL0), all pursuant to the previously announced cash tender offers and consent solicitations for the CCU Notes and the AMFM Notes. As of 5:00 p.m., New York City time, on Dec. 31, 2007, the company had received tenders and consents in respect of US$710,729,000 of the outstanding principal amount of CCU Notes (or approximately 94.76% of the aggregate principal amount), and AMFM had received tenders and consents in respect of US$555,582,000 of the outstanding principal amount of AMFM Notes (or approximately 86.16% of the aggregate principal amount). As a result of the receipt of the requisite consents for the CCU Notes, the company expects to enter promptly into a supplemental indenture incorporating the Clear Channel proposed amendments, which eliminate substantially all of the restrictive covenants and the covenants regarding mergers and consolidations contained in the CCU Notes and in the indenture governing the CCU Notes applicable to the CCU Notes, eliminate certain events of default, and modify or eliminate certain other provisions, including certain provisions relating to defeasance, contained in the CCU Notes and in the indenture governing the CCU Notes applicable to the CCU Notes. As a result of the receipt of the requisite consents for the AMFM Notes, AMFM expects to enter promptly into a supplemental indenture incorporating the AMFM proposed amendments, which eliminate substantially all of the restrictive covenants and the covenants regarding mergers and consolidations contained in the AMFM Notes and in the indenture governing the AMFM Notes, eliminate certain events of default, and modify or eliminate certain other provisions, including certain provisions relating to defeasance and providing for guarantees, contained in the AMFM Notes and in the indenture governing the AMFM Notes. Each supplemental indenture will become operative upon acceptance and payment of the tendered notes by AMFM or Clear Channel, as applicable. The company and AMFM have decided to extend the consent payment deadlines in connection with the tender offers and the consent solicitations. The new consent payment deadline for each series of Notes is 8:00 a.m. EST on Jan. 16, 2007, which is the same time as each tender offer expiration date. Each of the consent payment deadline and the tender offer expiration date is subject to extension by AMFM, with respect to the AMFM Notes, and Clear Channel, with respect to the CCU Notes, in their sole discretion. As a result of the extension of the consent payment deadlines, all holders that validly tender their notes in each tender offer will be eligible to receive the applicable total consideration offered, including the applicable consent payment. In each case, holders whose Notes are accepted for payment in the tender offers will receive accrued and unpaid interest in respect of such purchased Notes to, but not including, the applicable settlement date. The Clear Channel tender offer and consent solicitation is being made pursuant to the terms and conditions set forth in the Clear Channel Offer to Purchase and Consent Solicitation Statement for the CCU Notes dated Dec. 17, 2007, and the related Letter of Transmittal and Consent. The AMFM tender offer and consent solicitation is being made pursuant to the terms and conditions set forth in the AMFM Offer to Purchase and Consent Solicitation Statement for the AMFM Notes dated Dec. 17, 2007, and the related Letter of Transmittal and Consent. Clear Channel has retained Citi to act as the lead dealer manager for the tender offers and lead solicitation agent for the consent solicitations and Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated to act as co-dealer managers for the tender offers and co-solicitation agents for the consent solicitations. Global Bondholder Services Corporation is the Information Agent for the tender offers and the consent solicitations. Questions regarding the transaction should be directed to Citi at (800) 558-3745 (toll-free) or (212) 723- 6106 (collect). Requests for documentation should be directed to Global Bondholder Services Corporation at (212)430-3774 (for banks and brokers only) or (866) 924-2200 (for all others toll- free). About Clear Channel Communications Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Moody's Investors Service stated that it will likely downgrade Clear Channel Communications Inc.'s Corporate Family Rating to B2 when its change of control is completed. On Dec. 17, 2007, Clear Channel disclosed a tender offer and consent solicitation for its outstanding 7.65% senior notes due 2010 and its subsidiary, AMFM Operating Inc. announced a tender offer and consent solicitation for its 8% senior notes due 2008. COLFAX CORP: Registers Common Stock Initial Public Offering ----------------------------------------------------------- Colfax Corporation has filed a registration statement on Form S-1 with the Securities and Exchange Commission for a proposed initial public offering of its common stock. The number of shares to be offered and the price range for the offering have not yet been determined. Merrill Lynch & Co. is acting as lead book-running manager. A copy of the prospectus relating to these securities, when available, may be obtained by contacting: Merrill Lynch, Pierce, Fenner & Smith Incorporated Attn: Prospectus Department 5th Floor, 4 World Financial Center New York, NY 10080 Tel +1 212 449 1000 About Colfax Corporation Headquartered in Richmond, Virginia, Colfax Corporation - http://www.colfaxcorp.com/-- is a supplier of fluid handling products, including pumps, fluid handling systems and specialty valves. Its products serve a variety of applications in the commercial marine, oil and gas, power generation, navy and general industrial markets and are sold worldwide under the Allweiler, Fairmount, Houttuin, Imo, LSC, Portland Valve, Tushaco, Warren and Zenith brands. * * * Colfax Corporation continues to carry Moody's Investor Service's 'Ba3' long term corporate family rating and 'Ba1' bank loan debt rating, which were placed in January 2007. COMPUSA INC: Selling Selected Assets & Stores to Systemax Inc. -------------------------------------------------------------- CompUSA Inc. has entered into a definitive agreement with Systemax Inc., pursuant to which Systemax Inc. will acquire CompUSA's selected assets and retail stores. Completion of the transaction is subject to customary closing conditions and is expected to close at several dates throughout the first quarter of 2008. Under the agreement, Systemax will purchase the CompUSA brand, trademarks and e-commerce business, and many as 16 CompUSA retail outlets. "We believe the value of the CompUSA brand remains very high," Richard Leeds, chief executive officer of Systemax, said. "The company has a long legacy of value pricing, service and customer loyalty among consumers nationwide. We view this acquisition as a strong complementary business to our TigerDirect operation." According to TigerDirect chief executive officer Gilbert Fiorentino, CompUSA.com's customer base enhances that of TigerDirect.com and the CompUSA retail stores will strengthen the company's planned retail expansion. TigerDirect currently operates 11 retail stores in Florida, Illinois, North Carolina and Ontario, Canada. Pending required approvals, up to 16 CompUSA stores in Florida, Texas and Puerto Rico will be added during the first quarter of 2008. "Millions of loyal customers will come to the Systemax and TigerDirect family of businesses through this acquisition," Mr. Fiorentino said. "We anticipate hiring many experienced CompUSA employees, preserving hundreds of store management and sales positions and making us stronger and better in the process." As the select CompUSA retail stores are acquired, the stores will be integrated into TigerDirect's existing retail operating environment. "We have a terrific opportunity to continue the great CompUSA brand and establish a new heritage that will extend for generations to come," Mr. Fiorentino added. Until the agreement is closed, CompUSA's web site and retail operations will operate under CompUSA. Once the acquisition is completed, the new, improved CompUSA.com web site will operate within Systemax's family of ecommerce web sites. The new CompUSA.com will feature advanced searching and enhanced content including photo galleries and videos on thousands of the most popular PC, TV and consumer electronics items. The direct costs of the acquisition will depend on the specific retail store locations that are taken over and are expected to approximate $30 million. The indirect costs of the acquisition -- integration and recruiting costs, legal fees, inventory purchases, and other expenses - will be incremental to the direct costs. About Systemax Inc. Systemax Inc. (NYSE:SYX) - http://www.systemax.com/-- sells personal computers, computer supplies, consumer electronics and industrial products through a system of branded e-commerce web sites, direct mail catalogs, relationship marketers and retail stores in North America and Europe. It also manufacturers and sells personal computers under the Systemax and Ultra brands and develops and markets ProfitCenter Software, a web-based, on-demand application for multi-channel direct marketing companies. TigerDirect - www.tigerdirect.com/ -- is a subsidiary of Systemax. The company serves the needs of personal and business computer users, selling consumer electronics, computers, digital media technology and peripherals via retail stores, catalog and Internet channels. About CompUSA Inc. Headquartered in Dallas, Texas, CompUSA Inc. is a retailer and reseller of personal computers and related products and services, principally through its Computer Superstores located throughout the United States. Although retail sales through its Computer Superstores are the largest component of the company's business, its stores also fulfill the principal marketing, product, and service functions of the company's other businesses, including direct sales to corporate, government, and education customers and training and technical services. * * * As reported in the Troubled Company Reporter on Dec. 11, 2007, CompUSA was acquired by Gordon Brothers Group LLC and Gordon Brothers will initiate an orderly wind-down of CompUSA's retail store operations. The restructuring firm was engaged in discussions with various parties regarding the sale of certain assets. CompUSA's 103 retail stores were opened and staffed during the 2008 holiday season, and offered consumers bargains on computer and electronic products as part of store closing sales. COMUNITY LENDING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: ComUnity Lending, Inc. 5671 Santa Teresa Boulevard, Suite 201 San Jose, CA 95123 Bankruptcy Case No.: 08-50030 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- L.E.S. Liquidation, Inc. 08-50031 Type of Business: Founded in 1980, The Debtor is a mortgage lender approved by the U.S. Department of Housing and Urban Development. It offers mortgage programs that will lend up to $1,500,000. See http://www.comunitylending.com Chapter 11 Petition Date: January 4, 2008 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtors' Counsel: John Walshe Murray, Esq. 19400 Stevens Creek Boulevard, Suite 200 Cupertino, CA 95014-2548 Tel: (650) 852-9000 ComUnity Lending, Inc's Financial Condition: Estimated Assets: $10 to $50 Million Estimated Debts: $10 to $50 Million A. ComUnity Lending, Inc's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bear Stearns $6,311,790 Attention: Kristopher Armstrong 2780 Lake Vista Drive Lewisville, TX 75067 Indy Mac $5,459,705 Attention: Paulette Mendoza 888 East Walnut Street Pasadena, CA 91101 A.L.S. $4,318,010 Attention: Patricia Walter 2530 South Parker Denver, CO 80014 Greenwich $2,750,203 Attention: Mike Pillari 600 Steamboat Road Greenwich, CT 06830 Countrywide $2,506,211 Attention: Lydia Devries & Joseph Paganelli 8521 Fallbrook Avenue, MS WH-51M West Hills, CA 91304 Goldman Sachs $1,900,661 Attention: Victoria Clement 85 Broad Street, 27th Floor New York, NY 10080 Merrill Lynch $1,548,405 Attention: Cynthia Smiros & Molly McHugh 4 World Financial Center New York, NY 10080 Washington Mutual $1,521,920 Attention: Kim Cottrell & Michael Coyne 623 Fifth Avenue, 17th Floor 4438WCNY New York, NY 10022 Wells Fargo $1,395,717 Attention: Shana Larkin 700 Larkspur Landing, Suite 199 Larkspur, CA 94030 Winter Group $1,278,487 45 Rockefeller Plaza, Suite 420 New York, NY 10011 G.M.A.C.-R.F.C. $1,028,964 Megan-Gallagher One Meridian Crossings, Suite 100 Minneapolis, MN 55423 World Financial Group $1,000,000 Attention: Jerry Vahl, Executive Vice-President 11315 Johns Creek Parkway Duluth, GA 30097-7429 Morgan Stanley $917,500 Attention: Karen Ferrante & Brian Wornow 5002 T-Rex Avenue, Suite 300 Boca Raton, FL 33431 E.M.C. Mortgage Corp. $548,250 800 State Highway 121 Bypass Lewisville, TX 75067-4180 Gevity H.R., Inc. $471,792 Edwin E. Hightower, Jr. Vice-President & General Counsel 9000 Town Center Parkway Bradenton, FL 34202 Chris Hake $401,917 4974 St. Andrews Drive Stockton, CA 95219 Joyce Freeman $389,219 475 Mello Lane Santa Cruz, CA 95062 Credit Suisse $296,559 Attention: Kelvin Fynaardt 11 Madison Avenue, 4th Floor New York, NY 10010-3629 Deutsche Bank Structured $240,819 Products, Inc. John Nelson $227,668 B. LES Liquidation, Inc's Threee Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Gevity H.R., Inc. $471,792 Attention: Edwin E. Hightower, Jr. Vice-President & General Counsel 900 Town Center Parkway Bradenton, FL 34202 Optimal Blue $14,875 5601 Democracy Drive, Suite 150 Plano, TX 75024 Mortgage Resource Center, Inc. $7,400 2975 Lone Oak Drive, Suite 140 Eagan, MN 55121 CONVERGENCE ETHANOL: Files Voluntary Chapter 7 Petition in Texas ---------------------------------------------------------------- Convergence Ethanol Inc., on Dec. 21, 2007, filed a voluntary petition under Chapter 7 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Texas. The company had previously stated in its Form 10-QSB/A for the Quarter Ended June 30, 2007, that its working capital was not sufficient to satisfy its immediate working capital requirements and that if it was unable to raise the required funds, its ability to finance continued operations will be materially adversely affected. Last Hope The company's related that its last real hope of meeting its working capital requirements was by borrowing additional funds from its existing lender, GCA Strategic Investment Fund Limited. However, negotiations broke down and GCA elected to not make additional loans to fund the company's operations. Without GCA's financial assistance and their full cooperation, the company's ability to obtain funding from other independent sources evaporated. The company said that the filing was based on the Board of Directors' belief that the only and best option for the company was to liquidate its assets and distribute any realized proceeds to creditors. The company further said that its assets may have insufficient value upon liquidation to repay creditors in full doesn't expect any distribution to shareholders. Resignations The company discloses that the resignations of Mr. James A. Latty as President, CEO and Chairman of the Board of Directors and Ms. Miriam Wolverton as Senior Corporate Controller were submitted effective as of Dec. 14, 2007 and Dec. 15, 2007, respectively. The resignations of Mr. Richard W. York, CFO and Mr. Steven Newsom, Director were submitted effective as of Dec. 31, 2007. Hurdles Leading to Demise In a regulatory filing on Form 8-K with the U.S. Securities and Exchange Commission, the company's directors that the factors that lead to the company's demise were, among others: * The hostile corporate take-over attempts, incompetence of and harassment by former Director and Officer Mr. Daniel K. Moscaritolo. These activities, the company said, along with those of his associates resulted in huge and continuing legal expenses and fatally damaged the company's fund raising ability as well as diluted its efforts to conduct business; * the decision of the company's major lender to foreclose the loan secured by the company's assets in Texas. Although there were no scheduled payments overdue, the company disclosed that the loan agreement stated that unless the company had registered its stock underlying the convertible debt within an "unrealistically short time period" that penalties would be imposed. The lender foreclosed because those penalties could not be paid and the action effectively eliminated the company's ability to attract funding to meet its short-term working capital requirements; * the problem created by the company's factoring lender. The company related that in an attempt to improve the cash flow at its Texas companies, an agreement was entered into with a factoring lender. Unfortunately, the factoring lender breached the agreement and began withholding payments to the company and collecting payments to which it was not entitled. According to the company, this effectively cut off what little income the company could have received and the factoring lender's claims made it practically impossible to raise any capital to address the financial needs of the company; * its inability to overcome the the combined effects of the mid 2007 credit market melt-down, particularly sub-prime loans, along with the company's otherwise distressed situation which thwarted the its recent efforts to raise debt or equity financing to continue operations; and * the retainer agreement entered into by Mr. Moscaritolo with Mr. Louis Fillion, Esq., an attorney in Canada. Mr. Fillion was to represent the company's interest in Canada related to the construction of a biomass to ethanol plant. The company however had a strained relationship with Mr. Claude Villnueve, the president of its minority partner in the project. As a result of the contract, the company said, Mr. Fillion claimed the Corporation owed him approximately $34,000. In May 2007, Mr. Fillion placed a lien on the property that was to be the site of the ethanol plant. However, Mr. Fillion failed to contact anyone at the company to give notice of the lien and only gave notice to Mr. Villnueve. Mr. Villnueve failed to inform anyone at the company. When the company received notice that the property was going to be sold to satisfy the lien, it lacked the funds to pay the amount claimed under the lien. Thus the property was scheduled to be sold on Dec. 25, 2007. Ceased Business Activity In connection with the filings, the company disclosed that along with all of its subsidiaries, they have ceased all business activity and operations. Further, the company will also cease to file reports under the Securities Exchange Act of 1934. About Convergence Ethanol Convergence Ethanol, Inc., fka Mems USA, Inc. (CETH.OB) develops and manufactures advanced engineering products, systems and plants for the energy, oil and natural gas industries. It operates through its wholly owned subsidiaries California MEMS USA, Inc., Bott Equipment Company Inc. and Gulfgate Equipment Inc. California MEMS is an engineering and design firm that develops and sells instrumentation, blending skids and Intelligent Filtration Systems. Gulfgate produces particulate filtration equipment utilized in the oil and power industries. Bott is a stocking distributor for premier lines of industrial Pumps, compressors, flow meters, valves and instrumentation. CONVERGENCE ETHANOL: Voluntary Chapter 7 Case Summary ----------------------------------------------------- Debtor: Convergence Ethanol, Inc. fka Mems USA, Inc. c/o Margaret M. McClure, Esq. 909 Fannin, Suite 3810 Houston, TX 77010 Bankruptcy Case No.: 07-38717 Debtor affiliate filing separate chapter 7 petition on Dec. 21, 2007: Entity Case No. ------ -------- California MEMS USA, Inc. 07-38718 Debtor affiliate filing separate chapter 7 petition on Nov. 6, 2007: Entity Case No. ------ -------- Bott Equipment Company Inc. 07-37767 Type of Business: The Debtor develops and manufactures advanced engineering products, systems and plants for the energy, oil and natural gas industries. It operates through its wholly owned subsidiaries California MEMS USA, Inc., Bott Equipment Company Inc. and Gulfgate Equipment Inc. California MEMS is an engineering and design firm that develops and sells instrumentation, blending skids and Intelligent Filtration Systems. Gulfgate produces particulate filtration equipment utilized in the oil and power industries. On Dec. 18, 2007, GCA Strategic Investment Fund Limited and other creditors of Gulfgate Equipment, filed an involuntary petition for relief under Chapter 7 against . Gulfgate (Bankr. S.D. Tex. Case No. 07-38657). Bott is a stocking distributor for premier lines of industrial Pumps, compressors, flow meters, valves and instrumentation. Lowell T. Cage has been appointed as Chapter 7 trustee in the Debtor and its debtor-affiliates' respective cases. Chapter 7 Petition Date: December 21, 2007 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Margaret Maxwell McClure, Esq. Law Office of Margaret M. McClure 909 Fannin, Suite 3810 Houston, TX 77010 Tel: (713) 659-1333 Fax: (713)658-0334 Total Assets: $995,590 Total Debts: $4,159,455 DAYTON SUPERIOR: S&P Puts BB- Rating on Proposed $100 Mil. Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' bank loan rating to the proposed $100 million senior secured first-lien term loan B of Dayton Superior Corp. The senior secured rating is two notches above the 'B' corporate credit rating. S&P also assigned a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of a payment default. The rating is based on preliminary terms and conditions. S&P affirmed its existing ratings for Dayton Superior. The outlook is stable. Proceeds from the proposed term loan, in addition to $65 million in borrowings under a new, unrated $150 million revolving credit facility, will be used to refinance the company's existing $165 million second-lien notes due September 2008. Dayton Superior, based in Dayton, Ohio, is a leading manufacturer and provider of concrete construction products and forming and shoring equipment. "We expect the company to continue to benefit from good operating trends in its commercial and infrastructure end markets. In addition, its proposed refinancing will modestly reduce interest expense and somewhat enhance its overall liquidity position," said Standard & Poor's credit analyst Sean McWhorter. "We could revise the outlook to negative or lower the ratings if demand in the company's commercial end markets deteriorates meaningfully. We could also take one of those actions if raw material costs escalate appreciably and the company cannot pass through those increases to customers, resulting in significant margin compression. We could revise the outlook to positive if the company's operating performance significantly improves, resulting in lower debt balances and a strengthened financial profile, although this seems less likely in the near term." DB ISLAMORADA: Files Schedules of Assets and Liabilities -------------------------------------------------------- DB Islamorada LLC delivered to the U.S. Bankruptcy Court for the Southern District of Florida its schedules of assets and debts disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $25,000,000 B. Personal Property 3,236,009 C. Property Claimed as Exempt D. Creditors Holding $25,665,627 Secured Claims E. Creditors Holding - Unsecured Priority Claims F. Creditors Holding 1,880,433 Unsecured Nonpriority Claims ---------- ----------- TOTAL $28,236,009 $27,546,060 Miami, Florida-based DB Islamorada LLC filed for chapter 11 bankruptcy on Nov. 29, 2007 (Bankr. S.D. Fla. Case No. 07-20537). DB ISLAMORADA: Wants Stearns Weaver as Bankruptcy Counsel --------------------------------------------------------- DB Islamorada LLC asks the U.S. Bankruptcy Court for the Southern District of Florida for permission to employ Stearns Weaver Miller Weissler Alhadeff & Sitterson PA as bankruptcy counsel, nunc pro tunc to Nov. 29, 2007. Stearns Weaver is expected to: a. advise the Debtor with respect to its responsibilities in complying with the United States Trustee's Guidelines and Reporting Requirements and with the rules of the Court; b. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; c. protect the interests of the Debtor in all matters coming before the Court; and d. represent the Debtor in negotiation with creditors and in the preparation of a plan. Stearns Weaver will apply for compensation and reimbursement of costs, pursuant to Sections 330 and 331 of the U.S. Bankruptcy Code. To the best of the Debtor's knowledge, the firm does not have any connection with its creditors or other parties-in-interest or their respective attorneys. The firm can be reached at: Patricia A. Redmond, Esq. Stearns Weaver Miller Weissler Alhadeff & Sitterson PA Museum Tower, Suite 2200, 150 West Flagler Street Miami, FL 33130 Tel: (305) 789-3200 Fax: (305) 789-3395 http://www.swmwas.com/ Miami, Florida-based DB Islamorada LLC filed for chapter 11 bankruptcy on Nov. 29, 2007 (Bankr. S.D. Fla. Case No. 07-20537). DEERFIELD CAPITAL: Posts $23.2 Million Net Loss in Third Quarter ---------------------------------------------------------------- Deerfield Triarc Capital Corp. reported a net loss of $23.2 million for the third quarter ended Sept. 30, 2007, compared with net income of $19.6 million for the third quarter of 2006. The decrease reflected net losses in the derivatives trading portfolio, realized net losses on sale and unrealized losses on impairment of available-for-sale securities, and lower valuations in the loans held-for-sale portfolio. Providing a partial offset were higher net interest income and better results in the trading securities portfolio. Net interest income of $26.8 million increased 36.1% over the net interest income of $19.7 million in the prior year quarter. The improvement was largely driven by enhanced returns in the RMBS portfolio and a better mix of higher yielding alternative investments. Expenses totaled $5.1 million, down by $1.1 million, or 18.2%, from the prior year. The decrease was primarily due to no incentive fees paid in the current quarter. Other income and gain (loss) was a net loss of $45.3 million in the quarter, compared with a net gain of $6.3 million in the prior year quarter. The loss primarily reflected the following: -- Non-agency AAA RMBS AFS securities totaling $485 million were sold at a net loss of $7.2 million for liquidity enhancement purposes. -- Other-than-temporary impairment charges on AFS securities totaled $16.4 million during the third quarter. -- Wider credit spreads drove a net loss of $7.8 million on corporate bank loans held for sale in the Market Square CLO. -- The undesignated pay fixed interest rate swap portfolio, used as an economic hedge of the RMBS book, generated losses totaling $15.2 million due to falling swap rates during the quarter. -- Lower LIBOR rates resulted in losses in sold interest rate floors totaling $2.3 million. -- Total return swap activity produced losses totaling $2.2 million due to wider credit spreads. The following gains provided a favorable offset: -- Lower overall interest rates resulted in a net gain of $5.6 million in the trading securities portfolio. -- Agency RMBS AFS securities totaling $391 million were sold to generate liquidity resulting in a net gain of $1.1 million. Jonathan Trutter, chief executive officer, said, "Like many other financial companies, our third quarter results were significantly impacted by the recent disruption in the credit markets. The decision to enhance our liquidity during this period resulted in an increase in realized losses during the quarter. Had we not sold certain securities during the third quarter to increase operating liquidity, it is unclear whether the ultimate disposition of these investments would have resulted in losses for the company. "In addition, most of our investment portfolios had lower valuations at quarter-end, creating temporary impairment charges to our book value. We believe that many of these charges will reverse over time as markets recover. Despite the market turmoil, our taxable income remained strong and we were able to maintain the dividend payout rate at an attractive level in line with the past three quarters." Total invested assets were down 4.3% to $8.4 billion as of Sept. 30, 2007 compared to the end of 2006. The decrease reflected the sale of certain investments to generate liquidity as credit markets tightened and repurchase agreement margin requirements increased above historically observed levels. Liquidity The company's short-term liquidity needs are met primarily with proceeds from unrestricted cash and cash equivalents and repurchase agreement borrowings. Unencumbered RMBS and unrestricted cash and cash equivalents as of Sept. 30, 2007, totaled $175.1 million compared to $224.6 million as of the end of the second quarter. Longer term funding is in the form of trust preferred securities and CDO borrowings. Borrowings under the company's warehouse funding agreement totaled $76.9 million as of Sept. 30, 2007. Commenting on liquidity, Mr. Trutter noted, "Although the environment for repurchase agreement funding of our high quality mortgage collateral has improved substantially since early August, we continue to be focused on liquidity and believe our current position is sufficient to sustain the operation of our core mortgage financing activities. Our alternative strategies continue to rely primarily on term funding structures which greatly reduces our exposure to short term credit disruptions." Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $8.75 billion in total assets, $8.19 billion in total liabilities, and $550.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26d5 About Deerfield Triarc Based in Rosemont, Illinois, Deerfield Triarc Capital Corp. (NYSE: DFR) is a diversified financial company formed in 2004 to invest in real estate-related securities and various other asset classes. The company has elected and intends to continue to qualify to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. The objective is to provide attractive returns to investors through a combination of dividends and capital appreciation, which the company intends to achieve by opportunistically investing in financial assets and to construct an investment portfolio appropriately leveraged to seek attractive risk-adjusted returns. * * * As reported in the Troubled Company Reporter on Nov. 29, 2007, Moody's Investors Service downgraded Deerfield Triarc Capital Corp's corporate family rating to Ba3, from Ba2. DELPHI CORP: Court Approves Downer and Co. as Financial Advisor --------------------------------------------------------------- Delphi Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ independent middle market advisory firm Downer & Company LLC as their financial advisor and investment banker with regard to the divestiture or other strategic alternatives relating to their power products business. The Debtors propose to hire Downer & Company nunc pro tunc to Aug. 27, 2007. The Debtors' Power Products Business involve the engineering, manufacturing, or selling of power sliding door systems, power liftgate systems, power deck lid systems, internal cinching latches, advanced development power cinching latches, and advanced development power cinching strikers. Pursuant to the parties' Oct. 26, 2007 letter agreement, Downer & Company is expected to: -- assist in the review and analysis of the assets and the operating and financial strategies of the Power Products Business; -- assist in the definition of objectives related to the value and terms of divestiture; -- assist in the market examination for potential purchasers and identification of a universe of parties who should be contacted in relation to the proposed transaction; -- at the Debtors' direction, contact a priority list of parties agreed in common with the Debtors as part of a pre- marketing strategy; -- assist in the collection and analysis of information relevant to the market and the proposed transaction; -- prepare and review with the Debtors the valuation of the Power Products Business; -- define procedures concerning the divestiture process at its different stages, and implementing them with the potential purchasers at the Debtors' direction and on its behalf; -- assist in the organization and coordination of datarooms, management presentations, and due diligence sessions; -- review, analyze, and advise on the value and terms of the offers received and on appropriate negotiating strategies in relation to the various potential purchasers in connection with the proposed transaction or other transactions; -- assist in the negotiation of binding contractual documentation in conjunction with the Debtors' legal advisors; and -- render other financial advisory and investment banking services as may be reasonably requested by the Debtors in connection with the disposition of the Power Products Business. The services to be provided by Downer & Company will not duplicate the services of the Debtors' other professionals, Delphi Corp. vice president and chief restructuring officer John D. Sheehan assured the Court. In exchange for Downer & Company's services, the Debtors will pay the firm non-refundable work fees totaling $100,000: * $25,000 upon approval of the Employment Application; * $25,000 upon completion and delivery of a pre-marketing report; * $25,000 upon receipt of the first round offers; and * $25,000 upon receipt of the final offers in the form of a marked-up term sheet. The Debtors will also pay Downer & Company a Transaction Fee equal to $600,000 plus: * 2.5% of the Transaction Value, as defined in the Engagement Letter, between $35,000,000 and $45,000,000; and * 3.25% of the Transaction Value in excess of $45,000,000. The Transaction Fee may be reduced by the total amount of work fees paid if certain conditions are met as defined in the Engagement Letter, Mr. Sheehan related. Further more, the Debtors will reimburse Downer & Company for all reasonable out-of-pocket expenses incurred in connection with the performance of its duties under the Engagement Letter, including transportation, telephone, lodging, meals, research, postage, courier services, and interest fees. Downer & Company's services are necessary to enable the Debtors to maximize the value of their estates, Mr. Sheehan told the Court. The Debtors aver that Downer is well-qualified and able to represent them in a cost-effective, efficient, and timely manner. Arthur G. Gottlieb, a managing director at Downer & Company, LLC, assured the Honorable Robert Drain that Downer & Company has no connection with, and holds no interests adverse to, the Debtors, their creditors, or any other party-in-interest in the matters for which it is proposed to be retained. Downer & Company, Mr. Gottlieb adds, is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Reaches Settlement with Ad Hoc Trade Committee ----------------------------------------------------------- The Ad Hoc Trade Committee's withdrawal of its objection to the Dec. 3, 2007 Amendment to the New Equity and Purchase Agreement between Delphi Corp., its debtor-affiliates and the Plan Investors, led by Appaloosa Management L.P., is part of a settlement reached between the Debtors and the Trade Committee. In addition to the EPCA, the parties agreed to resolve their disputes with respect to the Debtors' Joint Plan of Reorganization. "This is in full settlement of any and all objections of the ad hoc trade committee to the disclosure and plan confirmation process, including without limitation, the disclosure statement, the proposed investment agreement amendment and the plan of reorganization, including plan confirmation matters," John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, said at the Dec. 6, 2007 hearing. The parties also agreed that: -- they will use commercially reasonable efforts to reconcile, if agreed, allow on or before the confirmation date trade claims held by members of the Ad Hoc Trade Committee; and -- the Debtors will reimburse the Trade Committee up to $750,000 for reasonable and documented professional fees and expenses, provided, however, the Committee will file with the Court an application for the reimbursement. Mr. Butler, however, said that the Trade Committee may still object to the Plan if the Debtors propose modifications that have a material adverse affect on the treatment of general unsecured creditors. The Debtors told the Court that they resolved majority of the objections to the Amendment to the Investment Agreement. In to the Trade Committee, representatives of the Securities Lead Plaintiffs, IUE-CWA, and the Official Committee of the Equity Security Holders confirmed that their objections have been resolved. The Equity Committee agreed to withdraw its objections following clarification on, among other things, the preservation of its legal, equitable, and contractual rights in connection with the Investment Agreement. "In light of the consideration that's being offered to the Equity Committee under the Plan, we're in support of the Plan and the third-party release therein," said Debra Torres, Esq. at Fried Frank Harris Shriver & Jacobson, LLP, in New York, on behalf of the Equity Committee. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA FINANCIAL: U.S. Trustee Appoints Unsecured Creditors' Panel ----------------------------------------------------------------- The U.S. Trustee for Region 3, Kelly Beaudin Stapleton, appointed five members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Delta Financial Corporation and its debtor-subsidiaries. The Creditors Committee members are: 1. Mortgage Information Services, Inc. Attn: Barton J. Craig 4877 Galaxy Pkwy., Suite I, Cleveland, OH 44128 Phone: 216-514-1330 Fax: 216-839-2074 2. Delta Funding Residual Exchange Company LLC Attn: James E. Morrison 236 East 47 th Street, No. 32D, New York, NY 10017 Phone: 646-918-6826 Fax (646) 918-6826 3. DB Structured Products, Inc. Attn: Silvia Spear/Vincent D'Amore 60 Wall Street, New York, NY 10005 Phone: 212-250-6146 Fax: 212-797-5695 4. J2 Global Communications, Inc. Attn: Alisa Moskowitz. 6922 Hollywood Blvd., Suite 500, Los Angeles, CA 90028 Phone: 323-860-9396 Fax: 323-693-5335 5. AT&T Corp. Attn: James Walter Grudus One AT&T W ay, Room 3A218, Bedminster, NJ 07921 Phone: 908-234-3318 Fax: 832-213-0157 Pursuant to Section 1103 of the Bankruptcy Code, the Creditors Committee may: -- consult with the Debtors concerning the administration of the bankruptcy cases; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization for the Debtors; -- participate in the formulation of a plan, advise its constituents regarding the Committee's determinations as to any plan formulated, and collect and file with the Court acceptances or rejections of the plan; -- request the appointment of a trustee or examiner; and -- perform other services as are in the interest of its constituents. The Creditors Committee may retain counsel, accountants, or other agents, to represent or perform services for the group. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected David B. Stratton, Esq. and James C. Carignan, Esq. at Pepper Hamilton LLP as their counsel. The Debtors' amended consolidated quarterly financial condition as of Sept. 30, 2007, showed $7,223,528,000 in total assets and $7,108,232,000 in total liabilities. The Debtors' petition listed D.B. Structured Products Inc. as their largest unsecured creditor holding a $19,500,000 claim. The Debtors' exclusive period to file a plan expires on April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). DELTA FINANCIAL: U.S. Trustee Sets Sec. 341 Meeting for Feb. 5 -------------------------------------------------------------- The U.S. Trustee for Region 3, Kelly Beaudin Stapleton, will convene a meeting of creditors in the Chapter 11 cases of Delta Financial Corporation and its debtor-subsidiaries on Feb. 5, 2008, at 2:00 p.m. The meeting will be held at Room 5209, 5th Floor, J. Caleb Boggs Federal Building, 844 King Street, Wilmington, Delaware. The meeting is required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Rule 9001(5) of the Federal Rules of Bankruptcy Procedure requires that a representative of the Debtors appear at the Meeting of Creditors. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected David B. Stratton, Esq. and James C. Carignan, Esq. at Pepper Hamilton LLP as their counsel. The Debtors' amended consolidated quarterly financial condition as of Sept. 30, 2007, showed $7,223,528,000 in total assets and $7,108,232,000 in total liabilities. The Debtors' petition listed D.B. Structured Products Inc. as their largest unsecured creditor holding a $19,500,000 claim. The Debtors' exclusive period to file a plan expires on April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). DELTA FINANCIAL: Files Amended List of Unsecured Creditors ---------------------------------------------------------- Delta Financial Corp. and its debtor-affiliates delivered t