T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 11, 2008, Vol. 12, No. 9 Headlines 91 BEACON: Case Summary & Two Largest Unsecured Creditors ACERMED INC: OIS Buys All Assets Through Abraxas Medical Unit ADVANCED LIVING: Case Summary & 19 Largest Unsecured Creditors ALLIANT TECHSYSTEMS: Moody's Holds Ratings on CDN$1.325 Bil. Deal ALLIANT TECHSYSTEMS: CDN$1.325 Bil. Deal Cues Fitch's Neg. Watch ALLIANT TECHSYSTEMS: S&P Puts BB Corp. Rating on Negative Watch ALLIS-CHALMERS Energy: Earns $13 Million in 2007 Third Quarter AMERICAN HOME: Wells Fargo, et. al Oppose File Destruction AMERICAN HOME: Wants To Abandon Heloc Loan Servicing Rights AMERICAN HOME: Wants to Auction Off Various Assets AMERICAN HOME: Wants DoveBid to Sell Miscellaneous Assets AVADO BRANDS: Sells 61 Restaurants to Rita Acquistion AVAGO TECH: S&P Upgrades Corporate Credit Rating to BB- from B BANC OF AMERICA: Fitch Holds 'B+' Rating on $3.9MM Certificates BARNERT HOSPITAL: Court Extends Plan Filing Deadline to April 2 BASIS YIELD: Case Now Under Official Liquidation BASIS YIELD: NY Court to Consider Liquidation Case on January 15 BAY AREA: Case Summary & Largest Unsecured Creditor BEAR STEARNS: Fitch Holds Low-B Ratings on Six Certificate Classes BEAR STEARNS: Fitch Holds 'B-' Rating on $2.1MM Class M Certs. BLACKBOARD INC: Moody's Vacates Ratings for Business Reasons BLACKHAWK AUTOMOTIVE: Court OKs Frost Brown as Panel's Counsel BOSTON HILL: Has Until Jan. 15 to File Schedules of Assets & Debts BOSTON HILL: Section 341(a) Meeting Moved to January 22 BRANTLEY HOMES: Files for Chapter 7 Liquidation in Birmingham BRIGANTINE HIGH: Moody's Junks Rating on $14 Mil. Notes from A2 CALPINE CORP: S&P Expects B Rating Upon Calpine's Bankruptcy Exit CABELA'S CREDIT: Fitch To Put 'BB+' Rating on $10.125MM Notes CALPINE CORP: Moody's Puts B2 Ratings on Looming Chapter 11 Exit CAPITAL LAND: Files Schedules of Assets and Liabilities CAPITAL LEASE: Fitch Affirms 'B+' Rating on $6.8MM Class E Certs. CARGO CONNECTION: Converts $800K Obligation to Promissory Note CENTENNIAL COMMS: Nov. 30 Balance Sheet Upside-Down by $1 Bil. CENTERPOINT ENERGY: Earns $91 Million in 2007 Third Quarter CENTRAL ILLINOIS: Files List of 20 Largest Unsecured Creditors CENTRAL ILLINOIS: Section 341(a) Meeting Scheduled for February 11 CENTRAL ILLINOIS: Wants to Hire Barash & Everett as Bankr. Counsel CENTRAL VERMONT: Earns $4.3 Million in 2007 Third Quarter CHARLES RIVER: Earns $42.8 Million in 2007 Third Quarter CHL MORTGAGE: Moody's Junks Ratings on Two Tranches from Baa2 CONMED CORP: S&P Retains BB- Corp. Rating with Positive Outlook CONTINENTAL GLOBAL: Moody's Ratings Unmoved by Joy Global Deal COUNTRYWIDE ALT: Higher Delinquency Cues Moody's to Cut Ratings COUNTRYWIDE FINANCIAL: May be Rescued by BofA Through Acquisition COTT CORP: Amends Credit Covenant, Inks ABL Credit Facility CRESCENT RESOURCES: Weak Revenues Cue S&P's Rating Cut to BB- CYPRESS SEMICONDUCTOR: Moody's Withdraws B1 Corp. Family Rating DEBT RESOLVE: Secures $4.5 Mil. Financing from Resolution Group DELPHI CORP: S&P Expects to Put B Rating After Chapter 11 Exit DELTA AIR: Board to Consider Consolidation with Northwest or UAL DURHAM FURNITURE: Files Creditor Protection Under CCAA in Ontario E*TRADE FIN'L: Pursues 2008 Turnaround Plan; To Exit Trading Biz FIRST COLONIAL: Claimants to Get Payments in First Quarter 2008 GOLDMAN SACHS: Moody's Junks Ratings on Eight Tranches HORNBECK OFFSHORE: S&P Ratings Unaffected by Vessel Purchase IMAX CORP: Moody's Changes Outlook to Stable; Upgrade Less Likely IMAX CORP: Sept. 30 Balance Sheet Upside-Down by $76.8 Million INPHONIC INC: Committee Hires Deloitte as Financial Advisor IWT TESORO: Judge Glenn OKs Bidding Procedure for Sale of Assets KB HOME: S&P Ratings Unstirred by Weak Fourth-Quarter Results KRONOS ADVANCED: Sept. 30 Balance Sheet Upside-Down by $954,100 KULICKE & SOFFA: Moody's Withdraws B2 Corporate Family Rating MAAX HOLDINGS: Inks Forbearance Contract With Secured Lenders M.B.H. INVESTMENTS: Voluntary Chapter 11 Case Summary MARCAL PAPER: Committee Balks at Proposed Asset Sale & Credit Bid MBIA INC: Offering $1BB Surplus Notes to Meet Rating Requirements MBIA INC: Capital Strengthening Plan Cuts Dividends to $.13/Share MBS MGT: Las Ventanas May Use Cash Collateral on Interim Basis MBS MGT: Wells Fargo Balks at Las Ventanas' Use of Cash Collateral MGM MIRAGE: To Launch Cash Tender Offer for 10 Million Shares MID ATLANTIC: Files Schedules of Assets and Liabilities MTI TECHNOLOGY: Taps Singer Lewak as Certified Public Accountant NOVASTAR FINANCIAL: Wachovia Extends Waiver Until February 4 NOVASTAR FINANCIAL: Says Top Executives Fired Without "Cause" NUANCE COMM: Gets Inducement Grant of 286,137 Restricted Stock OAKWOOD HOMES: Fitch Junks Ratings on Six Certificate Classes OXFORD INDUSTRIES: Earns $12.6 Mil. in Quarter Ended November 30 PEABODY ENERGY: Names Richard A. Navarre as President and CCO PERRY ELLIS: Buying C&C Calif. and Laundry Brands for $37 Million POLYONE CORP: Splits Polymer Coating Systems Into Two Units RACE POINT: Fitch Affirms 'BB-' Ratings on $21 Million Notes REGENCY ENERGY: Completes $139MM Buyout of FrontStreet Hugoton RISE LLC: Voluntary Chapter 11 Case Summary ROTECH HEALTHCARE: Posts $3.1 Million Net Loss in 2007 3rd Quarter SOFA EXPRESS: Can Hire Alston & Bird as Lead Bankruptcy Counsel SOFA EXPRESS: Court Approves Boult Cummings as Local Counsel SOLUTIA INC: Mulls Offering $400 Mil. of Senior Unsecured Notes SOUTHWEST FOOD: Files for Chapter 11 Protection in Oklahoma SOUTHWEST FOOD: Case Summary & 20 Largest Unsecured Creditors STARD INC: Case Summary & 38 Largest Unsecured Creditors SUCCESSOR HURRICANE: Moody's Places B2 Rating on $30 Mil. Notes SUMMERDALE PARTNERS: Files Schedules of Assets and Liabilities SUNRIDGE LAND: Section 341(a) Meeting Scheduled for January 23 THERMADYNE HOLDINGS: Earns $1.0 Million in 2007 Third Quarter VONAGE HOLDINGS: CEO Says Debt Refinancing is "Top Priority" VONAGE HOLDINGS: Expects Revenue in Excess of $800 Million in 2007 WCI COMMUNITIES: S&P Ratings Acknowledge Liquidity Challenges WEIGHT WATCHERS: Sept. 29 Balance Sheet Upside-Down by $944.7 Mil. * AlixPartners Names 11 New Managing Directors * Sheppard Mullin Adds Margaret M. Mann as Bankruptcy Partner * Fitch Creates Division That Will Consolidate Non-Rating Products * Fitch Introduces New Interface for Market Implied Ratings * BOOK REVIEW: Bankruptcy: A Feast for Lawyer ********* 91 BEACON: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------- Debtor: 91 Beacon Street Realty, L.L.C. 10-18 Brainerd Road Allston, MA 02134 Bankruptcy Case No.: 08-10170 Chapter 11 Petition Date: January 9, 2008 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Ryan Sullivan, Esq. Bodoff and Associates 225 Friend Street, Suite 704 Boston, MA 02114 Tel: (617) 742-7300 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Barry Winer 91 Beacon Street, Unknown One Gateway Center Boston, MA; value of Newton, MA 02458-2879 $6,000,000; value of senior lien: $5,000,000 Sawyer Realty Holdings, L.L.C. 91 Beacon Street Unknown 75 Second Avenue, Suite 200 Boston, MA; value of Needham Heights, MA 02494 security: $6,000,000; value of senior lien: $5,300,000 ACERMED INC: OIS Buys All Assets Through Abraxas Medical Unit ------------------------------------------------------------- Ophthalmic Imaging Systems acquired substantially all of the assets of AcerMed Inc. The acquisition was done through OIS's newly established subsidiary, Abraxas Medical Solutions Inc., and was approved by the California Central Bankruptcy Court. Terms of the transaction were not disclosed. AcerMed has been recognized as a leader in providing comprehensive and advanced EMR and Practice Management software solutions for a wide range of medical practices, from solo practitioners to multi- site, multi-specialty group practices nationwide. The AcerMed suite of software automates the clinical, administrative, and financial operations of a medical office. Paper charting can be virtually eliminated and clinical charting would be done intuitively using a wireless computer pen tablet at the point of care. AcerMed EMR software has been certified by the Center for Certification of Health Information Technology. Michael A. Bina, AcerMed's former CEO, has been named President of Abraxas. In addition, Abraxas has already signed employment agreements with seven additional employees, all of whom are former AcerMed's employees. Over the course of 2008, OIS anticipates expenses and investments of approximately $2 million related to the funds necessary to expand operations of Abraxas in all departments, including R&D, technical support and sales. "We are excited to expand upon our current line of informatics offerings through the acquisition of AcerMed's assets and are confident in our ability to further penetrate the growing market for EMR and Practice Management software solutions. This acquisition allows us to broaden our reach into new markets beyond our current offering of informatics platform to ophthalmologists," stated Gil Allon, CEO of Ophthalmic Imaging Systems. "On behalf of the company, I would like to welcome Mike and his team to OIS." "We look forward to combining our expertise and experience in the EMR industry with OIS's proven management and financial backing," said Mr. Bina. "We believe that Abraxas' clients will highly benefit from this winning combination, and enjoy best-in-breed EMR and Practice Management software, backed by exemplary service and support. As we expand our operations in 2008, we anticipate leveraging the positive trends favoring electronic solutions versus paper-based solutions." About Ophthalmic Imaging Systems Ophthalmic Imaging Systems, -- http://www.oisi.com/-- a majority- owned subsidiary of MediVision, provides ophthalmic digital imaging systems. The Company designs, develops, manufactures and markets digital imaging systems and informatics solutions for the eye care market. With over twenty years in the ophthalmic imaging business, the company has consistently introduced new, innovative technology. The company, together with MediVision, co-markets and supports their products through an extensive network of dealers, distributors, and direct representatives. OIS is a registered member Company listed on http://www.OTCVillage.com/ About AcerMed Inc. AcerMed Inc., -- http://www.acermed.com/-- headquartered in Irvine, California, provided workflow automation solutions for medical practices nationwide. The company's foundation is built on nearly 20 years of experience in automating small to mid-size practices, from solo-practitioners to multi-site, multi-specialty group practices. It is a privately held company that develops and markets Electronic Medical Records, Practice Management and scheduling software. It also delivers other solutions and services to automate the workflow of medical practices, including clinical, financial and administrative tasks. AcerMed filed chapter 11 in Sept. 20, 2007 (Bankr. C.D. Calif. Case No. 07-13005). Paul S. Nash, Esq., represents the Debtor in its restrucuturing efforts. The Debtor listed total assets of $1,165,089 and total debts of $3,603,580 when it filed for bankruptcy. ADVANCED LIVING: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Advanced Living Technologies, Inc. dba The Oaks at Brookshire dba Country Care Plex dba Stockdale Nursing Center dba Floresville Nursing and Rehabilitation Center dba Victoria Nursing and Rehabilitation Center dba Manor Oaks Nursing Center 10415 Morado Circle, III, Suite 120 Austin, TX 78759 Bankruptcy Case No.: 08-50040 Type of Business: The Debtor owns and operates nursing homes. Chapter 11 Petition Date: January 9, 2008 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: Patricia Baron Tomasco, Esq. Brown McCarroll, L.L.P. 111 Congress Avenue, Suite 1400 Austin, TX 78701 Tel: (512) 479-1141 Fax: (512) 226-7320 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pharmerica $617,191 P.O. Box 409251 Atlanta, GA 30384-9251 Healthcare Services $278,263 3220 Tillman Drive Suite 300/Glenview Bensalem, PA 19020 McKesson $156,315 P.O. Box 630693 Cincinnati, OH 45274-0693 Americana Ambulance $51,035 Heritage Management $50,519 Skin Care Management $45,994 Colinas Healthcare $45,000 U.S. Foodservice, Inc. $35,955 SYSCO $32,110 Premium Financing Specialists $30,423 Jenson & Guelker $29,287 Rehabcare Group East, Inc. $26,413 Phoenix E.M.S., Inc. $23,957 Country Careplex $23,924 Complete Medical Staffing $22,144 Vinson & Elkins $20,265 Manor Oaks $18,955 Omnicare Respiratory Group $15,824 Detar Hospital $14,586 ALLIANT TECHSYSTEMS: Moody's Holds Ratings on CDN$1.325 Bil. Deal ----------------------------------------------------------------- Moody's Investors Service affirmed Alliant Techsystems Inc.'s Ba3 Corporate Family Rating as well as the company's Baa3 senior secured and B1 subordinated note ratings. The action follows the announcement by ATK of its intention to acquire certain business units from MacDonald Dettwiler and Associates of Canada for approximately Cdn$1.325 billion. In affirming the ratings, Moody's noted that the acquired businesses will fit well with the company's existing operations and will enhance ATK's position in the space systems area. While the purchase price represents a full value for the acquired operations, Moody's believes that the company's financial metrics will remain consistent with the Ba3 rating over the intermediate term. While leverage metrics will initially be somewhat elevated, with proforma Debt/EBITDA approaching 5x, the rating agency anticipates that strong cash flow will enable ATK to quickly reduce debt incurred to fund the transaction. ATK's revenue, earnings and cash flow growth over the last several years have been viewed favorably under Moody's rating methodology for the aerospace/defense sector. However, Moody's revised its outlook for the company to negative from positive in September 2007 upon ATK's stock price having reached a level at which the holders of certain convertible subordinated notes could put those securities to the issuer. This contingent risk raised liquidity concerns under the rating analysis at a time when the company's committed and available cash resources might not have been sufficient to fund a full put of the convertible securities. To date, none of the holders of the convertible securities has exercised their put rights, and the full amount of the instruments remains outstanding. The company's public commentary regarding the financing of the proposed acquisition indicates that a portion of the facility could be available to address any potential put of the convertible notes, which could enhance the company's liquidity profile. Through the end of September, ATK's EBIT/interest coverage was 4.1 times and FCF/Debt was shown as 14% (using Moody's standard adjustments), both strong for the current Ba3 category. Recently, free cash flow has been used in purchasing shares common stock, which left ATK's debt/EBITDA at 3.8 times at the end of the third quarter. The proposed acquisition will likely weaken financial metrics from these levels in the near term, and support continued negative outlook on the rating. Nevertheless, should ATK's cash flows be prioritized toward debt reduction returning debt/EBITDA to 4.5x or below, the company's credit profile within the Ba3 rating category could strengthen. As the transaction progresses, Moody's will assess the effect which the company's longer-term financing plan and their respective terms may have on pro forma leverage, interest coverage and free cash flow metrics as well as how such arrangements address the prospectively larger organization's liquidity profile. In addition, the ultimate structural mix of secured and unsecured obligations may impact notching of existing debt instruments through the application of Moody's Loss Given Default Methodology. Ratings affirmed: -- Alliant Techsystems Inc. -- Corporate Family Rating, Ba3 -- Probability of Default Rating, Ba3 -- Senior Secured bank credit facilities, Baa3 (LGD-2, 13%) -- Senior convertible subordinated notes, B1 (LGD-4, 66%) Alliant Techsystems Inc, headquartered in Edina, Minnesota, is a leading supplier of propulsion, composite structures, munitions, precision capabilities and civil and sporting ammunition. The company operates three segments: Mission Systems, Launch Systems, and Ammunition Systems. ALLIANT TECHSYSTEMS: CDN$1.325 Bil. Deal Cues Fitch's Neg. Watch ---------------------------------------------------------------- Fitch has placed the ratings for Alliant Techsystems on Rating Watch Negative following the announced acquisition of the Information Systems and Geospatial Services divisions of MacDonald, Dettwiler and Associates, Ltd. for CDN$1.325 billion. The Rating Watch Negative applies to these ratings: -- Issuer Default Rating 'BB'; -- Senior secured term loan 'BBB-'; -- Senior secured revolver 'BBB-'; -- Convertible senior subordinated notes 'BB-'; -- Senior subordinated notes 'BB-'. The ratings cover outstanding debt totaling approximately $1.5 billion as of Sept. 30, 2007. The Rating Watch Negative reflects the higher leverage that will result from the transaction and uncertainty regarding the permanent financing package for the transaction. ATK has obtained committed financing for the transaction, but the company has not disclosed details of the intended permanent financial package, including the type of debt to be issued and whether there will be an equity component. The Rating Watch will be resolved following the determination of the permanent financing structure for the acquisition, and Fitch expects to resolve the Rating Watch prior to or concurrent with the closing of the transaction, which is expected within the company's first fiscal quarter of 2009 ending June 30, 2008. Should the ratings be downgraded in that time period, Fitch expects the IDR to remain in the 'BB' category. Fitch views the acquisition of the Canadian-based MDA businesses as favorable overall. The target assets are a strategic fit providing some needed diversification in terms of product lines and geography while complementing ATK's current space portfolio. The new business should also increase profitability and cash flows over the intermediate term. Near term concerns relate to the higher leverage associated with the transaction and potential integration issues. However, Fitch expects ATK to continue to generate solid free cash flow, and given management's intent to direct excess cash towards debt reduction, Fitch expects credit metrics to be near current levels within 12 to 24 months after the transaction closes. ATK's current ratings continue to be supported by solid free cash flow and adequate credit metrics for the rating; high levels of spending for munitions and missile defense; ATK's position in the NASA budget; ATK's role as a sole source provider for over two- thirds of its sales to the US Government; and pension plan funding status. Concerns focus on leverage; integration of the announced acquisition; potential budgetary pressures going forward, particularly for missile defense and NASA; a lack of diversity compared to other large and medium sized defense contractors; the amount of revenue generated by operations in Iraq and Afghanistan; and commodities exposure. ATK has three convertible notes issues outstanding, two of which recently became convertible due to a triggering event related to the increase in the company's stock price. The two notes (2.75% due 2024 and 3.0% due 2024) are now convertible in cash up to the conversion price and cash or stock in excess thereof at ATK's discretion. The notes remain convertible as long as the triggering condition persists. As a result, the principal amount of the two notes ($480 million) is now listed as a current liability. Although listed as current, the actual payment of these notes depends on holders exercising their right to convert. Fitch does not believe the convertible notes create a liquidity shortfall for several reasons. First, Fitch notes that ATK's latest-12-months free cash flow is understated due to approximately $300 million of discretionary pension contributions, and Fitch expects the company's cash generation and liquidity position to improve as a result of solid operating performance. Second, Fitch estimates that it is unlikely that the noteholders will choose to convert the notes at this time because there are other options to either realize the value of the securities or lock in the gain in the stock price. Additionally, as part of the financing arranged for the acquisition of the MDA businesses, ATK has assured access to funds which are designated solely for redemption of the convertible notes, which along with internal liquidity, should be adequate for potential liquidity needs. ALLIANT TECHSYSTEMS: S&P Puts BB Corp. Rating on Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB' corporate credit rating, on Alliant Techsystems Inc. on CreditWatch with negative implications. "The CreditWatch placement reflects the planned acquisition of two divisions of MacDonald, Dettwiler and Associates Ltd. for approximately $1.3 billion," said Standard & Poor's credit analyst Christopher DeNicolo. The debt-financed acquisition will result in pro forma adjusted debt to EBITDA increasing to more than 4.5x from about 3x expected for ATK standalone in fiscal 2008 (ending March 30, 2008). The acquired units, Information Systems and Geospatial Information Services, have about $500 million in sales and produce satellites and related components, ground stations, robotics used in space exploration, as well as processing and distributing satellite imagery, complementing ATK's existing space operations. The transaction is subject to U.S. and Canadian regulatory approvals, as well as approval by MDA's shareholders, and is expected to close by June 2008. Standard & Poor's will meet with management to discuss the rationale for the acquisition, financing plans, and financial policy to determine the impact on the ratings. Edina, Minnesota-based ATK is the leading manufacturer of solid rocket motors for space-launch vehicles and strategic missiles and is second in the market for tactical missiles. In addition, the company is the largest provider of small-caliber ammunition to the U.S. military and has strong positions in tank and other types of ammunition. ALLIS-CHALMERS Energy: Earns $13 Million in 2007 Third Quarter -------------------------------------------------------------- Allis-Chalmers Energy Inc. reported net income of $13.0 million for the third quarter ended Sept. 30, 2007, compared to net income of $11.3 million in the third quarter of 2006. Revenues for the third quarter of 2007 rose 70.4% to $147.9 million compared to $86.8 million for the third quarter of 2006. Revenues increased in the third quarter of 2007 due to acquisitions completed in 2006, investments in new capital equipment and the opening of new operating locations. The acquisitions included DLS Drilling, Logistics & Services Corporation, or DLS, the company's international drilling subsidiary in Argentina, acquired in August 2006, and substantially all of the assets of Oil & Gas Rental Services Inc., or OGR, acquired in December 2006. Income from operations grew 61.1% to $31.1 million for the third quarter of 2007, from $19.3 million in the third quarter of 2006. Adjusted EBITDA increased 78.2% to $46.4 million for the third quarter of 2007 compared to $26.0 million in the third quarter of 2006. The provision for income taxes for the third quarter of 2007 was $7.2 million, or 35.8% of net income before income taxes, compared to $3.1 million, or 21.7% of net income before income taxes for the third quarter of 2006. Micki Hidayatallah, Allis-Chalmers' chairman and chief executive officer, stated, "Our results in the third quarter were primarily affected by weaker Gulf of Mexico activity, including the impact of the hurricane season, delays in the delivery of coil tubing units and pre-election labor slow downs and strikes in Argentina." Mr. Hidayatallah also noted, "In spite of these challenges we had Adjusted EBITDA of $46.4 million in the third quarter and Adjusted EBITDA of $146.8 million for the nine month period ended Sept. 30, 2007. We believe the current levels of revenue and EBITDA are sustainable in the fourth quarter of this year. Next year we expect to see the benefits of our extensive capital expenditure program in 2007, our proposed 2008 capital expenditures, and from recent acquisitions in the Tubular Services and Directional Drilling segments. These factors, together with increasing demand for energy in Argentina should contribute to improved financial and operating performance." Liquidity and Capital Resources The company had cash and cash equivalents of $63.1 million at Sept. 30, 2007, compared to $39.7 million at Dec. 31, 2006. At Sept. 30, 2007, the company had $516.5 million in outstanding indebtedness, of which $508.9 million was long term debt and $7.6 million is due within one year. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $1.02 billion in total assets, $614.7 million in total liabilities, and $405.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26ed About Allis-Chalmers Allis-Chalmers Energy Inc. --http://www.alchenergy.com/-- (NYSE: ALY) is a Houston based multi-faceted oilfield services company. It provides services and equipment to oil and natural gas exploration and production companies, domestically in Texas, Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Utah, Wyoming, Arkansas, Alabama, West Virginia, offshore in the Gulf of Mexico, and internationally primarily in Argentina and Mexico. Allis-Chalmers provides rental services, international drilling, directional drilling, tubular services, underbalanced drilling, and production services. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised its outlook on Allis- Chalmers Energy Inc. to positive from stable and affirmed its 'B' corporate credit rating on the company. AMERICAN HOME: Wells Fargo, et. al Oppose File Destruction ---------------------------------------------------------- Wells Fargo Funding Inc. oppose American Home Mortgage Investment Corp. and its debtor-affiliates' motion to abandon and destroy hard copy duplicates of certain mortgage loan files, or alternatively, to return the files to their owners upon payment of reasonable costs and expenses. Wells Fargo contends that the Debtors are seeking to destroy mortgage loan files that are owned by third parties and in which they have no legal or equitable interest within the purview of Section 554 of the Bankruptcy Code. Thus, the U.S. Bankruptcy Court for the District of Delaware cannot authorize the Debtors to destroy the Loan Files, which include certain files owned by Wells Fargo, Karen C. Bifferato, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, tells Judge Sontchi. Ms. Bifferato also contends that the Debtors did not present procedures, and did not commit to a deadline, on their proposed delivery of the Loan Files at certain fees. Hence, Wells Fargo objects to any order requiring it to reimburse the Debtors for costs and expenses relating to the turnover of its Loan Files absent specific procedures governing that process. Wells Fargo Bank, National Association, asserts that the Loan Files may contain original loan documents and is concerned about the ultimate ability of the Debtors to realize upon loans, through foreclosure, without the original documents. Thus, it objects to the request to the extent the Debtors will destroy any original documents. JPMorgan Chase Bank, National Association, one of the Debtors' warehouse lenders, says that the request fails to protect its interest in the Loan Files, which might consists of documents constituting the warehouse facility collateral. The other parties, who filed objections to the request, are: -- Bank of America, N.A.; -- Calyon New York Branch; -- CitiMortgage, Inc.; -- Kelly Beaudin Stapleton, U.S. Trustee for Region 3; and -- Triad Guaranty Insurance Corp. Bear Stearns Mortgage Capital Corporation and EMC Mortgage Corporation reserve their rights with respect to the Debtors' proposal. They tell Judge Sontchi that the Debtors did not specify what files will be included and if any of the files covered by their purchase agreements with the Debtors will also be destroyed. Hence, Bear Stearns and EMC reserve their rights to ensure that the loan files covered by their agreements are not subject to the request. The Bank of New York joins and supports the objection of Wells Fargo Bank, National Association. Freddie Mac Objection Earlier, Federal Home Loan Mortgage Corporation expressed opposition to the Debtors' request noting that pursuant to two stipulations it executed with the Debtors on Sept. 18, 2007, the servicing rights related to the Freddie Mac portfolio were to be transferred to Bank of America, N.A., on an interim basis pending a subsequent auction sale. However, Freddie Mac asserted that seven weeks past the agreed- upon deadline, the Debtors have still failed to substantially complete the transfer of the documents relating to the Freddie Mac Portfolio to BofA. Freddie Mac also argued that it stands to suffer considerable harm from any destruction of its mortgage loan files, including a potential inability (i) to enforce its rights under any loan for which the loan documents were inadvertently destroyed or (ii) to provide releases and discharges of the notes and security instruments upon payoff, as potentially required by the loan documents and applicable state law. Duplicate Files In the ordinary course of the Debtors' loan origination business, they maintain individual loan files, which include copies of consumer loan applications, closing documents, titles and home appraisals. The loan origination offices sent copies of the loan files to the Debtors' headquarters in Melville, New York, for central storage, and which would be sent later to American Corporate Record Center, Inc., a non-affiliated third party-owned document storage facility. The Storage Facility currently holds 1,100,000 Hard Copy Loan Files, and charges approximately $45,000 per month. The Debtors also (i) began imaging approximately 490,000 of the Hard Copy Loan Files, and (ii) maintain various subsets of the information contained in the E-Loan Files as alternative sources for certain information. However, despite the imaging and maintenance of the E-Loan Files, the Debtors continue to store the corresponding Hard Copy Loan Files in the Storage Facility. Because the Hard Copy Loan Files, including the duplicates, contain confidential consumer information, federal regulations provide that the Debtors must properly dispose the files, like burning, pulverizing or shredding. In their request, the Debtors argued that given the volume of the Hard Copy Loan Files, their destruction will take a substantial amount of time. They noted that the immediate destruction of the Duplicate Files is the appropriate starting point for the lengthy destruction process. The Debtors estimated that the destruction of the Duplicate Files, in accordance with applicable law, will cost approximately $500,000 plus, among other things, costs and labor associated with the retrieval, review and scanning of the files prior to destruction. 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: Wants To Abandon Heloc Loan Servicing Rights ----------------------------------------------------------- American Home Mortgage Investment Corp. and certain of its debtor-affiliates are parties to servicing and subservicing agreements for certain home equity line of credit mortgage loans related to American Home Mortgage Investment Trust 2004-4. Generally, the Trust acquired and own the HELOC Mortgage Loans and issued securities that are backed by, or that rely directly on, the HELOC Mortgage Loans and related collections as the source of payment. MBIA Insurance Corporation insures the securities and The Bank of New York is the indenture trustee under the 2004-4 Trust. Previously, the U.S. Bankruptcy Court for the District of Delaware partly approved the request of CIFG Assurance North America Inc. and allowed the transfer of servicing rights under a 2006-2 Trust to GMAC LLC on Jan. 14, 2008. The Court also granted in part the request of Financial Guaranty Insurance Company, and allowed the transfer of servicing rights to GMAC under certain 2005 Securitizations on January 11. Given the (i) pending Assured Guaranty Corp.'s request, which asks virtually the same relief as FGIC and CIFG, and (ii) granting of CIFG's and FGIC's requests, Mr. Patton discloses that the only servicing rights remaining with respect to the HELOC Mortgage Loans are those related to the 2004-4 Trust. Accordingly, the Debtors obtained the Court's authority to abandon their servicing rights, effective as of January 11, 2008, under the 2004-4 Servicing Agreement. The Court also permitted the Debtors to take necessary actions to effectuate and facilitate the abandonment of the HELOC Servicing Rights. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, contends that the abandonment of the HELOC Servicing Rights is warranted under Sections 105 and 554(a) of the Bankruptcy Code. He disclosed that the Debtors estimate that by March 15, 2008, they will lose money for servicing the HELOC Mortgage Loans. Hence, the Debtors determined that the obligations and expenses related to the HELOC Servicing Rights are unnecessary administrative burden on, and are of inconsequential value to the bankruptcy estates. 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: Wants to Auction Off Various Assets -------------------------------------------------- American Home Mortgage Investment Corp. and its debtor- affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to sell certain assets pursuant to an auction. Prior to bankruptcy filing, the Debtors accumulated certain assets, including furniture, fixtures, office equipment and other personal property, which they no longer need due to the closure of their loan origination business. The prompt sale of the assets pursuant to the proposed auction procedures will provide an efficient mechanism for the Debtors to maximize the recovery from the sale of the Assets, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells Judge Sontchi. Pursuant to the proposed auction procedures, DoveBid, Inc., will act as auctioneer for the Assets. The Debtors previously obtained the Court's permission to sell, donate or abandon miscellaneous assets pursuant to a prescribed procedures. The Debtors' proposed auction procedures is intended to complement and work in conjunction with the prior order as not all of the Debtors' assets will be designated for auction or ultimately sold at auction. Mr. Patton contends that the Assets should be sold immediately to eliminate costs and maximize the value of the Debtors' bankruptcy estates. Sale and Auction Procedures The Debtors and DoveBid will negotiate and execute a mutually acceptable plan of sale for each proposed auction of Assets, which the Debtors identified to be disposed of. Each Plan will address, among other things: -- the Assets subject to a particular Auction; -- which Debtor entity owns the Assets; -- whether the Assets will be sold by public auction or private sale; -- if the Assets are to be sold by public auction, whether the auction will be promoted on DoveBid's Web site at http://www.dovebid.com/,as a "Featured On-Line Auction," or will be broadcast live over the Internet as a webcast auction and consigned into one or more exchange auctions; and -- the estimated expenses of DoveBid. The Debtors will file and serve a Plan to certain notice parties, which include the U.S. Trustee and all known parties holding claims or interests in the Assets subject to the Plan. The Notice Parties will have 10 days to object to a Plan. In the absence of a timely-filed objection, the Debtors and DoveBid may proceed with the Plan without further notice or hearing and that Plan will be deemed fully authorized by the Court. If an objection is timely filed, the Debtors will not proceed with the Plan unless (i) the objection is withdrawn or resolved, or (ii) the Court overrules the objection. DoveBid will advertise and market each Sale and the Debtors will provide DoveBid with an allowance for the advertisement and marketing. DoveBid may offer the Assets for sale by piece or lot, provided, that the Assets will not be commingled with any third parties' assets. It may also sell all Assets at auction to the highest bidder, provided, no officer, director or affiliate of the Debtors will be entitled to purchase any Assets. Mr. Patton discloses that DoveBid will not (i) guarantee the consummation of any sale and is not responsible if a purchaser fails to complete a purchase, and (ii) permit any purchaser to take possession of any Assets without full payment. He notes that DoveBid assumes the risk of collection for any equipment it allows to be removed. All buyers will acquire the Assets sold "AS IS-WHERE IS," without any representations or warranties from the Debtors. However, the buyers will take title to the Assets free and clear of any liens and interests, pursuant to Section 363(f) of the Bankruptcy Code. DoveBid will collect from the buyers the gross proceeds of each Plan, including any applicable sales taxes and deposit the funds into a bank depository account maintained by DoveBid. All applicable sales taxes will be paid to appropriate taxing authorities out of DoveBid's settlement account. Within 10 days of the Auction date, DoveBid will issue a check to the seller of the Assets for 80% of the net proceeds collected and cleared from the Auction. Within 30 days of the Auction, or 45 days if multiple sellers are involved, DoveBid will issue the Seller a check for the balance of the Sale proceeds, plus certain rebates. DoveBid will also issue to the Debtors a settlement report showing, a record of the sales and the allocation of the funds generated by the sales. Based on the information provided in the Settlement Report, the Debtors will file and serve on the Notice Parties a compensation report that identifies, among other things, the aggregate expenses paid by the Debtors to DoveBid. 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: Wants DoveBid to Sell Miscellaneous Assets --------------------------------------------------------- Pursuant to Sections 327(a), 328(a) and 363 of the Bankruptcy Code, American Home Mortgage Investment Corp. and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ DoveBid Inc. as auctioneer. The Debtors intend to sell certain assets, including furniture, fixtures, office equipment and other personal property, which they no longer need due to the closure of their loan origination business. The retention and employment of DoveBid will allow the Debtors to auction and sell the Assets in an efficient and expeditious manner because of DoveBid's specialized auction experience, relates James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Pursuant to the proposed auction procedures, the Debtors and DoveBid will negotiate and execute a mutually acceptable plan of sale for each proposed auction of Assets, which the Debtors identified to be disposed of. DoveBid will advertise and market each Sale and the Debtors will provide DoveBid with an allowance for the advertisement and marketing. DoveBid may offer the Assets for sale by piece or lot, provided, that the Assets will not be commingled with any third parties' assets. It may also sell all Assets at auction to the highest bidder, provided, no officer, director or affiliate of the Debtors will be entitled to purchase any Assets. Mr. Patton discloses that DoveBid will not (i) guarantee the consummation of any sale and is not responsible if a purchaser fails to complete a purchase, and (ii) permit any purchaser to take possession of any Assets without full payment. He notes that DoveBid assumes the risk of collection for any equipment it allows to be removed. DoveBid will collect from the buyers the gross proceeds of each Plan, including any applicable sales taxes and deposit the funds into a bank depository account maintained by DoveBid. The DoveBid Agreement The Debtors' agreement with DoveBid provides that the auctioneer will receive compensation on a percentage-fee basis for each Plan and that DoveBid is entitled to reimbursement for the actual and necessary expenses it incurred from the gross proceeds of each Plan. DoveBid will collect payment a buyer's premium from the buyers of any Assets at the rate of 16% of the purchase price for each Asset. Mr. Patton notes that the Buyer's Premium will be reduced by 1% of the purchase price of any Asset for which a purchaser pays by cash, cashier's check, company check or wire transfer, provided payment in full is received by DoveBid within 72 hours from receipt of invoice. In addition, the Buyer's Premium will be 0% and DoveBid will receive no compensation for any Asset, where the purchaser is a Debtors' employee and the Asset is purchased for personal use or consumption. DoveBid will also remit to the Debtors a rebate amount, which is a percentage of the aggregate gross proceeds realized as a result of the sale of Assets. The Rebate will be calculated as: Aggregate Gross Proceeds Rebate ------------------------ ------ between $0 and $1,000,000 2% between $1,000,001 and $2,000,000 3% in excess of $2,000,000 4% DoveBid is Disinterested The submission of detailed time entry is unnecessary and would be unduly burdensome to DoveBid, Mr. Patton argues. Moreover, other than the reimbursement of expenses, DoveBid is being compensated by charging the buyer of the Assets a percentage premium. Accordingly, the Debtors request that the submission of formal fee applications be waived pursuant to Local Rule 2016-2(g). Further, the Debtors request the authority to allow DoveBid's compensation and reimbursement for its actual and necessary expenses to be paid from the proceeds of each Plan, without further order of the Court, provided that any compensation or reimbursement made to DoveBid is subject to disgorgement in the event the Court sustains an objection to the compensations. John Carroll, DoveBid's senior vice president, assures the Court that the firm is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. 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). AVADO BRANDS: Sells 61 Restaurants to Rita Acquistion ----------------------------------------------------- The Honorable Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware approved the sale of Avado Brands Inc. and its debtor-affiliates' 61 restaurants to Rita Acquisition Corp., a company set up by DDJ Capital Management LLC, Bloomberg News reports. The sale, Bloomberg relates, will enable the Debtors to terminate at least $23 million in debt against DDJ Capital. DDJ Capital's counsel, William E. Chipman, Esq., told Bloomberg that Rita Acquisition will continue to operate the restaurants in the ordinary course of business. Madison, Georgia-based Avado Brands Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. About 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. AVAGO TECH: S&P Upgrades Corporate Credit Rating to BB- from B -------------------------------------------------------------- Standard & Poor's Ratings Services removed its ratings on San Jose, California and Singapore-based Avago Technologies Finance Pte. Ltd. and related entities, from CreditWatch, where they were placed on Sept. 19, 2007, with positive implications, and raised the company's corporate credit rating to 'BB-' from 'B'. This rating action includes an upgrade of the company's senior secured rating to 'BB-' (two notches above the corporate credit rating) on its revolving credit facility, which was recently upsized from $250 million to $375 million. The recovery rating remains '1', indicating the expectation of a very high (90%-100%) recovery of principal in the event of a payment default. The outlook is stable. "The rating action follows the company's steps to delever, while its operating trends have remained stable over the last several quarters," said Standard & Poor's credit analyst Lucy Patricola. "The ratings reflect Avago Technologies' challenges in growing its portfolio of sole-sourced, leading-edge technology semiconductors; modest free cash flow; and short operating track record as an independent company. These factors are partially offset by the company's broad product line--which produces stable revenues and earnings with minimal product, market, or customer concentration--and leverage that is moderate for the rating." The outlook is stable. A broad-based portfolio affords the company stability in its operating trends and downside protection. Upside potential is constrained by its niche focus and lack of revenue growth. BANC OF AMERICA: Fitch Holds 'B+' Rating on $3.9MM Certificates --------------------------------------------------------------- Fitch Ratings has upgraded Banc of America Securities LLC's commercial mortgage pass-through certificates, series 2003-1, as: -- $10.3 million class H to 'AA+' from 'AA'; -- $21.9 million class J to 'A' from 'A-'; In addition, Fitch has affirmed these classes: -- $254.3 million class A-1 at 'AAA'; -- $506.2 million class A-2 at 'AAA'; -- Interest-only class XC at 'AAA'; -- Interest-only class XP-1 at 'AAA'; -- Interest-only class XP-2 at 'AAA'; -- $34.9 million class B at 'AAA'; -- $12.9 million class C at 'AAA'; -- $24.5 million class D at 'AAA'; -- $11.6 million class E at 'AAA'; -- $11.6 million class F at 'AAA'; -- $11.6 million class G at 'AAA'; -- $7.7 million class K at 'BBB+'; -- $6.5 million class L at 'BBB'; -- $6.5 million class M at 'BBB-'; -- $5.2 million class N at 'BB'; -- $3.9 million class O at 'B+';. -- $1.3 million class SB-A at 'AAA'; -- $4.7 million class SB-B at 'AAA'; -- $10.8 million class SB-C at 'AAA'; -- $3.3 million class SB-D at 'AAA'; -- $7.3 million class SB-E at 'AAA'; -- $5.6 million class ES-A at 'AA'; -- $4 million class ES-B at 'AA-'; -- $4.4 million class ES-C at 'A+'; -- $4.6 million class ES-D at 'A'; -- $3.2 million class ES-E at 'A-'; -- $3.2 million class ES-F at 'BBB+'; -- $3.2 million class ES-G at 'BBB'; -- $9.8 million class ES-H at 'BBB-'. Fitch does not rate the $18.1 million class P, $16.4 million class WB-A, $8.3 million class WB-B, $1.8 million class WB-C, or $1.8 million class WB-D certificates. The rating upgrades reflect increased credit enhancement levels due to the prepayment of four loans, scheduled amortization as well as defeasance of an additional five loans (10.9%) since Fitch's last rating action. As of the December 2007 distribution date, the pool's aggregate certificate balance has decreased 8.1% to $947.7 million from $1,032.7 million at issuance. In total, twenty-eight loans (42.8%) have defeased since issuance, including the shadow rated Sotheby's Building loan (9.8%) and Wellbridge Portfolio loan (2.6%). Currently there is one asset (0.2%) in special servicing, which is an 84-unit multifamily property located in Jackson, Mississippi. It has been real estate owned since May 2007 and is currently under contract for sale. The special servicer does not expect losses upon the liquidation of the property. Fitch reviewed the remaining shadow rated loan: Emerald Square Mall (10.2%), the largest loan in the pool that is secured by a regional mall in North Attleboro, Massachussetts. The loan maintains its investment grade shadow rating due to stable performance. As of September 2007, occupancy at the property was stable at 93%, compared to 94 % at issuance. The loan is divided into an A and a B note: the A note, which has been contributed to the pooled proceeds and the B-note, which is structured as stand- alone rake classes. It is an amortizing balloon loan and is scheduled to mature in March 2013. Eight loans (3.58%) have been identified as Fitch loans of concern due to declining performance. The largest Fitch loan of concern is secured by a 220-unit multifamily apartment complex in Dallas, Texas and had servicer reported DSCR of 0.64 times as of June 30 2007. Three non-defeased multifamily loans (0.9%) are scheduled to mature in 2008, all of which are related but not cross- collateralized and cross-defaulted. Although servicer reported year-end 2006 DSCR declined compared to that at issuance, all three loans are performing with current DSCR above 1.0x. BARNERT HOSPITAL: Court Extends Plan Filing Deadline to April 2 --------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey further extended Nathan and Miriam Barnert Memorial Hospital Association dba Barnert Hospital's exclusive periods to: a) file a plan until April 2, 2008; and b) solicit acceptances of that plan until June 1, 2008. As reported in the Troubled Company Reporter on Dec. 19, 2007, the Debtor said that it needs additional time to complete negotiations with creditors and prospective buyers in connection with a sale of the Debtor's assets. "If such negotiations come to fruition, the Debtor will require time to prepare and file pleadings to proceed with a court- approved auction and sale of assets," David J. Adler, Esq., at McCarter & English LLP says. In addition, the Debtor told the Court that the sale of its assets is necessary in the formulation of a plan of reorganization as well as in its exit from Chapter 11. The Debtor's exclusive period to file a plan expired on Dec. 13, 2007. About Nathan and Miriam Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital, owns and operates a 256 bed general acute care community hospital located at 680 Broadway in Paterson, New Jersey. The company filed for chapter 11 protection on Aug. 15, 2007 (Bankr. D. N.J. Case No. 07-21631). David J. Adler, Esq., at McCarter & English, LLP, represents the Debtor in its restructuring efforts. Warren J. Martin Jr., Esq. and John S. Mairo, Esq., at Porzio Bromberg & Newman, P.C., represent the Official Committee of Unsecured Creditors in this case. Donlin Recano & Company Inc. is the Debtor's claims, noticing, and balloting agent. The Debtor's schedules reflect total assets of $46,600,967 and total liabilities of $61,303,505. As reported in the Troubled Company Reporter on Dec. 10, 2007, the Debtor has withdrawn its request for approval of the $5 million debtor-in-possession financing agreement with Northern Healthcare Capital LLC. BASIS YIELD: Case Now Under Official Liquidation ------------------------------------------------ Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham, joint liquidators of Basis Yield Alpha Fund (Master), filed a statement regarding the status of Basis Yield's liquidation proceedings before the Grand Court of Cayman Islands. In the statement, the JPLs notified the U.S. Bankruptcy Court for the Southern District of New York that, on December 19, 2007, the Cayman Court directed that Basis Yield be officially wound up pursuant to the provisions of the Cayman Islands' Companies Law (2007 Revision). The Statement also said the Cayman Court has appointed Messrs. Dickson, Akers and Billingham as Basis Yield's joint official liquidators. U.S. counsel for the Liquidators, Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, relates that, pursuant to the Cayman Court's order, the Official Liquidators are authorized to: -- do any act or thing they consider to be necessary or desirable in connection with the liquidation of Basis Yield and the winding up of its affairs; -- exercise all powers set out in Section 109 of the Cayman Companies Law without further sanction of the Cayman Court, including the liberty to employ attorneys, counsel and professional advisors in the Cayman Islands or elsewhere; and -- pay invoices out of the assets of Basis Yield for attorneys' and accountants' remuneration at the usual rates together with all costs and expenses. Ms. Dine further relates that the Cayman Court also authorized the Official Liquidators to file with the Cayman Court Clerk a report, in writing, of the position of and the progress made with the winding up of Basis Yield and with the realization of its assets, and as to any other matters connected with the company's liquidation, every 12 months or as the Cayman Court may direct. On August 28, 2007, Basis Yield asked the Cayman Court to immediately appoint Messrs. Dickson, Akers and Billingham as the company's joint provisional liquidators. The Cayman Court granted Basis Yield's request on that same day. The Liquidators were first appointed temporarily by the Cayman Grand Court as an interim measure designed to ensure that the status quo is maintained pending a full hearing of a winding up petition. The following day, the Liquidators filed a petition under Chapter 15 of the U.S. Bankruptcy Code believing that an ancillary case would facilitate an efficient, fair, prompt, and orderly conduct of the Cayman Islands Proceeding. The Cayman Grand Court usually appoints a provisional liquidator if it is persuaded that in all probability a winding up order will ultimately be made. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BASIS YIELD: NY Court to Consider Liquidation Case on January 15 ---------------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York will consider on January 15, 2008, the request of Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham, joint official liquidators of Basis Yield Alpha Fund (Master), for recognition of the Cayman Islands liquidation proceeding of Basis Yield Alpha Fund (Master) as a "foreign main" proceeding under Chapter 15 of the U.S. Bankruptcy Code. Judge Gerber has previously set January 8 as the deadline to file objections to the Joint Official Liquidators' request for summary judgement of their Chapter 15 petition. No objections to the summary judgement request, however, were filed on the U.S. Court dockets as of January 9. Basis Yield's Chapter 15 petition said it is estimated to have more than $100,000,000 in total assets and total liabilities, and less than 49 creditors. The Liquidators noted that more than $50,000,000 of Basis Yield's assets, held by various financial institutions, are located within the United States. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BAY AREA: Case Summary & Largest Unsecured Creditor --------------------------------------------------- Debtor: Bay Area Luxury Homes/Sausalito X, L.L.C. 171 Birch Street, Suite 4 Redwood City, CA 94062 Tel: (650) 400-5039 Bankruptcy Case No.: 08-30023 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: January 8, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Ignascio G. Camarena, II, Esq. Bustamante, O'Hara and Gagliasso 333 West San Carlos Street, 8th Floor San Jose, CA 95131 Tel: (408) 977-1911 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Couture Architecture trade debt $26,000 BEAR STEARNS: Fitch Holds Low-B Ratings on Six Certificate Classes ------------------------------------------------------------------ Fitch Ratings has upgraded Bear Stearns Commercial Mortgage Securities Trust 2004-TOP16, commercial mortgage pass-through certificates, as: -- $20.2 million class B to 'AA+' from 'AA'; -- $13.1 million class C to 'AA' from 'AA-'. In addition, Fitch has affirmed these classes: -- $1.5 million class A-2 at 'AAA'; -- $100 million class A-3 at 'AAA'; -- $100 million class A-4 at 'AAA'; -- $80 million class A-5 at 'AAA'; -- $676.1 million class A-6 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $13 million class D at 'A'; -- $15.9 million class E at 'A-'; -- $10.1 million class F at 'BBB+'; -- $11.6 million class G at 'BBB'; -- $10.1 million class H at 'BBB-'; -- $2.9 million class J at 'BB+'; -- $4.3 million class K at 'BB'; -- $5.8 million class L at 'BB-'; -- $1.4 million class M at 'B+'; -- $1.4 million class N at 'B'; -- $2.9 million class O at 'B-'. Fitch does not rate the $7.2 million class P. Class A-1 has been paid in full. The upgrades are due to an additional 8.3% defeasance, 4.6% pay down and stable performance since Fitch's last review. As of the December 2007 distribution date, the pool's aggregate principal balance has decreased 6.8% to $1.08 billion from $1.15 billion at issuance. One loan (0.3%), secured by a multifamily property in Sharonville, Ohio, is currently in special servicing. The loan recently transferred to the special servicer due to imminent default. The special servicer is pursuing foreclosure. Fitch's expected losses will be absorbed by the non-rated class P. Fitch reviewed the most recent operating statement analysis reports for the remaining seven shadow rated loans (20.4%): Jersey Gardens (7.0%), New Dominion Technology Park (5.8%), Hilton Old Town (2.3%), Huntington Square Plaza (1.8%), Fairview Center (1.5%), RBC Centura Bank Portfolio (0.9%) and Wilton Medical Arts (0.4%). Based on their stable to improved performance since issuance the loans maintain their investment grade shadow ratings. Jersey Gardens (7.0%) is secured by a 1.3 million square foot super-regional mall in Elizabeth, New Jersey. Anchor tenants include Burlington Coat Factory, Filene's Basement, Cohoes Fashions, Marshall's, Old Navy, Bed Bath & Beyond, Off 5th Saks Fifth Avenue, Nike Factory Store, Jeepers!, Home Living Group USA, Daffy's, Neiman Marcus Last Call and Gap Outlet. The A note consists of two pari passu portions with the $75.7 million A2 note included in this transaction and the $80.4 million A1 note included in GMAC 2004-C2. As of July 2007, occupancy has increased to 98.7% from 91.8% at issuance. New Dominion Technology Park (5.8%) is secured by a 257,400 sf single tenant suburban office building in Herndon, Virginia, occupied entirely by GSA. The property benefits from the experienced sponsorship of Boston Properties (rated 'BBB' with a stable outlook by Fitch). As of Sept. 30, 2007, the property remains 100% occupied, unchanged since issuance. Hilton Old Town (2.3%) is secured by a 241-room full-service hotel in Alexandria, Virginia. The property benefits from the experienced sponsorship of LaSalle Hotel Properties, Inc., a self- managed real estate investment trust that acquires, owns and leases primarily upscale and luxury full-service hotels. As of the trailing twelve months ending October 2007, occupancy is 76.2% compared to 79% at issuance. As of October 2007, the average daily rate and revenue per available room have improved to $200.92 and $153.14 from $144.00 and $113.00 at issuance, respectively. Huntington Square Plaza (1.8%) is secured by a 114,991 sf anchored retail center in East Northport, New York. The property is leased to two tenants, Stop & Shop and Best Buy (rated 'BBB+' with a Stable Outlook by Fitch), with long-term leases that expire in 2023. The sponsor is a subsidiary of the Inland Group. The property is 100% occupied as of Sept. 30, 2007, unchanged since issuance. Fairview Center (1.5%) is secured by a 222,546 sf anchored retail center in Goleta, California. Anchor tenants include Vons, Orchard Supply Center and Michaels. As of Sept. 30, 2007, occupancy has improved to 100% from 95% at issuance. BEAR STEARNS: Fitch Holds 'B-' Rating on $2.1MM Class M Certs. -------------------------------------------------------------- Fitch Ratings upgrades Bear Stearns Commercial Mortgage Securities Inc.'s commercial mortgage pass-through certificates, series 2000- WF2, as: -- $8.4 million class D to 'AAA' from 'AA+'; -- $26.1 million class E to 'A+' from 'A'. In addition, Fitch affirms these : -- $15.7 million class A-1 at 'AAA'; -- $529.4 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $28.3 million class B at 'AAA'; -- $26.2 million class C at 'AAA'; -- $7.3 million class F at 'A-'; -- $4.2 million class L at 'B'; -- $2.1 million class M at 'B-'. Fitch does not rate classes G, H, I, J, K and N. The upgrades reflect the improved credit enhancement levels as a result of a loan payoff, scheduled amortization and the defeasance of 13 loans (13.5%) since Fitch's last rating action. In total, 28 loans (26.7%) have defeased since issuance. As of the December 2007 remittance report the pool has paid down 18.9% to $680.2 million from $838.5 million at issuance and 141 loans remain in the transaction. There are currently no specially serviced or delinquent loans. Fitch reviewed the two shadow-rated loans in the pool, the MHC Portfolio (12.8%) and FM Global Headquarters (1.6%). The FM Global Headquarters loan has fully defeased. Both loans maintain their investment grade credit assessments based on their stable performance. The MHC Portfolio is secured by six manufactured housing communities located in Florida, California and Illinois. Although, occupancy has remained stable at 86% as of Sept. 30, 2007, the year-end 2006 servicer reported net operating income has improved 14% since issuance. BLACKBOARD INC: Moody's Vacates Ratings for Business Reasons ------------------------------------------------------------ These ratings of Blackboard Inc. have been withdrawn: -- Corporate Family Rating of Ba3 -- Speculative Grade Liquidity Rating of SGL-1 -- Probability of Default of B1 -- $10 million Senior Secured Revolving Credit Facility due 2010, Ba3, LGD3, 31% -- $70 million Senior Secured First Lien due 2011, Ba3, LGD3, 31% Moody's has withdrawn the ratings for business reasons. The ratings were withdrawn because the issuer has no rated debt outstanding. Blackboard Inc., headquartered in Washington District of Columbia, is a leading provider of software applications to the education industry for interactive teaching, learning, course management, and campus life. BLACKHAWK AUTOMOTIVE: Court OKs Frost Brown as Panel's Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Blackhawk Automotive Plastics Inc. and its debtor-affiliates' bankruptcy cases obtained authority from the United States Bankruptcy Court for the Northern District of Ohio to retain Frost Brown Todd LLC as its counsel, nunc pro tunc to Nov. 1, 2007. As reported in the Troubled Company Reporter on Jan. 4, 2008, Frost Brown is expected to: a) advise the Committee with respect to its powers, duties and responsibilities in these cases; b) provide assistance in the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' business and desirability of the continuance of the business, and any other matters relevant to the cases or to the negotiation and formulation of a plan; c) prepare on behalf of the Committee all necessary pleadings and other documentation; d) advise the Committee with respect to the Debtors' formulation of a plan(s), the Debtors' proposed plans with respect to the prosecution of claims against various third parties and any other matters relevant to the cases or to the formulation of a plan(s) in these cases; e) provide assistance, advice and representation, if appropriate, with respect to the employment of a Trustee or Examiner, should the action become necessary, or any other legal decision involving interests represented by the Committee; f) represent the Committee in hearings and proceedings involving the Committee; and g) perform other legal services as may be necessary and in the interest of the creditors and this Committee. Papers filed with the Court did not disclose the firm's compensation rates. Ronald E. Gold, Esq., a member of the firm, assured the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Gold can be reached at: Ronald E. Gold, Esq. Frost Brown Todd LLC 2200 PNC Center 201 East Fifth Street Cincinnati, Ohio 45202-4182 Tel: (513) 651-6156 Fax: (513) 651-6981 http://www.frostbrowntodd.com/ Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. provides the Debtors with claims, noticing, balloting and distribution services. No Official Committee of Unsecured Creditors has been appointed in either of the Debtors' cases. The Debtors' schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BOSTON HILL: Has Until Jan. 15 to File Schedules of Assets & Debts ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts extended the period in which Boston Hill Realty Trust must file its schedules of assets and liabilities and statement of financial affairs until Jan. 15, 2008. The schedules and statement were originally due on Jan. 4, 2008. The filing deadline was extended due to the administrative demands inherent in any chapter 11 bankruptcy. The Debtor is still in the process of compiling the information necessary for the accurate completion of the Schedules and Statements. In addition, the Debtor has experienced difficulty in assembling all of the documents necessary to prepare the bankruptcy filings as the documents are not currently in its possession. Kingston, Massachusetts-based Boston Hill Realty Trust owns and develops real estate. The Debtor filed for Chapter 11 Petition on Dec. 5, 2007 (Bankr. D. Mass. Case No. 07-17770). Earl D. Munroe at Munroe & Chew represents the Debtor in its restructuring efforts. The Debtor listed assets and debts between $10 million and $50 million. BOSTON HILL: Section 341(a) Meeting Moved to January 22 ------------------------------------------------------- The U.S. Trustee for Region 1 rescheduled the Section 341(a) Meeting of persons owed money by Boston Hill Realty Trust to Jan. 22, 2008, at 1:15 p.m., in the Office of the U.S. Trustee, Room 1190, Thomas P. O'Neill Federal Building, 10 Causeway Street in Boston, Massachusetts. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Kingston, Massachusetts-based Boston Hill Realty Trust owns and develops real estate. The Debtor filed for Chapter 11 Petition on Dec. 5, 2007 (Bankr. D. Mass. Case No. 07-17770). Earl D. Munroe at Munroe & Chew represents the Debtor in its restructuring efforts. The Debtor listed assets and debts between $10 million and $50 million. BRANTLEY HOMES: Files for Chapter 7 Liquidation in Birmingham ------------------------------------------------------------- Brantley Homes filed for Chapter 7 liquidation proceeding with the U.S. Bankruptcy Court for the Northern District of Alabama after the original partner, Bill Brantley, fell ill, Russell Hubbard of the Birmingham News reports. Rhonda Brantley told Birmingham News that she was torn between continuing the legacy of their homebuilding business and staying with her husband and business partner. "I had the choice of taking care of my business or my family... It hurts because this what we do. My husband became somewhat of a legend in Shelby County through building houses," she said. Ms. Brantley recounts that the Birmingham area was "insulated" from the U.S. home mortgage crisis due to economic and job growth, but admitted that the business wasn't foolproof from the meltdown, Birmingham News relates. "So I really found myself looking down two barrels," Birmingham News cites Ms. Brantley as saying. "This market and this illness, neither of which I can control." According to Birmingham News, the Alabama homebuilder listed assets of $1,700,000 and liabilities of $3,400,000. BRIGANTINE HIGH: Moody's Junks Rating on $14 Mil. Notes from A2 --------------------------------------------------------------- Moody's Investors Service downgraded these notes issued by Brigantine High Grade Funding, Ltd.: Class Description: $14,000,000 Class C Deferrable Floating Rate Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $11,000,000 Class D Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Moody's also downgraded and left on review for possible downgrade these notes: Class Description: $69,500,000 Class A-2 Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $17,000,000 Class B Floating Rate Notes Due 2051 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Lastly, Moody's also placed these notes on review for possible downgrade: Class Description: $500,000,000 Class A-1B Floating Rate Notes Due 2051 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $100,000,000 Class A-1C Floating Rate Notes Due 2051 -- Prior Rating: Aaa -- Current Rating: Aaa, 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 asset backed securities. CALPINE CORP: S&P Expects B Rating Upon Calpine's Bankruptcy Exit ----------------------------------------------------------------- Standard & Poor's Ratings Services announced that it expects to assign its 'B' corporate credit rating to Calpine Corp. (D/--/--) when the company emerges from Chapter 11 protection, which is expected to occur by the end of January 2008. Standard & Poor's also expects to assign its 'B+' rating (one notch higher than the expected corporate credit rating) and '2' recovery rating to Calpine's $6.6 billion first-lien term loan (includes a $300 million bridge loan and $1 billion first-lien revolving credit facility that make up the exit debt facilities). The '2' recovery rating indicates expectation of substantial recovery (70%-90%) in event of a payment default. S&P expects the outlook to be stable. S&P's expected ratings are based on the capital structure and other terms and conditions of Calpine's plan of reorganization as confirmed by the bankruptcy court and are subject to the company substantially consummating the plan at emergence. Any material changes in the plan or significant delays in the emergence process could result in different ratings. In addition, the expected bank loan ratings are based on preliminary terms and conditions of the exit debt facilities and assume that the bank facilities become effective at emergence as represented to S&P. The ratings are subject to review upon receipt of final documentation. On emergence from bankruptcy, Calpine expects to own 80 plants with 23,851 MW of generating capacity, making it the third-largest merchant generator in the U.S. by capacity. Calpine owns 7,246 MW in the West, 7,510 MW in Texas, 6,254 MW in the Southeast, and 2,841 MW in the Northeast and the Midwest. Consolidated debt on the balance sheet is expected to total about $10.7 billion which includes about $4.1 billion of debt at various Calpine projects, and a $300 million bridge loan that will be pari-passu with the first-lien term loan. The bridge loan is expected to be repaid in the first half of 2008 with proceeds of asset sales and certain tax refunds from Canada that have largely been locked in. The first-lien facility has an accordion feature that allows Calpine to refinance project debt at the corporate level, which is a strategy S&P believes management intends to pursue. S&P expects Calpine's 'B' corporate credit rating to reflect these strengths: -- Calpine owns 7% of the capacity in California and 10% of the capacity in the Electric Reliability Council of Texas - two heavily gas-driven markets that are expected to remain so. -- Calpine's fleet is new, has heat rates of about 7,000 BTU per kilowatt-hour (BTU/kWh), and will be among the first gas-fired plants to dispatch in any region. Accordingly, it has strong operating characteristics. -- Improving merchant market fundamentals in many regions of the country and difficulty in permitting new coal plants augur well for cash flow over the next few years. -- Regional capacity markets such as the ones in the New England Power Pool and the Pennsylvania New Jersey Maryland Interconnection may provide additional revenue stability. -- Potential carbon legislation could significantly aid clean gas-fired capacity such as owned by Calpine. -- A hedging program that seeks to contract a high proportion of its margins over the upcoming two years will provide for some cash flow stability. These are the offsetting weaknesses: -- Calpine's cash flows remain extremely vulnerable to gas price volatility. -- Other regions of the country, especially the Southeast, continue to have substantial surplus capacity and consequently poor cash flow prospects. -- Entry of substantial base load generation, especially in Texas, could hurt dispatch profile and gross margins. -- High hydro conditions will likely lead to lower power prices in California. Calpine, with its largely combined-cycle, gas-fired fleet, has large positions in gas-driven markets like California and Texas. These markets are expected to remain greatly influenced by gas in the foreseeable future. Calpine's fleet is new with heat rates averaging about 7,000 BTU/kWh and will likely be among the first gas-fired plants to be dispatched in any region. As a result, the fleet has strong operating characteristics, with capacity factors well above the national average and forced outage and heat rates below the national average. These characteristics position Calpine to benefit from tightening demand/supply conditions in many markets while mitigate the downside impact of an overcapacity in other markets. Calpine has hedges in place that provide some cash flow stability - about 75% of its gross margin is hedged in 2008, and the percentage hedged in subsequent years declines. S&P expects the company to continue to put on hedges over time on a rolling basis. Another 5% of gross margins come from steam contracts, whose revenues fluctuate with gas prices. Despite these hedges, Calpine's cash flows retain substantial exposure to gas prices and market heat rates. Specific vulnerabilities include the potential for a substantial base load buildout in Texas and annual hydro volatility in California and the Northwest. S&P expects that climate change concerns and the growth of renewable energy will be beneficial to Calpine's credit profile in the short to medium term. Calpine's Geysers facilities should see a substantial gain from renewable energy credits as California moves towards its 33% renewable portfolio standards target, and the company's gas-based fleet should benefit from potential climate change legislation through higher capacity factors, as fuel-switching from coal to gas will likely be the marginal abatement opportunity. Under Calpine's planned emergence capital structure, it will have a total of about $10.7 billion of debt with 23,851 MW of generation capacity almost entirely gas fired. The resulting high debt burden of about $450/kW, coupled with the relatively unhedged nature of the portfolio in the long term, creates an aggressive financial profile. Under Calpine's base case forecast, the 2007- 2012 debt service coverage ratios vary between 1.1x and 1.8x, while funds from operations coverage of debt ranges from 8% to 15%. These ratios reflect Calpine's consolidated financial profile, including the projects with non-recourse debt. Calpine would default under S&P's conservative merchant power price assumptions--but this is consistent with 'B' category expectations. Calpine's planned capital structure remains highly levered for several years with total debt to capitalization expected to fall to about 73% in 2012 from 77% in 2008 under the base case. Loan covenants provide for a 50% sweep of excess cash flow to pay down first-lien debt. CABELA'S CREDIT: Fitch To Put 'BB+' Rating on $10.125MM Notes ------------------------------------------------------------- Fitch Ratings expects to rate Cabela's Credit Card Master Note Trust, Series 2008-I as: -- $389,250,000 class A-1/A-2 notes 'AAA'; -- $31,500,000 class B-1/B-2 notes 'A+'; -- $19,125,000 class C-1/C-2 notes 'BBB+'; -- $10,125,000 class D notes 'BB+'. CALPINE CORP: Moody's Puts B2 Ratings on Looming Chapter 11 Exit ---------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and a B2 Probability of Default Rating to Calpine Corporation in conjunction with the company's plan to exit bankruptcy in early 2008. Moody's also assigned B2 to the company's $7.3 billion senior secured term loan and revolving credit facility, the majority of which will be used as the company's primary exit financing to help satisfy approximately $8.2 billion of secured and other claims to be settled in cash, as well as to pay other related expenses. The rating outlook for Calpine is stable. The B2 CFR reflects the degree of uncontracted revenues and resulting cash flow expected to be generated by Calpine's largely natural-gas fired merchant generation fleet over the next several years. While the company has substantial hedges in place for 2008 which should lock-in more than 70% of the company's margin this year, the percentage of margin hedged beyond 2008 declines leaving the company exposed to potentially greater year-over-year cash flow and earnings volatility over the next several years. Moody's believes that Calpine's funds from operations is expected to represent about 4.0-6.0% of total adjusted debt in 2008 while FFO from 2009 through 2010 is expected to average 5.0-8.0% of the company's projected average adjusted debt. Moody's also believes that Calpine's cash flow coverage of interest expense should range between 1.5x to 1.9x over the same three year time frame. These financial measures, which incorporate Moody's standard adjustments, are consistent with the financial measures of other B-rated independent power producers. Also factored into this rating assessment is Moody's recognition that Calpine's consolidated earnings and cash flow should improve above the projected 2008 credit metrics and should be accompanied by greater predictability due to stronger margins anticipated across the key electric markets served by Calpine as well as the expected in- service date of three new separate generation projects in 2008, 2009, and 2010. These three projects, which are currently under construction, will provide, when completed, highly predictable contracted revenues and cash flows over an extended period based upon power purchase arrangements already in place with high credit quality off-takers. The rating factors in the obvious benefit to the company's financial flexibility of a substantially reduced debt load, as more than $6 billion of unsecured funded debt and pre-petition interest is expected to be converted to equity as part of the company's plan of reorganization. Based upon the $18.95 billion valuation for Calpine that was approved by the bankruptcy court and underpins the company's POR and the company's most recent "low" and "high" claims estimates, unsecured creditors will receive new common stock of the reorganized Calpine equal to between 82% and 100% of their claims. The rating further considers the substantial degree of regional diversity that exists across Calpine's fleet, the company's recent operating performance, the fleet's competitive position in certain key markets, including California and to a lesser extent, in Texas, and the long-term advantages associated with having among the largest, most environmentally benign and efficient natural gas- fired electric generation fleets in North America. Under the terms of the POR approximately $8.2 billion of claims will be settled with cash upon emergence from bankruptcy. Specifically, approximately $3.912 billion represent amounts under the company's existing debtor-in-possession term loan converted to exit financing; $3.964 billion will be used to satisfy claims of Calpine's second lien note holders; approximately $141.2 million to meet other secured, administrative, priority and convenience claims; and $237.7 million to cover transaction costs and professional fees. Calpine expects to fund the $8.2 billion with a combination of $1.6 billion of cash and the incurrence of term debt, including the $6.3 billion of secured term loans rated (P)B2 and a separate $300 million one year secured term loan that will be entered into by Calpine as bridge financing which will be required to be repaid by the proceeds from two identifiable asset sales and a tax refund expected to be received from the Canadian government. Moody's expects the $300 million in bridge financing to be fully repaid from these external sources during the first half of 2008. Moody's observes that approximately $4.1 billion of project level debt at numerous subsidiaries will continue to exist under the current terms and conditions in their respective project loan financing documents. Moody's understands that several of these loan agreements have pricing terms that are above the current market for similar project financing's. As such, Moody's believes that the company may look to refinance several of these financing arrangements over the next several years, which should reduce consolidated interest expense further resulting in better cash flow coverage metrics than projected in the company's forecasts. Moody's further observes that the company's consolidated debt is expected to decline only modestly from the time of the company's emergence from bankruptcy through the end of 2009 as scheduled amortization payments under the term loan ($63 million annually) and under various project loan agreements ($252 million in 2008 and $268.7 million in 2009) are expected to be offset by the incurrence of more than $200 million of project level debt in 2008 and nearly $300 million of additional project level debt in 2009 to finance the completion of the Russell City Energy and Otay Mesa generation projects. Project finance debt associated with the construction of these two projects as well as the 50%-owned Greenfield project has already been arranged. The senior secured credit facilities, rated (P)B2, will consist of a $1.0 billion revolving credit facility and a $6.3 billion term loan. Both the revolver and term loan mature on March 29, 2014. These credit facilities will rank pari-passu with the one-year $300 million secured term loan bridge financing which is expected to be repaid in the first half of 2008. The facility ratings incorporate the fact that all of the Calpine corporate debt will be first lien debt and as such, should carry the same rating as the company's CFR. The collateral securing the senior secured credit facilities and the bridge financing will consist of a first priority lien on substantially all assets, including equity in subsidiaries of Calpine and the guarantors to the extent permitted by existing contractual arrangements. The key components of the collateral package include a direct first lien on the Geysers, the nation's largest geothermal operation, consisting of 19 units that operate as a 725 megawatts base load unit in California. The Geysers' average availability factor is 95%; it is considered among the lowest cost generating resources in California; and its value has strengthened in the recent past given its unique competitive position as a large, operating base load renewable resource. In addition to the Geysers, the collateral package will include a first lien on the assets of Calpine Generating Company, which consists of thirteen power generation facilities with a combined capacity of 9,480 MW located in California, Texas, Washington, the Southeast, Oklahoma and Illinois. The collateral package will also include a first lien on the equity interests in virtually all of the remaining plants with 15,130 MW of generation capacity. The senior credit facilities will have financial covenants that require minimum coverage of consolidated interest expense, limits on the amount of consolidated debt and consolidated senior debt (as defined in the credit agreement) relative to the company's consolidated EBITDA, and caps on the amount of capital expenditures incurred each year. The credit facilities will require Calpine to offer 50% of any excess cash generated each year to term loan lenders as a mandatory prepayment. The stable rating outlook incorporates Moody's expectation that the company will likely generate financial metrics that remain in- line with other independent power companies whose CFR is B2. Moody's believes that the company's FFO to adjusted debt will register in the mid-single digits while cash coverage of interest expense will remain less than 2.0x during the next three years. The stable outlook also reflects Moody's view that Calpine's revenues and cash flow will have a fair amount of volatility over the next several years given the commodity nature of the independent power business and Moody's understanding of the company's current commercial hedging strategy. In light of the company's likely emergence from bankruptcy and the fact that debt levels are not likely to appreciably decline until after 2009, limited prospects exists for the company's CFR to be upgraded within the next eighteen months; however, to the extent that Calpine is able to meet or exceed cash flow projections over the next two years resulting in greater than expected debt reduction, the company's CFR could be upgraded, particularly if company's FFO to adjusted debt reaches the high single digits on a sustainable basis and if greater predictability develops beyond one year due to contracts or hedges entered into by the company. The rating could be downgraded if poor operating performance or weaker than expected energy markets leads to a decline in expected cash flows for Calpine resulting in the ratio of cash flow to interest expense below 1.5 times or cash flow to total adjusted debt approaching 3% for an extended period. These ratings were affected by this action: Ratings assigned: Calpine -- Corporate Family Rating, (P)B2 -- Probability of Default Rating, (P)B2 Rating assigned/LGD Assessment assigned: Calpine -- $1.0 Billion Senior Secured Revolving Credit Facility, (P)B2 (LGD3, 49%) -- $6.3 Billion Senior Secured Bank Term Loan Facility, (P)B2 (LGD3, 49%) Headquartered in San Jose, California, Calpine is a major U.S. independent power company, capable of delivering nearly 24,000 MW of electricity to customers in 18 states in the U.S. The company owns, leases, and operates natural gas-fueled and renewable geothermal power plants. CAPITAL LAND: Files Schedules of Assets and Liabilities ------------------------------------------------------- Capital Land Investors LLC filed with the U.S. Bankruptcy Court for the District of Nevada, its schedules of assets and liabilities, disclosing: Name of Schedules Assets Liabilities ----------------- ------ ----------- A. Real Property $30,000,000 B. Personal Property $321 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $62,883,394 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims $639,032 ----------- ----------- TOTAL $30,000,321 $63,522,426 Las Vegas, Nevada-based Capital Land Investors LLC owns and manages real estate. The Debtor filed for chatper 11 protection on Dec. 4, 2007 (Bankr. D. Nev. Case No. 07-18099). Talitha B. Gray, Esq., at Gordon & Silver Ltd. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors its listed assets and debts between $10 million and $50 million. CAPITAL LEASE: Fitch Affirms 'B+' Rating on $6.8MM Class E Certs. ----------------------------------------------------------------- Fitch Ratings upgrades Capital Lease Funding Securitization, L.P.'s corporate credit-backed pass-through certificates, series 1997-CTL-1, as: -- $9.8 million class B to 'AAA' from 'AA+'. In addition, Fitch affirms these classes: -- Interest-only class IO at 'AAA'; -- $15.5 million class C at 'A'; -- $6.1 million class D at 'BBB-'; -- $6.8 million class E at 'B+'. The $1.9 million class F and the $1.3 million class G certificates remain at 'CCC'. The upgrade is due to transaction paydown and subsequent increase in credit enhancement. As of the December 2007 distribution date, the pool has paid down 67.9% to $41.5 million from $129.4 million at issuance. Currently 79.4% of the underlying credit tenants are below investment grade, compared to 30.4% at issuance. There have been no specially serviced loans and no realized losses since issuance. The pool's tenants consist of Circuit City (32.5%), Rite Aid Corp. (17.3%), RadioShack Corp. (14.8%), New York State Electric & Gas Corp. (11.1%), Food Lion (Delhaize America Inc.) (8.2%), Walgreen Co. (6.4%), Pep Boys (5.0%), CVS Corp. (3.1%), and HCA Inc. (1.7%). CARGO CONNECTION: Converts $800K Obligation to Promissory Note -------------------------------------------------------------- Cargo Connection Logistics Holding Inc. has converted an $800 thousand short-term obligation with Emplify HR Services Inc. into a four-year secured promissory note, which is guaranteed by certain of the company's subsidiaries. According to Scott Goodman, the company chief operating officer, this move will not only enhance Cargo's balance sheet but will free up additional working capital. "We continue to take steps to improve the company's financial condition," Mr. Goodman said. "Less than 40 days ago we replaced a factoring facility that was in place for our primary operating subsidiary with a new factoring agreement with Wells Fargo Business Credit. That agreement not only increased our factoring capacity but provided more favorable terms, including a lower cost of funds. "This Note is another step the company is taking to reposition its obligations and enhance its balance sheet allowing the company to operate and expand its operations in this upcoming year." Emplify is a privately held company based in Plantation, Florida engaged in providing consulting, staffing, process outsourcing, and marketing services to a variety of vertical markets. Cargo has utilized the firm for its staffing services. About Cargo Connection Cargo Connection Logistics Holding Inc., formerly Championlyte Holdings Inc. (OTC BB: CRGO.OB) -- http://www.cargocon.com/-- provides logistics solutions for partners through its network of branch locations and independent agents in North America. Its target base ranges from mid-sized to Fortune 100TM companies. The company operates through its network of terminals and transportation services and predominately as a non-asset based transportation provider of truckload and less-than-truckload transportation services. The company also provides logistics services, which include U.S. Customs Bonded warehouse facilities, container freight station operations, and a General Order warehouse operation, which the company began to operate in the latter part of the second quarter of 2006. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 10, 2007, Friedman LLP in East Hanover, New Jersey, reported several conditions that raise substantial doubt about the ability of the company to continue as a going concern after auditing the company's financial statements at Dec. 31, 2006. The auditing firm pointed to the company's losses from operations, negative cash flows from operating activities, negative working capital and stockholders' deficit. CENTENNIAL COMMS: Nov. 30 Balance Sheet Upside-Down by $1 Bil. -------------------------------------------------------------- Centennial Communications Corp.'s balance sheet at Nov. 30, 2007, showed total assets of $1.34 billion and total liabilities of $2.38 billion, resulting in a total stockholders' deficit of $1.07 billion. The company also reported net income of $925,000 for quarter ended Nov. 30, 2007, compared to net loss of $33.35 million for the same period in the previous year. "Our U