T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 9, 2008, Vol. 12, No. 7 Headlines ACA ABS: Moody's Junks Baa2 Rating on Class C Secured Notes ACCESS PHARMA: Completes Acquisition of Somanta Pharmaceuticals AFFILIATED COMPUTER: Inks Strategic Alliance Pact with Ingenix AMERICAN MEDICAL: President and CEO Martin J. Emerson Resigns ARMSTRONG WORLD: Nitram & Desseaux's Joint Plan Effective Dec. 28 ASAT HOLDINGS: Has Until July 1 to Comply With Nasdaq Rules ATLAS ENERGY: Moody's Puts B3 Rating on Proposed $400MM Notes ATLAS ENERGY: Mulls $400 Mil. Offering of Senior Unsecured Notes ATLAS ENERGY: S&P Puts B Rating on Proposed $400 Mil. Sr. Notes BALLY TOTAL: Court Okays Latham & Watkins' $1.8 Million Fees BEAR STEARNS: Posts $854 Million Net Loss in 2007 Fourth Quarter BEAR STEARNS: James Cayne Leaves CEO Posts, to Stay as Chairman BOSTON SCIENTIFIC: Completes $750 Mil. Sale of Surgery Business BRANDEIS LOFTS: Court OKs Sale of Condo to Townsend for $15.4 Mil. BRITISH AIRWAYS: Offers Alternative Travel to MAXjet Customers CITIZENS COMMS: Earns $47.4 Million in 2007 Third Quarter CHENIERE ENERGY: Sept. 30 Balance Sheet Upside-Down by $266.4 Mil. CHRYSLER LLC: 2007 Int'l Markets Sales Up 8% at 599,618 Units CLAYMONT STEEL: Waiting Period on Evraz Group's Offer Expires COMPASS DIVERSIFIED: Completes Acquisition of Fox Factory COUNTRYWIDE FINANCIAL: Denies Rumors of Looming Bankruptcy Filing CREDIT SUISSE: Fitch Downgrades Ratings on Four Classes to 'B' CREDIT SUISSE: Moody's Holds Ba1 Rating on $18.6 Mil. Certs. CRII LLC: Case Summary & Seven Largest Unsecured Creditors D&E COMMS: Earns $3.7 Million in Third Quarter Ended Sept. 30 D&E COMMS: Changes in Capital Structure Cues Moody's Rating Cut DANA HOLDING: Moody's Attaches Prospective Low-B Ratings DANA HOLDING: S&P Expects Negative Outlook After Chapter 11 Exit DAVID MONTGOMERY: Case Summary & 13 Largest Unsecured Creditors DELPHI CORP: Court Rejects Intermet's Demand for Claims Payment DELPHI CORP: Deloitte Resolves Securities Fraud Claims for $38MM DELPHI CORP: Plans To Reduce $6.8 Billion Exit Financing DELPHI CORP: Committees Wants Participation in Exit Loan Process DELTA FIN'L: Seeks Mar. 18 Deadline to File Schedules & Statements DELTA FIN'L: Taps Morrison & Foerster as General Bankr. Counsel DELTA FIN'L: Selects Pepper Hamilton as Delaware Counsel DELTA FINANCIAL: Wants FTI Consulting as Financial Advisor DIVERSIFIED ASSET: Moody's Cuts Ca Rating on $18.5MM Notes to C DOMTAR INC: Completes Offers to Purchase CDN$ Denominated Notes ENERGY PARTNERS: Posts $4 Million Net Loss in 2007 Third Quarter EUROFRESH INC: S&P Says Ratings Unmoved by Fin'l Advisor Hiring FINLAY ENTERPRISES: Weak Performance Prompts S&P to Junk Rating FIRST MAGNUS: Sells $5.25 Mil. Construction Loans at a Discount FIRST MAGNUS: Submits Revised Second Amended Plan of Liquidation FIRST MAGNUS: WaMu to Aid Sale of 40 Construction Loans to Summit FEDERAL GYPSUM: Creditors to Vote on Plan at January 22 Meeting FORD MOTOR: Investing $500 Million to Expand India Operations GARY BURIVAL: U.S. Trustee Assigns Eight-Member Creditors Panel GARY BURIVAL: Committee Taps Perry Guthery as Counsel GO FIG.: Files for Chapter 11 Bankruptcy in Missouri GO FIG: Case Summary & 200 Largest Unsecured Creditors GOODYEAR TIRE: Tire Mounting Biz Sells Assets to EnovaPremier GRAND PRIX: Files Schedules of Assets and Liabilities HAZEL POINTE: Motion to Extend Schedules Filing Considered Moot HAZEL POINTE: Principal at Distinct Intends to Leave Post HAZEL POINTE: Submit List of 20 Largest Unsecured Creditors IAC INTERACTIVECORP: Names Doug Lebda as CEO of Fin'l Services INPHONIC INC: Court Approves Reed Smith as Committee's Counsel INTERMET CORP: To Shut Down Operations in Pulaski, Tenn. Facility INVERNESS MEDICAL: Completes $37 Million Buyout of Panbio Ltd. ITRON INC: Posts $3.4 Million Net Loss in 2007 Third Quarter KB HOME: Posts $772.7 Million Net Loss in 2007 Fourth Quarter KITTY HAWK: Selling Freight-Handling Equipment at Jan. 17 Auction LEHMAN BROTHERS: Moody's Junks B2 Rating on $26.776 Mil. Certs. LIBERTY MEDIA: Acquires Control of Bodybuilding.com LUIS MARRERO: Case Summary & Two Largest Unsecured Creditors MAGNA ENTERTAINMENT: Taps Ron Charles as Chief Operating Officer MARASH NUCALAJ: Voluntary Chapter 11 Case Summary MARCAL PAPER: Wants Sale of Assets Exempted from Tax MARCAL PAPER: Illinois Balks at Tax Exemption Plea for Asset Sale MAXJET AIRWAYS: British Air Offers Alternative Travel to Customers MAXJET AIRWAYS: Wants to Sell Non-Core Assets for $50,0000 MBS-THE TRAILS: Section 341(a) Creditors' Meeting Set for Jan. 23 MBS MANAGEMENT: Can Amend Engagement of Heller Draper as Counsel MBS MANAGEMENT: Hires J.R. Medlin of FTI Consulting as CRO MBS MANAGEMENT: Submits Schedules of Assets and Liabilities MERRILL LYNCH: S&P Maintains Low-B Ratings on Six Certificates MICHAEL MCEVER: Case Summary & 19 Largest Unsecured Creditors MICHAEL MURPHY: Voluntary Chapter 11 Case Summary MONITOR OIL: Court Approves Dorsey & Whitney as Attorney MONITOR OIL: Hires Akin Gump as Special Counsel MOVIE GALLERY: Court Okays CRG as Committee's Financial Advisor MOVIE GALLERY: Four Officers Dispose of 99,942 Common Shares MOVIE GALLERY: Judge Tice Approves Lease Termination Procedures NASDAQ STOCK: Moody's Expects to Put Ba1 Rating on New $1.5BB Loan NATIONAL RV: Wants to Hire Klee Tuchin as Bankruptcy Counsel NOMURA ASSET: Fitch Junks Ratings on Two Certificate Classes OUR LADY OF MERCY: Has Until March 17 to File Chapter 11 Plan OUR LADY OF MERCY: U.S. Trustee Amends Creditors' Panel Members PERFORMANCE PROPERTIES: Co-Owners Want Chapter 11 Case Dismissed PINNACLE ENTERTAINMENT: Earns $5 Million in 2007 Third Quarter PRINCETON SKI: Mulls Selling Suburban Stores Next Month PROPEX INC: S&P Junks Rating on Corporate Credit from 'B-' RELIANT ENERGY: Wants Until February 19 to File Chapter 11 Plan PSS WORLD: Earns $14.5 Million in Second Quarter Ended Sept. 28 RESMAE MORTGAGE: Merrill Lynch's Appeal Stayed Until March 17 SALANDER-O'REILLY: Gets Court OK to Access $870,000 of DIP Funds SENDTEC INC: Inks Debt-for-Equity Swap Agreement with Bondholders SMART BALANCE: Moody's Reviews Low-B Ratings for Likely Upgrade SOUTHWESTERN ENERGY: Moody's Rates Proposed $400MM Notes at Ba2 SUN COAST: S&P Junks Rating on 1993 Bonds After Chap. 11 Filing SYNOVA HEALTHCARE: Cases Converted to Ch.7 Liquidation Proceedings SYNOVA HEALTHCARE: U.S. Trustee Names J. Burtch as Ch. 7 Trustee TITANIUM METALS: Earns $53.7 Million in 2007 Third Quarter TODD CURRY: Voluntary Chapter 11 Case Summary TROPICANA ENT: Moody's Reviews Rating on Denied License Renewal UNITEDHEALTH GROUP: Subsidiary Inks Strategic Alliance with ACS URS CORP: Bags $60-Mil. Contract for Unmanned Aircraft Program VICTORIA FINANCE: Declining Asset Value Cues S&P's Rating Cut VIKING SYSTEMS: Sept. 30 Balance Sheet Upside-Down by $22 Million WASHTENAW MORTGAGE: Fixes December 31 as Claims Bar Date WENDY'S INT'L: Reports Preliminary Same-Store Sales in 4th Quarter WILLIE SNEAD: Case Summary & 17 Largest Unsecured Creditors XYIENCE INC: Involuntary Chapter 11 Case Summary * Chadbourne & Parke Adds 5 Partners in NY, Moscow and UK Offices * Congress Considers Another Change in Bankruptcy Law * Default Research Says 2007 Phoenix Foreclosures Up by 88% * Default Research Says Detroit Foreclosures Up by 108% in 2007 * Hawaiian Developers Fred and Gwen Yamashiro File for Bankruptcy * Housing Market Downturn Affecting Major Rating Agencies * Susman Godfrey Obtains National Law's 2008 NLJ Pro Bono Award * Winston & Strawn Adds Three Intellectual Property Partners * Fitch Sees Loans Defaults To Increase This Year * Fitch Says Real Estate Loan CDO Delinquencies Are Up Again * Fitch Says US Energy Bill Will Trim Demand for Transport Fuels * S&P Anticipates No Rating Changes After TRIPRA Legislation * Upcoming Meetings, Conferences and Seminars ********* ACA ABS: Moody's Junks Baa2 Rating on Class C Secured Notes ----------------------------------------------------------- Moody's Investors Service downgraded these notes issued by ACA ABS 2002-1, Limited: Class Description: Class C Mezzanine Secured Floating Rate Notes, due Aug. 1, 2037 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. ACCESS PHARMA: Completes Acquisition of Somanta Pharmaceuticals --------------------------------------------------------------- Access Pharmaceuticals Inc. has closed the acquisition of Somanta Pharmaceuticals Inc. through the issuance of 1.5 million shares of Access Pharmaceuticals' common stock. On April 19, 2007, Access Pharmaceuticals and Somanta Pharmaceuticals Inc. have signed a definitive merger agreement by which Access will acquire Somanta. Under the terms of the merger agreement, Access will issue shares of common stock to Somanta stockholders in exchange for all the outstanding capital stock of Somanta. The merger agreement has been approved by the boards of both companies. In addition, Access has received voting agreements from certain Somanta shareholders representing approximately 81% of Somanta's outstanding common shares and approximately 60% of its outstanding preferred shares under which the parties, subject to certain limited exceptions, have granted an irrevocable proxy to vote their Somanta shares in favor of the merger. It is anticipated that select members of Somanta's management team who have established track records of guiding compounds through the FDA and EMEA approval processes will join the Access team. "The acquisition of Somanta brings four very exciting product candidates and one platform technology into the Access pipeline, and we look forward to advancing them towards clinical development this year," Jeffrey B. Davis, Access' chairman and CEO, stated. "Together with the ongoing development efforts with ProLindac and the Cobalamin oral insulin programs, we feel that the Somanta product candidates position us very well for the next few years." "In addition to internal development of these products, we are actively seeking development and marketing partners for our products, both domestically and overseas," Mr. Davis added. Somanta's broad portfolio of drug candidates features four novel anti-cancer compounds in development, each of which acts by a unique mechanism of action and has the potential to target a wide range of different cancer types. The Somanta product candidate portfolio includes Angiolix, a humanized monoclonal antibody with a unique target, Prodrax, a novel prodrug and platform technology that enables compounds to reach the hypoxic region of tumors, Alchemix, a multi-target inhibitor that is specifically designed to be effective against cancer cells resistant to conventional chemotherapy, and sodium phenylbutyrate, an HDAC inhibitor, that is currently in Phase 2 clinical development. About Somanta Pharmaceuticals Inc. Somanta Pharmaceuticals -- http://www.somanta.com/-- (OTC BB: SMPM) is focused on the development of novel oncology compounds and anti-cancer agents. Somanta's pre-clinical drug candidates include Angiolix, Prodrax and Alchemix. Angiolix is a humanized monoclonal antibody which appears to induce cell death selectively to tumor blood vessels using a different mode of action than VEGF- oriented therapies. Prodrax, is a novel family of prodrugs that enables compounds to remain inert until they reach the hypoxic region of tumors where they become toxic, thus targeting tumor cells which are typically difficult to kill. Alchemix is a pan- target inhibitor that is effective in tumor cells resistant to conventional chemotherapy by targeting and irreversibly binding to DNA. About Access Pharmaceuticals Headquartered in Dallas, Texas, Access Pharmaceuticals Inc. (OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging biopharmaceutical company developing products for use in the treatment of cancer, the supportive care of cancer, and other disease states. The company's product for the management of oral mucositis, MuGard(TM) has received marketing clearance by the FDA as a device. The company's lead clinical development program for the drug candidate ProLindac(TM) is in Phase II clinical testing. Access also has advanced drug delivery technologies including Cobalamin(TM) mediated oral drug delivery and targeted delivery. Access Pharmaceuticals reported total assets of $3.6 million and total liabilities of $19.1 million at June 30, 2007, resulting in a $15.5 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 13, 2007, Whitley Penn LLP, in Dallas, expressed substantial doubt about Access Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations, net working capital deficiency and accumulated deficit. AFFILIATED COMPUTER: Inks Strategic Alliance Pact with Ingenix -------------------------------------------------------------- Affiliated Computer Services Inc. and Ingenix, a UnitedHealth Group Inc. subsidiary, have disclosed a strategic alliance to provide Medicaid Management Information Systems decision support solutions to state governments. Under the terms of the alliance agreement, the two companies will work with each other to supply decision support solutions for Affiliated Computer's state Medicaid Systems initiatives. Affiliated Computer will license its portfolio of federally certified decision support technologies to Ingenix, which will provide its Medicaid Systems clients with a broad array of decision support methodologies, software applications, and related consulting services. Decision support systems analyze data to help health administrators assess Medicaid program status, analyze healthcare policy, monitor budget trends and measure program performance. "This partnership allows us to enhance our current systems and deliver better service to our Medicaid clients," said Affiliated Computer senior vice president and managing director, Government Healthcare Solutions, Christopher T. Deelsnyder. "Combining Ingenix' innovative decision support capabilities with ACS' technologies strengthens our ability to streamline and improve the delivery of healthcare in Medicaid programs." Impact Pro for Care Management is Ingenix' innovative platform for helping state Medicaid programs better identify and manage both chronic and acute health conditions. This predictive modeling and care management tool is currently being used by the ACS-Ingenix alliance to support the State of Mississippi's Division of Medicaid. "This relationship brings together an unparalleled set of data, technology and experience that will increase efficiency, reduce costs and improve care outcomes for Medicaid recipients and the state governments that manage their health services," said Ingenix chief executive officer, Andy Slavitt. "Together, we will offer a unique set of solutions that will help us grow our respective businesses by giving our clients a suite of services that meet their expectations." About Ingenix Ingenix -- http://www.ingenix.com/-- a wholly owned subsidiary of UnitedHealth Group Inc. (NYSE: UNH), transforms organizations and improves health care through information and technology. Organizations rely on its innovative products, services and consulting to improve the delivery and operations of their business. About Affiliated Computer Services Headquartered in Dallas, Affiliated Computer Services Inc. (NYSE: ACS) -- http://www.AffiliatedComputer-inc.com/-- provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company has more than 58,000 employees supporting client operations in nearly 100 countries. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland, and Singapore. * * * As reported in the Troubled Company Reporter on Jan. 7, 2008, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Dallas, Texas-based Affiliated Computer Services Inc., and removed it from CreditWatch, where it had been placed with negative implications on March 20, 2007. The outlook is negative. AMERICAN MEDICAL: President and CEO Martin J. Emerson Resigns ------------------------------------------------------------- American Medical Systems Holdings Inc.'s board of directors has accepted the resignation of Martin J. Emerson as president, chief executive officer and board member effective Jan. 4, 2008. The board has begun a search for a new chief executive officer and has retained Heidrick & Struggles to assist in its recruiting effort. Ross A. Longhini, executive vice president and chief operating officer, will serve as chief executive officer on an interim basis. "Marty has made a significant contribution to the growth of AMS during his more than seven years with the company, and we thank him for his efforts and service," A. Jay Graf, lead independent director, commented. "The board of directors has confidence in Ross's ability to lead AMS and will work closely with him and the company's management team through this transition period. We are all committed to the successful recruitment of the very best CEO to sustain and enhance the AMS industry leading franchises in urology, gynecology, and the entire pelvic health field." About American Medical Systems Holdings Inc. Based in Minnetonka, Minnesota, American Medical Systems Holdings Inc. -- http://www.americanmedicalsystems.com/-- (NASDAQ: AMMD) develops and delivers medical devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders in men and women pelvic health products for both men and women. AMS has operations in Australia, Austria, Brasil, Canada, Deutschland, Benelux, France, Iberica, Portugal, the United Kingdom, and the USA. * * * American Medical Systems Holdings Inc. continues to carry Moody's Investor Service's 'B1' long term corporate family rating, placed in June 2006 and 'B1' probability of default rating. ARMSTRONG WORLD: Nitram & Desseaux's Joint Plan Effective Dec. 28 ----------------------------------------------------------------- Nitram Liquidators, Inc., and Desseaux Corporation of North America relate that their First Amended Joint Plan of Liquidation became effective on Dec. 28, 2007. The First Amended Joint Plan of Liquidation was confirmed by Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware on Dec. 17, 2007. As a result of the occurrence of the Effective Date, all assets and liabilities of Nitram and Desseaux are deemed merged solely for purposes of the Plan. Each claim filed or to be filed against either Nitram and Desseaux in their Chapter 11 cases will be treated as one claim filed against the consolidated Debtors. Furthermore, on the Effective Date, Armstrong World Industries, Inc., the parent corporation of Nitram and Desseaux, transferred $200,000 in cash to the consolidated Debtors for the benefit of holders of Allowed Claims. The $200,000 cash will become property of Nitram and Desseaux's consolidated estates and will be distributed pursuant to the Plan. All requests for payment of an Administrative Claim against Nitram and Desseaux must be filed with the Bankruptcy Court, so as to be received on or before Jan. 28, 2008, at 4:00 p.m., Wilmington, Delaware time. Pursuant to the confirmed Plan, the Initial Distribution Date is set to occur on or before March 13, 2008, unless an unliquidated Administrative Expense is filed with the Bankruptcy Court by the Administrative Bar Date, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. Nitram and Desseaux will not be obliged to make further distributions on account of Allowed Claims, if: (a) a distribution is returned to the consolidated Debtors as undeliverable, and after reasonable inquiry the consolidated Debtors are unable to locate a new address for the holder of the Allowed Claim; or (b) a check for Distribution under the confirmed Plan is not cashed within 10 days prior to the Distribution Date. In the event of undeliverable or unclaimed distributions on account of an Allowed Claim, the Claim will be treated as a Disallowed Claim for all further distributions. The funds set aside for Distributions will be part of the Available Cash, pursuant to the confirmed Plan. As previously reported, all claims arising from the rejection or termination of Nitram's and Desseaux's executory contracts or unexpired leases prior to Dec. 17, 2007, must be filed with the Bankruptcy Court and served on Nitram and Desseaux by Jan. 16, 2008. Furthermore, all final requests for compensation or reimbursement of the fees of any professional employed in Nitram and Desseaux's Chapter 11 cases must be filed no later than January 27, 2008, or 30 days after the Effective Date. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. (NYSE: AWI) -- http://www.armstrong.com/-- designs and manufactures floors, ceilings and cabinets. AWI operates 42 plants in 12 countries and employs approximately 14,200 people worldwide. The company has Asia-Pacific locations in Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. It also has locations in Colombia, Costa Rica, Greece and Iceland, among others. The company and its affiliates filed for chapter 11 protection on Dec. 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. Nitram Liquidators Inc. and Desseaux Corporation of North America delivered to the Court a Joint Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Sept. 20, 2007. (Armstrong Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASAT HOLDINGS: Has Until July 1 to Comply With Nasdaq Rules ----------------------------------------------------------- ASAT Holdings Limited received a letter from the Nasdaq Staff stating that for the prior 30 consecutive business days, the bid price of the company's American Depositary Shares had closed below the minimum $1 per ADS requirement for continued inclusion on the Nasdaq Capital Market as set forth in Nasdaq Marketplace Rule 4320(e)(2)(E)(ii). Therefore, in accordance with the Rule, the company was provided with 180 calendar days, until July 1, 2008, to regain compliance with the Rule. If at any time before July 1, 2008, the bid price of the company's ADSs closes at $1 per ADS or more for a minimum of 10 consecutive business days, the Nasdaq Staff will provide written notification that the company complies with the Rule. If compliance with the Rule cannot be demonstrated by July 1, 2008, the Nasdaq Staff will determine whether the company meets the initial listing criteria for the Nasdaq Capital Market, other than the bid price requirement. If the company meets the initial listing criteria, the Nasdaq Staff will notify the company that it has been granted an additional 180 calendar day period to regain compliance with the Rule. If the company is not eligible for an additional compliance period, the Nasdaq Staff will provide written notification that the company's ADSs will be delisted, and, at that time, the company may appeal the Nasdaq Staff's determination to delist to a Listing Qualifications Panel. In addition, on Jan. 3, 2008, the company received a letter from the Nasdaq Staff stating that the value of its listed securities has been below $35,000,000 as required for inclusion by Marketplace Rule 4320(e)(2)(B). Therefore, in accordance with Marketplace Rule 4320(e)(2)(D), the company will be provided 30 calendar days, or until Feb. 4, 2008, to regain compliance. If, at any time before Feb. 4, 2008, the market value of listed securities of the company's ADSs is $35,000,000 or more for a minimum of 10 consecutive business days, the Nasdaq Staff will determine if the company regains compliance. If compliance cannot be demonstrated by Feb. 4, 2008, the Nasdaq Staff will provide written notification that the company's securities will be delisted. At that time, the company may appeal the Nasdaq Staff's determination to delist to a Listing Qualification Panel. The company was also notified by Nasdaq on Jan. 3, 2008 that it does not comply with the minimum stockholders' equity of $2,500,000 or net income from continuing operations of $500,000 in the completed fiscal year or in two of the last three completed fiscal years, which are requirements for continued listing on the Nasdaq Capital Market. About ASAT Holdings Limited Headquartered in Pleasanton, California, ASAT Holdings Limited (Nasdaq: ASTT) -- http://www.asat.com/-- is a provider of semiconductor package design, assembly and test services. With 18 years of experience, the company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in-package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. The company has operations in the United States, Hong Kong, China and Germany. * * * Standard & Poor's placed ASAT Holdings Limited's long term foreign and local issuer credit ratings at 'CCC-' in September 2007. The outlook is negative. ATLAS ENERGY: Moody's Puts B3 Rating on Proposed $400MM Notes ------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Atlas Energy Operating Company, LLC including a B1 Corporate Family Rating, a B1 probability of default rating, and a B3 rating (LGD 5, 82%) to its proposed $400 million of senior unsecured notes due 2018. Moody's also assigned a SGL-3 rating to Atlas Energy. Proceeds from the notes offering will be used to refinance a portion of the borrowings under Atlas Energy's credit facility that were used in the acquisition of DTE Gas & Oil Company in June 2007. The rating outlook is stable. The ratings reflect Atlas Energy's small size in terms of production and proved reserves; its LLC structure which typically involves the distribution of substantially all cash flow after estimated maintenance capital expenditures; and its high leverage. Support for the rating comes from the meaningful amount of equity funding supporting the DTE acquisition (approximately 47% of the purchase price); its long-lived reserve base with low production decline rates; its large inventory of relatively low risk developmental drilling opportunities; and the benefits of its partnership management business which provides a stream of ongoing fee-based income not directly tied to changes in commodity prices. As of June 30, 2007, Atlas Energy had total proved reserves of approximately 133.6 MMBoe (801.7 Bcfe) and PD reserves of approximately 98.3 MMBoe (589.6 Bcfe). For the three months ended Sept. 30, 2007, Atlas Energy had average daily production of approximately 15,217 Boe/d (91.3 MMcfe/d), or approximately 5.6 MMBoe on an annualized basis, which places it among the smallest E&P companies that Moody's rates. Atlas Energy's PD R/P ratio is a lengthy 18 years. Its properties are split between its recently acquired Michigan properties, which account for 76% of total proved reserves and 65% of average daily production, and its Appalachia properties which account for the remaining 24% of total proved reserves and 35% of average daily production. While its size and scale metrics are consistent with single-B E&P companies, Atlas Energy's properties have a long history and a predictable production profile. This is unlike other small single-B independent E&P companies which often have properties in areas with steeper decline rates and much greater capital intensity and higher development risks. While Atlas Energy's properties are located only two regions -- Michigan and Appalachia -- they have a large number of identified future drilling locations as well as significant undeveloped acreage. Notwithstanding the recent DTE acquisition, Atlas Energy's intended strategy is balanced between acquisitions and drilling. This is in contrast to some of its E&P MLP/LLC peers which have a stated strategy involving reserve replacement and growth through acquisitions. As noted above, Atlas Energy has a fairly significant acreage position and drilling inventory which should allow it to replace production without relying on the acquisitions market. One potential shortcoming of a strategy involving greater drillbit activity, however, is that it can shorten the average decline rate as newer production (flush production) declines faster than more mature wells. This may become a greater factor for Atlas Energy depending on results from its emerging Marcellus Shale Play. Atlas Energy's F&D costs are dominated by the DTE acquisition. The acquisition had a purchase price of $1.268 billion for acquired total proved reserves of 101.8 MMBoe (independently engineered as of June 30, 2007), resulting in an acquisition cost of $12.46/Boe. Adding in $118.4 million for future development costs, the acquisition cost on a fully developed basis is approximately $13.62/Boe. Given the very long life of these reserves, this acquisition cost is not comparable to other E&P companies with a shorter reserve life. This is evident in terms of the acquisition having a cost per daily flowing Boe of approximately $129,000, which is high relative to other E&P transactions in the market. On pro forma basis, Moody's estimates that Atlas Energy's three- year all sources F&D costs were $12.88/Boe and its three-year drillbit (including revisions) F&D costs were $15.92/Boe. Excluding revisions, the bulk of which are price-related, Atlas Energy's three-year drillbit F&D costs were $10.96/Boe. Pro forma for the notes offering, Atlas Energy's debt was $749.1 million as of Sept. 30, 2007. Using SEC reserves as of June 30, 2007, its debt/PD reserves was approximately $7.62/Boe and its debt plus future development costs/total proved reserves was approximately $7.69/Boe. Atlas Energy's RCF less sustaining capex/debt is expected to fall in the 0%-10% range as RCF (operating cash flow before changes in working capital less distributions) is expected to be close to estimated sustaining capex. Atlas Energy's SGL-3 rating reflects adequate liquidity for the next 12 months. Moody's expects that Atlas Energy will have negative free cash flow in 2008 as total capex and distributions will exceed operating cash flow. Atlas Energy's hedging contracts provide downside protection to operating cash flow over the next 12 months as approximately 81% of expected production in 2008 is hedged at favorable prices. Approximately 70% of expected production is hedged in 2009 and 57% is hedged in 2010. Pro forma for the notes offering, Atlas Energy will have a borrowing base under its revolving credit facility of $635 million, of which $285 million would have been available as of Sept. 30, 2007. Covenants under the facility include a minimum current ratio of 1-to-1 and a maximum leverage ratio of 4-to-1 through Dec. 31, 2008 and then stepping down in periods thereafter. The senior notes are rated two notches below Atlas Energy's CFR based on the application of Moody's LGD methodology. This outcome is driven by the amount of secured debt relative to the amount of the notes. Headquartered in Moon Township, Pennsylvania, Atlas Energy Operating Company, LLC is the principal operating subsidiary of publicly traded Atlas Energy Resources, LLC. Atlas Energy Resources is managed by Atlas Energy Management, Inc., a wholly owned subsidiary of Atlas America. ATLAS ENERGY: Mulls $400 Mil. Offering of Senior Unsecured Notes ---------------------------------------------------------------- Atlas Energy Resources LLC plans to offer $400 million of senior unsecured notes through a private placement, subject to market conditions. Atlas Energy will use the net proceeds of the proposed offering to repay outstanding indebtedness under its senior secured credit facility. Based in Moon Township, Pennsylvania, Atlas Energy Resources LLC (NYSE: ATN) -- http://www.atlasenergyresources.com/-- focuses on the development and production of natural gas and, to a lesser extent, oil principally in the eastern United States. Atlas Energy sponsors and manages tax advantaged investment partnerships, in which it co-invests, to finance the exploration and development of its acreage in the Appalachian Basin and drills on its own account in the Antrim Shale of Michigan. ATLAS ENERGY: S&P Puts B Rating on Proposed $400 Mil. Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to oil & gas exploration and production company Atlas Energy Resources LLC . The outlook is stable. At the same time, Standard & Poor's assigned a 'B' rating to the proposed $400 million senior unsecured notes to be co-issued by Atlas Energy's wholly-owned subsidiaries, Atlas Energy Operating Company LLC and Atlas Energy Finance Corp. Pro forma for the notes issuance, Moon Township, Pennsylvania-based Atlas Energy had $749 million of debt as of Sept. 30, 2007. "The corporate credit rating reflects the company's limited scale and geographic diversity, aggressive financial leverage, and substantial quarterly distributions paid to unitholders," said Standard & Poor's credit analyst David Lundberg. "These weaknesses are partially offset by the low geological risk inherent in the company's reserve base, a long reserve life, and the fee income generated by the company's partnership management business." BALLY TOTAL: Court Okays Latham & Watkins' $1.8 Million Fees ------------------------------------------------------------ The Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York, signed, on Jan. 3, 2008, an Omnibus Order granting the First and Final Applications of Compensation and Reimbursement of Expenses of professionals involved in the bankruptcy proceeding of Bally Total Fitness Holding Corp. and its debtor-affiliates. As previously reported in the Troubled Company Reporter, Bally Total Fitness emerged from Chapter 11 on Oct. 1, 2007, as a private company just over two months after filing for bankruptcy protection on July 31, 2007. The restructuring arrangements funded by Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund L.P. became effective on the same date. Harbinger invested approximately $233.6 million in exchange for 100% of the common equity of reorganized Bally. The fees approved are: Name of Firm Fees Requested Fees Awarded ------------ -------------- ------------ Latham & watkins LLP $1,813,250.75 $1,813,250.75 Deloitte Financial $85,278.37 $85,278.37 Advisory Services LLP Deloitte Tax LLP $432,349.41 $432,349.41 Hilco Real Estate LLC $255,049.11 $255,049.11 KPMG LLP $1,419,751.05 $1,419,751.05 Jefferies & Company $300,000.00 $300,000.00 Kirkland & Ellis LLP $573,778.50 $573,778.50 About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre-packaged chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P. represented the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had $408,546,205 in total assets and $1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. On Aug. 13, 2007, they filed an Amended Joint Prepackaged Plan and on Aug. 17 filed a Modified Amended Prepackaged Plan. BEAR STEARNS: Posts $854 Million Net Loss in 2007 Fourth Quarter ---------------------------------------------------------------- The Bear Stearns Companies Inc. reported a net loss of $854 million for the fiscal fourth quarter ended Nov. 30, 2007, as compared with net income of $563 million for the fourth quarter of 2006. Net revenues for the 2007 fourth quarter were a loss of $379 million down from revenues of $2.4 billion for the 2006 fourth quarter. In early November the company disclosed that it anticipated write- downs of approximately $1.2 billion in mortgage inventory net of hedges. At November 30, total net inventory write-downs were $1.9 billion. These write-downs served to reduce fourth quarter earnings per share (diluted) by $8.21. Including these write- downs the company reported a loss for the fourth quarter ended Nov. 30, 2007, of $6.90 per share. For the comparable fourth quarter of 2006, the company reported earnings per share (diluted) of $4.00. For the fiscal year the company reported $1.52 earnings per share (diluted), compared with $14.27 for fiscal 2006. Net income for the fiscal year was $233 million compared with $2.1 billion earned in fiscal year ended Nov. 30, 2006. Net revenues for the 2007 fiscal year were $5.9 billion, compared with $9.2 billion in the prior fiscal year. The after-tax return on common stockholders' equity was 1.8% for fiscal 2007. "We are obviously upset with our 2007 results, particularly in light of the fact that weakness in fixed income more than offset strong and, in some areas, record-setting performance in other businesses," said James E. Cayne, chairman and chief executive officer. "Our underlying fixed income franchise remains strong and we have taken steps to size the division to market conditions. We are taking appropriate measures to position Bear Stearns for renewed profitability in 2008 by focusing our resources on the businesses with growth potential in the current environment, while streamlining our operations in areas with lower expected activity levels. We are confident that these efforts will ensure Bear Stearns remains a strong and profitable competitor in the global marketplace in the years to come." "When Bear Stearns became a public company, consistent with our entrepreneurial roots and to ensure alignment of interests between management and shareholders, we designed our executive compensation programs to pay for performance. In a year in which we produced unacceptable results, the plans are working as they were designed -- and the members of the executive committee will not receive any bonuses for 2007." Capital Markets Net revenues in Capital Markets, which includes Institutional Equities, Fixed Income and Investment Banking, were a loss of $956 million in the fourth quarter of 2007, down from net revenues of $1.9 billion in the fourth quarter ended Nov. 30, 2006. Capital Markets net revenues were $3.9 billion in fiscal year 2007, a decrease of 46% from the $7.3 billion reported in 2006. Global Clearing Services Fourth quarter 2007 Global Clearing Services net revenues were $276 million, up 2% from $271 million in the fourth quarter of 2006. Net revenues for the 2007 fiscal year in Global Clearing Services were $1.2 billion, up 11% from $1.1 billion in fiscal 2006. Wealth Management Wealth Management net revenues were $272 million in the fourth quarter of 2007, up 10% from $247 million in the fourth quarter of 2006. Wealth Management net revenues were $830 million in fiscal 2007, a decrease of 3% compared with $858 million in fiscal 2006. Stockholders' Equity and Long-term Borrowings As of Nov. 30, 2007, total capital, including stockholders' equity and long-term borrowings, was $80.3 billion. Book value on Nov. 30, 2007, was $84.09 per share, based on 136.2 million shares outstanding. The company repurchased approximately 12.0 million shares of its common stock at a total cost of $1.7 billion during fiscal 2007. About Bear Stearns Companies New York-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAR STEARNS: James Cayne Leaves CEO Posts, to Stay as Chairman --------------------------------------------------------------- James E. Cayne has informed The Bear Stearns Companies Inc.'s board of directors of his desire to step down as chief executive officer, effective immediately. While Mr. Cayne will retire from the firm, he will stay on as chairman of the board of directors and will be succeeded as chief executive officer by Bear Stearns president Alan D. Schwartz. Mr. Cayne served as CEO of Bear Stearns since 1993 and as chairman and CEO since 2001. "Jimmy has much to be proud of -- under his leadership Bear Stearns has grown substantially over the past 15 years, with revenues increasing to $7 billion from $2 billion and the number of our employees more than doubling to 14,000," said Vincent Tese, Bear Stearns lead independent director. "This was his decision, and we are very pleased that he has agreed to stay actively involved in the business as chairman of the board." "The company's talent pool is particularly deep and the board is fortunate to have someone of Alan's caliber and experience ready to step in to lead the company," Mr. Tese added. "Alan has spent more than 30 years at Bear Stearns; he deeply understands our business and culture, and he is a strong leader and manager who is admired and respected throughout the organization." "I am gratified that the board has continued confidence in me, but I believe this is the right time to implement our succession plan," Mr. Cayne commented. "We are beginning a new year and are at a pivotal point in the development of our business at a time of rapid change on Wall Street." "Leading Bear Stearns and its wonderfully talented people has been one of the great joys in my life for nearly 15 years," he said. "These are people who know how to create value, who know how to serve clients well and who I am confident will continue to do so for many years in the future." "Alan is a good friend and one of the most capable executives on Wall Street. He is a great choice to lead the company in this new era and I am delighted to be in a position to help," Mr. Cayne added. "I have great confidence in him and in the seamlessness of this transition. I look forward to my new role, where I feel I can use my institutional knowledge of Bear Stearns and Wall Street to maximum advantage for the firm in the years ahead." Alan D. Schwartz joined Bear Stearns in 1976. He became executive vice president and head of the Investment Banking Division in 1985. Mr. Schwartz was named president and co-chief operating officer in June 2001 and sole president in August of 2007. "I am honored to have the opportunity to lead one of Wall Street's great franchises," Alan D. Schwartz, president of Bear Stearns, said. "Bear Stearns has a bright future. Our franchise is rock solid thanks to Jimmy's leadership; investors, customers and employees should not expect any abrupt changes in the period ahead." "We have a strong capital position, a unique culture and great talent throughout the organization," Mr. Schwartz stated. "Although the operating environment has been difficult, we are off to a good start in 2008. We remain excited about our core equity, banking and fixed income businesses, our international expansion initiatives, and the further development of our energy and wealth management platforms." "Jimmy Cayne is a Wall Street legend," he said. "I've learned a lot from him in the 30 years we have been friends and partners here at Bear Stearns, and I am pleased we will be able to continue working together." About Bear Stearns Companies New York-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BOSTON SCIENTIFIC: Completes $750 Mil. Sale of Surgery Business --------------------------------------------------------------- Boston Scientific Corporation has completed the sale of its Cardiac Surgery and Vascular Surgery businesses to the Getinge Group of Sweden for $750 million in cash. As reported in the Troubled Company Reporter on Nov. 7, 2007, Boston Scientific Corporation signed a definitive agreement for the sale of its Cardiac Surgery and Vascular Surgery businesses to the Getinge Group. The company disclosed its intent to sell the Cardiac Surgery and Vascular Surgery businesses on Aug. 16, as part of its plan to divest non-strategic assets and increase shareholder value. Boston Scientific acquired the Cardiac Surgery business in April 2006 as part of the Guidant transaction. The Cardiac Surgery business is a developer of medical technologies designed for use in surgical cardiac procedures, including beating-heart bypass surgery systems and endoscopic vessel harvesting for coronary bypass surgery. The business employs approximately 450 people. The company expects to record after-tax charges of approximately $240 million in connection with the transaction. These charges will be recorded during the fourth quarter of 2007 and the first quarter of 2008. "We have now sold three of our five previously identified non- strategic businesses, and we expect to close on the remaining two -- Fluid Management and Venous Access -- this quarter," Jim Tobin, president and chief executive officer of Boston Scientific, said. "These divestitures -- along with our ongoing efforts to reduce expenses and simplify our operating model -- should help us achieve our overall goals of restoring profitable growth, increasing shareholder value and strengthening Boston Scientific for the future." 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. BRANDEIS LOFTS: Court OKs Sale of Condo to Townsend for $15.4 Mil. ------------------------------------------------------------------ The Hon. Thomas L. Saladino of the Nebraska U.S. Bankruptcy Court in Omaha yesterday gave Brandeis Lofts LLC authority to sell its luxury condominium, Brandeis Building, Christine Laue writes for World-Herald News. The condo will be sold to Townsend Investments II LLC for $15.4 million, World-Herald relates. Debtor's counsel Robert V. Ginn, Esq., at Blackwell Sanders Peper Martin LLP told World-Herald that parties will discuss settlement of Weitz Co.'s objection as to the distribution of the sale proceeds. Weitz is the Debtor's contractor and creditor, World- Herald notes. Prior to granting sale approval, the Court sought the opinions of creditors, Great Western Bank and Weitz, regarding MaxCom Real Estate Services' contention that its $16.25 million purchase offer for the condo was better, World-Herald says. Great Western Bank told the Court, World-Herald relates, that it was contented with Townsend's offer and that it has no confidence in MaxCom. Weitz and MaxCom happen to owe Great Western Bank an undisclosed amounts of loans, World-Herald reveals. Mr Ginn says that a final sale hearing will be set for Monday and the sale to close utmost ten days following issuance of final order, World-Herald reports. About Brandeis Lofts Omaha, Nebraska-based Brandeis Lofts LLC owns the Brandeis Building which is a partially completed luxury condominium project in a 10-story, 1906 building located at 16th and Douglas Streets. Brandeis Lofts' investors are Bob Hampton of Lincoln, Breck Collingsworth of Lincoln and Steve Borgmann of Norfolk, Neb. The Debtor filed for chapter 11 protection On March 14, 2007 (Bankr. D. Neb. Case No. 07-80482) after suffering from lack of funds. Robert V. Ginn, Esq., at Blackwell Sanders Peper Martin LLP represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. The Debtor owes Hampton LLC $2,200,016, its largest unsecured creditor. BRITISH AIRWAYS: Offers Alternative Travel to MAXjet Customers -------------------------------------------------------------- British Airways plc is offering passengers of the bankrupt airline MAXjet Airways Inc. a special New Year's offer to help them have a happier start to 2008. The airline is offering customers of the U.S.-based airline booked to travel after December 24 the opportunity to book Club World (business class) return tickets from London Heathrow to New York for 1,000 and London Heathrow to Los Angeles for 1,250. The tickets are available for sale until Friday, Jan. 11, 2008, for travel throughout 2008. Steve Cassidy, GM long-haul sales, said: "We understand that this may be an uncertain time for customers who were booked to travel with MAXjet. We are pleased to be able to offer them an alternative with British Airways." He continued, "Our special New Year offer is available to any MAXjet customer who was due to travel after December 24, 2007. "British Airways offers customers a truly upgraded experience with our award-winning new Club World cabin, a superior network and schedule and our frequent flyer programme, the Executive Club, which rewards our most regular customers when they fly. "British Airways' 100 million investment in its new Club World is available on most British Airways flights between London Heathrow and New York and all flights between London Heathrow and Los Angeles." -- The British Airways offer is available for sale up to and including midnight on Jan. 11, 2008. -- Prices include all taxes, fees and charges. -- Customers can book with British Airways directly by calling 0870 850 9850 in the UK and 1-800-AIRWAYS in the U.S.A. -- Tickets are non-refundable and non-changeable and require a Saturday night stay. -- Travel is subject to availability throughout 2008. -- Proof of purchase of a MAXjet flight for travel after Dec. 24, 2007 is required to qualify for the special fare. -- British Airways flies to New York JFK and Newark airports from London Heathrow 11 times per day and once a day between Manchester and New York JFK. The airline flies three times per day between London Heathrow and Los Angeles. -- British Airways' frequent flyer programme, the Executive Club rewards frequent travellers with - BA Miles that can be used for free flights and upgrades. The 100 million investment in Club World includes: -- More comfortable six feet long fully-flat bed that is 25% wider than the original flat bed. -- A new 'z' bed position that extends to six foot six inches and allows the body to assume a position similar to that in zero gravity, ideal for watching movies. -- Electronically operated privacy screens using an innovative opaque material, Lumisty. -- A laptop locker where customers can stow electronic items, a small bag and shoes. -- Standard 110v US style in-seat power socket that only needs a U.K./U.S.A. adaptor. -- An enhanced in-flight entertainment system that allows customers to pause, stop, fast-forward or rewind up to 100 films and TV programmes, and play games on larger 10-inch digital screens. -- An onboard Club Kitchen where customers can enjoy hot and cold snacks in between meals. About MAXjet Airways Dulles, Virginia-based MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl & Jones LLP represents the Debtor in its restructuring efforts. The Debtor listed assets between $10 million and $50 million and debts between $50 million to $100 million when it filed for bankrutpcy. About British Airways Headquartered in West Drayton, United Kingdom, British Airways plc -- http://www.ba.com/-- and -- http://www.britishairways.com/ -- operates international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The company also operates a worldwide air cargo business with its scheduled passenger services. The company operates international scheduled airline route networks, comprising some 147 destinations in 75 countries at March 31, 2007. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. British Airways has operations in the United States. * * * British Airways plc carries Ba1 senior unsecured debt rating placed by Moody's Investors' Service on Aug. 14, 2007. The outlook is stable. CITIZENS COMMS: Earns $47.4 Million in 2007 Third Quarter --------------------------------------------------------- Citizens Communications Co. reported net income of $47.4 million for the third quarter ended Sept. 30, 2007, compared with net income of $128.5 million in the same period last year. Third quarter 2007 results include a charge of approximately $12.1 million for severance and early retirement costs primarily related to ongoing initiatives to enhance customer service, streamline operations and reduce costs. This compares to severance and early retirement costs in the third quarter of 2006 of approximately $500,000. Revenue for the third quarter of 2007 was $575.8 million, as compared to $507.2 million in the third quarter of 2006, a 13.5% increase. The third quarter 2007 increase of $68.6 million is primarily a result of $80.5 million of revenues related to the operations of Commonwealth Telephone Enterprises, which was acquired on March 8, 2007, and a $13.1 million increase in data and internet services revenue, offset by declines in Federal and state subsidies and lower local services revenues resulting from reduced access lines. "We delivered another quarter of strong financial results," said Maggie Wilderotter, chairman and chief executive officer of Citizens. "Continued customer product revenue growth along with disciplined expense control, realized synergies on our Commonwealth acquisition and other expense reduction initiatives generated a 52.8% operating cash flow margin. Excluding the $12.1 million severance and early retirement costs, our third quarter operating cash flow margin for the quarter would have been 54.9%. "Our penetration levels increased on all bundled products. Our residential high speed penetration is 30.0% and high speed revenues continue to be over $40.00 per customer per month. Our wireless data initiative is now operating in nine municipalities, four colleges and universities and over 20 hot spots in our territory. We are also excited about our recently closed acquisition of Global Valley and remain confident in delivering on our results for the remainder of the year." Other operating expenses for the third quarter of 2007 were $215.3 million, as compared to $186.7 million in the third quarter of 2006, a 15.3% increase. The third quarter 2007 increase of $28.6 million is primarily a result of $23.8 million in other operating expenses related to the operations of Commonwealth Telephone Enterprises and the incremental charge for severance and early retirement costs, offset by lower compensation and benefit costs resulting from reduced number of employees and improved expense controls. Depreciation and amortization expense for the third quarter of 2007 was $138.1 million, as compared to $117.0 million in the third quarter of 2006, an 18.0% increase. Depreciation and amortization expense for the third quarter of 2007, excluding the impact of the acquisition, decreased $5.8 million or 5.0% as compared to the third quarter of 2006. The decrease is primarily due to a declining net asset base. The company added approximately 17,900 high-speed internet customers during the third quarter of 2007 and had more than 497,200 high-speed internet customers at Sept. 30, 2007. The company added approximately 5,400 video customers during the third quarter of 2007 and had more than 86,400 video customers at Sept. 30, 2007. Operating income for the third quarter of 2007 was $165.9 million and operating income margin was 28.8%, as compared to operating income of $160.7 million and operating income margin of 31.7% in the third quarter of 2006. The third quarter 2007 increase of $5.2 million is primarily a result of $18.9 million related to the operations of Commonwealth Telephone Enterprises and $5.8 million from a reduction in depreciation and amortization, offset by the incremental charge for severance and early retirement costs. Third quarter 2007 income from continuing operations was $47.4 million as compared to third quarter 2006 income from continuing operations of $51.3 million. Free cash flow was $118.9 million for the third quarter of 2007 and $422.7 million for the first nine months of 2007. During the third quarter, the company repurchased 10,472,000 shares of its common stock for $148.4 million. The company completed its $250.0 million authorized stock repurchase program in mid-October 2007. In addition, during the third quarter, the company redeemed $30.4 million principal amount of its industrial development revenue bonds. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $7.34 billion in total assets, $6.29 billion in total liabilities, and $1.05 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?26d7 About Citizens Communications Based in Stamford, Conn., Citizens Communications Company (NYSE: CZN) -- http://www.czn.com/-- operates under the brand name of Frontier and offers telephone, television and internet services in 24 states with approximately 6,100 employees. * * * As reported in the Troubled Company Reporter on Sept. 19, 2007, Fitch Ratings affirmed Citizens Communications Company's Issuer Default Rating at 'BB'. CHENIERE ENERGY: Sept. 30 Balance Sheet Upside-Down by $266.4 Mil. ------------------------------------------------------------------ Cheniere Energy Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $3.02 billion in total assets, $2.99 billion in total liabilities, and $293.5 milion in minority interest, resulting in a $266.4 million total stockholders' deficit. The company reported a net loss of $53.5 million on net revenues of $394,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $33.1 million on net revenues of $737,000 during the corresponding period in 2006. Year to date through Sept. 30, 2007, Cheniere reported a loss of $129.1 million on net revenues of $9,000 compared to a net loss of $52.5 million on net revenues of $1.6 million for the comparable period in 2006. The company reported that the construction of the Sabine Pass LNG receiving terminal and Creole Trail pipeline remains on schedule and on budget. The company expects to commence operations on the Sabine Pass terminal in the second quarter of 2008 with initial send out capacity of 2.6 Bcf/d and storage capacity of 10.1 Bcf. Construction is also underway to expand the terminal to a total send out capacity of 4.0 Bcf/d and storage capacity of 16.8 Bcf by second quarter 2009. Commencement of operations of the 2.0 Bcf/d Creole Trail pipeline is expected to coincide with the initial start up of the terminal. Results for the quarter and nine months ended Sept. 30, 2007, were primarily impacted by costs associated with the development of the infrastructure as well as the continued development of the organization in preparation for operations. The primary reasons for the $20.4 million increase in the net loss between corresponding quarters in 2006 and 2007 included the following: -- general and administrative expenses increasing by $22.9 million principally related to personnel costs necessary for the expansion of Cheniere's business -- LNG terminal and pipeline development expenses increasing by $7.1 million due to the hiring of employees who will ultimately be operating and maintaining the Sabine Pass LNG receiving terminal and the Creole Trail pipeline and -- an increase in interest expense of $17.1 million primarily related to the Sabine Pass LNG L.P. senior notes. These increases were partially offset by increased interest income of $9.9 million and by the effect in 2006 of a $15.1 million income tax provision. Unrestricted Cash and Cash Equivalents At Sept. 30, 2007, Cheniere had unrestricted cash and cash equivalents of $446.6 million compared to $463.0 million at Dec. 31, 2006. The primary sources of cash and cash equivalents during the first nine months of 2007 were the receipt of $203.9 million in net proceeds from the sale of Cheniere Energy Partners L.P. common units to the public and receipt of $391.7 million in net proceeds from a $400.0 million term loan in May 2007. The primary use of the proceeds from the term loan was to purchase 9,175,595 shares of the company's common stock at a cost of $325.0 million, as previously disclosed. Another significant use of cash was for the construction of the Creole Trail pipeline, with costs incurred through Sept. 30, 2007, of $310.6 million. Estimated costs of the Creole Trail pipeline, before financing costs, are approximately $500.0 to $550.0 million. Restricted Cash, Cash Equivalents and Treasury Securities At Sept. 30, 2007, Cheniere held restricted cash, cash equivalents and treasury securities totaling $930.5 million which was comprised of $513.6 million dedicated to the completion of the construction of the Sabine Pass LNG receiving terminal including the expansion to 4 billion cubic feet per day of throughput capacity, $284.7 million reserved for interest payments on the Sabine Pass LNG L.P. senior notes and $86.7 million as a reserve for distributions to Cheniere Partners' common unit holders. Estimated costs, before financing costs, for the Sabine Pass terminal are $1.4 to $1.5 billion. Costs incurred through September 30, 2007 were $941.9 million. 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?26de About Cheniere Energy Based in Houston, Texas, Cheniere Energy Inc. (AMEX: LNG) -- http://www.cheniere.com/-- is developing a network of three LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States. Cheniere is pursuing related business opportunities both upstream and downstream of the terminals. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal. * * * As of Jan. 8, 2008, the company holds Standard & Poor's "B" long- term foreign and local issuer credit ratings. The outlook is stable. CHRYSLER LLC: 2007 Int'l Markets Sales Up 8% at 599,618 Units ------------------------------------------------------------- Chrysler LLC posted sales of 599,618 units in 2007 for markets outside the U.S., an 8% increase versus 2006. In Canada, 232,859 units were sold, a 6% increase while in Mexico, there was an increase of 0.1%, with 128,541 units sold. "On behalf of our leadership team, I would like to extend my thanks and appreciation to Chrysler's global network for a strong 2007," Bob Nardelli, Chrysler chairman and CEO disclosed. "This global performance is a great demonstration of what can be done when all of our employees, dealers, distributors and suppliers are fully aligned and focused on meeting the needs of our customers and being competitive in the industry. As we continue to grow globally, it's our proud heritage that will continue to differentiate Chrysler in global markets and resonate with customers worldwide," Mr. Nardelli added. With the segment that it created, Chrysler LLC remains the minivan leader with Dodge Grand Caravan holding the number one position in the United States with 176,041 units sold in 2007 and ranking second in global sales with 232,000 units sold. With 30,937 units sold outside North America, Dodge Caliber was the highest sales volume vehicle for the company. "We are fortunate that in a tough industry, customers in the United States, Canada, Mexico and around the world have responded favorably to our Chrysler, Jeepr and more recently, Dodge brands," Jim Press, Chrysler's vice chairman and president, said. "This is a revitalized organization, moving in the right direction, with a renewed emphasis on putting the global customer first at every step in the process-anxious to serve, proud of the value and quality of our products. I am pleased to say that our global results are beginning to show this." Sales increases in select markets were driven by the worldwide appeal and strong customer interest in Chrysler's new vehicles, including the Jeep Wrangler, Jeep Compass and Jeep Patriot. Worldwide sales were down less than one percent during 2007 to 2,676,268 units versus 2,698,429 units in 2006. Chrysler International Markets Spurred by demand for new Chrysler, Jeep and Dodge products, Chrysler achieved record sales outside North America in 2007, outselling any previous year in the company's history. Year-to- date sales increased 15% to 238,218 units from 2006 results of 206,925 units. The highest volume markets outside North America were: Italy (21,361 units); Venezuela (19,459 units); and the United Kingdom (18,623 units). Chrysler Canada Chrysler Canada sales rose 6% to 232,859 units in 2007 compared with 220,553 units sold in 2006, securing the automaker's position as the No. 2 seller of cars and trucks in Canada. Furthermore, with the introduction of nine new models in 2007, Chrysler Canada's sales growth has exceeded that of the Canadian market by gaining more new customers than any other OEM. Chrysler Mexico Posting its best sales year since 2001, Chrysler Mexico sales rose slightly (0.1%) to 128,541 units during 2007. Chrysler Mexico sales and market share have been consistently increasing in a competitive market; this growth has been made possible by the complete product lineup offered by the Chrysler, Dodge and Jeep brands in the Mexican automotive market. Chrysler U.S. Market In the United States, Chrysler LLC sold 2,076,650 units in 2007, a decrease of 3% from the 2,142,505 units in 2006. Chrysler LLC continues to invest in new product, including new fuel-efficient powertrains. For 2008, the Company will offer six vehicles with 28 miles per gallon or better highway fuel economy including Jeep Compass, Jeep Patriot, Dodge Avenger, Dodge Caliber, Chrysler Sebring Sedan and Chrysler Sebring Convertible. This combined with the best-in-industry Lifetime Powertrain Warranty on Chrysler, Jeep, and Dodge vehicles is bringing more customers to showrooms. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. CLAYMONT STEEL: Waiting Period on Evraz Group's Offer Expires ------------------------------------------------------------- Claymont Steel Holdings Inc. disclosed that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 relating to Evraz Group S.A.'s tender offer, through its subsidiary Titan Acquisition Sub Inc., to purchase all of its outstanding shares of common stock has expired. As reported in the Troubled Company Reporter on Dec. 14, 2007, Claymont Steel has entered into a definitive agreement with Evraz Group S.A. and Titan Acquisition, under which Evraz will acquire Claymont Steel for $23.50 per share, for an aggregate price of approximately $564.8 million, including debt and net of cash. Under the terms of the agreement, Titan will make a cash tender offer for all shares of Claymont Steel common stock and then merge with Claymont Steel. The board of directors of Claymont Steel has unanimously recommended that the shareholders of Claymont Steel accept the offer. The tender offer will expire at 12:00 midnight, New York City time, on Jan. 16, 2008, unless extended in accordance with the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission. The offer remains subject to other customary conditions, including the acquisition by Evraz of a majority of Claymont Steel's shares on a fully diluted basis. For further information, contact: Evraz Group S.A. Attn: Irina Kibina, Vice President Corporate Affairs and Investor Relations Tel: +7 495 232 1370 IR@evraz.com Edelman, for Evraz: John Dillard / Chris Mittendorf Tel: +1 212 704 8174/8134 About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. About Claymont Steel Headquartered in Claymont, Delaware, Claymont Steel Inc. -- http://www.claymontsteel.com/-- fka CitiSteel USA Inc., mills carbon steel plate. It services all major plate markets including service centers, bridge fabricators, railcar manufacturers, heavy construction machinery and material handling equipment, mining equipment, storage tanks, pressure vessel, and shipbuilding. It produces somewhere near 400,000 tons per year. The company sells its products to clients in Canada and the US. Previously a subsidiary of CITIC Group, Claymont Steel (as CitiSteel USA) was acquired by H.I.G. Capital, a private equity and venture capital investment firm in 2005. H.I.G. formed Claymont Steel Holdings in 2006 with the intent to take the company public. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Moody's Investors Service placed all of its ratings, including its 'B' corporate credit rating, on Claymont Steel Inc. on CreditWatch with positive implications following the announcement that Evraz Group S.A., through its wholly owned subsidiary Titan Acquisition Sub, Inc., has entered into a definitive agreement under which Evraz will acquire Claymont Steel for $23.50 per share, for an aggregate purchase price of approximately $565 million, including debt. If Claymont's debt is retired as a result of the transaction, its ratings will be withdrawn. COMPASS DIVERSIFIED: Completes Acquisition of Fox Factory --------------------------------------------------------- Compass Diversified Holdings, Compass Group Diversified Holdings LLC and its subsidiaries simultaneously entered into a definitive agreement to acquire and consummated the acquisition of Fox Factory Inc. Under the terms of the transaction, CODI's acquisition of Fox is based on a total enterprise value of $85 million, representing approximately 7.5 times Fox's estimated Earnings Before Interest, Taxes, Depreciation and Amortization for 2007, before taking into account the positive cash flow impact of the tax asset step-up pursuant to which CODI will be acquiring Fox. Fox management will invest in the transaction alongside CODI resulting in an initial minority ownership of approximately 24%. "Fox is a strong addition to our current group of subsidiaries," I. Joseph Massoud, CODI's CEO, said. "This company possesses the critical characteristics we look for in all of our businesses, including market leadership in a niche industry, strong cash flow and proven management. The Fox brand name is highly recognized and well respected globally in its industry, and Fox's products reflect the company's culture of continual design innovation and superior performance." "Robert Fox and the company's senior management team, who will continue to manage the business under our ownership, have driven growth by providing innovative suspension products for over three decades and we look forward to working with them to continue and accelerate this growth," Mr. Massoud added. "Upon closing, this acquisition will be accretive to our shareholders and increase our cash flow available for distribution," Mr. Massoud concluded. "Our ability to consummate this transaction was facilitated to a great extent by our financing structure, under which we will fund this acquisition through excess cash on hand and our newly expanded credit facility at the CODI level." Upon acquisition, CODI works with the executive teams of its subsidiary companies to identify and capitalize on opportunities to grow those companies' earnings and cash flows. These cash flows support distributions to CODI shareholders, which are intended to be steady and growing over the long term. About Fox Factory Inc. Headquartered in Watsonville, California, Fox Factory Inc. is a designer, manufacturer and marketer of high end suspension products for mountain bikes, all terrain vehicles, snowmobiles and other off-road vehicles. Founded in 1974, Fox both acts as supplier to action sport original equipment manufacturers and provider of aftermarket products to retailers and distributors. About Compass Diversified Holdings Headquartered in Westport, Connecticut, Compass Diversified Holdings - http://www.compassdiversifiedholdings.com/-- (Nasdaq GS: CODI) is a Delaware statutory trust that was formed on Nov. 18, 2005, to acquire and manage a group of middle market businesses that are headquartered in North America. CODI provides public investors with an opportunity to participate in the ownership and growth of companies which have historically been owned by private equity firms, wealthy individuals or families. Compass Group Diversified Holdings LLC, a Delaware limited liability company, was also formed on Nov. 18, 2005. In accordance with the Trust Agreement, Compass Diversified Holdings is the sole owner of 100% of the trust's Interests of Compass Group Diversified Holdings LLC. Compass Group Diversified Holdings LLC is the operating entity with a board of directors and other corporate governance responsibilities, similar to that of a Delaware corporation. Compass Diversified Holdings is managed by Compass Group Management LLC, which was established in 1998 as a private equity manager for an offshore philanthropic foundation established by J. Torben Karlshoej, the late founder of Teekay Shipping Corporation. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Compass Group Diversified Holdings LLC. The outlook is stable. At the same time, S&P assigned bank loan and recovery ratings to Compass's $200 million first-lien term loan due 2013. The loan is rated 'BB-' with a recovery rating of '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. COUNTRYWIDE FINANCIAL: Denies Rumors of Looming Bankruptcy Filing ----------------------------------------------------------------- Countrywide Financial Corp. denied speculations that it might seek bankruptcy protection after its shares dropped 28% to close at $5.59, reports say. "There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company," Countrywide said in a statement cited by Reuters. Separately, Countrywide is said to have fabricated documents related to a Chapter 13 bankruptcy case filed by Sharon Diane Hill in Monroeville, Pa., Gretchen Morgenson of The New York Times relates, citing court records. The documents, NY Times says, are letters from Countrywide addressed to Ms. Hill, claiming that she (as a homeowner) owed the company $4,700 because of discrepancies in escrow deductions. Countrywide argued that the letters are "recreated," prompting federal bankruptcy judge overseeing the case, Thomas P. Agresti, to call for a discovery in the case. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. November last year, Countrywide modified its funding structure by reducing its reliance on the public debt and non-agency secondary mortgage markets after credit rating agencies downgraded the company's debt ratings due to current market conditions and constrained liquidity. The company also disclosed that its mortgage loan fundings for the month of October 2007 totaled $22 billion, a 48% decline from October 2006. For the third quarter ended Sept. 30, 2007, Countrywide reported a net loss of $1.2 billion, compared to net income of $648 million for the third quarter of 2006. Countrywide said it will report its 2007 Fourth Quarter and Year- End Earnings on Jan. 29, 2008. CREDIT SUISSE: Fitch Downgrades Ratings on Four Classes to 'B' -------------------------------------------------------------- Fitch Ratings has taken these rating actions on Credit Suisse First Boston Home Equity Asset Trust 2007-3. Affirmations total $171.3 million and downgrades total $330.3 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: CSFB HEAT 2007-3 -- $201.3 million class 1-A-1 downgraded to 'AA-' from 'AAA' (BL: 37.66, LCR: 1.98); -- $104.7 million class 2-A-1 affirmed at 'AAA' (BL: 58.77, LCR: 3.09); -- $30.9 million class 2-A-2 affirmed at 'AAA' (BL: 46.93, LCR: 2.47); -- $35.6 million class 2-A-3 affirmed at 'AAA' (BL: 42.51, LCR: 2.24); -- $14.7 million class 2-A-4 downgraded to 'AA-' from 'AAA' (BL: 37.85, LCR: 1.99); -- $22.5 million class M-1 downgraded to 'AA-' from 'AA+' (BL: 33.44, LCR: 1.76); -- $20.6 million class M-2 downgraded to 'A' from 'AA+' (BL: 29.52, LCR: 1.55); -- $11.8 million class M-3 downgraded to 'A-' from 'AA' (BL: 27.21, LCR: 1.43); -- $10.7 million class M-4 downgraded to 'BBB+' from 'AA' (BL: 25.06, LCR: 1.32); -- $9.9 million class M-5 downgraded to 'BBB' from 'AA-' (BL: 23.04, LCR: 1.21); -- $9.3 million class M-6 downgraded to 'BBB-' from 'A+' (BL: 21.08, LCR: 1.11); -- $8.8 million class M-7 downgraded to 'BB' from 'A' (BL: 19.01, LCR: 1.00); -- $6.8 million class M-8 downgraded to 'B' from 'A-' (BL: 17.43, LCR: 0.92); -- $7.7 million class M-9 downgraded to 'B' from 'BBB+' (BL: 15.77, LCR: 0.83); -- $5.7 million class B-1 downgraded to 'B' from 'BBB' (BL: 14.81, LCR: 0.78); Deal Summary -- Originators: Various; -- 60+ day Delinquency: 9.84%; -- Realized Losses to date (% of Original Balance): 0.01%; -- Expected Remaining Losses (% of Current Balance): 19.02%; -- Cumulative Expected Losses (% of Original Balance): 18.14%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. CREDIT SUISSE: Moody's Holds Ba1 Rating on $18.6 Mil. Certs. ------------------------------------------------------------ Moody's Investors Service upgraded these ratings of two classes and affirmed these ratings of two classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-TFL2: -- Class J, $5,604,463, Floating, upgraded to Aaa from A3 -- Class A-X-1, Notional, affirmed at Aaa -- Class K, $14,500,000, Floating, upgraded to Aa3 from Baa2 -- Class L, $18,600,000, Floating, affirmed at Ba1 As of the Dec. 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 95.9% to $38.7 million from $948.1 million at securitization as a result of the payoff of fourteen loans initially in the pool. There is one adjustable rate loan remaining, the senior participation interest in the Castleton Office Park Portfolio Loan ($38.7 million), a 1.0 million square foot office park comprised of 33 separate buildings located in Castleton, Indiana. Since securitization, two buildings containing 78,219 square feet and with a weighted average occupancy rate of 68.3%, were released from the mortgage lien. Release premiums equaled 115% of the allocated loan balance. The loan matured in July, 2007 at which time the borrower exercised the first of three one-year extension options. The loan sponsor is Brookfield Asset Management, Inc. (Moody's senior unsecured rating Baa2, stable outlook). Portfolio occupancy, as of October 2007, was 82.5%, compared to 77.9% at securitization. Moody's loan to value ratio is 72.2%, compared to 66.1% at securitization. Moody's current shadow rating is Ba1, compared to Baa3 at securitization. Moody's is upgrading Classes J and K due to improved credit support resulting from loan payoffs. CRII LLC: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------- Debtor: C.R.I.I., L.L.C. P.O. Box 10940 Glendale, AZ 85318 Bankruptcy Case No.: 08-00135 Chapter 11 Petition Date: January 7, 2008 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Allan D. Newdelman, Esq. 80 East Columbus Avenue Phoenix, AZ 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 Total Assets: $25,000,081 Total Debts: $19,052,507 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lissberger Enterprises Loan $6,130,000 P.O. Box 1423 Santa Rosa, CA 95402 Markham Contracting Trade Debt $1,000,000 22820 North 19th Avenue Phoenix, AZ 85027-1312 Allen D. Jenkins & Associates Loan $150,000 5417 West Ironwood Drive Glendale, AZ 85302 Ronald McClure Loan $150,000 2155 West Williams Drive Phoenix, AZ 85027 Aatro Civil Engineering & Trade Debt $15,507 Development, Inc. Yavapai County Treasurer's Property Taxes and $7,000 Office Assessments Guaranty Title Agency Contingent Claim Unknown D&E COMMS: Earns $3.7 Million in Third Quarter Ended Sept. 30 ------------------------------------------------------------- D&E Communications, Inc. disclosed results of its operations for the third quarter ended Sept. 30, 2007. For the third quarter of 2007, the company reported net income of $3.7 million, compared to a net income of $731,000 for the same period in 2006. D&E disclosed total operating revenues of $38.2 million for the third quarter of 2007, compared to $40.6 million in the third quarter of 2006. Operating income for the third quarter of 2007 was $8.5 million compared to operating income of $6.2 million in the third quarter of 2006. The third quarter 2007 results were affected by a decrease in depreciation expense in the Wireline segment of $1.8 million primarily due to revisions in the estimated useful lives of certain fixed assets to update composite depreciation rates for regulated telephone property and certain fixed assets becoming fully depreciated in June 2007. The third quarter 2006 results were affected by the loss on early extinguishment of debt of $1.1 million and a loss from discontinued operations of $900,000. Net income before these items was $2.6 million for the third quarter of 2007, compared to $2.2 million for the third quarter of 2006. The revenue decrease of $2.4 million was primarily the result of a decline in directory revenue of $3.2 million, due to the terms of a directory contract which became effective in the fourth quarter of 2006 and which covers three of the four directories that D&E publish. Directory expenses decreased $3.0 million as a result of this contract, under which the responsibility for publication and distribution of the directory and the related financial risks became the responsibility of the publisher. As a result, its directory revenue, as the new directories that are covered by this contract are published, will only be the annual fee paid to the company for access to D&E's customers. Net income for the nine months ended Sept. 30, 2007 was $8.7 million, as compared to $3.3 million for the same period in 2006. For the nine months ended Sept. 30, 2007, the company reported total operating revenue of $113.8 million, compared to $122.3 million in the same period last year. Included in the 2007 results were a gain of $0.6 million from life insurance proceeds and a decrease in depreciation expense in the Wireline segment of $1.8 million. Included in the 2006 results were a loss on early extinguishment of debt of $1.1 million, a customer relationships intangible asset impairment loss recognized in continuing operations of $1.9 million and a loss from discontinued operations of $1.2 million. Net income before these items was $6.9 million for the nine months ended Sept. 30, 2007, compared to $6.2 million for the nine months ended Sept. 30, 2006. "I am pleased with the progress that we are making in growing our broadband connections, the number of subscribers in our CLEC markets and in the improving financial performance of our Systems Integration segment," James W. Morozzi, President and CEO of D&E Communications, said. "During the third quarter, we increased the number of DSL/High-speed Internet subscribers by 2,704. We also increased the percentage of CLEC customers that are serviced entirely on our own network to 33.2%. We were able to reduce the Systems Integration operating loss by 50% during this quarter compared to the third quarter of last year. By continuing to focus on these objectives and by controlling our operating expenses, we have been able to improve our financial performance." At Sept. 30, 2007, the company's balance sheet total assets of $502.6 million and total liabilities of $314.1 million, resulting in a stockholders' of equity of $188.4 million. Equity, at Dec. 31, 2006, was $185.5 million. About D&E Communications Based in Lancaster County, Pennsylvania, D&E Communications Inc. (NASDAQ: DECC) -- http://www.decommunications.com/-- is an integrated communications provider offering high-speed data, Internet access, local and long distance telephone, voice and data networking, network management and security, and video services. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised the outlook on Ephrata, Pennsylvania-based D&E Communications Inc. to stable from negative, and affirmed its ratings, including the 'BB-' corporate credit rating. Total debt as of Sept. 30, 2007, was about $200 million. D&E COMMS: Changes in Capital Structure Cues Moody's Rating Cut --------------------------------------------------------------- Moody's Investors Service has affirmed D&E Communications Inc.'s Ba3 corporate family rating and upgraded the Company's speculative grade liquidity rating to SGL-2, from SGL-3. As part of the rating action, Moody's downgraded D&E's senior secured credit facilities to Ba3, from Ba2, reflecting changes in the capital structure since the last rating action in September 2006. The outlook is stable. Moody's has taken these rating actions: Issuer: D&E Communications, Inc. -- Corporate Family Rating: Affirmed Ba3 -- Probability of Default Rating: Affirmed, B1 -- Senior Secured R/C Due 2011: Downgraded to Ba3, LGD2, 29%, from Ba2 -- Senior Secured TL A Due 2011: Downgraded to Ba3, LGD2, 29%, from Ba2 -- Senior Secured TL B Due 2011: Downgraded to Ba3, LGD2, 29%, from Ba2 -- Speculative Grade Liquidity Rating: Upgraded to SGL-2, from SGL-3 -- Outlook: Stable D&E' Ba3 corporate family rating reflects its high financial risk and the expected downward pressure on the Company's core wireline revenue and cash flow growth in the future due to increasing competition. The rating incorporates the Company's lack of scale and its modest free cash flow generation as a result of dividend payments and relatively high capital expenditures. The rating is supported by D&E's low leverage (debt-to-EBITDA) relative to its peers and the Company's good plant with very high DSL addressability. Moody's upgraded D&E's liquidity rating to SGL-2, reflecting the Company's "good" liquidity, consisting of $11 million of cash on hand, $25 million revolving credit facility that was undrawn as of 9/30/2007, and modest free cash flow of about $5 million for the LTM 3Q 2008 period. D&E's SGL-2 liquidity rating benefits from its modest yet stable free cash flow generation and the absence of any material near-term debt maturities. In accordance with its Loss Given Default Methodology, Moody's downgraded D&E's senior secured credit facilities including a revolver, Term Loan A and Term Loan B, all to Ba3, from Ba2, reflecting changes in the Company's capital structure. The downgrades primarily reflect reduced junior capital cushion due to lower unfunded pension obligations, which Moody's considers senior unsecured obligations of the Company in the event of a potential default. D&E, based in Ephrata, Pennsylvania, provides wireline telecommunications services to customers in central and eastern Pennsylvania through its Rural Local Exchange Carrier operations and also operates as a Competitive Local Exchange Carrier in "edge-out" territories. The Company generated $154 million in revenue in the LTM 3Q 2007 period and as of 3Q 2007, it had nearly 172,000 access lines in service. DANA HOLDING: Moody's Attaches Prospective Low-B Ratings -------------------------------------------------------- Moody's Investors Service assigned prospective ratings to the reorganized Dana Holding Corporation -- Corporate Family, (P)B1; Probability of Default rating, (P)B1; senior secured credit facilities, (P)Ba3, and Speculative Grade Liquidity Rating, SGL-2. The outlook is stable. In assigning prospective ratings, Moody's notes that Dana continues to pursue a planned emergence from Chapter 11 protection during January 2008, but that the effectiveness of the new debt facilities remains subject to final court approval. Absent any significant changes in the company's reorganization plan or capital structure, Moody's will confirm the ratings and remove the prospective designation upon completion of the emergence from bankruptcy. The (P)B1 Corporate Family rating reflects expectations that Dana will emerge from bankruptcy protection with a moderately leveraged capital structure that will be more readily serviced with the earnings and cash flows generated by its restructured operations. During the reorganization process Dana negotiated long term customer pricing increases that will eliminate significant losses that the company had been incurring on portions of its business. At the same time, the company was able to achieve important labor and wage savings, including the elimination of post retirement benefits, the freezing of pensions, and other labor contract savings that will make the company more cost competitive going forward. The company has also begun to implement manufacturing footprint improvements utilizing lower cost production facilities; and other SG&A cost reductions that should enhance overall margins beginning in 2008. However, the full effect of some of these initiatives will only be achieved with the passage of time. Given the weakening economic outlook, Moody's believes that Dana's automotive and heavy duty truck end markets will remain under significant pressure during 2008, which could constrain the company's ability to fully achieve anticipated operating improvements. Nevertheless, Moody's believes that Dana should sustain strong single digit EBITDAR margins and debt service metrics that are consistent with the B1 rating. Dana has entered into an agreement with Centerbridge Partners, L.P. and certain of Dana Corporation's existing bondholders (the Preferred Equity Investors), whereby the Preferred Equity Investors would provide an investment of $790 million of preferred equity to the reorganized Dana. The Exit Facilities combined with the preferred equity investment and certain cash on hand will be used to repay Dana's existing debtor-in-possession facilities, make one-time contributions to union and non-union "voluntary employee benefit associations", retire remaining Dana Credit Corporation liabilities, and pay transaction related fees, expenses, settlements and convenience class claims. The company expects to emerge from Chapter 11 on or about Jan. 31, 2008. The stable outlook reflects the adequacy of Dana's credit metrics within the assigned ratings combined with the expected good level of liquidity over the near term. The company's diverse platform mix and broad geographic revenue base should help to mitigate production pressures in North America. EBIT/interest coverage is expected to approximate 2.2x and debt/EBITDA would approximate 3.2x at year-end 2008. In addition, Dana is expected to be free cash flow positive in 2008 after restructuring expenses and dividends. Dana is expected to have good liquidity upon emergence with satisfactory borrowing base availability under its new $650 million asset based revolving credit facility, after about $200 million of letters of credit. Cash balances of approximately $900 million - $1 billion should be more than sufficient to absorb negative quarterly cash flow swings. Dana is expected to be free cash flow positive for 2008. Covenants under the term loan are expected to be set with sufficient cushions over the near-term. Alternative liquidity is limited as all of the company's domestic assets and 66% of the non-domestic subsidiaries secure the revolving credit and term-loan. Assigned Ratings: -- (P)B1, Corporate Family Rating; -- (P)B1, Probability of Default Rating; -- (P)Ba3 (LGD3, 35%) rating for the $650 million senior secured asset based revolving credit facility; -- (P)Ba3 (LGD3, 35%) rating for the $1.350 billion senior secured term loan; -- Speculative Grade Liquidity Rating, SGL-2. Future events that have potential to drive Dana's outlook or ratings higher include operating performance improvements that result in EBIT/Interest coverage sustained at 2.2x, or in leverage being reduced to 3.0x. Future events that have potential to drive Dana outlook or ratings lower include production volume declines at the company's OEM customers, material increases in raw materials costs that cannot be passed on to customers or mitigated by restructuring efforts, or deteriorating liquidity. Consideration for a lower outlook or rating could arise if any combination of these factors were to increase leverage over 5.0x, or result in EBIT/Interest coverage below 1.8x times. Dana is a world leader in the supply of axles; driveshafts; and structural, sealing, and thermal management products; as well as replacement parts. The company's customer base includes virtually every major vehicle manufacturer in the global automotive, commercial vehicle, and off-highway markets, which collectively produce more than 65 million vehicles annually. The company employs approximately 35,000 people in 26 countries. Dana filed for Chapter 11 in March 2006 as a result of a combination of factors, including the market share decline of the company's largest customers, pricing pressures, high unrecovered commodity and energy cost, and tightening trade credit. DANA HOLDING: S&P Expects Negative Outlook After Chapter 11 Exit ---------------------------------------------------------------- Standard & Poor's Ratings Services expects to assign its 'BB-' corporate credit rating to Toledo, Ohio-based Dana Holding Corp. when the company emerges from Chapter 11, which is expected to occur before Feb. 28, 2008. S&P expects to assign a negative outlook. "The expected ratings are based on the exit financing, capital structure, and other terms and conditions proposed under Dana's plan of reorganization filed with the bankruptcy court and are subject to the company's substantially consummating the plan at emergence," said Standard & Poor's credit analyst Nancy C. Messer. "Any material changes in the final plan of reorganization or significant delays in the emergence process could result in different ratings." At the time of exit, Standard & Poor's expects to assign Dana's proposed $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high (90%-100%) recovery in the event of a payment default. In addition, S&P expects to assign a 'BB' bank loan rating to Dana's proposed $1.35 billion senior secured term loan (one notch above the corporate credit rating) with a recovery rating of '2', indicating an expectation of average (70%-90%) recovery. S&P's expected ratings are based on preliminary terms and conditions. The expected bank loan ratings assume that other conditions precedent to the bank facility becoming effective are satisfied or waived; the ratings are subject to review once final documentation is received. In addition, the ratings assume successful placement and/or syndication of the loans as represented to us. Any changes to the loans during the marketing period may result in different ratings. The $2 billion secured financing is conditional on Dana's emergence from bankruptcy by Feb. 28, 2008. DAVID MONTGOMERY: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: David Mason Montgomery 3822 Azure Lane Addison, TX 75001 Bankruptcy Case No.: 07-36436 Chapter 11 Petition Date: December 31, 2007 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Rakhee V. Patel, Esq. Pronske & Patel, P.C. 1700 Pacific Avenue Suite 2260 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 13 Largest Unsecured Creditors: Entity