T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 10, 2008, Vol. 12, No. 8 Headlines ABN AMRO: Fitch Junks Rating on 2003-12 Class B-4 Certificates ACANDS INC: Judge Fitzgerald Approves Amended Disclosure Statement ACANDS INC: Amended Plan Confirmation Hearing Set on April 21 ACTIVBIOTICS INC: Bidding for Assets to End on February 1 ALERIS INT'L: To Phase Out Toronto Coil Coating Facility ALL AMERICAN: Creditors Committee Files Liquidating Plan ALLIANT TECHSYSTEMS: Taps Marchetto to Lead New Space Systems Biz ALLIANT TECHSYSTEMS: To Acquire MDA's Unit for CDN$1.325 Billion AMERICAN HOME: Court Okays Cutting DIP Commitment by $15 Million AMERICAN HOME: Limited Recourse Facility Up by $50 Million AMERICAN HOME: Gets OK to Set Servicing Business Sale Consummation AXIUM INTERNATIONAL: Shuts Down Offices Worldwide, Sources Say BEAR STEARNS: Moody's Junks 14 Tranches' Ratings on Delinquency BOSTON GENERATING: S&P Lowers Rating on $1.13 Billion Loan to B+ BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling BRADLEY RECKER: Voluntary Chapter 11 Case Summary BSI CORP: Case Summary & 20 Largest Unsecured Creditors BURKE TRUCKING: Case Summary & 12 Largest Unsecured Creditors CENTRAL ILLINOIS: Illinois AG Looking into Bankruptcy Filing CHC HELICOPTER: High Leverage Prompts Moody's to Change Outlook CINCINNATI BELL: Sept. 30 Balance Sheet Upside-Down by $671.2 Mil. CITIUS II: Moody's Junk Ratings on Two Note Classes CLASS V FUNDING: Moody's Cuts Rating on Preference Shares CONSOLIDATED HEALTH: Case Summary & 20 Largest Unsecured Creditors CONSTELLATION BRANDS: $700MM Notes Exchange Offer Expires Today CONSTELLATION BRANDS: Arm Buys 50% Stake in Planet 10 Project CONSTELLATION BRANDS: Earns $119.6 Mil. in 3rd Qtr. Ended Nov. 30 CONTINENTAL GLOBAL: Signs $270 Mil. Merger Deal with Joy Global CONTINENTAL GLOBAL: $270MM Deal Cues S&P's Positive CreditWatch COUNTRYWIDE FIN'L: Says December Total Loan Fundings Beat Forecast CUMMINS INC: Earns $184 Million in 2007 Third Quarter CW MINING: Involuntary Chapter 11 Case Summary DELPHINUS CDO: S&P Places Ratings Under Negative Watch DELTA FINANCIAL: GAIC Wants Stay Lifted to Cancel Surety Bonds DELTA FINANCIAL: Millers Sell 4,237,895 Shares in Private Deals DEUTSCHE BANK: Moody's Downgrades ratings on 62 Tranches DIRECT INSITE: Sept. 30 Balance Sheet Upside-Down by $1.6 Million DYADIC INTERNATIONAL: Unit Gets Default Notice from Emalfarb Trust EL PASO CORP: Earns $155 Million in 2007 Third Quarter ENTERGY GULF: S&P Maintains Rating on Preferred Stock at BB+ FAIRPOINT COMM: Urges Vermont Public Service Board to Okay Buy FEDDERS CORP: Runs Short of Sec. 363 Conditions, U.S. Trustee Says FEDERAL-MOGUL: Moody's Holds Low-B Ratings with Stable Outlook FINZER IMAGING: Case Summary & 13 Largest Unsecured Creditors FIRST MAGNUS: Panel Denies Snobbing Snell & Wilner Retention Issue FIRST MAGNUS: May Pursue Tucson Lot Sale; Pays Tax to Pima County FORD MOTOR: Focused Talks Spur Bidder Tata Motors' High Bond Risk G REIT INC: Discloses Intent to Form Liquidation Trust HARRAH'S ENTERTAINMENT: Prices Cash Tender Offer for Senior Notes HEALTHSOUTH CORP: Sept. 30 Balance Sheet Upside-Down by $1.5 Bil. HMSC CORP: S&P Changes Outlook to Negative and Retains B Rating HYPPCO FINANCE: Fitch Revises Recovery Rating on $11.2 Mil. Notes IAP WORLDWIDE: Likely Restructuring Cues S&P to Cut Ratings IMPAC SECURED: Moody's Lowers Ratings on 11 Tranches to Low-B KELLWOOD CO: Completes $162MM Sale of Smart Shirts Operations KRONOS ADVANCED: Lenders Extend Debt Maturity to February 29 KRONOS ADVANCED: Two Investors Elect Debt-for-Equity Swap LARRY CHAO: Case Summary & Two Largest Unsecured Creditors MICHAEL KIRKBRIDE: Case Summary & Five Largest Unsecured Creditors MIDDLE MOUNTAIN: Case Summary & Five Largest Unsecured Creditors MOVIE GALLERY: Wants Court Approval on Cure Procedures MOVIE GALLERY: Wants to Pursue Whitaker & Williams Litigations MOVIE GALLERY: Wants to Reject Boards Inc. License Agreement N-STAR REAL: Fitch Holds Low-B Ratings on Two Note Classes NASDAQ STOCK: S&P Upgrades Counterparty Credit Rating NATIONAL CITY: Moody's Puts B- Financial Strength Rating on Review NATIONWIDE HEALTH: Earns $57.7 Million in 2007 Third Quarter NATUROPATHIC LABORATORIES: Voluntary Chapter 11 Case Summary NORTH PARK: Wants to Use Bank Midwest's Cash Collateral ORANGE REGIONAL: Moody's Holds Ba1 Rating on $260 Million Bonds PACIFIC LUMBER: Panel Has Until Jan. 31 to File Competing Plan PACIFIC LUMBER: Withdraws Amended Chapter 11 Plan PACIFIC LUMBER: Wants Court Approval on MAXXAM Log Purchase Pact PAUL SHERIDAN: Case Summary & 17 Largest Unsecured Creditors PERRY ELLIS: To Acquire Liz Claiborne Brands for $37 Million PHARMANET DEV'T: Moody's Lifts $45 Mil. Facility's Rating to Ba3 PROPEX INC: Posts $60.7 Mil. Net Loss in Quarter Ended Sept. 30 QUECHAN TRIBE: Fitch Assigns 'BB' Rating on Gaming Revenue Bonds SHARPE LLC: Case Summary & Three Largest Unsecured Creditors SVI MEDIA: Court Okays Use of Secured Lenders' Cash Collateral SWEET TRADITIONS: Mulls Sale of 21 Krispy Kreme Stores to Allied TARPON INDUSTRIES: AMEX to Delist Securities on January 17 THOMAS BLICKHAHN: Case Summary & 20 Largest Unsecured Creditors TOPPS MEAT: Court Okays Sale of Assets for $1.25 Million US ENERGY: Files for Chapter 11 Bankruptcy Protection in New York US ENERGY: Case Summary & 40 Largest Unsecured Creditors WARNEX INC: Gets Waiver on Quarterly Capital Repayment from SIPAR WHEELING ISLAND: Note Redemption Cues Moody's Rating Withdrawal WHITEFORD BAPTIST: Case Summary & 19 Largest Unsecured Creditors * Andrew Curie Joins as Partner in Venable's Baltimore Office * Chadbourne & Parke Names Six Partners for US, Russia & London * Kroll Opens Grenada Office to Serve Eastern Caribbean Clients * M. Mann Joins Sheppard Mullin as Finance and Bankruptcy Partner * Proskauer Rose Outlines Litigation & Regulation Top Issues * Sallie Mae's Credit Quality Worsens as Risk Indicators Rise * Fitch Expects Continued Weakness in Mortgage and Housing Markets * Chapter 11 Cases with Assets & Liabilities Below $1,000,00 ********* ABN AMRO: Fitch Junks Rating on 2003-12 Class B-4 Certificates -------------------------------------------------------------- Fitch Ratings has taken rating actions on these ABN AMRO 2003-12 mortgage pass-through certificates: -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $142.09 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $844,306 in outstanding certificates. The pool factor is approximately 48%, and the transaction is 48 months seasoned. The cumulative losses are approximately 0.19%. The trust is secured by conventional, 30-year fixed-rate mortgage loans. All of the loans were originated by ABN AMRO Mortgage Group, Inc. Washington Mutual Mortgage Securities Corp. (rated 'RPS2+' by Fitch) acts as servicer. ACANDS INC: Judge Fitzgerald Approves Amended Disclosure Statement ------------------------------------------------------------------ Hononrable Judith K. Fitzgerald of the United States Bankruptcy Court for the District of Delaware approved the adequacy of ACandS Inc.'s Second Amended Disclosure Statement explaining its Second Amended Chapter 11 Plan of Reorganization dated Nov. 19, 2007. Overview of the Plan The Amended Plan provides for the issuance of injunctions under Section 524(g) of the Bankruptcy Code that result in channeling of certain asbestos-related liabilities of the Debtor into a trust. The Debtor says that its $449,000,000 insurance claim against Travelers Casualty and Surety Company is its most valuable asset. The Debtor also says that a Trust will be created which will (i) possess the status and features of a "qualified settlement fund" for the purposes of Section 468B of the IRC, (ii) assume the Debtor's liabilities with respect to all Asbestos Personal Injury Claims, and (iii) use Trust Assets and income to pay Asbestos Personal Injury Claims, as provided in the Plan and Trust Documents. The Trust will be funded with various assets, which includes, among others things: a) an $11,600,000 cash contribution by Irex Corporation; b) 100% of common stock of the Reorganized Debtor and 100% of the common stock of the Debtor; c) Pre-Petition trust assets and remaining collateral in the Pre-Petition trust as of the effective date; and d) the ACandS QSF Trust, which had a value of $2,665,336 as of July 31, 2007. Treatment of Claims Under the Amended Plan, all Administrative and Priority Tax Claims will be receive cash in full satisfaction of the claim. Priority Claims against the Debtor will receive, either: a) cash in the allowed amount of its priority claim; or b) other, lesser treatment as agreed in writing by the holder and the Debtor. Holders of this claim is expected to receive 100% of the allowed amount of their claims. Holders of Non-Asbestos Secured Claims will retain, unlatered, legal, equitable and contractual rights, including any liens that secure the allowed claim. The Debtor further says that holders of this claim will also receive 100% of the allowed amount of their claims. All holders of Asbestos Personal Injury Claims will be assumed by the Trust without further act and will be channeled to and resolved in accordance with the asbestos personal injury claim treatment. Holders of General Unsecured Claims will receive cash equal to 10% of their claims. Holders of Non-Asbestos Unsecured Insured Litigation Claims will be allowed to liquidate their claims. The recovery of these claims depends on the amount of any available applicable insurance coverage for each claim. If these holders have not received 10% of the principal amount of their allowed claim, the Debtor says that it will distribute cash to these holders in the sum of 10% of the principal amount plus 6% interest rate. Holders of Equity Interests will retain their interest under the Amended Plan. About ACandS Headquartered in Lancaster, Pennsylvania, ACandS Inc. was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represent the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. At Dec. 31, 2006, the Debtor disclosed that it had book assets of approximately $11.78 million and book liabilities, including liabilities for the payment of asbestos-related and other claims of $11.78 million. At June 30, 2007, net book assets before liabilities for asbestos-related and other claims was approximately $9,010,000. ACANDS INC: Amended Plan Confirmation Hearing Set on April 21 ------------------------------------------------------------- the Honorable Judith K. Fitzgerald of the United States Bankruptcy Court for the District of Delaware set April 21, 2008, at 11:30 a.m., to consider confirmation of AcandS Inc.'s Second Amended Chapter 11 Plan of Reorganization. Objections to the Plan, if any, are due March 24, 2008. Headquartered in Lancaster, Pennsylvania, ACandS Inc. was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represent the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. At Dec. 31, 2006, the Debtor disclosed that it had book assets of approximately $11.78 million and book liabilities, including liabilities for the payment of asbestos-related and other claims of $11.78 million. At June 30, 2007, net book assets before liabilities for asbestos-related and other claims was approximately $9,010,000. ACTIVBIOTICS INC: Bidding for Assets to End on February 1 --------------------------------------------------------- ActivBiotics, Inc., said that upon reviewing strategic options after its clinical trial of Rifalazil failed in peripheral arterial disease patients, it will sell all or substantially all of its assets on an "as is" basis through an Assignment for the Benefit of Creditors process. The Assignee of the assets is Mr. Joseph Finn, Jr., CPA, of Finn, Warnke & Gayton. The bidding for the assets, which may be purchased separately or in combination, started on Dec. 18, 2007 and will end on Feb. 1, 2008. "The Board of Directors has decided to pursue the sale of the company's clinical and preclinical drug assets," said Steven C. Gilman, Ph.D., Chairman of ActivBiotics. "We believe that our anti-inflammatory Phase II drug candidate and our antibacterial library of compounds are of significant value to companies in those therapeutic areas," added Gilman. Bidding packages have been assembled and are ready to be distributed subject to a potential purchaser entering into a standard form confidentiality agreement. The company assets available for sale include: 1. A superoxide dismutase (SOD) mimetic program consisting of two clinical-stage drug candidates, M40403 and M40419, and a library of 250 small molecules which have potential as novel therapeutic agents for the treatment of inflammatory diseases. M40403, which has been studied in approximately 700 patients/subjects, has an active IND, and a protocol on file with the FDA under which a Phase II clinical trial for the treatment of post-operative ileus can be conducted, and a protocol to initiate a Phase II clinical trial for the treatment of oral mucositis. The company has submitted and expects to shortly receive Orphan Drug Designation status in Europe and has an Orphan Drug application pending with the US FDA for the treatment of oral mucositis in subjects with advanced head and neck cancer. In addition to these indications, the SOD mimetics have potential therapeutic uses in a variety of inflammatory disorders including asthma, chronic obstructive pulmonary disease, and radiation protection, stroke, and ischemia reperfusion injury. 2. An antibacterial library of compounds consisting of approximately 800 small molecules, all new chemical entities (NCEs), which may be developed for the treatment of serious bacterial infections, including complicated skin and skin structure infections, endocarditis, osteomyelitis, foreign-body infections, Clostridium difficile-associated diarrhea (CDAD), as well as peptic ulcer disease due to Helicobacter pylori, and disease due to Chlamydia infections. In addition, these NCEs have the potential to be administered as topical agents for the treatment of acne and for the eradication of Staphylococcus aureus in nasal passages. 3. Rifalazil, a clinical stage compound which has been tested in approximately 600 patients, is a potent antibacterial agent with activity mainly against pathogenic Gram- positive bacteria. Rifalazil was found efficacious in a Phase II Chlamydia STD clinical trial, and, separately, a protocol has been submitted to the FDA to begin a Phase II clinical trial in carotid artery atherosclerosis. Rifalazil has been granted Fast Track designation for the treatment of CDAD. The company has open INDs to continue rifalazil development for infectious diseases, and atherosclerosis-related disease. Any person interested in purchasing the assets or learning more about the bidding process should contact the Assignee, Mr. Finn at: Joseph F. Finn, Jr., CPA Finn, Warnke & Gayton 167 Worcester Street, Suite 201 Wellesley Hills, MA 02481-3613. Tel: (781) 237-8840 ActivBiotics, Inc. -- http://www.activbiotics.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of therapies for the treatment of inflammatory diseases and bacterial infections. ALERIS INT'L: To Phase Out Toronto Coil Coating Facility -------------------------------------------------------- Aleris International Inc. will be permanently closing its Toronto, Ontario coil coating facility. Production will be phased-out during the first quarter of 2008 and the site will be permanently closed shortly thereafter. The facility, which was acquired by Aleris when it acquired the downstream aluminum business of Corus plc in 2006, employs 64 people and supplies coated aluminum coil for building and construction, transportation, distribution and consumer durables applications. Aleris expects to take a restructuring charge of approximately $5 million to $6 million related to severance, shutdown costs and asset impairment. Production will be transferred to other Aleris facilities in North America and Aleris will continue to provide the same high quality products and services that customers expect. Headquartered in Beachwood, Ohio, Aleris International Inc. (NYSE: ARS) -- http://www.aleris.com/-- manufactures rolled aluminum products and offers aluminum recycling and the production of specification alloys. The company also manufactures value-added zinc products that include zinc oxide, zinc dust and zinc metal. The company operates 42 production facilities in the United States, Brazil, Germany, Mexico and Wales, and employs approximately 4,200 employees. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007, Standard & Poor's Ratings Services revised its outlook on Aleris International Inc. to negative from stable. At the same time S&P affirmed its 'B+' corporate credit rating and the other ratings on the company. Concurrently, S&P assigned a 'B-' rating to the company's recent $105 million 9% senior notes due 2014, which are an add-on to the company's existing $600 million 9% senior notes due 2014. ALL AMERICAN: Creditors Committee Files Liquidating Plan -------------------------------------------------------- The Official Committee of Unsecured Creditors of All American Semiconductor Inc. delivered to the United States Bankruptcy Court for the Southern District of Florida a Chapter 11 Plan of Liquidation and a Disclosure Statement explaining that Plan. Overview of the Plan The proposed Plan contemplates the liquidation of all of the Debtor's assets and to investigate and prosecution of all litigation claims of the estate. The Plan intends to maximize the value of recoveries to all valid creditors of the Debtors on an equitable basis. The Committee says it will select Kenneth A. Welt as liquidating trustee who is expected to liquidate and distribute the proceeds in accordance with the Plan. Treatment of Claims Under the Plan, these claims are unimpaired and will be paid in full: -- Super-Priority Claims totaling $8,526,060; -- Administrative Claims totaling $3,227,818; -- Priority Tax Claims totaling $321,443; and -- Priority Claims totaling $468,580. The Debtor relates that holders of Allowed General Unsecured Claims, totaling $34,205,920, will receive at least 32.93% of their respective claims plus a pro rata share of the initial distribution amount. Holders of Allowed Lender Deficiency Claims, totaling $9,361,650, is also expected to recover at least 32.93% of their claims. Equity Interests will be cancelled on the effective date and holders will not receive anything under the Plan. A full-text copy of the Disclosure Statement is available for a fee at: A full-text copy of the Chapter 11 Plan of Liquidation is available for a fee at: About All American Semiconductor Based in Miami, Florida, All American Semiconductor Inc. (Pink Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributes electronic components manufactured by others. The company distributes a full range of semiconductors including transistors, diodes, memory devices, microprocessors, microcontrollers, other integrated circuits, active matrix displays and various board- level products. All American also distributes passive components such as capacitors, resistors and inductors; and electromechanical products such as power supplies, cable, switches, connectors, filters and sockets. The company also offers complete solutions for flat panel display products. In total, the company offers approximately 40,000 products produced by approximately 60 manufacturers. The company has 36 strategic locations throughout North America and Mexico, as well as operations in China and Western Europe. The company and its debtor-affiliates filed for Chapter 11 protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No. 07-12963). Craig D. Hansen, Esq., Tina M. Talarchyk, Esq., and Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P., represent the Debtors. Mesirow Financial Consulting, LLC serve as financial advisor to the Committee. William Hawkins, Esq., at Loeb & Loeb, LLP, is the Official Committee of Unsecured Creditors general bankruptcy counsel. Jerry M. Markowitz, Esq., at Markowitz, Davis, Ringel & Trusty, P.A., is the Committee's local counsel. As of Feb. 28, 2007, the Debtors' balance sheet showed total assets of $117,634,000 and total debts of $106,024,000. ALLIANT TECHSYSTEMS: Taps Marchetto to Lead New Space Systems Biz ----------------------------------------------------------------- Alliant Techsystems Inc. disclosed that Carl A. Marchetto has joined the company to lead the formation of ATK Space Systems, a fourth business group for the company which will be established on April 1, 2008. Mr. Marchetto will become President, ATK Space Systems once the group is established. Mr. Marchetto was most recently the Executive Vice President of Orbital Sciences Corporation's Space Systems Group. He previously held senior leadership positions at NASA's Jet Propulsion Laboratory, Lockheed Martin's Astro Space Division, as well as Eastman Kodak, where he led its Commercial and Government Systems group. ATK Space Systems will include the existing space operations of ATK's Mission Systems group. This will be combined with the Information Systems and Geospatial businesses of MacDonald Dettwiler and Associates upon completion of the acquisition, which is expected to close early in the first quarter of the company's fiscal year 2009. The new group will be a full-spectrum satellite and space systems business with FY09 revenues of approximately $900 million. The group will have operations in four Canadian provinces and numerous facilities across the United States. "The strategic significance of acquiring MDA's Information Systems and Geospatial Information Services businesses calls for equally strategic leadership and vision. Carl possesses these critical talents and I am very pleased he has joined our company," Dan Murphy, Chairman and CEO, said. "Carl brings decades of technical experience, a wealth of customer knowledge, and a focused, disciplined business approach. Through his leadership, we will capitalize on significant opportunities in international commercial and military space markets." About Alliant Techsystems Headquartered in Edina, Minnesota, Alliant Techsystems, Inc. (NYSE: ATK) -- http://www.atk.com/-- is an advanced weapon and space system company that provides small satellites and large satellite sub-systems, hypersonic engines, rocket motors for spacecraft launch and orbit transfer -- programs critical to reaching new space frontiers. The company employs approximately 17,000. ATK also produces solid rocket motors and the prime contractor for the first stage of Ares I, NASA's next-generation launch vehicle. * * * Alliant Techsystems, Inc., continues to carry Fitch's 'BB' Issuer Default Rating assigned on May 2007. Fitch says the rating outlook is stable. ALLIANT TECHSYSTEMS: To Acquire MDA's Unit for CDN$1.325 Billion ---------------------------------------------------------------- Alliant Techsystems Inc. has negotiated definitive agreements with Canadian-based MacDonald, Dettwiler and Associates Ltd., to acquire its Information Systems and Geospatial Information Services businesses for CDN$1.325 billion. The company expects that this acquisition will provide a higher growth and earnings profile, and be neutral to earnings per share in fiscal year 2009 and accretive thereafter. With more than 1,900 employees and estimated FY09 revenues of approximately US$500 million, the MDA business ATK is acquiring is a global leader in space-based radar systems, space robotics, satellite systems, and imaging satellite ground stations and processing; with additional world-class capabilities in satellite payloads, C4ISR, and geospatial services. The transaction, which is subject to regulatory and MDA shareholder approval, is expected to close early in the first quarter of the company's FY2009. ATK has arranged committed financing to support the proposed acquisition. However, there can be no assurance that the transaction will be completed. This acquisition will establish ATK as a full-spectrum international space company, providing launch services, next- generation satellites, robotics, and the ground systems that will process and deliver mission critical information solutions. It will also provide an entry point for MDA's proven high-performance technology to the U.S. market, creating significant sales growth opportunities. Further, it will diversify ATK's portfolio into non-U.S. and commercial space markets, nearly doubling the company's international revenues. The transaction will also enhance ATK's existing and potential content in space exploration, Operationally Responsive Space, and C4ISR; while adding satellite ground station and geospatial imagery content. "The welcome addition of MDA's Information Systems and Geospatial Information Services, and their talented workforce substantially grows our market position in space systems, both domestically and internationally," Dan Murphy, ATK Chairman and CEO, said. "ATK has enjoyed a close working relationship with MDA for many years. Like ATK, its business model is one of low-cost innovation. Together we will make a significant contribution to the global space industry." "We believe that this transaction provides an excellent home for our Information Systems and Geospatial Services business as it is highly complementary to ATK's business," MDA President and CEO, Daniel Friedmann, said. "ATK is committed to realize the inherent value in the U.S. market of the many accomplishments of our employees." Beginning April 1, 2008, ATK will establish a fourth business group, ATK Space Systems. Carl Marchetto, formerly Executive Vice President and General Manager of Orbital Sciences Corporation's Space Systems Group, will become President, ATK Space Systems. With operations in four Canadian Provinces and across the United States, ATK Space Systems is expected to generate FY09 sales of approximately $900 million. It will be a full-spectrum satellite and space systems business building markets in North America and around the world. The combined value of ATK Launch Systems and the new Space Systems group will make ATK the fifth largest space systems company in North America. About MDA's Information Systems MacDonald, Dettwiler and Associates Ltd.'s Information Systems business -- http://www.mdacorporation.com/-- provides space-based and ground-based systems that support the information and operational needs of government and commercial customers worldwide, and MDA's Geospatial Services business provides these same customers with satellite imagery and value-added information products. About Alliant Techsystems Headquartered in Edina, Minnesota, Alliant Techsystems, Inc. (NYSE: ATK) -- http://www.atk.com/-- is an advanced weapon and space sytem company that provides small satellites and large satellite sub-systems, hypersonic engines, rocket motors for spacecraft launch and orbit transfer -- programs critical to reaching new space frontiers. The company employs approximately 17,000. ATK also produces solid rocket motors and the prime contractor for the first stage of Ares I, NASA's next-generation launch vehicle. * * * Alliant Techsystems, Inc., continues to carry Fitch's 'BB' Issuer Default Rating assigned on May 2007. Fitch says the rating outlook is stable. AMERICAN HOME: Court Okays Cutting DIP Commitment by $15 Million ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved American Home Mortgage Investment Corp. and its debtor-affiliates' request to amend their debtor-in-possession loan and security agreement with WLR Recovery Fund III, L.P. dated as of Aug. 6, 2007. The amendment reduces the total commitment under the DIP Facility from $50,000,000 to $35,000,000. The Court also ruled that the DIP Lenders' liens on the construction loans owned by Bank of America, N.A., will be released once the amount of certain construction loan advances is recovered by the Debtor-Borrowers. Judge Sontchi said that the amounts received by the Debtor- Borrowers in excess of the advances will be held by the Debtors in a segregated account for the benefit of their general unsecured creditors for eventual distribution pursuant to a confirmed plan of reorganization, unless the Official Committee of Unsecured Creditors agrees that a portion of the fund may be used for other purposes. As reported in the Troubled Company Reporter on Jan. 3, 2008, the Debtors sought to modify the DIP Agreement due to recent developments in their bankruptcy cases, including the sale of their loan servicing business and the sale's initial closing. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 22, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Limited Recourse Facility Up by $50 Million ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized American Home Mortgage Investment Corp. and its debtor-affiliates to increase the limited recourse facility commitment from $50,000,000 to $100,000,000, pursuant to and on the terms and conditions of an amended agreement among them and their lenders. The Debtors previously obtained the Court's approval to enter into a $50,000,000 Debtor-in-Possession Loan and Security Agreement dated Nov. 16, 2007, among the Debtor-Borrowers, several lenders, and AH Mortgage Acquisition Co., Inc., in its capacity as lender and administrative agent. In their request for amendment of the limited recourse facility, the Debtors told the Court that since operating their mortgage loan servicing business from its initial closing without the use of the cash collateral, they determined that additional availability is necessary to satisfy the obligations associated with the Servicing Business. According to them, the necessity for additional funding is due to, among other reasons, the increased amount of servicing advances and other costs. The Debtors-Borrowers believe that by the increased financing commitment, they will be able to meet the borrowing needs necessary to operate the Servicing Business to the final closing of its sale, and thus, enable them to operate the business as required under an asset purchase agreement. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 22, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Gets OK to Set Servicing Business Sale Consummation ------------------------------------------------------------------ American Home Mortgage Investment Corp. and its debtor- affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to undertake certain activities to prepare for the consummation of the previously-approved sale of their mortgage loan servicing business to AH Mortgage Acquisition Co. Inc. pursuant to the terms of an assset purchase agreement. As reported in the Troubled Company Reporter on Jan. 3, 2008, under the APA, the Sale will close in two steps, in which the initial "economic" close occurred on November 16, 2007. From the Initial Closing Date until the "legal" close on the final closing date, the Debtors will continue to operate the Servicing Business, subject to certain bankruptcy exceptions, for the economic benefit and risk of AHM Acquisition. Specifically, the Debtors sought Court authority to: -- create one or more non-debtor business entities, which may include corporations, limited liability companies and transition entities, for entering into certain agreements relating to the transition of the purchased assets from the sellers to the purchaser, or relating to the continued operation of the Servicing Business; -- fund the Transition Entities with amounts sufficient to perform their respective obligations under the Transition Entities Agreements; -- enter into a fourth amendment to the APA, which provides, among other things, that the Debtors' interests in the Transition Entities will be deemed Purchased Assets under certain provisions of the APA; -- enter into a employment agreement, between American Home Mortgage Servicing, Inc., and David M. Friedman; -- file the Employment Agreement with the Court under seal, and direct that the Employment Agreement remain under seal, confidential and not be made available to anyone, except for the Court, the office of the U.S. Trustee, counsel to the Official Committee of Unsecured Creditors, counsel to Bank of America, N.A., AHM Acquisition, and counsel to the DIP Lenders; and -- limit service of the request to: * the U.S. Trustee; * counsel to the Creditors Committee; * counsel to BofA; * counsel to the Debtors' postpetition lender; * counsel to AHM Acquisition; and * all other parties entitled to notice under Rule 2002-1(b) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware. The Debtors state that the Transition Entities will assist them in transitioning the Purchased Assets to AHM Acquisition, and facilitate the continued operation of the Servicing Business. Prior to the Final Closing, the Transition Entities will be funded by the Sellers to the extent necessary to meet any obligations incurred in connection with the Transition Entities Agreements. However, only sources of funding would be the revenues and working capital of the Servicing Business. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 22, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AXIUM INTERNATIONAL: Shuts Down Offices Worldwide, Sources Say -------------------------------------------------------------- Axium International Inc. reportedly shut down operations for an undetermined period, The Hollywood Reporter says, citing sources familiar with the matter. According to the Reporter, Axium's headquarters in Los Angeles, and offices in New York, Burbank, Ontario, British Columbia and London "were quiet." The Reporter relates that Axium workers were informed not to report beginning Tuesday through electronic mail messages. Ruben Rodriquez, company president, resigned from his post, Reporter added, citing undisclosed sources. The company had remained silent on whether the closures involved the Internal Revenue Service. Axium International Inc. -- http://www.axium.com/-- has nearly two decades of experience in the entertainment industry by providing payroll solutions for production. It offers various financial services and technology for the entertainment industry through Axium Global and Axium Global Workforce. It serves companies ranging from mid-market to Fortune 500. Axium International has offices in Los Angeles, New York, Burbank, Hollywood, Las Vegas, Toronto, Vancouver and London. BEAR STEARNS: Moody's Junks 14 Tranches' Ratings on Delinquency --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 46 tranches and has placed under review for possible downgrade the ratings of 11 tranches from 8 deals issued by Bear Stearns in 2007. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its re-rating Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete list of rating actions: Issuer: Bear Stearns Alt-A Trust 2007-1 -- Cl. II-B-2, Downgraded to Baa1, previously A2, -- Cl. II-B-3, Downgraded to B1, previously Baa2. -- Cl. I-M-1 Currently Aa2 on review for possible downgrade, -- Cl. I-M-2, Downgraded to Baa1, previously A2, -- Cl. I-B-1, Downgraded to Ba2, previously Baa1, -- Cl. I-B-2, Downgraded to Ba3, previously Baa2, -- Cl. I-B-3, Downgraded to B3, previously Baa3, -- Cl. I-B-4, Downgraded to Caa3, previously Ba2. Issuer: Bear Stearns ALT-A Trust 2007-2 -- Cl. I-M-1 Currently Aa2 on review for possible downgrade, -- Cl. I-M-2, Downgraded to Baa2, previously A2, -- Cl. I-B-1, Downgraded to Ba3, previously Baa1, -- Cl. I-B-2, Downgraded to B2, previously Baa2, -- Cl. I-B-3, Downgraded to Caa2, previously Baa3, -- Cl. I-B-4, Downgraded to Caa3, previously Ba2, -- Cl. II-B-1 Currently Aa2 on review for possible downgrade, -- Cl. II-BX-1 Currently Aa2 on review for possible downgrade, -- Cl. II-B-2, Downgraded to Ba1, previously A2, -- Cl. II-B-3, Downgraded to B3, previously Baa2. Issuer: Bear Stearns ALT-A Trust 2007-3 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to Baa1, previously A2, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa2, -- Cl. B-3, Downgraded to B2, previously Baa3, -- Cl. B-4, Downgraded to Caa2, previously Ba2. Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC1 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2 Currently Aa3 on review for possible downgrade, -- Cl. M-3, Downgraded to A3, previously A1, -- Cl. M-4, Downgraded to Baa1, previously A2, -- Cl. B-1, Downgraded to Baa2, previously A3, -- Cl. B-2, Downgraded to Ba2, previously Baa1, -- Cl. B-3, Downgraded to B1, previously Baa2, -- Cl. B-4, Downgraded to Caa3, previously Ba2. Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC2 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to A3, previously A1, -- Cl. M-3, Downgraded to Baa2, previously A2, -- Cl. M-4, Downgraded to Baa3, previously A3, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa2, -- Cl. B-3, Downgraded to Caa1, previously Baa3, -- Cl. B-4, Downgraded to Caa2, previously Ba2. Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC3 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to A3, previously A1, -- Cl. M-3, Downgraded to Baa2, previously A2, -- Cl. M-4, Downgraded to Baa3, previously A3, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa2, -- Cl. B-3, Downgraded to Caa1, previously Baa3, -- Cl. B-4, Downgraded to Caa2, previously Ba2. Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC4 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2, Downgraded to Ba1, previously A2, -- Cl. B-1, Downgraded to Caa1, previously Baa2, -- Cl. B-2, Downgraded to Caa3, previously Ba2. Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC5 -- Cl. B-1 Currently Aa2 on review for possible downgrade, -- Cl. B-2, Downgraded to Ba2, previously A2, -- Cl. B-3, Downgraded to Caa1, previously Baa2, -- Cl. B-4, Downgraded to Caa2, previously Ba2, -- Cl. B-5, Downgraded to Caa3, previously B2. BOSTON GENERATING: S&P Lowers Rating on $1.13 Billion Loan to B+ ---------------------------------------------------------------- Standard & Poor's Rating Services lowered its rating on Boston Generating Co. LLC's $1.13 billion first-lien term loan B due in 2013, its $70 million revolving facility, and its $250 million letter of credit facility to 'B+' from 'BB-' (the '1' recovery rating is unchanged). In addition, S&P lowered the rating on the issuer's second-lien $350 million term loan C to 'B-' from 'B' (the '4' recovery rating is unchanged). The outlook is negative. The $300 million of holding company notes outstanding at parent EBG Holdings are not rated. The rating action follows the project's weak financial performance due to lower energy revenue and absence of reliability must run payments. The project's rolling 12-month interest coverage ratio and leverage ratio have been well below initial forecasts by previous management, and has steadily weakened. However, operating performance in 2007 was in line with 2006's performance. "As a result of weaker financial performance, the project could not achieve supplemental debt amortization under the cash sweep mechanism, thus increasing the refinancing risk when the debt matures in 2013," said Standard & Poor's credit analyst Mark Habib. Effective June 1, 2007, Astoria Generating Co. Acquisitions LLC's and Boston Gen's parent companies completed their merger, with the combined entity named US Power Generating Co. Inc. The two project companies (Astoria Gen and Boston Gen) will, however, remain separate, bankruptcy-remote entities. After the merger, USPG owns and operates eight power generation facilities with a total capacity of more than 5,000 MW. Boston Gen owns generating assets with a total capacity that exceeds 3,000 MW through its primary subsidiaries Mystic I LLC, Mystic Development LLC, and Fore River Development LLC, which guarantee Boston Gen's loans. The negative outlook on Boston Gen reflects S&P's concern about financial performance that has fallen short of anticipated levels. Preservation of the rating will hinge on the project's demonstration of stronger and sustainable financial performance. Inability to resume debt amortization under the cash sweep mechanism at a pace more closely in line with 2006's expectations could further increase refinancing risk and result in a lowered rating. S&P could revise the outlook to stable if the project demonstrates stronger and more sustainable financial performance than exhibited in the past and significantly improves the pace at which its cash sweep mechanism amortizes debt. Prospects for rating upgrades are unlikely. BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling --------------------------------------------------------------- Boston Scientific Corp. announced that the Court of Appeals for the Federal Circuit affirmed a District Court ruling that found the NIR stent infringed one claim of a patent owned by Johnson & Johnson. Standard & Poor's Ratings Services' says that this does not affect its ratings or outlook for Boston Scientific. Boston Scientific's corporate credit rating is rated 'BB+' by S&P with a negative outlook. The District Court must now rule on Johnson & Johnson's request for the reinstatement of damages of $324 million. Also, the company has not indicated that it will appeal this decision, but noted that the District court may need to revisit the issue of validity in light of a revised claim construction. As a result, the amount and timing of a potential payment by Boston Scientific are unknown. To some degree, the financial uncertainty of litigation is factored into the rating. Boston Scientific, like many of its peers, is involved in several patent and product liability lawsuits. The company has both initiated litigation and been subject to challenges by other companies, and such proceedings can be protracted. Boston Scientific continues to make progress in reducing its debt burden; adjusted debt to EBITDA declined to 3.8x for the 12 months ended Sept. 30, 2007, from 4.1x at the end of the second quarter of 2007. Cash was $1.2 billion at the end of the second quarter, and proceeds from recently announced asset divestitures should provide the means for further debt reduction. BRADLEY RECKER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtors: Bradley J. Recker Cindy M. Recker 9125 Longfellow Lane Machesney Park, IL 61115 Bankruptcy Case No.: 08-00161 Chapter 11 Petition Date: January 7, 2008 Court: Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtors' Counsel: Harley E. Riedel, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtors do not have any creditors who are not insiders. BSI CORP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: BSI Corp 352 West 39th Street New York, NY 10018 Bankruptcy Case No.: 08-10046 Chapter 11 Petition Date: January 8, 2007 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Fredrick J. Levy, Esq. Olshan Grundman Frome Rosenzweig & Wolosky, LLP 65 East 55th Street New York, NY 10022 Tel: (212) 451-2218 Fax: (212) 451-2222 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dicarlo Distributors Inc. $148,706 P.O. Box 2365 1630 North Ocean Avenue Holtsville, NY 11742-0911 ADJ Wholesale Produce Inc $50,847 1290-A Oak Point Avenue Bronx, NY 10474 Moritt Hock Hamroff & Horowitz LLP $38,648 400 Garden City Plaza Garden City, NY 11530 Sweet Clover FarmsInc. $34,276 Isabella City Carting Corporation $31,846 Paper Plus $28,854 Strategic Energy $25,706 Davidoff & Malito LLP $25,419 Mayab Happy Tacos Inc $18,724 AICCO Inc $17,233 NYC Water Board $12,291 ESCOLAB $12,045 Ace Natural Inc. $11,874 Austin Meat Company $10,596 Verizon $9,864 Broadview $8,568 State Insurance Fund $7,815 Intelli-Tec Security Services $7,053 Anastasi & Associates $6,424 Plascon $5,944 BURKE TRUCKING: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Burke Trucking, Inc. 101 Spurgeon Road West Monroe, LA 71291 Bankruptcy Case No.: 08-30033 Type of Business: The Debtor provides trucking services. Chapter 11 Petition Date: January 8, 2008 Court: Western District of Louisiana (Monroe) Debtor's Counsel: James W. Spivey, II, Esq. 1310 North 7th Street West Monroe, LA 71291-4338 Tel: (318) 387-3666 Fax: (318) 387-3630 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Financial Federal vehicles; value of $1,428,452 1300 PootOak Boulevard, security: $97,1000 Suite 1660 Houston, TX 77056 Paccar Financial Group 9-Truck/Trailers $310,120 P.O. Box 1518 Bellevue, WA 98009-1518 First National Bank of land $263,571 Farmerville 310 East Water Street Farmerville, LA 71241 Bancorp South real estate $100,686 $10,500 V.M.S., Inc. $84,954 J.W. Burke vehicles $48,000 I.F.C. Credit Corp. leases $38,003 Susquehanna Commercial Finance $21,914 Citibank $20,789 Pelican General Insurance $18,127 Agency Ronald L. Bell & Associates $18,044 A.R.J. Enterprises, Inc. vehicles $17,617 CENTRAL ILLINOIS: Illinois AG Looking into Bankruptcy Filing ------------------------------------------------------------ The Illinois Attorney General's Office is looking into Central Illinois Energy's bankruptcy filing, Brenda Rothert of the Journal Star reports. A spokesman for the Attorney General told the Journal Star that the Department of Commerce and Economic Opportunity requested the investigation and asked the Attorney General's Office to represent the state in the ethanol plant's bankruptcy proceeding. The Journal Star relates that the $40 million plant project tumbled into bankruptcy despite numerous corporate and government grants amounting to $130 million to keep the plant afloat. Most of the company's board of directors have resigned before the filing. The DCEO already made initial payments to meet infrastructure and equipment costs. "Because the company has entered bankruptcy, they are not eligible to receive the remaining payment at this time," Journal Star reports citing DCEO spokeswoman Marcelyn Love. "The final result of the bankruptcy proceeding is impossible to predict, but the agency hopes that the project will emerge from bankruptcy to be completed, operate as an ethanol production facility and provide stable jobs and growth for the region and state." Based in Canton, Illinois, Central Illinois Energy LLC -- http://www.centralillinoisenergy.com/-- operates a 37-million gallons-per-year ethanol plant. The Debtor filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817). Barry M. Barash, Esq., at Barash & Everett, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets between $1 million to $100 million, and more than $100 million in estimated liabilities. CHC HELICOPTER: High Leverage Prompts Moody's to Change Outlook --------------------------------------------------------------- Moody's Investors Service changed the rating outlook for CHC Helicopter Corporation to negative from stable. Moody's affirmed CHC's corporate family rating and probability of default rating at Ba3, and the B1 (LGD 5, 72% changed from LGD 4, 67%) rating on CHC's $400 million senior subordinated notes. "Moody's changed CHC's rating outlook to negative to highlight our concerns regarding the company's substantial increase in leverage to fund its major fleet expansion," commented Pete Speer, Moody's Vice-President/Senior Analyst. "While this fleet expansion is in response to strong customer demand driven by the deepwater development trends, CHC has funded these capital expenditures almost exclusively with lease financing and revolver borrowings." Since fiscal year ended April 30, 2006, CHC has purchased 43 heavy and medium helicopters, increasing its total fleet size by 10%, net of the disposal of older aircraft. While these net additions have further high-graded the company's fleet towards heavy and medium helicopters to service the increasing demand from deepwater oil and gas activities, CHC's leverage has increased from approximately 4.5x at FY 2006 to around 6x for LTM Oct. 31, 2007 (including standard lease adjustment at a 6x multiple of rent expense). As of Oct. 31, 2007, the company had 85 helicopters on order for delivery through 2012. The effect on this leverage metric from the financed helicopter additions has been compounded by the significant introduction costs incurred for this new technology aircraft and the lag between the delivery of the new helicopters and their commencement of customer operations. Including management's estimate of the additional EBITDA that would have been generated had these helicopters been in full operation over the period, Debt/EBITDA would have been around 5.5x, which is still high for the company's rating. The Ba3 CFR is supported by CHC's leading global market position in helicopter services, including an approximate 64% market share in its core North Sea operations. Approximately 67% of the company's revenues in its most recent fiscal year were generated under long-term contracts and most of the company's revenues are tied to production activities, factors that provide a level of stability and predictability to the company's earnings and cash flows. The outlook for helicopter services demand is currently strong, with major and national oil companies requiring additional medium and heavy helicopters to support their increasing deepwater oil and gas activities. CHC's Ba3 CFR also incorporates the inherent cyclicality in the oil and gas services sector; the company's lack of operating presence in the Gulf of Mexico and relative concentration in the North Sea; and the fact that the company's long-term contracts contain cancellation clauses and therefore are not as binding as contracts for offshore drilling rigs, although CHC has rarely experienced customer cancellations. The rating outlook could return to stable if CHC's expectations for increased EBITDA from its fleet expansion and investments in its repair and overhaul operations are achieved resulting in the company reducing its Debt/EBITDA to below 5x on a durable basis. The company's complicated ownership structure, partially due to the regulatory licensing requirements of some foreign jurisdictions, has made equity offerings difficult. However, if CHC were to address these issues and complete a meaningful equity offering, the company could also return leverage metrics to levels consistent with the Ba3 rating. If CHC's continued fleet expansion results in further increases in leverage or if the expected leverage reductions are not achieved the ratings could be downgraded. In addition, if market conditions were to weaken with these elevated leverage levels the ratings could also be downgraded. CHC Helicopter Corporation is headquartered in Vancouver, British Columbia, Canada. It is one of the world's largest providers of helicopter services to the offshore exploration and production industry, with operations in over 30 countries. CINCINNATI BELL: Sept. 30 Balance Sheet Upside-Down by $671.2 Mil. ------------------------------------------------------------------ Cincinnati Bell Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1.97 billion in total assets and $2.64 billion in total liabilities, resulting in a $671.2 million total shareowners' deficit. The company reported net income of $25.7 million for the third quarter ended Sept. 30, 2007, versus net income of $25.1 million in the comparable period of 2006. Net income excluding special items was $25.5 million in the three months ended Sept. 30, 2007, compared with net income excluding special items of $24.3 million in the 2006 quarter, a 5% increase. For the third quarter 2007, revenue totaled $344.3 million, an increase of 8% over revenue of $320.1 million for the corresponding period in 2006. "The momentum generated in Cincinnati Bell's key growth areas of Wireless, Technology Solutions and DSL led to the eighth consecutive quarter of year-over-year revenue growth. In addition, adjusted EBITDA in our core operations has increased the last five quarters," said Jack Cassidy, president and chief executive officer of Cincinnati Bell Inc. "By introducing new products and developing previously underserved markets, Cincinnati Bell continues to meet customer demands for value and convenience, superior network quality and outstanding service." "We are pleased with the financial performance in each of our business segments," said Brian Ross, chief financial officer of Cincinnati Bell Inc. "We produced revenue, EBITDA and subscriber growth, while continuing to invest in the expansion of our data center business and new 3G wireless network." Liquidity As of Sept. 30, 2007, the company held $27.3 million in cash and cash equivalents. At Sept. 30, 2007, the company had $205.9 million of availability under the Corporate credit facility. 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?26e0 About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. CITIUS II: Moody's Junk Ratings on Two Note Classes --------------------------------------------------- Moody's Investors Service has downgraded these notes issued by Citius II Funding, Ltd.: Class Description: $20,000,000 Class C Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa2 Class Description: $19,000,000 Class D Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca In addition Moody's also downgraded and left on review for possible downgrade these notes: Class Description: $95,000,000 Class A Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $50,000,000 Class B Secured Floating Rate Notes Due 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CLASS V FUNDING: Moody's Cuts Rating on Preference Shares --------------------------------------------------------- Moody's Investors Service placed these notes issued by Class V Funding, Ltd. on review for possible downgrade: Class Description: Class C Fourth Priority Secured Floating Rate Deferrable Notes due 2045 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade Class Description: Class D-1 Fifth Priority Mezzanine Secured Floating Rate Notes due 2045 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade Class Description: Class D-2 Fifth Priority Mezzanine Secured Fixed Rate Notes due 2045 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: Class Description: 15,000 Preference Shares with an Aggregate Liquidation Preference of $15,000,000 -- Prior Rating: Ba2 -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CONSOLIDATED HEALTH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Consolidated Health Services Inc. dba Advantage Hospice & Homecare P.O. Box 1828 Lumberton, NC 28358 Bankruptcy Case No.: 08-00103 Chapter 11 Petition Date: January 7, 2008 Court: Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Gerald A Jeutter, Jr., Esq. Kilpatrick Stockton LLP P.O. Box 300004 Raleigh, NC 27622 Tel: (919) 420-1700 Fax: (919) 420-1800 http://www.kilpatrickstockton.com/ -- and -- John A. Northen, Esq. Northen Blue, LLP P.O. Box 2208 Chapel Hill, NC 27515-2208 Tel: (919) 968-4441 Fax: (919) 942-6603 http://www.nbfirm.com/ Total Assets: $6,717,358 Total Debts: $14,001,275 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Centers for Medicare & value of security: $13,200,000 Medicaid Services $1,350,000 Palmetto GBA, LLC 2300 Springdale Avenue Camden, SC 29020 Procare $48,764 3090 Premiere Parkway Suite 100 Duluth, GA 30097 Britthaven of Harnett $41,402 P.O. Box 1597 Dunn, NC 28335 Brookstone Living Center $32,636 Premier Living $26,333 Smithfield Manor $21,552 Wesley Pines $21,551 Dunn Rehab And Nursing $21,103 Allstate Workplace Div. $20,586 Brian Center Health $20,186 Harnett Manor $20,093 Gulfsouth $18,895 Alltel $16,588 Elizabethtown Nursing Center $14,549 Apria Healthcare Inc. $14,020 Betsy Johnson Hospital $12,246 Deltacom $12,167 Cumberland Health Care $11,657 Wayne Pharmacy $11,475 Forestview Rehabilitation $10,925 Court CONSTELLATION BRANDS: $700MM Notes Exchange Offer Expires Today --------------------------------------------------------------- Constellation Brands Inc. has extended its offer to exchange $700 million aggregate principal amount of its 7.25% Senior Notes due 2017 for all $700 million of its outstanding 7.25% Senior Notes due 2017. The exchange offer, which had been scheduled to expire on Jan. 7, 2008 at 5:00 p.m., New York City time, will expire today, Jan. 10, 2008, at 5:00 p.m., New York City time, unless further extended by the company. The extension of the exchange offer has been made to allow holders of outstanding Original Notes who have not yet tendered their Original Notes for exchange additional time to do so. All other terms, provisions and conditions of the exchange offer will remain in full force and effect. As of 5:00 p.m. New York City time, Jan. 7, 2008, $697,499,000 in aggregate principal amount of the Original Notes had been validly tendered and not withdrawn in the exchange offer, representing approximately 99.6% of the outstanding principal amount of the Original Notes. Persons with questions regarding the exchange offer should contact the exchange agent, The Bank of New York Trust Company, N.A., at 212-815-2742. The company will not receive any proceeds from the exchange offer, nor will the company's debt level change as a result of this exchange offer. The terms of the Exchange Notes and the Original Notes are substantially identical in all material respects, except that the Exchange Notes have been registered under the Securities Act. A copy of the prospectus for the exchange offer, dated Dec. 6, 2007, and related letter of transmittal, which have been filed with the United States Securities and Exchange Commission, may be obtained by calling the exchange agent, The Bank of New York Trust Company, N.A., at 212-815-2742. About Constellation Brands Headquartered in Fairport, New York, Constellation Brands Inc. (NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. The company has market presence in the U.K., Australia, Canada, New Zealand; Mexico. Barton Brands Ltd. is the spirits division of Constellation Brands Inc. is a producer, importer and exporter of a wide range of spirits products, including brands such as Black Velvet Canadian Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka. * * * As reported in the Troubled Company Reporter on Dec. 3, 2007, Fitch Ratings assigned a 'BB-' rating to a note registered by Constellation Brands Inc. to fund the purchase price of Beam Wine Estates Inc., a subsidiary of Fortune Brands Inc: $500 million 8.375% senior unsecured note due Dec. 15, 2014. The rating outlook is negative. CONSTELLATION BRANDS: Arm Buys 50% Stake in Planet 10 Project ------------------------------------------------------------- Constellation Brands Inc. disclosed that its Chicago-based spirits company, Barton Brands, has acquired the remaining 50% equity stake in its Planet 10 Spirits joint venture. Terms of the transaction were not disclosed. Planet 10 Spirits was formed in 2004 as an entrepreneurial premium spirits brand development and marketing platform to expand Constellation's participation in the imported vodka category. Planet 10 Spirits' leading product, Effen vodka from Holland, has achieved widespread on- and off-premise distribution and consumer acceptance resulting in a fivefold increase in Effen sales volume since the formation of the joint venture. In addition, Effen has been launched in key global spirits markets such as the U.K., Canada, Japan and Australia. "Our participation in the Planet 10 Spirits joint venture has given us invaluable insights into the high-end spirits marketplace and has enabled us to shape a strategy for growing this important piece of our business," Marty Birkel, president of Barton Brands, said. "We are confident that our efforts to expand our premium spirits portfolio will continue to provide profitable growth and value creation for the long term. The addition of Planet 10 Spirits to the Barton organization will provide us with a team of dedicated and successful on-premise sales & marketing specialists who will continue to build Effen and other select premium spirits brands within our portfolio." About Constellation Brands Headquartered in Fairport, New York, Constellation Brands Inc. (NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. The company has market presence in the U.K., Australia, Canada, New Zealand; Mexico. Barton Brands Ltd. is the spirits division of Constellation Brands Inc. is a producer, importer and exporter of a wide range of spirits products, including brands such as Black Velvet Canadian Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka. * * * As reported in the Troubled Company Reporter on Dec. 3, 2007, Fitch Ratings assigned a 'BB-' rating to a note registered by Constellation Brands Inc. to fund the purchase price of Beam Wine Estates Inc., a subsidiary of Fortune Brands Inc: $500 million 8.375% senior unsecured note due Dec. 15, 2014. The rating outlook is negative. CONSTELLATION BRANDS: Earns $119.6 Mil. in 3rd Qtr. Ended Nov. 30 ----------------------------------------------------------------- Constellation Brands Inc. reported Tuesday results for its fiscal 2008 third quarter ended Nov. 30, 2007. The company reported net income of $119.6 million on net sales of $1.09 billion for the third quarter ended Nov. 30, 2007, compared with net income of $107.8 million on sales of $1.50 billion in the corresponding period ended Nov. 30, 2006. "The company's third quarter performance was in line with our expectations, and we are especially pleased with the performances from our North American wine business and our spirits business," said Rob Sands, Constellation Brands president and chief executive officer. "We're also delighted with the addition of the Fortune Brands U.S. wine portfolio to Constellation's U.S. wine business and the benefits we expect from our expanded super-premium-plus offerings. Also, we are continuing our efforts in the U.K. to mitigate the impact of the lingering Australian wine surplus in the marketplace and to maximize profitability." The reported consolidated net sales decrease of 27% primarily reflects the impact of reporting the Crown Imports and Matthew Clark wholesale business joint ventures under the equity method, partially offset by the benefits of favorable foreign currency, branded wine business growth and the SVEDKA Vodka acquisition. Organic net sales increased 6% on a constant currency basis. Branded wine net sales increased 4% on an organic constant currency basis. For North America, branded wine net sales increased 5% on a constant currency basis, reflecting solid growth in the U.S. "Our U.S. branded wine business turned in a solid third quarter performance, with wines such as Woodbridge, Robert Mondavi Private Selection, Blackstone, Estancia, Kim Crawford and Simi leading the way with very healthy sales growth," explained Sands. "Growth of these brands is indicative of the trade-up trends we've been seeing for the past several years, and we feel that the growth trajectory for our premium and luxury brands will continue due to consumer preferences for these wines." Organic net sales for branded wine for Europe increased 4% on a constant currency basis, primarily due to higher sales of popular priced wine in mainland Europe, and a slight increase in net sales for the U.K. On a constant currency basis, net sales for Australia/New Zealand branded wine were even with the prior year. The branded wine market in the U.K. and Australia reflects ongoing competitive challenges and continued pricing pressure. Total spirits net sales increased 31% for the quarter, primarily due to the March 2007 acquisition of SVEDKA Vodka, with 12% growth in organic net sales reflecting higher average selling prices and volume gains. "SVEDKA's double-digit growth continues to prove that this is an exceptional brand," stated Sands. "We anticipate SVEDKA will continue to be a growth engine in our spirits portfolio. Additionally, focus on our premium offerings, including Black Velvet, the 99 Schnapps line and Ridgemont Reserve 1792 has bolstered our spirits portfolio performance." Operating income decreased to $198.3 million during the three months ended Nov. 30, 2007, versus $235.8 million in the comparable period last year. Equity in earnings of equity method investees increased to $74.2 million versus $10.4 million in the corresponding period in fiscal 2007. The decrease in operating income and the increase in equity earnings for third quarter 2008 were primarily due to the impact of reporting $62.0 million of equity earnings from the Crown Imports joint venture under the equity method. For the third quarter, acquisition-related integration costs, restructuring and related charges and unusual items totaled $3.0 million, compared with $45.0 million for the prior year. Net income was also impacted by interest expense, which increased 13% to $82.0 million for third quarter 2008, primarily due to the financing of the SVEDKA acquisition and $500.0 million of share repurchases completed earlier in the year. On a year-to-date basis through November the company generated free cash flow of $173.0 million versus a usage of $22.0 million in the prior year. The increase in free cash flow was primarily driven by improved working capital, reduced tax payments and lower capital spending. Acquisition and integration of Fortune Brands U.S. wine business Constellation Brands completed the acquisition of the Fortune Brands U.S. wine portfolio on Dec. 17, 2007, for a purchase price of $885.0 million, subject to closing adjustments. "This acquisition significantly advances our strategy for expanding our presence in the growing high-end U.S. wine business," stated Sands. Constellation expects the integration of the acquired wine business, realignment of the U.S. wine sales and marketing teams and portfolio rationalization to produce net cost savings of approximately $30.0 million annually by the end of fiscal 2010, with approximately $20.0 million anticipated as savings in fiscal 2009. The company expects to incur one-time cash charges of $22.0 million and one-time non-cash charges of $23.0 million, for a total of $45.0 million in one-time charges. The company also expects to incur one-time cash costs of approximately $28.0 million that will be recorded in the company's allocation of purchase price in connection with the acquired wine business, including $19.0 million for employee termination costs and $9.0 million for contract termination and other costs that will be paid primarily in fiscal 2009. Balance Sheet At Nov. 30, 2007, the company's consolidated balance sheet showed $10.19 billion in total assets, $6.68 billion in total liabilities, and $3.51 billion in total stockholders' equity. About Constellation Brands Headquartered in Fairport, New York, Constellation Brands Inc. (NYSE:STZ) -- http://www.cbrands.com/-- is a producer and marketer of beverage alcohol in the wine, spirits and imported beer categories, with market presence in the U.S., Canada, U.K., Australia and New Zealand. The company has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. * * * As reported in the Troubled Company Reporter on Dec. 3, 2007, Fitch Ratings assigned a 'BB-' rating to a note registered by Constellation Brands Inc. to fund the purchase price of Beam Wine Estates Inc., a subsidiary of Fortune Brands Inc: $500.0 million 8.375% senior unsecured note due Dec. 15, 2014. The rating outlook is Negative. CONTINENTAL GLOBAL: Signs $270 Mil. Merger Deal with Joy Global --------------------------------------------------------------- Joy Global Inc. has entered into a definitive agreement with NES Group Inc. to acquire Continental Global Inc. Continental's 2007 sales of conveyor equipment are expected to be approximately $340 million. The purchase price will be $270 million to be funded through available liquidity sources pending completion of permanent financing. The transaction is structured as a purchase from NES Group of the stock of NES Investment Co., the parent holding company of Continental, and is expected to be accretive to earnings in the first full fiscal year following the acquisition. All businesses of NES unrelated to conveyor equipment are being retained by NES Group. Completion of the transaction is subject to the receipt of necessary regulatory approvals and other customary closing conditions and is expected to occur during the first calendar quarter of 2008. "Continental Global expands the range of products and services we can deliver to our customers, and is consistent with our strategy of adding related and highly synergistic product lines," stated Mike Sutherlin, president and chief executive officer of Joy Global. "Continental's conveyor systems fit closely with our surface and underground businesses, allowing us to leverage our strong global presence in both segments." "Integrating conveyor systems into our life cycle management programs will extend the impact of these programs to deliver the highest reliability in equipment and systems that are mission critical to our customers, Mr. Sutherlin continued. "This enhances the efficiency of our existing mine site operations, and is even more important as our customers look to green field projects for future expansion." "We are very pleased to welcome the Continental family to Joy Global," Mr. Sutherlin added. About Joy Global Inc. Headquartered in Milwaukee, Wisconsin, Joy Global (Nasdaq:JOYG) -- http://investors.joyglobal.com-- is a manufacturing, distributing and servicing equipment for surface mining through P&H Mining Equipment and underground mining through Joy Mining Machinery. About Continental Global Group Inc. Based in Winfield, Alabama, Continental Global Group Inc. -- http://www.continentalglobalgroup.com/-- designs and manufactures conveyor systems and components for mining applications, primarily in the coal industry. The company's direct operating subsidiaries are Continental Conveyor and Equipment Company, and Goodman Conveyor Company. The company indirectly owns Continental Conveyor & Equipment Pty. Ltd., an australian holding company that owns four australian operating companies and a wholly foreign owned enterprise in Beijing, China. The company also owns indirectly Continental Conveyor Ltd., a United Kingdom operating company, and Continental MECO Ltd., a South African operating company. In April 2007, the company acquired Mid-Florida Wheel and Axle Inc., a business in Florida that refurbishes axle components and tires. The company operates in two principal business segments: conveyor equipment and manufactured housing products. CONTINENTAL GLOBAL: $270MM Deal Cues S&P's Positive CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Continental Global Group Inc. on CreditWatch with positive implications, following the announcement that Joy Global (BBB-/Stable/--) will acquire the company for $270 million. "We did not place the ratings on CGG's bank loan and revolving credit facility on CreditWatch, because we expect the debt to be refinanced as part of the acquisition," said Standard & Poor's credit analyst Sarah Wyeth. Furthermore, S&P expects to withdraw the corporate credit rating shortly after the close of the acquisition, expected in the first quarter of 2008. COUNTRYWIDE FIN'L: Says December Total Loan Fundings Beat Forecast ------------------------------------------------------------------ Countrywide Financial Corporation released operational data for the month ended Dec. 31, 2007. "Our fourth quarter ended with a number of positive operational trends," said David Sambol, President and Chief Operating Officer. "Total loan fundings were $24 billion for the month of December, up slightly from November 2007 and ahead of our forecasts. This pushed our fourth quarter fundings to $69 billion, also exceeding our expectations. Although average daily mortgage loan applications and the pipeline of mortgage loans-in-process decreased from November, this reflected a seasonal decline typically seen this time of year. "Our mortgage loan servicing portfolio is approaching $1.5 trillion, representing approximately 9 million loans," Mr. Sambol continued. "Prepayment speeds continued to decline throughout the quarter, which has enhanced the economic value of our mortgage servicing rights asset. "Banking Operations' assets were $113 billion at Dec. 31, 2007, with total deposits reaching $61 billion at the end of December. Retail deposits alone increased $2.3 billion during the month and $7.7 billion for the quarter to $33 billion. The Bank continued to make progress in opening its Financial Centers during the month, with 194 in operation at year-end. Our Insurance segment also produced solid operating results, with continued growth and net premiums earned reaching a record $1.5 billion for 2007. "Management is pleased with the progress we have made in positioning the Company to navigate the current challenging environment," Mr. Sambol concluded. Summary of Key Operating Statistics * Total loan fundings for the month of December 2007 were $24 billion, up one percent from November 2007. * Average daily mortgage loan application activity for December 2007 was $1.5 billion, which compares to $1.9 billion for November 2007. The mortgage loan pipeline was $35 billion at Dec. 31, 2007, as compared to $43 billion for November 2007. * The mortgage loan servicing portfolio continued to grow, reaching $1.48 trillion at Dec. 31, 2007, up $5.4 billion from Nov. 30, 2007 and $178 billion from Dec. 31, 2006. * Banking Operations' assets were $113 billion at Dec. 31, 2007, which compares to $109 billion at Nov. 30, 2007 and $83 billion at Dec. 31, 2006. * Securities trading volume in the Capital Markets segment was $315 billion for December 2007 as compared to $294 billion for November 2007 and $362 billion for December 2006. * Net earned premiums from the Insurance segment were $164 million in December 2007, up 12 percent from November 2007 and up 55 percent from December 2006. 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. * * * The company recently denied speculations that it might seek bankruptcy protection after its shares dropped 28%. "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. 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. 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. CUMMINS INC: Earns $184 Million in 2007 Third Quarter ----------------------------------------------------- Cummins Inc. reported net earnings of $184 million in the third quarter ended Sept. 30, 2007, versus net earnings of $171 million in the comparable 2006 period. Sales grew 20.0% to $3.37 billion, from $2.81 billion during the same period in 2006, led by record sales in the Engine, Power Generation and Distribution segments while the Components segment also experienced a strong sales performance. Earnings before interest and taxes rose 3.4% to $306.0 million, or 9.1% of sales, from $296.0 million, or 10.5% of sales, in the same period in 2006. Earnings growth was moderated by a downturn at some OEM customers, and the expected higher costs associated with the introduction of new emissions-related products. "We continue to experience significant growth in most of our markets around the world, and are well-positioned to take advantage of many opportunities for future growth," said Cummins chairman and chief executive officer Tim Solso. "Our technology leadership has resulted in a sustainable competitive advantage for Cummins, and we remain focused on producing profitable growth for all our stakeholders." Net earnings for the nine months ended Sept. 30, 2007, were $541.0 million on sales of $9.53 billion, compared to net earnings of $526.0 million on sales of $8.33 billion in the corresponding period of 2006. Liquidity Cash and cash equivalents decreased $216.0 million during the period to $624.0 million at the end of the first nine months compared to $840.0 million at the beginning of the period. Cash and cash equivalents were higher at the end of 2006 due to lower accounts receivable at the end of 2006. In the first quarter of 2007, approximately $62.0 million of the company's $120.0 million 6.75% debentures were repaid on Feb. 15, 2007, at the election of the holders. Total debt as a percent of the company's total capital, including total debt, was 17.2% at Sept. 30, 2007, compared with 22.4% at Dec. 31, 2006, and 28.4% at Oct. 1, 2006. Balance Sheet At Sept. 30, the company's consolidated balance sheet showed $8.03 billion in total assets, $4.56 billion in total liabilities, $275.0 million in minority interests, and $3.20 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?26e2 About Cummins Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI) -- http://www.cummins.com/-- designs, manufactures, distributes and services engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Cummins serves customers in more than 160 countries through its network of 550 company-owned and independent distributor facilities and more than 5,000 dealer locations. * * * Cummins' Junior Convertible Subordinated Debentures carry Fitch's 'BB' rating with a stable outlook. Moody's Investors Service raised Cummins' convertible preferred stock rating to Ba1 from Ba2 and withdrew the company's SGL-1 Speculative Grade Liquidity rating and its Ba1 Corporate Family Rating. CW MINING: Involuntary Chapter 11 Case Summary ---------------------------------------------- Alleged Debtor: C.W. Mining Co. dba Co-Op Mining Company P.O. Box 65809 Salt Lake City, UT 84165 Case Number: 08-20105 Involuntary Petition Date: January 8, 2008 Court: District of Utah (Salt Lake City) Petitioner's Counsel: Keith A. Kelly, Esq. 79 South Main Street P.O. Box 45385 Salt Lake City, UT 84145-0385 Tel: (801) 532-1500 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Aquila, Inc. judgment $24,841,988 20 West 9th Street Kansas City, MO 64105 House of Pumps, Inc. trade debt $19,256 8510 South Sandy Parkway Sandy, UT 84070 Owell Precast, L.L.C. trade debt $3,440 P.O. Box 2347 Sandy, UT 84091 DELPHINUS CDO: S&P Places Ratings Under Negative Watch ------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on the class A-1A, A-1B, S, A-1C, A-2, A-3, B, C, D-1, D-2, and D-3 notes issued by Delphinus CDO 2007-1 Ltd. on CreditWatch with negative implications. Standard & Poor's noted that Delphinus CDO 2007-1 Ltd. triggered an event of default on Jan. 2, 2008, under section 5.01(i) of the indenture dated July 19, 2007, when the par value coverage ratio fell below 100%. When Standard & Poor's receives EOD notices, S&P place all of the affected note ratings on CreditWatch with negative implications. Ratings Placed on CreditWatch Negative Delphinus CDO 2007-1 Ltd. Rating ------ Class To From ----- -- &